In September 2017, the Commonwealth Parliament passed the Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Act 2017 (Cth) to amend and reform the insolvency and external administration provisions of the Corporations Act 2001 (Cth).

One of the main changes implemented by these reforms was the introduction of a ‘safe harbour’ protection for company directors.

Following a landmark decision in the Full Federal Court, employees will retain their priority to payment of their entitlements in a company liquidation, even where the company is a corporate trustee of a trust.

This week’s TGIF is the second of a two-part series considering Commonwealth v Byrnes [2018] VSCA 41, the Victorian Court of Appeal’s decision on appeal from last year’s Re Amerind decision about the insolvency of corporate trustees.

The Senate Legal and Constitutional Affairs Legislation Committee (“the Committee”) has endorsed the passing of the Bankruptcy Amendment (Enterprise Incentives) Bill 2017 (“the Bill”) in its report dated 21 March 2018.[1]

In the recent decision of Jones (liquidator) v Matrix Partners Pty Ltd, re Killarnee Civil & Concrete Contractors Pty Ltd (in liq) [2018] FCAFC 40 (Killarnee), the three member bench comprised Allsop CJ, and Siopis and Farrell JJ. Their Honours of the Full Court wrote three separate judgments, with the Chief Justice writing the lead.

Liquidators will generally be pretty happy if a court finds that a transaction was both an uncommercial transaction and an unfair preference and dismisses any defence. Unfortunately for the liquidator in Re Cyberduck Software Pty Ltd (In Liq) & Anor [2018] VSC 122 you can still fail.

In Cyberduck:

In handing over any documents in litigation or Court process, you must assess whether or not the documents have tax relevance.

By now, most accountants are likely to have heard about, and perhaps have some familiarity with, the new “safe harbour” laws. But for those accountants who still feel unsure about their knowledge of these new provisions, the following article will help you get your head around what safe harbour means for your accounting practice.

How safe harbour fits into the existing law

The Queensland Court of Appeal has upheld an appeal by the liquidators of Linc Energy Limited (In Liquidation) (“Linc”) and given full effect to their disclaimer of contaminated mining property and onerous obligations the subject of an environmental protection order (“EPO”) issued by the Queensland Department of Environment and Science (“DES”).[1]

The liquidators were not bound to cause Linc to comply with the EPO from the date of the disclaimer.