May 212015
 

Slap with feather … (updated 4 December 2015)

Case 3

Australian Financial Security Authority – Media release: (NSW) Hull – Bankrupt pleads guilty to three offences under the Bankruptcy Act

Wed 02 December 2015

A man was sentenced for disposing of property within 12 months prior to becoming a bankrupt with intent to defraud his creditors and having made a false declaration on his Statement of Affairs. Mr Denis John Hull was sentenced in the Downing Centre Local Court on 24 November 2015 following a guilty plea being entered to having disposed of property within 12 months prior to becoming a bankrupt with intent to defraud his creditors and to having made a false declaration on his Statement of Affairs.

On 31 March 2012 Mr Hull received a total of $21,175.44 from the sale of two parcels of shares authorised for sale on 26 March 2012. On 10 April 2012 he became bankrupt via Debtor’s Petition, by which time he had disposed of monies totalling $16,000 received from the sale of shares. In his Statement of Affairs completed on 5 April 2014, Mr Hull failed to disclose the sale of the two parcels of shares, and failed to disclose the existence of the bank account into which the share proceeds were subsequently deposited.

During the proceedings Magistrate Milledge remarked that the offending was “quite deceitful and very worrying”. She later stated that the offending was “despicable, mean and criminal”, but acknowledged that it was clear that Mr Hull accepted that as demonstrated in his letter to the court. In passing sentence, Magistrate Milledge gave consideration to Mr Hull’s age at the date of the offending; the fact that he had previously managed to lead a trouble free life; and that his recent efforts to repay the monies showed remorse; and remarked that it was her view that whilst there was serious criminality she saw it as something that was done at a critical place in life and understood that this was why Mr Hull had done what he had done, noting that this did not excuse the offending.

Mr Hull was sentenced and was ordered to enter into a 2 year good behaviour bond in the amount of $200 with nil conviction to be recorded pursuant to Section 19B(1)(d) Crimes Act 1914. Magistrate Milledge noted that no restitution order would be made as this was being taken care of.

The matter was prosecuted by the Office of the Commonwealth Director of Public Prosecutions.;


Amazing … (updated 11 August 2015)

Case 2

Australian Financial Security Authority – Media release: (TAS) Smith – Discharged bankrupt faces court and imprisonment for failing to disclose financial details and withdrawing cash of $72,600

Thu 06 August 2015

A dairy farmer formerly of King Island, Dominic Luke Smith was prosecuted in the Launceston Court of Petty Sessions on 24 July 2015 for removing $72,600 from his bank accounts in 2012, prior to and just after the date of bankruptcy.
Mr Smith also failed to keep appropriate books and records relating to his business transactions for five years prior to his bankruptcy and failed to disclose information as required by the trustee. Mr Smith was not able to account for how he spent a $100,000 loan and failed to produce bank account statements and cheque butts when requested by his bankruptcy trustee. Mr Smith pleaded guilty to 15 offences under the Bankruptcy Act and was sentenced to a total effective sentence of 4 months’ imprisonment, released on a $1,000 two-year good behaviour bond. The matter was prosecuted by the Office of the Commonwealth Director of Public Prosecutions.

Case 1

Australian Financial Security Authority – Media release NSW (McElwaine) – Nine-month bond for offence against the Bankruptcy Act

Thu 14 May 2015

A NSW woman has pleaded guilty to gambling away more than $137,000 from the sale of her property rather than paying creditors before declaring bankruptcy with debts of $438,000. Dee Why resident Bridgett McElwaine was sentenced in the Downing Centre Local Court on 12 May 2015 after pleading guilty to an offence against the Bankruptcy Act. Ms McElwaine filed for voluntary bankruptcy in October 2012 with debts of $438,000 mostly from the use of 22 credit cards. Before her bankruptcy, Ms McElwaine had received proceeds of more than $137,000 after selling her property in Frenchs Forest, NSW. She withdrew more than $96,000 in the 12 months before her bankruptcy and told the court she ‘blew the lot’ on gambling instead of making the money available to her creditors. In sentencing Magistrate Goodwin noted a jail term was available for Ms McElwaine’s serious offence and that a clear message needed to be sent to the community about the unacceptable nature of that behaviour. Ms McElwaine was convicted and placed on a nine-month good behaviour bond, recognisance of $500 and to accept Community Corrections Service supervision. The case was prosecuted by the Office of the Commonwealth Director of Public Prosecutions.Media release NSW (McElwaine) – Nine-month bond for offence against the Bankruptcy Act


 

Sep 242012
 

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.

Note: There is no July 2012 edition of Australian Insolvency Decisions.

Bankruptcy Act – following Date of Bankruptcy

Ambrose (Trustee) in the matter of Poumako (Bankrupt) v Poumako [2012] FCA 889 (21 August 2012) BANKRUPTCY – where transfer void against trustee in bankruptcy – property jointly owned by bankrupt and another person – appropriate orders in circumstances

BANKRUPTCY – where transfer void against trustee in bankruptcy – transferee paid part consideration – property subject to mortgage – mortgagee’s rights – mortgage funds used to pay part consideration – operation of s 120(4) regarding repayment of consideration paid by transferee

BANKRUPTCY – whether two transfers of property are void against the trustee in bankruptcy – undervalued transactions – transfer of residential properties by bankrupt to family members – whether the properties were held in trust – reliability of evidence – repayment of consideration paid http://www.austlii.edu.au/au/cases/cth/FCA/2012/889.html

Mulhern v Pearce [2012] FCA 884 (17 August 2012)  http://www.austlii.edu.au/au/cases/cth/FCA/2012/884.html

Maxwell-Smith v Donnelly [2012] FCAFC 82 (16 May 2012) http://www.austlii.edu.au/au/cases/cth/FCAFC/2012/82.html

Seems to be an important matter, providing review of s.179 – clearly a lot going on Liprini v Pascoe as Trustee of the Bankrupt Estate of Liprini [2012] FCA 886 (16 August 2012) BANKRUPTCY – application for inquiry pursuant to s 179 Bankruptcy Act 1966   – threshold requirements for inquiry http://www.austlii.edu.au/au/cases/cth/FCA/2012/886.html

Freeman v National Australia Bank Limited [2012] FCA 866 (16 August 2012) PRACTICE AND PROCEDURE – vexatious litigant – application for extension of time for leave to appeal – application for leave to appeal against decision dismissing application to rescind vexatious litigant orders – order declaring vexatious litigant interlocutory not final – relevant principles in considering application for extension of time and for leave to appeal – reopening previous decision because of alleged fresh evidence – merits of case – whether primary judge had proper regard to issues raised by applicant – indemnity costs http://www.austlii.edu.au/au/cases/cth/FCA/2012/866.html

Interesting reading – looking forward to future hearings National Australia Bank Limited v Moore [2012] FCA 865 (15 August 2012) BANKRUPTCY AND INSOLVENCY – bank seeking leave pursuant to s 58(3)(b) of the Bankruptcy Act 1966   to take fresh steps in, and to continue with, proceedings in the Supreme Court of New South Wales http://www.austlii.edu.au/au/cases/cth/FCA/2012/865.html

