The NSW Supreme Court has given a Landlord leave to commence proceedings against a company for rent and make good costs arising after the date of the DOCA.

BACKGROUND

In a decision that will be welcomed both by second-ranking secured creditors and by administrators, the Court of Appeal recently held that a second-ranking floating charge (SRFC) was still capable of being a qualifying floating charge for the purposes of Schedule B1 of the Insolvency Act 1986 despite the earlier crystallisation of a prior-ranking floating charge (PRFC). In addition, the SRFC was capable of being enforceable notwithstanding the fact that there were no assets of the chargor which were not covered by the PRFC.

This week’s TGIF examines a recent decision of the Supreme Court of New South Wales which considered whether payments made by a third party to a company’s creditors could be recovered as unfair preferences.

What happened?

On 2 September 2015, liquidators were appointed to a building and construction company (the Company) and later commenced proceedings against eight defendants for the recovery of payments considered to be unfair preferences.

This week’s TGIF considers a NSW Court of Appeal decision which confirms that liquidators who bring a claim for preference payments within the limitation period may amend that claim to capture additional transactions otherwise subject to a statutory bar.

Background

Sydney Recycling Park (SRP) provided “tipping services” to Cardinal Group (Cardinal), who were in the business of “waste management”. Cardinal ran into some financial difficulties and on 1 February 2012, it was placed into liquidation.

This week’s TGIF considers the recent decision of Hastie Group Ltd (in liq) v Moore [2016] NSWCA 305 in which the Court held that privilege attached to an expert report prepared for the purpose of obtaining litigation funding.

WHAT HAPPENED?

Much time is spent by MLAs and Sponsors negotiating the list of unanimous lender decisions in a leveraged finance syndicated facilities agreement. The Sponsor will be concerned that its portfolio company should not find itself "held to ransom" on a waiver request by a dissenting minority lender. On the other hand, lenders require certain fundamental transaction terms to be entrenched so that key decisions cannot be taken without them. Commonly, changes which would increase the facilities, reduce the margin or extend the final repayment date will require the consent of all lenders.

The Federal Court has recently handed down a decision that clarifies the power of receivers to administer trust property under a debenture. In Benton, in the matter of Mackay Rural Pty Ltd (Receivers and Managers Appointed) [2014] FCA 1285, the Federal Court confirmed that section 420 of the Corporations Act 2001 (“the Act”) confers upon receivers a power to dispose of trust property, provided that this is necessary for the purpose for which they have been appointed.

FACTS

The Supreme Court of Western Australia recently handed down its decision in Soil and Contracting Pty Ltd v Boban Pty Ltd [2014] WASC 402 which confirmed that, notwithstanding the operation of s 459R of the Corporations Act, the slip rule is available to extend the time limit within which a winding up application may be determined.

SECTION 459R

Connections Total Fitness for the Family Pty Limited (Connections) operated a gym on premises owned by Selkirk Pastoral Co Pty Limited (Selkirk). The gym business ultimately failed and ceased trading when administrators were appointed on 4 October 2013. Connections’ assets were limited to some cash at bank and a $1.1m claim against Selkirk.

The respondent in this matter, Mr Culleton, owed Macquarie Leasing Pty Limited (Macquarie) a debt arising out of two chattel mortgage agreements.

Macquarie obtained judgment against Mr Culleton in the amount of $94,304. The judgment debt was not paid and Macquarie petitioned for a sequestration order to be made against Mr Culleton’s estate.

Macquarie served the Bankruptcy Notice on Mr Culleton by affixing it to a padlocked gate at his last known address.