Peter Keenan

Resident of Australia. Former Chartered Accountant. Fellow CPA. Former Registered Liquidator (25 years). Experienced in corporate and personal insolvency law and practice; forensic accounting; writing; research; taxation law and practice; accounting and bookeeping.

“Australian Insolvency Decisions” June 2012 edition

Case Reports, Corporate Insolvency, court decisions, Insolvency Law, Insolvency practices, law reports, Personal Bankruptcy Comments Off

Aug 062012

Complied by Michael Ennis. Michael developed an interest in insolvency case law, while a Deputy Registrar in Bankruptcy at the Federal Court of Australia and while undertaking various roles at the Insolvency Trustee Service Australia (ITSA). He has maintained this interest since retiring. If you would like to receive the Insolvency Decisions schedule direct, advise Michael of additional decisions, or share your observations, you may contact Michael direct on rmci53mje@spin.net.au. Michael’s comments appear in red text.

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Bankruptcy Act – Prior to Date of Bankruptcy

Commonwealth Bank of Australia v Oswal [2012] FCA 772 (12 July 2012) BANKRUTPCY – debtor resident outside of Australia – substituted service of bankruptcy notice – service upon solicitors who are representing or have represented the debtor in other proceedings in Australia – whether leave to serve a bankruptcy notice out of Australia is required http://www.austlii.edu.au/au/cases/cth/FCA/2012/772.html

Westpac Banking Corporation v Cossar & Anor [2012] FMCA 602 (10 July 2012) BANKRUPTCY – Creditor’s Petition – whether respondent debtors’ proposed proceeding against supporting creditor warrants adjournment or constitutes other sufficient cause not to make a sequestration order – whether sufficient evidence that proposed proceedings will proceed without undue delay and are likely to be successful – this criteria not established on evidence before Court – sequestration order made http://www.austlii.edu.au/au/cases/cth/FMCA/2012/602.html

Rookharp Pty Ltd & Anor v Webb & Anor [2012] FMCA 607 (5 July 2012) BANKRUPTCY – Creditor’s petition – no appearance of debtors at hearing – no grounds of opposition – sequestration order made http://www.austlii.edu.au/au/cases/cth/FMCA/2012/607.html

Bankruptcy Act – following Date of Bankruptcy

Quickly & thoroughly review all estates transferred from another Trustee – Newman v Bain [2012] FMCA 629 (5 July 2012) BANKRUPTCY – Application for extension of time for election by trustee pursuant to s.60(3) of the Bankruptcy Act – matters relevant to exercise of discretion http://www.austlii.edu.au/au/cases/cth/FMCA/2012/629.html

One with the lot – Cooper v Mbuzi [2012] QSC 190 (17 July 2012) PROCEDURE – MISCELLANEOUS PROCEDURAL MATTERS – VEXATIOUS LITIGANTS AND PROCEEDINGS – where the respondent in this matter has had a vexatious proceeding order made against him– where the applicant in this matter is the respondent in a matter commenced by the current respondent before the vexatious proceeding order was made against the current respondent – whether the applicant should be granted leave to be added to the earlier vexatious litigant proceedings – whether the earlier order under the Vexatious Proceedings Act 2005 should be amended to stay the other proceeding brought by the respondent http://www.austlii.edu.au/au/cases/qld/QSC/2012/190.html

Bankruptcy was annulled 9 months after Sequestration Order made, but action continues – Phillip Segal & Anor v Max Christopher Donnelly & Ors [2012] NSWSC 833 (24 July 2012) Whether solicitor authorised by registered proprietors of property to conduct sale process on their behalf – whether emails between solicitor and plaintiffs evidence an intention to enter into binding contract – where one co-owner acted as agent for the purchasers – whether other co-owner entitled to reject offer made by plaintiffs for purchase of the Property http://www.austlii.edu.au/au/cases/nsw/NSWSC/2012/833.html

Maxwell-Smith v Hall & Anor [2012] NSWCA 205 (25 June 2012) PRACTICE AND PROCEDURE – application for pro bono assistance under UCPR 7.36 – where litigant had received assistance under a previous referral twice within preceding three years – determining whether interests of justice are in the applicant’s favour requires assessment of whether the appeal has reasonable prospects of success – prospects of success found to be insufficient – application refused
PRACTICE AND PROCEDURE – power to waive, postpone and remit fees under Civil Procedure Regulation 2005 reg 11 – power to be exercised by Registrar on separate application http://www.austlii.edu.au/au/cases/nsw/NSWCA/2012/205.html

Same mistake still being made!! – “…a search by an officer of the Deputy Commissioner in April 2012 did not reveal the 2010 Order because the search was made by entering only the first name and surname of Mr Russell which, due to the form of that search, did not reveal the 2010 Order” – Deputy Commissioner of Taxation v Russell [2012] FMCA 598 (9 July 2012) BANKRUPTCY – Annulment – whether second sequestration order ought to have been made http://www.austlii.edu.au/au/cases/cth/FMCA/2012/598.html

Unusual circumstance in which this application considered – it occurred during the transfer of the bankruptcy administration to a registered trustee in bankruptcy pursuant to s 181A of the Bankruptcy Act 1966 – given outcome of the FMCA matter above, should in-coming Trustee be ‘engaged’ by ITSA to manage the administration, till transfer confirmed? – Leader Computers Pty Ltd v Johnson [2012] FCA 716 (6 July 2012) BANKRUPTCY AND INSOLVENCY – application pursuant to s 58(3)(b) of Bankruptcy Act 1966 (Cth) for leave to proceed in actions in the District Court of South Australia against bankrupt for voidance of transfer of property – whether leave should be granted in absence of indication from trustee in bankruptcy as to whether application opposed – where urgency in leave being granted due to impending trial date for District Court actions. Held: It was appropriate to grant leave pursuant to s 58(3)(b) of the Act. http://www.austlii.edu.au/au/cases/cth/FCA/2012/716.html

Re s. 153B – Stewart v Grauby [2012] FCA 703 (2 July 2012) BANKRUPTCY AND INSOLVENCY – application under r 36.05 of the Federal Court Rules 2011 to extend time to appeal – order from Federal Magistrates Court of Australia dismissing application for annulment – whether time should be extended http://www.austlii.edu.au/au/cases/cth/FCA/2012/703.html

Sullivan v Macquarie Leasing Pty Ltd [2012] FMCA 601 (2 July 2012) BANKRUPTCY – Application to set aside substituted service orders and sequestration order of Registrars of the Federal Magistrates Court – where applicant concedes debts owed – where applicant provides no evidence of ability to repay debts – where applicant claims unaware of papers relating to bankruptcy – whether to set aside orders http://www.austlii.edu.au/au/cases/cth/FMCA/2012/601.html

The end (perhaps) of an interesting, long running series of hearings in this bankruptcy – Sheahan (Trustee) in the matter of Frost (Bankrupt) v Frost (No 4) [2012] FCA 708 (29 June 2012) http://www.austlii.edu.au/au/cases/cth/FCA/2012/708.html

One of two significant decision Bob referred to me – as Bob remarked: “The judgment at paras 143-145, succinctly details the operation of s.58(1)(b) & (6) and s.116(1) of the Bankruptcy Act, and confirms that unrealised divisible property remains vested in the bankrupt estate notwithstanding that the bankrupt has been discharged from bankruptcy” – Falloon v Madden; Madden v Madden [2012] NSWSC 652 (14 June 2012) TRUSTS – sole proprietor – resulting trust – beneficiary bankrupt at the time – joint tenants or tenants in common – payments for benefit deceased estate – occupation fee http://www.austlii.edu.au/au/cases/nsw/NSWSC/2012/652.html

