In a judgment issued yesterday (Francis v Gross [2024] NZCA 528), the Court of Appeal unanimously overturned the controversial High Court decision in Francis v Gross [2023] NZHC 1107 and held that purchasers of partly constructed modular buildings (pods) did not have equitable liens (at all, and especially not in priority to secured creditors) over those pods.

This morning, after much anticipation, the Supreme Court has released its judgment in Yan v Mainzeal Property Construction Limited (in liq) [2023] NZSC 113, largely upholding the Court of Appeal's decision, and awarding damages of $39.8m against the directors collectively, with specified limits for certain directors. The decision signals that a strong emphasis on 'creditor protection' is now embedded in New Zealand company law.

In recent years much ink has been spilled opining on the so called 'Quincecare' duty of care, and the limits of it (see links to our recent insolvency law updates covering the topic below). The judgment in Barclays Bank plc v Quincecare Ltd [1992] 4 All ER 363 was a first instance decision on Steyn J, in which he found that a bank has a duty not to execute a payment instruction given by an agent of its customer without making inquiries if the bank has reasonable grounds for believing that the agent is attempting to defraud the customer.

Co-author: Ben  Gibson, Barrister, Victorian Bar

Case Name:Bryant v Badenoch Integrated Logging Pty Ltd [2023] HCA 2

Issues: Voidable transactions and unfair preferences: abolition of the peak indebtedness rule, the existence of a continuing business relationship.

The abolition of the peak indebtedness rule will likely reduce the quantum of unfair preference claims where there is a running account and render some claims unviable for further pursuit.

The United Kingdom Supreme Court has just released an important insolvency judgment in BTI 2014 LLC v Sequana SA [2022] UKSC 25 (Sequana), which concerns when and the extent to which directors of a company must consider the interests of creditors.

The United Kingdom Supreme Court has just released an important insolvency judgment in BTI 2014 LLC v Sequana SA [2022] UKSC 25 (Sequana), which concerns when and the extent to which directors of a company must consider the interests of creditors.

In significant news for the insolvency industry, the High Court will hear the long-awaited Gunns Group preference claim appeal in Bryant & Ors v Badenoch Integrated Logging (A10/2022) on 18 October 2022.

Johnson Winter & Slattery act for PwC, the appellant liquidators of the Gunns group, in the proceeding.

Briefly stated, the grounds for the appeal are:

In a recent Supreme Court of Victoria decision[1] in which we acted for the successful liquidators, the Court made various orders to enable the company to complete an ultra-efficient, streamlined second voluntary administration to expedite creditor consideration of a new DOCA proposal.

Key points

In brief

The courts were busy in the second half of 2021 with developments in the space where insolvency law and environmental law overlap.

In Victoria, the Court of Appeal has affirmed the potential for a liquidator to be personally liable, and for there to be a prospective ground to block the disclaimer of contaminated land, where the liquidator has the benefit of a third-party indemnity for environmental exposures.¹

In brief

Australia's borders may be closed, but from the start of the pandemic, Australian courts have continued to grapple with insolvency issues from beyond our shores. Recent cases have expanded the recognition of international insolvency processes in Australia, whilst also highlighting that Australia's own insolvency regimes have application internationally.

Key takeaways