1. Having regard to the issues raised, it is necessary to set out a brief history of the matter and what the Committee decided.
2. The applicant is a chartered accountant who was appointed as a registered liquidator on 29 April 1996. As such, he was authorised to act as an administrator and liquidator of companies as provided under the Corporations Act. He carries on business under the name Auricht Chartered Accountants and was the sole registered liquidator at that firm.

1. By notice dated 18 August 2022, the applicant was given a show cause notice by ASIC under s 40-40 of the IPS (show cause notice). The show cause notice stated:

ASIC believes that you: > > a) are not a fit and proper person (s40-40(1)(m) of Schedule 2 to the Act); > > b) have failed to carry out adequately and properly duties as a liquidator by not lodging documents with ASIC (s40-40(1)(f) and (l)(i) of Schedule 2 to the Act); and > > c) no longer have the qualifications, experience, knowledge and abilities prescribed under s20-20(4)(a) of Schedule 2 to the Act (s40-40(1)(a) of Schedule 2 to the Act);

2. The show cause notice concerned the administration or liquidation of six companies. These were:

(a) Ultimate Air Control Pty Ltd (In Liquidation) (Ultimate Air Control); > > (b) JG Esklund (In Liquidation); > > (c) GN Bricklayers Pty Ltd (In Liquidation); > > (d) Celdon Nominees Pty Ltd (In Liquidation); > > (e) Nowat Pty Ltd (In Liquidation); and > > (f) Ambassadors KW Pty Ltd (In Liquidation). > > (collectively the Companies)

3. The show cause notice included Schedule B which detailed three "concerns" relating to the applicant:

Concern 1 > > [You] are not a fit and proper person [s40-40(1)(m) of Schedule 2 of the Act] because as an officer of Ultimate Air Control (administrator, deed administrator and liquidator) under section 182(1) of the Act, you: > > i) improperly used your position to draw remuneration of between $339,188.54 and $388,688.54 from Ultimate Air Control without being entitled to so do. You did not have approval from creditors or the Court to draw this remuneration and by doing so used your position to gain an advantage for yourself and your firm. > > ii) have since at least 2016, failed to apply to the Court to have your remuneration approved. > > iii) have since October 2021, failed to address ASIC's concerns raised with you regarding the remuneration drawn and approvals in paragraphs (a)(i) and (ii). > > Concern 2 > > [You] as administrator, deed administrator and liquidator, failed to carry out adequately and properly duties as a liquidator by not lodging documents with ASIC [ss40-40(1)(f) and (l)(i) of Schedule 2 of the Act] by: > > i) failing to lodge on ASIC's Published Notices website (PNW) a notice of meeting of creditors for G N Bricklayers and Ultimate Air Control. > > ii) failing to lodge the following documents with ASIC: > > A. Form 5602 Annual administration returns for J. G Esklund, Ultimate Air Control, Celdon Nominees, Nowat and Ambassadors; > > B. Form 5601 Statutory Report by a liquidator to creditors for G N Bricklayers; and > > C. Form 5603 End of Administration Return for G N Bricklayers. > > Concern 3 > > As evidenced by your conduct in Concern 1 and Concern 2, you no longer have [s40-40(1)(a) of Schedule 2 of the Act] the qualifications, experience, knowledge and abilities prescribed under paragraph 20-20(4)(a) of Schedule 2 of the Act to continue to be registered as a liquidator. This is further supported by the fact that you have not taken a Chapter 5 appointment since November 2018.

3. Some sections of the Act referred to in this Schedule have been repealed, however, s 1573 of the Act states: > > Subdivision E of Division 40 of the Insolvency Practice Schedule (Corporations) applies whether an event mentioned in subsection 40-40(1) of the Schedule occurs before, on or after the commencement day.

5. Following receipt of the show cause notice, by his solicitors, the applicant responded in a letter dated 21 September 2022 and an email dated 1 December 2022. ASIC was not satisfied with the applicant's response and on 9 December 2022 advised it was convening the Committee.

1. In its Reasons, the Committee set out the issues which it was required to determined as follows:[2]

17. The two broad issues that the Committee were required to determine in coming to its decision were: > > a. Have the preconditions to the making of a decision been satisfied? > > i. Was Mr Auricht issued with a valid Show-Cause Notice? and > > ii. Was Mr Auricht interviewed as required by IPR 50-85? > > And if the answer to both limbs of a) is yes, then: > > b. Has the Committee observed the rules of natural justice? > > And if the answer is yes, then: > > c. What is the appropriate decision with reference to the outcomes those (sic) listed in IPS 40-55? > > 18. In order to decide upon the appropriate outcome set out in IPS 40-55, the committee determined the following issues: > > a. Did Mr Auricht draw remuneration from Ultimate Air Control Pty Ltd without being entitled to do so because Mr Auricht did not have approval of the creditors or the Court to draw this remuneration? In considering this issue, the Committee was required to determine what "entitled" meant in the context of the concern set out in the Show-Cause Notice. > > b. If the answer to a) is yes, then, in making the drawings, did Mr Auricht gain an advantage for himself or his firm? > > c. Did Mr Auricht fail to apply to the Court in a timely manner to obtain approval to have his remuneration approved? > > d. Did Mr Auricht fail to address in a timely manner ASIC's concerns in relation to the remuneration and the failure to seek Court approval for the same? > > e. And if the answer to a) and b), or c) or d) is yes, did Mr Auricht improperly use his position as an officer of Ultimate Air Control Pty Ltd to gain an advantage for himself or Auricht Chartered Accountants contrary to s182(1) of the Act? > > f. And if the answer to e) is yes, does this make Mr Auricht not a fit and proper person to be a registered liquidator? > > g. Did Mr Auricht fail to lodge on ASIC's published notices website (PNW) two notices of meeting of creditors? > > h. Did Mr Auricht fail to lodge the documents set out in Annexure D to the Show- Cause Notice with ASIC? > > i. And if the answer to g) or h) is yes, did Mr Auricht fail to carry out adequately and properly the duties as a liquidator by not lodging documents with ASIC? > > j. And if the answer to a) and c), or d) or d) (sic) or g) or h) is yes, then on the basis of that conduct, does Mr Auricht no longer have the qualifications, experience , knowledge and abilities prescribed under paragraph 20-20(4)(a) of the IPS? > > 19. Then having determined the above issued and made the appropriate decision, the Committee was required to decide if it should direct ASIC to publish the Decision.

2. For the purpose of determining the proceedings before it, the applicant was interviewed by the Committee on 13 February 2023 in the company of his solicitor and barrister.
3. The Committee made the following determinations.
4. The show cause notice was valid and the Committee was properly constituted. The Committee noted there was no prescribed form or format for a show cause notice issued under s 40-40(1) of the IPS and the use of the expression "concerns" did not mean ASIC had not formed the required belief in order to enliven the power to convene a committee.
5. In respect of his fees as liquidator of Ultimate Air Control, fees were drawn without first obtaining approval of either a committee of creditors, the creditors in general meeting or approval of the Court.[3] The Committee made the following findings:[4]

The Committee is satisfied on the basis of the information before it that in total fourteen drawings were made that exceeded the approvals Mr Auricht had at the time each drawing was made. > > These drawings occurred in two tranches:- > > a. $179,192.49 was drawn through six drawings made between 6 September 2015 and 16 January 2016, which he did not have approval for at the time he made the drawings. > > b. $118,803.18 was drawn through eight drawings made between 12 June 2016 and 10 March 2017, which Mr Auricht did not have approval for at the time that he made the drawings.

6. In making this finding, the Tribunal made reference to Table 1 (Table 1) in its Reasons.[5] I note Table 1 includes an entry dated 28 January 2016 being an approval of $338,310.17[6]. This approval was made by order of the Federal Court of Australia (2016 Court Approval).
7. A second amount was approved by order of the Supreme Court of South Australia in the amount of $118,802.92 on 8 February 2023 (2023 Court Approval). That order was made by Judge Dart in an application to the Court made by Mr Auricht on 24 November 2022 (Supreme Court fee approval proceedings), the Record of Outcome of the Court setting out the reasons of His Honour's (2023 Court Reasons) as follows:[7]

This is an application to fix the remuneration of a liquidator in a long running external administration which is now nearly finalised. Remuneration of about $800,000 has been approved by a committee of inspection and/or the creditors and the Court. There is now a final claim for $344,847.22. The committee of inspection declined to approve the final amount. It is not possible to determine why that occurred. The liquidator notes that some of the members of the committee of inspection were subject to claims in respect of unfair preferences. That may have coloured their view. The role of the Court is set out in s 60-12 of the Insolvency Practice Schedule. It provides a detailed range of considerations. The Court is not in a position to undertake that at the moment. However, as a practical matter, and in light of the fact that most of the remuneration will not be paid as there is insufficient money in the administration, the liquidator is content to have the remuneration in the amount $118,802.92 which includes GST. I am satisfied that if a detailed consideration of the claim was undertaken the amount to be awarded would exceed that sum. In the circumstances, rather than cause further delays and expense, it is appropriate to fix the remuneration in the lesser amount.

8. I note there is a minor difference between the amount drawn by the applicant as recorded in Table 1 and the amount in the 2023 Court Approval. However, neither party raised any issue about this difference. Further, I note the parties did not suggest the content of Table 1 was otherwise incorrect. I will proceed on this basis.
9. In connection with drawing fees without approval, the Committee made the following findings:[8]

(a) "The business practice described by [the applicant] was not sufficiently rigorous to ensure that only approved funds were drawn. The practice was heavily reliant on staff members to keep track of approvals and drawings, and contained insufficient checks to account for human error, including error in the spreadsheet or [the applicant] not consulting the spreadsheet before authorising multiple drawings".[9] > > (b) The "Committee does not consider that the new procedure and the measures taken by [the applicant] are sufficient to ensure the same error is not made again".[10] In this regard the Committee referred to the evidence of the applicant concerning use of a spreadsheet in the same form as previously kept when the over drawings occurred and the involvement in the office manager including final authorisation of payment. > > (c) The Committee had before it a medical report dated 26 February 2023. This report dealt with events affecting the applicant in the period 2014 to 2018 and stress suffered by the applicant during this period. While not contemporaneous evidence from the treating doctor in the relevant period, the Committee accepted and took into consideration that the applicant was "overwhelmed by stress" ..."but does not consider that it satisfactorily explains the lack of appropriate business practices" in connection with drawing funds.[11] > > (d) In conclusion, the Committee said:[12] > > The Committee is therefore satisfied that while Mr Auricht did not deliberately set out to make drawings without approval, he did not have sufficiently rigorous business practises in place to ensure that only approved amounts were drawn. The Committee is not satisfied that Mr Auricht has implemented practises that will prevent the same error being repeated in future.

10. As to delay applying to the Court in a timely manner to obtain approval of his fees, the applicant's explanation included evidence that it was due to the complexity of the legal provisions concerning an application to the Court and the need to obtain legal advice, the retirement of the solicitors he had instructed and the loss of physical files of Ultimate Air Control[13]. The applicant said this was also compounded by the Covid pandemic. Further, there had been a change of staff and the applicant "was extremely busy with the taxation side of the business, helping people with job keeper and the government requirement to keep afloat during Covid".[14]
11. The Committee determined the explanation was unsatisfactory.
12. Further, having discovered he had overdrawn funds without approval, the Committee concluded that it was "incumbent upon Mr Auricht to take immediate, effective steps to rectify the situation, including to repay the funds."[15] In this regard, reference was made to clause 16.3 of the 3rd edition of the Australian Restructuring Insolvency & Turnaround Association (ARITA) Code of Professional Practise: Insolvency Services (ARITA Code)[16] which stated:

If a Practitioner becomes aware that fees have been improperly taken, because, for example, the correct process has not been followed, the Practitioner must immediately repay the amount in question into the Administration account.

13. As to the actions of the applicant upon becoming aware he had drawn funds without approval, the Committee said:[17]

Even taking into account Mr Auricht's stress prior to and following the death of his father, the Committee does not consider that Mr Auricht's actions upon becoming aware of the over payment were reasonable or consistent with his obligations as a liquidator.

Mr Auricht did not repay the unapproved drawn funds upon discovering he had made the withdrawals without approval. Mr Auricht said at the interview this was because he did not have the funds to do so, but also because it would have been a circular situation where he would have paid the funds back, made the application, and gotten Court approval and taken the funds again. The Committee considers that the circular nature of that process is irrelevant given that it is what is required by law, and that that answer given by Mr Auricht is very concerning as it indicates he lacks the ethical insight to see why drawing fees without approval requires the immediate repayment of the fees until they can be approved. The Committee is satisfied that Mr Auricht did not repay the drawings because he did not have the funds to do so and because he did not consider he was ethically obliged to do so.