The 2^nd from Bob – again I will include Bob’s worthy comment “So I would submit that the lesson to be learnt from this judgment is that when you are fully engaged in investigating a “suspect” transaction with a view to recovery a property etc, from time to time stand back and ask the question “ Is the investigation/legal action still going to bring money into the estate ?”” – Travaglini v Raccuia [2012] FCA 620 (14 June 2012) COSTS – application for leave to discontinue with no order as to costs – application of r 26.12(7) of the Federal Court Rules 2011 that the discontinuing party is liable for costs unless the Court is satisfied there is a good reason for ordering otherwise – whether parties acted reasonably in prosecuting and defending the proceeding Held: when applicant commenced proceeding there was a reasonably foreseeable risk that litigation would become futile – applicant should pay the respondents’ costs upon discontinuance http://www.austlii.edu.au/au/cases/cth/FCA/2012/620.html

Tarrant v Statewide Secured Investments Pty Ltd [2012] FCA 582 (6 June 2012) BANKRUPTCY – Appeal from sequestration order – where federal magistrate refused to adjourn creditor’s petition – federal magistrate allowed the creditor’s petition to be amended to correct judgment date and dispensed with service of the amended petition – federal magistrate refused to receive bankrupt’s evidence where bankrupt required for cross-examination on her affidavits but did not attend – whether grounds of appeal disclose any appealable error http://www.austlii.edu.au/au/cases/cth/FCA/2012/582.html

A ‘must read’ – the circumstances in which a S of A could be rejected by ITSA has not been considered by the Court as far as I’m aware – I wonder where these Orders would put the Offence provisions, if the answers are not answered accurately – Vince (Trustee), in the matter of Sopikiotis (Bankrupt) v Sopikiotis [2012] FCA 573 (1 June 2012) BANKRUPTCY – s 54(1) Bankruptcy Act 1966 (Cth) – whether document purporting to be a statement of affairs defective – whether bankrupt should be required to file a statement of affairs – order made http://www.austlii.edu.au/au/cases/cth/FCA/2012/573.html

Another matter deserving a good read & consideration – Weeden v Rambaldi [2012] FCA 552 (29 May 2012) BANKRUPTCY – whether notices of objection to discharge filed pursuant to s 149B of the Bankruptcy Act 1966 (Cth) valid – whether notices of contribution assessment made pursuant to s 139(1)(c) of the Bankruptcy Act valid – whether notices were invalid because made by a joint trustee acting alone – unanimous concurrence required for act of joint trustee – whether joint trustees were appointed or a sole trustee appointed by meeting of creditors – s 257 of Bankruptcy Act and presumption that minutes of meeting provide prima facie evidence of meeting – whether evidence of concurrence of joint trustees – whether s 306(1) of the Bankruptcy Act validates the act of a joint trustee acting alone, where the consent of other trustee is later given, in relation to the making and notification of an assessment pursuant to s 139W(1) of the Bankruptcy Act and in relation to the filing of an objection to discharge pursuant to s 149B of the Bankruptcy Act – whether a formal defect or irregularity within the meaning of s 306(1) http://www.austlii.edu.au/au/cases/cth/FCA/2012/552.html

I’m not quite sure what is going on here – also, the plaintiff, joint trustees, use subpoena rather that s. 77C Notice – Re estate of Mischel [2012] VSC 296 (13 June 2012) PRACTICE AND PROCEDURE – Objection to a subpoena – Whether the Commissioner has power to release documents pursuant to the Taxation Administration Act 1997 (Vic) – Sections 91, 93, 94, 95 considered http://www.austlii.edu.au/au/cases/vic/VSC/2012/296.html

Corporations – pre-appointment

TRINH OPTICAL YLLUSION PTY LTD v VAN [2012] SASC 125 (25 July 2012) Application to set aside a statutory demand – amount due under a trust – whether a debt for the purposes of the Corporations Act 2001 – creditor/beneficiary an eight year-old boy – statutory demand served on the instructions of his mother – whether mother had authority to do so http://www.austlii.edu.au/au/cases/sa/SASC/2012/125.html

Williams (as liquidator of Willahra Pty Ltd (in liq)) v Kim Management Pty Ltd [2012] QSC 143 (19 June 2012) CORPORATIONS – WINDING UP – CONDUCT AND INCIDENTS OF WINDING UP – LIQUIDATORS – where an application was made to set aside an order made pursuant to s 588FF(3)(b) of the Corporations Act – whether an order should be set aside as of right because a party affected by the order made was not given an opportunity to be heard on the s 588FF(3)(b) application – circumstances in which a shelf order can be made on an ex parte basis – where the plaintiff liquidator did not know that the defendant was a potential target of an application under s 588FF(1) – whether the plaintiff liquidator ought to have known that the defendant was a potential target of an application under s 588FF(1) and served the defendant – the standard expected of a party and its lawyers on an ex parte application – the duty to make proper inquiries before making an ex parte application http://www.austlii.edu.au/au/cases/qld/QSC/2012/143.html

GMW Group Pty Ltd (Receivers and Managers Appointed) (in liquidation) & ors v Michael Saadie in his own right and trading as GMW1 & ors [2012] QSC 140 (4 June 2012) PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER UNIFORM CIVIL PROCEDURE RULES AND PREDECESSORS – DEFAULT OF PLEADING – where the applicants apply for summary judgement against the respondents under r 374 of the Uniform Civil Procedure Rules 1999 – where the proceeding was commenced by originating application and pleadings were later ordered – where service and timing of service of the statement of claim on the second and third respondents within the required period is unclear – where the first respondent has filed a defence and the second and third respondents have filed no defence – where the respondents have not complied with a court order requiring them to file affidavits detailing their personal assets – whether the applicants have satisfactorily proven that the respondents have failed to take a step in the proceeding thus warranting summary judgment under r 374 http://www.austlii.edu.au/au/cases/qld/QSC/2012/140.html

Applicant became bankrupt subsequent to initial application – McElligott v Boyce & Ors [2012] QSC 189 (17 July 2012) PROCEDURE – JUDGMENTS AND ORDERS – AMENDING, VARYING AND SETTING ASIDE – where applicant seeks to set aside under r 667(2) of the Uniform Civil Procedure Rules an earlier order of the court for the winding up of a company on the basis of allegations of fraud – where earlier appeals against winding up order were dismissed – where the allegation of fraud was considered in the appeal – where the applicant is a bankrupt – whether the applicant has standing to bring the application – whether the applicant’s contentions are based on newly-discovered material http://www.austlii.edu.au/au/cases/qld/QSC/2012/189.html

Field Camp Services Pty Ltd v Green (No.3) [2012] FMCA 577 (6 July 2012) CONSUMER PROTECTION – Alleged misleading and deceptive conduct – hire of transportable accommodation and camp units. PRACTICE AND PROCEDURE – Failure to pay costs of earlier proceedings in other courts – statutory demand made – whether application to be dismissed or permanently stayed. COSTS – Failure to pay costs of earlier proceedings in this court and State courts – statutory demand made – whether application to be dismissed or permanently stayed http://www.austlii.edu.au/au/cases/cth/FMCA/2012/577.html

Deputy Commissioner of Taxation v Compumark Pty Ltd [2012] FCA 583 (5 June 2012) CORPORATIONS – application to wind up company in insolvency by reason of tax debt – court’s residual discretion in applications for winding up – test for reasonably arguable case to challenge the existence of a tax debt PRACTICE AND PROCEDURE – corporate respondent – leave to appear otherwise than by a lawyer – dispensing with r 4.01(2) of the Federal Court Rules 2011
EVIDENCE – “fullest and best” evidence principles http://www.austlii.edu.au/au/cases/cth/FCA/2012/583.html

