Federal court disqualifies three Youpla directors over funeral fund collapse

More than 13,000 Aboriginal people were left without means for funerals

On Wednesday, Federal Court Justice Geoffrey Kennett disqualified three former directors of Youpla Group, previously the Aboriginal Community Benefit Fund, from managing corporations and ordered them to pay the commonwealth a combined $90,000. Kennett found that Jonathan Law, Michael Wilson and Geoffrey Clayton had failed to perform their duties with the degree of “care and diligence” expected, had failed to manage conflicts of interest and had caused detriment to ACBF members.

Law was ordered to pay $50,000 and barred from managing corporations for six years. Wilson was ordered to pay $20,000 and barred for 10 years, while Clayton was ordered to pay $20,000 and barred for five years. The trio was also ordered to pay a combined $17,000 toward plaintiffs’ costs.

Youpla sold funeral policies to Indigenous people across Australia for decades, targeting communities where English was not the first language and communities with low literacy levels. Its marketing materials used the red, black and yellow colours of the Aboriginal flag, while stuffed toys and colouring books for children were also used to market the policies. Youpla turned up to community events and conducted door-to-door sales.

Youpla collapsed in March 2022, leaving more than 13,000 Aboriginal people without the means to pay for funerals. Some of those people were elderly or in palliative care. Families had to resort to crowdfunding, and some were forced to leave their loved ones’ bodies in the morgue while they raised funds.

The Australian Securities and Investments Commission commenced proceedings in federal court in August 2023 against five former directors and officers, alleging breaches of their duties, governance failures and director misconduct that affected First Nations people who were members of the funds. ASIC alleged that the directors and officers maintained insurance arrangements with Crown Insurance, a Vanuatu-based company owned and controlled by Ron Pattenden and Jonathan Law, and did not act in the best interests of the ACBF entities and members.

Breaches of directors’ duties can attract a maximum penalty of $200,000 for each breach occurring between 2017 and March 2019.

In a judgment late last month, Youpla founder Ron Pattenden was ordered to pay a quarter of a million dollars and barred from managing corporations for 15 years. Pattenden acknowledged that he had breached directors’ duties in a claim settlement with ASIC. During the same judgment, former Youpla Group chief Bryn Jones was found to have breached his directorial duties after a contested liability hearing in February. Jones denied having knowledge of the fund’s insurance premium increases. A hearing at a later date will determine his penalty.

Youpla had been investigated by various regulators over the years, but its conduct was not exposed in the banking royal commission until 2018, when its licence to sell new products was withdrawn. In 2021, ASIC questioned its solvency, and Youpla’s directors pulled the plug.

The federal court handed Youpla a $1.2 million fine in September 2023 for misrepresenting the funeral policies. The court found that Youpla told policyholders they would receive a lump-sum payment when they would only be reimbursed for expenses they could prove had been incurred. Youpla avoided paying millions more in fines handed down by the federal court in July 2025 because it was in liquidation.

A $97 million federal government support package was announced in February 2024 to help thousands of mostly low-income Aboriginal families recover from financial loss. Government payments to remaining victims will continue to be processed until 1 December this year. Eligible recipients can choose a funeral bond or a cash payment worth 60% of the value of their policy.