15. In consequence of the above, the Committee determined that the applicant and his business "received a benefit from the making of the unapproved drawings and caused a detriment to the shareholders and creditors of Ultimate Air Control, and therefore the company, by his making the unapproved drawings and his delay in seeking approval from the Court"[19].
16. In reaching this conclusion, the Committee rejected the applicant's submission that the reasons of the Court in the 2023 Court Approval "evidence that there was no detriment to the corporation caused by the unapproved drawings"[20] . Further, the Committee rejected a submission that because there were insufficient funds in the liquidation to provide a return to creditors, there was no prejudice suffered by the creditors arising from his actions to withdraw funds without approval. Here, the Committee said:[21]

114. This is a reductive view of prejudice or detriment and fails to consider that the creditors were deprived of their right to approve or disapprove of the fees before Mr Auricht withdrew the fees. By the time Mr Auricht first put a resolution to creditors to approve the fees, in May 2018, some 22 months had passed since the first withdrawal in the second tranche of drawings. By the time the Court approved the fees in February 2023 it was over six years since he made the first drawing that the approval related too. Some four years had passed since Mr Auricht found out about the drawings. In this time the books and records of Ultimate Air Control had become lost. > > 115. A liquidator holds funds in a liquidation in a capacity tantamount to funds held on trust. They are not his to do with what he wants. A Liquidator is entitled to be paid for fees incurred on a proper and reasonable basis and is entitled to draw those fees once proper approval to do so has been obtained. The statutory conditions around fee approvals are not optional, they are requirements dictated by law to ensure that a transparent, efficient and accountable process is followed by the professional who has been entrusted to manage the liquidation of a company. > > 116. That Mr Auricht would go on to obtain approval some four years after he found out about the unapproved drawings does not negate that Mr Auricht received a benefit of being paid when he did not have approval to be paid. He received the benefit of having drawn the second tranche of fees for six years before he had approval to do so. And the Corporation was denied the opportunity to oppose the fees and scrutinise the basis on which they were drawn at a time when the books and records of the company were able to be produced.

17. Based on this finding, and because the applicant was an officer of Ultimate Air Control within the meaning of s 9 of the Corporations Act, the Committee decided he had therefore contravene s 182(1) because he obtained an advantage for himself or cause detriment to the corporation "by making drawings totalling $118,803.18 that he did not have approval for".[22]
18. By reason of these findings, the Committee concluded that the applicant was not a fit and proper person to be registered as a liquidator.[23] In reaching this conclusion the Committee determined:

(a) The role of a liquidator carries with it significant responsibility, referring to the decision of Hughes and Vale Pty Ltd v The State of New South Wales (No 2)[24] (Hughes). > > (b) The applicant did not deliberately make drawings without the approval to do so. However, drawings were made in circumstances where the applicant did not have sufficient business practices in place to ensure that unapproved fees were not drawn. > > (c) In the context of acting as a liquidator, the applicant's "failure to follow proper processes around the drawing of his fees has potential to bring the entire profession into disrepute". While the Committee accepted that errors might be made, the present case involved a number of unapproved drawings over an extended period of time totalling a considerable sum of money. Upon discovering such over drawing, a fit and proper registered liquidator would immediately have repaid the amounts in question, "sought approval with haste, and implemented new strategies and business systems in order to ensure that the error would not be repeated in future to ensure that no further harm could flow to the specific company involved but also to the profession as a whole". The applicant did not repay the funds and, when creditors did not approve his fees, he only applied to the Court for approval after the show cause notice was served on him which was some 4 ½ years later. > > (d) The delay was excessive and contributed to the detriment suffered by the corporation and its creditors. The explanation for the delay was unsatisfactory and the actions of the applicant upon learning of the unapproved drawings "lack professionalism, competence, integrity and diligence".

19. As to the applicant adequately and properly performing his duties as a liquidator, the Committee noted that the applicant had failed to lodge a number of forms relating to the Companies and the administrations in which he was involved.[25] Some of the forms subsequently lodged bear dates well after they were required to be lodged.[26]
20. The Committee determined forms were not lodged on time.
21. Also, the Committee concluded that lodging the forms by post, rather than online demonstrated a lack of sufficient skills and that the applicant's continuing use of paper lodgements when he was aware they are not actually being received "has repercussions to the parties interested in the administrations that the lodgements relate to, and also has macro implications for the profession and its regulations as a whole"[27]. While the Committee accepted it was permissible to lodge forms by post, the Committee found the applicant "failed to ensure that the 19 Form 5602s he posted were received and processed by ASIC"[28].
22. Consequently, the Committee determined that the applicant failed to carry out adequately and properly the duties as a liquidator and did not possess the necessary skills, particularly in relation to lodgement of documents electronically.[29]
23. Next, the Committee determined that the applicant did not have qualifications, experience, knowledge and abilities as provided by s 20-20(4)(a) of the IPS.
24. In reaching this view, the Committee considered that the expression "capacity", used in s 20-1(2) of the Insolvency Practice Rules (Corporations) 2016 (Cth) (IPR), is a reference to the practice capacity which is the resources, technical, staff and financial, that are available to the applicant, as well as the personal capacity, the skills, knowledge, time and attributes of the applicant.[30]
25. The Committee referred to the evidence of the applicant concerning:[31]

(a) the required content of a remuneration approval report for creditors and the preparation process undertaken by him; > > (b) his lack of a risk management framework required by standard APES 325 Risk Management for Firms of the Accounting Professionals & Ethical Standards Board; > > (c) the applicant not accepting any appointment for a number of years and that he no longer has staff to conduct insolvency work. In this regard the applicant said it was his intention to contract to a mid-tier firm to utilise their staff and resources to conduct a matter, including any meetings of creditors. > > (d) The applicant's proposal for appointment "to a chapter 5 appointment in October 2020" for which he was not successful.

The Committee has found that Mr Auricht did not have sufficient business systems in place that ensured that he was aware what fee approvals he had in place and what drawings he had made relative to those fee approvals. The Committee has found that Mr Auricht either failed to have business systems that ensured he met the lodgement requirements, or he ignored his obligations to lodge documents on time. The Committee is satisfied that Mr Auricht has not acquired the skills required to lodge documents through the liquidator portal. The Committee is satisfied that Mr Auricht, does not, at the present time have the staff to conduct insolvency work, and does not have the systems in place to do so. The Committee is satisfied that Mr Auricht has failed to adequately and properly carry out the duties of a registered liquidator. The Committee is satisfied that Mr Auricht has contravened s182 in relation to Ultimate Air Control.

27. As to sanctions, the Committee determined that the registration of the applicant should be cancelled. This decision, the Committee said, "will help to ensure that the high standard of conduct expected by the public of registered liquidators is maintained". The Committee also directed ASIC to publish the Committee's report under s 40-55(1)(h) of the IPS. This was based on the findings referred to above, the Committee's conclusion the contravening conduct was serious and that the applicant had not taken effective steps to ensure the same failings to not occur in the future.

1. The review application was heard by the Tribunal on 4 and 5 September 2025.
2. The applicant was represented by Mr T Hurren of Counsel. The respondent was represented by Ms A Carruthers of Counsel.
3. For the purpose of determining the review application, directions had been made for the filing and service of evidence and submissions. The evidence was contained in a hearing bundle (hearing bundle/HB) which included documents colloquially referred to as "T-Documents" provided to the AAT pursuant to s 37 of the AAT Act (now required by s 23 of the ART Act). In addition, the parties filed Statements of Fact, Issues and Contentions (SFICS) and submissions in support of their respective positions. These documents were contained in a second bundle marked "Submissions & Other Materials" (submissions bundle/SB). The submissions bundle included a document entitled "Joint Statement Setting Out Issues in Dispute Between the Parties" (joint statement).
4. As necessary, I will refer to these documents below.
5. The hearing bundle contained two affidavits of the applicant relied on for the purpose of this application. One was affirmed 13 September 2022 (September statement)[33]. The second statement was affirmed 18 November 2022 (November statement)[34]. There was also an affidavit of Mr Stewart-Rattray affirmed 31 January 2023 (Stewart-Rattray statement).[35] These documents had been filed in the Supreme Court fee approval proceedings.
6. There were no witnesses called to give oral evidence and no cross-examination of those that provided written statements. The hearing proceeded by way of oral submissions. As necessary, I will refer to the submissions below.

1. The joint statement identified the issues to be resolved as follows:[36]

ISSUE 1 > > Did the Committee have the power to make the Decision? > > Sub-issues to be considered as part of the resolution of Issue 1: > > A. Was the Show Cause Notice valid? > > B. Was the Committee precluded, through res judicata, issue estoppel, Anshun estoppel and/or abuse of process, from making the Decision, insofar as the Decision concerned the drawing by Mr Auricht of fees pre-approval and/or an alleged delay by Mr Auricht in seeking such approval and/or an alleged breach by Mr Auricht of section 182 of the Act? If so, is the Tribunal likewise prevented from making its own decision having regard to those matters? > > C. Is Mr Auricht not, or no longer, a fit and proper person (within the meaning of s40- 40(1)(m) of the IPS) in circumstances where he drew remuneration as an officer of UAC to which he was not entitled? > > D. Did Mr Auricht fail (within the meaning of s 40-40(1)(f) and (l)(i) of the IPS) to carry out adequately and properly the duties of a liquidator, by not lodging required documents with ASIC? > > E. Does Mr Auricht lack, or no longer have (within the meaning of s 40-40(1)(a) of the IPS), the knowledge and abilities to continue to be registered as a liquidator as prescribed under s 20-20(4)(a) of the IPS? > > ISSUE 2 > > Provided the Committee's jurisdiction has been enlivened, was the Committee's decision open and appropriate in the circumstances?

2. I will deal with these issues under the following headings:

(a) Was the show cause notice valid? > > (b) Res judicata, issue estoppel, Anshun estoppel and/or abuse of process. > > (c) Issue 1, sub-issues C, D and E? > > (d) Appropriate sanctions, if any.

3. In dealing with this matter on review, I note it is for the Tribunal to form a view on the evidence before it about the matters in contention.

40-40 ASIC may give a show-cause notice > > (1) ASIC may give a registered liquidator notice in writing asking the liquidator to give ASIC a written explanation why the liquidator should continue to be registered, if ASIC believes that: > > (a) the liquidator no longer has the qualifications, experience, knowledge and abilities prescribed under paragraph 20-20(4)(a); or > > ... > > (f) the liquidator has contravened a provision of this Act; or > > ... > > (l) the liquidator has failed to carry out adequately and properly (whether in Australia or in an external Territory or in a foreign country): > > (i) the duties of a liquidator; or > > ... > > (m) the liquidator is not a fit and proper person; or > > ...

2. As is evident from the chapeau, ASIC may issue a show cause notice to a liquidator if ASIC forms a belief about one or more of the matters specified in s 40-40 of the IPS. Where such a notice is given, ASIC may refer a registered liquidator to a committee convened under section 40-45 of the IPS if the conditions in s 40-50 are met. Section 40-50 provides:

40-50 ASIC may refer matters to the committee > > ASIC may refer a registered liquidator to a committee convened under section 40-45 if ASIC: > > (a) gives the liquidator a notice under section 40-40 (a show-cause notice); and > > (b) either: > > (i) does not receive an explanation within 20 business days after the notice is given; or > > (ii) is not satisfied by the explanation.

3. As stated in the show cause notice, the belief which ASIC formed was about the matters in s 40-40(1)(a), (f), (l)(i) and (m) of the IPS.
4. The basis for the belief included the following matters:

(a) drawing remuneration on multiple occasions without first obtaining approval from either the committee of creditors, creditors in meeting or the Court; > > (b) failing to seek court approval for remuneration; > > (c) contravening s 182 of the Corporations Act by drawing between $339,188.54 and $388,688.54 in remuneration when there was no entitlement to do so; > > (d) failing to lodge various forms in relation to the Companies

5. The applicant provided a response to the show cause notice by a letter from its then solicitors, Minter Ellison, dated 21 September 2022 (Show Cause Response). [37]
6. There is no dispute that ASIC was not satisfied with the response to the show cause notice. However, the applicant contends that the show cause notice is invalid.
7. In a document entitled "Applicant's Submissions - issue 1A", the applicant summarised his position as follows:

9. Mr Auricht submits, for reasons also set out in more detail in the SFIC and in Minter Ellison's letter of 21 September 2022 (which reasons are not repeated again here, and can be further addressed in argument before the Tribunal), that: > > (a) the Legislature required that a valid Show Cause Notice be based upon "beliefs" held by ASIC, as opposed to mere "concerns"; > > (b) a "belief" about a matter requires a much greater level of confidence in its existence than does a mere "concern" about the matter; and > > (c) ASIC in fact had only ever held "concerns" (as opposed to "beliefs") about, at least, the question of whether Mr Auricht had acted in contravention of section 182(1) of the Act. So much so is clear from ASIC's: > > > i) repeated use of the word "concern" in this regard (as opposed to the word "belief"), not only in its 28 October 2021 letter and in the Show Cause Notice, but also in the subsequent correspondence from ASIC on 1 December 2022 and 27 January 2023; > > > > ii) frank admissions that it "cannot determine whether creditor approval has been validly obtained for the remuneration drawn" (see its letter of 28 October 2021) and that it "is unable to assess the reasonableness of the remuneration claimed" (see its letter of 27 January 2023); and > > > > iii) further admission in the Show Cause Notice itself (at [21] of Schedule B) that ASIC had been unable to reconcile the information available to it as regards the drawing of fees without approval. > > 10. In any event, ASIC could not have formed a "belief" about whether Mr Auricht had contravened section 182(1), not only because of an (admitted) absence of evidence, but also because section 182(1) contains elements that require conclusions of law, such as the meaning of the concept of the gaining of an "advantage", and what is required in order for the gaining of an advantage to be "improper". Absent a Court judgment, or perhaps Senior Counsel's opinion, on such matters, ASIC was in no position to form a "belief" about them. > > 11. As at the date of the Show Cause Notice, ASIC not only lacked evidence (hence its admissions that it "cannot" and is "unable" to determine various matters about the remuneration drawn by Mr Auricht), but it had not yet heard (and had therefore not considered) Mr Auricht's counter-arguments (including the important argument that any assessment of a breach of section 182(1) must take into account the detriment suffered by Mr Auricht from undertaking a massive amount of pro bono work), and nor did ASIC have the benefit of a Court determination, or even Counsel's opinion, on the application of the law to the facts. > > 12. Plainly, therefore, ASIC was correct to state, as it did, that its concerns about a breach of section 182(1) were just that - mere "concerns". ASIC was obviously at pains in the Show Cause Notice not to say that it held "beliefs" about the question of such alleged breaches, no doubt because no individual officer within ASIC was willing to go that far, and potentially be exposed to cross-examination on how they formed a "belief" about such a breach, as opposed to merely being "concerned" about the topic.