Corporations – post appointment

Handberg & Anor v MIG Property Services Pty Ltd [2012] VSCA 126 (15 June 2012) PRACTICE AND PROCEDURE – Application for leave to appeal – Whether substantial injustice demonstrated http://www.austlii.edu.au/au/cases/vic/VSCA/2012/126.html

Mischel v Mischel Holdings Pty Ltd (in liq) [2012] VSC 292 (27 July 2012) CO-OWNERSHIP – Joint tenancy at law – whether tenancy in common in equity – whether consideration given for acquisition of share – severance of joint tenancy by agreement and by conduct – effect of death of joint tenant after exchange of contracts but before completion of sale of the subject land EQUITY – Maxims – Equity will not assist a volunteer http://www.austlii.edu.au/au/cases/vic/VSC/2012/292.html

Clarke & Ors v Great Southern Finance Pty Ltd & Ors [2012] VSC 312 (24 July 2012) COSTS – Privilege – Loss of privilege under s 124 Evidence Act 2008 (Vic) determined before trial – Plaintiffs successful. COSTS – Application by plaintiffs under s 1321 Corporations Act 2001 (Cth) to review decision of liquidators to assert joint privilege – application adjourned sine die without determination http://www.austlii.edu.au/au/cases/vic/VSC/2012/312.html

Clarke & Ors v Great Southern Finance Pty Ltd (in liq) & Ors (Ruling No 1) [2012] VSC 295 (29 June 2012) PRACTICE AND PROCEDURE – Application by Plaintiffs to amend statement of claim – whether proposed amendments are defective – whether prejudice is likely to be suffered if the application were to be allowed – application refused http://www.austlii.edu.au/au/cases/vic/VSC/2012/295.html

Re Traditional Values Management Ltd [2012] VSC 308 (19 July 2012) PRACTICE AND PROCEDURE – COSTS – Orders made without adjudication on the merits – Discussion of relevant principles – Costs order made http://www.austlii.edu.au/au/cases/vic/VSC/2012/308.html

Traditional Values Management Limited (in liq) v Taylor & Ors [2012] VSC 299 (10 July 2012) PRACTICE AND PROCEDURE – Consolidation of proceedings – Separate proceedings against directors and officers, auditors, accountants and unitholders in failed managed investment scheme – Supreme Court (General Civil Procedure) Rules 2005 (Vic), r 9.12 http://www.austlii.edu.au/au/cases/vic/VSC/2012/299.html

Hoddinott & Ors v Willmott Forests Limited (recs & liq apptd) (in liq) [2012] VSC 282 (27 June 2012) PRACTICE AND PROCEDURE – COSTS – Orders agreed without adjudication on the merits – Relevant principles for an award of costs in a compromised proceeding – Costs order made http://www.austlii.edu.au/au/cases/vic/VSC/2012/282.html

TNT Building Trades Pty Limited v Benelong Developments Pty Limited (administrators appointed) [2012] NSWSC 766 (9 July 2012) CORPORATIONS – Creditors’ meeting – Resolution of meeting – Corporations Act 2001 (Cth) s 600A(2)(a) – Application to set aside resolution of creditors’ meeting.
CORPORATIONS – Termination of deed of company arrangement – Whether deed should be terminated by Court – Interests of creditors of company as a whole – Whether winding up would allow more favourable outcome or better return to creditors than deed of company arrangement and whether deed of company arrangement would be contrary to the interests of or prejudicial to creditors as a whole http://www.austlii.edu.au/au/cases/nsw/NSWSC/2012/766.html

Fw: Napier Constructions Pty Ltd (Subject to DOCA)(Receivers & Managers Appointed) -v- Christopher Honey (in his capacity as Joint and Several Receiver and Manager of Napier Constructions Pty Ltd) [2012] NSWSC 762 (6 July 2012) CONTRACT – Construction of deed recording agreement as to the basis upon which a party would assist companies and their receivers in prosecuting proceedings against certain third parties – where another party (the bank) makes available funds to facilitate prosecution of proceedings and is owed money under secured facilities – construction of formula for the sharing of settlement proceeds (between the companies and the bank) where provision is capable of two meanings – construction of clauses providing for the taking into account of interest http://www.austlii.edu.au/au/cases/nsw/NSWSC/2012/762.html

St Hilliers Construction Pty Ltd (In Administration) -v- Fitzpatrick Investments Pty Ltd [2012] NSWSC 804 (2 July 2012) BUILDING AND CONSTRUCTION – where design and construct building contract requires provision by the contractor of bank guarantees as security for performance – where, upon satisfaction of certain conditions, the contractor is entitled to a reduction of the security – whether such conditions satisfied – whether, by taking possession of the works, the principal has exercised an election amounting to a waiver of its right to continue to keep the security http://www.austlii.edu.au/au/cases/nsw/NSWSC/2012/804.html

Management 3 Group Pty Ltd (In Liq) v Lenny’s Commercial Kitchens Pty Ltd (No 2) [2012] FCAFC 92 (25 June 2012) PRACTICE AND PROCEDURE – pre-judgment interest – date from which interest is to run – interest to run until judgment is entered – rate at which interest accrues – whether penalty interest rate or Reserve Bank of Australia cash rate plus 4% – Practice Note CM16 Pre-judgment Interest – Federal Court of Australia Act 1976 (Cth), ss 51A, 52 http://www.austlii.edu.au/au/cases/cth/FCAFC/2012/92.html

In the matter of KASH Aboriginal Corporation ICN 108 (Administrators Appointed) No 2 [2012] FCA 789 (27 July 2012) CORPORATIONS – Aboriginal Corporation – administrators seeking directions in respect of proposed loan and mortgage with associated entity – whether administrators personally liable for monies borrowed – potential liability of administrators in respect of workplace health and safety issues – proposal to borrow funds from related entity http://www.austlii.edu.au/au/cases/cth/FCA/2012/789.html

Roumanus v Orchard Holdings (NSW) Pty Limited (In Liq) [2012] FCA 775 (20 July 2012) CORPORATIONS –Whether the defendant corporation in liquidation should be held liable as the primary contravenor or, alternatively, as an accessory, in respect of misleading and deceptive conduct constituted by representations made by persons who occupied office as directors of the corporation in connection with the sale by one of those persons to others of shares in the corporation – whether causes of action out-of-time in any event – whether causes of action could be maintained pursuant to ss 52, 75B and 82 of the Trade rPractices Act 1974 (Cth) http://www.austlii.edu.au/au/cases/cth/FCA/2012/775.html

Australian Securities and Investments Commission v Storm Financial Limited (Receivers and Managers Appointed) (in liq) [2012] FCA 750 (16 July 2012) http://www.austlii.edu.au/au/cases/cth/FCA/2012/750.html

Australian Competition and Consumer Commission v ACN 135 183 372 (in liquidation) (formerly known as Energy Watch Pty Ltd) [2012] FCA 749 (13 July 2012) CONSUMER LAW – declaratory relief, penalties and costs – breach of ss 18(1), 29(1)(g) and 34 of the Australian Consumer Law, Schedule 2 to the Competition and Consumer Act 2010 (Cth) – misleading and deceptive conduct – false and misleading representations – in trade or commerce – multimedia mass advertising campaign – retail energy prices – energy brokering services – general and specific deterrence – consumer protection http://www.austlii.edu.au/au/cases/cth/FCA/2012/749.html

