The High Court has delivered a landmark decision in prioritising employee entitlements in insolvency, irrespective of whether the company was trading in its own right or as a trustee, MyBusiness reported. Last week, the High Court dismissed an appeal in Carter Holt Harvey Woodproducts Australia Pty Ltd v The Commonwealth of Australia and Others  HCA 20. Amerind Pty Ltd became insolvent in 2014, with $21 million in debts repaid to Bendigo and Adelaide Bank, leaving a receivership surplus of about $1.6 million.
The High Court has declared it would be "perverse" not to give worker entitlements priority in any collapse, whether a company trades in its own right or as a trustee, the Australian Financial Review reported. The court's decision in the Carter Holt Harvey Woodproducts case means the same rules apply for the payment of creditors and is an important win for workers. This has been welcomed by leading insolvency practitioners, who say the status of workers employed by trading trusts has been so uncertain that they faced being pushed to the back of the queue with other unsecured creditors.
The Australian dollar dropped on Wednesday after weaker than expected inflation in the first quarter, raising expectations of a possible rate cut by the central bank. In quarter-on-quarter terms, consumer inflation was unchanged in March after a 0.5 per cent rise in the December quarter, according to the Australian Bureau of Statistics. That compared to a 0.2 per cent rise forecast by economists polled by Reuters. Consumer prices rose 1.3 per cent year on year in March, against February’s reading of 1.8 per cent. The reading was also below a Reuters poll forecasting a rise of 1.5 per cent.
Investors in collapsed Australian derivatives trader Halifax are set to have a long wait to get their money back after the administrator found "accounting irregularities" and said they will have to go to court to get a direction on how to disperse the money, The New Zealand Herald reported. Voluntary administrators Ferrier Hodgson, who were appointed in November, released an update on Halifax yesterday and said they had now undertaken a wide-scale investigation of Halifax's financial position.
Crown Resorts director and former AFL chief executive Andrew Demetriou has been grilled in court over the $145 million collapse of education group Acquire Learning, ABC News reported. Mr Demetriou was never a director of the company but was executive chairman of an advisory board and paid $75,100 a month and $1.6 million in shares for three days a week of work in an office downstairs from the directors.
A special government-appointed inquiry excoriated Australia's financial sector for misconduct on Monday, referring two dozen cases to regulators for possible legal action but leaving the structure of the country's powerful banks in place, the International New York Times reported on a Reuters story. Regulators will be subjected to a new oversight body and the financial industry's pay will be overhauled to remove conflicts of interest, according to the recommendations of the so-called Royal Commission.
Australia’s banking regulator said on Tuesday it had decided to keep the countercyclical capital buffer (CCyB) for banks on hold at zero percent, though it was considering setting a different rate in time. The Australian Prudential Regulation Authority (APRA) reviews the buffer quarterly and it has been held at zero since it started in 2016, Reuters reported. The buffer is an additional amount of capital that banks can be required to hold during periods of heightened systemic risk.
Free iPads, rental guarantees and an eye-watering A$100,000 ($72,000) off the price of an apartment are some of the sweeteners on offer from property developers amid the worst housing downturn in Australia for 35 years, the Financial Times reported. National house prices fell 1.3 per cent in December, the largest monthly fall since 1983, which resulted in an annual decline of 6.1 per cent last year.
Asia is finally succumbing to the global property slowdown that’s jolted homeowners and investors from Vancouver to London, with markets in Singapore, Hong Kong and Australia showing fresh signs of softening, Bloomberg News reported. The economic ramifications could be serious. Lower house prices and higher mortgage rates will not only dent consumer confidence, but also disposable incomes, S&P Global Ratings said in a report last month. A simultaneous decline in house prices globally could lead to “financial and macroeconomic instability,” the IMF said in study released in April.
An inquiry that has exposed rampant greed and wrongdoing in Australia’s major banks and wealth managers wraps up this week ahead of a final report which could trigger sweeping reform of the financial sector of the world’s 12-largest economy, Reuters reported. Dismissed initially as a “populist whinge” by the ruling conservative party, the quasi-judicial inquiry known as a Royal Commission has revealed branch-to-boardroom misconduct which will almost certainly trigger tougher regulation.