The Federal Magistrates Court recently found that an undischarged bankrupt was unable to seek compensation or a financial penalty against a former employer for unlawful dismissal, but was able to seek reinstatement instead.

Introduction

In the latest episode in one of Australia's most complex and lengthy commercial disputes, the Western Australia Court of Appeal recently dismissed an appeal by a syndicate of banks (the Banks) from a decision in favour of the liquidators of the Bell Group (the Group): Westpac Banking Corporation v The Bell Group Limited (in liquidation) [No 3] [2012] WASCA 157.

Following the review of the Fair Work Act 2009 conducted earlier this year, the federal government has introduced a number of Bills into the Parliament to reform the Act. One of the Bills is the Fair Entitlements Guarantee Bill 2012 which was introduced to provide for financial assistance for workers who have not been fully paid for work done for insolvents or bankrupts.

In discussing the Bill, Minister for Employment and Workplace Relations, Bill Shorten said:

ITSA has released its Insolvency Compliance Strategy 2012-2013 which confirms that, between July 2012 and June 2013, ITSA will concentrate the resources in its compliance program on specified technical areas by:

As noted in our recent insolvency law update, the Western Australian Court of Appeal has recently delivered its judgment (comprising over 1,000 pages) on one of Australia's longest running pieces of litigation: Westpac Banking Corporation v The Bell Group (in liq) [No 3].

In Saraceni v Mentha [No.2] [2012] WASC 336 a director sought to challenge the appointment of receivers to Westgem Investments Pty Ltd ("Westgem") under a fixed and floating charge ("the Charge").  In 2008 Westgem entered into a Facility Agreement with financiers and executed the Charge, which charged the "secured property".

The plaintiff contended that:

Before the recent decision in Rubin and another v Eurofinance SA and others and New Cap Reinsurance Corporation (In liq) and another v AE Grant [2012] UKSC 46 (the joint appeal of two earlier cases) (the Rubin/New Cap Appeal), an insolvency judgment obtained in an Australian court could be enforced in the UK despite falling outside of the traditional common law enforceability rules.

The Rubin/New Cap Appeal has now removed this special treatment afforded to foreign insolvency judgments and the old common law rules once again apply.

Australian banks have historically relied on formal liquidation, voluntary administration and receivership processes available under the under the Corporations Act 2001 (Cth) and under general law where informal restructurings have failed. There has been little appetite for exploring alternative methods to exit distressed situations by debt trading.

On 1 December 2011 the Farm Debt Mediation Act 2011 (Vic) commenced operation. Under the Act, a farm debt mediation scheme is implemented which makes it compulsory for banks and other creditors to offer mediation to farmers before commencing debt recovery proceedings against the farmer on mortgages. Special Counsel, Jacqueline Browning discusses the scheme, which is about to mark its first anniversary of operation.

Key features

Some key features of the new Act (which in many ways mirrors similar legislation in NSW) are as follows:

Key Points:

The decision will give liquidators the certainty of knowing that disclaimer of a lease means that a tenant no longer has any interest in the land.

A recent decision of the Victorian Court of Appeal has confirmed that a liquidator of a landlord can disclaim a lease with full effect, so that the land is no longer encumbered by a tenant's interest.