This week’s TGIF considers a decision in which the court appointed an additional liquidator to conduct further investigations alongside the incumbent liquidators in a creditors’ voluntary winding up.

WHAT HAPPENED?

On 18 July 2014, liquidators were appointed to Ambient Advertising Pty Ltd (Ambient) pursuant to the resolution of creditors under section 439C(c) of the Corporations Act 2001 (Cth).

In Austcorp Project Number 20 Pty Ltd v The Trust Co (PTAL) Limited, in the matter of Bellpac Pty Limited (Receivers and Managers Appointed) (in liq) [2015] FCA 850, the Federal Court of Australia had to determine whether to dismiss the proceedings for failure to comply with previous orders for security for costs, or vary those orders for security. The basis upon which the Court made the orders for security in the first place is set out in Austcorp Project Number 20 Pty Ltd v LM Investment Management Ltd [2014] FCA 1371, and was canvassed in an ear

Key Points:

A section 439A report must contain all material information which is known or reasonably ascertainable by administrators.

Victorian Supreme Court confirms that an application to set aside a statutory demand can be served electronically, and the Court’s evaluation of a genuine dispute concerns the establishment of a genuine level of claim, and not the likely result of the claim.

Background

In so far as they relates to creditor's statutory demands, the provisions of the Corporations Act 2001 (Cth) are construed by the courts particularly prescriptively.

On 5 June 2015, His Honour Justice Brereton delivered judgment in In the matter of Unity Resources Group Australia Pty Limited [2015] NSWSC 1174. This is another example of the technical application of these sections by the court.

BH Apartments v Sutherland Nominees [2015] VSC 381

The costs of ‘convening’. Whether the person requesting a meeting of creditors, pursuant to 5.6.15(1)(b) of the Corporations Regulations 2001 (Cth) be called is only liable for the costs of calling the meeting.

Sutherland Nominees Pty Ltd (Sutherland) was being administered pursuant to a deed of company arrangement under part 5.3A of the Corporations Act 2001 (Cth).

You can lose your equipment by failing to register your interests on the Personal Property Securities Register (PPSR).

Failing to consider the impact of the Personal Property Securities Act 2009 (PPSA) is still having dramatic adverse implications for many construction industry participants. 

The Fair Entitlements Guarantee Act 2012 (Cth) requires the Commonwealth Government to pay outstanding superannuation, annual leave, redundancy and wages entitlements for eligible employees who have lost their jobs due to the liquidation or bankruptcy of their employers. It is generally recognised as an important safety net for employees, so that their superannuation is guaranteed.

The point at which a company becomes insolvent is not always clear. The Courts will consider “various indicia of insolvency”, including the company’s ability to raise further capital and access to alternative finance. In some situations, a director or related entity may be willing and able to contribute funds to the company to allow it to pay its debts. This can affect whether a company is viewed as solvent or not. Once insolvency is reasonably suspected, directors must prevent the company from incurring further debts or risk being held personally liable for the debts incurred.

Research and development expenditure not incurred

In Commissioner of Taxation v Desalination Technology Pty Limited [2015] FCAFC 96, the Full Federal Court upheld the Commissioner’s appeal from the earlier decision of Justice Perram in the Federal Court. That earlier decision was the result of an appeal by the Commissioner, on a question of law, from the decision of the Administrative Appeals Tribunal (AAT) in favour of the taxpayer (DST).