Last year, we reported that Australia had proposed significant insolvency reforms that, in our view, are long overdue ("A Major Leap Forward for Australian Insolvency Laws").
A garnishee order is a common form of enforcing a judgment debt against a creditor to recover money. Put simply, the court directs a third party that owes money to the judgement debtor to instead pay the judgment creditor. The third party is called a ‘garnishee’. A garnishee order is a legal notice the court issues that allows the creditor to collect the amount from either:
If you’re a creditor and for some reason, your debtor is showing no signs of repaying what they owe, what are your options? In some cases, you may be able to bankrupt your debtor. Once a court judgment has been entered against your debtor, you are entitled to take steps to have them declared bankrupt. Your judgment debtor must be an individual (not a company), and the judgment debt must be $5,000 or more. But is it worth it?
This week’s TGIF considers Tai-Soo Suk v Hanjin Shopping Co Ltd [2016] FCA 1404 in which the Court was required to determine the scope of a stay arising under the UNCITRAL Model Law on Cross Border Insolvency.
BACKGROUND
A Korean shipping company was subject to ‘rehabilitation’ proceedings in Korea. Rehabilitation proceedings seek to ‘rehabilitate’ insolvent debtors by restructuring their debt pursuant to a rehabilitation plan approved by the creditors and the Rehabilitation Court.
When an individual becomes bankrupt, the bankrupt’s property vests in the bankruptcy Trustee with a number of exceptions. One exception is in respect of the bankrupt’s interest in a regulated superannuation fund, an approved deposit fund or an exempt public sector superannuation scheme.
This week’s TGIF considers the case of Compton v Ramsay Health Care Australia Pty Ltd [2016] FCAFC 106, where the Court exercised its power to “go behind” a judgment upon which a petitioning creditor relied as proof of a debt that was owed.
WHAT HAPPENED?
This week’s TGIF considers the case of Brandon Industries (Vic) Pty Ltd v Locker Pty Ltd [2016] VSC 373 where the Court dismissed an application to set aside a statutory demand due to the applicant’s failure to establish a genuine dispute or offsetting claim pursuant to section 459H of the Corporations Act 2001 (Cth).
BACKGROUND
In Cato Brand Partners Pty Ltd v Air India Ltd the Supreme Court was required to consider whether or not a foreign company had grounds to challenge an application for a winding up order in circumstances where it had not sought to set aside a statutory demand within the required 21 day period.
A problem often faced by creditors is how to recover unsecured judgment debts. If a debtor owns real property, there is a mechanism available through the Courts to have the debt registered against the property and the sheriff's office sell the property to satisfy the judgment debt.
This week’s TGIF considers the most recent decision in a line of cases which hold that the provisions of the Code of Banking Practice may be incorporated into loan agreements, as well as guarantees given by individuals.
BACKGROUND