Australia has an Insolvency Law Reform Bill in Parliament and plans for more change further down the track in the form of recommendations from the Australian Productivity Commission, which the Australian Government has signalled it will adopt.
These developments will be of interest to New Zealand insolvency practitioners, company directors and creditors. We summarise the proposed changes and comment briefly on the possibility of similar reform in New Zealand.
Insolvency Law Reform Bill
As New Zealand inches sloth-like toward a more regulated regime through the Insolvency Practitioners Bill, introduced in April 2010 and yet to have its third reading, Australian court decisions may become more relevant here.
After regulation, our two systems will still be different but less so than they are now, and already Australia provides a pointer to some of the issues which may arise here.
With that in mind, we have identified the top six insolvency law developments in Australia as we see them.
It has become our recent practice to dust off the crystal ball and look ahead to what we expect will be the ‘big five’ insolvency issues.
Below is a retrospective assessment of how we did last time and our best guess as to what will dominate the next 12 months.
The big issues for 2013
Our ‘top five’ picks for last year were:
In brief - Court sets aside DOCA in Helenic v Retail Adventures
The NSW Supreme Court has recently set aside a deed of company arrangement (DOCA) on the basis that it was prejudicial to creditors who voted against it. The court appointed liquidators to the company.
Declaration of interest: CBP Lawyers acted for the plaintiffs in the case discussed in this article and also represent a large number of unsecured creditors of Retail Adventures Pty Ltd (Administrators Appointed).
In Madsen-Ries v Rapid Construction Ltd [2013] NZCA 489, the Court of Appeal considered an appeal concerning a liquidator's attempt to have a payment set aside.
In our September 2012 insolvency update, we reported on Re Willmott Forests Ltd [2012] VSC 29, where the Victorian Court of Appeal found that a leasehold interest in land is extinguished by a liquidator's disclaimer of the lease pursuant to section 568(1) of the Australian Corporations Act 2001 (Cth).
On 11 October 2013, the Trans-Tasman Proceedings regime will come into effect. The Trans-Tasman Proceedings Act 2010 aims to streamline the process for resolving Trans-Tasman civil proceedings, with the intention of reducing costs and improving efficiency in enforcing Australian judgments in New Zealand.
The first significant decision1 under the Australian Personal Properties Securities Act 2009 has followed New Zealand and Canadian law.
The case involved competing claims by a general security holder and a lessor to three civil construction vehicles located in the Northern Territory.
The relationship between the parties
It is quite a thing for the law to remove from owners the rights normally associated with ownership and to confer them on receivers.
Which is why, although receivers are allowed considerable discretion in the exercise of their duties, they are also subject to oversight by the courts.
So how much freedom of manoeuvre do they have, and when will the court intervene? We look at a recent decision1 in the Australian Federal Court and consider its relevance for New Zealand insolvency practitioners.
Several issues of far-reaching significance in the world of restructuring and insolvency will be decided by the courts, and by Parliament, this year.
Some have yet to surface but others are already in the pipeline.
We look at what we consider to be the “top five”.
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