8. In his SFICS, the applicant said:[38]

These arguments are not mere technicalities. They go to a very significant issue of substance, relating to the premature character of the Show Cause Notice. In particular: > > (a) as demonstrated, and in relation to "Concern 1", the Show Cause Notice showed that ASIC had merely held "concerns", as opposed to a "belief", about whether Mr Auricht had drawn "remuneration of between $339,188.54 and $388,688.54... without proper approval from creditors or the Court", and therefore contravened sections 182(1) and (2) of the Act; > > (b) ASIC's "concern" about those matters could only have been elevated to a "belief" if and when ASIC had resolved the conflicting information before it on the question of the quantum of Mr Auricht's remuneration and had available to it some appropriate determination (such as a judicial declaration or, perhaps, an opinion of senior counsel) as to the operation of sections 182(1) and (2) of the Act in such circumstances; > > (c) neither ASIC nor the Respondent are judicial bodies and they were not able to form binding views, such as would affect Mr Auricht's legal rights, in relation to the operation of sections 182(1) and (2) of the Act. They were certainly not able to do so whilst the underlying facts still required clarification; > > (d) for these reasons, it was incumbent upon ASIC to defer the Show Cause Notice (at least to the extent that it was based upon "concerns" regarding the drawing of remuneration and the operation of sections 182(1) and (2) of the Act) until the conclusion of the Proceedings, the Proceedings being the appropriate forum for ASIC to seek (as an Interested Party) to: > > i) determine the true factual circumstances surrounding the alleged drawing of remuneration prior to approval; and > > ii) then, if it saw fit, seek a declaration from the Court (being the appropriate decision making body in respect of alleged contraventions of the law) as to whether, how, and (if so) the extent to which Mr Auricht had supposedly breached section 182 of the Act.

9. As is apparent from the extracted submissions, the primary contention is that the use of the word "concern" in the show cause notice demonstrates ASIC had not formed the necessary belief.
10. I reject this ground for the following reasons:

(a) The process implemented by a show cause notice is for possible referral by ASIC to a committee appointed for that purpose under Division 40 Subdivision E of the IPS. > > (b) The form of a show cause notice given under s 40-40(1) is not prescribed, other than it must be in writing. However, its issue is subject to ASIC having a belief about one or more of the matters specified in that section. > > (c) If there is no response or ASIC is not satisfied by any response to the show cause notice, ASIC may refer the registered liquidator to a committee convened under s 40-45. It was then for the committee to determine what, if any, disciplinary action should be taken based on the information provided to the committee. > > (d) There is ample information in the show cause notice to demonstrate that ASIC has undertaken a process of analysis and, based on that material, formed a reasonable opinion that there had been a significant number of drawings made by the applicant without first obtaining approval for his remuneration. > > (e) There is no dispute that, on various occasions, remuneration was in fact drawn without the requisite approvals. In particular there is no dispute that, at the time the show cause notice was issued, the liquidator had drawn amounts for his remuneration that had not been approved. > > (f) The fact that ASIC was wrong in its estimate of the unapproved drawings at the time the show cause notice was issued does not vitiate the belief it formed, nor does it show such belief was unreasonable or unfounded. Nor does its statements in its letters dated 28 October 2021 or 27 October 2023 alter the fact that monies were drawn without authority. The Show Cause Response does not suggest otherwise. > > (g) Whether or not there had been a contravention of s 182 of the Corporations Act established in court proceedings is beside the point. Rather, the role of ASIC was to determine whether it had a belief concerning one or all of the matters identified in s 40-40 justifying the issue of a show cause notice. Of course, an erroneous view of relevant considerations or the law to be applied may affect whether any belief was properly formed. > > (h) Further, as appears to be acknowledged in the applicant's SFICS at [80 (d)], there were reasons other than the unapproved drawing of remuneration which formed the basis of ASIC's belief for the purpose of s 40-40. As identified in the notice, and as admitted by the applicant, there had been a failure to lodge various notices required in the administrations of the Companies. This matter itself was sufficient to form the requisite belief. > > (i) While the word "concern" is used in the show cause notice, rather than "belief", it is clear from the notice and the matters identified therein that, based on the evidence available to it, ASIC did believe the conduct of a type specified in s 40-40(1) which was identified in the notice had occurred.

11. As noted in the extract above, the applicant suggested in his SFICS that there was some requirement for any issue concerning entitlement to remuneration to be resolved in the proceedings ultimately issued in the Supreme Court of South Australia. The applicant said this was the "appropriate forum" and that ASIC could seek, as an "interested party", both a determination of the "true factual circumstances surrounding the alleged drawing of remuneration prior to approval" and declarations concerning "whether, how, and (if so, the extent to which Mr Auricht had supposedly breached section 182 of the [Corporations] Act".
12. I do not accept this submission. There is no statutory requirement mandating such a course of action and no statutory provision making this a prerequisite to issuing a show cause notice.
13. For these reasons, I am satisfied the show cause notice was validly issued and the Committee lawfully constituted.

Res judicata, issue estoppel, Anshun estoppel and/or abuse of process.

1. This issue relates to the Supreme Court fee approval proceedings, and the effect and consequences of the decision made.
2. As noted above, those proceedings concerned an application by the applicant for determination of his remuneration. In this regard, a liquidator "is entitled to receive remuneration for necessary work properly performed".[39]
3. In those proceedings, the applicant had relied upon his affidavit affirmed 13 September 2022[40] and an affidavit of his then solicitor, Mr Stewart-Rattray affirmed 31 January 2023[41].
4. Extracts from the applicant's SFICS conveniently set out the matters said to have been raised in the Supreme Court fee approval proceedings and determined by the Court so as to give rise to res judicata, issue estoppel, Anshun estoppel and/or abuse of process:

81. Mr Auricht issued the Proceedings in order for the Court to "make a determination" under section 60-10(1)(c) of the IPS "for the purpose of specifying" Mr Auricht's remuneration in the administration of [Ultimate Air Control]. Mr Auricht also sought "such further or other orders as the Court sees fit." > > 82. Section 60-12(m) of the IPS provides that, in making such a determination, the Court "must" have regard to "any... relevant matters." > > 83. The Proceedings were supported by several affidavits, in lieu of pleadings. It follows that the matters in issue in the Proceedings are to be identified by reference to those affidavits. > > 84. The matters in issue on the affidavits included, relevantly, the issue of Mr Auricht having drawn certain fees in advance of creditor or Court approval (the Fee Drawing Issue). > > 85. In particular, the Fee Drawing Issue was set out at paragraphs 52 to 54 inclusive of Mr Auricht's affidavit sworn 13 September 2022 (FDN 3) (Auricht Affidavit), where he disclosed various facts relevant to the Fee Drawing Issue, and provided both an explanation and an expression of regret. > > 86. The Proceedings (including the Auricht Affidavit) were served upon ASIC, and ASIC thereafter participated in the Proceedings, albeit in a somewhat unconventional manner. > > 87. That is, and rather than availing itself of the opportunity (which it clearly had) to be joined as an Interested Party, ASIC set out its position in a detailed letter to Mr Auricht's then solicitor (Mr Stewart-Rattray) dated 27 January 2023 (ASIC Letter), and requested that Mr Stewart-Rattray place the ASIC Letter before the Court. > > 88. In accordance with ASIC's request, the ASIC Letter was placed before the Court as an annexure to Mr Stewart-Rattray's affidavit affirmed 31 January 2023 (FDN 4), and that affidavit was served on ASIC on 31 January 2023. > > 89. The ASIC Letter expressly addressed the Fee Drawing Issue, at least insofar as the ASIC Letter: > > (a) stated (at [6]) that, during a compliance review commenced in April 2018, ASIC "became concerned that Mr Auricht may have drawn remuneration without approval from creditors or the Court..." [emphasis added]; > > (b) asserted (at [7]) that Mr Auricht had allegedly failed to "adequately respond" to requests by ASIC for information regarding fee approvals; and > > (c) provided commentary (at 13]) as regards the adequacy of fee-approval documents lodged with ASIC including, in some respects, as to whether those documents adequately recorded the amount of the remuneration being approved or the period of time to which the approval related. > > 90. It is therefore beyond argument that each of Mr Auricht and ASIC had, in one way or another, put the Fee Drawing Issue before the Court. The Fee Drawing Issue therefore became a "relevant matter" which, by virtue of section 60-12(m) of the IPS, the Court was required to take into account. > > 91. The fees the subject of the Fee Drawing Issue were the only fees for which Mr Auricht sought approval,13 and it would have been open to ASIC to rely upon the Fee Drawing Issue in contending and seeking declarations that Mr Auricht: > > (a) had acted in breach of his duties to the Company under sections 182(1) and (2) of the Act; and/or > > (b) should first repay the monies drawn pre-approval as a condition of, and prior to, the Court approving his remuneration. > > 92. However, despite all of the above, ASIC chose not to appear, nor otherwise actively to participate in, the Proceedings. ASIC chose not to make the contentions, or seek the declarations, set out in the previous paragraph.

5. At [101] of the applicant's SFICS, the applicant then set out the manner in which it said the respondent impermissibly sought to make findings:

(a) contrary to those of Judge Dart; and/or > > (b) about whether, in making the 2023 Court Approval, the Judge had turned his mind to particular issues. Here, reference was made to the Reasons at [112], where the Committee said: > > The Committee does not accept that the approval of the Supreme Court of Mr Auricht's fees on 8 February 2023, and the Court's comments in the Record of Outcome, evidence that there was no detriment to the corporation caused by the unapproved drawings. All that the Record of Outcome is evidence of is that the Court was satisfied that "if a detailed consideration of the claim was undertaken the amount to be awarded would exceed that sum." The Court specifically said, "In the circumstances, rather than cause further delays and expense, it is appropriate to fix the remuneration in the [amount of the already drawn fees]." The Court did not, and was not required to, turn its mind to if there was any detriment caused to the corporation by Mr Auricht drawing fees without approval.

6. Of the Reasons at [112], the applicant continued:[42]

(h) for all the Respondent knows, Judge Dart may well have turned (and probably did turn) his mind to the above questions of advantage and detriment, and may well have concluded that none had arisen, especially given that: > > i) Mr Auricht had a clear entitlement to the remuneration claimed; and > > ii) any benefit to Mr Auricht in receiving "early" payment of that remuneration was well offset by the detriment to Mr Auricht (or the corresponding benefit to the Company) in Mr Auricht performing $308,302.45 worth of gratuitous work.

1. In Jackson v Goldsmith[43], Fullagar J, in his seminal statement, explained the principles in relation to res judicata and issue estoppel as follows:

The rule as to res judicata can be stated sufficiently for present purposes by saying that, where an action has been brought and judgement has been entered in that action, no other proceedings can thereafter be maintained on the same cause of action. This rule is not, to my mind, correctly classified under the heading of estoppel at all. It is a broad rule of public policy based upon the principles expressed in the maxim "all". > > The rule as to issue estoppel is generally stated in the words of Lord Ellenborough in Outram v Morewood (1803) 3 Beast 346 at 355; [1803] EngR 498; 102 ER 630 at 633. His Lordship said that the parties and privies are "precluded from contending to the contrary of that point, or matter of fact, which having been once distinctly put in issue by them ... has been, on such issue joined, solemnly found against them". This is I think, a true case of estoppel, analogous to estoppel by deed and estoppel by representation. The same rule was concisely stated by Dixon J in Blair v Curran (1939) 69 CLR and 531 where his Honour said "A judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies." > > It is unnecessary here to discuss these two principles further beyond noting two points. > > In the first place, if A sues B to judgement and in subsequent proceedings between them a plea of res judicata is raised, the primary question is whether the cause of action in the later proceedings is the same as that which was litigated in the former proceedings. This was the question which arose in the well-known case of Brunsden v Humphrey [1884] UKLawRpKQB 158; (1884) 14 QBD 141. It was held there that the causes of action were not the same. The injuria was the same but the damnum was different, and, since damage was "of the gist" of the particular action, the causes of action were not the same. The plea therefore failed. On the other hand, if A sues B to judgement and in subsequent proceedings between them a plea of issue estoppel is raised, the plea may succeed although the causes of action in the two cases are entirely different. The question will be whether an issue of fact or law which is raised in the later proceedings was an issue of fact or law which was also raised in the earlier proceedings and therefore determined. > > In the second place, it follows from the very nature of the difference between the plea of res judicata and the plea of issue estoppel that different materials are relevant in each case. Where the pleas of res judicata, only the actual record is relevant. Where the plea is of issue estoppel, any material may be looked at which will show that issues were raised and decided. Reasons given for the judgement pronounced are likely to be particularly important for this purpose: see Ord v Ord [1923] to KB 432 at 440 and Marginson v Blackburn Borough Council [1939] 2 KB 4 to 6 at 437. Both those cases were cases of issue estoppel and were clearly treated as such, though I think, with great respect, that both illustrate the unfortunate absence of a clear legal terminology, to which I have already referred. > > It should perhaps be added that, as Dixon J said in Blair v Curran [1939] 62 CLR at 532, the estoppel, so far as it applies to the facts, is confined to ultimate facts. It does not extend to mere evidentiary facts.