Carson, in the matter of Hastie Group Limited (No 3) [2012] FCA 719 (5 July 2012) CORPORATIONS – application for directions under s 447D of the Corporations Act 2001 (Cth) http://www.austlii.edu.au/au/cases/cth/FCA/2012/719.html

Australian Executor Trustees Ltd v Provident Capital Ltd (No 2) [2012] FCA 754 (3 July 2012) PRACTICE AND PROCEDURE – stay – principles applying to grant of a stay http://www.austlii.edu.au/au/cases/cth/FCA/2012/754.html

Smith in the matter of Actively Zoned Pty Ltd (in liq) [2012] FCA 605 (8 June 2012) http://www.austlii.edu.au/au/cases/cth/FCA/2012/605.html

Quikfund (Australia) Pty Ltd v Prosperity Group International Pty Limited (In Liquidation) [2012] FCA 603 (7 June 2012) CORPORATIONS – consideration of an application for leave to proceed to prosecute an appeal http://www.austlii.edu.au/au/cases/cth/FCA/2012/603.html

Hancock, in the matter of St Hilliers Construction Pty Limited (administrators appointed) [2012] FCA 602 (7 June 2012) CORPORATIONS – extension of time to convene a second meeting of creditors of a company in administration http://www.austlii.edu.au/au/cases/cth/FCA/2012/602.html

Burrup Fertilisers Pty Ltd (Receivers and Managers Appointed) v Oswal (No 6) [2012] FCA 590 (7 June 2012) COSTS – security for costs application – compliance with a subpoena – whether the Court is empowered under the Federal Court Rules 2011 to award security for costs in advance for costs and expenses of a non-party who is subpoenaed by a party Held: a stranger to litigation should not be put to onerous expense in complying with a subpoena issued by a party not resident in the jurisdiction – that quantum of security should be reviewed and fixed by a Registrar http://www.austlii.edu.au/au/cases/cth/FCA/2012/590.html

Australian Competition and Consumer Commission v ACN 135 183 372 (Administrators Appointed) (formerly known as Energy Watch Pty Ltd) [2012] FCA 586 (1 June 2012) http://www.austlii.edu.au/au/cases/cth/FCA/2012/586.html

Moodie, in the matter of Gowinta Farms Pty Ltd (administrators appointed) [2012] FCA 578 (31 May 2012) CORPORATIONS – extension of time to convene a second meeting of creditors of company in administration http://www.austlii.edu.au/au/cases/cth/FCA/2012/578.html

An on-going matter – looking forward to seeing where it all ends up – MG Corrosion Consultants Pty Ltd v Gilmour [2012] FCA 568 (31 May 2012) CORPORATIONS – variation to freezing order http://www.austlii.edu.au/au/cases/cth/FCA/2012/568.html

Insolvency practitioners cleared to provide tax and BAS agent services

BAS, Corporate Insolvency, Insolvency practices, Personal Bankruptcy, Returns, Taxation Issues Comments Off

Jul 202012

Liquidators who provide a tax agent or BAS service to the company they are administering do not have to be registered as tax agents or BAS agents.

That is the ruling issued by the Tax Practitioners Board on 26 June 2012 in its Information Sheet TPB(1) 12/2012.

The same rule applies to most other types of insolvency practitioners appointed under the Corporations Act or the Bankruptcy Act.

CONDITIONS APPLY:

But the rule, or exemption, only applies to work done for the client after the insolvency practitioner’s appointment. During the pre-appointment period the ban on unregistered persons providing a tax agent service or a BAS service for a fee or reward will apply.

The insolvency practitioners exempted under the ruling are liquidators, provisional liquidators, company administrators, administrators of deeds of company arrangement, receivers, receivers and managers, and bankruptcy trustees.

But the exemption might not apply to insolvency practitioners who act as agents for mortgagees in possession. On one reading of the Information Sheet it seems that because such insolvency practitioners are not agents of the company (as are liquidators, administrators and receivers) then they might not be performing the tax/BAS agent services “in accordance with the duties and responsibilities of the insolvency practitioner under the terms of the relevant legislation” in a situation “analogous to that of a self-preparing entity”. (See paras. 20 and 21.)

The Information Sheet also addresses the situation where, during the post-appointment period, an insolvency practitioner “bring(s) in outside consultants such as accountants or bookkeepers to deal with the entity’s tax or BAS issues”. The Tax Practitioners Board says that such consultants would need to be registered.

In other words, the exemption only applies where the insolvency practitioners or his or her employees carry out the tax work.

To see the TPB Information Sheet CLICK HERE.

ASIC invites comment on use of its new power to wind up companies

ASIC, Corporate Insolvency, Employee Entitlements, GEERS, Insolvency Laws, Insolvency practices, Regulation, White collar crime Comments Off

Jul 182012

How should the public interest test be applied?

The Australian Securities and Investments Commission (ASIC) has released a consultation paper outlining how it intends to implement its new power to wind up companies.

Recent amendments to the Corporations Act have given ASIC the power to order the wind up a company in specific circumstances and appoint a liquidator. The Corporations Amendment (Phoenixing and Other Measures) Act 2012 amends the Corporations Act to add a new part to Chapter 5 – External Administrations. The new part (Part 5.4C) – which comprises new sections 489EA, 489EB and 489EC – gives ASIC the power to wind up companies in FOUR scenarios:

SCENARIO 1:

ASIC may order a winding up if:

(a)	the response to a return of particulars given to the company is at least 6 months late; and
(b)	the company has not lodged any other documents under this Act in the last 18 months; and
(c)	ASIC has reason to believe that the company is not carrying on business; and
(d)	ASIC has reason to believe that making the order is in the public interest.

SCENARIO 2:

ASIC may order a winding up if the company’s review fee in respect of a review date has not been paid in full at least 12 months after the due date for payment.

SCENARIO 3:

ASIC may order a winding up if

(a)	ASIC has reinstated the registration of the company under subsection 601AH(1) in the last 6 months; and
(b)	ASIC has reason to believe that making the order is in the public interest.

SCENARIO 4:

ASIC may order a winding up if

(a)	ASIC has reason to believe that the company is not carrying on business; and
(b)	at least 20 business days before making the order, ASIC gives to:
	(i)	the company; and
	(ii)	each director of the company;
	a notice:
	(iii)	stating ASIC’s intention to make the order; and
	(iv)	informing the company or the director, as the case may be, that the company or the director may, within 10 business days after the receipt of the notice, give ASIC a written objection to the making of the order; and
(c)	neither the company, nor any of its directors, has given ASIC such an objection within the time limit specified in the notice.

Comments on Consultation Paper 180 are due by Friday 10 August, 2012.

Click here to download Consultation Paper 180. (PDF format.)

The following is ASIC’s media release of 12 July 2012:

ASIC today released a consultation paper outlining how it intends to implement its new power to wind up abandoned companies under the Corporations Act 2001 (Corporations Act) to facilitate greater access to the General Employee Entitlements Redundancy Scheme (GEERS).

Consultation Paper 180 ASIC’s power to wind up abandoned companies outlines how ASIC intends to exercise this new power, and how it will prioritise matters for winding up

‘When using this power, our first consideration will be if an order to wind up the company would facilitate employee access to GEERS’, Commissioner John Price said.

GEERS is a scheme funded by the Australian Government to assist employees of companies that have gone into liquidation and who are owed certain employee entitlements. However, companies are sometimes abandoned by their directors without being put into liquidation. This has previously resulted in employees of the company who are owed employee entitlements being unable to access GEERS.

