This week’s TGIF considers David Djordjevich v Richard Trygve Rohrt in his capacity as liquidator of ACN 091 518 302 Pty Ltd (in liq) ACN 091 518 302 [2021] VSC 178, a Victorian Supreme Court decision that focuses on the circumstances in which a court will order an inquiry into the conduct of a liquidator and the interests that such an inquiry is intended to serve.

Key takeaways

Victorian Supreme Court rules that the appointment of an administrator was invalid, void and of no effect because the directors did not genuinely believe the company was insolvent and appointed the administrator for an improper purpose.  

BACKGROUND

This week’s TGIF looks at a recent decision of the Victorian Supreme Court, where a winding up application was adjourned to allow the debtor company to pursue restructuring under the recently introduced small business restructuring reforms.

Key takeaways

Hudson v Signalla [2015] FCAFC 140 confirms that leave of the court is not required under s58(3) Bankruptcy Act 1966 (Cth) to sue a former bankrupt in respect of what was a provable debt in the bankruptcy, after an annulment of the bankruptcy by way of a composition under ss73 and 74 of the Bankrupcty Act.

BACKGROUND

A bankrupt had his bankruptcy annulled by way of presentation of a composition that was accepted by participating creditors (Composition). 

This week’s TGIF examines a decision of the Supreme Court of Victoria in which an unfair preference claim was defended on the basis that the liquidators had been invalidly appointed and lacked standing to continue the proceeding.

Key takeaways

Victorian Supreme Court confirms that an application to set aside a statutory demand can be served electronically, and the Court’s evaluation of a genuine dispute concerns the establishment of a genuine level of claim, and not the likely result of the claim.

Background

This week’s edition of TGIF considers the landmark decision of the High Court in BMW Australia Ltd v Brewster; Westpac Banking Corporation v Lenthall[2019] HCA 45 and what it might mean for insolvency practitioners.

Decision

640 Elizabeth Street Pty Ltd (in liq) & Ors v Maxcon Pty Ltd [2015] VSC 22 confirms that the granting of security by a company to avoid a proceeding against a related company will not necessarily constitute an “uncommercial transaction”.

BACKGROUND

This week’s TGIF considers a recent application for injunctive relief by a bankrupt to restrain liquidators who initiated his examination from continuing to retain their lawyers, given the firm had previously represented the examinee.

What happened?

On 8 August 2016, Richard Nash became bankrupt, on his own petition, and was later served with a summons for examination and orders for the production of books and records.

The recent Victorian Supreme Court decision of Le Roi Homestyle Cookies Pty Ltd (in liquidation) v Gemmell [2013] VSC 452 determined that a person who does not claim privilege when being publicly examined by a liquidator will not be allowed to avoid pleading and providing discovery in subsequent civil proceedings on the basis that complying may expose them to a civil penalty or criminal sanction.

Facts

The defendants were alleged former de facto and shadow directors of Le Roi Homestyle Pty Ltd.