In our October 2010 insolvency legal update, we reviewed the case of South Canterbury Finance Ltd v Nielsen, where the Court found in favour of second mortgagee, SCF, on the interpretation of a deed of priority.  That case was appealed successfully to the Court of Appeal by the first mortgagee, ASB.  This update provides a brief review of the Court of Appeal's reasoning.

In Official Assignee v Spencer, Mr Spencer's bankruptcy period was extended from three to six years due to his conduct and failure to comply with his obligations under the Insolvency Act 1967 (Act). 

Mr Spencer was adjudicated bankrupt for the second time in August 2007 and was due to be discharged from bankruptcy in 2010.  However, the Official Assignee objected to Mr Spencer's discharge and asked the Court to exercise its discretion and decline to order the discharge.

In Grant v Commissioner of Inland Revenue, the Court of Appeal took little time to uphold a High Court decision that a deed of company arrangement (DOCA) under Part 15A of the Companies Act 1993 was void.

At the creditors meeting, the DOCA had been approved by the majority of creditors in number. Nevertheless, this did not constitute 75% of creditors in value. Mr Grant, as chair of a creditors' meeting, purported to exercise a casting vote in favour of the DOCA in order for it to be approved. 

Managh v Morrison and Ors involved an application by a liquidator to set aside a transaction pursuant to section 292 of the Companies Act 1993.  Approximately one year before liquidation the company assigned causes of action against a firm of solicitors and a real estate agent to a trust associated with the company's director.

The recent case of Re Armitage, ex parte Established Investments Limited (in liquidation) considered an objection by the Official Assignee to Mr Armitage's automatic discharge from bankruptcy. 

Levin v Rastkar involved an appeal against a High Court decision dismissing an application by the liquidators of Western Clothing Limited to set aside several transactions by Western alleged to be voidable under section 292 of the Companies Act 1993 (in its previous form).  

In our legal update on insolvency law issued in July 2010 we commented on the High Court decision of McKay v Toll Logistics (NZ) Limited. 

We reported on the first instance decision in this litigation last year (see here).  The New South Wales Court of Appeal recently delivered judgment on the liquidators' appeal.

Mr Petricevic is the former director of Bridgecorp and currently faces criminal charges of fraud that carry with them the possibility of a maximum of 49 years in prison.

Findings last week of criminal liability in the Nathans Finance case echo the Centro ruling from the Australian Federal Court last month and make it clear that directors must apply their own judgement in the exercise of their duties rather than simply relying on management and expert advice.