Tuesday 29 May 2007 LAWFUEL – The Australia Law News Wire – On 25 May 2007 the Honourable Justice Dodds-Streeton handed down her reasons for decision following the Supreme Court of Victoria’s inquiry into the conduct of Mr Robert John Edge as liquidator, administrator and deed administrator of 24 companies. Mr Edge, 57 of Kew in Victoria, is an insolvency practitioner who is a registered and an official liquidator, an official liquidator being an officer of the Supreme and Federal Courts. Her Honour’s 153-page judgment sets out her findings regarding Mr Edge’s conduct.
The parties have been given the opportunity to submit draft proposed orders by 8 June 2007 based on her Honour’s conclusions. A further hearing, on a date yet to be set, will be conducted prior to the making of final orders. Justice Dodds-Streeton concluded that the evidence established that Mr Edge repeatedly contravened numerous provisions of the Corporations Act (the Act) and Corporations Regulations and that his failure to comply with statutory requirements was ‘chronic and widespread’. Her Honour stated that Mr Edge’s ‘repeated contraventions struck at the heart of the statutory regime designed to ensure the liquidator’s accountability, to facilitate the audit and review of his conduct and to inform and protect members, creditors and the public’.
Mr Edge failed on numerous occasions to lodge forms of account, convene and hold final meetings of creditors, lodge final accounts and had destroyed books and records of companies in contravention of the Act. Her Honour also found that remuneration was paid to or at the direction of Mr Edge in circumstances where there was no permission given by the creditors in contravention of the Act. Her Honour found that Mr Edge had intermingled the funds of various companies in his firm’s bank account and that the payment of remuneration without approval or supporting documentation amounted to the ‘most serious breaches of duty’. Her Honour considered that Mr Edge should be required to pay amounts drawn by him for remuneration without approval, estimated by ASIC to be over $400,000, into the Supreme Court fund.
He will then be required to apply to a Master of the Supreme Court for approval of his remuneration. Her Honour stated that she was not satisfied as to what work had been performed by Mr Edge and concluded that satisfactory supporting documentation was either not prepared or was not in evidence before her. Her Honour concluded that the ‘wholesale destruction of the books and records of many companies’ in breach of the Act made a detailed and comprehensive review of Mr Edge’s conduct impossible.
Finally, her Honour concluded that Mr Edge was unfit to be an official or registered liquidator and that he should be prohibited from holding the office of liquidator, provisional liquidator, voluntary administrator, deed administrator or receiver for 10 years. Background ASIC’s investigation revealed the documentation and explanations provided by Mr Edge were incomplete and inadequate. On 10 March 2006 ASIC commenced proceedings in the Supreme Court of Victoria against Mr Edge alleging that he had contravened numerous statutory provisions and regulations in the course of conducting 24 insolvency administrations. ASIC’s originating process sought an inquiry by the Supreme Court pursuant to section 536 of the Act into the conduct of Mr Edge as liquidator of each of the companies in liquidation and orders pursuant to the Court’s supervisory power under section 447E of the Act in respect of three voluntary administrations. A number of ancillary and consequential orders were sought by ASIC. The Supreme Court’s inquiry was heard over six days during September and October 2006.
Mr Edge was required to give evidence at the inquiry. During the proceedings her Honour stated Mr Edge’s attitude to ASIC’s investigation had been ‘needlessly uncooperative’. There were a number of inconsistencies between Mr Edge’s initial letters to ASIC, documents in evidence, affidavits filed on behalf of Mr Edge and oral evidence given at the inquiry. For further information contact: Jan Redfern Executive Director, Enforcement Telephone: 02 9911 2191 Mobile: 0411 119 210 Danielle Huck ASIC Media Unit Telephone: 03 9280 3407 Mobile: 0417 540 769 Page 2 of 2