The second question
17 Sub-sections (2) and (3) of s 1560 provide:
Old Act registrant may not accept further appointments after registration expires
(2) The old Act registrant is taken to be registered as a liquidator under Subdivision B of Division 20 of the Insolvency Practice Schedule (Corporations) after the expiry day, subject to a condition that he or she must not accept any further appointments as external administrator of a company.
(3) That condition is a current condition imposed on the old Act registrant.
18 The issue that arises is what is the consequence of an old Act registrant accepting further appointments after their registration expires, as occurred in this case?
19 The answer to that question, as ASIC submitted, is found in Div 40 of Sch 2 to the Corporations Act.
20 That Division is headed "Disciplinary and other action". Section 40-20 is headed "Automatic cancellation" and provides that the registration of a person as a liquidator is cancelled if the person becomes "an insolvent under administration" or dies. Sections 40-25 and 40-30 respectively provide that ASIC may suspend (s 40-25) or cancel (s 40-30) the registration of a person as a liquidator if:
(1) the person is disqualified from managing corporations under Pt 2D.6 of the Corporations Act, or under a law of an external Territory or a law of a foreign country: ss 40-25(1)(a), 40-30(1)(a); or
the person ceases to have adequate and appropriate professional indemnity insurance (ss 40-25(1)(b)(i), 40-30(1)(b)(i)) or adequate and appropriate fidelity insurance (ss 40-25(1)(b)(ii), 40-30(1)(b)(ii)) against the liabilities that the person may incur working as a registered liquidator; or
(2) the person's registration as a trustee under the Bankruptcy Act 1966 (Cth) has been cancelled or suspended, other than in compliance with a written request by the person to cancel or suspend the registration: ss 40-25(1)(c), 40-30(1)(c); or
(3) if the Court has made an order under s 90-15 of the Corporations Act that the person repay remuneration and the person has failed to repay the remuneration: ss 40-25(1)(d), 40-30(1)(d); or
(4) the person has been convicted of an offence involving fraud or dishonesty: ss 40-25(1)(e), 40-30(1)(e); or
(5) the person lodges a request with ASIC in the approved form to have the registration suspended (s 40-25(1)(f)) or cancelled (s 40-30(1)(f)); or
(6) in the case of a person who is a leviable entity (within the meaning of the ASIC Supervisory Cost Recovery Levy Act 2017 (Cth)), the following have not been paid in full at least 12 months after the due date for payment:
(a) an amount of levy (if any) payable in respect of the person;
(b) an amount of late payment penalty payable (if any) in relation to the levy;
(c) an amount of shortfall penalty payable (if any) in relation to the levy.
21 Where ASIC decides under s 40-25 or s 40-30 to suspend or cancel the registration of a person as a liquidator it must provide to that person, within 10 business days after making the decision, a written notice setting out the decision, and the reasons for it: s 40-35(2). The decision comes into effect on the day after the notice is given to the person: s 40-35(3).
22 ASIC may also give a show-cause notice to a registered liquidator. Section 40-40 provides that "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, among a variety of other things, that "the liquidator has breached a current condition imposed on the liquidator": s 40-40(1)(e). ASIC does not have the power to suspend or cancel the registration of a person as a liquidator if it believes that he or she has breached a current condition imposed upon the liquidator, without complying with the show-cause notice provisions, contained in ss 40-45, 40-50, 40-55, 40-60 and 40-65. Section 40-45 provides that ASIC may convene a committee to make a decision under s 40-55 whether, among other things, the liquidator should continue to be registered (s 40-55(1)(a)), whether the registration should be suspended or cancelled (s 40-55(1)(b) and (c)), whether the liquidator should be publicly admonished or reprimanded (s 40-55(1)(e)) or whether conditions should be imposed (s 40-55(1)(f) and (g)). If the committee is convened and the matter is referred to it, the committee must report to ASIC its decision in relation to the liquidator (s 40-60) and ASIC must give effect to the committee's decision (s 40-65).
23 Subdivision F of Div 40 permits a person whose registration as a liquidator has been suspended to apply to ASIC for the suspension to be lifted or for the period of suspension to be shortened. Such applications may in turn be considered by a committee, which must then report its decision to ASIC.
24 The consequence of an old Act registrant accepting further appointments after his or her registration expires depends upon the circumstances of each case. What is clear, and critical for current purposes, is that an alleged breach of a current condition imposed on a liquidator, which includes "a condition that he or she must not accept any further appointments as external administrator of a company" within the meaning of s 1560(2), if it is to be the subject of any action by ASIC, must be dealt with by following the show-cause provisions contained in Sch 2: s 40-40(1)(f). Obviously enough, the severity of the penalty, if any is to be imposed, will depend upon the individual circumstances of each case, including any explanation given by the liquidator as to why he or she did accept further appointments as external administrator of a company in circumstances where it was a current condition of their registration under s 1560 that they not do so.
25 As I explained in my reasons for extending the convening period (see Deppeler, in the matter of Deppeler [2017] FCA 768 at [22]), Mr Deppeler and Mr Cooper:
(1) made their applications for an extension of time to this Court to apply to have their registrations as liquidators renewed only days after becoming aware of the expiry of their respective registrations;
(2) provided a frank explanation of the circumstances giving rise to the need for an extension, which included that, unlike at least one of their partners, they did not receive a reminder or notice in the form that had apparently been provided by ASIC to other liquidators; and
(3) are experienced liquidators who had satisfied all of the relevant continuing professional development requirements, had not been the subject of any ethical or related complaints and had all the adequate and appropriate professional indemnity and fidelity insurance.
26 It seems to me, having had the benefit of very helpful submissions from ASIC on the point, that, properly construed, s 1560 does not operate in such a way that the accepting of further appointments as external administrator of a company by an old Act registrant means that the mere acceptance of those appointments has the consequences that he or she is "not taken to be registered as a liquidator".
27 Ultimately, however, ASIC did not oppose the making of the declarations set out at [6] above - which, if I may say so, was very sensible, given that Mr Deppeler and Mr Cooper were the first liquidators who found themselves in this position, that they brought an application seeking to regularise things as soon as they could, and that issues of statutory construction arose for decision.
I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice O'Callaghan.