2. In relation to the reference by Fullagar J to the decision of Dixon J (as he then was) in Blair v Curran,[44] it is useful to set out in full the principle stated by Dixon J in relation to issue estoppel. At 531-532 Dixon J explained that:

A judicial determination directly involving an issue of fact or of law disposes once and for all of the issue, so that it cannot afterwards be raised between the same parties or their privies. The estoppel covers only those matters which the prior judgement, decree or order necessarily established as the legal foundation or justification of its conclusion. ... Nothing but what is legally indispensable to the conclusion is thus finally closed or precluded. In matters of fact the issue- estoppel is confined to those ultimate facts which form the ingredients in the cause of action, that is, the title to the right established."

3. Anshun estoppel was considered in the decision of the High Court in Port of Melbourne Authority v Anshun[45] (Anshun). The test to be applied to establish such an estoppel was set out by the plurality (Gibbs CJ and Mason and Aiken JJ),[46] in the following terms:

... there will be no estoppel unless it appears that the matter relied upon as a defence in the second action was so relevant to the subject matter of the first action that it would have been unreasonable not to rely. Generally speaking it would be unreasonable not to plead a defence if, having regard to the nature of the plaintiff's claim, and its subject matter it would be expected that the defendant would raise the defence and thereby enable the relevant issues to be determined in the one proceeding. In this respect, we need to recall that there are a variety of circumstances, some referred to in earlier cases, why a party may justifiably refrain from litigating an issue in one proceeding yet wish to litigate the issue in other proceedings... > > It has generally been accepted that a party will be estopped from bringing an action which, if it succeeds, will result in judgment which conflicts with an earlier judgment.

4. Where these principles are engaged, the maintenance of proceedings asserting rights which are otherwise precluded by operation of the principles, may constitute an abuse of process.

Decision on res judicata, estoppel, Anshun estoppel and abuse of process

1. There is no dispute that the principles of res judicata, issue estoppel or Anshun estoppel can apply to these proceedings. The issue is whether any of those principles operated to prevent the Committee (or the Tribunal on review) making findings concerning the drawing of fees without first obtaining approval and/or making findings concerning contravention of s 182 of the Corporations Act.
2. In the Supreme Court fee approval proceedings, the applicant sought approval of fees in connection with his role as liquidator of Ultimate Air Control.
3. As is evident from the 2023 Court Reasons, the Court approved remuneration in the amount of $118,802.92 against a final claim made by the applicant of $344,847.22.
4. ASIC was not a party to the proceedings. However, the applicant contends ASIC could have intervened in those proceedings and chose not to do so. Reference was made to Sanderson as Liquidator of Sakr Nominees Pty Ltd (in liquidation) v Sakr[47] (Sanderson) where ASIC and the ARITA were said by the applicant to have "intervened".
5. I should note that it is unclear whether ASIC in fact intervened in Sanderson, as opposed to appearing and making submissions. The reasons of Bathurst CJ record that ARITA appeared as amicus curiae.[48]
6. Further, the applicant says he placed before the Supreme Court a letter from ASIC concerning the application. That letter, dated 27 of January 2023, was annexed to the Stewart-Rattray statement.[49] In that letter, ASIC requested a copy be provided to the Court prior to any determination being made. The letter records the views of ASIC concerning its inability "to assess the reasonableness of the remuneration claimed for the reasons and in the circumstances set out below". The letter then dealt with the following:

(a) "Matters ASIC considers when assessing the reasonableness of remuneration claimed by an external administrator"; > > (b) ASIC's prior engagement with the applicant, noting the concern of ASIC that the applicant "may have drawn remuneration without approval from creditors or the Court during the period 21 August 2013 to 31 March 2018"; and > > (c) ASIC's views on reasonableness of remuneration.

7. Under the last heading, ASIC said:[50]

ASIC's views on reasonableness of remuneration > > 14. ASIC was, and continues to be, unable to form a view about the reasonableness of the remuneration claimed by Mr Auricht. > > 15. To form a complete view of the reasonableness of remuneration, a review of the WIP would be necessary to determine the matters in paragraph 5.b)(ii)-(v). > > 16. Further, ASIC would have regard to the past remuneration approved and drawn to consider whether those tasks were commensurate with the level of fees charged and whether there has been overcharging or duplication of work.

8. Having regard to the above, the applicant submitted:[51]

37. Therefore, in the present case, where ASIC chose not to intervene, it is, with respect, necessary, in order for the Tribunal to adhere (as it must) to the doctrine of res judicata, first to determine the causes of action that were in fact before the Supreme Court at the time of the Judgment and, having identified them, the Tribunal must then conclude that they no longer exist, having "merged" in the Judgment, and being thereby otherwise "extinguished". > > 38. It is similarly necessary for the Tribunal to identify all other issues that were in fact before the Supreme Court at the time of the Judgment, in order for the Tribunal to adhere (as it must) to the doctrine of Issue Estoppel. > > 39. In identifying such causes of action and issues, it is necessary to have regard to the pleadings, or (in a case, such as the present, that proceeded on affidavits rather than pleadings) the affidavits. > > 40. The key issues (Issues) expressly arising on the affidavits before Dart J included: > > (a) the issue of the payments (of $887,302.75) in fact received by Mr Auricht in relation to UAC exceeding the Previously Approved Fees (of $768,499.83) by the said sum of $118,802.92; > > (b) the reasons for the said divergence of $188,802.92 between fees approved and fees drawn; > > (c) the expression by Mr Auricht of regret for his conduct (Conduct) in causing or allowing drawn fees to exceed approved fees; > > (d) the question of whether there was any prejudice to Creditors of UAC (Creditors) arising from the Conduct - Mr Auricht provided reasons as to why no such prejudice arose; > > (e) the period to which the unapproved fees related32 and, therefore, the obvious fact of a significant delay in the bringing of the Fee Approval Application; > > (f) the fact that Mr Auricht had, in effect, undertaken very substantial work for UAC on a pro bono basis, in that there was a Shortfall of $308,302.45 between the total fees incurred by Mr Auricht for work undertaken in his administration of UAC, and the funds in fact paid, and available to be paid, in that regard; > > (g) the question of whether there was sufficient information before the Court to assess and determine the "reasonableness of Mr Auricht's remuneration claim", including ASIC's assertions: > > i) that it had been "unable", from the information available to it, to make such an assessment; > > ii) as to the factors to which ASIC normally has regard when making such an assessment; and > > iii) that Mr Auricht had provided the Court with "some of" the necessary information; > > (h) the fact that ASIC had become "concerned" about Mr Auricht having "drawn remuneration without approval", and ASIC's view that Mr Auricht had not adequately responded to ASIC's requests in that regard"; > > (i) the fact of the giving by ASIC of the Show Cause Notice, and the fact of the referral by ASIC of Mr Auricht to the Respondent; and > > (j) the question of whether Mr Auricht had "contravened" sections 182(1) and (2) of the Corporations Act 2001 (Cth) (Act). In particular, the Show Cause Notice - to which ASIC had made express reference in its said letter of 27 January 2023, being a letter that ASIC had insisted be put before the Supreme Court on the Fee Approval Application - expressly alleged that Mr Auricht had contravened section 182(1) of the Act and, indeed, made no less than twenty (20) express references to that section. > > 41. As there can be no doubt that each of the Issues referred to in the previous paragraph had been put before the Court for the purposes of the Fee Approval Application, there is likewise no doubt that each such issue "merged" in the Judgment, such that each Issue has now been "extinguished", and therefore no longer has any separate or independent existence.

9. I do not accept res judicata, issue estoppel or Anshun estoppel operate to preclude the Committee from making the findings sought to be impugned by the applicant.
10. My reasons are as follows.
11. The matter determined by the Supreme Court fee approval proceedings was whether an order should be made approving the applicant's fees for the work identified as having been done as liquidator of Ultimate Air Control.
12. Section 60-5 of the IPS provides an administrator "is entitled to receive remuneration for necessary work properly performed by the external administrator in relation to the external administration". Where that determination is made by the Court, s 60-12 specifies the matters to which the Court is required to have regard.
13. Section 60-12 provides:

60-12 Matters to which the Court must have regard > > In making a remuneration determination under paragraph 60-10(1)(c) or (2)(b), or reviewing a remuneration determination under section 60-11, the Court must have regard to whether the remuneration is reasonable, taking into account any or all of the following matters: > > (a) the extent to which the work by the external administrator was necessary and properly performed; > > (b) the extent to which the work likely to be performed by the external administrator is likely to be necessary and properly performed; > > (c) the period during which the work was, or is likely to be, performed by the external administrator; > > (d) the quality of the work performed, or likely to be performed, by the external administrator; > > (e) the complexity (or otherwise) of the work performed, or likely to be performed, by the external administrator; > > (f) the extent (if any) to which the external administrator was, or is likely to be, required to deal with extraordinary issues; > > (g) the extent (if any) to which the external administrator was, or is likely to be, required to accept a higher level of risk or responsibility than is usually the case; > > (h) the value and nature of any property dealt with, or likely to be dealt with, by the external administrator; > > (i) the number, attributes and conduct, or the likely number, attributes and conduct, of the creditors; > > (j) if the remuneration is worked out wholly or partly on a time-cost basis - the time properly taken, or likely to be properly taken, by the external administrator in performing the work; > > (k) whether the external administrator was, or is likely to be, required to deal with one or more controllers, or one or more managing controllers; > > (l) if: > > (i) a review has been carried out under Subdivision C of Division 90 (review by another registered liquidator) into a matter that relates to the external administration; and > > (ii) the matter is, or includes, remuneration of the external administrator; > > the contents of the report on the review that relate to that matter; > > (m) any other relevant matters.

14. The application is made by a liquidator. No other parties are required to be named.
15. Absent intervention or an application to join another party, it seems to me there is no determination of a cause of action between the relevant parties capable of giving rise to res judicata, issue estoppel or Anshun estoppel.
16. Certainly, the Committee was not and could not be a party in the Supreme Court fee approval proceedings.
17. Further, for the purpose of res judicata, the "cause of action" was a claim for remuneration for "necessary work properly performed as an external administrator".
18. It was not a claim in respect of a contravention of s 182 of the Corporations Act nor a claim for reimbursement of funds improperly drawn without authority nor was it an action seeking to impose a sanction upon the applicant for contravention of any of his obligations as a Liquidator. Therefore, res judicata could not operate as a defence in relation to proceedings before the Committee.
19. As to issue estoppel, as stated by Dixon J in Blair, "Nothing but what is legally indispensable to the conclusion (emphasis added) is thus finally closed or precluded. In matters of fact the issue estoppel is confined to those ultimate facts which form the ingredients of the cause of action (emphasis added)".
20. Subsections 60-12(a)-(l) are not concerned with whether a liquidator has drawn funds without approval or whether s 182 of the Corporations Act has been contravened. Clearly the matters identified by the applicant as "issues" in its submissions at paragraph 40 (a)-(j) (which I have set out above) are not relevant to those considerations or any decision arising therefrom.
21. However, the applicant submits that s 60-12(m), "any other relevant matters", required the Court to consider whether funds had been drawn without approval, whether s 182 had been contravened and/or the other matters specified as "issues" in its submissions at paragraph 40 (a)-(j).
22. I do not agree.
23. In Phoenix Institute of Australia Pty Ltd (in liq), in the matter of Phoenix Institute of Australia Pty Ltd (in liq)[52], Cheeseman J said:

... the burden lies with the liquidator to establish that the remuneration claimed is fair and reasonable: Re Sallway, Mossgreen Pty Ltd (in liq) (remuneration of liquidators) [2019] FCA 1771 (2019) 140 ACSR 331, [9] (Perram J); Sanderson as Liquidator of Sakr Nominees Pty Ltd (in liq) v Sakr [2017] NSWCA 38; (2017) 93 NSWLR 459, [54] (Bathurst CJ). The court's function is to determine that remuneration by reviewing the relevant material and bringing an independent mind to bear on the relevant issues: Sanderson, [54]. > > ... > > 30 The work done must be proportionate to the difficulty and importance of the task in the context in which it needs to be performed: Sanderson, [55]. Even where work is undertaken in an unsuccessful attempt to recover assets, provided it was reasonable to carry out the work and the amount charged is reasonable, a liquidator is entitled to remuneration for that work: Sanderson, [58].

24. In Sanderson, when considering the former s 473(10) of the Corporations Act (which was in similar terms to s 60-12), Bathurst CJ said:[53]

53. ... It seems to me that whilst not all the factors in s 473(10) may be relevant in a particular case, for a court not to take any of them into account would constitute error. > > 54. It is well settled that the onus is on the liquidator to establish that the remuneration claimed is reasonable and that it is the function of the Court to determine the remuneration by considering the material provided and bringing an independent mind to bear on the relevant issues: Venetian Nominees Pty Ltd v Conlan [1998] WASCA 273; (1998) 20 WAR 96; (1998) 16 ACLC 1653; Conlan (as liquidator of Rowena Nominees Pty Ltd) v Adams (2008) 65 ACSR 521; [2008] WASCA 61 at [28]- [29]. Although these two cases related to the legislation as it stood prior to the 2007 amendments, the principles referred to in them remain applicable. Further, it will be expected that the liquidator in supplying material to enable the Court to assess whether a remuneration claim was reasonable, would supply material by reference to the matters referred to in s 473(10). > > 55. That is not to say that the question of proportionality has no bearing on the task to be undertaken by the Court. As the Federal Court said in Templeton v ASIC (at [31]) the question of proportionality is a well recognised factor in considering the question of reasonableness and the factors in s 425(8)(d)-(e) and (g)-(h) (the equivalent to s 473(10)(d)-(e) and (g)-(h)) have as their unifying theme the concept of proportionality. The Court in that case recognised (at [32]) that the question of proportionality in terms of work done as compared with the size of the property the subject of the insolvency administration or the benefit to be obtained from the work, is an important consideration in determining reasonableness. The Court also stated (at [33]), endorsing the observations of McClure JA in Conlan v Adams supra (at [47]), that the work done must be proportionate to the difficulty and importance of the task in the context in which it needs to be performed, stating that that is what is encompassed in assessing the value of the services rendered. > > 56. Further, as was pointed out by Black J in Idylic Solutions Pty Ltd [2016] NSWSC 1292 at [50], evidence as to the percentage that remuneration constitutes of realisation, will at least provide a measure of objective testing of the reasonableness of the remuneration claimed and will identify those cases in which there ought to be a real concern in that respect. > > 57. I would add two matters. First, the mere fact that the work performed does not lead to augmentation of the funds available for distribution does not mean the liquidator is not entitled to be remunerated for it. The most obvious example is work done by a liquidator in complying with his or her statutory obligations. As Farrell J pointed out in Warner, Re GTL Tradeup Pty Ltd supra at [71] it is relevant to consider whether the work was necessary to be done. If it was, there is no reason the liquidator should not be remunerated for it.

