Document Sample
Volume 1              Issue 1                                                                          June 2002
This client newsletter by ITSA’s Bankruptcy Regulation branch will be issued each quarter to registered and controlling
trustees. In keeping with one of Bankruptcy Regulation’s main purposes it is aimed at informing bankruptcy trustees of
changes to bankruptcy law, both legislative and case law, and discussing areas of practice and Inspector-General
requirements. Articles are welcome and can be forwarded by email to

BANKRUPTCY LAW                                                                                           PRACTICE

BLAB 2002                                     from bankruptcy of uncooperative
                                              bankrupts after the standard three-
                                                                                      In concluding he added “These
                                                                                      amendments are designed to stop abuses

O    n 21 March 2002, the Attorney-           year bankruptcy period                  of the bankruptcy system and to
     General, the Hon Daryl Williams,      · the confirmation of the Court’s          encourage      people    to    consider
     AM QC MP, introduced two Bills          power to annul a bankruptcy if the       alternatives to bankruptcy such as debt
into Parliament which will amend             bankruptcy petition was an abuse of      agreements. They address concerns that
bankruptcy law.                              process, even if the debtor is           bankruptcy is ‘too easy’ and better
                                             insolvent; and                           balance the interests of debtors and
In introducing the legislation he said                                                creditors.”
“Bankruptcy should be a last resort for    · an increase in the debt agreement
people who have overwhelming debts           income threshold by 50% to about         The BLAB has passed through the
and need a fresh start. However, some        $46,800, after tax, to encourage         House of Representatives and will now
people see it as a way to get out of         more use of debt agreements as an        be considered in the Senate in the
paying debts they can afford to pay. The     alternative to bankruptcy.               Spring sitting.
new bankruptcy laws will make it                                                      ITSA will be providing information
harder for these people to abuse                                                      sessions for practitioners on the
Australia’s bankruptcy system.”                                                       legislative changes prior to the
Changes    under the        Bankruptcy                                                legislation commencing.
Legislation Amendment       Bill 2002                                                 Details of the 2002 Bankruptcy Law
include:                                                                              Amendment      Bill   including  the
·  a new discretion for Official           The Bill will not include the previously   Explanatory Memorandum can be found
   Receivers to reject a debtor’s          proposed mandatory 30-day cooling-off      on ITSA’s website in
   petition where it appears that the      period for people filing for their own     the Bankruptcy Reforms area.
   debtor can afford to pay their debts    bankruptcy.
   and the petition is an abuse of the
   bankruptcy system;                      “Consultation with stakeholders in the     Part X Issues
                                           personal insolvency industry revealed
· the removal of early discharge                                                         ssues have arisen in some Part X
  provisions that have permitted some      that most believed it would add
                                                                                         matters with a number of
  people to be bankrupt for only six       unnecessary complexity to the system
                                                                                         administrations recently subject to
  months;                                  and questioned whether it would
                                                                                      complaints by creditors and put under
· the strengthening of trustee powers      significantly reduce the number of
                                                                                      media and the political microscope.
  to object to the discharge               avoidable bankruptcies” the Attorney
                                           General commented.                         Concerns raised include:
                                                                                      · the extent of enquiries undertaken by
                                                                                        the controlling trustees,
Included Inside This Issue                                                            · the quality of the opinion provided
                                                                                        in    the    report     to   creditors
    1        BLAB Update                                                                recommending the Part X and
                                                                                      · the notice had not been forwarded to
    2        Part X Issues                                                              the major creditor or if it had it had
    3        New BR National Manager                                                    been to an inappropriate address.
                                                                                      An article is included in this edition on
    4        Requirements on Controlling Trustees - s189A                             s189A is to assist trustees. ITSA’s
    5        Recent Case Law incl What is a Quorum? -                                 regulation personnel are responding to
                                                                                      these concerns both through continued
    6        Realisations Charge and Inspection Issues                                education and through an increased
    7        Bankruptcy Fraud News
2                                                                                           Bankruptcy Regulator
PRACTICES                                                                                                          CASE LAW
presence at Part X meetings where they        the meeting should be adjourned and the             must act in an impartial and
will raise issues of concern.                 matter referred to BR for investigation.            independent manner and be impartial
                                                                                                  to the wishes of the debtor4.
                                              The Inspector-General will consider

