Welcome to the eighth edition of our quarterly disputes newsletter, which covers key developments in the dispute resolution world over the last three months or so.
Keeping on top of the latest financial services regulatory and compliance trends?
Investing time in your professional development within a rapidly changing financial services industry is challenging. To meet that challenge, the Australian Regulators Weekly Wrapis designed to keep you at the forefront of your practice by quickly setting out the top five developments from the past week, analysis and practical considerations for the future.
The long awaited Sequana Supreme Court judgment[1] has provided some welcome clarity around the duties of the directors of a company in the "twilight zone" – i.e. where the company is facing financial difficulties.
In Kellow, Re Advanced Building & Construction Ltd (In Liq) v Advanced Building & Construction Ltd (In Liq) (No 2) (Kellow) the Court considered whether an insolvency proceeding commenced in New Zealand should be recognised as a “foreign main proceeding” pursuant to the United Nations’ Commission on International Trade Law’s Model Law on International Trade Law (Model Law).
In a recent case involving a former financial services provider in liquidation, thousands of pending claims from former customers and a letter of comfort with a looming expiry date, the Liquidators appointed to wind up Forex Capital Trading Pty Limited successfully applied to the Federal Court of Australia for orders permitting them to conduct an expedited process for the adjudication and admission of claims.
Background
In Brooks, in the matter of Tease Hair & Spa Pty Ltd (in liquidation), the Federal Court made orders in favour of the Liquidator, pursuant to section 90-15 of Schedule 2 to the Corporations Act 2001 (Cth) (Insolvency Practice Schedule (Corporations)) and section 47 of the Trustee Act 1989 (Tas) allowing the Liquidator to realise trust property for the benefit of creditors.
Background
The Insolvency Service has recently published its interim report (the "Report") which considers the three permanent measures that were introduced pursuant to the Corporate Insolvency and Governance Act 2020 ("CIGA"). For further details on the temporary and permanent measures introduced pursuant to CIGA, see our previous update.
This matter involved the former director and former accountant of CGS Constructions (QLD) Pty Ltd filing proceedings seeking an injunction to restrain the Liquidators from engaging Cornwalls Lawyers to act on the basis that:
- Cornwalls also acted for a substantial creditor, Union Share Pty Ltd; and
- the Liquidators, by engaging Cornwalls, had manifested a tendency to favour certain interests at the expense of others.
Background
In the matter of Squirrel Limited (In Liquidation), the Court considered an application for summary judgement against a director for insolvent trading. In doing so, the Court considered the principles underpinning a director’s duty to prevent insolvent trading and the compensation payable as a result.
Background
In Re Intellicomms Pty Ltd (in liq) [2022] VSC 228, it was determined that a sale agreement was a creditor-defeating disposition within the meaning of section 588FDB of the Corporations Act 2001 (Cth) (Act) and voidable pursuant to section 588FE(6B) of the Act.