The new Building Industry Fairness (Security of Payment) Bill 2017 (Qld) was assented to on 10 November 2017, which will see the introduction of project bank accounts (PBAs) into the Queensland construction industry. As the project bank account provisions will be trialled from 1 January 2018, contractors, at least those involved in State Government projects, should familiarise themselves with the relevant provisions.

What Are Project Bank Accounts?

A PBA is a trust over:

Factoring agreements are very popular with subcontractors and suppliers in the construction industry, assisting cash-flow by providing a line of credit against accounts receivable. However, like any financial product, they can present complexities, pitfalls and at times surprises when pursuing debt recovery and enforcement action. 

Where a subcontractor is factoring its debts:

Court of Appeal judgment: Burlington Loan Management and others v Lomas and others (as the joint administrators of Lehman Brothers International (Europe) (in administration)) [2017] EWCA Civ 1462

Summary and background

On 1 September 2017, Boart Longyear Limited (Boart), successfully implemented the reconstruction of its US law governed debt using Australian creditor schemes of arrangement (Schemes).

This is a landmark case that will influence Australian corporate reconstructions for years to come.

The case involved approval by the NSW Supreme Court and recognition by the US Bankrupcty Court under Chapter 15 of the US Bankruptcy Code, ensuring cross border effectiveness for the reconstruction.

Highlights

External administrators of companies can now assign any right to sue that is conferred on them by the Corporations Act, for example voidable transaction claims and insolvent trading claims. Previously these were considered rights that could only be utilised by the appointed liquidator and so could not be assigned. Now they can.

When did this start?

• This has already begun. It commenced on 1 March 2017.

What legislation brought this about?

The New South Wales Court of Appeal granted leave to appeal following a finding that certain documents relating to attempts to secure litigation funding were not privileged.

Yesterday, in a unanimous 5-0 decision, the New South Wales Court of Appeal knocked out Justice Brereton’s remuneration decision in Sakr Nominees Pty Ltd [2016] NSWSC 709, the sixth in a series of controversial decisions on insolvency practitioner remuneration.

A recent Western Australian Supreme Court case considered the insolvency of a partnership comprised of corporate members. When a partnership is formally dissolved, the partnership assets are realised by a court-appointed receiver, who will realise and distribute the assets in accordance with the relevant State partnership legislation. Senior Associate, Stefano Calabretta and Lawyer, Brendan May discussion this scenario further.

On 23rd November 2016, the European Commission released a package of banking legislation reforms. Some of these were expected in particular those related to the minimum requirement for eligible liabilities and own funds (MREL) under the Bank Recovery and Resolution Directive (BRRD) and the implementation of the Financial Stability Board's (FSB) total loss absorbing capacity (TLAC) principles into the MREL requirements.

WATERFALL IIC JUDGMENT (ISDA MASTER AGREEMENT ISSUES)1