Key Points:

Complex cross-border issues can be dealt with relatively easily under the Cross-Border Insolvency Act as long as flexibility is built into the relevant orders.

Until now the 1981 English case of The Halcyon Isle has been the principle authority on maritime liens and conflict of laws in Anglo-Common law jurisdictions. In that case, which was on appeal from the Singapore courts, the majority of the Privy Council held that the recognition and enforcement of maritime liens were to be determined according to the law of the forum in which the proceedings were commenced (i.e. the lex fori).

The government's proposed changes to Australia's insolvency laws as part of the NISA are:  

Client alert 11 DECEMBER 2015 Contact us Visit our website Productivity Commission’s recommended changes to Australia’s insolvency laws The Productivity Commission published its final report on Business Set-up, Transfer and Closure on 7 December 2015. A copy of the final report is available here.

Yesterday the High Court handed down its decision in Commissioner of Taxation v Australian Building Systems Pty Ltd (in liq) [2015] HCA 48.  The High Court held (by a majority of 3:2) that, in the absence of an assessment, a liquidator is not required to retain funds from asset sale proceeds in order to meet a tax liability which could become payable as a result of a capital gain made on the sale.  In doing so, the majority of the High Court affirmed the decision of the Full Federal Court and provided long awaited guidance to liquidators, receivers and administrators.

A Singapore entity who had entered into a joint venture with an Indonesian entity brought suit in Singapore. The Indonesian entity owned shares in an Australian company. The Singapore entity made an ex parte application to the Supreme Court of Western Australia ("Supreme Court") to freeze the shareholding interests. The court granted the application, but the Court of Appeal dismissed the freezing order. The High Court reversed.

Key Points:

You can lead a director to the safe harbour, but you can't make him drink.

The Government's new approach to insolvency is long on rhetoric about risk taking and the need to remove the stigma of business failure.

However, it is short on detailed consideration of exactly why we have legal rules for corporate and personal insolvency.

Those rules aim to balance the interests of creditors against the need to encourage business start-ups.

High Court says "Yes"

Need to know

In a win for creditors of insolvent companies, on 10 December 2015 the High Court determined that the obligation of a liquidator under section 254(1)(d) of the Income Tax Assessment Act 1936 (Cth) (1936 Act) to retain sufficient funds to pay tax on assets realised during the winding up only arises after a tax assessment has been made. If the funds are distributed prior to a tax assessment being made, then the obligation does not arise.

Although most western legal systems have recognised for some decades the public benefit in rehabilitating failed enterprises, some countries do it better than others. To some extent, this is because of differences in local legislation (sometimes small, but with far-reaching effects), which either shapes, or is shaped by, popular or political attitudes to business failure.

Key Points