Trusts are established for many reasons. One of the most common is asset protection.

The recent decision of Boensch v Pascoe [2019] HCA 49 from the High Court gives some insight into how that asset protection could be undone in the event of the bankruptcy of an individual trustee.

Facts

As part of its response to the national emergency arising from the spread of the Coronavirus, the government announced changes to insolvent trading duties in March 2020.

This will assist organisations under pressure to keep going, pay necessary staff and be positioned to return to normal business.

The relevant legislation (Coronavirus Economic Response Package Omibus Act 2020 (Cth) (the Act)) came into effect on 24 March 2020.

Critically, the laws have been softened, not repealed, and other directors’ duties remain in place.

While there is some relief for Victoria and Northern Territory associations, all associations should be aware of penalties that may apply in their own State or Territory. Registered charities must still ensure their Committee members do not allow the charity to operate while it is insolvent.

Liquidating a company won’t necessarily avoid husbands and wives from back-paying employees out their own pockets.

In FWO v Sinpek Pty Ltd (In Liquidation) & Ors [2020] FCCA 88, the national workplace regulator secured orders against a director and spouse to personally reimburse two underpaid workers $52,722.48.