Points (1) and (2) above both concerned Mr Mansfield’s status as a resident of Singapore.
Subsection 20-20(4) of the Corporations Schedule provides a mandatory pathway to registration in that an applicant must be registered to the extent the Committee is satisfied that the applicant has met the criteria set out in (a) to (i). Subsection 20-20(4)(i) requires the applicant to be resident in Australia or in another prescribed country. It was not in dispute in the proceedings that Mr Mansfield was not resident in Australia or that no other country has been prescribed to date.
However, an alternative, discretionary pathway to registration is provided for in subsection 20-20(5), which provides that if the committee is not satisfied of certain elements of subsection 20-20(4), including (a) and (i), it may nonetheless determine that the applicant should be registered on a conditional basis.
It was submitted on behalf of Mr Mansfield that what subsection 20-20(5) evinces is an acceptance by Parliament that an inability to meet the factors in subsection 20-20(4)(a) and (i) does not automatically preclude registration, provided that there are conditions which can be imposed which mean the public is adequately protected.
Subsection 20-1(2)(e) of the Corporations Rules requires assessment of whether an applicant has demonstrated the capacity to satisfactorily perform the functions and duties of a registered liquidator. In determining Mr Mansfield’s application, the Committee had referred to unspecified ‘logistical problems’ as a result of his status as a resident in Singapore. These difficulties were expanded upon during the course of the appeal and primarily concerned ASIC’s ability to effectively supervise and regulate a non-resident practitioner.
The position advanced by the Committee was that there were no conditions that would be capable of addressing the regulatory and supervisory concerns of ASIC in respect of a non-resident liquidator.1 This position was primarily dependent on the assertion that Mr Mansfield’s status as a non-resident would deprive ASIC of certain regulatory mechanisms otherwise available to it. In particular, it was submitted that due to the fact that the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) does not have extraterritorial effect, ASIC would be unable to validly issue notices requiring attendance and/or the production of information or documentation under sections 19 and 30B of the ASIC Act to a non-resident.
The Tribunal held, consistent with the submissions of counsel for Mr Mansfield, that the position advanced by the Committee would effectively render subsection 20-20(5) redundant. In other words, to accept that there was no condition sufficient to deal with Mr Mansfield’s status as a non-resident would mean that he could never be registered as a liquidator which clearly contradicts the express terms of subsection 20-20(5). In so doing, the Tribunal held that the relevant test is not whether the regulatory regime for a non-resident liquidator is identical to that of a resident liquidator but whether conditions of registration would provide an adequate level of protection of the public, which is to be determined on a case by case basis.
The Tribunal went on to note that the conditions that had been agreed between the parties resolved the majority of concerns raised in respect of residency. The conditions related to issues of service, Mr Mansfield’s presence within the jurisdiction, the establishment of a Borelli Walsh office in the jurisdiction, disclosure to creditors, methods of contact, interaction with the regulator, the retention and availability of books and records and membership of ARITA. It was also noted that there were alternative processes available to ASIC, albeit that they may be more time consuming and/or costly, under the Corporations Act 2001 (Cth) (e.g. the public examination process) and the Corporations Schedule, Singaporean statutes and the UNCITRAL Model Law on Cross-Border Insolvency to effectively regulate Mr Mansfield for the periods of time that he was not present within the jurisdiction.
The one condition that was not agreed between the parties and that was imposed by the Tribunal was a condition that Mr Mansfield only accept appointments on a joint and several basis with a registered liquidator resident in Australia for a period of 12 months.