A      further area where inconsistent
       and      sometimes     inaccurate
       practices have been observed is in
                                              funding a controlling trustee for a legal
                                              challenge to any such proxy.
                                                                                             It is important for the Controlling
                                                                                             Trustee to remember that whilst they are
                                                                                             the “agent” of the debtor, from the
Part X administrations and sometimes
                                                                                             perspective of furnishing creditors with
bankruptcies, involving 2 or more
debtors, with the incorrect application       S189A Reports                                  a s189A report their duty to creditors
                                                                                             overrides any duty to the debtor.
of section 110 of the Bankruptcy Act.         A Controlling Trustees Duty
                                              (by BR’s Athena Burton and                     The various authorities suggest the
The usual requirement is that resolutions
                                               Charles Smith )                               following information should be
in favour are required in each separate
                                                                                             included in the report as a minimum:

estate and the joint estate for a proposal          n issue for Controlling Trustees is
to be accepted.                                     “what information is required in         1. Debtor’s details, date and type of
                                                    order to provide creditors with an           administration, summary of the
Joint creditors are entitled to vote only                                                        statement           of         affairs.
in the joint estate and separate creditors    adequate section 189A report?”
                                                                                                 (PINS 2.1.1–2.1.4)
in the relevant separate estate.              A Controlling Trustee is required to           2. An outline of the debtor’s proposal.
The exception to this is when there is no     carry out investigations and report to             (PINS 1.2.8 and 11.4)
joint estate (ie no joint property to         creditors pursuant to s189A in a
                                              relatively short time frame and the            3. An outline of matters investigated by
distribute) wherein joint creditors can                                                          the        Controlling         Trustee
vote in each separate estate along with       report is critical to the course of the
                                              Part X.                                            (PINS 2.1.9)
the separate creditors.
                                                                                             4. An outline of matters requiring
The implications of this are that Deeds       The Bankruptcy Act provides only a                 further investigations.(PINS 2.1.11)
of Arrangement and Assignment are not         brief outline of the details to be included
                                              in the report. Further guidance can be         5. Comparison of the estimated
able to be structured to provide eg for                                                          dividend under the proposal and
joint property to be sold and applied         obtained from case law and the Personal
                                              Insolvency National Standards1.                    bankruptcy. (PINS 2.1.7)
equally to all creditors. They need to be
                                                                                             6. The basis and method for the
structured to apply joint property to         As creditors are generally not in a                Controlling Trustee’s and Trustee’s
joint creditors and separate property and     position to obtain information they rely           remuneration and an estimate of the
contributions to the respective separate      almost exclusively on the Controlling              remuneration. (PINS 2.1.13 & 11.4)
estates as outlined in s110.                  Trustee to provide the relevant
                                              information. The main principles from          7. A list of all creditors and the amount

Proxy Purchase                                case law are as follows:
                                              · The purpose of the (s189A) report is
                                                                                                 of each debt. (PINS 2.1.5)
                                                                                             8. The Controlling Trustee’s opinion as
“Not On”                                         to appraise the creditors as to the
                                                 debtor’s affairs so that creditors can
                                                                                                 to whether they believe that
                                                                                                 creditors’ interests would be better