Rose v Meriton Apartments Pty Limited [2012] FCA 844 (13 August 2012) BANKRUPTCY AND INSOLVENCY – discretion to make sequestration order – whether discretion miscarried – whether leave should be granted to amend notice of appeal http://www.austlii.edu.au/au/cases/cth/FCA/2012/844.html

Frost v Bovaird [2012] FCA 831 (10 August 2012) http://www.austlii.edu.au/au/cases/cth/FCA/2012/831.html

Rahman v Dubs [2012] FCA 849 (9 August 2012) http://www.austlii.edu.au/au/cases/cth/FCA/2012/849.html

 Corporations – pre-appointment

 Valuestream Investment Management Ltd v Richmond Management Pty Ltd [2012] FCA 898 (22 August 2012) CORPORATIONS – urgent ex parte interlocutory application for the appointment of an interim receiver and manager – managed investment scheme – whether circumstances justified appointment of a receiver and manager – prima facie evidence that the trustee company no longer had director resident in Australia or registered office – prima facie evidence that the trustee company had made improper investments, failed to keep accounting records, appoint an auditor and report to unit holders http://www.austlii.edu.au/au/cases/cth/FCA/2012/898.html

Valeba Pty Ltd v Deputy Commissioner of Taxation [2012] QSC 200 (2 August 2012) STATUTORY DEMAND – SETTING ASIDE – DEMAND SERVED BY DEPUTY COMMISSIONER OF TAXATION – CONCLUSIVITY PROVISIONS OF TAXATION LEGISLATION – GENUINE DISPUTE – OTHER REASON TO SET ASIDE http://www.austlii.edu.au/au/cases/qld/QSC/2012/200.html

 Corporations – post appointment

 Warner v Hung, in the matter of Bellpac Pty Limited (Receivers and Managers Appointed) (In Liquidation) (No 3) [2012] FCA 819 (6 August 2012) http://www.austlii.edu.au/au/cases/cth/FCA/2012/819.html

Robinson, in the matter of Darrell Lea Chocolate Shops Pty Ltd (Administrators Appointed) [2012] FCA 833 (3 August 2012) period for holding meeting extended http://www.austlii.edu.au/au/cases/cth/FCA/2012/833.html

Shannon (in his capacity as receiver and manager of North East Wiradjuri Co Limited) v North East Wiradjuri Co Limited (No 4) [2012] FCA 836 (2 August 2012) Fees fixed http://www.austlii.edu.au/au/cases/cth/FCA/2012/836.html

WARWICK ENTERTAINMENT CENTRE PTY LTD (RECEIVERS AND MANAGERS APPOINTED) atf THE WARWICK ENTERTAINMENT CENTRE UNIT TRUST -v- SILKCHIME PTY LTD (RECEIVERS AND MANAGERS APPOINTED) atf THE SILKCHIME UNIT TRUST [No 2] [2012] WASC 275 (1 August 2012) Companies – Payment by one company to another in group – Existence of debt – Evidence of Joint Venture Agreement – Interest payments
Evidence – Corporations Act s 1305 – Books kept – Admissible
Directors’ duties – Corporations Act s 181 – Breaches of statutory duties http://www.austlii.edu.au/au/cases/wa/WASC/2012/275.html

Gannell v Seaquest Pleasure Boats Pty Ltd (In Liquidation) [2012] VCC 893 (26 July 2012) CATCHWORDS – Personal injury claim – negligence of boat builder – breach of contract of sale of boat – assessment of damages for pain and suffering and pecuniary loss http://www.austlii.edu.au/au/cases/vic/VCC/2012/893.html

VCC & the QDC! – seldom, if ever see insolvency matters in this jurisdiction  Andrew Fielding as Liquidator of Lyngray Developments Pty Ltd v Dushas & Anor [2012] QDC 96 (11 May 2012) Corporations – external administration – voidable transactions – uncommercial transactions http://www.austlii.edu.au/au/cases/qld/QDC/2012/96.html

Vouris and Tonks as Deed Administrators Of Good Impressions Offset Printers Pty Limited (ACN 002 306 587) [2012] NSWSC 603 (30 May 2012) CORPORATIONS – Deed of company arrangement –   Corporations Act 2001, 444DA – employees – employees not given priority by deed – employee creditors consent to deed – circumstances in which court will approve non-inclusion of provision under 444DA – whether approval can be given after execution of deed http://www.austlii.edu.au/au/cases/nsw/NSWSC/2012/603.html

Inglewood Farms Pty Ltd v AM No. 1 Pty Ltd (administrators appointed) (No 2) [2012] NSWSC 591 (29 May 2012) CORPORATIONS – Winding up – Corporations Act 2001   s 440A(2) – Application for the adjournment of winding up application – Relevant factors as to whether application should be adjourned – Whether requirements satisfied http://www.austlii.edu.au/au/cases/nsw/NSWSC/2012/591.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

 Miscellaneous

Lowe v Pascoe (No 2) [2012] NSWSC 885 (3 August 2012) Cash payments journals and expert report in relation to them admitted as evidence in fresh trial http://www.austlii.edu.au/au/cases/nsw/NSWSC/2012/885.html

Appoint of a Receiver and Manager of the partnership businessesLowe v Pascoe [2010] NSWSC 388 (7 May 2010) Existence of partnership Unusual signed partnership agreement Family patriarch conducting partnership business (or businesses) as if it (they) was (were) his own and controlling all aspects Numerous disputed questions of fact and law and subsidiary issues
Substantial cash businesses (grocery and butchery) Non-disclosure of full partnership income to ATO
Evasion of tax – plushttp://www.austlii.edu.au/au/cases/nsw/NSWSC/2010/388.html 

END OF POST. 

Jun 122012
 

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.

____________________________________________________________________________

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

Apr 262012
 

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.

____________________________________________________________________________

Bankruptcy Act – Prior to Date of Bankruptcy

I like to see matters such as this where the Constitution is considered – Capital Finance Australia Ltd v Vellar [2012] FMCA 285 (4 April 2012) BANKRUPTCY – Creditors petition – opposition challenging authority of Federal Magistrate – High Court summons filed on eve of hearing – adjournment applications refused – sequestration order made.

