Paul Bublitz’ and Bruce McKay’s current disqualifications from acting as company directors were extended to 2026 by the High Court. Companies Office wanted their disqualifications extended to 2032.
Bublitz and McKay were convicted in 2019 of fraud following a cost to taxpayers of $3.38 million on government guaranteed borrowings by Mutual Finance Ltd; a guarantee offered finance companies to discourage feared runs by depositors during the 2008 world-wide banking crisis. Their direct and indirect control of several companies enabled losses that would otherwise be suffered by Bublitz’ Hunter Capital to be shifted across to taxpayers through a series of related party dealings; Hunter Capital assets were transferred to Mutual, with Mutual in return providing further funding for property developments. These related party dealings were specifically prohibited as a condition of Mutual getting a government guarantee for its borrowing from the public.
Conviction for dishonesty resulted in an automatic five year Companies Act disqualification from acting as directors. Their automatic ban expires in February 2024. Companies Office applied to the High Court for a further twelve year extension. The court looks to see if past behaviour indicates a future need to protect both the public and the commercial community. Justice Fitzgerald ruled a further extension was necessary, given the seriousness of their dishonesty. But since the convictions leading to current disqualification arose from their business activities more than a decade ago, a twelve year extension was too long, she said.
Legal argument that any further extension is a ‘penalty’ governed by the Sentencing Act and Bill of Rights Act was dismissed. Australian courts have treated director disqualifications as a penalty.
Registrar of Companies v. Bublitz & McKay – High Court (30.08.22)
22.154