B      R have become aware of an                 make an informed decision on                    served by accepting the proposal or
       occasion where a creditor, initially      whether to accept the debtor’s                  by the bankruptcy of the debtor.
       opposed to a proposal, was paid a         proposal. 2                                     (s189A(1)(b))
substantial sum of money outside of the       · The s189A(1)(b) statement of belief          It is difficult to prescribe the extent of
Part X proposal to appoint a person,             of the Controlling Trustee, must be         investigations needed to provide the
from the same firm as the debtor’s               properly based and with such degree         above. The extent of the Controlling
solicitor, as their proxy vote on all            of authority that the creditors can         Trustee’s inquiries will depend on the
matters. The proxy holder then voted in          confidently act upon the opinion. 3         individual circumstances and complexity
favour of the debtor’s proposal. This                                                        of the debtor’s affairs.
appears to have been arranged by the          · The underlying basis of the
debtor’s solicitor.                             preparation of the s189A report is           In the McDougall case5 it was argued
                                                that of a fiduciary duty to the              that the Deed of Arrangement was
BR considers this is an abuse of the            creditors. A Controlling Trustee             flawed as the Controlling Trustee had
process and believes that s64ZC(6)                                                           not provided certain information, albeit
gives a controlling trustee sufficient        1                                              that the information was not known to
right to reject proxies in favour of the        For PINS see or
                                                                    the Controlling Trustee at the time of
debtor or their legal representative.         2
Should a trustee or controlling trustee         Moustafa; Cobbs Hill (Tas) Meat
become aware at, or prior to, a meeting         Supplies Pty Ltd & Others v Moustafa
that this has occurred they should reject       & Others [1998] 838 FCA                          Also see Moustafa
                                              3                                              5
the proxy. Alternatively if uncertain           Re Messina; Ex p Westpac Banking                 McDougall; Ex p Policy Nominees
                                                Corp (unreported 17 April 1998)                  Pty Ltd & Thomas {1997} 197 FCA
3                                                                                     Bankruptcy Regulator
PRACTICES                                            PEOPLE                                                  CASE LAW
the report. Goldberg J concluded that a
S189A report needs to set out only that    New National                                “Suggestions made by trustees included
                                                                                       BR being more visible, having more

                                           Manager BR
information which is available to the                                                  joint training opportunities and dealing
trustee and that the requirement “to                                                   quickly with trustees who contravene
prepare and file a report…within 14                                                    the Act, and who don’t consistently
days of consenting….gives the Trustee
a limited time in which to make relevant
enquiries.” However it should be noted
                                           I   TSA’s Chief Executive and
                                               Inspector-General in Bankruptcy
                                               Terry      Gallagher     recently
                                                                                       display the type of conduct required”.
                                                                                       Andrew considered that “BR will have
                                           announced the appointment of Andrew         a greater presence initially by being
that in the McDougall administration
                                           Robinson as the National Manager            involved in more regular open forums
the trustee had:
                                           Bankruptcy Regulation.                      with practitioners and by attending
· identified the existence of a family                                                 more creditor meetings”.
· set out a number of the trusts                                                       Andrew has commenced this initiative
  activities and                                                                       having recently been involved in
· made it clear that in the event of                                                   presentations and meetings in Hobart,
  bankruptcy the trustee would most                                                    Adelaide Brisbane and Melbourne.
  likely have access to trust assets
  pursuant to Section 139D of the Act                                                  How Many
The Court thought this sufficient
enquiry and appropriate reporting.         Andrew will be based in Brisbane and
                                           will lead ITSA’s regulators with
It is therefore suggested that as a
                                           responsibility for:                         (What constitutes a quorum?)
minimum level of enquiry basic
searches such as property, motor
vehicle and company records together
with independent advice as to asset

