Recent updates to the Alleged Offence Referral to AFSA template now provide for the inclusion of details of any person (individual or corporate) acting on behalf of, or assisting, a bankrupt or debtor. This can include a spouse, child, friend, accountant or lawyer assisting a bankrupt in an informal capacity, as is often the case.
As trustees are aware, they have a duty under section 19(1)(i) of the Bankruptcy Act 1966 to refer to AFSA any evidence of an offence committed by a bankrupt. However, there are often circumstances where it is unclear whether there is sufficient evidence to support an offence referral. AFSA has available a Pre Referral Enquiry (“PRE”) program that is a convenient and efficient way to deal with such matters. PREs can be as simple as emailing AFSA with a summary of the circumstances and suspected offence/s and are particularly useful:
- for suspected trivial offences (e.g. failure to advise the trustee within 21 days of new employment) that do not impact on an administration;
- when there is partial compliance with a trustee’s direction or formal notice; and
- to gauge AFSA’s view as to whether a detailed offence referral is warranted.
Trustees should be mindful of the requirements for the proper service of directions/formal notices – ordinary post is insufficient in the absence of confirmation of receipt (such as a written or verbal reply). Trustees should also be mindful of the short limitation periods for certain offences and aim to complete an offence referral or PRE as soon as possible in order to ensure AFSA has sufficient time to investigate the matter. For example, AFSA would not accept for investigation an offence referral, eight months after the fact, in which a bankrupt failed to provide details of their income.
To clarify, a trustee remains obligated to report an offence, even if outside of the limitation period, and serves as a record during AFSA’s annual inspection. Offence referrals also assist AFSA in tracking current trends and maintaining its database of every offence referral and PRE.
If you would like more information or advice in relation to insolvency, restructuring or debt recovery practice and procedure, contact Andrew Behman at email@example.com, or a Principal of the Matthews Folbigg Insolvency, Restructuring & Debt Recovery Group:
Jeffrey Brown on (02) 9806 7446 or firstname.lastname@example.org
Stephen Mullette on (02) 9806 7459 or email@example.com