Professional Conduct Committee determination – Mrs Suelen McCallum and Mr Riad Tayeh

ARITA investigated independence concerns in relation to the material prior professional relationship of Mrs McCallum and Mr Tayeh’s firm with ACN 152 546 453 Pty Ltd (formerly Hemisphere Technologies Pty Ltd) (In Liquidation) and its impact on their independence and ability to accept the subsequent appointment as liquidator, including the decision In the matter of ACN 152 546 453 Pty Ltd (formerly Hemisphere Technologies Pty Ltd) (in liq) [2018] NSWSC 1002.

ARITA’s Professional Conduct Committee (PCC), in accordance with the powers delegated to it by the ARITA Board, determined that Mrs McCallum and Mr Tayeh’s actions in accepting the subsequent appointment as liquidators to ACN 152 546 453 Pty Ltd (In Liquidation) constitutes reckless, negligent or intentional behaviour or behaviour without mitigating factors within the scope of section 6.18.2C of the ARITA Code of Professional Practice.

The PCC determined that the following penalties be imposed pursuant clause 6.3 of the ARITA Regulations:

  • A financial penalty be imposed collectively against the members requiring them to pay $10,000 (the equivalent of the fees earned for provision of the precluded pre-appointment advice) by way of a fine which ARITA will remit as a donation to The Ethics Centre to underline the importance of ethics and independence in the profession, and
  • A direction that the members attend ARITA’s Essential Skills – Insolvency: Independence course at the next available opportunity.

The PCC noted that a Special Purchase Liquidator has been appointed to the company by the Court and for that reason only, the PCC did not, on this occasion, seek Mrs McCallum and Mr Tayeh’s replacement as liquidator. However, this should not be interpreted as diminishing the seriousness of the determined breach of the independence requirements of the Code.

ARITA gratefully acknowledges the members' immediate compliance in remitting the fine which has been on-paid by ARITA to The Ethics Centre.