ASIC’s civil penalty regime – an academic review
In the midst of a focus on the enforcement activity of ASIC following a critical Senate Committee report,[1] we have an article – Penalty Regimes Enforced by the Australian Securities and Investments Commission [2] – which examines the civil penalty regime under the Corporations Act, the ASIC Act and related legislation, and its history. The […]
ASIC’s revised guidance on insolvency practitioner offence reporting – RG 16
ASIC has issued revised guidance on insolvency practitioner offence reporting obligations – RG 16 External administrators and controllers: Reporting of possible offences and misconduct, September 2024. 2023 PJC Report on Corporate Insolvency recommendation 19 As I fully explained in April 2024 – ASIC’s review of offence reporting – RG 16 – Murrays Legal, this review […]
Insolvency numbers in decline
Numbers of insolvencies of individuals and companies have fallen dramatically over the years, which we may find represents a fundamental shift away from the formal legal processes involved. That is, of the 3.4 million companies in Australia in 2023-2024, only around 11,000 went into some sort of insolvency administration (0.33%). While this exceeded the […]
$364k mistakenly paid by the ATO to a company in liquidation – retain or return?
In a recent case,[1] C88 Project Pty Ltd, a liquidator was ordered by the Court to return tax moneys of $364,267 paid by the ATO to the company in liquidation by mistake. Various issues were raised, including as to the law of mistake, constructive trusts and the particular tax law provisions. [2] The liquidator had properly […]
Splitting ASIC 2024 and the 2010 Senate Committee Report
In the discussions about separating ASIC’s tasks following the July 2024 Senate Economics References Committee report – Australian Securities and Investments Commission – investigation and enforcement, there has been no mention of the same Senate Economics References Committee’s earlier separation recommendation about ASIC in its 2010 report The regulation, registration and remuneration of insolvency practitioners […]
Some proposed personal insolvency reforms in Australia
With the federal government yet to respond to the PJC Report on corporate insolvency of July 2023, which recommended a general review of both personal and corporate insolvency law, it has nevertheless proceeded to announce personal insolvency reforms and proposals. This may be because the changes involved are fairly routine, and the proposal is consumer […]
Senate report on ASIC’s investigation and enforcement roles – July 2024
The Senate Economics References Committee has issued its Report – Australian Securities and Investments Commission – investigation and enforcement, of 3 July 2024, which is highly critical of ASIC as a corporate regulator and which makes a series of recommendations.[1] One of its main points and recommendations is that ASIC has too much on its […]
“Personal insolvencies increased in May 2024…” – by 3
AFSA reports that “personal insolvencies increased in May 2024”. They did – by 3 more than in April 2024. Personal insolvency numbers increased by only 3 more in May 2024 (1049) than in April 2024 (1046), and only 18 more than in May 2023 (1031). Provisional personal insolvencies increased in May 2024 | Australian Financial […]
The 2023 Parliamentary Joint Committee Report and insolvency law reform?
While the federal government is yet to give its response to the PJC Report on Corporate Insolvency of July 2023, there is little to suggest that the industry and others interested have been working on any of the threshold issues that the Report says need attention to assist any law reform. It is approaching […]
Insolvency practitioners and missing moneys – on-line regulation required
The sentencing hearing in relation to former liquidator Mr Peter Amos was mentioned on 17 June 2024 and was then adjourned for a day’s hearing on 5 August 2024. See “Thousands and thousands of pounds have been lost …” – Murrays Legal According to ASIC, Amos held various insolvency appointments which rendered him an “officer” […]
The bankruptcy trustee and missing funds, continuing
The court hearing of an Australian bankruptcy trustee who may need to explain missing funds has been adjourned without ceremony to August 2024. Proceedings are before the Federal Court concerning former bankruptcy trustee Paul Leroy. The Inspector-General continues to say that his “investigation is ongoing and further details will be provided at an appropriate time”: […]
Personal insolvency numbers suffer a slight rise
There is not much to report from the latest personal insolvency figures, save for continued small increases over time. It seems unlikely that personal insolvencies will quite reach the predicted 12,250 for the 2023-24 year, let alone the long-term average of 23,100. Whether the numbers are ‘soaring’ or ‘surging’ is a matter of interpretation. The […]
Insolvency law terms – what do they mean?
