The requirement to provide a DIRRI to stakeholders is not an unreasonable task for practitioners. However, the ongoing implications of the Walton case are likely to include continual heightened supervision by ASIC in regards to appointments where the referrer was involved in pre-appointment transactions requiring investigation and the increased scrutiny of DIRRI’s (even though they were held in the Walton case to be satisfactory). It has been suggested by some that pre-appointment meetings be restricted to the insolvency practitioner and the director/s of a company. A third party in attendance at a meeting regarding the solvency of the company and privy to the advice given from the practitioner may appear to have been favoured in the proceedings and accordingly the practitioner may have breached independence duties. In the Walton case, a representative of the Mawson Group attended the meeting and the court found that “the Mawson Group appeared to have influenced the decision of who would be appointed as administrators and investigate their own pre appointment conduct.” Although no official reprimand …show more content…
There is a commercial reality in the profession that appears to have been overlooked in this case. This element of perceived independence is circumstantial and can come under scrutiny at any time following the commencement of an administration. Compliance with the requirement not to compromise this perceived independence is challenging as practitioners will often have a close and repeat relationships with particular stakeholders. Although it is important, as it always has been, for a practitioner to consider the facts and assess whether an appointment may impinge upon their ability to carry out their duties as a fiduciary and/or according to the professional standards set by the Act or the Code, there is pressure on liquidators to maintain an almost unmanageable level of