Corporate Advisory Update – January 2017

January, 2017

In the media

Former director of plumbing company charged with fraud

Mr Paul Joseph Hanson, a former director of Wida Plumbing Supplies Pty Ltd (Wida), has appeared at the Magistrates Court of Victoria in Melbourne, charged with three counts of fraud under the Crimes Act (Vic).

ASIC alleges that approximately eight months after Wida was placed in liquidation, Mr Hanson transferred $124,763.84 from a Wida overdraft bank facility to the personal bank account of a family member.  Mr Hanson then arranged for the family member to withdraw the funds, which he used for his own personal use.

ASIC was alerted about the alleged contravention by the liquidator of Wida.  The maximum penalty for the offence is 10 years imprisonment.

The matter was in Court on 21 December 2016 and has been adjourned to 1 March 2017.

Shining a spotlight on small business payment terms

Small business payment terms, times and practices are in the spotlight thanks to an inquiry of the Australian Small Business and Family Enterprise Ombudsman.

Written submissions closed on 13 January 2017 and the Ombudsman will present her report to Small Business Minister, Michael McCormack in March 2017.

The Ombudsman’s survey is open until the end of February 2017 and can be accessed at: http://asbfeo.gov.au/inquiries/payment-times-and-practices/business-survey

Former Noodle Box franchisee allegedly engaged in illegal phoenix activity

Ms Amy Timko, a former sole director of A Twisted Little Company Pty Ltd (ATLC), appeared at the Court of Petty Sessions in Hobart on 16 December 2016 charged with two counts of fraudulent conduct under the Corporations Act 2001.

It is alleged that while operating a number of Noodle Box franchises in Northern Tasmania, Ms Timko:

    (a) entered into a Bill of Sale to sell the plant and equipment of ATLC for $30,000 to another company;
    (b) had authorised the plant and equipment to be transferred to the other company without receiving the $30,000;
    (c) placed ATLC in liquidation soon after the plant and equipment was transferred to that other company; and
    (d) reassigned a number of leases entered into by ATLC to operate Noodle Box stores to the other company, which was contrary to the franchising arrangement in place.

The Commonwealth Director of Public Prosecutions is prosecuting the matter.  The matter has been adjourned to 23 March 2017 for plea.

In Practice and Courts

Consultation on whistleblower protections

The Minister for Revenue and Financial Services has released the ‘Review of tax and corporate whistleblower protections in Australia’ paper for consultation.  This consultation is the next step in implementing the Government’s commitment to Australia’s first Open Government National Action Plan.

Submissions for this consultation will close on 10 February 2017.

To view the consultation paper or make a submission, please see: http://www.treasury.gov.au/ConsultationsandReviews/Consultations/2016/Review-of-whistleblower-protections

Cases

Commonwealth Bank of Australia v Kojic [2016] FCAFC 186

Facts

Issue

The Court’s Decision

       1. the conduct of CBA was not unconscionable as there were no facts to suggest the investment was valueless; and
       2. the trial judge erred in aggregating the knowledge of the two CBA employees as there was no duty of either employee to inform the other, or anyone else, about what they knew.

For the full decision, please see: http://www.austlii.edu.au/au/cases/cth/FCAFC/2016/186.html

Contact Mills Oakley

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