It will be very interesting to see how the Royal Commission and the Courts react to the recent revelations of the dumping of a significant quantity of records by one of the Unions involved in the Royal Commission. Both the disposal of records and lack of retention of records are significantly at the heart of any insolvency investigation and if it is openly accepted that once a demand is received then you can freely arrange for their disposal without penalty then we may as well give up now.
I have over the years often been entertained by the ingenious methods used by people to deal with the problems confronted by the potential of a thorough investigation. Probably the best was this one:-
“Upon contacting the director we were advised that he had kept the records and that the total represented approximately one box trailers worth. Not wanting to retain unnecessary or irrelevant material a member of staff was duly despatched to review the contents and select all of the appropriate material for retention and review.
Upon arrival the staff member was advised that the material was actually stored in a box trailer and that we were welcome to have the trailer as well if we wished. Next they were escorted to a trailer located at the side of the house which contained both boxes as well as assorted lose records, well, at least what had once been records. They were now essentially little more than pulp that fell to nothing if picked up. The trailer was itself unregistered and in fact un-registerable. It was clear that the records had been in the weather for some time and were probably frequently caught by the owners sprinkler when the gardens were watered!
There was nothing we could do, we were formally advised by the authorities that the Director had technically complied with the law in providing us the records and thus would escape prosecution. Regrettably there was ultimately little to investigate.”
There is an ongoing insistence on improvements to how the insolvency profession works, I support this, but equally there need to be some real changes to how some basic aspects of how the law works to genuinely make it so.
As I said it will be interesting to see how both the Royal Commission and the Courts deal with this as both would potentially have an interest, one possibly for contempt the other when an appropriate authority questions the destruction of records of an entity by an Officer or employee of that entity.
Let’s see what happens