CONSTITUTIONAL LAW – Creation of Federal Magistrates Court – appointment of Federal Magistrates – whether invalid under Chapter III of the Constitution by reason of exclusion from judges’ pensions http://www.austlii.edu.au/au/cases/cth/FMCA/2012/285.html

‘Stay Orders’ seem to go in & out of favour – a good summary of where the Court has gone in relation to the definition of insolvency in recent times – I’m not sure that I understand the basis for the change. Could it be that given that there is much more ready access to credit now, as opposed to a generation ago, the debtor is demonstrating reluctance to pay rather than insolvency?? – 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

It will be interesting to see if there is more Court action in this matter – Zekry v Nair [2012] FMCA 237 (19 March 2012) BANKRUPTCY – Application to set aside bankruptcy notice – controlling trustee appointed – applicant failed to appear

 http://www.austlii.edu.au/au/cases/cth/FMCA/2012/237.html

No surprises – Deputy Commissioner Of Taxation v Caporale [2012] FMCA 206 (16 March 2012) BANKRUPTCY – Contested creditor’s petition – unpaid tax – taxpayer objecting to assessments – second such objection – no reason to delay making a sequestration order http://www.austlii.edu.au/au/cases/cth/FMCA/2012/206.html

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Bankruptcy Act – following Date of Bankruptcy

Romeo v The Trust Company (PTAL) Ltd [2012] NSWCA 62 (30 March 2012) APPEAL – application for leave to appeal – default judgment for possession of property set aside on condition that mortgagors pay part of claimed debt into court – whether condition should have been imposed – effect of bankruptcy of one mortgagor http://www.austlii.edu.au/au/cases/nsw/NSWCA/2012/62.html

A Bankruptcy & a Part X!! – The Trustee of the Property of Paul Jason Uhrhane, A Bankrupt & Anor v Gunn & Anor [2012] QCA 75 (30 March 2012) PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER UNIFORM CIVIL PROCEDURE RULES AND PREDECESSORS – PLEADING – DEFENCE AND COUNTERCLAIM – where the appellants made an admission in their original defence that a registered mortgage was granted in favour of the respondents – where the appellants subsequently filed an amended defence that challenged the validity of that mortgage – where the primary judge struck-out the amended defence for inconsistency with the admission in the original defence – whether the appellants’ original defence contained an admission that was inconsistent with their amended defence – whether the primary judge was correct in striking-out the amended defence http://www.austlii.edu.au/au/cases/qld/QCA/2012/75.html

** follows Setting Aside of Sequestration Order ** –  Mbuzi v SV Partners & Anor [2012] QSC 84 (5 April 2012) PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER UNIFORM CIVIL PROCEDURE RULES AND PREDECESSORS – ORIGINATING PROCESS – where the applicant started proceeding by originating application – where the applicant claims compensatory damages for negligence, undue harassment and defamation and aggravated and vindicatory damages – where the applicant sought an order under r 14 of the Uniform Civil Procedure Rules 1999 (Qld) that the proceeding continue as if started by claim – where claims for damages could proceed only if properly pleaded and particularised – where purpose of return date of application was to address the applicant’s choice of originating process – where the amounts claimed for damages did not require the claim to be started in the Supreme Court – whether the choice of incorrect originating process was an abuse of the court’s processes

http://www.austlii.edu.au/au/cases/qld/QSC/2012/84.html  

Should Trustees start reading the transcript of Sequestration Order hearings ? Mbuzi v Favell (No 2) [2012] FCA 311 (28 March 2012) BANKRUPTCY AND INSOLVENCY – appeal against sequestration order made by Federal Magistrate – service of bankruptcy notice – reg 16.01 Bankruptcy Regulations 1996 (Cth) – bankruptcy notice alleged to have been sent by post – evidence given of standard office practice for sending mail – claimed register of outgoing mail – claim that secretary/receptionist put bankruptcy notice in post – no evidence given by any person who may have put bankruptcy notice in post – system of postage – sequestration order of utmost seriousness – strict proof of service of bankruptcy notice required – onus of establishing proof of service of bankruptcy notice lies with creditor – appeal allowed COSTS – unrepresented litigant – self-represented litigant – appeal successful but no costs awarded http://www.austlii.edu.au/au/cases/cth/FCA/2012/311.html

Frost v Sheahan as Trustee of the Bankrupt Estate of Allen Gordon Frost [2012] FCAFC 46 (28 March 2012) BANKRUPTCY – whether property held on trust – findings of fact – impermissible attempt to re-canvass evidence on appeal – no appellable error – a mortgage – whether a transfer of property PRACTICE AND PROCEDURE – leave to amend Notice of Appeal – overturning factual conclusions on appeal – denial of procedural fairness

http://www.austlii.edu.au/au/cases/cth/FCAFC/2012/46.html

Part IV Compositions are so uncommon, but an application to have one set aside!! – Hingston v Westpac Banking Corporation [2012] FCAFC 41 (23 March 2012) BANKRUPTCY AND INSOLVENCY – consideration of an appeal by the bankrupt to set aside orders of the primary judge setting aside a composition made between the bankrupt and his creditors under Division 6 of Part IV of the Bankruptcy Act 1966 (Cth) – consideration of the grounds set out in s 222(1)(d) and s 222(5)(e)(i) of the Bankruptcy Act in setting aside the composition made by the bankrupt with his creditors under Division 6 of Part IV – consideration of the construction to be attributed to s 222(5)(e)(i) and s 76B in applying the grounds contained in that subsection to a composition under Division 6 of Part IV – consideration of the construction to be attributed to s 222(5)(e)(i) and s 76B in circumstances where the omission of a material matter from the debtor’s statement of affairs concerns a statement of affairs presented to the Official Receiver under s 55 of the Act rather than a debtor’s statement of affairs for the purposes of s 188(2C) or (2D) of the Bankruptcy Act – consideration of the factors informing the exercise of the discretion to set aside a composition made between the bankrupt and his creditors under Division 6 of Part IV in the context of s 222(1)(d) and s 222(5)(e)(i) as applied to a composition by s 76B of the Bankruptcy Act BANKRUPTCY AND INSOLVENCY – consideration of the scope of consequential orders to be made consequent upon setting aside a composition under s 222(1)(d) and s 222(5)(e)(i) and s 30(1) of the Bankruptcy Act 1966 (Cth) – consideration of the relationship between s 74(5) of the Bankruptcy Act and the power of the Court to make remedial orders that put the parties in their pre-composition position

http://www.austlii.edu.au/au/cases/cth/FCAFC/2012/41.html

Samootin v Official Trustee in Bankruptcy (No. 2) [2012] FCA 316 (28 March 2012) PRIVILEGE – Legal professional privilege – waiver – common interest – documents coming into existence after sequestration order made and challenged – litigation involving Official Trustee in Bankruptcy and bankrupt – interests of Official Trustee potentially in conflict with interests of bankrupt http://www.austlii.edu.au/au/cases/cth/FCA/2012/316.html

Ambrose v Poumako [2012] FCA 318 (22 March 2012)

http://www.austlii.edu.au/au/cases/cth/FCA/2012/318.html

Owners Corporation PS334337A v Hoiles [2012] FMCA 218 (19 March 2012) BANKRUPTCY – Application of trustees under s.146 of the Bankruptcy Act 1966 (Cth) for distribution of dividends – no statement of affairs received in relation to deceased’s estate – application acceded to – costs charges and expenses incurred by applicants including in period between initial bankruptcy and subsequent bankruptcy of a deceased estate be paid in priority by bankrupt deceased estate http://www.austlii.edu.au/au/cases/cth/FMCA/2012/218.html

Hansen Yuncken Pty Ltd v Ian James Ericson trading as Flea’s Concreting & Anor [2012] QSC 51 (14 March 2012) TAXES AND DUTIES – ADMINISTRATION OF FEDERAL TAX LEGISLATION – COLLECTION AND RECOVERY OF TAX – COLLECTION OF AMOUNT FROM THIRD PARTY – Taxation Administration Act 1953 (Cth), Schedule 1 s260-5 – notices – statutory charge created by – where moneys paid into court by recipient of notice – where debt owing be recipient to taxpayer discharged by that payment – whether Commissioner of Taxation entitled to a charge over money in court

http://www.austlii.edu.au/au/cases/qld/QSC/2012/51.html

Must have missed this one earlier, worth a good look – Burness v Taliauli [2011] FMCA 910 (10 November 2011) BANKRUPTCY – Application for vacant possession of property – failure to annul bankruptcy – application successful http://www.austlii.edu.au/au/cases/cth/FMCA/2011/910.html

