The latest wave of reforms to hit the construction industry in Queensland is causing more than just a ripple. You can now be automatically excluded from acting as a director or senior manager of a construction company for 3 years, even if you are not at fault.

You can lose your livelihood quickly

The construction game has always been competitive and risky. There are traps everywhere. Despite this, people still tend to be surprised and upset when things go bad.

This week’s TGIF considers the case of In the matter of Idoport Pty Limited (in liquidation) [2015] NSWSC 1412 in which the Court reinforced that a reluctance to give directions to a liquidator in respect of commercial matters is qualified in respect of matters which are capable of giving rise to a legal controversy.

What happened?

The High Court of Australia has confirmed that Australian Supreme Courts have the power to make orders freezing the Australian assets of a foreign company in anticipation of a possible judgment in a foreign court being obtained against that foreign company.

Background

It is not uncommon for companies served with wind up proceedings to appoint external administrators for the purposes of investigating the affairs of the company and so that recommendations can be made to creditors to either have the company wound up, execute a deed of company arrangement or hand the company back into the control of directors.

In circumstances where the administrators conclude that the company should be wound up, it is common for the administrators to seek to be appointed as the official liquidators of the company.

A recent decision of the NSW Court of Appeal demonstrates the importance for security trustees tocarefully consider and understand their obligations in an enforcement scenario.

Need to know

There's been a drop-off, but Peter Bowden says things might be about to change.

Click here to watch video.

This week’s TGIF considers the circumstances in which a resolution passed at a creditor’s meeting will be set aside on the basis that it is contrary to the interests of creditors as a whole.

Background

BACKGROUND

Administrators were appointed to a company and as a result, the company entered into a Deed of Company Arrangement (DOCA). 

After the DOCA had been entered into, a secured creditor who had abstained from voting on the decision of whether the company should enter into the DOCA, purported to appoint an administrator under its security. 

The deed administrators sought a declaration from the Court that the second administration should be terminated (amongst other things). 

DECISION

In March 2015, the High Court delivered its judgment in Grant Samuel & Ors v Fletcher & Ors[2015] HCA 8, and unanimously overturned the decision of the New South Wales Court of Appeal, in holding that liquidators cannot rely on the procedural court rules of a State or Territory, to extend the time within which to commence voidable transaction proceedings, under section 588FF(3)(a) of the Corporations Act 2001 (“the Act”).

HOW THE GAME UNFOLDED

The Federal Court’s decision in Commissioner of Taxation v Warner [2015] FCA 659 has clarified that the Australian Taxation Office’s (ATO) coercive powers requiring a taxpayer to produce documents and information to the ATO prevail over section 486 of the Corporations Act 2001 (Cth) (CA) (section 486 provides that a Court order must first be obtained before a creditor is authorised to inspect the books of a company).