Ronald Lester Cardwell of Cherrybrook, New South Wales, has been convicted and sentenced to a term of 24 months imprisonment, to be served by way of intensive correction order (ICO) for dishonestly using his position as a liquidator to withdraw company funds, following an ASIC investigation (22-280 MR).

Mr Cardwell pleaded guilty to one count of contravening s184(2) of the Corporations Act 2001 (Cth) (Corporations Act), with one count of contravening s63(1) of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) taken into account at sentence pursuant to s16BA of the Crimes Act 1914 (Cth).

During the period of the ICO, Mr Cardwell must not commit any offence and must submit to supervision by a community corrections officer. Mr Cardwell must also complete 150 hours of community service.

Mr Cardwell has also been referred to community corrections for a report relating to the imposition of a home detention condition.

The execution of the sentence is stayed pending receipt of the report.

An ASIC investigation found that Mr Cardwell, who is not a registered liquidator, was appointed members’ voluntary liquidator of Loch-Co No 6 Pty Ltd on 2 December 2013. Between 4 May 2015 and 17 March 2016, Mr Cardwell dishonestly used his position to withdraw $150,367.12 in 12 separate transactions from Loch-Co's liquidation bank account, for his own financial advantage.

Mr Cardwell also failed to comply with a notice issued to him by ASIC under section 33 of the ASIC Act requiring him to produce books and records.

This matter was reported to ASIC by registered liquidator Steven Gladman of Hall Chadwick, who was appointed the replacement liquidator to Loch-Co on 17 October 2016 by the NSW Supreme Court, following an application by the members of Loch-Co to have Cardwell removed as liquidator.

As a result of Mr Cardwell’s conviction, he is disqualified from managing corporations for 5 years.

The matter is next listed on 4 April 2024 for receipt of the report on a home detention condition as part of the ICO.

The Commonwealth Director of Public Prosecutions prosecuted the matter following an ASIC referral.

Background

At the time of the offending:

• Section 184(2) of the Corporations Act had a maximum penalty of 5 years imprisonment and/or a fine of up to 2,000 penalty units, and
• Section 63(1) of the ASIC Act had a maximum penalty of 2 years imprisonment and/or a fine of up to 240 penalty units.

Under section 532(4) of the Corporations Act, a members’ voluntary liquidator is not required to be a registered liquidator if winding up a proprietary company. All other types of insolvent external administration must be conducted by a registered liquidator.

Editor's Note:

On 4 April 2024, Mr Cardwell appeared before the Parramatta District Court. The court confirmed the sentence imposed on 1 March 2024 and imposed an additional condition to the ICO that Mr Cardwell be subject to home detention for six months. The ICO commenced on 4 April 2024.