25. As these passages make clear, in an application to determine remuneration, the Court is required to determine reasonable remuneration of the liquidator for necessary work properly performed. It is only matters relevant to that consideration which the Court is required to consider.
26. Payment of fees without approval in the circumstances that occurred in the present case is not a matter relevant to the issue of whether the work undertaken by the applicant was work for which the applicant should be remunerated in accordance with the statutory entitlement in s 60-5 of the IPS.
27. Further, whether or not s 60-12(m) made relevant the matters identified in the applicant's submissions at 40 (a)-(j), it is clear the Court did not undertake a full review of all the considerations in s 60-12. In the 2023 Court Reasons, the Court stated it "was not in a position to undertake that at the moment". Rather, the Court proceeded on the basis that there would be insufficient funds in the liquidation to pay all of the applicant's fees and that the liquidator was "content to have the remuneration in the amount of $118,802.92 which includes GST" approved.
28. In these circumstances, I am satisfied that the issues identified by the applicant about which it is asserted an issue estoppel arises were not "legally indispensable to the conclusion" of the Court, namely that the applicant was entitled to remuneration in the sum of $118,802.22. Rather the "ultimate facts which form the ingredients of the cause of action" was the Court's findings that work had been performed by the applicant in carrying out the liquidation as identified in his claims and that the reasonable remuneration for that work was at least $118,802.22.
29. As to Anshun estoppel, neither ASIC nor the Committee was a party to the Supreme Court fee approval proceedings. They were not required to be parties. Contrary to the applicant's submission, there was no obligation to participate in the Supreme Court fee approval application.
30. The action initiated by ASIC, giving rise to the convening of the Committee, the Committee's decision and these review proceedings arise under a distinct statutory regime by which the applicant's conduct as a liquidator could be reviewed and, if appropriate, sanctions imposed. Nothing in the Corporations Act, it suggests that ASIC was required to raise such issues in the Supreme Court fee approval proceedings and/or become a party to those proceedings.
31. Consequently, it could not be said the conduct of ASIC or the Committee was unreasonable in not raising the issues identified by the applicant in the Supreme Court fee approval proceedings.
32. Therefore, no Anshun estoppel arises.
33. Having regard to the above, there is no abuse of process.
34. For the above reasons this ground fails.

1. The submissions in relation to sub-issues C, D and E can be summarised as follows.

1. The first sub-issue concerns whether the applicant is a fit and proper person within the meaning of the legislation.
2. The applicant submits that the finding he was not a fit and proper person was fundamentally flawed, based on the alleged breach of s 182 of the Corporations Act.
3. The applicant says that he could not breached s 182 "by receiving that to which the law says he has an entitlement"[54] The applicant continues:

The Respondent's concern can rise no higher than a concern as to timing - being that the remuneration was received prior to the fixing of its quantum. But once (as here) the quantum was in fact "fixed", that was an end to the matter. There is nothing in the legislation to say that the fixing process must occur prior to the drawing process - it can, as here, occur afterwards.

4. Next, while the applicant accepts there is an attempt in the ARITA Code to prohibit drawing fees without approval, the ARITA Code is not law nor is it part of the Corporations Act.[55]
5. Further, even if it applies, and there was an obligation to repay remuneration that has been improperly drawn as provided in clause 5.8 of the ARITA Code, the applicant submitted that clause 5.8 "does not give any clear guidance as to what the term 'improperly drawn' means in relation to remuneration". The applicant refers to clause 5.3 of the ARITA Code, which deals with what remuneration and disbursements can be claimed in respect of services performed, and submits:

(d) a member of ARITA would conclude the expression "improperly drawn" was only a reference to drawing fees for which a claim could not properly be made, that is fees that were not "performed in an effective and efficient manner" as specified in clause 5.3; and > > (e) because the applicant "always considered the work the subject of his fees to have been performed "effectively and efficiently, none of his fees were ever "improper" and thus never "improperly drawn".

6. The applicant then says the wording of clause 5.8 is "highly ambiguous". Consequently, the applicant submits, the Committee "should have moderated, but failed to moderate, its expectations for compliance with (and therefore moderate any disciplinary action for breach of) the ARITA Code in line with the clarity (or otherwise) of its requirements". Here, the applicant says such an approach is necessary "as a matter of natural justice and common sense".
7. In its SFICS, the respondent says the contention the applicant is not a fit and proper person is not limited to the unapproved drawings.
8. However, of the unapproved drawings, the respondent says that the applicant gained an advantage for himself and his firm and improperly used his position in drawing funds having failed to have remuneration approved between 2016 and 2022. This failure to obtain approvals meant that funds available to creditors were reduced and creditors were not provided an opportunity to scrutinise the value of the applicant's work. This, the respondent submitted, was not a "mere temporal glitch" fixed by the subsequent orders made by the Court.
9. Further, on the question of fitness and propriety, the Committee said it was entitled to inform itself on any matter as it sees fit, reference being made to s 50 of the IPR. Having regard to this provision the respondent submitted it was entirely appropriate to consider the requirements of the ARITA Code.
10. The respondent continued:

(a) the answers of the applicant's Counsel at his interview before the Committee, that the conduct of the applicant was regretted but not serious, raised "grave concerns"; > > (b) while the applicant said in evidence that the Ultimate Air Control liquidation involved a large volume of matters requiring his attention, he was "silent regarding the outcome of those matters, and the fact that the unsecured creditors derived no benefit whatsoever from them". In this regard the respondent noted the applicant received total payments of $887,302.75, including the unapproved drawings;[56] > > (c) the applicant did not repay the funds having unsuccessfully sought creditor approval in 2018 and did not apply to the Supreme Court until 2022, after being served with the show cause notice. This, the respondent submitted, was an excessive delay; and > > (d) the applicant failed to respond to the enquiries of ASIC in a timely, fulsome and transparent manner.

11. Accordingly, the respondent said the Tribunal should be satisfied as to a lack of fitness and propriety.
12. Similar submissions were made orally by the Committee.
13. In oral submissions, the Committee referred to various documents including records from the various administrations. One such document was the annual meeting of creditors of Ultimate Air Control held 3 July 2015. The Minutes of that meeting record the following answer concerning seeking creditor approval for payment of fees:[57]

The Liquidator was asked why he did not seek creditor approval for payment of legal fees and he responded that it was not required under the law. Mr Cook stated that in previous meetings the Liquidator had agreed to do so. > > The Liquidator stated that he was willing to discuss the creditors concerns with them on an individual basis if they wished to do so. > > The Liquidator stated that before the resolutions regarding fee approvals were considered that the meeting should be aware that if the fees were not approved that he would have to apply to the Federal Court for approval & that this would involve additional cost to the creditors.

14. The Committee also made oral submissions concerning the applicant's interview with the Committee. Reference was made to the manner in which fees were reconciled using a spreadsheet, who undertakes that work and changes to the process which was said to have given rise to the unintentional over drawing of funds. In the absence of any further evidence, the respondent said these answers to the Committee and the lack of any evidence to demonstrate current abilities should lead the Tribunal to conclude the applicant was not and now is not a fit and proper person.

Submissions - Fail to carry out adequately and properly the duties of a liquidator

1. This sub-issue concerns a failure of the applicant to lodge required documents associated with various administrations conducted by him in a timely manner. The respondent also raised issues concerning other administrative matters said to be relevant to this topic.
2. Annexure D to the show cause letter sets out the particular administrations, what documents have been lodged late and the date of lodgement occurred.[58]
3. In his SFICS, the applicant said in relation to the failure to lodge 19 Forms 5602, these were lodged by post at the address nominated by ASIC. Copies of the forms were enclosed in the Show Cause Response.[59]
4. The applicant acknowledged that documents could also be lodged electronically. However, the applicant said there was no obligation to do so.
5. Otherwise, the applicant said there was "only a small number (3 or 4) forms which in fact were not lodged on time. Of such errors, the applicant said "most (if not all) liquidators might make at least one in their career".
6. Consequently, the applicant submitted, any failure did not give rise to circumstances warranting cancellation of his registration.
7. In response, the Committee points to the fact that some documents were dated well after they were due to be lodged. In the Committee's SFICS at [129], the respondent says:

Mr Auricht cannot rationally expect this Tribunal to find that late lodgements, many years after the relevant dates, assist him in demonstrating whether he failed in his obligations. For example, documents later provided by Mr Auricht to the Committee in seeking to belatedly cure these issues included "in relation to Ultimate Air Control, a notice of meeting of creditors for the meeting held on 14 March 2014 dated 21 September 2022".

8. The respondent continues at [132] of its SFICS:

In relation to multiple entities with unsecured creditors of "approaching $4 million" Mr Auricht failed to provide proper notice to creditors, failed to comply with required statutory lodgements, and accordingly failed to keep creditors, ASIC and the public informed of critical matters. Mr Auricht "either has insufficient business systems to ensure that he made the lodgements when they were required, or he chose to ignore his lodgement requirements. Either way, the damage of the late lodgement is not rectified by his providing the documents to ASIC in response to the Show-Cause Notice."

9. As to the Forms 5602 said to have been posted to ASIC, having referred to the Reasons at [146]-[147] (including a finding the applicant "failed to obtain sufficient skills to allow him to lodge the documents electronically, and the applicant continuing to send documents in by post when he was aware they were not actually being received as 'lodge'"), the respondent submitted:[60]

... the relevant point is not whether the documents were posted, but lodged. This is similar to the question of service, where a Tribunal must consider the distinction between whether a document was sent or received. Here, the relevant obligation of Mr Auricht is to lodge documents - and they were not lodged. In considering this question, the Tribunal can have regard to: > > 137.1. the absence of evidence or contemporaneous records reflecting the alleged posting of such documents, copies of those documents, or any detail as to when and how he says they were sent; > > 137.2. the fact that ASIC has stated the forms were not received; > > 137.3. the fact that the documents were not in fact lodged; > > 137.4. the ability of Mr Auricht to check on the National Names Index whether the documents were received, lodged and made available on the public register; and > > 137.5. the large number of documents over many years which Mr Auricht alleges were sent but not lodged.

10. Lastly, the respondent referred to the applicant leaving "17 archive boxes outside his office unattended at night in January 2019, with the outcome that they have since been missing".[61] Here, the respondent says that the applicant has not offered any explanation as to why such a decision was appropriate or in line with his obligations.
11. In summary, the respondent says:[62]

(a) Mr Auricht failed to lodge numerous documents despite his obligations as liquidator of various companies, and/or to ensure they were lodged; > > (b) any late lodgements made years after the requisite timeframe, and/or after show cause notice was served, does not rectify his failure; > > (c) Mr Auricht failed to maintain or use adequate systems to ensure he met his statutory obligations for lodgements; > > (d) Mr Auricht failed to gain the necessary skills to lodge documents electronically; and > > (e) Mr Auricht in many respects failed to carry out adequately and properly the duties of a registered liquidator.

Submissions - Lack of or no longer having knowledge and abilities to continue to be registered as a liquidator

1. The applicant says this matter predominantly relates to delay in seeking court approval for certain fees in the administration of Ultimate Air Control and delay in addressing ASIC's concerns in that regard.
2. The applicant accepts there was some delay but says they were beyond his control and/or transitory in nature. He identifies three main factors:

(a) the illness and death of his father; > > (b) the ongoing impact of the Covid-19 pandemic; and > > (c) the unexpected unavailability of his legal representatives, being those instructed to make the applications to the Court for approval of his fees.

3. The applicant says that in its decision, the Committee provided no weight to factors (a) and (b). As to the last factor, instructing new lawyers would have led to further delay and expense as well as the possible difficulty of securing files from the existing lawyers due to outstanding legal fees.
4. Referring to the decision of Strazdins v DNPW Pty Ltd[63], the applicant said that any delay in applying to the Court did not affect creditors or cause prejudice.
5. In reply, the respondent says that the applicant "seeks to skew this question to there simply being 'some delay' in his seeking court approval". The respondent says that is not a "reasonable nor rational reading" of the Reasons at [155]-[179].
6. The issue of delay concerned the following:[64]

(a) the applicant "knew from at least 2016 that he paid himself or his firm monies in the external administration of UAC which had not been approved by creditors"; > > (b) the applicant did not seek creditor approval until 2018; and > > (c) the applicant "did not seek court approval for another 4.5 years, years after ASIC began investigating, and month after being served with the show cause notice".