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Bankruptcy Act – Other Schemes under the Act

Moran v Robertson [2012] FCA 371 (13 April 2012) BANKRUPTCY – application to have personal insolvency agreements set aside – terms of agreement unreasonable – derisory dividend payable to creditors – some creditors electing not to participate in distribution GUARANTEES construed strictly in favour of guarantor PRACTICE AND PROCEDURE – filing of written submissions after hearing – submissions manifestly in excess of that contemplated TRUSTS – personal liability of trustee http://www.austlii.edu.au/au/cases/cth/FCA/2012/371.html

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Corporations – pre-appointment

Deputy Commissioner of Taxation v Bayconnection Property Developments Pty Limited [2012] FCA 363 (16 April 2012) CORPORATIONS – application to wind up company in insolvency by reason of tax debt – tax debt the subject of pending review proceedings in the Administrative Appeals Tribunal – application to adjourn winding up application until decision in review proceedings CORPORATIONS – extension of period within which application for company to be wound up in insolvency be determined – “special circumstances” under s 459R(2) of the Corporations Act 2001 (Cth) TAXATIONapplication to wind up company – tax debt the subject of pending review proceedings in the Administrative Appeals Tribunal – adjournment 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 principle – standard of proof – balance of probabilities http://www.austlii.edu.au/au/cases/cth/FCA/2012/363.html

Hillam v Ample Source International Ltd (includes Corrigendum dated 18 April 2012) [2012] FCA 374 (13 April 2012) PRACTICE AND PROCEDURE – winding up order on the ground of oppression previously stayed on conditions pending appeal – preservation of status quo – interlocutory application for the reconstitution of the board of the company and for the sale of a substantial asset of the company pending appeal

http://www.austlii.edu.au/au/cases/cth/FCA/2012/374.html

Lifese Pty Limited v Lee Crane Hire Pty Limited [2012] FCA 302 (28 March 2012) CORPORATIONS – statutory demand for payment of debt – application to set aside – whether “genuine dispute” – whether abuse of process Held: statutory demand be set aside

http://www.austlii.edu.au/au/cases/cth/FCA/2012/302.html

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Corporations – post appointment

MG Corrosion Consultants Pty Ltd v Gilmour [2012] FCA 383 (16 April 2012) CORPORATIONS – freezing orders – appointment of an external administrator – s 440D of the Corporations Act 2001 (Cth) – proceeding – in relation to – any of its property – legal or equitable estate or interest – a thing in action – chose in action – bare right to litigate – third parties – Mareva type order – undertaking – discretionary considerations – dissipation or disposal of assets – Div 7.4 of the Federal Court Rules 2011 (Cth) – good arguable case – inference – danger or real risk http://www.austlii.edu.au/au/cases/cth/FCA/2012/383.html

An interesting matter – also related to a Bankruptcy – Healy, in the matter of Falaren Pty Ltd (deregistered), v Australian Securities and Investments Commission [2012] FCA 368 (12 April 2012) CORPORATIONS – whether a deregistered company should be reinstated – whether the deregistration of a company should be deferred – whether proposed liquidator is qualified to be appointed as a replacement liquidator http://www.austlii.edu.au/au/cases/cth/FCA/2012/368.html

Australian Property Custodian Holdings Ltd v Capital Finance Australia Ltd & Ors [2012] VSC 124 (4 April 2012) CORPORATIONS – Whether future chose in action secured under charges – Construction of charges – Whether bare right to sue – Genuine commercial interest – Right incidental or ancillary to transfer of interest in property – Whether liquidators may prosecute chose in action when charges enforced and receivers appointed – Whether trustee charged its right of indemnity including right of exoneration – Application by liquidators for approval of litigation funding agreement – Director of proposed funder defendant in other proceedings brought by the liquidators – Corporations Act 2001 (Cth) s 477(2B)http://www.austlii.edu.au/au/cases/vic/VSC/2012/124.html

It sounds like this will be an interesting matter to follow this matter –  AGBC Pty Ltd & Anor v Dessa & Ors [2012] VSC 118 (30 March 2012) CORPORATIONS – Application for interim injunction pursuant to Section 1324(4) of the Corporations Act 2001 (Cth).

http://www.austlii.edu.au/au/cases/vic/VSC/2012/118.html

Grapecorp Management Pty Ltd (in liq) v Grape Exchange Management Euston Pty Ltd [2012] VSC 112 (30 March 2012) CORPORATIONS LAW – Set-off provisions for insolvent companies under s 553C – Meaning “mutual credits, debts or other mutual dealings” – To be construed widely. CORPORATIONS LAW – Set-off provisions for insolvent companies under s 553C – Whether funds were trust funds thereby precluding mutuality and set-off. CORPORATIONS LAW – Set-off provisions for insolvent companies under s 553C – Whether post liquidation expenses can be set-off against post liquidation income – Relevance of antecedent agreement – Meaning of contingent or vested claims. CORPORATIONS LAW – Set-off provisions for insolvent companies under s 553C – Whether notice of insolvency precludes set-off under s 553C(2) – Relevant time that creditor must have such notice. CORPORATIONS LAW – Insolvent companies – Whether costs and expenses were properly incurred and are priority claims under s 556(1)(a) Corporations Act. AMENDMENT AND LEAVE TO RE-OPEN CASE – Whether late amendment should be permitted – No prejudice to plaintiff – Matter raised early in proceeding – Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 applied

http://www.austlii.edu.au/au/cases/vic/VSC/2012/112.html

Georges v Seaborn International Pty Ltd (Trustee) [2012] FCA 294 (26 March 2012) APPEAL – Application for leave to appeal – whether order for directions was final or interlocutory – application for leave to appeal by non party – refusal of application to be appointed as a representative in the proceedings http://www.austlii.edu.au/au/cases/cth/FCA/2012/294.html

Sheahan; In the matter of SK Foods Pty Ltd (In Liquidation) [2012] FCA 268 (23 March 2012) http://www.austlii.edu.au/au/cases/cth/FCA/2012/268.html

Gould Bros & Co Pty Limited (Administrators Appointed), in the matter of Gould Bros & Co Pty Limited (Administrators Appointed) [2012] FCA 285 (22 March 2012) CORPORATIONS – administration – application as to how Pt 5.3A of the Corporations Act 2001 (Cth) is to operate – administrators’ liability and indemnity for debts of administration – funding agreement http://www.austlii.edu.au/au/cases/cth/FCA/2012/285.html

STARRS -v- RETRAVISION (WA) LTD [2012] WASCA 67 (27 March 2012) Practice and procedure – Application to set aside default judgment – Merits of proposed defence – Turns on own facts http://www.austlii.edu.au/au/cases/wa/WASCA/2012/67.html