Consistent with the new law, ASIC is proposing to apply a public interest test when deciding whether to wind up a company. This public interest test will consider factors like the cost of winding up, the amount of outstanding employee entitlements and how many employees are affected.

‘ASIC needs to consider the broader public interest when deciding which abandoned companies with outstanding employee entitlements will be wound up’, Mr Price said.

ASIC is proposing not to reinstate companies that have already been deregistered in order to wind them up later. Among other reasons, there are already court processes in place to facilitate the reinstatement of a company where that is needed.

ASIC intends to commence using this new power to wind up abandoned companies in the final quarter of 2012.

Comments on Consultation Paper 180 ASIC’s power to wind up abandoned companies are due by Friday 10 August, 2012.

Background

One of the measures of the Australian Government’s Protecting Workers’ Entitlements Package (announced July 2010) is to assist employees of abandoned companies to access the General Employee Entitlements and Redundancy Scheme when they are owed certain employee entitlements.

When the employer is a corporation, it must be in liquidation before GEERS can assist an employee.

Amendments to the Corporations Act have given ASIC the power to wind up an abandoned company in specific circumstances.

ASIC may appoint a registered liquidator over a company when exercising its power to wind up an abandoned company.

Employers and unions trade blows on GEERS scheme

Corporate Insolvency, Employee Entitlements, GEERS, Personal Bankruptcy Comments Off

Jul 172012

(From SCR: Supply Chain Review. July 12, 2012 – http://www.supplychainreview.com.au/news/articleid/80211.aspx )

“The General Employee Entitlements and Redundancy Scheme (GEERS) has become an industrial relations and regulatory football, two weeks after its near-death experience in the High Court.

Federal Employment and Superannuation Minister Bill Shorten fast-tracked GEERS payment to 1st Fleet employees amongst others two months ago but industry and union heads are now engaging in robust debate on the issue sparked by a recent surge in payouts.

The latest into the fray is Australian Industry Group (Ai) CEO Innes Willox, who lambasted the Australian Council of Trade Unions (ACTU) over accusations that employers were milking GEERS.

“Union assertions that the $1 billion paid out to the employees of insolvent employers under the scheme over the past decade is money taken by employers from their employees is arrant nonsense,” Willox says.

ACTU Secretary Dave Oliver, in a statement reportedly in tune with the thinking in Shorten’s office, put the issue at the door of managers.

Oliver has called for tougher penalties for company directors who breach corporations laws, including trading insolvent or failing to make superannuation contributions, saying the taxpayer should not have to pay for employer malfeasance.

“The amount of money being covered by taxpayers highlights the important role this scheme plays, but also backs up union calls for greater penalties,” he says.

“It should be the responsibility of employers to make provision for workers’ entitlements, and directors who run their companies into the ground with no funds left for workers should be punished.

“These entitlements have been earned over years of loyal service, and employers have a legal obligation to pay them.

“But all too often businesses go broke leaving nothing in the bank. Frequently, companies treat workers’ entitlements as a kind of unsecured, interest-free loan – without telling the workers and often with no intention of ever paying it back. It is left to taxpayers to come to the rescue.

“This type of behaviour must be punished through tougher penalties.”

But Willox hit back, describing the union imputation as “deserving of the strongest condemnation”.

“Under the Corporations Act, directors have a legal duty not to trade insolvently and penalties for individuals of up to $220,000 or imprisonment for up to five years apply,” Willox says.

“Directors can also become personally liable for debts incurred while the company is insolvent.”

He points out that, under the Act, to enter into an agreement or transaction with the intention of avoiding the payment of employee entitlements is an offence.

A court can order those convicted to compensate employees who have suffered loss or damage because of the agreement or transaction.

Penalties of up to $110,000 or imprisonment for up to 10 years apply.

“When companies go broke there are no winners,” Willox says.

“Often directors and business owners experience great hardship.

“Employees are in a different position; they have the GEERS scheme to prevent hardship in these unfortunate circumstances.”

He adds that Ai had warned the Government in January 2011 that increasing redundancy protection from a maximum of 16 weeks to an entitlement of up to four weeks per year of service “could create a huge budget shortfall” if even one large company with a generous redundancy scheme failed.

All about the Report As To Affairs in corporate insolvency

ASIC, Corporate Insolvency, Insolvency Law, Insolvency practices, Regulation Comments Off

Jul 112012

The corporate regulator may not care much about it but liquidators do, and they want some changes made.

The Report as to Affairs (RATA) is a form which is prepared for the purpose of showing the financial position of a company at commencement of its entry into liquidation, controllership or administration.

Between November 2011 and March 2012, and with support from a scholarship administered by the Insolvency Practitioners Association of Australia (IPA), I carried out extensive research into the RATA, including a random survey of 105 official liquidators.

My research paper is now available from the IPA or from the Centre for Corporate Law and Securities Regulation.

Titled “An Appraisal of the Report as to Affairs”, the paper is a report on the written survey of official liquidators concerning the Report as to Affairs form and associated compliance issues. The report also examines the history and purpose of the Report as to Affairs, laws which impose duties to submit the form, and ideas for change.

The paper concludes with several recommendations and observations, including the following:

“This survey of liquidators has brought to light substantial criticisms and concerns about the RATA and a desire for change. It coincides with moves towards harmonisation of personal and corporate insolvency regulation, and with the start of the Personal Property Securities Act, which makes significant changes to priority rules for secured parties as well as introducing a new vocabulary. All this suggests that it’s time the RATA form was revisited and overhauled. The ASIC should make the RATA the subject of an inquiry through a Consultative Paper …. The ultimate aims of the consultation would be to produce a new or redesigned form, a Regulatory Guide to the form, and an information sheet for directors. The inquiry should consider, for example, what constitutes an acceptable standard for a RATA – i.e., when does a professed RATA qualify as a valid RATA – and how the receipt of a RATA that fails to meet that standard should be handled.”

Appended to the main research report is a supplement which reproduces verbatim all the ideas, suggestions and comments made by liquidators concerning what is wrong with the present RATA and how it could be improved.

Thanks to Professor Ian Ramsay, of Melbourne University, who is Director of the Centre for Corporate Law and Securities Regulation, the full research paper appears in SAI Global Corporate Law Bulletin No. 178. A copy of the paper (including the annexures) is available as one pdf file from http://cclsr.law.unimelb.edu.au/files/The_RATA_-_research_paper_-_Keenan_-_2012_-_IPA_TTS.pdf

A shortened version of the paper appears in the latest edition of the Australian Insolvency Journal , which is published by the IPA (see Volume 24 Number 2, pages 10 to 23). The link to that version is http://www.ipaa.com.au/default.asp?menuid=319&artid=1157

I am indebted to Michael Murray, Legal Director of the IPA, who vetted the research paper and edited the version that appears in the Australian Insolvency Journal. It was as a result of his enthusiasm and status in insolvency law circles that Professor Ian Ramsay took an interest in the paper and had it published by the Centre for Corporate Law and Securities Regulation. Michael has also forwarded the paper to the ASIC, ITSA and relevant government departments.

Location of ASIC website for publication of insolvency notices

ASIC, Corporate Insolvency, Insolvency Notices, Insolvency practices, Regulation Comments Off

Jul 042012

The new ASIC website to be used by liquidators and other insolvency practitioners, and which can be searched by the public free of charge, is located at https://insolvencynotices.asic.gov.au/

The name of the site is a little misleading, because not all the notices are about insolvent companies. Notices to do with solvent companies who have entered a members’ voluntary liquidation are also shown. Accordingly, caution needs to be shown when browsing or searching. For example, regardless of whether a company is undergoing a solvent liquidation or an insolvent liquidation, the Browse/Search Notices page of the website shows the Status of such companies as simply “In liquidation”. Even when a notice is Viewed, there is no obvious sign as to the type of liquidation the company is undergoing.

