This story sounds very familiar with Adam Toma National Enforcement Manager protecting the corrupt trusteePaul Pattison....
This National Enforcement Manager at ITSA who is on the take needs a big cock up his arse!!!!!!!
AAT Confirms decision to cancel trustee’s registration The Administrative Appeals Tribunal in Wong v Inspector-General and others Wong v Inspector-General in Bankruptcy and others (V 200600930) Melbourne, 12 June 2008 (AAT) has affirmed the decision of the Committee formed by the Inspector-General to cancel the registration of Loke Ching Wong.
Whilst there are prior cases where the Court has cancelled a trustee’s registration this is the first time that an administrative decision to cancel a trustee’s registration, made by a Committee formed by the Inspector-General, has been the subject of review in the AAT. Senior Member Pascoe summarised the history of the matter at paragraphs 3 and 5:
- Eight matters in which estimated remuneration and costs of Mr Wong in his report to creditors was lower than the amount in his work in progress at the time and lower than his actual final fees. The final fees varied from 11 percent to 244 percent in excess of the estimate.
- Taking remuneration in excess of that fixed by creditors in five administrations.
- Banking estate monies in Mr Wong’s firm’s bank account instead of a required special interest-bearing account on six occasions.
- Use of proxies to pass a creditors’ resolution relating to Mr Wong’s remuneration in wording different to that previously sent to creditors.
- Systematic and unnecessary registration of estates for GST involving unnecessary work and incorrect banking of GST refunds.
- Failure to disclose a second and higher valuation of a property in a report to creditors.
- Failure to disclose to creditors a possible valid claim of a creditor and likely invalid claims of three creditors.
- Failure to investigate validity of claim for lien.
- Representing that a petitioning creditor’s taxed costs had been paid at the date of the report when they had not been so paid.
- Failure to properly calculate the income contribution by a bankrupt.
- Incorrect classification of interest earned as a charge.
- Failure to put resolution to appoint a committee of inspection notwithstanding a clear majority of creditors seeking to have such a committee appointed.
3. In 2004, the Bankruptcy Regulation Branch of the Insolvency and Trustee Service Australia (ITSA) undertook an inspection of 23 files relating to bankruptcy administrations conducted by Mr Wong. By letter of 5 April 2005, Mr Wong was advised that a number of errors had been identified and he was requested to respond by 2 May 2005. After an interview and his letter of response, Mr Wong was advised by letter of 14 October 2005 that the Inspector-General had formed a belief that he had failed to exercise the powers, or carry out the duties of a registered trustee properly. He was requested to provide a written explanation of why he should continue to be registered as a trustee. The Inspector-General did not accept the written explanation and pursuant to s 155H of the Act, convened a Committee to consider his registration. After four days of hearing between June and August 2006. The Committee provided a report dated 5 September 2006 in which it decided that Mr Wong should cease to be registered as a trustee under the Act.
5. In its report, the Committee made a number of specific findings detailing breaches under various sections of the Act including sections 19, 109, 139W, 140,162, 165, 168, 169 and 189A. The report was lengthy but the breaches found can be summarised as follows:
- 1 Wong v Inspector-General in Bankruptcy and others (V 200600930) Melbourne, 12 June 2008
As both parties agreed with the evidence on which the decision was based the AAT needed to consider whether this evidence warranted a cancellation of registration or a lesser penalty such as suspension.
The primary argument submitted by counsel on Mr Wong’s behalf was that the effective penalty of de-registration for ten years was too severe. It was accepted that some penalty was appropriate. An effective suspension of twelve months was proposed by varying the decision to allow Mr Wong to remain registered on condition that he hand over any existing appointments to another trustee and not undertake any new appointments for the suspension period.
It was further submitted that the matters identified by the Committee were either errors of judgement or simple mistakes. It was argued that, as trustee under Part X arrangements, there was limited time and ability to make full enquiries. It was suggested that the legislation in relation to these arrangements contemplated the need to make a judgement call within a limited time frame. Counsel for Mr Wong submitted that there was no evidence of dishonesty or personal gain, only possible negligence. The Tribunal was urged to accept that Mr Wong had learned by his mistakes and the possibility of any further lapses is most unlikely.
The Inspector-General submitted that:
- an effective 10 year de-registration period was that chosen by Parliament in enacting section 155A;
- the breaches by Mr Wong were while acting in a capacity of trustee and involved regular, culpable and negligent conduct in that capacity over several years;
- Mr Wong’s errors of judgement or mistakes favoured him in taking remuneration in excess of that estimated or capped and no mistakes favoured creditors;
- the retention of public confidence required the cancellation of registration; and
- conditions contemplated in s 155I(2)(b) and 3(b) were matters such as undertaking a course of study but not an effective period of suspension of less than ten years.
The AAT made the observation that it was tempted in a form of suspension of less than the statutory period of ten years and could in its view achieve this pursuant to sub-section 155I(3) if it were to decide that Mr Wong’s should cease to be registered if he failed to meet certain conditions, suggesting the conditions that could be imposed might include:
- “that he does not continue with or accept any appointment as trustee for two years and, for those appointments accepted in the third year, provide to the Inspector-General full details of remuneration including creditors resolutions, his reports to creditors showing estimated remuneration, work in progress records and invoice for payment.”
This would have the effect of leaving Mr Wong registered as a trustee. Senior Member Pascoe referred to Muir v Bradley (1984) 57 ALR 155:
- “It is accepted that a trustee under the Act has an onerous duty. At times the estate will not have sufficient funds to provide an adequate remuneration. Particularly in Part X arrangements, the trustee has limited time and limited coercive powers. However, as stated in Muir v Bradley (1984) 57 ALR 155:
“a trustee in bankruptcy is a person who must command and retain the confidence of the Court, of the creditors and debtors in bankruptcy proceedings and of the general community. His competence must be, and remain, of a high order.”…”
In affirming the Committee’s decision he went on to conclude:
- “….having fully considered the report of the Committee, the acceptance of the factual findings of that Committee and the number of breaches relative to the number of files inspected it would be inappropriate to allow Mr Wong to retain his registration. The only alternative is an effective suspension for a period of less than that provided in s 155A(4). Parliament has specifically provided for a 10 year period in that section and, unlike many other Acts of Parliament which have registration provisions, does not otherwise specifically provide the Committee with power to suspend.”
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