Introduction
Christmas came early last year for certain creditors of Glenfyne Farms International AU Pty Ltd (Glenfyne Farms), when the NSW Court of Appeal quashed the casting vote made by the outgoing voluntary administrator and gifted those creditors with the appointment of their preferred liquidators.
On 19 June 2019, the High Court delivered its judgment in one of the most hotly anticipated insolvency judgments this year, the Amerind appeal: Carter Holt Harvey Woodproducts Australia Pty Ltd v The Commonwealth.
The High Court unanimously dismissed the appeal, upholding the Victorian Court of Appeal’s decision and confirming (although for differing reasons) that:
The Commonwealth has released an exposure draft of the Corporations Amendment (Strengthening Protections for Employee Entitlements) Bill 2018 (Bill) for consultation which will make key amendments to the Corporations Act 2001 (Cth) (Corporations Act). The Bill strengthens the current provisions aimed to deter companies from diverting assets to avoid the payment of employee entitlements on insolvency. The proposed changes will impact:
Bicheno Investments Pty Ltd v David John Winterbottom [2017] NSWSC 536 has confirmed that the completion of a stocktake does not necessarily require a full physical stocktake. Rather insolvency practitioners may satisfactorily complete a stocktake by reviewing a business’ records, provided they are satisfied that those records are accurate and complete.
On 2 May 2017, the Supreme Court of New South Wales handed down its decision refusing an application to extend time to register a security interest in Production Printing (Aust) Pty Ltd (in liquidation)[2017] NSWSC 505.
The importance of security holders accurately registering their interest on the Personal Property Securities Register (PPSR) to create a valid, enforceable interest is constantly emphasised in commentary and cases. It is accepted that an error in a grantor’s identifier is likely to be fatal to a PPSR registration1, often resulting in a creditor’s unperfected interest vesting in a company upon it entering administration or liquidation. However, a recent decision of the New South Wales Supreme Court illustrates that a defective registration may be cured without losing priority.
The decision in Re Forge Group Construction Pty Ltd (in liq) (Receivers and Managers appointed); ex parte Jones [No 2] [2016] WASC 87 confirms that while some communications between liquidators, receivers and their respective solicitors can be privileged, it is not necessarily always the case. Critical factors include the purpose of the communication in question and whether there is a sufficient commonality of interest between liquidators and receivers in relation to the communication’s subject matter.
Facts
On 1 December 2015, we wrote about the decision of His Honour Judge Chivell of the District Court of South Australia in Matthews v The Tap Inn Pty Ltd [2015] SADC 108.
With the introduction of the unfair preference regime in the Corporations Act 2001, a short provision was included which stated:
“… a secured debt is taken to be unsecured to the extent of so much of it (if any) as is not reflected in the value of the security.”(section 588FA(2))
The provision has been rarely considered. There has been little case law providing any judicial interpretation of the subsection.
That is, until the Personal Property Securities Act 2009 (PPSA) commenced.
On 8 October 2014 the Full Court of the Federal Court delivered judgment in favour of the liquidators in the much anticipated Australian Building Systems appeal1 (Appeal).
Barring the Commission of Taxation seeking special leave to appeal to the High Court, liquidators (and other trustees, including receivers and managers) can now take comfort that they are not personally liable for failing to hold sufficient funds for any anticipated CGT liability, in the absence of a notice of assessment.