When times get tough, business fold. A strategic benefit of voluntarily liquidating a company is that, typically, a business which is euthanised is 'judgment proof' in that it cannot be pursued for debts. Unless the directors actively traded whilst insolvent, they also can't be pursued for company debts.

Most directors think that once the business is liquidated, that it the end of the matter. But what if the nightmares of the business could come back from the grave?

This is precisely what happened for Bullin Pty Ltd. Bullin encountered financial difficulty and was wound up. Prior to winding up, the company had committed some 500 overloading and overdimension offences between 2003 and 2007. One year after being liquidated, prosecutions were commenced against the director for 89 executive liability over mass offences.

Unfortunately for the director, liquidation doesn't clean the slate for regulatory prosecutions. Also, the Heavy Vehicle National Law states that prosecution for executive liability offences can be commenced even if proceedings are not first or also brought against the company concerned. The director was fined $158,697 and ordered to pay the prosecution costs. The Court found that the director was a "systematic or persistent offender", which is presumably why a prosecution was brought against the director even after the company had ceased to trade. Also, and to stop further non-compliance in any new company, the Court banned the director from engaging in any business involving heavy vehicle transport.

So, whether you are a stand-up director or not, you need to remember that Chain of Responsibility (CoR) offences are like barnacles and will hold on for dear life, even if your business goes bust. Given that this is a lingering personal exposure, this is an excellent reason to ensure that CoR is being addressed in your business.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.