Two recent Supreme Court of Canada decisions demonstrate that the corporate attribution doctrine is not a one-size-fits-all approach.

Court approval of a sale process in receivership or Bankruptcy and Insolvency Act (“BIA”) proposal proceedings is generally a procedural order and objectors do not have an appeal as of right; they must seek leave and meet a high test in order obtain it. However, in Peakhill Capital Inc. v.

The High Court decision in Re All Star Leisure (Group) Limited (2019), which confirmed the validity of an administration appointment by a qualified floating charge holder (QFCH) out of court hours by CE-Filing, will be welcomed.

The decision accepted that the rules did not currently provide for such an out of hours appointment to take place but it confirmed it was a defect capable of being cured and, perhaps more importantly, the court also stressed the need for an urgent review of the rules so that there is no doubt such an appointment could be made.

The Federal Court of Australia recently struck off an insolvency practitioner from the register of liquidators and restrained him for ten years for acting as an insolvency practitioner. The case concerns the conduct of David Iannuzi, who the Court found had "repeatedly fell short of the standards that would ordinarily be expected of him as a competent registered liquidator". The judgment sets out in detail the conduct that the Court found to be unsatisfactory and serves as a reminder of the standards expected of liquidators.

Background

Like many areas of insolvency law, statutory demands have strict procedural requirements as to the timing by which documents must be served. But how is the passage of time calculated? If something is required to be done "21 days after" a document is served, is this intended to be inclusive or exclusive of the day the document was served? The Supreme Court of NSW recently grappled with this issue in Verimark Pty Ltd v Passiontree Velvet Pty Ltd [2019] NSWSC 455 and has provided clarity for lawyers and insolvency practitioners alike.

In certain circumstances, if a claim is proven, the defendant will be able to offset monies that are due to it from the claimant - this is known as set off.

Here, we cover the basics of set off, including the different types of set off and key points you need to know.

What is set off?

Where the right of set off arises, it can act as a defence to part or the whole of a claim.

In our update this month we take a look at some recent decisions that will be of interest to those involved in insolvency litigation. These include:

Creditor not obliged to take steps in foreign proceedings to preserve security

The last few years have seen the Commonwealth increasingly crack down on misuse of the Fair Entitlements Guarantee, or FEG, program. The cases that have resulted have led to various disputes in insolvency law about the priorities of different creditors. The priorities to be applied in insolvent trading trusts have been one issue recently puzzling lawyers and insolvency practitioners alike. Relief may well be around the corner, however, as the High Court is set to weigh in.

What the FEG?

No duty of care owed for negligent bank reference to undisclosed principal

The Supreme Court has held that a bank which negligently provided a favourable credit reference for one of its customers did not owe a duty of care to an undisclosed principal who acted on that reference.