The
reason complaints to ITSA's Bankruptcy Regulation are
fucked over is because this supposedly "independent "
branch has no investigation policy. ITSA only has a fraud
Enforcement investigation policy so any compliance breaches by ITSA
are not investigated correctly.
This
is because ITSA's Legal Branch are advising that
S134 gives discretion to fuck everyone over.
I
was told by Tibor Karolyi ( whose wife , a schoolteacher ,had an
affair with a schoolboy) that ITSA accepts False Statement of
Affairs by Bankrupts, and the fat skank Chery Cullen told
me ITSA has the discretion to give
false information . This is on the legal advice of Matthew
Osborne.
Adam
Toma , National Manager Enforcement and REGULATION has failed
to implement a correct investigation policy for Bankruptcy
Regulations.
The
Inspector General clearly outlines the procedures that
Bankruptcy Regulation should be observing when they are aware of non
compliance, however there is no compliance with these
directions.
Disciplinary
sanctions
6.
As described in the Schedule 4A Trustee Performance Standards, there
is an expectation that trustees who, without reasonable explanation,
regularly fail to comply with the Bankruptcy Act and Regulations, or
who diverge from acceptable standards of practice or whose behaviour
or conduct brings the integrity of the insolvency system into
disrepute will be subject to disciplinary action.
7.
Disciplinary action may be taken where a breach of the Act or a
performance standard is identified. In deciding what action is
appropriate Bankruptcy Regulation takes into account: (a)
the nature of the breach;
(b)
the seriousness of the effect of a failure to comply, including the
impact on a particular estate or individual; and
(c) a
trustee's performance history and whether the trustee has previously
failed to comply when able to.
1
These
directions also refer to ITSA
According
to the AGIS all complaints are to be investigated . With no
investigation policy Bankruptcy Regulations are under no obligation
to refer compliance breaches
This
is according to the Australian Government Investigation
Standards...........
Responsibility
for conduct and referral of investigations/
Under
the guidelines agencies are required to investigate minor and routine
offences against agency programs, irrespective of whether the
investigation results in the application of an administrative
remedy OR referral of the matter for prosecution
Inspector
General Practice statement 8
..Involuntary
Cancellation of Trustee Registration
Release
Date January 2009
i
CONTENTS
Page No
Introduction.............................................................................
1
Overview
of a bankruptcy trustee’s duties........................... 1
Disciplinary
sanctions.............................................................
1
Classification
of Non-Compliance........................................... 2
Disciplinary
and committee process...................................... 3
Legislative
Basis.....................................................................
3
Committee
Process.................................................................
4
The
interview process and natural justice...............................
5
The
decision.............................................................................
6
Right
of
Review.......................................................................
7
Introduction
1.
In
the past Courts decided on whether to cancel a trustee’s
registration. On 16 December 1996 this became an administrative
decision made by a committee convened by the Inspector-General in
Bankruptcy.
2.
This
document outlines the process involved when the Inspector-General
considers taking steps that may lead to cancellation of the
registration of a registered trustee under the Bankruptcy Act. This
document also outlines the independent committee processes and the
basis of the Inspector-General’s decision making.
Overview
of a bankruptcy trustee’s duties
3.
Registered
trustees are required to maintain the utmost professionalism,
independence, impartiality, honesty and ethics in their dealings.
They are considered officers of the Court and in exercising powers
and discretions and making decisions no lesser standard is to be
expected of them than of a court or judge. They play a central role
in the administration of estates and are under a general duty to
exercise the powers in such a fashion that the objects of the Act,
including those of equality between creditors and fairness to
bankrupts and debtors are served.
4.
Registered
trustees also have statutory duties set out in the Bankruptcy Act.
They have a fundamental duty when administering an estate to carry
out certain investigations and undertake certain tasks and functions
as set out in section 19 of the Bankruptcy Act. Trustees are also
required to maintain proper accounts and records, have proper money
handling processes and assist the Inspector-General in his
investigations when required.
5.
Registered
trustees are also required to comply with the legislative standards
set out in Schedule 4A of the Act.