Metro Chatswood Pty Ltd v CRI Chatswood Pty Ltd (In Liquidation) (Receivers and Managers Appointed) & Ors [2012] NSWCA 49 (22 March 2012) APPEAL – interlocutory injunction pending appeal – balance of convenience – no question of principle

http://www.austlii.edu.au/au/cases/nsw/NSWCA/2012/49.html

C Pty Limited and Ors & PGW as Liquidator of S Pty Limited (in Liq) (Costs) [2012] FamCAFC 38 (15 March 2012) FAMILY LAW – APPEAL – COSTS – where the appellants seek that each party bear their own costs or in the alternative that they be granted a certificate pursuant to the Federal Proceedings (Costs) Act 1981 (Cth) – where the respondent seeks costs on “the ordinary basis” – where costs certificates cannot be granted pursuant to the Federal Proceedings (Costs) Act 1981 (Cth) given the appeals have been dismissed – where the appellants object to the Full Court receiving the respondent’s submissions in reply which they assert were filed out of time – where the submissions in reply were received – where both sets of proceedings before the Family Court were proceedings under the Family Law Act 1975 (Cth) (“the Act”) and thus the applications are governed by s 117 of the Act – where the appeals have been wholly unsuccessful – where there is no evidence as to the financial circumstances of the parties which either supports or prevents an order for costs being made – where there is no basis for making an order for costs based on the conduct of the respondent – where there is relevant conduct by the appellants to be taken into account in favour of an order for costs being made – where the offers of settlement made by the appellants are disregarded – where the applicants are to pay the respondent’s costs of and incidental to the appeals as agreed and in default of agreement as assessed on a party/party basis – costs order made http://www.austlii.edu.au/au/cases/cth/FamCAFC/2012/38.html

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Miscellaneous

Income for Income Tax purposes – what about if a Bankrupt? – Sent apears to be an interesting fellow – Sent v Commissioner of Taxation [2012] FCA 382 (16 April 2012) INCOME TAX – Employee incentive share trust plan — Whether payment to trust had character of ordinary income – Whether payment in substitution for bonuses from employment is ordinary income – Whether when part of amount deemed to be ordinary income assessable to the respondent but the remaining part is not — Whether respondent obtained a benefit or gain — Whether amount of ordinary income “derived” – When amount is applied or dealt with by a taxpayer – Whether exemptions applied to treat amount as a fringe benefit – PENALTIES and OFFENCES — Recklessness – Failure by taxpayer to discharge onus regarding recklessness of tax agent – Failure to adopt a reasonably arguable position ADMINISTRATIVE LAW — Whether error of law by the Administrative Appeals Tribunal —– Statutory requirement to provide reasons – Whether inadequacy of reasons an error of law – Whether appropriate to set aside decision for failure to provide adequate reasons – Whether facts as found are capable of supporting the decision http://www.austlii.edu.au/au/cases/cth/FCA/2012/382.html

NORTHWEST CAPITAL MANAGEMENT -v- WESTATE CAPITAL LTD [2012] WASC 121 (5 April 2012) Corporations – General meeting – Validity of purported resolutions – Whether chairperson appointed – Requirement of chairperson for validity of general meeting – Whether meeting in such disarray that no valid resolutions passed – Whether proxy votes invalidly excluded – s 1322 Corporations Act – Whether irregularities substantive or procedural Corporations – Whether proxy appointment ineffective under s 250B of the Corporations Act if it is provided to a third party for delivery to the company – Whether proxies tabled prior to general meeting Trade practices – Conduct likely to mislead or deceive – Misleading or deceptive conduct in relation to voting process for purported resolutions and circulating resolution – Whether s 18 The Australian Consumer Law (sch 2 of the Competition and Consumer Act 2010 (Cth) applies – Whether s 12DA of the Australian Securities and Investments Commission Act 2001 (Cth) applies – Meaning of ‘engage in conduct’ – Relevance of lack of evidence that any person was misled or deceived – Nature of injunctive relief under s 232 of The Australian Consumer Law and s 12GD of the Australian Securities and Investments Commission Act Trusts and trustees – Written circulating resolution – Whether power in Trust Deed for the removal of trustee by a circulating resolution – Nature of requirement for notice of meetings – Whether the same principle extends to requiring circulating resolutions to be provided to all unit holders Trusts and trustees – Whether implied term arises from a clause providing for removal of trustee for a power to appoint a new trustee – Powers under the Trustees Act 1962 (WA) to appoint a new trustee – History of powers to remove trustees and appoint new trustees – Trusts and trustees – Trustees Act 1962 (WA) s 77(1) – Whether expedient to appoint a new trustee – Whether issue of units in Trust and stapled shares in company occurred for purpose of procuring voting support – Whether it is inexpedient, difficult or impracticable to appoint a new trustee in substitution for an existing trustee without the assistance of the Court – Considerations in exercise of discretion under s 77(1) – Rule against direction of trustee – Whether meeting of unit holders should be convened by Trustee – Powers of unit holders http://www.austlii.edu.au/au/cases/wa/WASC/2012/121.html

Barescape Pty Ltd & Anor v Bacchus Holdings Pty Ltd & Anor (No 6) [2012] NSWSC 257 (21 March 2012) EVIDENCE – Expert evidence – Expert’s reports – Rules of court as to admissibility of expert’s reports – Rule 31.28 of Uniform Civil Procedure Rules 2005 (NSW) – Whether “exceptional circumstances” exist supporting the admissibility of expert’s reports – Whether substantial prejudice exists preventing the admission of expert’s reports.EVIDENCE – Tender of MYOB records – Whether sufficient evidence exists to establish how MYOB records were prepared – Whether business records under s 69 of Evidence Act 1995 (NSW).

PERSONAL PROPERTY SECURITY LEGISLATION

As the PPSA is about to take effect, I thought I’d have a look at what is happening in NZ  – surprise, surprise the 1st three decisions feature corporate insolvency practitioners!!  – Does anyone know of a Canadian equivalent to AUSLII?Commissioner of Inland Revenue v Stiassny [2012] NZCA 93 (15 March 2012) Were the receivers personally liable to pay the GST? Can any of the respondents recover the GST from the Commissioner on the basis it was paid under a mistake of law, namely that the receivers were personally liable to pay the GST?

http://www.nzlii.org/cgi-bin/sinodisp/nz/cases/NZCA/2012/93.html?query=”personal%20property%20securities%20

Marac Finance Limited v Greer [2012] NZCA 45 (1 March 2012) A question of priorities – if the PPSA does not apply

 http://www.nzlii.org/cgi-bin/sinodisp/nz/cases/NZCA/2012/45.html?query=”personal%20property%20securities%20

Glenmorgan Farm Limited (in rec and in liq) v New Zealand Bloodstock Leasing Limited [2011] NZCA 672 (20 December 2011)

http://www.nzlii.org/cgi-bin/sinodisp/nz/cases/NZCA/2011/672.html?query=”personal%20property%20securities%20

Stop looking!  I’ve found a Canadian source – note Price Waterhouse as Receiver and Receiver/Manager in this decision – AGT Financial Corporation v. Ellake Services Limited, 2011 BCSC 578 ‘The standard described in Re Searcy does not require an individual to have conscious knowledge. Rather, it requires that the relevant information be delivered to a corporation in a manner such that a reasonable person would take cognizance of it. The court’s concern in Re Searcy, leading to its discussion of “actual knowledge”, was that the basis for the knowledge did not require the corporation to draw inferences (however reasonable) in order to arrive at the requisite conclusion’

LINK

And now a Bankrupt Estate – Bankruptcies of Arseneau and Arseneau, 2005 NSSC 26 

LINK

An older Canadian case, but useful in terms of what you might need to consider in conducting a search of the PPSR (Aust) – of interest to me because of the eccentricities of the Bankruptcy database Harry Watson Farm Supply Ltd. v. Hi-Way Service Inc., 2000 ABQB 26 There can be little doubt that a farm tractor is equipment and serial numbered goods as defined by the Act and by Personal Property Security Regulation Alt. Reg. 234/90 (see Regulations l(j);1(1); 1(s);1(t); and Section 1 (1)0 of the Act)

LINK

END

Nov 142011
 

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.

