Insolvency Test Case Rules In Employees’ Favour

The High Court has delivered a landmark decision in prioritising employee entitlements in insolvency, irrespective of whether the company was trading in its own right or as a trustee, MyBusiness reported. Last week, the High Court dismissed an appeal in Carter Holt Harvey Woodproducts Australia Pty Ltd v The Commonwealth of Australia and Others [2019] HCA 20. Amerind Pty Ltd became insolvent in 2014, with $21 million in debts repaid to Bendigo and Adelaide Bank, leaving a receivership surplus of about $1.6 million. The Commonwealth of Australia had sought to claim the surplus to compensate $3.8 million in accrued wages and entitlements to former employees of Amerind under the Fair Entitlements Guarantee Scheme. Carter Holt, a creditor of Amerind, competed against the claim, submitting that that s 433 of the Corporations Act did not afford priority to the Commonwealth. Read more

Location