Disciplinary
sanctions
6.
As
described in the Schedule 4A Trustee Performance Standards, there is
an expectation that trustees who, without reasonable explanation,
regularly fail to comply with the Bankruptcy Act and Regulations, or
who diverge from acceptable standards of practice or whose behaviour
or conduct brings the integrity of the insolvency system into
disrepute will be subject to disciplinary action.
7.
Disciplinary
action may be taken where a breach of the Act or a performance
standard is identified. In deciding what action is appropriate
Bankruptcy Regulation takes into account:
(a)
the
nature of the breach;
(b)
the
seriousness of the effect of a failure to comply, including the
impact on a particular estate or individual; and
(c)
a
trustee's performance history and whether the trustee has previously
failed to comply when able to.
1
IGPS
8 – Involuntary cancellation of registration
8.
There
is a range of sanctions or actions which Bankruptcy Regulation can
take when it considers breaches of duty or non compliance have
occurred. Involuntary cancellation of registration is generally a
sanction of last resort. Sanctions that Bankruptcy Regulation may
consider prior to initiating action to de-register a trustee include:
(a)
Education
– making trustees aware of problem areas and the correct practice
or law individually and collectively;
(b)
Individual
counselling – by far the most effective means to achieve timely
remedial action;
(c)
Changing
in the risk classification of a trustee. This will lead to a larger
sample of files being selected for future annual inspections and a
more detailed inspection being undertaken, particularly in areas of
prior non-compliance;
(d)
Formal
investigation and reporting under section 12 of the Bankruptcy Act.
Such reports may be supplied to creditors, police and other regulator
or disciplinary bodies such as ICAA, CPA or Law Councils and
Societies;
(e)
Audit
of a trustees accounts - section 175;
(f)
Imposition
of penalties for Realisation and Interest Charge breaches;
(g)
Issue
of “show cause” letters requiring a trustee to explain both their
actions and why they should continue to be registered; and
(h)
Referral
to other investigation units or law enforcement bodies.
Classification
of Non-Compliance
9.
Bankruptcy
Regulation utilises a classification system to describe areas of
non-compliance and assist it to decide on the appropriate action to
take subject to the seriousness and impact.
Category
A
Fundamental
breaches and lack of controls that are likely to bring into question
the integrity of the system. This includes cases where there are
repeat non-compliance occurrences of Cat B type previously identified
and reported on.
These
matters will give rise to either legal action, referral to fraud
investigators or section 155H action concerning deregistration.
Category
B
Serious
and systemic issues that will have a material impact on the
administration and require timely action.
In
these cases the trustee will be counselled and timely remedial action
is expected to be taken. Failure to take timely remedial action will
give rise to reclassification to a Cat A and appropriate action.
2
IGPS
8 – Involuntary cancellation of registration
Category
C
One
off practice or procedural non compliance is not systemic and doesn’t
have a significant impact on the administration, dividend or
creditors, debtor’s rights or system integrity but should be
brought to the attention of the trustee.
Further
identification of errors of this nature through complaints or later
inspections would see the escalation of the error to a category B and
counselling of the trustee.
10.
This
provides a structured process that will see the escalation of a
matter if it is not resolved by the trustee. Most matters are
resolved quickly and amicably on Bankruptcy Regulation intervention.
11.
Hence
breaches or non-compliance with the Act or a performance standard may
give rise to a simple query by Bankruptcy Regulation on the reasons
why there has been a deviation and where repetitive breaches occur
or, in the case of a serious breach, result in action to cancel a
trustee’s registration.
Disciplinary
and committee process
12.
Usually
a trustee will be well informed of issues of concern raised by
Bankruptcy Regulation as delegate for the Inspector-General in
Bankruptcy during investigations or inspections and will have been
provided the opportunity to state their position.
Legislative
Basis
13.
