7 December 2016
Every director of a company is required to (amongst other matters):
pursuant to section 530A(1) of the Act.
The consequences of failing to submit the RATA and deliver the books are:
Generally, the courts are reluctant to order imprisonment and may order the director to pay a fine. However, this depends on the circumstances surrounding the offence.
Pursuant to sections 475(11) and 530A(6B) of the Act, a director will not be deemed to have committed the offences if they have a reasonable excuse.
A reasonable excuse refers to any “physical or practical difficulties in complying with a requirement”. In Jovanovic v Australian Securities and Investment Commission (2001) TASSC 6 Cox CJ stated at paragraph 9:
“…the appellant’s failure to complete and lodge the report within the initial 14 days was reasonably excused by his undoubted ignorance of the day to day operations of the company and his inability to access the books of the company which were then in the possession of the earlier administrator of the company, Mr Green. I think it was clearly impossible for the appellant to have provided meaningful answers to the questions posed in the prescribed form given his unchallenged evidence about his involvement with the company and his inability to view the books at that time.”
In Leydon v Forrest the Supreme Court of South Australia held that it was not a reasonable excuse to say that the officer had not been paying attention to the affairs of the company. In this case, a company secretary had been absent from the state and did not know that a winding up order had been made.
Recently, JHK Legal represented a company director who was charged under sections 475(1) and 530A(1) of the Act. It was his first offence and he did not have a criminal history.
We were successful in achieving the following great result for the client:
Offences under sections 475(1) and 530A(1) of the Act are serious and criminal penalties apply if you are found guilty. It is important to act in a timely manner as a director has a continuing obligation to the liquidator or provisional liquidator which essentially means that he or she must still comply with these sections after being charged.
Author: Aleksandra Symenovych
 Corporate Affairs Commission (NSW) v Yuill (1991) 172 CLR 319 Per Dawson J at 336
 Jovanovic v Australian Securities and Investment Commission (2001) TASSC 6 at paragraph 9
 Leydon v Forrest (1980) 4 ACLR 502