Invalid remuneration approval
The IPA received a complaint in relation to claims that the agreement for a fixed fee agreement had been breached and the member's failure to notify of the rejection of a related party proof of debt prior to the distribution of funds. The complainant also raised concerns about whether the remuneration resolution sought at the first creditors meeting was actually proposed.
While it was determined that no further action would be taken in relation to the matters raised in the initial complaint, although some remedial action was required, the IPA's investigation revealed that the member had failed to comply with the requirements of section 499(7) of the Corporations Act 2001 by not providing creditors with a remuneration report prior to the meeting of creditors where he sought approval.
Following a recommendation by the IPA, the member repaid the remuneration drawn based on the invalid resolution and has undertaken to seek new approval from creditors.
The failure to obtain appropriate approval of the remuneration was considered by the IPA's Professional Conduct Committee and it was determined that it was substantiated, however taking into account the member's acknowledgment of the breach and the steps taken to repay the remuneration and seek further approval, no further action was appropriate.
The determination was made on the basis that the member attend the IPA's Remuneration workshop to reinforce his knowledge of remuneration obligations and practicalities.