7. There was also delay arising from the late lodgement of notices.
8. The respondent also relied upon the interview of the applicant by the Committee concerning his ability and capacity to satisfactorily perform the required functions of his office. Of these matters, the respondent said:[65]

150. ... Among other issues, as discussed in the Decision at [161]-[166] and apparent from the Transcript, Mr Auricht admitted: > > 150.1. despite APES 325, Mr Auricht did not have a risk management framework; > > 150.2. he does not prepare remuneration reports (rather, others do, and he checks them); > > 150.3. he could not explain what was required in a remuneration report in 2023, as opposed to what had been required in 2018; > > 150.4. he did not have the necessary staff to perform insolvency work, and "if he was to accept an appointment he would need to sub- contract the staff of a midsized firm, or recruit sub-contractors of his own firm's if necessary"; > > 150.5. if he needed to conduct a creditors' meeting: > > > 150.5.1. his wife would send the notices to the creditors and book a room; and > > > > 150.5.2. "he would need to either form a relationship with another firm or hire someone in order to conduct the meeting"; and > > 150.6. he had not been appointed for some years. > > 151. In the circumstances, as set out in the Decision: > > [168] The Committee has found that Mr Auricht did not have sufficient business systems in place that ensured that he was aware what fee approvals he had in place and what drawings he had made relative to those fee approvals. The Committee has found that Mr Auricht either failed to have business systems that ensured he met the lodgement requirements, or he ignored his obligations to lodge documents on time. The Committee is satisfied that Mr Auricht has not acquired the skills required to lodge documents through the liquidator portal. The Committee is satisfied that Mr Auricht, does not, at the present time have the staff to conduct insolvency work, and does not have the systems in place to do so. The Committee is satisfied that Mr Auricht has failed to adequately and properly carry out the duties of a registered liquidator. The Committee is satisfied that Mr Auricht has contravened s182 in relation to Ultimate Air Control. > > [169] The Committee is satisfied that Mr Auricht does not have the capacity to perform satisfactorily the functions and duties of a registered liquidator. > > [170] The Committee is therefore satisfied that Mr Auricht does not have the qualifications, experience, knowledge and abilities prescribed under paragraph 20-20(4)(a) of the IPS.

9. In respect of the matters identified by the applicant above as causing delay, the respondent says that these events do not satisfactorily explain the delay in obtaining approval for the payment of fees. Further, any psychological impact from the identified matters and the psychologist report relied upon by the applicant "does not adequately justify Mr Auricht's repeated and ongoing failures as set out in the decision"[66].
10. In oral submissions, the applicant accepted there was delay in obtaining approval for fees from the Court and that the delay was inappropriate. Again, reliance was placed upon his father's illness and death, the pandemic and the effect of those matters on his business. Otherwise, the applicant said the events related to an isolated error in one administration that was complex.
11. On the issue of adequate systems, the applicant said that he had a process for recording receipts and payments. This system, the applicant said, did account for approvals, noting the conclusion of the Committee that he had not "implemented sufficiently robust business processes"[67].
12. I note the transcript of the applicant's interview by the Committee includes the following exchange concerning the process for managing receipts and payments at a time when the unapproved drawings were made:[68]

MR AURICHT: Um, as this liquidation I suppose from their perspective deteriorated, especially two of the committee members were subject to my, my letters. So, and one of them I think you saw in the affidavit that we gave the supreme court expressed his feelings about me in his payment of the preference claim. So, there was a lot of anger within that committee and on the occasion before the overdrawing they had refused my pleas and gave me no explanation as to why not. I then went to the courts. I'd already been to the federal court twice for fee approval and, um, we then, we then became embroiled in, as I think Tony has pointed out about 40 preference claims. So at, the arrangement I'd reached with my barrister and solicitor at the time was that we would, we would consider what our WIP was at the previous, end of the previous month in relation to the work we were doing on these preference claims. As the money came in from the preference claims we were then allocated 1 that, or I then allocated those funds to the three parties. Based on that calculation. So I admit my, my focus at the time was dealing with that particular calculation. In the background Denny was keeping a record of our monthly, I had them doing it monthly - - - > > MR HURREN: Denny being? > > MR AURICHT: Oh sorry, Denny Fisher my officer manager at the time. Um, I asked her initially because (indistinct) the administration every month to, to, um, uh, put out the WIP and summarise the fees. We did that on a spreadsheet and against that we had our, our approval amounts and the dates. That was going fine until, as I said towards the end there when the committee, again rejected approval of my fees. We were in the middle of negotiating and handling a lot of claims. I had my father's situation in the background. And I take full responsibility that whilst that information in my system I didn't check it as carefully as I should have. > > MS THRIFT: M'hmm. > > MR AURICHT: And I accept that. It's a mistake on my behalf. Um, it was not deliberate. It was intentional (sic). It was not to defraud creditors or to give myself, as (indistinct) I gave myself an unfair advantage. I don't believe that to be the case. I understand um, to some extent why they've raised that issue but, um and I won't go into all the legal side of it all. I was trying to do that but my reading of section 182 is, um, you need to have a cause of loss for someone, Tony has already addressed that, but the only person that suffered a loss in this administration, or three people, was myself and, the barrister and myself. It was never going to be, short of us having some major investigation success, any likelihood of any return to the creditors at any point in time. So I don't believe that I am ultimately in breach of s182 (1). I don't believe that I've drawn the fees improperly. I do understand the process of course because I had gone through it twice before. So, to go to court. > > ...

13. Questioning then continued concerning the processes currently adopted by the applicant in his business, that is as at February 2023. The following exchange occurred:[69]

MS THRIFT: Yes. So it's the, I think for me, it's trying to understand the process that you had at the time for insuring and you've spoken to that, that you're looking to having a spreadsheet that had the running WIP as well as the approval amounts in it? And you've said that you accept you didn't check it. Can you talk to me now about the process that you have now for the matters that you're running? > > MR AURICHT: Um, again, yes, so what I've done now is we've, we've got a system in place that, that, the same spreadsheet is there but there's a reminder put up in my office manager's calendar who I, I, I admit is my wife. So, um, in one, in one sense I can't, I can't avoid being reminded about it. Um, so I have, I have reminders in my calendar every month to check that spreadsheet, that same spreadsheet that is being used. I don't believe there was anything wrong with that spreadsheet. I think, um, it may not have been kept quite up to date as I would have liked. I, I, I should say as well, I did, as a liquidator I did delegate responsibility. I did have another person who I spoke about who was a senior manager on the file, John Tracy. Um, you know, in fairness, I'm not sure that he, he kept on top of that as he should have either. I understand the responsibility is ultimately mine to check. Um, but he didn't come to me I don't think often enough as that was occurring to say I've checked that we are okay. with the approvals. I should have then perhaps also have been firmer on reminding him to check that for me. Um, all I can say is that the process broke down because we were, we were under a lot of stress to handle a lot of different matters at that time. It was a lot bigger administration that only really had those three staff members including myself.

14. As to the need for approval for overdrawn fees, the applicant provided the following evidence:[70]

MS THRIFT: ... At what point did you first become aware Richard of the issue? > > MR AURICHT: I knew you were going to ask me that. Um, uh, I suppose realistically when I was preparing for that final annual meeting of the creditors on the, uh, I have to get the date right, in May, what's the date at the end of the, I put it in the affidavit - - - > > MR HURREN: 18. > > MR AURICHT: - - - yeah, thank you. > > MR HURREN: May 18. Yeah. > > MR AURICHT: Thank you. Um, as we were preparing the, um, the summary receipts and payments and the remuneration reports I realised that we had overdrawn the fees. Obviously I was hopeful that, that creditors' meeting would approve the fees and perhaps we wouldn't be sitting here. I don't control the creditors obviously and there was a lot of, as I said, anger amongst the creditors. I believe that the directors had some close connections with a lot of those creditors from being in the industry for a long time. I don't know what their relationship was necessarily. I don't have any evidence around that. But I do know that there was a lot of anger and I think they were trying to force me into a situation that I ended up in which was that I had to go to court again because they knew that, that was going to cost me time and money.

1. It is convenient to deal with these sub-issues together.

1. It is useful to first set out various legal principles relevant to the determination of these issues.
2. Section 40-40(1)(a), (f), (l)(i) and (m) are the provisions on which the show cause notice was based.
3. For the purpose of s 40-40(1)(a) and s 20-20(4)(a) of the IPS, rule 20-1 of the IPR prescribes the following qualifications, experience, knowledge and abilities:

(a) the applicant has completed the academic requirements for the award of a tertiary qualification that includes at least 3 years of full-time study (or its equivalent) in commercial law and accounting; > > (b) the applicant has completed the academic requirements for at least 2 course units accredited under the Australian Qualifications Framework Level 8 (or equivalent study) in the practice of external administrators of companies, receivers, receivers and managers, and trustees under the Bankruptcy Act 1966; > > (c) if the applicant wishes to be registered to practise as an external administrator of companies, receiver and receiver and manager - the applicant has, during the 5 years immediately preceding the day on which the application is made, been engaged in at least 4,000 hours of relevant employment at senior level; > > (d) if the applicant wishes to be registered to practise only as a receiver, and receiver and manager - the applicant has, during the 5 years immediately preceding the day on which the application is made, been engaged in at least 4,000 hours of relevant employment at senior level; > > (e) the applicant has demonstrated the capacity to perform satisfactorily the functions and duties of a registered liquidator; > > (f) the applicant is able to satisfy any conditions to be imposed under the Insolvency Practice Schedule (Corporations) if the applicant is registered as a liquidator.

4. As to duties of a liquidator, they include obligations imposed by the Corporations Act in the discharge of his functions as a liquidator and as an officer of any relevant company in consequence of an appointment: see eg Australian Securities and Investments Commission v Bettles[71] (Bettles).
5. Of the obligations of a liquidator who is a member of ARITA, Markovich J said in Bettles:[72]

3.4 The ARITA Code of Professional Practice for Insolvency Practitioners > > 453. Clause 1 of the ARITA Code sets out its primary purposes which are to:

• set standards of conduct for insolvency professionals;
• inform and educate ARITA Members as to the standards of conduct required of them in the discharge of their professional responsibilities; and
• provide a reference for stakeholders and disciplinary bodies against which they can gauge the conduct of ARITA Members.

454. Clause 1.1 of the ARITA Code relevantly provides: > > The Code is not a simple restatement of Legislation, regulations and judicial pronouncements, rather it is a set of principles and guidance based on standards of conduct that are founded in established precedent. Some standards imposed on Members are higher than those existing legal requirements. Where the law is silent, or ambiguous, the Code introduces principles to clarify understanding of the desired behaviour. > > 455. The requirements for registration as a liquidator are set out in Div 20 of the IPS. In summary: an application to be registered by a liquidator is to be made to ASIC in the prescribed form; ASIC is required to refer an application for registration as a liquidator properly made to a committee convened under s 20-10 of the IPS; and the committee must consider the application and decide whether the applicant should be registered as a liquidator. ASIC must register the applicant as a liquidator if the conditions set out in s 20-30(1) of the IPS are met, namely if the committee has decided that the applicant should be registered and the applicant has adequate and appropriate professional indemnity and fidelity insurance. > > 456. There is no requirement for an applicant for registration as a liquidator to be or become a member of ARITA. However, those persons, including registered liquidators, who choose to become members of ARITA are subject to the ARITA Code: see cl 1.6 of the ARITA Code. Relevantly Mr Bettles is a member of ARITA.

While a breach of a provision of the ARITA Code is a matter that the Court may take into account in considering whether an order should be made under s 45-1(4) of the IPS, ASIC has not established any such breach. Accordingly there is no matter to be taken into account for the purposes of s 45-1 of the IPS arising out of this alleged conduct.

2. That is, Markovic J accepted that a contravention of the Code is relevant in determining whether an order should be made in connection with the conduct of a liquidator. In that regard, s45-1(4) of the IPS identifies a number of relevant considerations for the Court to consider, which include:

(a) whether the registered liquidator has faithfully performed, or is faithfully performing, the registered liquidator's duties; and > > (b) whether an action or failure to act by the registered liquidator is in compliance with this Act and the Insolvency Practice Rules; and > > ...

3. Adopting the approach of Markovic J, it seems to me that in evaluating the conduct of a liquidator in respect of the matters identified in s 40-40, regard can be to any requirements provided in the ARITA Code or provisions in the rules of another professional organisation which regulate the conduct of that professional as a liquidator.
4. As to the meaning of the expression "adequately and properly" used in s 40-40(1)(l) of the IPS, guidance can be found from the decision of the High Court in Albarran v Members of the Companies Auditors and Liquidators Disciplinary Board[73] (Albarran). There, the plurality (Gleeson CJ and Gummow, Hayne, Callinan, Hayden and Crennan JJ) said:

... weight must be given to the introductory but controlling words "to carry out or perform adequately and properly". Of the words "proper" and "adequate" as they appear here, Tamberlin J said in Dean-Willcocks v Companies Auditors and Liquidators Disciplinary Board that they invite: > > "the testing of performance against a relevant standard or benchmark of performance. The interpretation advanced for the applicant, in my view, is too narrow in requiring the identification of a specific duty directly imposed by legislation. The level of performance called for is that of 'adequacy'. The standard is that the duty must be performed 'properly'."

5. In the same case, their Honours also accepted the statement of Tamblin J concerning the expression "duties and functions" of a liquidator, as that expression was used in the then s 1292 (2) of the then Corporations Act. At [20] their Honours said:

Against that background, in Dean-Willcocks, Tamberlin J went on to observe that par (d)(ii) of s 1292(2): > > "is designed to enable a board representative of the commercial and accounting communities to consider whether the function has been adequately and properly carried out. To assess this, it is permissible, in my view, to have regard to the standards operative in the relevant sphere of activity."