                                               monitoring the standard of trustees
                                               and bankruptcy administration,
                                               working with trustees to improve
                                                                                       I   n order to determine whether a
                                                                                           quorum is constituted at a meeting it
                                                                                           is necessary to refer to
worth should be obtained, rather than          bankruptcy       knowledge       and    section 64N(2) of the Bankruptcy Act.
simply relying on details contained in         practice,
                                                                                       However in respect to voting, should
the statement of affairs.                  ·   registration of bankruptcy trustees     the words in sub-section 64N(2)(a)
                                           ·   investigating complaints against        “where there is only creditor entitled to
Similarly as was the case in McDougall,
                                               trustees, and                           vote”, relate to where there is only one
where company/trusts are involved
                                           ·   undertaking specified IG reviews        creditor of the estate or should they be
some independent enquiry is necessary
                                               of trustees decisions                   interpreted with reference to who
to ascertain their activity, worth, the
bankrupts involvement and possible         Andrew brings 20 years experience in        attends the meeting and whether they
antecedent transactions, in order to       the personal insolvency area to the         have provided a s64ZA statement?
allow the trustee to comment on the        position and was a Deputy Official          BLAB 2002 amendments propose a
effect of bankruptcy particularly in       Receiver for 8 years. For the last 3        change to section 64N(2) to ensure that
respect to sections 139D, possible         years he has been ITSA’s national           a quorum will be constituted where a
deeming of income and contributions        business line leader for its bankruptcy     creditor together with the trustee or
and possible voidable transactions.        administration arm where he has             representative is present.
                                           primarily focused on consistency of
In summary, all relevant issues                                                        Until the legislation is amended the
                                           Official    Trustee     practice    and
necessary to give the creditors a ‘true                                                current position is reflected in the
                                           bankruptcy law interpretation.
and fair view’ of the debtor’s affairs                                                 Huynh case1, a decision of a full
must be commented upon.                    Amongst accomplishments in this time        Federal Court, 20 March 2002.
                                           Andrew oversaw the design and
Given that the integrity of the Personal                                               The Court held that where a meeting is
                                           implementation of GST compliant
Insolvency system is questioned when                                                   attended by only one creditor, either
                                           practices in ITSA’s administrations and
creditors are not properly informed                                                    personally or by proxy, and there are 2
                                           was on the ATO’s GST Insolvency
Bankruptcy       Regulation    will   be                                               or more creditors in the estate, there is
                                           Forum. Andrew disclosed that he plans
examining section 189A reports to                                                      no quorum constituted for the purposes
                                           to use his contacts and his experiences
ensure that they are adequately prepared                                               of section 64N(2)(a) of the Act.
                                           as an ITSA trustee to build on the
and plan to hold information sessions to
                                           existing      relationship     between      BACKGROUND
assist controlling trustees.
                                           Bankruptcy Regulation (BR) and
These are likely to be towards the end     insolvency practitioners.                   On the request of Huynh, a creditor and
of this year subject to timing of BLAB                                                 the appellant in these proceedings, the
                                           “I also plan to draw on feedback            trustee called a meeting in order to
2002 presentations.
                                           provided to BR in ITSA’s client
                                           survey”, Andrew stated.                     1
                                                                                           Huynh v Pascoe {2002} FCA 309
4                                                                                           Bankruptcy Regulator
CASE LAW                                                                                                         PRACTICES
consider the appointment of a new             In addition for there to be a creditor         Third Party payments
trustee, pursuant to section 181.At the       “who is entitled to vote” the creditor
first meeting and the subsequently            must have complied with ss64ZA(5) &            In some instances debtors have arranged
adjourned meeting the appellant was the       (6) by having given the trustee a              to pay a trustee the amount of a Part X
only creditor present. Both meetings          statement under s64D. The proposed             Deed or Composition net of fees. The
were adjourned pursuant to section            BLAB 2002 amendments to section                fees are then paid by a third party. The
64N(3) by the trustee, who took the           64N(2) will result in a change to this         Inspector-General’s      legal     advice
view that no quorum was present.              position so that one creditor and the          confirms realisation charge is payable
                                              trustee will constitute a quorum.              on funds received from the third party.
The appellant then sought an order                                                           The receipt should be reflected in the
under section 178 that the trustee be
removed. The main point highlighted in
this summary is the context in which
                                              Recent AAT                                     estate account.

