Fat finger syndrome behind ANZ wind up error

The erroneous listing showing ANZ as being subject to wind up proceedings  

WELL you wouldn't have wanted to be a hung over fund manager yesterday morning, logging on to check the state of the portfolio after a big night out.

If you had then you might've seen that the daily insolvency notices included a listing for the ANZ Bank. Further, the listing showed that the bank was being wound up by the tax office.

According to the notice ANZ was subject to wind up proceedings brought by Gadens Lawyers on behalf of the Deputy Commissioner of Taxation (DCoT).

Imagine the potential reaction of the crapulous fundie if he or she was in charge of a serious parcel of ANZ stock. In their vulnerable state they might've panicked. A precipitous share price plunge could've been accidentally engineered.

Fortunately Insolvency Notices publisher Louttit & Associates realised that Gadens had mistakenly entered ANZ's Australian Company Number (ACN) and was quick to act.

"Correction - AMENDED Insolvency Notices Alert 3 March 2016," read the follow up email.

Tax Commissioner continues campaign against rogue SMEs

Recent ATO winding up activity
Chart courtesy Insolvency Notices

THE Commissioner of Taxation's campaign to cull recalcitrant non-compliance from the Small-to-Medium Enterprise sector (SME) is continuing at near record levels, with more than 450 company winding up applications lodged with the courts in June.

While less than the record 556 wind-ups filed in May, the June numbers still dwarfed the ATO's previous monthly record of 361 applications - filed in August 2013 - and take total winding up applications initiated by the ATO to more than 1100 in two months. Prior to May 2015, the ATO's monthly average was 92.

"The activity by the ATO is still very substantial," said Jamieson Louttit, who produces analysis based on insolvency notices lodged with the Australian Securities and Investments Commission (ASIC).

"They are way higher than average and I do think it's reflective of the Government being short of cash," he said. "While the ATO winding up notices have come off a bit, there's still significant pressure being applied by the ATO issuing director penalty notices (DPN) and garnishee notices," Louttit said, though he had no hard numbers for DPNs and other actions at the sharp end of enforcement.

"They are not published anywhere," he said. "I tried Freedom of Information and was told I'm wasting my time."

The ATO declined to provide specifics on DPNs and garnishee orders when contacted by SiN. "In 2014-15, we supported small businesses by providing over 500,000 payment arrangements that allowed them to manage their tax debts," the regulator said.

"During the year, there were about 1,000 ATO-initiated small business wind-ups, however, we did have a greater focus on legal action in the second half of the 2014/15 year and filed about 1200 wind up actions in this period."

EXCLUSIVE: Taxman's May wind-up blitz a record

THE Australian Taxation Office (ATO) issued more wind-up notices in the month of May than in any given month since July 2012, figures obtained exclusively by Sydney Insolvency News (SiN) show.

The ATO numbers - collated from company wind up activity initiated by the offices of state revenue, workers compensation insurers, ASIC, the ATO and non-government sources - show the ATO filed 556 applications to wind-up non-compliant companies last month. From all sources, the number of wind-ups filed in May reached 722, also a record for the period.

                                                     Courtesy Insolvency Notices

According to Insolvency Notices, produced by Jamieson Louttit & Associates, the next busiest month was August 2013, when the ATO issued 361 notices out of a total of 624.

"If you look at the ATO's annual reports and work out the averages, the number of wind-ups the ATO has filed in May 2015 represents more than half the annual average," Louttit said.

The ATO's annual report for the year to June 30, 2014 shows that since 2009/2010 the taxman has initiated wind-up action an average of 1,103 times per annum. That indicates a monthly average of 92 wind-up applications.

"If you look at the red line on the graph, there's been a significant uptrend by the government to push insolvencies," Louttit said.

"There's a positive in this in that if they are cleaning the system out of people who aren't paying their taxes then it gives everyone the ability to do business with someone who is compliant with the laws."

In March 2015, ATO commissioner Chris Jordan flagged the ATO was taking a tougher stance against non-payers. And Louttit said wind-ups by the ATO and other statutory agencies this month could equal May's record number.

