Sydney liquidator’s registration suspended

Following an application by ASIC, the Administrative Appeals Tribunal (AAT) suspended Mr Geoffrey McDonald’s registration as a liquidator for two years after finding he failed to carry out or perform adequately and properly his duties as a liquidator under s1292 of the Act.
ASIC’s application followed an investigation into Mr McDonald’s conduct while Formula Engineering Pty Ltd (Formula) was in external administration between April 2000 and January 2003.

Registered liquidators from Hall Chadwick were prohibited by professional standards from accepting an appointment as the external administrator of Formula because of a prior professional relationship – Hall Chadwick were the external accountants for Formula.

The investigation found Mr McDonald participated in arrangements with the appointed external administrators of Formula when the company was in external administration.

The investigation also found the external administrator then engaged Hall Chadwick personnel to carry out and perform (and receive fees for) the majority of professional services associated with the external administration.

During this period, Mr McDonald was a partner at Hall Chadwick and continued to be a partner until he left the firm in August 2008.

The CALDB held Hall Chadwick’s arrangements with the external administrators were not permitted by applicable professional standards given Hall Chadwick’s prior professional relationship with Formula, and Mr McDonald thereby failed ‘to carry out or perform adequately and properly’ ‘duties or functions required to be carried out by a registered liquidator.

The registration of voluntary administrator appointed, Mr Andrew Ashton who it was alleged was engaged by Hall Chadwick to perform the work of the external administrator was not suspended or found guilty of any offence. Similarly, the registration of the Deed Administrator, Mr Smiles who it was alleged was egaged by Hall Chadwick was not suspended or found guilty of any offence.

See ADMINISTRATIVE APPEALS TRIBUNAL No: 2008/4078