Bankruptcy Act – Prior to Date of Bankruptcy 

Lewis v Lamru Pty Ltd; In the Matter of Lewis (No 3) [2011] FCA 1177 (19 October 2011) BANKRUPTCY – whether monies paid into Court by a judgment debtor in satisfaction of a condition voluntarily offered by the judgment debtor as the price for obtaining an extension of the time for compliance with a bankruptcy notice should be paid out to the judgment creditor http://www.austlii.edu.au/au/cases/cth/FCA/2011/1177.html

 Interesting new way to lose a bankruptcy notice-  Rookharp Pty Limited v Webb & Anor [2011] FMCA 801 (14 October 2011) BANKRUPTCY – Creditor’s petition – whether bankruptcy notice must be issued in the names of all joint creditors – whether all joint creditors must be named as petitioners – scope of s.40(3)(d) of the Bankruptcy Act – whether respondents solvent – whether overstatement in bankruptcy notices or creditor’s petition – whether bankruptcy notices invalid as imposing interest on professional costs http://www.austlii.edu.au/au/cases/cth/FMCA/2011/801.html

 Bankruptcy Act – following Date of Bankruptcy

 Another instance where action / inaction of bankrupt may have given rise to significant costs to estate – debt to petitioning creditor not large – trustees remuneration, at one taxation, substantiallially reduced –  Maxwell-Smith v Donnelly (No 3) [2011] FCA 1226 (31 October 2011) BANKRUPTCY – application under s 179 of the Bankruptcy Act 1966 (Cth) – consideration of trustee’s refusals to reconvey property to former bankrupts in circumstances where trustee’s costs, charges and expenses of administration remain unpaid – application dismissed  http://www.austlii.edu.au/au/cases/cth/FCA/2011/1226.html

 Singh v Khatri & Griffin [2011] FMCA 804 (27 October 2011) BANKRUPTCY – Proof of debt – application for an extension of time within which to file an application seeking review of Trustee’s decision to reject proof of debt – whether debt was legally enforceable – whether sufficient evidence of legally enforceable contract – allegation of sham contract – whether transaction represented gifts – indebtedness was contingent and remained a provable debt and is provable in the bankrupt’s bankruptcy http://www.austlii.edu.au/au/cases/cth/FMCA/2011/804.html

 Lasm v Body Corporate For La Porte D’Or CTS 12681 [2011] FMCA 800 (20 October 2011) BANKRUPTCY – Sequestration order – application for review of decision of Registrar – fresh proceeding – requirement on petitioning creditor to file fresh affidavits – where failure to file fresh affidavits http://www.austlii.edu.au/au/cases/cth/FMCA/2011/800.html

 Chubb v Dunlop [2011] FMCA 813 (14 October 2011) BANKRUPTCY – Trustee’s application for writ of possession – orders made in absence of bankrupt – application to set aside or stay – whether discretionary power – stay sought in support of Federal Court appeal from sequestration order – stay refused – interim application dismissed http://www.austlii.edu.au/au/cases/cth/FMCA/2011/813.html

 Goodridge v Robinson [2011] FCA 1213 (21 October 2011) PRACTICE AND PROCEDURE – Bankruptcy – urgent interim application – where judgment reserved in New South Wales Supreme Court – whether direction should be made that an application be withdrawn in the New South Wales Supreme Court – application dismissed http://www.austlii.edu.au/au/cases/cth/FCA/2011/1213.html

 Watts, in the matter of Watts [2011] FCA 1185 (21 October 2011) CORPORATIONS – leave to manage corporations generally – leave to manage specific classes of corporations – where no evidence of the business, activities or affairs of the corporations – where no evidence of plaintiff’s past or intended role in corporations http://www.austlii.edu.au/au/cases/cth/FCA/2011/1185.html

 Mortgage!! –  Menzies v Paccar Financial Pty Ltd [2011] FCA 1161 (21 October 2011) COSTS – indemnity costs orders sought – arising out of bankruptcy proceedings – stay of sequestration order – appeal from sequestration order allowed – contempt charges – motions for removal of trustees – brought for ulterior purpose http://www.austlii.edu.au/au/cases/cth/FCA/2011/1161.html

 Liprini v Liprini (No 2) [2011] FCA 1150 (7 October 2011) http://www.austlii.edu.au/au/cases/cth/FCA/2011/1150.html

 Barlaw Pty Ltd v Crouch (Trustee) [2011] FCA 1149 (4 October 2011) PRACTICE AND PROCEDURE – appeal – whether security for the respondent’s costs of an appeal from a Federal Magistrate should be ordered http://www.austlii.edu.au/au/cases/cth/FCA/2011/1149.html

 Debrossard & Official Trustee in Bankruptcy [2011] FamCA 648 (19 August 2011) FAMILY LAW – PROPERTY – Where consent orders provided for the former matrimonial home to be transferred into the wife’s name following the husband being declared bankrupt – Where Official Trustee sought orders that consent orders be set aside – Where consent orders were subsequently set aside – Where wife seeks orders that the consent orders be reinstated – Contributions – Division of property between the wife and the Official Trustee – Whether Official Trustee should be empowered to act as trustee for the sale of the property http://www.austlii.edu.au/au/cases/cth/FamCA/2011/648.html

 Cleary Bros (Parramatta) Pty Limited & Ors v Commonwealth Bank of Australia & Ors (No 3) [2011] ACTSC 139 (9 August 2011) PROCEDURE costs impecuniosity of corporate plaintiffs – absence of presumptions in relation to discretion to order corporate plaintiffs to provide security for costs – whether order for security for costs would stultify progress of plaintiffs’ action – absence of evidence about means of current officers and shareholders of corporate plaintiffs – application for security for costs granted http://www.austlii.edu.au/au/cases/act/ACTSC/2011/139.html

 Cleary Bros (Parramatta) Pty Limited and Ors v Commonwealth Bank of Australia and Ors (No 2) [2011] ACTSC 130 (8 August 2011) LEGAL PROCEEDINGS – dismissal of fourth plaintiff’s action – action of fourth plaintiff abandoned by trustee in bankruptcy – action that cannot be continued in any form should be dismissed – action of fourth plaintiff against all four defendants dismissed. LEGAL PROCEEDINGS – application by plaintiffs for adjournment of hearing of application for security for costs – new solicitor instructed two working days before hearing date – plaintiffs failed to take steps to be ready to hear the application for security for costs – application for adjournment refused http://www.austlii.edu.au/au/cases/act/ACTSC/2011/130.html

