Impact on mortgagees of a bankruptcy trustee’s disclaimer of mortgaged land
A mortgagee may be faced with a situation where the mortgagor becomes bankrupt and the trustee, in which the property then vests, disclaims the mortgaged property. We outline the process a mortgagee is required to follow when a mortgaged property has been disclaimed and summarise the key issues considered by the Court. Click below to […]
ReadmoreATO on the watch after liquidators claw back funds despite a Deed of Company Arrangement
In the matter of Western Port Holdings Pty Ltd (receivers and managers appointed)(in liq) [2021] NSWSC 232, Deed Administrators who were subsequently appointed Liquidators of Western Port Holdings Pty Ltd (the Company) clawed back over $2 million worth of payments made to the Australian Taxation Office (ATO) whilst the Company was subject to a Deed […]
ReadmoreFederal Court approves administrators’ entry into funding deed to trade company pending sale
Section 90-15 of the Insolvency Practice Schedule (the IPS) confers on Courts wide powers to adjust rights related to companies in external administration. Here, the administrators of a mining group obtained orders approving their entry into a deed to fund the ongoing operation of the group pending sale and limiting their liability under the deed […]
ReadmoreFederal Court considers whether bankrupt’s property should vest in mortgagees following disclaimer by bankruptcy trustee
The Federal Court’s recent decision in Kellendonk[1] concerned a $350,000 loan made by the applicants, Mr and Mrs Kellendonk, to Ms Maria Jasienska-Dudek to help her buy a property in Midland, Western Australia (Property). Ms Jasienska-Dudek defaulted under the loan agreement and the parties subsequently entered an informal agreement which, after Ms Jasienska-Dudek became a […]
ReadmoreIt’s a brave new world: NZ and Australian courts join to determine a high profile, cross-border insolvency
Cross-border insolvency has ventured into new territory as a judgment is released from the first contemporaneous sitting of the Federal Court of Australia and the High Court of New Zealand. Liquidators originally sought separate directions from each Court regarding the distribution of funds from the insolvency of Halifax New Zealand Ltd (Halifax NZ) and Halifax […]
ReadmoreDrawing Inferences – the extent that evidence can be inferred
In Ross, in the matter of Print Mail Logistics (International) Pty Ltd (in liq) v Elias,[1] the Federal Court considered the extent to which a Jones v Dunkel[2] inference can be made. There were three factual issues to be determined by the Court and both parties relied heavily on inferences to prove their case. Ultimately, […]
ReadmoreThe ‘Constitutional Imperative’ – a bankrupt’s right to review a sequestration order
In Bechara v Bates,[1] the Full Federal Court reminds us of the proper procedure for review of a sequestration order made by a registrar. This case raises an important point about bankruptcy practice and procedure in the Federal Circuit Court and the Federal Court. Sometimes described as a ‘constitutional imperative’, a bankrupt is entitled to […]
ReadmoreIf you have a need for speed, don’t allow this to compromise the correct registration of your PPSR security interest
In Rohrt, in the matter of Rose Guerin and Partners Pty Ltd (in liq) v Princes Square W24NY Pty Ltd,[1] the Federal Court of Australia held that as BMW failed to correctly register their security interest in a 2017 Ferrari GTC4 Lusso (by registering against the ACN of a corporate trustee but not against the […]
ReadmoreThe Federal Court takes aim in Gunns – and extinguishes the Peak Indebtedness Rule in Australia
On 10 May 2021 in Badenoch Integrated Logging Pty Ltd v Bryant, in the matter of Gunns Limited (in liq)(receivers and managers apptd)[i] the Full Court of the Federal Court of Australia abolished the application of the Peak Indebtedness Rule to a running account ‘single transaction’ under section 588FA(3) of the Corporations Act 2001 (Cth) […]
ReadmoreUlterior motives and personal interests lead to setting aside of Public Examination Order
In ACN 004 410 833 Ltd (formerly Arrium Limited) (in liq) v Michael Thomas Walton & anor,[1] the New South Wales Court of Appeal considered the purpose for which public examination summons and production of documents can be ordered. Drawing on authorities that the predominant purpose of a public examination should be for the benefit […]
Readmore“Don’t let perfect be the enemy of the good”: Court approves pragmatism in liquidators entering into Deed of Settlement
In Re Octaviar Ltd,[1] the Supreme Court of Queensland has given a recent example of a settlement considered too ‘good’ to approve, even while noting its failure to achieve perfection. Where a settlement will significantly progress two very lengthy liquidations and save value for creditors by avoiding further costs and delay, the Court is prepared […]
ReadmoreOverturning Orders for Possession on appeal – beware of an appellant’s new evidence and new contentions
In De Pasquale v ASCF Managed Investments Pty Ltd,[1] an appeal was brought against an Order for Possession made by a Master of the Supreme Court of South Australia on 19 December 2019 against the appellants’ property. In the appeal, Justice Livesay of the Supreme Court of South Australia considered the following: whether it was […]
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