"If you look at the statistics for June, the applications to courts already banked up suggest it's probably going to be the same amount," he said. "It's being increased significantly and it's the SMEs being hit."

Louttit said applying to wind-up non-compliant companies generally results in half of those companies being placed into liquidation while the other half finally pay their outstanding bills.

The ATO has begun working harder to recover billions of dollars in taxes SMEs have failed to pay after conciliatory strategies to debt recovery saw tax debt grow, both in terms of total amount owing and the length of time the debt had been outstanding. See: EXCLUSIVE: ATO in debt assault on SMEs

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Murray Godfrey facing bankruptcy action

Murray Godfrey.
Photo Veritas Advisory

MURRAY Godfrey, founder of RMG offshoot Veritas Advisory, is potentially facing bankruptcy after a court last week dismissed his application to have a bankruptcy notice set aside.

In her judgement of October 18, newly-minted Federal Court Justice Melissa Perry outlines why Godfrey’s application - which argued that the notice should be set aside because it had been served twice and was capable of misleading him - must fail.

“I consider that a debtor in the applicant’s circumstances … would have understood that the act of second service would not absolve him of the responsibility to comply with the notice within the period of 21 days from the date of first service on 5 July 2013”, Justice Perry said.

Godfrey is being chased by Weriton Finance over a $160,000 debt incurred following consent orders made in the District Court in 2012. He declined to comment when contacted by SiN. It is not known if he intends to appeal.

Weriton Finance is associated with Graham Keith Werry, and DTC No. 1 Pty Limited (in Liquidation).

Werry, a property developer with a significant footprint in the Illawarra region, has had issues of his own recently, details of which are contained in this Enforceable Undertaking he provided to ASIC in March, 2011.

Godfrey consented to the District Court orders in March 2012. They required him to pay $160,000 to DTC No. 1 Pty Ltd by December 20, 2012. 

Levi exposed - judge says criminal prosecution "likely"

MARK Darrren Levi has been exposed as the Sydney liquidator alleged to have taken more than $90,000 from a company in receivership to pay his tax.

Levi, who denies the allegations, had until yesterday been protected by a Supreme Court non-publication order.

That order was imposed while he appealed an earlier judgement which had dismissed his application for a stay of a disciplinary hearing before the Companies Auditors and Liquidators Disciplinary Board (CALDB).

The appeal proceedings, held before Justice John Basten, were dismissed on May 2, 2013 and in the NSW Supreme Court yesterday, Justice Stephen Rothman agreed with ASIC's application to have his order of April 3, 2013, suppressing the Titan Advisory managing director's identity, set aside.

“The court orders the non-publication order issued on April 3, 2013 be vacated,” Justice Rothman said, adding: “the suppression orders are sought in order to ensure the plaintiff has a fair criminal trial, if and when one commences.

“The fact that the criminal trial has not commenced is a factor to be taken into account in this exercise. Nevertheless, as stated in the first judgement, I consider a criminal prosecution likely”, Justice Rothman concluded. (Read today's judgement)

EXCLUSIVE: Criminal charges "on the cards" for Sydney liquidator

A Sydney-based liquidator is in strife after being accused of pilfering $90,000 to pay his tax.

The official liquidator, whose identity is subject to a non-publication order, recently failed in his application to stay a hearing before the Companies Auditors and Liquidators Disciplinary Board (CALDB) that could see him stripped of his liquidators registration.

In a Supreme Court of NSW judgement published last week, Justice Stephen Rothman outlined how the accused, while working for Pitt Street insolvency firm Jamieson Louttit & Associates (JL&A), allegedly caused two payments from an account at JL&A to be made to himself to "discharge a tax liability".

The transactions allegedly occurred whilst the accused was working on Biseja Pty Ltd, a property developer to which Jamieson Louttit had been appointed receiver on September 4, 2008.

According to the judgement, the accused claims the payments were authorised by Louttit as part of an agreement the two had.