Mr Purdie was the sole legal practitioner director of an incorporated legal practice (ILP).
The ILP had accumulated liabilities for PAYG withholding amounts for three years and superannuation liabilities for six years. Although these liabilities had been mounting over the years, it was not until Mr Purdie received Director Penalty Notices from the Australian Tax Office (ATO) in August 2018 that he took any steps to address the ILP’s solvency issue. The Director Penalty Notices crystallised the risk of him being personally liable for at least part of those debts.
On 19 August 2018, a liquidator was appointed to the ILP, which was a show cause event. On 28 August 2018, Mr Purdie established another incorporated legal practice, Paterberg Legal Pty Ltd (Paterberg), to continue the business.
As a result of the circumstances surrounding the liquidation, QLS cancelled Mr Purdie’s principal practising certificate. He then applied for a restricted employee certificate, which QLS also refused. It decided Mr Purdie had deliberately liquidated the ILP to avoid paying debts, to defeat creditors and avoid personal responsibility. By that conduct, he demonstrated that he preferred his own interests to those of his creditors and his employees, so he was not a fit and proper person to be granted a practising certificate.
Mr Purdie applied to the Queensland Civil and Administrative Tribunal to review the decision. The tribunal found the decision to refuse to grant a practising certificate to Mr Purdie was the correct and preferable decision.
Sean Russell appeared for the Respondent, instructed by the Queensland Law Society.
The judgment is published here.
The Queensland Law Society in house publication ‘Proctor’ report on the matter is available here.