In June 2017, the New South Wales Parliament introduced the Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW Act), designed to clarify the rights of claimants to proceed directly against insurance companies. But in the context of insolvent corporations, has it created more problems than it has solved?

This week’s TGIF considers Linc Energy Ltd (in Liq) v Chief Executive Dept of Environment & Heritage Protection [2017] QSC 53, in which the Queensland Supreme Court directed that the liquidators of Linc Energy were not justified in causing it to fail to comply with an environmental protection order

BACKGROUND

This week’s TGIF considers a recent decision in which the Court directed that liquidators would be justified in utilising trust funds to conduct further investigations to identify and pursue potential claims available to a trustee.

WHAT HAPPENED?

The plaintiffs were appointed as voluntary administrators of the trustee company (Trustee) and subsequently became its liquidators. The Trustee acted as responsible entity and trustee within a corporate group that funded property investment and development activities.

This week’s TGIF examines the NSW Supreme Court decision In the Matter of Kevin Jacobsen Pty Limited (in liq) [2016] NSWSC 538 which considered a challenge to an application under s 477(2B) to assign a cause of action.

WHAT HAPPENED?

On 10 August 2015, the liquidators of Kevin Jacobsen Pty Limited (in liquidation) (KJPL) applied to the NSW Supreme Court for:

Marsden v Screenmasters Australia provides guidance to liquidators who commence and continue proceedings, pursuant to funding arrangements, when met with arguments that the proceedings will not confer a benefit to creditors. 

WHAT HAPPENED?

WHAT HAPPENED?

On 4 February 2013, Stansfield DIY Wealth Pty Ltd (in liquidation) was wound up, and a liquidator was appointed. At that time, the only function of the company was acting as trustee of a self-managed superannuation fund. It had no assets or liabilities, save in its capacity as trustee of the super fund.

In Rathner in his capacity as Official Liquidator of Kalimand Pty Ltd (in liq) v Hawthorn [2014] FCA 1067, the Federal Court considered the elements of voidable transactions under Pt 5.7B of the Corporations Act, and the meaning of becoming insolvent “because of” entering into a transaction.

The decision Akers as a joint foreign representative of Saad Investments Company Limited (in Official Liquidation) v Deputy Commissioner of Taxation [2014] FCAFC 57 demonstrates that Australian Courts may be willing to depart from the philosophical basis for cross border insolvency in order to protect the interests of Australian based creditors.

Background

The spate of insolvencies in the NSW construction sector shows no signs of easing. On 24 October 2013, the Building and Construction Industry Security of Payment Act Amendment Bill 2013 was introduced into Parliament. The Bill is part of the government’s broader reform package to address the level of insolvency being experienced in the NSW construction sector.

In Saraceni v ASIC [2013] FCAFC 42 the Full Court of the Federal Court of Australia confirmed that it is not necessary for ASIC to provide potential examinees with an opportunity to be heard prior to authorising receivers to conduct examinations under s596A of the Corporations Act.

FACTS