Hello, my name is Paul Shaw and I am the National Manager of AFSA’s Regulation and Enforcement division. I welcome all practitioners and their staff
to this podcast on the topic of referring alleged offences to AFSA. I also welcome members
of the wider community who have an interest in personal insolvency and bankruptcy law. One of AFSA’s aims is to ensure practitioners
comply with the Bankruptcy Act when referring alleged offences to AFSA. AFSA also aims to assist practitioners to
carry out their duties as required by the Act. In this podcast we will cover: The structure of AFSA’s Enforcement team,
The obligations and AFSA’s expectations of insolvency practitioners in relation to
offence referrals, pre referral enquiries, and
offence referrals The AFSA Enforcement team is part of the Regulation
and Enforcement division of AFSA, and is primarily responsible for compliance with the personal
insolvency-related offence provisions in the Bankruptcy Act.
While AFSA also has responsibilities for the investigation of contraventions and offences
relating to the Personal Property Securities Register, often known as the PPSR, this podcast
will focus on offences concerning the Bankruptcy Act, which I will refer to as the Act.
AFSA’s responsibilities include the identification and investigation of material offences under
the Act and, where appropriate, the preparation of briefs of evidence for consideration of
prosecution, a decision which is made by the Commonwealth Director of Public Prosecutions.
AFSA’s powers in relation to personal insolvency offences are limited to offences under the
Act, and specific sections of the Commonwealth Criminal Code.
The definition of an offence in section 5 of the Bankruptcy Act, includes offences under
sections 137.1 and 137.2 of the Criminal Code which relate to providing false or misleading
information. AFSA Enforcement has three teams in different
states to handle alleged personal insolvency offences:
Offences relating to alleged offenders located in South Australia, Victoria, and Tasmania
are usually assessed in Melbourne. Offences relating to alleged offenders located
in New South Wales and the ACT are usually assessed in Sydney.
And offences relating to alleged offenders located in Queensland, Western Australia and
the Northern Territory are usually assessed in Brisbane.
Compliance offences, such as failure to lodge a statement of affairs under s.54(1) of the
Act, are assessed by AFSA‘s Compliance Team located in Melbourne. One duty of trustees under section 19(1) sub-paragraph
(i) of the Act, is to refer matters to the Inspector-General in Bankruptcy, in practice,
AFSA’s Enforcement team where there is evidence that an offence under the Act may have been
committed. AFSA also expects that registered debt agreement
administrators will report any offence committed by a debtor under either subsections 267(2)
or 269(1) of the Act. I note these provisions can also potentially
apply to bankrupts. An offence under subsection 267(2) of the
Act, for example, in relation to Debt Agreements arises where a debtor makes a declaration
they know to be false in either: An explanatory statement accompanying
their debt agreement proposal An explanatory statement accompanying
a proposal to vary a debt agreement An explanatory statement accompanying
a proposal to terminate a debt agreement; and
A Debt Agreement Statement of Affairs An offence under section 269(1) of the Act
arises where, for example, a debtor obtains credit either by themselves or jointly in
an amount exceeding $3000 or operates a business without disclosing that they are a party to
a debt agreement. AFSA’s website contains information for
practitioners on referring alleged offences. These pages contain important information
about pre referral enquiries and detailed offence referrals. I will now talk about pre referral enquiries. AFSA understands that compiling offence referrals
can be time consuming for practitioners, and this prompted us to introduce pre referral
enquiries (which I will refer to as PREs) as a precursor to preparing detailed offence
referrals. The introduction of PREs has been part of
AFSA’s commitment to reduce the regulatory burden for practitioners. PREs should be used when a practitioner considers
that an offence against the Act may have occurred and it is unclear (or the practitioner is
undecided) whether there is sufficient evidence to support the completion of an offence referral. A PRE can also be used if a practitioner considers
a suspected offence to be trivial and having no impact on the administration of the estate. AFSA suggests practitioners, and their staff,
use PREs where there is doubt about referral of a matter. I will now provide an example of when a PRE
could be submitted. Assume a bankrupt has not disclosed a bank
account in their Statement of Affairs. The trustee’s investigations have revealed the
bank account had been dormant for over two years, contains negligible funds and the bankrupt
has said that the omission was an oversight as they had completely forgotten that the
account existed. The omission would appear to be minor for the administration of the
estate, and AFSA may consider it unnecessary for the practitioner to refer the matter with
a detailed referral. Depending on the particular circumstances,
AFSA Enforcement may not proceed to a formal investigation if the circumstances show that
the public interest would not be served by investigating and prosecuting that offence.
In those circumstances, a PRE could be an option rather than a practitioner completing
a detailed offence referral. So how do you submit a PRE?
Practitioners can submit PREs by completing the PRE form or they can simply email relevant
details to AFSA Enforcement. At a minimum, the details required are:
the alleged offender’s name, address, administration number; the relevant suspected offence; a
brief summary of what has occurred and any other relevant factors. Practitioners should also ensure that a record
of the PRE and AFSA Enforcement’s response is kept on the relevant file. Information
included in the PRE should be concise and accurate as it may be reviewed by AFSA Regulation
at a later date to check it identifies all of the relevant issues that have come to the
practitioner’s notice. A PRE database is maintained by AFSA Enforcement
to keep records of the number of queries and email exchanges between Enforcement and the
practitioners making the enquiries. I will now talk about a detailed offence referral.
If a practitioner considers that there is evidence that an offence under the Act has
been committed, and a PRE is not used, a detailed offence referral must be submitted which will
need to set out all the information and evidence in relation to the alleged offence. To submit a detailed offence referral, practitioners
should complete the AFSA offence referral form with supporting evidence. AFSA Enforcement
prefers that referrals are submitted by email. Please note that a 10 megabyte limit applies
to all incoming emails. If a referral is too large to be submitted
by email, hard copies can be submitted to the appropriate AFSA state office for investigation
based on where the alleged offender resides. If the alleged offender resides in Victoria,
South Australia or Tasmania, please post your referral to our Melbourne office. If the alleged offender resides in New South
Wales or the ACT, please post your referral to our Sydney office. If the alleged offender resides in Queensland,
Western Australia or the Northern Territory, please post your referral to our Brisbane
office. The postal address for our offices are located
on our website. All compliance related offence referrals,
such as failure to lodge a statement of affairs under subsection 54(1) of the Act, should
be forwarded to our Melbourne office. For further guidance please see: Inspector-General Practice Statement 14.1
– Referring offences against the Bankruptcy Act 1966 to the Inspector-General That concludes our podcast on offence referrals. Further guidance regarding offence referrals
can be found on our website and Official Receiver’s Practice Statement
10 – Filing of a Statement of Affairs and issue of a 77CA notice by the Official Receiver
Inspector-General Practice Statement 6 – Referral of offences for rash & hazardous
gambling under section 271 Inspector-General Practice Statement 14
– Referring offences against the Bankruptcy Act 1966 to the Inspector-General Inspector-General Practice Statement 18 – Issuing of infringement notices by the
Inspector-General in Bankruptcy. I encourage practitioners to contact AFSA
Enforcement with any questions. You can email us at [email protected] or by phone
on 1300 364 785 and ask to speak to Enforcement. Thank you for watching this podcast.