On 29 January 2019, a disciplinary committee hearing took place to consider whether Mr David Leigh’s registration as a personal insolvency trustee should continue.
The Inspector-General convened the hearing as Mr Leigh, through his own admission, had acted fraudulently and with dishonesty, misappropriating $800,000 in a corporate liquidation.
Although no fraudulent activity or misappropriation of funds was evident in Mr Leigh’s capacity as a registered trustee for personal insolvencies, the roles and responsibilities of a trustee and liquidator are very similar.
The disciplinary committee was asked to investigate whether Mr Leigh was still a fit and proper person to adequately perform the role of a trustee.
In its report dated 31 January 2019, the committee decided that Mr Leigh’s registration should be cancelled.
It further decided that a condition should be imposed on all other registered trustees that they must not allow Mr Leigh to carry out any of the functions or duties, or exercise any of the powers of a trustee on their behalf, (whether as an employee, agent, consultant or otherwise), for a period of 10 years from the date of the report.
Mr Hamish McCormick, AFSA’s Chief Executive and Inspector-General in Bankruptcy, said it is a condition of registration that Trustees maintain high professional standards.
“People who use the personal insolvency system need to have confidence in it—and in those who work within it.
“AFSA will not hesitate to take appropriate action against trustees if they become unfit to hold that position,’ Mr McCormick said.
Registered trustees in bankruptcy play an important part in Australia’s financial system.
They are entrusted with ensuring, among other things, that people with unmanageable debt fully account for their financial position and to also maximise the returns to those that are owed money.
This places them in a position of great trust, essentially safeguarding “other people’s money” until it is ready for distribution to creditors.
Further details, including the committee’s reasons for its decision and the committee’s report can be accessed on the AFSA website.