It started as one of those days. I get to Brisbane airport for a 7.00am flight to Sydney. Arrive about 8.30am and go to the Court House at Sutherland. At that time of the day it is about a 50 minute drive, so I arrive at the Court House around 9.30am ready for my 10.00am appearance to give evidence in a hearing on a non-lodgment of a Report as to Affairs matter conducted by ASIC.
Part of the duties of a liquidator is to report to ASIC when directors do not lodge Reports as to Affairs or deliver books and records, and ASIC will prosecute the directors in most cases. Sometimes this actually does lead to the director complying with the Act and lodging a Report as to Affairs and delivering the company’s records – sometimes not. This was a ‘not’ case. But the director had pled not-guilty to the offence so off we went to court.
Interestingly, the company traded in Brisbane, the directors lived in Brisbane, I was in Brisbane, the company was wound up in the Queensland Supreme Court, but the matter was heard in the Sutherland Court. The registered office was in North Sydney and maybe that was why we were in NSW, but Sutherland is well south of the city. Why Sutherland? I do not know, but there we were.
After the Judge had heard the usual adjournments, traffic offences, common assault pleas – apparently the usual Tuesday morning in the Sutherland Court – the ASIC matters were heard. These were all non-lodgment of Report as to Affairs and non-delivery of books and records offences. This is where I started to wonder why I was there, and is what prompted this article.
The directors of other companies who had pled guilty were there in court. They addressed the Judge, their solicitors explained the circumstances, noted that they had since complied with the Act by lodging the Report as to Affairs and forwarding documents and, due to the circumstances in each case, they were all let off without conviction. As a liquidator I have no issue with these directors not have convictions recorded, as the aim from my point of view is to get the information.
Then, about 11.00am, came the hearings for the directors that had pled not-guilty. My chance at my 5 minutes of, well not fame, but usefulness. Once the bailiff had called all of the directors’ names a few times around the Court House it was established that none of them (yes, none) had turned up. The Judge then excused the witnesses – our usefulness was not required – and proceeded to find these directors all guilty in their absence. I have not heard yet what fine was brought down to my two directors.
It was 11.10am and I was heading back to the airport.
On the few times that I have actually had to take the stand to give evidence in these matters, the questioning when something like this:
Q: Did to send this letter to the directors at this address? A: Yes
Q: Did you send this follow up letter to this address? A: Yes
Q: Have the directors lodged a Report as to Affairs? A: No
No further Questions. And no questions are asked by the defendants.
Liquidators accept the fact that they have responsibilities that can sometimes be inconvenient. But in these types of matters, when the liquidator has already given a statement that only include basic facts about issuing letters and not receiving responses, surely a statement that we mailed a letter and have not received the Report as to Affairs can be deemed to be conclusive unless proved otherwise.
Apart from not needing liquidators to travel the country to (maybe) give a few minutes of evidence, it should also make ASIC’s job of prosecuting these matters quicker and easier – and this would hardly impinge on the director’s rights.
On the upside, I got to catch up on a lot of reading.