De Le Cuona v Big Apple Marketing Ltd, Chancery Division, 12 April 2017 

Easement to park; illusory; true construction of a deed

It is common practice for company contracts to contain clauses, known as “ipso facto” clauses, which terminate or amend the contract (e.g. by accelerating payments) merely because a company has entered into a formal insolvency process.

The case confirmed that the provisions of the CPR apply to applications for an extension of time to apply for rescission of a winding up order. The case further stated that any such extensions of time should be exceptional and for a very short period.

Facts

Facts

Facts

This case concerned the rejection by the liquidators of Saff One LLP (‘LLP’) of a proof of debt lodged by ESS. The issue was whether a tax mitigation structure involving a loan to LLP for purported investment in the Ultra Green Scheme gave rise to a provable debt if the monies ‘loaned’ passed in a circle and no such investment was made.

Facts

A Trustee in Bankruptcy (‘TiB’) applied for committal of a bankrupt (‘B’) for contempt for repeated failure to provide financial information sought in conjunction with an application for an Income Payment Order (‘IPO’).

Facts

Mr Mikki is a photographer (‘the Bankrupt’). Bankruptcy was 2010 when pertinently he had a bank account with £1,500 in it and a car.

The £1,500 was spent, but £3,000 was subsequently paid in. When the account was frozen it again had £1,500 in it. After investigations it was determined that this money derived from post-bankruptcy income and was returned. Those investigations took some time and the Bankrupt demanded penal interest.

This article was first published in the LexisNexis Corporate Rescue and Insolvency Journal (2017) 2 CRI 45.

Key Issues

On 28 March 2017, the Federal Government released draft reform legislation to Australia’s insolvency laws to promote a culture of entrepreneurship and help reduce the stigma associated with business failure.

The reforms, known as ‘safe-harbour’ provisions propose changes to directors’ personal liability for insolvent trading under the Corporations Act 2001 (Cth) (Act).

Background

The recent Federal Court of Australia decision of The Owners – Strata Plan No 14120 v McCarthy (No 2) [2016] FCCA 2017, demonstrates the dangers of errors in a bankruptcy notice.

In McCarthy, the Court found that when a debtor disputes the validity of a bankruptcy notice on the ground of a misstatement of the amount claimed, the debtor’s notice does not need to identify the misstatement with complete precision to render the bankruptcy notice invalid.