 Bankruptcy Act – Other Schemes under the Act

 Corporations – pre-appointment

 Deputy Commissioner of Taxation v Property Builders (Constructions) Pty Limited [2011] FCA 1221 (20 October 2011) DISCOVERY – application for general discovery – where plaintiff allegedly gave implied undertaking not to commence proceedings – where documents specifically sought to be discovered not relevant to substantive application for winding up of defendant company http://www.austlii.edu.au/au/cases/cth/FCA/2011/1221.html

 Deputy Commissioner of Taxation v Caporale Group Pty Ltd [2011] FCA 1189 (18 October 2011) CORPORATIONS – application to adjourn hearing of winding up proceedings – where no evidence of solvency http://www.austlii.edu.au/au/cases/cth/FCA/2011/1189.html

 Deputy Commissioner of Taxation v Interactive Community Planning Pty Ltd [2011] FCA 1173 (14 October 2011) CORPORATIONS – winding up in insolvency under s 459A Corporations Act – whether company is solvent – whether Court should exercise discretion to refuse order under s 459A http://www.austlii.edu.au/au/cases/cth/FCA/2011/1173.html

 In the matter of 7 Steel Building Solutions Limited [2011] NSWSC 1191 (11 October 2011) CORPORATIONS – winding up – statutory demand – application for order setting aside – no appearance for plaintiff when matter called on for hearing – counsel sought leave to appear for plaintiff’s directors – refused – defendant in liquidation when proceedings commenced and remains in liquidation – no attempt by plaintiff to seek leave to proceed – proceedings therefore doomed to fail – costs to be assessed on the indemnity basis http://www.austlii.edu.au/au/cases/nsw/NSWSC/2011/1191.html

 Deputy Commissioner of Taxation v Interactive Community Planning Pty Ltd [2011] FCA 1173 (14 October 2011) CORPORATIONS – winding up in insolvency under s 459A Corporations Act – whether company is solvent – whether Court should exercise discretion to refuse order under s 459A http://www.austlii.edu.au/au/cases/cth/FCA/2011/1173.html

 Cristovao v Forensic Documents Examiners Pty Ltd [2011] FCA 1131 (30 September 2011) http://www.austlii.edu.au/au/cases/cth/FCA/2011/1131.html

 Deputy Commissioner of Taxation v Polcarp Pty Ltd [2011] FCA 1142 (29 September 2011) CORPORATIONS – Winding Up – Application to adjourn winding up – Corporations Act 2001 (Cth) s440A http://www.austlii.edu.au/au/cases/cth/FCA/2011/1142.html

 Corporations – post appointment

 Velissaris v Fitzgerald [2011] FCAFC 120 (9 September 2011) CORPORATIONS – appeal against primary judge’s order dismissing application to terminate winding up of corporation – primary judge’s exercise of discretion not shown to have miscarried – appeal dismissed with costs http://www.austlii.edu.au/au/cases/cth/FCAFC/2011/120.html

 Receivers & Managers caught up in a complex ‘barney’ – Transpacific Pty Ltd v Prudential Retirement Insurance and Annuity Company No 2 [2011] FCA 1215 (26 October 2011) PRACTICE AND PROCEDURE – application to vacate hearing date filed five days before commencement of hearing – applicant’s case not ready for trial – applicant yet to obtain expert evidence on issue of New York law in substantive proceeding – delays in filing evidence despite extensions of time – change of solicitor – consideration of respective prejudice to parties – applicant unable to make its case if hearing not adjourned – order for costs without more would not remedy prejudice to respondents if application allowed – consideration of principles relevant to exercise of Court’s discretion – objectives in s 37M Federal Court of Australia Act expressed at high level of generality – each case to be decided on its unique facts – in the circumstances, vacating the hearing and dissolving the injunction restraining the first respondent from dealing with the aircraft, coupled with indemnity costs and strict orders for preparation of hearing a fair resolution  COSTS – indemnity costs – application for applicant to pay respondents’ costs thrown away by vacation of hearing date on indemnity basis – Court has pre-eminent discretion – in the circumstances, such costs not unreasonable http://www.austlii.edu.au/au/cases/cth/FCA/2011/1215.html

 Binetter v Commissioner of Taxation (No 2) [2011] FCA 1214 (24 October 2011) http://www.austlii.edu.au/au/cases/cth/FCA/2011/1214.html

 Binetter v Commissioner of Taxation [2011] FCA 1195 (21 October 2011) CORPORATIONS – winding up – application for approval for director of companies in liquidation to bring proceedings in name of companies – whether companies were necessary parties to any winding up order made in relation to them – whether winding up order can take effect at the same time as order for reinstatement of deregistered company – principles relevant to exercise of discretion to grant approval under s 471A(1A)(d).  http://www.austlii.edu.au/au/cases/cth/FCA/2011/1195.html

 Saker, in the matter of Great Southern Managers Australia Ltd (Receivers and Managers Appointed) (in liquidation) (No 3) [2011] FCA 1192 (21 October 2011) CORPORATIONS – managed investment scheme – liquidation of responsible entity – amendment to constitution – whether entitled to management fees – whether entitled to set-off for mismanagement – whether orders should be made under s 511(2) of the Corporations Act 2001 (Cth) http://www.austlii.edu.au/au/cases/cth/FCA/2011/1192.html

 Walker and Moloney, in the matter of ZYX Developmental Learning Centres Pty Limited (in liq) (Receivers and Managers Appointed) [2011] FCA 1110 (20 October 2011) CORPORATIONS – application for Court’s approval for liquidators to enter into litigation funding agreement on behalf of company http://www.austlii.edu.au/au/cases/cth/FCA/2011/1110.html

 Includes an interesting order that the Liquidator not make further investigations    In the matter of JTS Property & Investments No. 1 Pty Ltd ACN 113 271 426 (In Liquidation) and JTS Property & Investments No. 2 Pty Ltd ACN 113 271 408 (In Liquidation) [2011] NSWSC 1210 (13 October 2011) CORPORATIONS – winding up by the court – application by liquidator under s 479(3) for directions from the court – directions made regarding shareholding and creditors of company in liquidation http://www.austlii.edu.au/au/cases/nsw/NSWSC/2011/1210.html

 Australian Securities and Investments Commission v Letten (No 14) [2011] FCA 1174 (18 October 2011) http://www.austlii.edu.au/au/cases/cth/FCA/2011/1174.html

 Australian Securities and Investments Commission v Letten (No 13) [2011] FCA 1151 (7 October 2011) CORPORATIONS – court appointed receiver – expenses incurred in receivership – expense of receivership – priority of payment – contract entered into before receiver appointed – whether payment accruing after appointment of receiver has priority http://www.austlii.edu.au/au/cases/cth/FCA/2011/1151.html

