In our December 2010 and April 2011 insolvency updates, we reported on the UK High Court and Court of Appeal decisions in BNY Corporate Trustee Services Limited v Eurosail. The issue before both Courts was whether Eurosail was insolvent by virtue of being unable to pay its debts under the balance sheet limb of the solvency test in section 123 of the UK Insolvency Act 1986. The Court of Appeal upheld the High Court decision that Eurosail was solvent, noting that it had not reached the "point of no return".

On 11 October 2013, the Trans-Tasman Proceedings regime will come into effect. The Trans-Tasman Proceedings Act 2010 aims to streamline the process for resolving Trans-Tasman civil proceedings, with the intention of reducing costs and improving efficiency in enforcing Australian judgments in New Zealand.

In a recent costs decision, the English High Court partly disallowed an indemnity sought by receivers in respect of costs payable to certain third parties and the receivers' own costs and expenses for certain steps.

On 25 July 2013 the Court of Appeal issued its final judgment in Farrell v Fences & Kerbs Limited [2013] NZCA 329. The final judgment related to three conjoined appeals in which an interim judgment had been delivered on 27 March 2013 (Farrell v Fences & Kerbs Limited [2013] 3 NZLR 82). The interim judgment held that to rely on the defence to setting aside a voidable transaction in section 296(3)(c) of the Companies Act 1993 "new value" was required to be given at the time the payment that is sought to be set aside was made.

The NSW Court of Appeal recently confirmed that the bankruptcy of a personal trustee or appointer of a family trust does not affect the protection afforded to the family trust assets by the trust structure. 

Bilta (UK) Limited (Bilta) and its liquidators brought a claim against the defendants for damages and equitable compensation on the basis of conspiracy to defraud and injure Bilta and for dishonest assistance by (among others) the 6th and 7th defendants in breach of fiduciary duties by Bilta's directors. The defendants argued that the unlawful conduct of Bilta's directors and sole shareholder could be attributed to the company itself, meaning that the action brought by Bilta and its liquidators would fail.

Wentworth Metals Group Pty Ltd (Wentworth) applied under the Corporations Act 2001 (Cth) (Act), for a review by the Federal Court of Australia of a decision by the liquidators of Bonython Metals Group Pty Ltd to sell Bonython's interest in a joint venture mining project to Pure Metals Pty Ltd. 

Reports have estimated that 1,300 UK law firms have been put at risk after Latvian insurer Balva was put into liquidation. Initially Latvian Board of Financial and Capital Market Commission (FCMC) insisted there was no cause for concern as all Balva’s insurance policies would remain effective and be transferred to its replacement underwriter, Berliner. However, when Berliner pulled the pin, declining to cover the Balva policies, panic hit the UK legal market. Berliner's exit was described by one broker as the “biggest hand grenade into [the] bottom end of the market for many years.”

In Commissioner of Inland Revenue v Property Ventures Limited (in Liq & In Rec), the liquidator of Property Ventures Limited (in liq and rec) obtained orders requiring the New Zealand Police to produce computer equipment holding certain company records. The Police obtained the relevant information from the offices of a Mr Henderson, following a complaint by the liquidator alleging a failure to comply with notices issued under section 261 of the Companies Act 1993. 

The High Court has held that liquidators cannot rely on the common law to recover insolvent transactions, and must now proceed under the statutory provisions of the Companies Act.

In Grant v Lotus Gardens Limited, the liquidators of Quantum Grow Limited applied unsuccessfully for an order that Lotus Gardens Limited be put into liquidation on the grounds that it was unable to pay its debts, asserting that Lotus Gardens owed it $25,000 being the amount of preferential payments made to them.