The Federal Court of Australiahas dismissed a challenge by Perth businessman Rodney Charles Carter against ASIC’s decision to disqualify him from managing companies for a period of four years.
Mr Carter had claimed that he was not properly served by ASIC with the Notice of Disqualification that advised he was disqualified from managing corporations and sought a declaration that the decision to disqualify him was not effective.
In dismissing his claim on 17 July 2018, the Court found that Mr Carter was properly served and that he was disqualified from managing companies from when he received the Notice of Disqualification.
Consequently, Mr Carter is disqualified from managing corporations until 30 July 2021. He is recorded on ASIC’s Banned and Disqualified Persons Register.
Background
On 20 July 2017, ASIC decided to disqualify Mr Carter from managing corporations for a period of four years. In reaching the decision, ASIC considered the conduct of Mr Carter as director of the following companies:
- Voiceworks IT Pty Ltd;
- Voiceworks (Australasia) Pty Ltd;
- Mycooee.Com.Au Pty Ltd;
- First Homebuyers Group (Australia) Pty Ltd;
- Standard Publishing House (Aust) Pty Ltd; and
- S P H Holdings Pty Ltd.
Section 206F of the Corporations Act allows ASIC to disqualify a person from managing corporations for up to five years if, within a seven-year period, the person was an officer of two or more companies, and those companies were wound up and a liquidator provides a report to ASIC about the company’s inability to pay its debts.
ASIC also maintains a 'Banned and Disqualified Persons' register that provides information about people who have been disqualified from:
- involvement in the management of a corporation,
- auditing self-managed superannuation funds (SMSFs), or
- practicing in the financial services of credit industry.
ASIC's Small Business Strategy was released in August 2017 which includes protecting creditors, employees and small business from directors that mismanage companies. This outcome is an example of ASIC taking such action.