 Lion Energy Limited v Tulloch Lodge Limited (in liq), in the matter of Tulloch Lodge Limited (in liq) [2011] FCA 1139 (5 October 2011) CORPORATIONS – power of liquidator to compromise claim – time limit on power to enter into agreement – Corporations Act 2001 (Cth) s 477(2A), s 477(2B) – Confidentiality of litigation funding agreement – no prejudice to administration of justice – Federal Court of Australia Act 1976 (Cth) s 40(1).  http://www.austlii.edu.au/au/cases/cth/FCA/2011/1139.html

 Genworth Financial Mortgage Insurance Pty Ltd v KCRAM Pty Ltd (in Liquidation) (No 2) [2011] FCA 1124 (4 October 2011) PRACTICE AND PROCEDURE – Parties – Joinder – application to join insurer as respondent – claims made policy – availability of statutory charge under s 6 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) – application for declaratory relief PRACTICE AND PROCEDURE – Parties – Joinder – Dispute between insurer and insured about cover – whether party suing insured entitled to declaration that insurer is liable to insured where insured in liquidation INSURANCE – Professional indemnity insurance – claims made policy – application to join insurer as respondent – statutory charge – discussion of availability of charge under s 6 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) – where event giving rise to claim by third party occurred before policy period – application for declaratory relief – where insurer denies indemnity – insured in liquidation – where third party claims priority under Corporations Act 2001 (Cth) s 562  http://www.austlii.edu.au/au/cases/cth/FCA/2011/1124.html

 Yeo v Damos Earthmoving Pty Ltd, in the matter of Beachwood Developments Pty Ltd (in liq) [2011] FCA 1129 (30 September 2011) http://www.austlii.edu.au/au/cases/cth/FCA/2011/1129.html

 Warner v Hung, in the matter of Bellpac Pty Limited (Receivers and Managers Appointed) (In Liquidation) (No 2) [2011] FCA 1123 (30 September 2011) EQUITY – contested beneficial ownership of convertible bonds issued to a company – where liquidators sought declaratory relief against a defendant who was in possession of bond certificates and executed transfers, and who sought to become the registered holder of the bonds – whether an alleged series of undocumented assignments of equitable interest in the bonds was effective – whether the alleged assignments were made for valuable consideration EQUITY – effect of the Conveyancing Act 1919 (NSW) on alleged assignments of the equitable interest in the bonds – whether s 23C(1)(c) was required to be complied with in order for the alleged assignments to be effective – whether s 23C(1)(c) applies to equitable dispositions of personalty EVIDENCE – onus of proof – whether plaintiffs, as parties seeking declaratory relief and as the only parties seeking relief at all, bore the onus of disproving the chain of alleged assignments contended for by the defendants – whether defendants’ allegations constituted denials of essential ingredient in the plaintiffs’ cause of action or a defence of a prima facie claim – whether company’s registration as bondholder gave rise to a presumption of equitable ownership – whether possession of bond certificates and transfers gave rise to competing presumption of equitable ownership CORPORATIONS – whether company’s alleged equitable assignment of the bonds was an insolvent, uncommercial or unreasonable director-related transaction within the meaning of the Corporations Act 2001 (Cth) – whether transaction voidable – whether s 588FG available as a defence – degree to which the chain of alleged assignments could be regarded as a single transaction of the company – whether alleged equitable assignment of the bonds involved breach of directorial and fiduciary duties http://www.austlii.edu.au/au/cases/cth/FCA/2011/1123.html

 Higgins v Hancock as Liquidator of 246 Arabella Investments Pty Limited (in liq) [2011] FCA 1119 (30 September 2011) JUDICIAL REVIEWs 39B(1A)(c) of the Judiciary Act 1903 (Cth) – application for judicial review of decision of Administrative Appeals Tribunal to refuse an application to adjourn proceedings part heard in the Tribunal – Commissioner of Taxation sought to cross-examine the applicant on documents not included in T-documents – tender of those documents by the Commissioner ultimately rejected by Tribunal – Tribunal ruled it would not give consideration to applicant’s answers in cross-examination and ruled parts of the transcript be expunged or restricted – review on grounds of denial of natural justice and failure to take into account relevant considerationHeld: application dismissed, neither ground made out  http://www.austlii.edu.au/au/cases/cth/FCA/2011/1119.html

 Oswal v Burrup Fertilisers Pty Ltd (Receivers and Managers Appointed) [2011] FCAFC 117 (1 September 2011) PRACTICE AND PROCEDURE – applications for leave to appeal a decision to refuse stay of Federal Court proceeding where Supreme Court proceeding on foot – proceeding in Federal Court issued shortly after Supreme Court proceeding instituted, raising overlapping issues – some parties to proceedings different – different relief sought – stay applications refused – whether the primary judge’s decision is attended by sufficient doubt to warrant its reconsideration by the Full Court – where it be desirable that all issues be heard and determined in one proceeding, while the other is stayed, or that by cross-vesting the two actions they be heard together – where the parties have made no attempt to resolve which action should proceed or the most desirable course – where the interests of justice do not simply demand that the proceeding which was commenced first in time be pursued http://www.austlii.edu.au/au/cases/cth/FCAFC/2011/117.html

 Miscellaneous

 Peters v Lithgow Forge Pty Ltd [2011] NSWSC 1185 (10 October 2011) EQUITY – solicitor claims charge over real property in name of corporation to secure payment of a judgment for costs against a former client – shares in corporation transferred by client to his wife – real property of corporation mortgaged – solicitor seeks to set aside both the transfer and mortgage under Conveyancing Act, s 37A – client funds acquisition of property by corporation – HELD – solicitor has equitable interest by way of charge over the real property – mortgage but not transfer voidable under Conveyancing Act, s 37A – corporation holds property on resulting trust for client http://www.austlii.edu.au/au/cases/nsw/NSWSC/2011/1185.html

 A Bank & Coleiro and Anor [2011] FamCAFC 157 (2 August 2011) FAMILY LAW – APPEAL – where the Federal Magistrate made an order joining the bank to the property settlement proceedings between the husband and wife – where there was no application before the Federal Magistrate seeking that the bank be joined as a party to the proceedings – where the bank was not given notice of the proposed joinder order, or the opportunity to make submissions in relation to the proposed joinder order – appealable error found – appeal allowed – order set aside.  FAMILY LAW – APPEAL – where the Federal Magistrate made an order which purported to relieve the husband and wife from compliance with the provisions of s 121 of the Family Law Act 1975 (Cth) – where there was no application before the Federal Magistrate seeking such an order – where the Federal Magistrate did not provide the opportunity for the bank to be heard prior to the making of the order – where the Federal Magistrate failed to give reasons for the making of the order – appealable error found – appeal allowed – order set aside.  FAMILY LAW – APPEAL – where the Federal Magistrate made an order that the bank provide further material to the Court – where it was argued that the bank should not have to disclose further material to the Court until the determination of the bank’s application for summary dismissal of the wife’s amended application was determined – appeal allowed – order set aside.  FAMILY LAW – CONTEMPT – in face of the Court – observations made concerning the Federal Magistrate’s use of the contempt procedure against the husband http://www.austlii.edu.au/au/cases/cth/FamCAFC/2011/157.html

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