Summary

Dispute is one of priority, not ownership.

The first judgment regarding a major Personal Property Securities Act ("PPSA") priority dispute between a bank with a perfected "General Security Agreement" and an equipment owner with an unperfected "PPS Lease" has been handed down.

The decision in Richard Albarran and Blair Alexander Pleash as receivers and managers of Maiden Civil (P&E) Pty Ltd & Ors v Queensland Excavation Services Pty Ltd & Ors  highlights three key issues for the insolvency industry:

Summary

The recent Supreme Court of New South Wales decision of In the matter of Octaviar Administration Pty Limited (in liquidation) [2013] NSWSC 786 confirms that liquidators must notify all interested parties prior to seeking an extension for the period in which to bring preference actions.  For the first time, the Court has confirmed that the directors of the insolvent company are “interested persons” in cases where a liquidator intends to pursue the Australian Taxation Office (ATO) over potential preferential payments based solely on the potential for the ATO to

In an important decision for the large number of discretionary trusts in Australia, the Supreme Court of New South Wales has considered whether a family trust structure is a sufficiently robust firewall to protect the family trust assets against claims by a trustee in bankruptcy appointed to the personal Trustee or Appointor of a family trust.

The decision is Lewis v Condon; Condon v Lewis [2013] NSWCA 204 which was handed down on 4 July 2013 by the Court of Appeal.

The importance of notifications to potential defendants and directors of the insolvent company

The decision in Re Octaviar Administration Pty Ltd (in liq) [2013] NSWSC 786 highlights two key issues for insolvency practitioners:

The Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 (Regulations) to amend the structure of UK annual reports have been published and laid before Parliament.

The Personal Property Securities Act 2009 (Cth) (PPSA) came into effect on 30 January 2012 and has introduced major changes for businesses that lease or hire personal property. If you lease or hire personal property it is vital that you understand how the PPSA affects your business, including what additional steps you need to take to protect your property and the consequences for not doing so, especially as the PPSA’s transitional provisions will end shortly.

What does the PPSA mean for your business?

The recent Australian Federal Court case of Neeat Holdings (in liq) [2013] FCA 61 considered the issue of whether the liquidator of a trustee company should be permitted to sell trust assets notwithstanding the appointment of a new trustee in substitution for the insolvent trustee company.

The Federal Court found that where a trust deed provides for the cessation of a corporate trustee upon the appointment of an administrator or upon a resolution for its liquidation (and there is no replacement trustee appointed), the corporate trustee retains its right of indemnity and continues as bare trustee but does not have the power to sell the trust assets.  However, the Court was persuaded to grant relief to the liquidators of the trustee (who had sold trust assets) on the basis they had not been advised by their solicitors of the disqualification clause and they com