This is an important update in the Australian corporate and insolvency law context because, in BTI 2014 LLC v Sequana SA and others [2022] UKSC 25, the UK Supreme Court (being the UK’s highest court) confirmed the existence of a duty owed by directors to creditors in certain circumstances (creditor duty). Under the common law and equity (together, general law), there is a gateway to applicability of the creditor duty in Australia.

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Questions & Answers

In a recent judgment, the English Court of Appeal gives guidance on when a non-party costs order will be made against directors or shareholders of an insolvent company engaged in litigation. The judgment will be of interest to all involved in insolvency based litigation.

A snap shot of the courts’ jurisdiction to make costs orders against non-parties

In any economic downturn, there is usually an increase in the number of demands made throughout supply chains and in particular by owners / employers on project securities (e.g. for performance issues, upon termination or following insolvency) and the recent global economic slowdown caused by the coronavirus pandemic is no different.

As England enters its second period of lockdown, commercial landlords are reminded that the temporary measures put in place by the UK Government earlier this year, protecting commercial tenants from eviction and the operation of CRAR and restrictions on the use of certain insolvency processes, are set to continue during the second lockdown and beyond.

The measures are intended to protect business tenants that are unable to pay their rent as a result of the COVID-19 pandemic.

The key measures

Petroplus, the largest independent refiner and wholesaler of petroleum products in Europe entered into various insolvency proceedings in Switzerland, England and Wales, France, Germany and Belgium on 24-27 January 2012 after the group failed to reach agreement with its creditors to extend the deadline of its loan repayments.

In the English case of Derby& Co v Weldon (No3 and 4) (1990) Ch 65, the Court of Appeal held unequivocally that a court can order a defendant’s assets to be frozen even if they are situated outside of the jurisdiction. However what is vital to be established in such circumstances is:

The English Court has agreed to lift the automatic stay on proceedings under the Cross Border Insolvency Regulations 2006 (“CBIR”) against STX Offshore & Shipbuilding Co Ltd (“STX”) which had entered into rehabilitation proceedings in Korea.

Facts

In a recent judgment the Irish High Court for the first time confirmed as “good law” in Ireland the approach taken by the English courts to the circumstances in which a transaction, documented as a sale of receivables, may be re-characterised as a secured loan. Invoice discounting, factoring and similar receivables financing products are important sources of working capital finance for SMEs and are increasingly a funding tool offered by alternative lenders.

Last year, the Ministry of Justice published its statistics for judicial and court activity in England and Wales for 2014. In this note, we take a look at the 2014 figures and highlight emerging litigation trends.

Our own enquiries into professional negligence claims for the first three quarters of 2015 show that claims numbers are likely to be broadly similar to those for 2014 and 2013. We intend to follow this note with an update after the Ministry of Justice publishes its own figures for the whole of 2015 later this year.