When browsing or searching the results can be filtered by Appointment Type. The types are Court Liquidation, Creditors’ Voluntary Liquidation, Deed of Company Arrangement, Deregistration, Members’ Voluntary Liquidation, Scheme of Arrangement, Voluntary Administration and Winding Up Application.

Reasons why court replaced special purpose liquidator of One.Tel

ASIC, Case Reports, Corporate Insolvency, court decisions, Insolvency Law, Insolvency Laws, law reports, Regulation Comments Off

Jun 292012

A NSW Supreme Court judge has replaced the special purpose liquidator of the collapsed telecommunications company One.Tel.

Registered Liquidator, Paul Weston, who has served as special purpose liquidator since December 2003, was removed from his role after judge Patricia Bergin found creditors, led by Optus, had lost confidence in Mr Weston’s capacity “to bring a dispassionate mind to bear in exercising his powers in the liquidation”. Mr Weston contended that the creditors’ loss of confidence in him was not enough to justify his removal. He contended that there must be some serious misconduct, conflict of interest or lack of independence.

Justice Bergin appointed another registered liquidator, Stephen Parbery, in Mr Weston’s place.

The application for removal of was Mr Weston was brought under section 503 of the Corporations Act 2001: “The Court may, on cause shown, remove a liquidator and appoint another liquidator.”

Issues considered in the case included:

The special liquidator’s relationship with the creditors’ Committee of Inspection.
The liquidator’s remuneration and expenses.

THE JUDGMENT ALSO CONTAINS A “BRIEF” HISTORY OF THE LONG BATTLE THAT HAS BEEN GOING ON BETWEEN THE PACKER/MURDOCH/RICH INTERESTS, THE SPECIAL LIQUIDATOR AND THE COMMITTEE OF INSPECTION.

Extracts from the court judgment, and a link to the full judgement of 19 June 2012, are given below.

“In a court appointed liquidation (or a liquidation by the Court), a liquidator, as an officer of the Court, is a representative of the Court, entrusted with the reputation of the Court. It is expected that the liquidator will discharge the relevant functions and powers with impartiality and proper dispatch: Commissioner for Corporate Affairs v Peter William Harvey [1980] VR 669. Albeit that it may be inappropriate to refer to the defendant as “an officer of the Court” in this particular liquidation, it is expected that he would discharge his relevant functions and powers with impartiality and proper dispatch.” (para 151)

“It is expected that the defendant will maintain an “even and impartial hand” in his dealings with those interested in the liquidation … It is expected that he will be independent in the sense that he will deal impartially and objectively in the interests of the creditors …”. (para 152)

“In City & Suburban Pty Ltd v Smith, Merkel J observed at 336 (excluding citations): Section 503 of the Law provides that the court may “on cause shown” remove a liquidator and appoint another liquidator. It has long been accepted that the section and its predecessors were not confined to situations where it is established that there is personal unfitness, impropriety or breach of duty on the part of the liquidator. Cause is shown for removal whenever the court is satisfied that it is for the better conduct of the liquidation or, put another way, it is for the general advantage of those interested in the assets of the company that a liquidator be removed.” (para 160)

“In the present case the acrimony which has arisen between the liquidator and the committee of inspection has not come about as a result of any unreasonable conduct on the part of the committee. Rather, it has come about because the liquidator has carried out his tasks in respect of the liquidation with some insensitivity to the angst of the members of the committee of inspection.” (para 162)

“In AMP Music Box Enterprises Ltd v Hoffman [2002] BCC 996, Neuberger J (as his Lordship then was) considered the power under s 180(2) of the Insolvency Act 1986 (UK) to remove a liquidator “on cause shown” and said at 1001-1002:

On the other hand, if a liquidator has been generally effective and honest, the court must think carefully before deciding to remove him and replace him. It should not be seen to be easy to remove a liquidator merely because it can be shown that in one, or possibly more than one, respect his conduct has fallen short of ideal. So to hold would encourage applications under s 108(2) by creditors who have not had their preferred liquidator appointed, or who are for some other reason disgruntled. Once a liquidation has been conducted for a time, no doubt there can almost always be criticism of the conduct, in the sense that one can identify things that could have been done better, or things that could have been done earlier. It is all too easy for an insolvency practitioner, who has not been involved in a particular liquidation, to say, with the benefit of the wisdom of hindsight, how he could have done better. It would plainly be undesirable to encourage an application to remove a liquidator on such grounds. It would mean that any liquidator who was appointed, in circumstances where there was support for another possible liquidator, would spend much of his time looking over his shoulder, and there would be a risk of the court being flooded with applications of this sort. Further, the court has to bear in mind that in almost any case where it orders a liquidator to stand down, and replaces him with another liquidator, there will be undesirable consequences in terms of costs and in terms of delay.” (para 164)

“Conclusion

I am satisfied that it is in the best interests of this liquidation for the defendant to be removed as special purpose liquidator and for Mr Parbery to be appointed in his place. The defendant is to meet with Mr Parbery and provide him with any advice, documents or other assistance sought by Mr Parbery so that he may be in a position to pursue the remaining purposes of the special purpose liquidation in the most cost efficient manner.
I am conscious that ASIC’s review of the defendant’s remuneration and fees has effectively been put on hold pending the outcome of these proceedings. I am satisfied that it is appropriate to defer any ruling in relation to conducting an inquiry under s 536 of the Act until ASIC’s review has concluded. It may be that, having regard to the defendant’s removal and/or the outcome of ASIC’s review, the plaintiffs may no longer wish to press for such an inquiry.”

FULL JUDGMENT:

SingTel Optus Pty Limited & Ors v Weston [2012] NSWSC 674 (19 June 2012)

Click here to read and/or copy judgment.

New regime for publication of insolvency notices

ASIC, Corporate Insolvency, Insolvency Notices, Insolvency practices, Regulation Comments Off

Jun 262012

From 1 July 2012 most insolvency notices issued by Australian registered liquidators will be published on a new website set up by the Australian Securities and Investments Commission (ASIC).

This largely replaces the existing age-old system under which notices were published in classified advertisements in newspapers and in the Federal Government’s business gazette.

Just ahead of the start of the new system and the launch of the ASIC’s special website, the ASIC has sent three documents to liquidators explaining the change:

“Getting started on ASIC’s new website for insolvency and other matters.” To read and/or copy CLICK HERE.
“Updated fact sheet for Registered Liquidators – 26/6/2012: Lodging notices for publication on the ASIC’s website.” To read and/or copy CLICK HERE.
“Fact sheet – Proposed changes to publish notices electronically.” To read and/or copy CLICK HERE.

The types of notices that must be sent to the new ASIC website are :

1. notices of winding up applications
2. notices relating to appointments
3. notices of meetings of creditors
4. notices of intention to disclaim property
5. notices calling for proofs of debt and intention to declare dividends
6. company deregistration.

Anyone will be able to search the new website free of charge for a particular notice. The enquiry/search parameters will be:

* company name.
* trading name.
* appointment type (eg court liquidation, voluntary administration etc)
* notice purpose (eg meeting of creditors, appointment, declaration of dividend, disclaimer etc).
* publication date.

The ASIC expects to introduce more advanced search functionality after 1 July 2012.