                                                                                             Secured Creditors              -    R/C

section 64N(2)(a) is to be interpreted.           n the recent AAT decision of               Deductions
                                                  Jeanette Ayoub v Inspector-in
INITIAL DECISION                                  Bankruptcy (2002) the AAT                  Following the Realisation Charge
Branson J held that “the question of          affirmed the decision of the Inspector-        presentations BR was requested to
whether ‘there is only one creditor           General to refuse to exercise a discretion     provide a list of what constituted a
entitled to vote” within the meaning of       under regulation 16.10 of the                  “permitted deduction” under sub-section
subs 64N(2) is to be determined firstly       Bankruptcy Regulations to waive or             8(3)(b) of the B(EC)A “amounts paid to
by reference to the total body of             remit the whole or part of the Official        secured creditors”.
creditors and not by reference only to        Trustee's fees, and pursuant to section        In the absence of a specific reference the
those present at the meeting.”                283 of the Act to remit the realisations       definitions under the Bankruptcy Act
                                              charge.                                        apply to the B(EC) Act. In this case the
In addition the creditor must also then
have complied with ss64ZA by having           The discussion concerning waiver of the        definition of a “secured creditor” under
given the trustee a statement of their        realisations charge (pp 16-18) may be of       section 5 of the Bankruptcy Act applies.
debt (see section 64D).                       particular interest.                           This states:

DECISION ON APPEAL                                                                            “secured creditor in relation to a
                                                                                              debtor, means a person holding a
The Appeal Court upheld the decision                                                          mortgage, charge or liens on property
with the majority agreeing with the trial                                                     of the debtor as security for a debt
Judge’s determination with respect to                                                         due…from the debtor”.
the interpretation of the relevant words
in section 64N.                                                                              The essential elements have been
                                                                                             highlighted. Hence charges, mortgages
Conti and Ryan JJ held “That principle,                                                      or liens provided by a trustee over
which we consider to be reaffirmed in
s64N(2), is that where there are two or       B(EC) Act                                      monies due to the trustee for debts
                                                                                             incurred by a trustee are not payments to
more creditors entitled, independently of
s64ZA or its predecessors, to vote, a
quorum may not be constituted by only
                                              Charges                                        a “secured creditor” within s5 of the Act
                                                                                             and do not qualify as a permitted
one such creditor or his or her proxy or      “Up Front” Payments
attorney.”                                                                                   It is inappropriate to try to be too

Carr J, in also dismissing the appeal
disagreed with Conti and Ryan JJ in
                                              F     ees are often paid to a trustee prior
                                                    to the signing of an authority
                                                    under Part X or consent. The
                                                                                             prescriptive but by way of example
                                                                                             permitted deductions include payments
                                                                                             made or money withheld in respect to:
relation to the issue of the interpretation   Inspector-General’s ruling is that where       · valid mortgages given by the debtor
of the words in section 64N(2). Carr J        the payment represents a preliminary              prior to bankruptcy or Part X to
held that the subsection should be            consultation and professional advice              secure housing debt,
interpreted in the context of 64ZA.           prior to a s188 authority being signed or
                                                                                             · local council rates owing at the time
                                              consent this is not a “receipt” by a
WHAT DOES THIS MEAN FOR                                                                        of sale,
                                              trustee subject to realisations charge.
TRUSTEES?                                                                                    · a solicitors lien on funds where the
                                              However any amount which represents              debtor engaged the solicitor prior to
The current position is that where there      an upfront payment of controlling                bankruptcy ie the work was not
are 2 or more creditors in the estate, to     trustees’ or trustees’ fees is subject to        undertaken on behalf of the trustee,
form a quorum and have a valid                the charge. Such components should be
meeting, at least 2 creditors who are         properly brought to account in the Part        · registered bill of sale on plant and
entitled to vote must be present, either      X accounts of the controlling trustee and        equipment given by the debtor to
personally or by proxy or attorney.           trustee if applicable.                           secure business advances.
5                                                                                        Bankruptcy Regulator
PRACTICES                                                                                  BANKRUPTCY FRAUD
Costs that are not permitted “secured        Advances to cover trustees fees are          trustee administering the bankruptcy,
creditor” deductions:                        therefore not payments to the trustee        ITSA’s fraud investigation team, state
·    a trustees legal costs (irrespective    “under an indemnity in respect of            police and both State and Federal DPP.
     as to whether the solicitor has a       costs” within ss8(2)of the B(EC)A.
                                                                                          Suarez was charged with various state
     lien on funds due to the trustee)       The out of pocket costs are capable of       and bankruptcy offences and in
·    trustees agents costs                   a costs indemnity and R/C would not          handing down his decision Senior
                                             be payable on funds received from an         Judge Gilbert Trafford Walker
Section 161B Monies                          indemnifying creditor for this purpose.      indicated that he would have jailed
Does the realisations charge apply to                                                     Suarez for longer had he not made a
                                             EES/GEERS Payments to a                      guilty plea on 73 charges and had no
payments made to a trustee by the
debtor pursuant to section 161B?
                                             trustee                                      other convictions.

