With the release of its much anticipated National Innovation and Science Agenda (the NISA), the Federal Government has committed more than $1 billion over the next four years to turning around Australia’s innovation performance.
Australia’s poor record in translating research to commercial products and services is well known. We rank last amongst OECD countries for collaboration on innovation between industry and higher education and public research institutions.
The Australian government has announced a 'National Innovation and Science Agenda' to be introduced by the middle of 2017, which includes providing a defence to protect directors from liability for insolvent trading where restructuring advice is obtained in an attempt to turn around a company's financial position. The government has also released the Productivity Commission Report on 'Business Set-up, Transfer and Closure' which contains recommendations on how the defence will operate.
Today, by a majority of 3-2, the High Court of Australia in Commissioner of Taxation v Australian Building Systems Pty Ltd (in liq) [2015] HCA 48 confirmed that s 254(1)(d) of the Income Tax Assessment Act 1936 (Cth) (ITAA 1936) does not impose an obligation on trustees (including administrators, receivers and liquidators) to retain sufficient moneys from the trust fund to pay tax unless a relevant assessment has been issued.
What do you do when a company owes you money? Or a creditor issues a statutory demand on your company?
This article discusses what a statutory demand is and the risks and benefits of issuing a statutory demand to recover your money.
The "running account" defence to an unfair preference claim is a fragile flower. In a recent decision, the Queensland Court of Appeal has reminded solvent counterparties that suspension of a customer's trading account will probably break the "running account", exposing a solvent counterparty to greater unfair preference risk.
Need to know
With continuing market volatility a number of companies remain under financial pressure. Businesses or individuals receiving payments from companies that might be financially distressed should be aware of the ability of a liquidator to apply to a court under the Corporations Act 2001 (Cth) (Corporations Act) to recover payments made to creditors in the six months prior to the appointment of a liquidator/administrator on the grounds the payment constituted an “unfair preference”.
Quick Recap on the Relevant Provisions
A recent case[1] is a reminder to creditors in a voluntary winding up that the Court has the power to appoint an additional or special purpose liquidator (SPL) to carry out a set function in the orderly liquidation of a company where it is 'just and beneficial' to do so.
What is a special purpose liquidator?
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.
Victorian Supreme Court confirms that an application to set aside a statutory demand can be served electronically, and the Court’s evaluation of a genuine dispute concerns the establishment of a genuine level of claim, and not the likely result of the claim.
Background
BH Apartments v Sutherland Nominees [2015] VSC 381
The costs of ‘convening’. Whether the person requesting a meeting of creditors, pursuant to 5.6.15(1)(b) of the Corporations Regulations 2001 (Cth) be called is only liable for the costs of calling the meeting.
Sutherland Nominees Pty Ltd (Sutherland) was being administered pursuant to a deed of company arrangement under part 5.3A of the Corporations Act 2001 (Cth).