New law on companies’ non-compliance with PAYG withholding and superannuation guarantee obligations

Insolvency Law, Insolvency practices, Priority Debts, SGC, Superannuation liabilities, Tax liabilities, Taxation Issues Comments Off

Jun 212012

On 20 June 2012 the following documents concerning proposed new tax laws on non-compliance with PAYG withholding and superannuation guarantee obligations was posted on the website of the Parliament of Australia:

Explanatory Memorandum to law.
Tax Laws Amendment (2012 Measures No. 2) Bill 2012 (Third reading).

Both documents can be read and/or downloaded HERE.

On the 21 June the legislation went to the Senate.

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“Australian Insolvency Decisions” May 2012 edition

Case Reports, Corporate Insolvency, court decisions, Insolvency Law, Insolvency practices, law reports, Personal Bankruptcy Comments Off

Jun 122012

____________________________________________________________________________

Bankruptcy Act – Prior to Date of Bankruptcy

You will recall the following Decision from the previous email – I now understand that it is related to the earlier Decision , In the matter of Macryannis [2011] FCA 1272) , which itself had some particularly interesting features , especially in relation to the conduct of the Trustee – National Australia Bank Limited v Oberg [2012] FMCA 233 (27 March 2012) BANKRUPTCY – Creditor’s petition – whether debtor satisfied court that he is able to pay his debts within s.52(2)(a) of the Bankruptcy Act 1966. http://www.austlii.edu.au/au/cases/cth/FMCA/2012/233.html

Bankruptcy Act – following Date of Bankruptcy

Worth a solid read- Rambaldi (The Trustees of the Estate of John Edward Atkinson a Bankrupt) v Woodward [2012] NSWSC 434 (11 May 2012) REAL PROPERTY – co-owners – statutory power of sale – application by bankruptcy trustees of one co-owner – property encumbered – whether trustees entitled to sell if no equity remaining in property – whether sale would be outside provisions of Bankruptcy Act and Regulations – whether discretion in court to refuse order for sale http://www.austlii.edu.au/au/cases/nsw/NSWSC/2012/434.html

Bankruptcy Act – Other Schemes under the Act

nil

Corporations – pre-appointment

In the matter of Samkev Investments Pty Limited [2012] NSWSC 527 (21 May 2012) Statutory Demand set aside http://www.austlii.edu.au/au/cases/nsw/NSWSC/2012/527.html

Elite Catering Equipment Pty Ltd v Serosthan [2012] VSC 194 (11 May 2012) CORPORATIONS – External administration – Application to set aside statutory demand pursuant to Section 459G of the Corporations Act 2001 on basis of alleged genuine dispute – Accounts of plaintiff and other documents support defendant’s contentions as to existence of debt and are not satisfactorily rebutted by the plaintiff – Demand varied to reflect recalculation of interest by reason of reduction in principal component of demand http://www.austlii.edu.au/au/cases/vic/VSC/2012/194.html

Golden Era Investments Pty Ltd v Commonwealth Bank of Australia Limited [2012] VSC 178 (4 May 2012) CORPORATIONS – External administration – Corporations Act 2001 (Cth) – Application to set aside statutory demand by reason of existence of genuine dispute – Defendant bank deals with bearer cheques in accordance with mandate without notice of impropriety of bearer who was plaintiff’s accountant – No plausible contention requiring investigation – Application dismissed http://www.austlii.edu.au/au/cases/vic/VSC/2012/178.html

Corporations – post appointment

Dolores Correa and The Spanish Club Limited (subject to Deed of Company Arrangement) v Kenneth Michael Whittingham (No 3) [2012] NSWSC 526 (21 May 2012) CORPORATIONS – External administration – Administration under deed of company arrangement – Validity of appointment of administrator – Whether appointment invalid by reason of lack of number of directors as required by articles of association – Whether appointment invalid by reason of lack of quorum for directors meeting – Indoor management rule – Whether appointment valid by reason of statutory assumptions under ss 128-129 of Corporations Act 2001 (Cth) – Whether appointment should be validated under s 447A and s 1322 of Corporations Act 2001 (Cth) – Factors relevant to validation application brought when administration largely complete – Relevance of delay on part of party challenging validity of administrator’s appointment – Whether exposure to statutory regime for assessment of remuneration under s 449E of Corporations Act 2001 (Cth) amounts to substantial injustice http://www.austlii.edu.au/au/cases/nsw/NSWSC/2012/526.html

McCracken v Phoenix Constructions (Qld) Pty Ltd [2012] QCA 129 (18 May 2012) CORPORATIONS – GENERALLY – CORPORATIONS LEGISLATION – where respondent is creditor of corporation of which appellant is director – where trial judge found appellant in contravention of s 182(1) Corporations Act 2001 (Cth) and awarded damages to respondent pursuant to s 1324(10) – where appellant argued s 1324(10) does not confer right of damages upon creditor for contravention of s 182 – where appellant argued award of damages under s 1324(10) would amount to preference over other unsecured creditors – where respondent argued damages available under s 1324(10) – where respondent argued jurisdiction for granting injunction sufficient to enliven award of damages under s 1324(10) – whether trial judge erred in awarding damages under s 1324(10) EVIDENCE – ADMISSIBILITY AND RELEVANCY – FACTS SHOWING STATE OF MIND – INTENTION – where the appellant sought to rely on affidavit at trial as evidence of understanding or agreement between appellant and his wife in relation to proper construction of joint venture agreement – where trial judge concluded that the affidavit evidence was not admissible – where appellant argued evidence admissible on different ground that it showed appellant’s purpose of entering into deed of amendment – where respondent argued that affidavit not tendered as evidence of appellant’s purpose, but evidence of conduct – whether the trial judge erred in not admitting the affidavit evidence EVIDENCE – GENERAL – OTHER GENERAL MATTERS – where trial judge awarded damages equal to respondent’s contractual claim against appellant for contravention of s 182(1) Corporations Act 2001 (Cth) – where appellant argued respondent failed to prove alleged loss due to existence of unsecured creditors and no evidence of financial position – where respondent argued contention should not be considered because not pleaded, not subject of any disclosure, not subject of evidence, and because appellant was only person capable of doing so – whether appellant not giving evidence could justify drawing adverse inference – whether respondent failed to prove claimed loss http://www.austlii.edu.au/au/cases/qld/QCA/2012/129.html

Perpetual Nominees Limited v Rytelle Pty Ltd (recs & mgrs apptd) & Ors [2012] VSC 209 (18 May 2012) PRACTICE AND PROCEDURE – Joinder of party to proceedings – Discretion of court to permit joinder – Supreme Court (General Civil Procedure) Rules 2005 (Vic), rule 9.02. CORPORATIONS LAW – Managed Investment Scheme – Whether former Responsible Entity entitled to indemnity from fund – whether new Responsible Entity liable for obligations and liabilities of former Responsible Entity – Whether new Responsible Entity entitled to indemnity from fund – Corporations Act 2001 (Cth) Pt 5C, ss 601FS, 601FT, 601GA. http://www.austlii.edu.au/au/cases/vic/VSC/2012/209.html

Sanelli v Acee Victoria Pty Ltd (No 2) [2012] VSC 190 (14 May 2012) COSTS ― Judgment for plaintiff after defendant company withdrew defence ― Costs order in favour of plaintiff ― Insolvent defendant ― Application for company directors to pay plaintiff’s costs ― Principles applicable for costs orders against non parties ― Application refused http://www.austlii.edu.au/au/cases/vic/VSC/2012/190.html

