Conference hears how IPs missed their own boat

Conferencing is hungry work. Photo: SiN Images 

THERE was opinion aplenty at Dockside recently as the 15th annual Traill & Associates Practical Insolvency Conference played out less than three weeks after the Insolvency Law Reform Act 2016 received Royal Assent on February 29.

Much of that opinion - self interested though it might be - was focussed on what's viewed as the new Act's adversarial tone. 

As one insolvency guru said to SiN: "In introducing the new Act the government claimed that probably 95 per cent—or even 99 per cent—of liquidators were compliant with their legal obligations. If that is the case, the overly prescriptive approach of the ILRA, seemingly anticipating non-compliance, is unnecessary. Lawyers would never stand for this," the irritated guru concluded.

All very well, but might not this outcome be self-inflicted? Conference chairman Richard Fisher AM told SiN he was disappointed that ARITA's predecessor, the IPAA, had failed to respond to the challenge of accepting responsibility for self-regulation at the time it was raised by the Australian Law Reform Commission.

"I am an advocate for self-regulation of the professions subject to the appropriate oversight," he said.

"That position reflects my view that there is no group with a greater interest in the reputation of any professional group for integrity and competence than the members of that group themselves," Fisher said.

Of course, the somewhat resentful reception the new Act has received should not be thought to have influenced the decision by special guest opening speaker the Honourable Alex Hawke MP to withdraw at the last minute.

By happy chance Keay's Insolvency co-author and Associate Professor of Law at UTS Jason Harris was more than able to fill the gap and his pairing with Minter's Ian Walker saw the new laws dissected in acute and articulate detail.

Over the course of the conference there were many instances where exchanges were full and frank. When Jones Day's Philip Hoser spoke about the implications for secured creditors in the wake of Justice Ashley Black's decision on Bluenergy Group, Victorian QC Gary Bigmore told the conference Black's reasoning was "plainly wrong".

Leading bankruptcy Lawyer Sally "Bashful" Nash spent much of her presentation evading SiN's insistent lens whilst simultaneously propounding on examples where Family Law can collide with the corporate statutes to toss up hybridised headaches for liquidators. (See: Kijurina (as liquidator of ET Family Pty Limited) v Taouk [2015] FCA 424)

Nash also spoke on the relative ease with which so-called "binding financial agreements" can be unraveled and, while waving a heavy, new looking paperback before the audience, remarked that "while some girls get diamonds, I get Keay's Insolvency. That's what I get for having an insolvency barrister for a husband."

Voidable transactions guru Farid Assaf, still aglow with the sense of achievement one acquires from becoming a fellow of INSOL, observed that his international study had revealed that Australia possesses "a very sophisticated approach to conceptual distinctions relating to voidable transactions".

One of the final presentations canvassed the implications for insolvency profession in terms of regulation and discipline in an entertaining panel discussion featuring David Castle, Bob Cruickshanks and Michael Hayter.

Castle, a former chairman of the Companies Auditors, Liquidators Disciplinary Board (CALDB), opened with a provocative gambit about imagining certain colourful insolvency identities "falling on their swords" before moving on to warn that there was no guarantee that replacing CALDB with specially convened committees as proposed would produce better outcomes.

“The whole process looks like an exercise in summary decision making," Castle said, adding that as yet there are no rules available with which to assess the proposals.

From the floor Michael Murray warned that the there was also no requirement on the proposed disciplinary committees to publish their reasons, as currently applies to CALDB.

He said the obligation to publish was necessary to keep the three member committees and ASIC honest, particularly if ASIC as investigator and prosecutor, was also entitled to appoint one of its own to the committee as is apparently envisaged.

Gillis Delaney partner and lawyer Hayter was equally critical of the new proposals, which he argued give ASIC an undeserved degree of influence over the disciplinary process.

Referring to the case of Brisbane liquidator Jonathan Paul McLeod, Hayter said the manner in which ASIC conducted the disciplinary action as "disgraceful".

"ASIC wouldn’t participate in mediation. The judgment was praiseworthy of the liquidator but ASIC never turned up to the mediation," he said.

"ASIC wouldn’t negotiate. The decision of CALDB was no cancelation, no suspension, no reprimand. Merely an admonishment.

“We’re now relying on ASIC to appoint someone to determine these matters. I find it hard it to believe the person appointed will be critical of ASIC," Hayter concluded.

While the rules are yet to be revealed it all seems to be trending in a direction the profession would be unlikely to endorse but the reality is that in broad terms ARITA backs the idea of disciplinary committees like those AFSA convenes when trustees go rogue. But then, ARITA gets to nominate a committee member too.

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