Section
155H provides that the Inspector-General may ask a registered trustee
to give the Inspector-General a written explanation why the trustee
should continue to be registered, if the Inspector-General believes
that:
(a)
the
trustee no longer has a qualification or ability that is prescribed
by the regulations made for the purposes of paragraph 155A(2)(a); or
(aa)
the
trustee no longer has the ability (including knowledge) to perform
satisfactorily the duties of a registered trustee; or
(b)
the
trustee has been convicted of an offence involving fraud or
dishonesty since registration as a trustee; or
(c)
the
trustee is not insured against liabilities that the trustee may
incur, or has incurred, working as a registered trustee; or
(d)
the
trustee is no longer practising as a registered trustee; or
(e)
the
trustee has contravened any conditions imposed by the committee on
the trustee’s practice; or
(f)
the
trustee has failed to exercise powers of a registered trustee
properly or has failed to carry out the duties of a registered
trustee properly; or
(fa)
if the trustee is or was the administrator of a debt agreement—the
trustee has failed to properly carry out the duties of an
administrator in relation to a debt agreement; or
3
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8 – Involuntary cancellation of registration
(g)
the
trustee has failed to comply with a standard prescribed for the
purposes of subsection (5).
14.
If
Bankruptcy Regulation as delegate of the Inspector-General then forms
the belief that a ground set out in section 155H is established and
other sanctions are either inappropriate or have had no positive
effect, Bankruptcy Regulation will formally write to the trustee
outlining the breaches in detail, seeking the trustee’s formal
response as to why their registration should not be cancelled. The
trustee is given 28 days to respond in writing.
15.
If
the Inspector-General or delegate does not receive an explanation
within a reasonable time, or is not satisfied by the explanation, the
Inspector-General or delegate must convene a committee to consider
whether the trustee should continue to be registered.
Committee
Process
16.
The
committee must consist of the Inspector-General in Bankruptcy or
delegate, an officer of the Australian Public Service (APS) and a
registered trustee, registered for more than five years, nominated by
the Insolvency Practitioners Association (IPA). To ensure
impartiality no delegate involved in decisions to this point will act
as delegate of the Inspector-General on the committee.
17.
The
committee is required to make inquiries that are reasonable for the
purpose of making an informed decision or that the chairperson
believes are appropriate in order for the committee to have
sufficient information to make the decision.
18.
A
committee must observe natural justice. This is explained in more
detail below.
19.
A
committee is not bound by any rules of evidence but may inform itself
on any matter as it sees fit. This means that the committee will not
hear submissions on whether information provided is admissible in a
court of law or not. Similarly there is no right of “objection”
to the questions being asked by the committee. Questions will be
asked of the trustee and the trustee can choose either to answer or
not. The committee may proceed with its consideration of the matter
irrespective of any refusal to answer.
20.
Whilst
it will usually consider all the supporting documents that formed the
basis of Bankruptcy Regulation’s decisions and the trustee’s
responses the committee is not limited to just that information or
the information that formed the basis of the prior decision to issue
a show cause letter. The committee can consider any information and
form its own view in the matter.
21.
The
committee will interview the trustee. Details of the interview
process are provided below.
22.
Once
the committee has considered all the information it needs it will
decide firstly whether there was a breach set out in section 155H,
and if so whether that breach or breaches were serious enough to
either impose conditions on the registration or to cancel the
trustee’s registration.
4
IGPS
8 – Involuntary cancellation of registration
23.
It
must provide reasons for its decision to both the trustee and the
Inspector-General. The Inspector-General must accept the committee’s
decision and give effect to the decision.
24.
Pursuant
to regulation 8.32 a committee must take all reasonable measures to
protect from unauthorised use or disclosure information given to it
in confidence in, or in connection with the performance of its
functions or the exercise of its powers.
The
interview process and natural justice
25.
Once
the Inspector-General or delegate has determined the makeup of the
committee, the committee will convene to consider the matter. The
date of convening will usually be the first time the committee meets
and as timeframes commence from this date, the trustee will be
advised.
26.
The
interview date, time and place will be arranged to meet the needs of
the committee and the trustee.
27.
Should
the trustee fail to attend the interview and fail to give a
reasonable excuse for non attendance within 7 days, the committee may
proceed with its consideration of the matter. If a reasonable excuse
for failure to attend is provided within 7 days, the committee must
arrange another interview date, time and place.