Re Environinvest Ltd (No 6) [2012] VSC 173 (14 May 2012) CORPORATIONS – Managed Investment Scheme – Winding up by a person appointed under s 601NF(1) of the Corporations Act 2001 (Cth) – Conflict of duty – Person appointed to wind up the schemes also the liquidator of the Responsible Entity – Directions in winding up under s 601NF(2) of the Corporations Act – Approval of deeds of sale – Approval of mediated agreement as to costs, expenses and remuneration – Scheme liquidator excused from compliance with obligations arising under scheme constitution – Discharge of scheme liquidator on completion of winding up http://www.austlii.edu.au/au/cases/vic/VSC/2012/173.html

Sellers & Anor v Flinn & Anor [2012] VSC 132 (13 April 2012) PRACTICE AND PROCEDURE – Injunctions – Interlocutory injunctions – Application to restrain the defendants from dealing with livestock – Application for declarations as to ownership of livestock pursuant to stock mortgage http://www.austlii.edu.au/au/cases/vic/VSC/2012/132.html

KLEENTEX (THAILAND) CO LTD & ORS v CORPORATE IM PTY LTD & ORS [2012] SASC 71 (2 May 2012) The chargee of a fixed and floating charge seeks by way of summary judgment a declaration that its interest in the charged property is superior to that of the defendants and an injunction restraining the defendants from interfering with the exercise by its appointed receiver of his functions. Whether the appointment of the receiver was invalid – whether an event of default had occurred justifying the receiver’s appointment – whether the failure to give notice of a default invalidated the appointment – whether the charge had an ulterior purpose which invalidated the appointment – whether permission should be granted for the defendants to bring proceedings in the name of the second plaintiff. http://www.austlii.edu.au/au/cases/sa/SASC/2012/71.html

COMMONWEALTH BANK OF AUSTRALIA -v- PANKAJ OSWAL (IN HIS PERSONAL CAPACITY AND AS TRUSTEE OF THE BURRUP TRUST) [2012] WASC 128 (26 April 2012) Application for summary judgment – Extension of time – Issue to be determined – Arguable case – Turns on own facts
Appointment of receiver – Whether beyond power – Improper purpose – Good faith obligation – Sale of assets – Undervalue – Fair market value http://www.austlii.edu.au/au/cases/wa/WASC/2012/128.html

In the matter of Steven Sherman & Peter Walker in their capacities as liquidators of One.Tel Limited [2012] NSWSC 544 (3 May 2012) CORPORATIONS – Payment of Special Purpose Liquidator’s legal costs by General Purpose Liquidator is justified – undertaking to repay legal costs if those costs were not properly incurred http://www.austlii.edu.au/au/cases/nsw/NSWSC/2012/544.html

Another worth a good read = In the matter of Purcom No 34 Admin Pty Ltd (Receiver and Manager Appointed) [2012] NSWSC 543 (3 May 2012) CORPORATIONS – Australian Securities and Investments Commission Act 2001(Cth) ss 502 and 503 – Where liquidator is to be removed or has resigned his appointment in a number of external administrations after disciplinary proceedings – appointment of new liquidator being a principal of the firm where the first liquidator works – comprehensive undertakings having been given by the first liquidator to ASIC under s 93AA of the Australian Securities and Investments Commission Act 2001(Cth) – appointments made http://www.austlii.edu.au/au/cases/nsw/NSWSC/2012/543.html

Leslie John Schirato -v- SCW Pty Ltd (In Liquidation) [2012] NSWSC 541 (24 April 2012) CORPORATIONS – Corporations Act 2001 (Cth) s 488(2) – application under s 488(2) for special leave to distribute surplus funds in circumstances where shareholders and contributories consent to distribution and where company has adequate funds to meet any possible further obligations – HELD – surplus funds appropriate to be distributed – operation of orders subject to receipt of notice from Commissioner of Taxation pursuant to s 260-45 of Schedule 1 of the Taxation Administration Act 1953 (Cth) CORPORATIONS – Corporations Act 2001 (Cth) – application under s 477(2B) for retrospective approval of agreement between liquidator and his solicitors – HELD – agreement approved by the Court http://www.austlii.edu.au/au/cases/nsw/NSWSC/2012/541.html

Miscellaneous

Whild v GE Mortgage Solutions Ltd [2012] VSC 212 (18 May 2012) MORTGAGES – Mortgagee’s power of sale – Whether mortgagee’s notice to pay in the exercise of the statutory power of sale mistakenly referred to extent of moneys owing or to extent of default – Requirements as to form of statutory notice – Whether financial information provided to mortgagor indicating arrears could amount to statutory or contractual notice – Whether mortgagee of a registered Torrens system mortgage could also have available and exercise contractual power of sale – Websdale v S & JD Investments Pty Ltd (1991) NSWLR 573 (CA); Bunbury Foods v National Bank of Australasia Ltd [1984] HCA 10; (1984) 153 CLR 491; Midland Montagu v Cuthbertson (1989) 19 NSWLR 309 – Transfer of Land Act 1958, ss 76 and 77. http://www.austlii.edu.au/au/cases/vic/VSC/2012/212.html

Have not seen reference to this Act for a while – the instalment provisions of the Act have interesting implications for Bankruptcy Notices – Davidson v Greedy & Anor [2012] VSC 202 (15 May 2012) JUDGMENTS ORDERS AND DECLARATIONS ― Judgment debt ― Application for payment of judgment debt by instalments ― Applicable considerations ― Judgment debt includes interest payable on judgment debt ― Application refused ― Judgment Debt Recovery Act (No 10063 of 1984) http://www.austlii.edu.au/au/cases/vic/VSC/2012/202.html

Butler & Ors v Vavladelis & Ors [2012] VSC 186 (9 May 2012) PRACTICE AND PROCEDURE – Application to set aside default judgment – Whether arguable defence based on unconscionable conduct – Asset based lending – Arguable defence established – Judgment set aside on conditions. EQUITY – Unconscionable conduct – Whether asset based lending unconscionable – Loan by clients of solicitor’s mortgage practice – Arguable defence of unconscionability established – Default judgment set aside on conditions –Elkofairi v Permanent Trustee Co Ltd [2002] NSWCA 413; Kowalczuk v Accom Finance Pty Ltd [2008] NSWCA 343; Perpetual Trustees Australia Limited v Schmidt & Anor [2010] VSC 67; Perpetual Trustee Company Limited v Khoshaba [2006] NSWCA 41 considered. http://www.austlii.edu.au/au/cases/vic/VSC/2012/186.html

Thiess Pty Ltd & Anor v Arup Pty Ltd & Ors [2012] QSC 131 (17 May 2012) EVIDENCE – ADMISSIBILITY AND RELEVANCY – OPINION EVIDENCE – EXPERT OPINION – Qualifications of witness – Where witness is accountant and auditor – Whether witness possesses expertise in a specialised field of knowledge relevant to the proceedings – Whether report prepared by witness sufficiently discloses the bases or reasoning for opinions http://www.austlii.edu.au/au/cases/qld/QSC/2012/131.html

Older Entries Newer Entries

Bankruptcy Act – Prior to Date of Bankruptcy

Bankruptcy Act – following Date of Bankruptcy

Corporations – pre-appointment

Corporations – post appointment

How should the public interest test be applied?

“Conclusion

“Getting started on ASIC’s new website for insolvency and other matters.” To read and/or copy CLICK HERE.

“Updated fact sheet for Registered Liquidators – 26/6/2012: Lodging notices for publication on the ASIC’s website.” To read and/or copy CLICK HERE.

“Fact sheet – Proposed changes to publish notices electronically.” To read and/or copy CLICK HERE.