BR’s short answer based on legal             Money received from DEWRSB under             He is reported to have taken fraudulent
advice is “yes”. The Explanatory             the EESS or GEERS legislation is not         advantage of a number of parties
Memorandum to the Bankruptcy Estate          monies received by the trustee in their      including friends and his employers
Charges Act 1997 states that “Clause 6       capacity of trustee under the                over a 4 year period. The conviction
proposes the imposition of a similar         Bankruptcy Act, rather it is a payment       received good press coverage where it
charge which will replace the fee            made as agent of DEWRSB. Neither             was reported that the state prosecutor
imposed by sub-rules 179(2) and (3)”.        funds paid to a practitioner, to be          took 90 minutes to summarise Suarez’s
Sub-rules 179(2) and (3) refer to a fee      passed on to employees, or fees for          "varied and diverse" offences.
payable upon furnishing an account to        providing      that  service,    attract
the Registrar in accordance with
s175(1)(a) or s211(1) of the Act.
                                             realisations charge.
Those sections, now repealed, referred       Trustee                                      Investigators
to the account of receipts and payments
in respect of the estate that had to be
furnished to the Registrar. Former
                                             Resigns                                      I   TSA’s        Bankruptcy      Fraud
                                                                                              Investigation team (BFI), have
s179(5) imposed a fee on the total
amount received by the trustee of the
estate, less amounts paid to secured
                                             A     s a result of BR’s proactive
                                                   routine inspection program a
                                             trustee faced with an inspection and
                                                                                          since September 2001 applied greater
                                                                                          resources to bankruptcy offences and
                                                                                          have adopted a more streamlined
creditors, amounts paid in carrying on       discovery advised BR that he had             approach to investigations. They are
the business and any surplus returned        misappropriated estate trust monies for      now able to handle and investigate
to the bankrupt or debtor.                   personal use. At the same time the           more referrals and have a more
                                             trustee resigned as a registered trustee.    focussed      service   delivery    to
As a trustee's remuneration is reflected
in the account of receipts and payments      The matter was referred by ITSA to the
in respect of the estate, it is subject to   state police who have interviewed the        BFI investigators are recruited &
the B(EC) Act charges. Accordingly a         trustee and charges are pending. The         trained for their offence investigative
trustee's    minimum        remuneration     matter is currently with the state DPP.      role and the team is also augmented
received under s 161B including the                                                       with out posted AFP Agents.
top up which has been recovered from
the bankrupt under s 161B(2), is
subject to the B(EC) Act.
                                             B’rupt Jailed                                Meetings have taken place in most
                                                                                          states between trustees and BFI head
                                                                                          Jeff Hanley which has enabled ITSA to
Payment by Creditors                   to                                                 outline its processes and for trustees to
                                                                                          provide valuable feedback. Trustees
Trustees to cover fees
                                                                                          have been offered electronic Offence
Are payments by creditors that include                                                    Referral Forms, Offence check-lists,
funds to cover a trustees fees and out of                                                 Contact Details for the entire Fraud
pockets “amounts paid to the trustee by            1996      Queensland     bankrupt      Investigation crew to facilitate and
creditors under an indemnity in respect
of costs” pursuant to sub-section 8(2)
of the B(EC)A?
                                             A     Laurence David Suarez was
                                                   jailed for seven years in May for
                                             a multitude of offences which saw him
                                                                                          enhance the offence referral process.
                                                                                          Jeff has advised that “In the last 9
                                                                                          months       99 referrals have been
The Inspector-General’s legal advice         receive $1.3 million from a series of        received from registered trustees
reinforces the principles in s109 that       fraudulent transactions.                     compared to 45 referrals received in 12
“costs” in this regard only relates to       The prosecution followed a co-               months prior”. “Referrals from private
amounts payable by the trustee and not       ordinated effort between the registered      practitioners have increased 400% in
the trustees fees.                                                                        the last 6 months which has led to 40
  6                                                                         Bankruptcy Regulator
ISSUES                                                                  CONTACTS
briefs recently submitted to the DPP”
Jeff said.
It is also pleasing to see that in the last
                                                          How to Contact us:
9 months 35 people have received 89
convictions whilst 20 people were
convicted on 33 offences in the 12
months to 31 August 2001.
Trustees should contact BFI upon
discovery of potential offences.
Successful prosecutions are posted on
ITSA's website.