6. In relation to the test of whether a person is "fit and proper", reference was made by the parties to Hughes. There, the plurality of the High Court said:[74]

The expression "fit and proper person" is of course familiar enough as traditional words when used with reference to offices and perhaps vocations. But their very purpose is to give the widest scope for judgment and indeed for rejection. `Fit' (or `idoneus') with respect to an office is said to involve three things, honesty, knowledge and ability: `honesty to execute it truly without malice, affection or partiality; knowledge to know what he ought duly to do; and ability as well in estate as in body, that he may intend and execute his office, when need is, diligently, and not for impotency or poverty neglect it' - Coke."

7. Finally, the statement of their Honours in Albarran is relevant in the context of considering the approach to be taken to the issue of whether s 182 of the Corporations Act has been contravened, a matter considered by the Committee in determining whether the applicant was a fit and proper person. At [21] their Honours said:

That reasoning of Tamberlin J should be accepted as indicative that the function performed by the Board in the present cases was not the ascertainment or enforcement of any existing right or liability in respect of an offence and the punishment for an offence. So, also, should the conclusion expressed by the Full Court in the judgment here under appeal. Their Honours said: > > "The function of the Board is not, as was submitted, to find (as an exercise of deciding present rights and obligations in the above sense) whether an offence has been committed and, if so, to inflict a punishment therefor. It is, as we have said, to assess whether someone should continue to occupy a statutory position involving skill and probity, in circumstances where (not merely because) the Board is satisfied that the person has failed in the performance of his or her professional duties in the past. Messrs Gould and Albarran say that punishment or a penal or harmful consequence is finally inflicted on the person consequent upon the finding of the committal of an offence prescribed by law. That is not what s 1292(2) says the function of the Board is. It is not, in substance, what the Board does."

1. There is no dispute the applicant drew funds to pay his fees in circumstances where he had not first obtained approval to do so.
2. The Committee did not find, nor was it contended in the proceedings before the Tribunal, that any withdrawal of the funds was dishonest or that the applicant otherwise acted in a dishonest manner. Rather, the drawing of funds was said, in effect, to be a mistake and/or without proper authority.
3. Here, the respondent contends the applicant gained an advantage and/or reduce funds available to creditors without permitting them an opportunity to scrutinise his fees.
4. In examining his conduct, the applicant seeks to confine the time during which funds were withdrawn without approval and the significance of what occurred. In effect, the submission is made that there were no funds in the liquidation and therefore no harm was done to Ultimate Air Control or its creditors. The evidence of the applicant given to the Committee, including his statement he did not believe he had drawn fees improperly, is relevant to this enquiry.
5. The content of Table 1 of the Reasons, the correctness of which was not in dispute, shows that amounts drawn by the applicant and when they occurred. The first overdrawing occurred on 6 September 2015. Instead, there were six occasions funds were drawn without approval until the 2016 Court Approval was made on 28 January 2016. Immediately prior to the 2016 Court Approval, the applicant had drawn a total of $179,192.49 for which he did not have approval.
6. Consequent upon the 2016 Court Approval, Table 1 shows the applicant was then "in credit", that is he had an approval which covered the overdrawn amounts of $179,192.49 and an approval to draw a further amount or amounts up to $159,117.68.
7. Following the 2016 Court Approval, eight further amounts were drawn between 29 January 2016 and 30 May 2016. At this time, an amount of $36,758.35 remained undrawn following the 2016 Court Approval.
8. The next amount drawn by the applicant was $56,674.84. This amount was drawn on 12 June 2016 and resulted in the applicant again being overdrawn, this time by $19,916.50. Then, between 15 June 2016 and 10 March 2017, the liquidator made a further seven drawings without approval.
9. In consequence of the drawings on 12 June 2016 and the seven drawings thereafter, a total of $118,803.18 was drawn by the applicant for which he did not have approval.
10. In evaluating the actions of the applicant, it seems to me the following matters are relevant:

(a) The applicant was an officer of Ultimate Air Control responsible for winding up the company. > > (b) In addition to carrying out relevant investigations, the applicant was required to identify claims which the company might have and, if possible, recover funds for the purpose of discharging debts of the company, including any fees that he might properly incur. > > (c) The applicant is an accountant. His role included realising assets of companies to which he is appointed as liquidator, disburse monies collected as permitted by law and account for his actions. Funds handling is regulated by Division 65 of the IPS. Inter-alia, s 65-25 regulates paying money out of the administration account which the applicant was required to operate. > > (d) As noted above, s 60-5(1) entitled the applicant to receive remuneration for "necessary work properly performed ... in accordance with a remuneration determination". Section 60-10 Remuneration Determinations of the IPS (rather than s 65-5(2)) specified the means by which determinations were to be made. > > (e) Section 60-10(1) required a "determination, specifying remuneration that [the applicant] is entitled to receive for necessary work properly performed" made by the committee of creditors, a resolution of the creditors in general meeting, or by the Court. It is the amount so determined to which a liquidator was entitled. > > (f) At all times the applicant was aware of the need for such determinations as reflected by the fact he sought approval from the creditors and/or different Courts from time to time. He did not suggest otherwise to the Tribunal, rather saying that he did not realise over drawings had occurred. > > (g) In my view, until a relevant determination was made, there is no entitlement to payment. On this matter, I reject the applicant's submission concerning clause 5.8 of the ARITA Code and the expression "improperly withdrawn".[75] > > (h) Where fees were overdrawn, without approval, they ought to have been immediately repaid upon discovery of this fact. This is because money could only be appropriated from the company's account to the applicant's account when approval was given. > > (i) The ARITA Code provides guidance to the applicant that he should repay funds to the company if an error was made resulting in him being overdrawn. He did not do so as he did not have the funds.

11. As to the circumstances in which the overdrawing occurred, there is evidence of the keeping of a spreadsheet of drawings made by the applicant from time to time. Having regard to the number of occasions on which unapproved drawings were made, there can be no doubt that the processes adopted by the applicant to account for those payments were inadequate.
12. The sums involved were significant. There were multiple occasions on which funds were improperly drawn.
13. I do not accept that the personal circumstances of the applicant provides a reasonable excuse for what occurred. The applicant had other staff working for him in the liquidation of Ultimate Air Control. They had, apparently, been charged with responsibility to keep the spreadsheet. The passage from the applicant's interview by the Committee, recorded in the Reasons at [59], is telling:

59. At the interview Mr Auricht said: > > "I don't believe there was anything wrong with that spreadsheet. I think, um, it may not have been kept quite up to date as I would have liked. I, I, I should say as well, I did, as a liquidator I did delegate responsibility. I did have another person who I spoke about who was a senior manager on the file, [name known to the Committee]. Um, you know, in fairness, I'm not sure that he, he kept on top of that as he should have either. I understand the responsibility is ultimately mine to check. Um, but he didn't come to me I don't think often enough as that was occurring to say I've checked that we are okay with the approvals. I should have then perhaps also have been firmer on reminding him to check that for me. Um, all I can say is that the process broke down because we were, we were under a lot of stress to handle a lot of different matters at that time. It was a lot bigger administration that only really had those three staff members including myself."

14. Also telling is the applicant's following evidence to the Committee:

MR AURICHT: Well it's a three person firm so there's not a lot of, and I did keep as, as liquidator with full control over the actual payments that were made. So I made the payments as I thought I could pay them based on the, at that time, on the split between the barristers and the solicitors as you will see in the administration account that I have withdrawn three payments. And that was around when the monies were received from the larger preference claims. Normally or debtor collections. So the whole decision making process around that. At that point in time was based on that calculation. And I didn't pay enough attention to the spreadsheet that had the level of approval as against what fees were withdrawn. > > MS ERSKINE: Was that presented to you? > > MR AURICHT: Uh, I'm just trying to think. Denny must have, must have shown it to me at some point but, um, I don't believe it was up to date enough to show until they, as I said, I didn't, I didn't realise completely that we'd overdrawn until (indistinct) the reports for the final creditors' meeting. [Emphasis added] > > MS ERSKINE: So - - - > > MR AURICHT: So, I mean I should have checked more closely but I was relying on, on, on John and Denny to have said to me, 'You're overdrawn.' Now they didn't do that. Now that's a breakdown of procedure, I understand that but it's, it's a one off in my 23 years. I'm not perfect. I made a mistake. > > MS ERSKINE: So your process is what? > > MR AURICHT: So basically once I'd made that calculation I transferred the money, I logged into the bank account and transferred money to the, on the basis of invoices obviously being produced to me. Um, I transferred the money that way. > > MS ERSKINE: So that was the process of those payments and, and now? > > MR AURICHT: So now, I mean, well, basically, um, yeah, I mean I wouldn't, I've asked everyone to make sure that we've got that spreadsheet up to date and that's presented to me before I, before I can see that all the approvals are in place. Before I can do any, any transfers of any funds of course. It's not, I haven't had an administration since that point that I've had funds to be able to pay out but.

15. In relation to these matters, the Committee concluded there had been a contravention of s 182 of the Corporations Act. As stated in Albarran, it was not the role of the Committee (or the Tribunal on review) to determine whether a penalty should be imposed for contravention of that section. Rather, its role was, and that of the Tribunal on review is, to determine whether, in consequence of any response to the show cause notice and having regard to the matters in s 40-55(3), circumstances exist warranting the imposition of a relevant sanction concerning his registration as a liquidator, or otherwise make a decision as required by s 40-55 of the IPS.
16. It seems to me that payment without authority is an advantage which the applicant obtained. It was gained because the applicant was able to make the payments from the Ultimate Air Control account which he controlled.
17. In any event, the conduct in relation to drawing funds in the circumstances that occurred constituted a serious breach of the duties of the applicant.
18. While there is no suggestion of any dishonesty or that the action of drawing the funds without approval was deliberate, the breaches were numerous and occurred over an extended period of time. The payments constitute an appropriation of money to the applicant's own account without authority. They were made without first obtaining a determination as required by ss 60-5 and 60-10 of the IPS.
19. The fact that Court approval was sought on two occasions makes the breaches all the more serious. One could reasonably expect a full reconciliation would have been undertaken as part of the first application to the Court, which should have identified the earlier over drawings and lead to action to avoid future occurrences. However, because the accounting procedures in place were inadequate, the applicant "didn't realise completely that we'd overdrawn until ... the reports for the final creditors' meeting".
20. Further, contrary to the submission of the applicant, the fact he might, upon determination in accordance with the Corporations Act, have been entitled to the remuneration in question does not provide justification for failing to act in accordance with the statutory requirements relating to approval.
21. Lastly, there was a failure to repay funds immediately on becoming aware the funds had been drawn without authority.
22. Another matter is the loss of boxes of files, apparently left for collection outside the applicant's premises. The evidence does not suggest appropriate arrangements were put in place to keep these materials secure nor is there any adequate explanation about why this situation was permitted to occur. The fact there may have been other, electronic, copies of the materials does not excuse the failure to keep the hard copies secure.
23. These facts satisfy me the applicant lacked capacity to perform satisfactorily the functions and duties of a liquidator.
24. I am also satisfied the applicant failed to comply with his reporting obligations to ASIC in connection with the lodgement of forms.
25. As Annexure D of the Decision records, these failures occurred across multiple administrations in connection with a number of Forms.
26. The applicant concedes "a small handful (3 or 4) forms were in fact not lodged on time".[76] They were said to have been lodged in paper form by post. The respondent says the forms said to have been posted had not in fact been received by ASIC.
27. It seems to me that, even if forms had been sent by post, it was incumbent on the applicant to check the records of ASIC to see relevant forms had been received and, if not, to re-submit the forms. Clearly this did not occur and it is apparent no action was taken to monitor or rectify the situation until ASIC issued the show cause notice.
28. Finally on this point, notwithstanding the above experience, it appears the applicant continued to lodge documents by post rather than through the ASIC portal, at least up until the time of the Committee report.
29. On the question of fitness and propriety, the authorities to which I have referred make clear that a lack thereof is not dependent upon a finding of dishonesty.
30. By his reference to the decision of Percival v Australian Securities Commission,[77] (Percival) the applicant accepts that "a decision on fitness and propriety involves the exercise of a very wide discretion"[78]. That is, a wide variety of factors may be relevant in assessing whether an individual is fit and proper.
31. A high level of trust is placed in the liquidator in conducting the administration, investigating the affairs of the company in question, managing and accounting for funds received and disbursed and reporting on compliance issues arising under the relevant law. As stated by Deputy President McMahon in Percival:[79]

A high standard of care and diligence is required of a liquidator in the performance of his duties. He is bound to exhibit a degree of skill and care, commensurate with the heavy responsibilities which the nature of his office casts upon him. ...

32. For the reasons set out above, the applicant did not meet those standards. His actions constituted a breach of the IPS in the manner described above and constituted a failure to meet the obligations under the ARITA Code arising from his membership of ARITA.
33. Taken together, the above demonstrates a lack of fitness and propriety to hold the position of liquidator.
34. In reaching this conclusion, I note the applicant submitted that the illness and death of his father, which occurred in March 2018, the Covid pandemic and the unavailability of his lawyers provide some explanation for the delay in obtaining approval for his fees and what otherwise occurred in connection with the administrations in which he was involved.
35. On the first matter, a psychological report dated 26 February 2023 (Psychological Report) had been provided to the Committee and was in evidence before the Tribunal.[80] At paragraph 4.6 the author stated:

The current assessment indicated that Mr Auricht was a person who generally dealt effectively with stresses and maintained relatively positive health and mental health. During the period of his father's ill-health, however, he indicated that his level of stress was very high, as were the demands of his liquidation practice. > > In my opinion, I do not consider that Mr Auricht satisfied any formal diagnosis for "mental illness", but that he experienced significant stress that overwhelmed him, and likely affected his capacity to fulfil some of his work obligations for ASIC.

