The Parliamentary Joint Committee on Corporations and Financial Services has commenced an inquiry into Australia’s corporate insolvency regime. The inquiry, due to be completed by 30 May 2023, will examine the effectiveness of the current regime and consider potential reform.

Key takeaways

This week’s TGIF examines Sentinel Orange Homemaker Pty Ltd v Davis Investment Group Holdings Pty Ltd (in liquidation) (No 2) [2022] NSWSC 1171 where a court considered an application for non-party costs orders against a litigation funder and the liquidator of an insolvent defendant.

Key takeaways

This week’s TGIF considers a recent decision of the Federal Court of Australia in which the Court relieved administrators of liability for entering a funding agreement with a major creditor in order to keep the company trading.

Key takeaways

This week’s TGIF considers the decision in Enares Pty Limited v Nimble Money Limited [2022] FCAFC 126, in which the Full Court considered shareholder information rights in the context of a dispute between Nimble’s board and its largest shareholder as to how to refinance Nimble’s debt.

Key takeaways

This week’s TGIF considers In the matter of Nicolas Criniti Pty Ltd (In Liquidation) [2022] NSWSC 1149 which examined the intersection between the winding up provisions in the Corporations Act 2001 (Cth) and the Building and Construction Industry Security of Payment Act 1999 (NSW).

Key takeaways

This week’s TGIF considers Hill, in the matter of Ovato Limited (Administrators Appointed) [2022] FCA 903 in which the Federal Court approved the administrators’ proposal for the Ovato Group to continue trading in order to maximise the chances of a sale as a going concern. The proposal was dependent on ongoing funding from the Ovato Group’s financier and, in that context, the administrators were able to agree to have their personal liability limited to the assets subject to the financier’s security.

Key takeaways

It is common for construction project owners to finance projects through multiple mortgages, especially in times of rising construction costs. However, when an insolvency situation arises, holdback priority claims from contractors and subcontractors are particularly complex when there are multiple building mortgages involved. The Ontario Superior Court (Commercial List) provided new clarity in this regard in its April 29, 2022 decision in BCIMC Construction Fund Corp. et al.

Understanding limitation periods are of crucial importance in the construction industry, particularly when a contractor is faced with unpaid invoices for services or materials rendered. The Ontario Court of Appeal stepped back into the spotlight in this regard with its decision in Thermal Exchange Service Inc. v Metropolitan Toronto Condominium Corporation No. 1289, 2022 ONCA 186, in holding that a defendant's assurances may prolong the "discoverability" of a claim for non-payment.

Background

This week’s TGIF considers Manda Capital Holdings Pty Ltd v PEC Portfolio Springvale Pty Ltd [2022] VSC 381, a recent Victorian Supreme Court decision that focused on the effect of COVID-19 on the property market, through the lens of a mortgagee’s duties under section 420A of the Corporations Act 2001 (Cth).

Key takeaways

This week’s TGIF examines a recent NSW Supreme Court decision that illustrates the circumstances in which a person will be regarded as a ‘de facto director’ and the duties owed to creditors when facing insolvency.

Key takeaways