A recent decision of the High Court has ended an insurer’s fight to avoid being joined to insolvent trading proceedings. This decision confirms the ability of liquidators to directly pursue proceeds of insurance policies held by insolvent insured defendant directors and has important ramifications for insolvency practitioners as well as insurers and litigation funders.

Summary

In Australian Securities & Investment Commission v Planet Platinum Ltd [2016] VSC 120, the Australian Securities and Investment Commission (ASIC) sought, and was granted, a declaration from the Supreme Court of Victoria that the appointment of the administrator of Planet Platinum Ltd (Planet Platinum) was invalid and of no effect. 

In the matter of Fat 4 Pty Limited (In Liquidation)

A recent case in the Supreme Court of Victoria has provided some relief for liquidators seeking to add a defendant to a voidable transaction claim after the expiry of the limitation period in circumstances where the wrong defendant was sued by mistake. In such circumstances, liquidators can substitute the incorrect party for the desired defendant without being time barred by s 588FF(3) of the Corporations Act, irrespective of whether the liquidator’s mistake as to the correct party was reasonable.

Snapshot

This week’s TGIF considers In the matter of Blue Sennar Air Pty Ltd (in liq); In the matter of Eye Plantain Pty Ltd (in liq) [2016] NSWSC 772 in which the Court clarified the rights of a liquidator to disclaim “unprofitable contracts” pursuant to section 568(1A) of the Corporations Act 2001 (Cth).

WHAT HAPPENED?

On 14 May 2015, the defendant liquidator was appointed administrator of Eye Plantain Pty Ltd (Eye Plantain).  He became liquidator of Eye Plantain shortly thereafter.

The New South Wales Supreme Court case of Forge Group Power Limited (in liquidation) (receivers and managers appointed) v General Electric International Inc [2016] NSWSC 52 provides guidance on the following issues in relation to the Personal Property Securities Act 2009 (Cth) (the PPSR):

Last Friday, Justice Brereton finally published his reasons in Sakr Nominees Pty Ltd [2016] NSWSC 709, the latest in a series of controversial decisions on insolvency practitioner remuneration. 

In Sakr, consistently with his Honour’s previous remuneration decisions:

On 23 February 2016, Justice Brereton in the New South Wales Supreme Court handed down the decision in the matter ofIndependent Contractor Services (Aust) Pty Ltd ACN 119 186 971 (in liquidation) (No 2) [2016] NSWSC 106.

This is an important judgment, with significant consequences for the insolvency community.

The decision deals with two fundamental aspects of insolvency law, being:

Key Points:

This case provides some clarification of matters relating to registration of retention of title clauses for secured creditors dealing with grantors

The registration of security interests on the Personal Property Securities Register (PPSR) is a critical, yet unresolved, issue in the context of the appointment of administrators and liquidators, and also for parties to sale transactions.

Bell Group N. V (in liquidation) v Western Australia [2016] HCA 21

Alan Bond passed away last year, but the legal battles over the 1990 collapse of his Bell Group companies may yet continue. The High Court has declared state legislation, which was designed to end the long-running litigation by short-circuiting certain aspects of the Corporations Act 2001 (C’th), constitutionally invalid.

Background