A liquidator has many competing duties and pressures in the performance of their role. Can the failure to make a simple phone call be a breach of those duties?

The decision in In the matter of Independent Contractor Services (Aust) could mean more reliance upon fair entitlements guarantee funding provided by the Commonwealth in relation to the liquidation of trading trusts.

The Bankruptcy Act 1966 (Cth) specifies the circumstances in which a bankrupt is entitled to continue prosecuting legal proceedings after a sequestration order has been made.  Sections 60 and 116 of the Act allow a bankrupt to continue with their proceedings if the proceedings are “in respect of any personal injury or wrong done to” the bankrupt.  

This week’s TGIF considers Legend International Holdings Inc (In Liquidation) v Indian Farmers Fertiliser Cooperative Ltd & Kisan International Trading FZE [2016] VSCA 151 in which it was held that s 581 does not prohibit a winding up order where Chapter 11 proceedings are on foot.

What happened?

In Berryman v Zurich Australia Ltd [2016] WASC 196, the Supreme Court of Western Australia held a bankrupt, Berryman, was able to maintain legal action in his own name, claiming TPD insurance benefits from Zurich.

The Bankruptcy Act 1966 (Cth) relevantly provides:

Liquidators of insolvent Australian companies often pursue directors of the failed company in recovery proceedings for the benefit of creditors. Following a High Court of Australia decision in April 2016, it is now clear that the liquidators can join liability insurers of defendant directors in such proceedings, even when the insurer has denied liability under a policy.  The liquidators, even though not a party to the contract, may then seek a declaration in the same proceedings that the insurer is liable to indemnify the insured defendant.

In brief

On 1 June 2016, the Victorian Court of Appeal determined that a group member in a class action is not precluded by Anshun estoppel from raising separate defences in claims against them.

Short history of the Timbercorp proceedings

The Timbercorp group of companies operated managed investment schemes. The group went into liquidation in June 2009, at which time there were more than 14,500 outstanding loans to over 7,500 borrowers, totalling more than $450m.

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

FUNDING IN FOCUS CONTENT SERIES REPORT T HREE JULY 2016 2 | VANNIN CAPITAL Funding in Focus Content Series Welcome Welcome to the third edition of Funding in Focus. Since the inception of Funding in Focus, the funding market has grown and developed. This development is reflected in the number, type and complexity of the cases we are being asked to fund across the globe. We have seen an exponential rise in requests for funding in a range of sectors, including in arbitration and insolvency, and in a range of jurisdictions.

In Berryman v Zurich Australia Ltd [2016] WASC 196 it was decided that a bankrupt's entitlement to claim a TPD benefit under a life insurance policy is not an entitlement that is divisible amongst the bankrupt's creditors, and therefore such an entitlement does not vest in the Official Trustee in bankruptcy. Tottle J of the Supreme Court of Western Australia ruled that the bankrupt insured could continue an action in his own name to recover the TPD benefit. Life insurers may need to adjust their claims' payment practices in light of the Berryman decision.