Australian Securities and Investments Commission v McDermott, in the matter of Conalpin Pty Ltd (in liq)

In the Federal Court of Australia, the Australian Securities and Investments Commission (ASIC) initiated proceedings against McDermott concerning his conduct as a liquidator and administrator for Conalpin Pty Ltd, a company in liquidation. The central issues were whether McDermott failed to act independently and free from conflicts of interest, whether he acted with the appropriate degree of care and diligence, and whether he improperly informed creditors about his remuneration or drew down remuneration without proper approval. The parties agreed to settle the matter, and the court considered whether to approve the proposed consent orders.

The court examined the agreed facts and joint submissions to determine the appropriate relief. Section 536 of the Corporations Act provides the court with broad supervisory jurisdiction over the conduct of liquidators. The court must not narrowly construe this power, and the threshold for initiating an inquiry is not very high. The court found that the agreed facts sufficiently supported the proposed consent orders, which included McDermott's acknowledgment of his misconduct and his undertakings for further education and peer review.

Given the agreement between the parties and the sufficiency of the agreed facts, the court concluded it was appropriate to make the consent orders. The orders reflected the court's acceptance of McDermott's undertakings and provided a basis for ensuring proper conduct in future roles as a liquidator or administrator. The court granted the orders substantially as proposed, thereby formalising the settlement and McDermott's commitments to professional development and oversight.