In my opinion, this affected his work capacity, including his actions related to ASIC concerns 1 and 2. It is my understanding that Mr Auricht acknowledged these errors, and has since taken appropriate steps to correct them.

Since Mr Auricht's father's death, 5 years previous, his stress level has returned to being "normal" and there were no physical or psychological symptoms to suggest otherwise. Mr Auricht indicated that the majority of his accounting work is now "taxation accounting", which he also maintained was less stressful than liquidation accounting work. From a psychological perspective, Mr Auricht does not exhibit any obvious impairments, and from the objective data considered, he is a highly intelligent person who has a balanced personality with minimal mental health issues. In my opinion he is a fit and healthy person to undertake his work as a registered accountant and provided he manages his stress level effectively, is a fit and healthy person to undertake his work as a registered liquidator.

38. Accepting the opinion of the doctor, the Psychological Report does not suggest incapacity. At most, it supports a conclusion his capacity may have been reduced to some unspecified extent.
39. Further, the medical evidence concerning the applicant's well-being does not explain why processes in the applicant's practice and other staff working with the applicant could not have avoided the unauthorised drawings which occurred and/or why any necessary application to the Court to obtain fee approvals could not have been made much earlier.
40. Finally on the question of the applicant's health and personal circumstances, the report suggests that after his father's death, any effect on the applicant's health abated and he returned to "normal". As such, these facts do not provide an explanation for the failures which occurred in the period after March 2018.
41. As to the Covid pandemic, this fact does not explain why unauthorised drawings were made (the drawings predating the pandemic) nor why application to the Court could not have been submitted at a much earlier point in time. Further, even if the hearing of any court proceedings was delayed by the Covid pandemic, an experienced and competent liquidator would not have drawn funds without authority and would have had processes in place to prevent this occurring and repaid any overdrawn funds.
42. To the extent his existing lawyers did not or could not carry out instructions necessary to apply to the Court, again an experienced and competent liquidator would have appointed alternative lawyers to avoid any excessive delay and/or repaid overdrawn amounts in the meantime.
43. In this regard, I again note Table 1 records significant amounts for overdrawn on multiple occasions from February 2015 until the 2016 Court Approval on 28 January 2016.Then, significant amounts for overdrawn on multiple occasions from 12 June 2016 until 10 March 2017 which totalled more than $118,000. Approval in respect of these later drawings was not sought from the court until an application was lodged in 2022, more than 5 years later (and more than 4 years after the creditors meeting), approval being obtained from the Court on 8 February 2023 when the 2023 Court Approval was made.
44. Against this factual background, I do not accept the matters identified by the applicant provide a satisfactory explanation or excuse the applicant from responsibility for his conduct. I do not accept that the failures of the applicant arose from "unfortunate coincidences" that were "beyond his control".[81]
45. As to the present position, I am not satisfied the applicant is now fit and proper person or that he has the capacity to adequately and properly perform the functions and duties of a registered liquidator.
46. My reasons are as follows.
47. In submissions, the applicant maintained before the Tribunal a position that his conduct was excusable and/or not serious and that, ultimately, he was entitled to the amount overdrawn. This reflects a continuing lack of appreciation for his inappropriate conduct.
48. The evidence available to the Tribunal indicates the applicant has not performed the role of a liquidator for some considerable period of time. Of course, in part that is due to the decision made by the Committee to cancel his registration.
49. However, the evidence of the applicant available to the Tribunal is that his practice does not have the capacity to properly resource any administration if he was appointed. The respondent dealt with this matter at [165] and following of the Reasons.
50. In his interview before the Committee, the applicant gave the following evidence:

MS ERSKINE: Are you still struggling with resources? > > MR AURICHT: Yes, but - - - > > MS ERSKINE: I think you said? It's a challenge. > > MR AURICHT: Yes. But it's a chicken and egg. I can't put someone on until I get a decent job. Which is leading me to what I said before is that I, my preference, I think going forward would be to be a consultant to a mid-tier firm who would have the resources so I wouldn't have to go and employ people and I would then just operate as the appointee of the job.

51. The applicant did not provide evidence to the Tribunal to suggest the position had changed or that he was now able to resource future work if his registration was reinstated.
52. Further, his evidence to the Committee concerning risk management is also of concern. In this regard, the transcript of his interview by the Committee demonstrates he had no risk management framework nor had any quality assurance program been recently implemented.[82]
53. Again, how recurrence of previous problems will be prevented has not been adequately explained.

40-55 Decision of the committee > > (1) If a registered liquidator is referred to a committee under section 40-50, the committee must decide one or more of the following: > > (a) that the liquidator should continue to be registered; > > (b) that the liquidator's registration should be suspended for a period, or until the occurrence of an event, specified in the decision; > > (c) that the liquidator's registration should be cancelled; > > (d) that ASIC should direct the liquidator not to accept any further appointments as liquidator, or not to accept any further appointments as liquidator during the period specified in the decision; > > (e) that the liquidator should be publicly admonished or reprimanded; > > (f) that a condition specified in the decision should be imposed on the liquidator; > > (g) that a condition should be imposed on all other registered liquidators that they must not allow the liquidator to carry out any of the functions or duties, or exercise any of the powers, of a registered liquidator on their behalf (whether as employee, agent, consultant or otherwise) for a period specified in the decision of no more than 10 years; > > (h) that ASIC should publish specified information in relation to the committee's decision and the reasons for that decision.

2. In making a decision, the Committee (or the Tribunal on reviewed) may impose one or more conditions as provided in s 40-55(2) of the IPS.
3. As is evident from the above, there is a range of sanctions that can be imposed. The most severe of those is cancellation. The authorities make clear that cancellation would ordinarily be reserved for the most serious breaches of the liquidator's obligations. In saying so, the purpose is not to punish and there is a need to consider issues such as specific and general deterrence as well as protection of the public and preserving public confidence in the regulation and supervision of insolvency practitioners: see eg Rich v Australian Securities and Investments Commission[83] and Australian Securities and Investments Commission v Macks (No. 5) (Macks)[84].
4. The Committee determined that the applicant's registration should be cancelled and that the fact of the decision and its report should be published by ASIC. The Committee said:[85]

176. ... given the seriousness of [the Committee's] findings, and [the applicant's failure to understand the seriousness of the conduct and his failure to satisfy the committee that he has taken effective steps to ensure that the same failings are not made again in future. > > 177. The Committee places weight on the finding that it is satisfied that he does not have the capacity to adequately and properly perform the duties of a liquidator. > > 178. The Committee considers that the cancellation of Mr Auricht's registration is appropriate as it will help to ensure that the high standard of conduct expected by the public of registered liquidators is maintained.

5. The applicant sets out a summary of matters recorded in the Reasons relating to the conclusions of the respondent[86] and what should be an appropriate sanction.[87]
6. The applicant referred to various cases including Macks, Trajan Kukolovski[88] (Kukulovski) and Australian Securities and Investments Commission v Dunner[89] (Dunner) and the sanctions imposed therein. The applicant then submitted:

13. The Court in Dunner held that "the conduct in question indicates a systemic failure of administration and internal protocols, as well as (in a number of instances) extremely poor professional judgment" and imposed a prohibition of five years upon Mr Dunner. > > 14. Whilst Dunner was a case that also involved the payment of remuneration which was not validly approved, the circumstances of Dunner were significantly more serious as they were spread across 12 administrations, and also involved a failure to investigate the circumstances of the companies to which he was appointed. > > 15. Again, the facts of the present case reflect less seriously, and therefore, adopting a proportionate approach, warrant a lesser sanction, than those in Dunner, given that: > > (a) Mr Auricht's conduct as regards fee approvals was isolated to one company, and occurred at a time when he was suffering from a medically diagnosed condition, as well as other impediments such as the COVID-19 pandemic; and > > (b) there has never been the faintest suggestion that Mr Auricht failed properly to investigate the circumstances of any company. On the contrary, one of the more curious aspects of the Respondent's approach toward Mr Auricht is that apparently no credit whatsoever was given for the fact that he diligently investigated the affairs of UAC and undertook, in one form or another, very active work across "over 100 actual and potential matters" 2 arising out of UAC. > > 16. In the circumstances, and given the much more serious and extensive breaches in Kukulovski, a suspension of Mr Auricht of 2.5 years would be proportional to the 5-year suspension in Kukulovski.

7. It should be noted at this point that the sanctions in Kukulovski were imposed in consequence of consent orders made by the Tribunal on 7 January 2021.
8. Be that as it may, it seems to me that the circumstances of this case do not warrant cancellation, which, by operation of s 20-20(4)(e) of the IPS, will prevent the applicant applying for re-registration for a period of 10 years. In the circumstances of the applicant and this case, where there has been no dishonesty, such an outcome would be too extreme.
9. Rather, I have come to the view that a period of suspension applicant's registration is appropriate. Suspension is necessary because of what I regard as serious breaches of the trust placed in him, arising from the applicant paying himself remuneration when he was not entitled to do so. There were multiple payments which, together, reflect a systemic failure by the applicant over an extended period of time. The fact Court orders were made approving fees on two occasions and that on each of those occasions the applicant had drawn fees without approval on multiple occasions reinforces the need for suspension rather than any lesser sanction.
10. So to does the fact that the applicant did not repay monies immediately upon becoming aware of his error.
11. The applicant's suggestion that, in effect, there were no funds in the liquidation that would be available to creditors and, therefore, he has not caused any loss, does not reduce the seriousness of his conduct.
12. In considering what period of suspension is appropriate, I have had to regard to my findings concerning the applicant's conduct and his present capacity to perform satisfactorily the functions and duties of a registered liquidator. I have also had regard to the need for general deterrence, the protection of the public and preserving public confidence in the regulation and supervision of insolvency practitioners.
13. On the other hand, I note that there is no suggestion the applicant had been the subject of previous disciplinary action in connection with his work as a liquidator or otherwise. In this regard the applicant has been a registered liquidator since 29 April 1996.[90]
14. Weighing these matters, I have formed the view that a suspension for a period of 5 years is appropriate. Such suspension is to date from 23 June 2023, being the date the original Decision of the respondent to cancel the registration took effect. In this regard, I note the Decision was not stayed by the Tribunal and has remained in effect since these proceedings were commenced.
15. In addition, the fact of the decision and reasons of the Tribunal should be published under s 40-55(1)(h) of the IPS.

(a) The decision of the respondent dated 23 June 2023 is set aside. > > (b) In substitution, the Tribunal makes the following decision: > > > (i) Pursuant to s 40-55(b) of Schedule 2 - Insolvency Practice Schedule (Corporations) of the Corporations Act 2001 (Cth) (IPS), the registration of the applicant as a liquidator is suspended for a period of 5 years commencing on 23 June 2023. > > > > (ii) Pursuant to s 40-55(1)(h) of the IPS, the fact of this decision and the reasons of the Tribunal should be published by the Australian Securities and Investments Commission.

Robert Chiarella - Australian Securities and Investments Commission

[1] s 1317B

[8] Reasons at [57] and following - HB 18

[13] Reasons at [81] and following - HB 22

[16] 3rd Edition of the ARITA Code was in force from 18 August 2014 to 1 January 2020

[21] Reasons at [114]-[116] - HB 27

[22] Reasons at [118]-[121] - HB 27-28

[23] Reasons at [122]-[128] - HB 28-29

[24] [1955] HCA 28; [1955] HCA 28; (1955) 93 CLR 127

[25] Reasons at [129]-[147] - HB 29-31

[29] Reasons at [148]-[154] - HB 31

[31] Reasons at [162] and following - HB 33

[40] HB 741-867 (as well as other locations in the hearing bundle)

[43] (1950) 81 CLR 446; [1950] HCA 22 at 466-8

[44] (1939) 62 CLR 464; [1939] HCA 23 at 531-532

[45] (1981) 147 CLR 589; [1981] HCA 45

[47] [2017] NSWCA 38; 93 NSWLR 459

[51] Applicant's Submissions-Issue 1B - SB 96 and following at paragraphs [38]-[41]

[52] [2021] FCA 1203 at [27], [30]

[54] Applicant's SFICS [127]-[128] - SB 22

[55] Applicant's SFICS [129] and following - SB 23 and following.

[56] Respondent's SFICS at [121] - HB 54

[60] Respondent's SFICS at [137] - SB 59

[61] Respondent's SFICS at [138] - SP 59

[62] Respondent's SFICS [140] - SB 60

[63] [2013] FCA 1368

[64] Respondent's SFICS at [144] and following.

[65] Respondent's SFICS at [150] and following - SB 62 and following.

[66] Respondent' SFICS at [156] - SB 65

[71] [2023] FCA 975

[73] [2007] HCA 23; 231 CLR 350

[76] applicant's SFICS at [147] - HB 25

[77] [1993] AATA 196

[78] Applicant's SFICS at [120] and following.

[82] Interview transcript page 38 line 20 and following - HB 1324

[83] [2004] HCA 42; (2004] 20 CLR 129 per McHugh J at [48] and following.

[84] [2021] SASC 12 per Doyle J at [74]

[86] Applicant's Submissions - Issued 2 at [2]

[89] [2013] FCA 872; 303 ALR 98