Illegal Phoenix Activity? Court Confirms It Is Difficult To Identify - And To Plead

This week's TGIF considers the case of Australian Securities and Investments Commission v Bettles [2020] FCA 1568, where the Federal Court of Australia confirmed the need for precision in making allegations of illegal phoenix activity.

Key takeaways

• There is no such thing, per se, as 'illegal phoenix activity' and there is inherent difficulty in attributing content to that phrase.
  
  
• The dramatic allegory of the phoenix dying in flames and being reborn from the ashes is well understood. When determining whether conduct in relation to a business operation reborn from the ashes of a liquidated company constitutes 'illegal phoenix activity', the starting point is to identify the alleged conduct and demonstrate how it contravenes the Corporations Act. Only then can such conduct be described as 'illegal phoenix activity'.