28.
The
trustee may choose to have legal representation at any point in the
process.
29.
The
interview is an inquisitorial process not an adversarial one. The
process is both to provide the trustee with an opportunity to further
rebut or comment on the issues raised previously by the Bankruptcy
Regulation delegate and to allow the committee to seek clarification
on issues and ask questions concerning the administrations and
practices.
30.
The
trustee may make submissions both on the issue of the prior delegates
decision concerning breaches set out in sub-section 155H(1) of the
Bankruptcy Act and on appropriate sanctions that should be imposed by
the committee, in the event that the committee also finds breaches
occurred.
31.
Time
will be allowed for such submissions and the trustee may introduce
any further information either in writing or orally and this includes
any other parties who would like to put submissions on the trustee’s
behalf. The trustee should advise the committee prior to the
interview if there are any other people he wishes to call to put
information to the committee at that time.
32.
Usually
prior to the interview, the trustee will be provided with all the
information the committee has been provided with and may rely upon,
to allow the trustee to prepare a response. However as some
information may not become available until the interview or
afterwards this will not always be possible.
33.
The
committee will before making its decision provide advice on the
information it will rely upon and provide any subsequent information
to the trustee obtained during or after interview and allow a
reasonable time for the trustee to consider and respond.
5
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8 – Involuntary cancellation of registration
34.
Should
assertions be made as to the character of the trustee by any party
and the assertions form part of the information on which the
committee will rely, the trustee will have a right under natural
justice principles to cross examine the person who made the
assertion.
The
decision
35.
The
committee is required to keep minutes recording their meetings and
decisions made and must make a decision within 60 days of first
convening, which is usually the day of the interview.
36.
The
committee has 14 days from the date of reaching a decision to provide
a report of its decision to the trustee and the Inspector-General.
37.
The
committee has three decision options:
•
Cancel
the trustee’s registration;
•
Allow
the trustee to remain registered unconditionally; or
•
Allow
the trustee to remain registered but with conditions imposed.
38.
It is
important to note that the decision on whether to remove a trustee’s
registration lies with the committee and not the Inspector-General.
The committee decision is also independent to Bankruptcy Regulation’s
investigations and decisions.
39.
The
Courts have historically held trustees’ registrations in high
regard and have been reluctant to de-register trustees unless the
most serious breaches have occurred. Committees, whose decisions are
reviewable in the AAT, will consider any legal precedents which may
provide guidance, in arriving at their decision.
40.
Committees
cannot suspend a trustee’s registration. However a conditional
registration could be made where the trustee remains registered but
may be restricted from practicing for a certain period or restricted
in some other way.
41.
The
committee report, to be provided to the trustee and Inspector-General
in Bankruptcy within 14 days of reaching its decision, will outline
the basis of the decision, detail the issues considered and the
information and law relied upon.
42.
If
the decision is to cancel registration, the trustee will be required
to return their Certificate of Registration unless they have a
reasonable excuse not to do so. The trustee will not be entitled to a
refund of all or part of any registration fee that has been paid. The
trustee would not be entitled to re-apply for registration for a
period of 10 years.
43.
The
Inspector-General is required by law to record the cancellation of
the trustee’s registration on the National Personal Insolvency
Index, a publicly accessible database. The Inspector-General is also
required to report to Parliament on activities under the Bankruptcy
Act. This means that, while the decision in detail is not made
publically available, the name of the trustee whose registration has
been cancelled will be made public as will the general nature of the
breaches involved.
6
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8 – Involuntary cancellation of registration
7
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8 – Involuntary cancellation of registration
Right
of Review
44.
If
the trustee is dissatisfied with the committee’s decision, they may
appeal to the Administrative Appeals Tribunal (the AAT). An
application to the AAT for a review of the committee’s decision
must be in writing, set out the reasons for the application and must
be made within 28 days of the date the committee’s report is
received by the trustee. Full information about applications to the
AAT can be obtained from the local AAT Registry or from the internet
at www.aat.gov.au.
