The Bottom Line:

IN RE: GOLF 255, INC. (July 22, 2011)

Can liquidators disclose legal advice to creditors without waiving privilege? Common interest privilege may assist.

Common interest privilege

Legal professional privilege protects communications between a lawyer and client created for the dominant purpose of seeking or providing legal advice or for current or anticipated litigation.

If advice is disclosed to third parties, there may be a waiver of that privilege.

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

The recent Victorian Supreme Court decision of Le Roi Homestyle Cookies Pty Ltd (in liquidation) v Gemmell [2013] VSC 452 determined that a person who does not claim privilege when being publicly examined by a liquidator will not be allowed to avoid pleading and providing discovery in subsequent civil proceedings on the basis that complying may expose them to a civil penalty or criminal sanction.

Facts

The defendants were alleged former de facto and shadow directors of Le Roi Homestyle Pty Ltd.

In Bunting v Buchanan, the applicant shareholders sought discovery ahead of a hearing of their substantive application which involved the level of costs charged by two liquidators as a consequence of a drawn-out liquidation.

Recent changes in Peruvian insolvency laws1 will now allow financial institutions and insurance company counterparties to close-out and net obligations under derivatives and repurchase agreements with Peruvian financial institutions or insurance companies which become subject to bankruptcy proceedings.

With the global recession still being felt, times are tough and many companies are struggling to collect debts from errant customers or clients. In these cases, a winding-up application is arguably the most effective way to collect substantial debt as the following example shows.

Introduction

During the past 14 months, courts in Ontario have rendered three decisions dealing with the application of limitation periods to claims for fraudulent conveyances or preferences. A “limitation period” is a period of time, specified in a statute, within which a plaintiff must commence a court proceeding to seek a remedy. Otherwise, the claim is said to be “statute-barred” and an action to enforce the claim will be dismissed.

The recent decisions have brought some clarity to the law in this area, but have left other questions unanswered.

Background