The limitations of set-off in a liquidation scenario and the nature and effect of a security interest under the Personal Property Securities Act 2009 (Cth) (PPSA) have been clarified, with significant ramifications for principals and financiers, who should now review their rights, following the WA Supreme Court's decision in Hamersley Iron Pty Ltd v Forge Group Power Pty Ltd (In Liquidation) (Receivers and Managers Appointed) [2017] WASC 152 (Clayton Utz acted for the successful receivers).

This week’s TGIF considers Bunnings Group Ltd v Hanson Construction Materials Pty Ltd & Anor [2017] WASC 132, where the Court considered whether the order of registration of caveats determined the priority of competing unregistered charges.

BACKGROUND

Bunnings and Hanson each supplied building materials to Capital Works prior to Capital Works’ liquidation by means of a creditors’ voluntary winding up.

Creation of the charges

Bankruptcy is not something that many people want to hear about. In 2017, the words bankruptcy and insolvency still have negative connotations that many people fear. But, this fear often comes from a place of misunderstanding. Although bankruptcy may seem like a complete dead end to many, the fact of the matter is, bankruptcy (both personal and business) can often lead to a clean slate and a fresh start for many.

Is a “stay of enforcement” of a judgment within the meaning of s 15(2) of the Foreign Judgments Act brought about by s 58(3) of the Bankruptcy Act?

Talacko v Bennett [2017] HCA 15, 3 May 2017

The New South Wales Court of Appeal has, in a decision that has surprised many practitioners, dismissed an appeal which challenged the composition of classes in the creditors’ scheme of arrangement involving Boart Longyear Limited.1

The recent case of M Webster Holdings Pty Limited (administrators appointed) v Specific Freight Pty Limited [2017] FCA 269 illustrates how a transport provider can become ‘the meat in the sandwich’ when a consignee of goods becomes insolvent.

Webster, a fashion retailer, operated two well-known Australian businesses, David Lawrence and Marcs. Webster was placed into administration in February 2017 and its administrators continued to trade with a view to securing a purchaser.

Justice Robson has delivered his decision on an application by receivers and managers for directions as to, among other things, their obligations to pay preferential debts under the Corporations Act from the surplus generated by their trading-onof a business and other recoveries by their appointing bank.

Following consultation on exposure draft legislation between 28 March 2017 and 24 April 2017, the Treasury Laws Amendment (2017 Enterprise Incentives No.2) Bill 2017 (Cth) (Bill) was introduced into the House of Representatives and received its second reading speech on 1 June 2017.

The Bill proposes to:

Bicheno Investments Pty Ltd v David John Winterbottom [2017] NSWSC 536 has confirmed that the completion of a stocktake does not necessarily require a full physical stocktake. Rather insolvency practitioners may satisfactorily complete a stocktake by reviewing a business’ records, provided they are satisfied that those records are accurate and complete.

On 2 May 2017, the Supreme Court of New South Wales handed down its decision refusing an application to extend time to register a security interest in Production Printing (Aust) Pty Ltd (in liquidation)[2017] NSWSC 505.