Welcome to our latest quarterly bulletin which contains updates on commercial litigation developments over the past three months, largely by reference to articles posted to our Litigation Notes blog in that period. Other posts are available on the blog, which you can visit any time. Or subscribe to be notified of the latest updates: https://www.herbertsmithfreehills.com/notes/litigation.

The Parliamentary Joint Committee on Corporations and Financial Services (the Committee) has delivered its report following an inquiry into the “effectiveness of Australia’s corporate insolvency laws in protecting and maximising value for the benefit of all interested parties and the economy”.

The Court of Appeal has set aside a freezing order obtained by a provisional liquidator within winding up proceedings, on the basis that the cross-undertaking in damages given by him was inadequate because it was limited to the amount recovered for the estate. The liquidator had not discharged the burden of showing good reason to depart from the “default position” that a cross-undertaking should be unlimited in amount: Hunt v Ubhi [2023] EWCA Civ 417.

In the much-anticipated decision of Bryant v Badenoch Integrated Logging Pty Ltd [2023] HCA 2 (Badenoch (HCA)), the High Court of Australia (the HCA) has now confirmed that the peak indebtedness rule may not be used when assessing the quantum of an unfair preference claim arising from a continuing business relationship.

The Federal Court of Australia (Court) has handed down the first reported decision on the ipso facto stay provisions contained in the Corporations Act 2001 (Cth) (Act).

Chief Justice Hammerschlag, sitting in the New South Wales Supreme Court (the Court), has delivered a judgement of importance to secured creditor and insolvency practitioners alike in Volkswagen Financial Services Australia Pty Ltd v Atlas CTL Pty Ltd (Recs and Mngrs Apptd) (In liq) [2022] NSWSC 573 (Atlas).

The Parliamentary Joint Committee on Corporations and Financial Services (the Committee) has commenced an inquiry into the “effectiveness of Australia’s corporate insolvency laws in protecting and maximising value for the benefit of all interested parties and the economy”.^[1]

A recent Hong Kong Court of Appeal decision examined a creditor’s right to commence bankruptcy/insolvency proceedings where the petition debt arises from an agreement containing an exclusive jurisdiction clause in favour of a foreign court: Guy Kwok-Hung Lam v Tor Asia Credit Master Fund LP [2022] HKCA 1297.

In The Australian Sawmilling Company Pty Ltd (in liq) v Environment Protection Authority [2021] VSCA 294 (Australian Sawmilling), the Victorian Supreme Court of Appeal (VSCA) dismissed an appeal by the liquidators of The Australian Sawmilling Company Pty Ltd (TASCO) against a decision of Garde J of the Victorian Supreme Court (VSC) setting aside the liquidators’ disclaimer of land subject to significant environmental ‘clean up’ costs (Primary Judgment).

The Court of Appeal has held that a settlement agreement between a bank and a group of companies which included releases of the parties’ affiliates prevented the companies from later pursuing claims against their own affiliates. Those affiliates were held to include former administrators appointed by the bank and the administrators’ solicitors: Schofield v Smith [2022] EWCA Civ 824.