                                              Queensland and South Australia
                                              Arthur Carrick       tel 07-33605404           PO Box 10443, Adelaide St
                                              Charles Smith        tel 07 3360 5425          BRISBANE QLD 4000
                                              Daniel McAuliffe     tel 07 3360 5406          Facsimile: (07) 3360 5466
                                              New South Wales
Issues                                        Mike Barr*             tel 02-8233 7873        Level 8, 135 King Street
                                              Mark Findlay           tel 02 8233 7860        Sydney NSW 2000

    n addition to the Part X and              Helen Karalemas        tel 02 8233 7802        Facsimile: 02-8233 7805
    realisation charge issues canvassed                                                      Email:
    above the following are the most
common compliance issues that have
been identified from the 2002                 Victoria and Tasmania
inspection program of registered              Annette Moodie        tel 03 9272 4805         Level 10, Melbourne Central
trustees and the Official Trustee:            Simon Hogan           tel 03 9272 4886         360 Elizabeth Street
                                              Terry Clarke*         tel 03 9272 4891         MELBOURNE VIC 3000
· Non compliance with general
                                                                                             Facsimile: (03) 9272 4940
  meeting     procedures   including
  recording attendances, minutes and
  resolutions passed,                         Western Australia
                                              Athena Burton         tel 08 9268 1204         GPO Box H536
· Inadequate control over assets
                                                                                             PERTH WA 6001
  including insufficient inventories,
                                                                                             Facsimile: (08) 9268 1218
  passport control and inadequate
  safeguards of the trustees interest in
  respect to real estate,
                                              National Manager
· Insufficient    examination    of
  creditors claims when determining           Andrew Robinson        tel 07 3360 5405        PO Box 10443, Adelaide St
  voting rights,                                                                             BRISBANE QLD 4000
                                                                                             Facsimile: (07) 3360 5466
· Breaches of s168/169 with funds                                                            Email
  relating to an administration not
  being     receipted    into   the
  administration bank account,
                                                          NB * Mike and Terry have responsibility nationally for
· Inadequate internal controls re                         Complaints and IG Reviews
  payment of remuneration resulting
  in   unintentional  unauthorised
  payments, and                                        ************************************************
· Failure to comply with sub-
  regulation 4.14.1 requiring a notice
  to creditors within 28 days.

Shared By: