Protecting Creditors - Voiding Transactions using section 37A of the Conveyancing Act 1919 (NSW)

On 28 September 2018, the NSW Supreme Court in Greenwood Futures v DSD Builders (No. 2) [2018] NSWSC extended a stay of a judgment in favour of a contractor based upon a Security of Payment Act NSW (SOPA) adjudication on the basis that the contractor was at risk of insolvency. This is consistent with previous decisions of the court in similar circumstances.

Background Facts

This week’s TGIF examines a recent decision of the New South Wales Court of Appeal in Hosking v Extend N Build Pty Limited [2018] NSWCA 149, which considered whether payments made by a third party to an insolvent company’s creditors could be recovered by the liquidator as unfair preferences.

What happened?

This week’s TGIF considers In the matter of Arrium Limited [2018] NSWSC 747 in which the Court granted creditors access to documents produced in public examinations.

What happened?

Introduction

The New South Wales Supreme Court recently confirmed that an insolvent construction contractor is not able to immediately enforce its right to payment of an adjudication decision under the NSW Security of Payment legislation (Building and Construction Industry Security of Payment Act 1999 (NSW)) against another party which has an offsetting claim.

This week’s TGIF considers the recent decision of the NSW Court of Appeal in the Arrium liquidation, where the Court set aside examination orders sought for the purpose of a possible shareholder class action.

Key takeaways

A recent saga played out in the Supreme Court of NSW illustrates why the dispute resolution procedures available to strata owners under the Strata Schemes Management Act 2015 (NSW) make strata title superior to company title.

This is because company title property owners have only the blunt instruments of liquidation and administration available under the Corporations Act 2001 (Cth).

This article analyses how poorly the Corporations Act 2001 (Cth) is equipped to handle disputes between owners of company title properties.

It is said that Sisyphus, the ancient king of Ephyra, is destined for eternity to roll a boulder uphill, only to watch it roll down again. Perhaps Sisyphus should have been a liquidator. One could certainly forgive the liquidator of Aberdeen All Farm Pty Ltd (In Liq) (Aberdeen) for thinking so.

After taking appointment in February 2018, Aberdeen has been embroiled in Supreme Court litigation, by which certain parcels of land were claimed to have been held on trust for Barry McWhinney as a result of an alleged fraud.