The Companies Auditors and Liquidators Disciplinary Board (CALDB) has suspended the registration of Mr William James Hamilton as a liquidator for six months.
Liquidator handed six-month suspension
Mr Hamilton, of Northbridge, NSW, was a partner in the insolvency firm, Hamiltons Chartered Accountants, Business Advisors.
The suspension, effective from 3 June 2014, follows an ASIC application to the CALDB detailing an investigation into Mr Hamilton’s conduct as a joint liquidator of ERB International Pty Ltd (in liquidation) (ERB) from 2 April 2008.
The CALDB found Mr Hamilton did not adequately and properly perform his duties as a joint liquidator. In reaching this view, CALDB agreed with ASIC’s submission that in carrying out the office of liquidator, a joint liquidator who does not have main carriage of the matter must still have an adequate and proper involvement in the liquidation.
Specifically, the CALDB found Mr Hamilton did not adequately and properly perform his duties as a joint liquidator by:
• entering into a deed of settlement and release with the directors of ERB and a director-related company to accept an amount which had not been properly assessed and no proper investigation had been made as to the financial capacity of the directors and related company to pay or what their true indebtedness was
• failing to seek the approval of the court or a resolution of creditors before entering into the deed of settlement and release, and
• failing to seek legal advice about entering into the deed of settlement and release.
The CALDB also said that reports to creditors lacked meaningful information to enable creditors to make an informed assessment of the reasonableness of the liquidator’s remuneration, and that the liquidators failed to adequately account to creditors regarding their conduct of the winding-up of ERB.
Lastly, the CALDB found that Mr Hamilton failed to lodge a report with ASIC in circumstances where possible offences by the directors had been identified.
In addition to his suspension, Mr Hamilton is required to enter a number of undertakings with which he must comply before accepting any new appointments as a liquidator, including:
• completing courses and professional development training agreed in advance with ASIC, and
• retaining a qualified independent consultant, agreed in advance with ASIC, to analyse the risk management and compliance procedures in place at Mr Hamilton’s firm. This will include the conduct of liquidations and company administrations and to prepare a report outlining any gaps identified, including recommendations to address those gaps, with implementation to be overseen by the independent consultant.
Following his suspension, Mr Hamilton must also submit the first four company external administrations conducted by him as a liquidator to an independent review by a person approved by ASIC.
ASIC Commissioner John Price said, "This action reaffirms our message that ASIC will not hesitate to take disciplinary action against practitioners who fail to act in the best interests of creditors, or whose conduct falls short of required professional standards."