The High Court of Australia in Metal Manufactures Pty Limited v Morton [2023] HCA 1 has confirmed the view of the Full Court of the Federal Court of Australia that the "set off" defence under section 553C of the Corporations Act 2001 (Cth) (Act) is no longer available to claims by liquidators for an unfair preference claim made under section 588FA of the Act.

This decision brings finality to claims brought by Creditor Defendants to such claims and no doubt brings much joy to liquidators across Australia.

Background

Delaware has seen a significant uptick in the number of assignment for the benefit of creditors (ABC) filings. Through recent decisions, the Court of Chancery has sent a strong message that it expects parties pursuing this bankruptcy alternative to do a better job of justifying the relief they seek. This will require significantly more frequent and robust disclosures to the court and public.

From 15 February 2022, the UK Insolvency Service is granted new powers to investigate and disqualify or prosecute directors of dissolved UK companies. The Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Act (the Act) extends the Insolvency Service’s powers, on behalf of the UK Business Secretary, to deal with company directors who abuse the company dissolution process.

Introduction

For some time, the reliance on section 553C of the Corporations Act 2001 (Cth) (Act) as a "set-off" defence to an unfair preference claim, under section 588FA of the Act, has caused much controversy in the insolvency profession. Defendants of preference claims loved it, liquidators disliked it and the courts did not provide clear direction about its applicability – until now.

For some time, the reliance on section 553C of the Corporations Act 2001 (Cth) (Act) as a "set-off" defence to an unfair preference claim, under section 588FA of the Act, has caused much controversy in the insolvency profession. Defendants of preference claims loved it, liquidators disliked it and the courts did not provide clear direction about its applicability – until now.

The case of John Doyle Construction Ltd v Erith Contractors Ltd [2021] EWCA Civ 1452 (07 October 2021) saw the Court of Appeal re-explore the conflict between the adjudication process and insolvency following the Supreme Court decision ofBresco Electrical Services Ltd v Michael J Lonsdale Ltd.

According to press reports, utilities contractor NMCN (formerly North Midland Construction) plc and its subsidiary NMCN Sustainable Solutions Limited, have gone into administration.

Administration is the procedure by which a company that is, or is likely to become, insolvent can be reorganised or have its assets realised for the benefit of creditors. The primary aim of an administration is to rescue the company so that it can continue to trade as a going concern. If this is not possible, a company may go into administration for two other purposes:

As Andrew Jones and Daniela Miklova report, the recent case of Ristorante Limited t/a Bar Massimo v Zurich Insurance plc [2021] EWHC 2538 is a useful insight into how the Court will interpret the questions and answers in insurers’ proposal forms in coverage disputes. It also shows how insurers can lose potential policy defences through the drafting of proposal form questions going wrong.

In her recent keynote speech, delivered at the 25th IBA Competition Conference on 10 September 2021, European Commission (the Commission) Executive Vice President Margrethe Vestager called for a green revolution—the replacement of a linear economy with a circular one, coupled with investments in infrastructure.