Relation back day changes
Section 588FE and 588FF of the Corporations Act 2001 (Cth) (Act) operate to make certain transactions by a company voidable within a prescribed period prior to the company entering liquidation/voluntary administration. The relation back day is the date by which the prescribed period begins whereby transactions entered into by the company may be considered void.
The amendments to the Act introduced by section 91 of the Insolvency Law Reform Act 2016 (Cth) provide clarity on the definition of “relation back day” where a company is wound up. In particular, the amendments clarify that in certain circumstances where the company has entered voluntary administration after an application to the Court is made to wind up the company, the relation back day will be the date the administrators were appointed and not the date of the Court application.
The tables below provide a high level overview of the reforms and the definition of “relation back day” in particular insolvency contexts which had not previously been identified in the Act itself.
CHANGES – DATE APPLICATION FILED WITH COURT
| Events | Relation Back day after ILRA | Change from before ILRA |
| Court application + Voluntary administration + Liquidation | Date application filed in Court | Arguably date administrators appointed |
| Court application + Voluntary administration + DOCA + Liquidation | Date application filed in Court | Previously date administrators appointed |
| Court application + Voluntary administration + Voluntary Winding Up | Date application filed in Court | Previously date administrators appointed |
NO CHANGES – DATE OF APPOINTMENT OF ADMINISTRATORS
| Events | Relation Back day after ILRA – no change from pre ILRA |
| Voluntary administration + Court application + Liquidation | Date Administrators appointed |
| Voluntary administration + Court application + DOCA + Liquidation | Date Administrators appointed |
| Voluntary administration + Voluntary Winding Up | Date Administrators appointed |
| Court application which is dismissed/withdrawn + Voluntary administration + Voluntary Winding Up | Date Administrators appointed |
| Court application which is dismissed/withdrawn + Voluntary administration + DOCA + DOCA terminated + Voluntary Winding Up | Date Administrators appointed |
CHANGES – DATE THE APPLICATION WAS FILED WITH THE COURT
| Events | Relation Back day after ILRA – no change from pre ILRA |
| Court application + Voluntary administration + DOCA + DOCA terminated + Voluntary Winding Up | Date application filed in Court |
| Court application + Liquidation | Date application filed in Court |
Click here to access a PDF version of the above tables.
Authored by:
Susan Forrest, Partner
Marikki Watego, Solicitor
Get in touch
- Susan Forrest
- Partner, Brisbane
- +61 7 3231 1586
- susan.forrest@gadens.com
