MK Builders Pty Ltd v 36 Warrigal Road Pty Ltd & Ors [2014] VSC 149

The decision is significant because it confirms that a payment of a dividend to a creditor does not necessarily extinguish the company’s claim for the balance in fact owing to it.

Korda v Australian Executor Trustees (SA) Ltd [2014] VSCA 65

In Korda v Australian Executor Trustees (SA) Ltd, the VSCA may have assisted the investors in a radiata pine managed investment scheme at the expense of trusts law orthodoxy.

The Court found that the appointment of voluntary administrators to a company constituted oppressive conduct under section 232 of the Corporations Act 2001 (Cth) in circumstances where it was part of a clear strategy by the controlling shareholder to gain control of the company’s business, to the exclusion of the minority shareholders.  This case provides some useful observations on the operation of section 232, particularly around action by a parent company “of the affairs of” a subsidiary. 

In the recent Victorian Supreme Court decision of Central Cleaning Supplies (Aust) Pty Ltd v Elkerton and Young (in their capacity as joint and several liquidators of Swan Services Pty Ltd (in liquidation))[1], the Supreme Court considered the issue of whether the Plaintiff's credit application signed by Swan Services Pty Ltd (Swan Services) before 30 January 2012 was a 'transitional security agreement' within the meaning of that term in the Personal Property Securities Act

The Victorian Court of Appeal recently held that a payment, disposition or grant of security by a company to a person on behalf of, or for the benefit of a director of the company, extends to a mortgage of land given by the company to a creditor of the director in consideration of a covenant by the creditor not to sue the director. 

As a result, insolvency practitioners now have stronger judicial guidance as to what constitutes a 'benefit' for the purposes of setting aside or varying voidable transactions, which should assist in recovering proceeds for unsecured creditors.

In Willmott Growers Group Inc v Willmott Forests Limited (Receivers and Managers Appointed) (In Liquidation) [2013] HCA 51, the High Court has confirmed that a liquidator of a landlord company has the power to disclaim a lease. The effect of the disclaimer is to terminate the leasehold interest of the lessee.

FACTS

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.

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).

In a decision handed down earlier today, in Willmott Growers Group Inc v Willmott Forests Limited (Receivers and Managers appointed) (in liquidation) [2013] HCA 51,  the majority of the High Court upheld the Victorian Court of Appeal’s conclusion that the liquidators of an insolvent landlord can disclaim a lease, thereby extinguishing the tenant’s leasehold interest.

Summary 

In the recent decision of Re Willmott Forests Ltd,1the Victorian Court of Appeal held that a liquidator could disclaim a lease under the Corporations Act (Act).