The "true employer" question is one which frequently arises in insolvencies of corporate groups, and it also arises in solvent workplace dispute scenarios. Answering it, however, is often hampered by inconsistent or incomplete records and very divergent returns for employees, depending on the outcome of the question.

The COVID-19 pandemic and the associated lock downs have led to a global economic slowdown, and Australia has been no exception. GDP fell by 0.3% in the March quarter, and on 3 June 2020 Treasurer Josh Frydenberg announced that Australia was officially in its first recession in 29 years.

While the Australian Government was quick to provide a range of economic support measures – having already spent $289bn or 14.6% of GDP in an attempt to keep the economy afloat – Treasury expects Australia's GDP will decline by 0.5% in 2019-20 and a further 2.5% in 2020-21.

In SJG Developments Pty Ltd v NT Two Nominees Pty Ltd (in liq),[1] the Supreme Court of Queensland set aside a statutory demand served by the liquidators of NT Two Nominees Pty Ltd (in liquidation) (NT Two Nominees) on SJG Developments Pty Ltd (SJG). Costs were awarded on the indemnity basis and more significantly, were also ordered against the liquidators personally.

The recent Supreme Court of Victoria decision in Re National Personnel Pty Ltd (in liquidation) [2012] VSC 508 confirms that the Court will take a broad approach in determining the true employer where the employer-employee relationship is confused and the liquidator is in doubt as to the identification of the employer.

Background

Who should bear the risk and ultimately the financial burden of insolvent wrongdoers when determining the liability of defendants to a plaintiff?  The defendants, or the plaintiff?

The Law Commission revisits this question in an Issues Paper, published last week, after recommending in 1998 to retain the traditional position.¹ 

A creditor with assets in England should refrain from involvement in a foreign insolvency proceeding if it is at risk of being sued in the foreign court.

Courts are willing, in certain circumstances, to consider the commercial realities of voluntary administrations, and can be flexible.

The recent Federal Magistrate’s decision in Commonwealth Bank of Australia v Oswal [2012] FMCA 1082 reminds us that leaving a jurisdiction does not mean leaving your business behind, including the business of paying debts.

Background

Mr Oswal guaranteed a loan of $27 million from the Commonwealth Bank of Australia (CBA) to Garuda Aviation Pty Ltd (Garuda) for the purchase of a jet plane.  Mr Oswal was, and remains, a director of Garuda.

In Carey v Korda [2012] WASCA 228, the Supreme Court of Western Australia Court of Appeal confirmed the rights of receivers to claim legal professional privilege.  A little over a year ago, we considered the first instance judgment in a previous TGIF article. 

THE BACKGROUND FACTS

A recent High Court judgment illustrates potential issues when the same liquidator(s) are appointed to Australian and New Zealand companies.

Australian liquidators were appointed to the Cedenco group of companies, two of which were New Zealand companies and three Australian. They sought orders requiring delivery of documents and for the companies’ relationship manager at ANZ to attend for a second examination. One of the arguments against this was that the New Zealand companies' creditors were likely to be paid in full.