Former director disqualified from managing companies for five years

Mr David James Pattison of Mackay, Queensland has been disqualified from managing companies for five years for his involvement in six failed companies.

Between 2014 and 2017, Mr Pattison was a director of six failed companies involved in the automotive maintenance industry operating in Palmerston City, Northern Territory:

  • Pattison's Maintenance Pty Ltd ACN 169 032 508 (Pattison's);
  • Minesite Freight Pty Ltd ACN 163 590 636 (MSF);
  • Norter Pty Ltd ACN 114 404 125 (Norter) - previously Pattison's Heavy Machinery Maintenance Pty Ltd;
  • NT Diesel Services Pty Ltd ACN 163 590 645 (NTDS);
  • Northern Territory Diesel Pty Ltd ACN 169 146 052; and
  • Heavy Diesel Consulting Pty Ltd ACN 611 059 986.

The ASIC Delegate found that Mr Pattison:

  • failed to exercise his duties as a director with due care and diligence in respect of Pattison's and Norter;
  • failed to ensure that Pattison's, Norter and NTDS paid taxes;
  • failed to property use his position as a director of Pattison's and Norter;
  • failed to prevent Pattison's and MSF from incurring debts when they were insolvent;
  • transferred Norter's business to Pattison's and transferred its assets to another company, to continue trading unburdened by debt; and
  • transferred Pattison's business and the assets of the other company to a related company to continue trading unburdened by debt.

This conduct is commonly referred to as illegal phoenix activity.

At the time of ASIC's decision, the six companies owed creditors more than $4.5 million.

In making its decision to disqualify Mr Pattison, ASIC's investigation relied on supplementary reports lodged by the liquidators of Pattison's, Mr William Robson and Mr William Cotter of Robson Cotter Insolvency Group, the liquidators of MSF, Mr Glenn Franklin and Mr Alexander Milne of PKF Australia and the liquidators of Norter, Mr Jason Tang and Mark Hutchins of Cor Cordis.

Funding from the Assetless Administration Fund was provided to the liquidators of Pattison's, MSF and Norter to assist in preparing the supplementary report.

Mr Pattison is disqualified from managing corporations until 29 November 2025.

Background

Section 206F of the Corporations Act gives ASIC the power to disqualify a person from managing corporations for up to five years if, within a seven-year period, the person was an officer of two or more companies that were wound up and the liquidators lodge reports with ASIC about each company's inability to pay its debts or alleges misconduct.

ASIC also maintains a Banned and Disqualified Persons register that provides information about people who have been disqualified from involvement in the management of a corporation, auditing self-managed superannuation funds (SMSFs); or practicing in the financial services of credit industry.

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