Offences for Failure to Comply With Statutory Duties By Guarantor

– section 283CE of the Corporations Act 2001
Financial Records
This charge is generally laid in situations where a guarantor intentionally or recklessly contravenes paragraph 283CB(b) or section 283CC of the Act (a link to the Act is further down the page).
Examples of Offences for Failure to Comply With Statutory Duties By Guarantor
  • You are a guarantor. You fail to update your financial records, and when the trustee asks to look at your financial records, you refuse to give them access.
Questions in cases like this
  • Are you a guarantor?
  • Did you intentionally or recklessly breach your duty?
  • Did you fail to make your records available upon inspection?
  • Did you fail to conduct your business in a proper and efficient manner?
  • Did you inform the trustee about a security interest?
What are some of the possible defences to Offences for Failure to Comply With Statutory Duties By Guarantor?

Defences to this charge can include a factual dispute or a lack of intent, as well as the concept of beyond reasonable doubt. Deciding on whether to plead guilty or not has consequences for you and should be made after proper discussion with a criminal lawyer.

Maximum penalty and court that deals with this charge

ImprisonmentOffences for failure to comply with statutory duties by a guarantor is an offence that can carry a gaol term but is generally in itself not that serious. It is generally heard in the Magistrates Court.

According to Schedule 3 of the Corporations Act 2001, the maximum penalty of this offence is 25 penalty units (about $4000) or imprisonment for 6 months, or both.

What is the legal definition of Offences for Failure to Comply With Statutory Duties By Guarantor?

The guarantor commits an offence if it intentionally or recklessly contravenes paragraph 283CB(b) or section 283CC.

Legislation

The legislation for this offence can be found on section 283CE of Corporations Act 2001 No. 50, 2001.

Elements of the offence

To prove this charge, the Prosecution must show that:

  1. The guarantor intentionally or recklessly breached its duty to:
    1. Conduct its business in a proper and efficient manner
    2. Make all of its financial and other records available for inspection, or
    3. Inform the trustee about any security interest.

Did the guarantor intentionally or recklessly breach their duty?
“Guarantor” means a body that has guaranteed, or has agreed to guarantee, the repayment of any money deposited or lent to the borrower.1 To be liable for an offence under this section, they must intentionally or recklessly breach their duty – it is not sufficient if they inadvertently breach their duty.

The prosecution will usually seek to rely on circumstantial evidence to show intent or recklessness.

Did the guarantor fail to conduct its business in a proper and efficient manner?
The prosecution must show that the guarantor intentionally or recklessly breached their duty to conduct their business in a proper and efficient manner. ‘Proper’ and ‘efficient’ have their ordinary meaning, and assessing whether a breach has occurred will require looking at all the surrounding circumstances.

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Did the guarantor fail to make all of its financial and other records available for inspection?
Alternatively, the prosecution must show that the guarantor intentionally or recklessly breached their duty to make all their financial and other records available for inspection by:

  1. The trustee; or
  2. An officer or employee of the trustee authorised by the trustee to carry out the inspection; or
  3. A registered company auditor appointed by the trustee to carry out the inspection;

…and give them any information, explanations or other assistance that they require about matters relating to those records.2

Did the guarantor fail to inform the trustee about any security interest?
Alternatively, the prosecution must show that the guarantor intentionally or recklessly breached their duty to inform the trustee about any security interest. ‘Security interest’ has the meaning given by Section 51A. It means a security interest under the Personal Property Security Act 2009; or a charge, lien or pledge.3

“Can they prove you recklessly or intentionally breached your duty as guarantor?”
Other important resources

 



[1] Corporations Act 2001 Section 9.
[2] Corporations Act 2001 Section 283CB.
[3] Corporations Act 2001 Section 51A.