Introduction
Achieving sales growth is a significant challenge for many Australian businesses. Even if new customers can be found, an inability to collect and hold onto payments can pose another obstacle to growth.
To survive and prosper businesses must plan, and implement, strategies for sustained profitability. It is not enough to simply achieve fantastic sales results and get the money in, businesses must also anticipate, and protect against, the risk that payments received from customers may be clawed back if a liquidator is later appointed to the customer.
In Rathner in his capacity as Official Liquidator of Kalimand Pty Ltd (in liq) v Hawthorn [2014] FCA 1067, the Federal Court considered the elements of voidable transactions under Pt 5.7B of the Corporations Act, and the meaning of becoming insolvent “because of” entering into a transaction.
The decision of the Full Court of the Federal Court handed down this week in Commissioner of Taxation v Australian Building Systems Pty Ltd (in liq) [2014] FCAFC 133 offers welcome certainty to administrators, receivers and liquidators in relation to their obligations with respect to post-appointment tax liabilities.
Significance
Introduction
There are various Personal Property Securities Act 2009 (Cth) disasters occurring in the construction industry following contractors’ insolvency or default. These typically arise from a failure to register against leased/hired or retention of title (ROT) equipment or materials, late registration, or incorrect financing statements.
In some cases, legal owners of equipment or materials have lost title to those goods or lost out to secured financiers in a priority dispute.
In the news this week:
A recent Federal Court decision has confirmed that liquidators of a corporate trustee are entitled to be remunerated out of the trust assets for costs incurred in monitoring and investigating claims made against the trust.
FACTS
InKitay, in the matter of South West Kitchens (WA) Pty Ltd [2014] FCA 670, Mr Kitay was appointed liquidator of South West Kitchens (WA) Pty Ltd (SW Kitchens) by voluntary winding up. SW Kitchens was trustee of a trust and owned all its assets as trustee of that trust. The trust deed provided that SW Kitchens was disqualified from acting as trustee if it was wound up.
With Commonwealth funding to Medicare Locals ceasing on 30 June 2015, now is the time for Boards of Medicare Locals to ensure that they are, and remain, solvent, now that a substantial part of their revenue flow is being terminated.