We discuss the Federal Court of Australia’s judgment and distil insights to assist trustees in bankruptcy navigate difficult estates and deal with recalcitrant bankrupts.
We are pleased to present our first edition of the Annual Return, reporting on landmark cases, legislative reform, and the implications for your practice.
Uncharted waters
Whilst Australia navigates the effects of COVID-19 including health authorities advising people to stay home to contain the spread of COVID-19, people are likely to consume less and spend differently. The ultimate impact on Australian businesses may be significant.
Government Economic Stimulus Package
Court of Appeal Clarifies the Tension Between Disclaimed Property and State Based Laws
On 9 March 2018, the Queensland Court of Appeal overturned the controversial first instance decision of the Supreme Court in the matter of Linc Energy Pty Ltd (In Liquidation).[1]
The Court of Appeal’s judgement is significant, as it clarifies the position regarding:
Key Points:
Throughout 2016 a series of judgments were delivered that gave conflicting guidance to practitioners about what they should consider when accepting a voluntary administration appointment.
In a decision of interest to both secured creditors and liquidators, the High Court has now overturned a decision of the Court of Appeal of the Supreme Court of Victoria that found a liquidator was not entitled to an equitable lien to secure his reasonable costs in obtaining a settlement sum.
Section 254 of the Income Tax Assessment Act 1936 sets out the circumstances when a 'trustee' (which is defined to include a liquidator and a receiver) must account to the Commissioner, out of the proceeds of sale, for any capital gains tax (CGT) liability that would result as a consequence of the sale. Justice Logan of the Federal Court of Australia1 last Friday found that a liquidator does not have any obligation to pay under section 254 unless and until an assessment has been issued. A similar analysis would also apply to a receiver.