Statutory demands are a quick and convenient way to prove a debtor company’s insolvency. But they’re sensitive creatures. There seems to be an endless list of potential defects to make the demand challenge-worthy.

Luckily for creditors, a recent decision of the WA Court of Appeal means there is one less way for a demand to fail.

The loan and the demand

Garuda Aviation is a small WA operator that borrowed $27 million from CBA to buy a plane. The loan was secured by a mortgage over the plane.

Part 1 of a two-part analysis of the recommendations of the NSW Construction Industry Insolvency Inquiry.

Australia has signed on to a new framework that will standardise aircraft financing transactions the world over. It’s positive news for those in Australia’s aviation industry and should lead to cheaper and easier financing of aircraft. However, in exchange, the industry may have to forego some of the benefits of Australia’s current debtor-friendly voluntary administration regime.

It also means any contracts for the purchase, operation or lease of aircraft or engines that extend beyond 2014 should be reviewed before the law changes.

Part 2 of a two-part analysis of the recommendations of the NSW Construction Industry Insolvency Inquiry. Part 1 considered the proposed NSW Building and Construction Commission.

The Inquiry aims to safeguard the interests of sub-contractors and was initiated by the NSW Government following a year marred by high levels of insolvency in the NSW construction industry.

The period for submissions on wide-ranging reforms to the NSW construction industry recommended by the Independent Inquiry into Construction Industry Insolvency in NSW is closing soon.

The recent New South Wales Supreme Court (Court) decision in In re MF Global Australia Ltd (in liq) No 2 [2012] NSWSC 1426 (23 November 2012) confirms that liquidators who properly incur costs and expenses in seeking court directions regarding the distribution of trust property and, in recovering such property, will generally be able to recover their relevant remuneration, costs and expenses from that trust property.

In August 2012 the NSW Government commissioned an Independent Inquiry into Construction Industry Insolvency. The Inquiry was asked to assess the causes and extent of insolvency in the building and construction industry and to recommend measures to better protect subcontractors from the effects of insolvency.

The recent decision of the Federal Court in Carter in the matter of Damilock Pty Ltd (Damilock) highlights the need for liquidators to review current practices when paying priority creditors (e.g. employee entitlements).

Facts

The plaintiffs were appointed as administrators of Damilock on 26 June 2007 and subsequently appointed as liquidators by creditors’ resolution at a meeting on 7 September 2007.

In the recent decision of Oswal v Burrup Fertilisers Pty Limited (Receivers and Managers Appointed) [2013] FCAFC 9, the Full Court of the Federal Court of Australia recently confirmed that receivers and managers will be justified in refusing to allow a director access to books and records of the company where access may adversely impact on the realisation of the secured assets.

THE FACTS

In brief - Bill implements reforms proposed in options paper