In the recent case of 1st Fleet Pty Ltd (in liquidation), the Court clarified the information disclosure obligations of external administrators in the Insolvency Practice Schedule (Corporations) (IPSC) and Insolvency Practice Rules (Corporations) 2016 (Rules).
There is only a short time period for compliance, and there can be cost consequences for non compliance.
In business it is not uncommon for a director of a company to be owed money by that company.
If the commercial relationship breaks down, the director may think it is an option to serve a creditor’s statutory demand on the debtor company.
However, recent court decisions demonstrate that issuing a creditor’s statutory demand is not a sure fire method of obtaining payment where the director is owed the debt personally or is a director of both the creditor and debtor companies.
Cases where statutory demands have been successfully challenged
The Personal Properties Securities Register (PPSR) will be seven years old on 30 January 2019; accordingly, security interests with seven year registration periods will, unless renewed, expire from 30 January 2019.
The seven year security interest is the most common registration period and is the maximum period of registration for goods with a serial number (such as motor vehicles). According to the Australian Financial Security Authority, an estimated 115,239 registrations will expire in January 2019.
High Court orders the liquidation of CBL Insurance
On various occasions during the periods 2012 to 2018, Shane Warner Builders Limited (SWBL) regularly failed to pay GST and PAYE to the Commissioner of Inland Revenue.
In January 2018 the Commissioner filed an application to put SWBL into liquidation. The proceeding was adjourned in March 2018 whilst the Commissioner and Applicant engaged in negotiations for relief which ultimately failed due to SWBL's history of failures to pay tax arrears and failing to provide substantive supporting evidence regarding the source of funds required to settle current tax arrears.
North Harbour Motors Limited (in liquidation) (North Harbour) issued a statutory demand against Moffat Road Limited (Moffat) in respect of two separate $30,000 deposits paid by North Harbour to Moffat on the purchase of two properties pursuant to agreements for sale and purchase dated 6 July 2015 (the Agreements).
FTG Securities Limited involved an application by FTG Securities Limited (FTG) for declarations as to the interpretation of a Deed of Priority. The Deed of Priority was entered into by Canterbury Finance Limited (CFL) and a bank with respect to the security interests in Tuam Ventures Limited (in Rec and in Liq) (TVL). Declaratory relief was sought against the bank and the receivers of TVL. An issue raised by way of an affirmative defence was whether the assignment of TVL's debt and securities to FTG is valid from a technical legal perspective and therefore wh
In what is likely to be the final chapter in the Ross Asset Management (RAM) liquidation, assuming no appeal is filed, the High Court has considered an application for directions by the liquidators of Ross Asset Management concerning how best to distribute recovered funds. David Ross operated RAM as a Ponzi scheme for decades until the fraud was uncovered in 2012 and the company went into liquidation. Mr Ross is currently serving a ten year plus term of imprisonment for his role as architect of the scheme.
In Lafferty v Official Assignee Gordon J considered Mr Lafferty's appeal of two decisions of the Official Assignee to refuse Mr Lafferty's applications under section 62(1)(a) of the Insolvency Act 1967 to enter or carry on business while bankrupt.
Gordon J dismissed the appeal on the basis that Mr Lafferty could not show that the Official Assignee had made an error of law, failed to take into account relevant considerations or was manifestly wrong in exercising its discretion under regulation 34 of the Insolvency Regulations 1970.
An application by New Zealand Life Care Limited (Life Care) for an order reversing the decision of the Official Assignee to reject its claim for $4.9m in the bankruptcy of Mr Harman was dismissed by the High Court in New Zealand Life Care Ltd v Official Assignee [2018] NZHC 17. Life Care said that Mr Harman had guaranteed loans from Life Care to his companies, but accepted that it did not have a written guarantee signed by Mr Harman. Instead it relied on Mr Harman's admission of the guarantee in affidavits made after his adjudication.