Edgeworth Capital Luxembourg Sarl (2) Aabar Block Sarl V Glenn Maud [2015] EWHC 3464 (Comm)

The High Court in England has ruled on whether Spanish Law has the effect of extinguishing third party guarantees when the beneficiary of the guaranteed liabilities enters into insolvency proceedings in Spain.

In December 2015, as part of its National Innovation and Science Agenda, the Federal Government announced a proposal to introduce a ‘safe harbour’ for directors from personal liability for insolvent trading.

Taxpayers in Western Australia have been left to foot the bill after Jirsch Sutherland, liquidator for the Kimberley Diamond Company Pty Ltd (“KDC”), used a legal loophole to handball expensive mining leases back to the Department of Mines and Petroleum (“DMP”).

Care and maintenance costs for KDC’s Ellendale diamond mine amount to $100,000 (AUD) a month and environmental rehabilitation obligations are estimated to be $40 million (AUD). The DMP has been servicing these costs since KDC went into liquidation.

Today, by a majority of 3-2, the High Court of Australia in Commissioner of Taxation v Australian Building Systems Pty Ltd (in liq) [2015] HCA 48 confirmed that s 254(1)(d) of the Income Tax Assessment Act 1936 (Cth) (ITAA 1936) does not impose an obligation on trustees (including administrators, receivers and liquidators) to retain sufficient moneys from the trust fund to pay tax unless a relevant assessment has been issued.

The Insolvency Law Reform Bill 2015 has been introduced into Parliament as part of the Australian Government's strategy to modernise and strengthen the nation's insolvency and corporate reorganisation framework.

This week’s TGIF considers a decision in which the Court held that an administrator who has unsuccessfully defended a proceeding may need to reinstate any remuneration previously received to satisfy the resultant costs order.

BACKGROUND

The deed administrator of a company subject to a Deed of Company Arrangement (DOCA) rejected proofs of debt submitted by a number of creditors.  The creditors successfully appealed against the rejection of the proofs of debt. 

Marsden v Screenmasters Australia provides guidance to liquidators who commence and continue proceedings, pursuant to funding arrangements, when met with arguments that the proceedings will not confer a benefit to creditors. 

WHAT HAPPENED?

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.

Have the tough times in the construction industry changed? It would appear not despite an uptick in the New South Wales economy. “I just want to be paid” is the title of the report just released by the Senate Economics References Committee.[1]

The Federal Government's NationalInnovationandScienceAgendawas announced on 7 December 2015.