While insolvency law uses many and varied terms to describe its various processes for dealing with an insolvent business, no fewer than six in the UK, we are told, “something is preventing struggling businesses from using it”?! Perhaps because of the very fact that insolvency law does use so many and varied terms to describe […]
Insolvency law’s elephants in the room
Professor Jason Harris and I will be presenting a session at INSOL Academics Colloquium in San Diego USA on 22 May. Consistent with the theme of the INSOL conference, our session is titled ‘rethinking Australian insolvency law’ and comprises much of what we put to the Australian Parliamentary Joint Committee in its Corporate Insolvency inquiry […]
ASIC’s review of offence reporting – RG 16
In response to the PJC Report, although a bit premature, ASIC is reviewing its RG 16, on offence reporting obligations, its consultation paper acknowledging many of the issues raised in the Report, but also awaiting the government’s response to that report: see 24-072MR ASIC consults on misconduct reporting guidance for external administrators and controllers | […]
“Thousands and thousands of pounds have been lost …”
By way of an update to this post, on 11 June 2024 the Federal Court adjourned the 14 June case management hearing in Leroy to 9 August 2024 at 9.30am. No reasons were given. ============================================================ The regulation of insolvency practitioners (IPs) in Australia might come in for scrutiny in light of two current matters involving […]
Bankruptcy and mental ill health
Justice John Logan of the Federal Court has raised some interesting issues in an otherwise straightforward bankruptcy judgment concerning the court’s ability to organise mental health assistance for a bankrupt – a single mother “in a spiralling situation of debt” and “in quite some despair”. LL was made bankrupt by the Federal Circuit Court on […]
Small business sole trader insolvencies
A recent newspaper report on the trend of insolvencies in small business was interesting for the reason that it acknowledged that many or most businesses are run by individual people and not by inanimate companies, and that even if there is a company involved, corporate veil protection of the owners has its limits: Insolvencies up […]
AFCA financial compensation scheme of last resort
The federal government has announced [1] that a compensation scheme for victims of financial services misconduct will start from 2 April 2024, including a Compensation Scheme of Last Resort (CSLR) in the event that the financial service provider is unable to pay a compensation determination against it made by the Australian Financial Complaints Authority (AFCA). […]
Insolvency practitioners as employees
Updated on 5 March 2024 to refer to a 1996 Explanatory Memorandum in bankruptcy which says that, despite the case law, a person’s status as an employee, rather than a partner, should not preclude a person from obtaining registration as a trustee. ====== A liquidator disciplinary committee has decided that conditions should be imposed on a […]
Insolvency Practitioner Registration and Disciplinary Committees
I am pleased to have been appointed by the government as a part‑time member to the Ministerial pool for the Corporate Insolvency Practitioner Registration and Disciplinary Committees, for a three‑year period beginning on 2 March 2024. Appointments – members, Insolvency Practitioner Registration and Disciplinary Committees | Treasury Ministers. These committees sit as required to determine […]
Report on the Franchising Code of Conduct – and insolvent franchisors
Further to my comments of September 2023 below as to a review of the franchising code of conduct, that review has been completed and on 8 February 2024 a report was released. Review of the Franchising Code of Conduct Final Report | Treasury.gov.au, Dr Michael Schaper (“Report”). As I indicated earlier, a review of franchising […]
Offence referrals by liquidators
Offence referrals to ASIC by liquidators continue to be contentious and perhaps distracted by the issue of claimed automated decision-making by ASIC itself, although the main issue of law reform remains in focus. Parliamentary Joint Committee on Corporations and Financial Services At a 3 November 2023 PJC inquiry,[1] Senator Deborah O’Neill, as chair, referred to […]
Cancellation of a bankruptcy trustee’s registration and freezing orders obtained
The registration of Australian bankruptcy trustee Mr Paul Leroy was cancelled by the Inspector-General in Bankruptcy (IGB) on 2 February 2024, effective from 5 February. Federal Court proceedings have been commenced and freezing orders obtained on 2 February appointing Micheletto and Carrafa as joint and several trustees of the bankrupt estate of Katherine Jackson, until […]