In the world of finance and business, sometimes what you don’t do can be just as important as what you do. Nonfeasance—the failure to act when there’s a duty to do so—is a concept every Australian consumer and business leader should understand in 2025. As regulations tighten and expectations rise, ignoring your obligations can lead to serious legal and financial headaches.
What is Nonfeasance? The Modern Australian Context
Nonfeasance occurs when a party fails to perform a required duty or responsibility. Unlike misfeasance (doing a lawful act improperly) or malfeasance (doing a wrongful act), nonfeasance is about inaction. In 2025, this concept is increasingly important across sectors, from financial services to corporate governance and beyond.
- Financial advisers who ignore new ASIC requirements for client disclosures could be accused of nonfeasance.
- Company directors who fail to implement cybersecurity measures, despite knowing the risks, may face nonfeasance claims under updated Corporations Act provisions.
- Landlords who neglect urgent repairs can be held liable for nonfeasance under the latest state tenancy reforms.
Australian law distinguishes between nonfeasance and other forms of wrongdoing, and the consequences can vary dramatically depending on the industry and the nature of the duty breached.
2025 Regulatory Updates: Where Nonfeasance Matters Most
This year has seen several policy changes that sharpen the focus on nonfeasance in Australia:
- Financial Services Royal Commission Follow-Up: ASIC has increased its enforcement around adviser obligations. Failing to act in clients’ best interests—such as not updating portfolios in response to risk—can now trigger direct penalties.
- Corporate Governance: The 2025 amendments to the Corporations Act mean directors must take reasonable steps to address foreseeable risks, particularly in areas like climate disclosure and data protection. A board’s failure to act on expert advice could now be classified as nonfeasance, opening the door to shareholder action.
- Residential Tenancies: Several states have enacted reforms requiring landlords to address health and safety repairs promptly. Non-action is now subject to expedited tribunal processes and financial penalties, especially for repeat offenders.
These changes underline a trend: regulators and courts are less tolerant of inaction, especially where vulnerable consumers or systemic risks are involved.
Real-World Examples and Lessons for 2025
Understanding nonfeasance is not just about legal compliance—it’s about protecting reputation, customer trust, and financial wellbeing.
- Banking: In 2024, a regional bank faced heavy fines when it failed to update its anti-money laundering protocols, despite warnings from AUSTRAC. This nonfeasance resulted in millions in penalties and major reputational damage.
- Superannuation: Trustees who delay reviewing underperforming funds are now under increased scrutiny. APRA’s 2025 guidelines make clear that inaction can constitute a breach of fiduciary duty.
- Small Business: A retailer in Victoria was ordered to compensate a customer after failing to repair faulty goods within a reasonable time, as required under the Australian Consumer Law. The tribunal’s decision highlighted that nonfeasance can be as costly as outright negligence.
For individuals, nonfeasance can also arise in personal financial arrangements—think of a guarantor who fails to act when notified of a borrower’s default, or a trustee who ignores beneficiary requests.
How to Avoid Nonfeasance in Your Financial Life
Whether you’re a business owner, investor, or everyday consumer, a proactive approach is essential in 2025. Here’s how to stay on the right side of your obligations:
- Stay Informed: Monitor regulatory updates relevant to your industry or personal finances. Regularly review ASIC, APRA, and ACCC bulletins.
- Document Decisions: If you decide not to act, record your reasoning and any advice received. This can be crucial if your inaction is later questioned.
- Implement Processes: Set up reminders and compliance checks to ensure you meet recurring duties—such as annual disclosures, maintenance obligations, or customer reviews.
- Engage Professionals: Where duties are complex (e.g., superannuation trusteeship or company directorship), seek expert guidance to avoid accidental nonfeasance.
The cost of doing nothing is rising. In a climate of heightened regulatory scrutiny, Australian consumers and businesses can’t afford to let obligations slip through the cracks.
