ASIC flips on the applicant the committee rejected

They say there is more than one way to skin a cat, though having limited familiarity with the skinning game iNO cannot vouch for the veracity of this disturbing adage.

We can however see the maxim at work in the case of a recent registration of a Sydney lawyer as a liquidator.

The mail crossing iNO’s desk is that the registration – heavily garlanded with restraints and conditions – came about in unusual circumstances and only after the lawyer’s original application had been rejected by a committee convened to consider his application.

Fortunately Ben Sewell, principal of Sewell & Kettle Lawyers and bearer of a newly minted liquidator’s registration, was happy to confirm what iNO had heard.

Yes, his application was initially rejected, though he is unable to disclose why on the basis that the committee’s decision was confidential.

And in the wake of that initial disappointment Sewell rallied. The committee had got it wrong, and he wasn’t going to let a committee deprive the Administrative Appeals Tribunal (AAT) of the opportunity of proving him right.

Inevitably ASIC was made aware of Sewell’s AAT bid. Suddenly a “conciliation hearing” was held.

Next we knew Sewell, who is not a recognised accountant but is taking the steps to become one, had secured a registration “by consent” with ASIC, an outcome that means the committee’s reasons for declining Sewell’s application won’t become public, and neither will ASIC’s reasons for consenting in the wake of the conciliation hearing.

“It’s a pity that this matter settled without the evidence being adduced at hearing,” Sewell said. “If the AAT matter had run the dispute would have gone public.”

Yes. A pity. What is public comes from ASIC’s Registered Liquidator summary which shows that Benjamin Noel Sewell – who in his capacity as a lawyer is a prominent advocate for debtor-in-possession type remedies – made his bones as a registered liquidator on March 31, 2023.

What is also public is that those bones have been restricted in their movements which is no surprise. Sewell is not an accountant. He lacks the minimum 4,000 hours working on external administrations requirement to qualify for an unrestricted ticket. So he can’t take appointments as a liquidator or administrator.

He can’t be appointed a receiver either, and can only act as a restructuring practitioner on a joint, or joint and several basis, with another registered liquidator whose rap sheet’s spotless.

That means Sewell’s hypothetical joint and several appointee partner can never have incurred a sanction from either ASIC, a disciplinary committee, a court, a tribunal or a professional body including but not limited to any professional body representing accountants.

Nor can the registration of the joint and several be subject to any restriction. Sewell will need to entice a genuine clean skin if he’s to get his new career as a restructuring practitioner started, and that’s only after he undertakes the appropriate degree of upskilling, which he confirmed is a process underway.

“I have already started it – it is part of a Masters of Professional Accounting that I enrolled in last year,” Sewell said.

So what of ASIC’s about face? The regulator appears to have shied away from standing with the decision of the committee that rejected Sewell’s application once the threat of an AAT hearing manifested.

Perhaps it’s the lack of consequences for the regulator that imbues it with such a flexible attitude? The costs of the conciliation hearing and of the ongoing monitoring of Sewell won’t trouble ASIC’s masters in Treasury given they’ll be passed on to the regulated population.

In short, Sewell appears to have played ASIC equally well with both carrot and stick, knowing that a restricted registration is better than none.

“I can certainly say that my objections to the committee’s decision, although not reviewed by the Tribunal were ultimately accepted by ASIC (in my opinion) because the matter settled on a consent basis with my registration,” he said.

“I’m happy with the outcome overall and looking forward to the new line of professional work.” We bet you do Ben.