On 22 May 2012, ASIC released its first annual report of its activity surrounding the regulation of registered liquidators in Australia. According to ASIC, this is part of its recent focus on the insolvency industry and its attempt to promote confidence in the market.
For more information, you can access the full report.
Friday, June 1, 2012
Thursday, May 31, 2012
Universal cross-border enforcement of insolvency proceedings fails to take flight in Ireland
In February this year, the Supreme Court of Ireland handed down the decision of Flightlease (Irl) Ltd (In Vol Liq) & Cos Act [2012] IESC 12 which considered the enforceability of foreign insolvency related judgments in Ireland. The Supreme Court confirmed that a judgment from an action in personam will only be enforceable if, at the time the proceedings were instituted, the judgment debtor was present in the foreign country or if they submitted to the jurisdiction of the courts of the foreign country. The court rejected an application to accept the Canadian 'real and substantial connection' test between the proceedings and the country of enforcement.
Although not the focus of the decision, the Supreme Court decided not to adopt the principle of universal enforceability of insolvency proceedings underpinning the UK Court of Appeal decision in Rubin & Anor v Euro Finance SA [2010] E.W.C.A Civ (see our November 14, 2011 blog entry).The Rubin decision and a later decision involving the enforcement of an Australian unfair preference judgment obtained against foreign defendants who did not appear in the Australian proceedings (New Cap Re v A.E.Grant [2001] EWCA Civ 971 - see our April 27, 2011 blog entry) are the subject of appeals which will be heard by the UK's highest Court of Appeal - the Supreme Court - later this year. In Ireland at present, the common law has not expanded in the way that it has (subject to the appeals just mentioned) in the UK and the Irish common law continues to exclude the enforceability of foreign bankruptcy and insolvency judgments. However, in a separate judgment, Mr Justice O'Donnell did not rule out the possibility of the Supreme Court developing such a principle in the future.
Although not the focus of the decision, the Supreme Court decided not to adopt the principle of universal enforceability of insolvency proceedings underpinning the UK Court of Appeal decision in Rubin & Anor v Euro Finance SA [2010] E.W.C.A Civ (see our November 14, 2011 blog entry).The Rubin decision and a later decision involving the enforcement of an Australian unfair preference judgment obtained against foreign defendants who did not appear in the Australian proceedings (New Cap Re v A.E.Grant [2001] EWCA Civ 971 - see our April 27, 2011 blog entry) are the subject of appeals which will be heard by the UK's highest Court of Appeal - the Supreme Court - later this year. In Ireland at present, the common law has not expanded in the way that it has (subject to the appeals just mentioned) in the UK and the Irish common law continues to exclude the enforceability of foreign bankruptcy and insolvency judgments. However, in a separate judgment, Mr Justice O'Donnell did not rule out the possibility of the Supreme Court developing such a principle in the future.
Wednesday, May 30, 2012
Administrator's consent or leave of the court not required to bring a shareholder derivative action
The Federal Court has delivered a decision clarifying the application of section 440D(1) of the Corporations Act. Under the provision, administrator's consent or leave of the court is required before an action is brought or proceeded with against a company under administration or in relation to any of its property.
In MG Corrosion Consultants Pty Ltd v Gilmour [2012] FCA 383, Justice Barker looked at the question of whether a derivative action brought by a shareholder on behalf of the company for breaches of director's duties was a 'chose of action' and fell within the category of 'in relation to any of the company's property' for the purpose of the section. Justice Barker found that the derivative action was not itself property, nor 'in relation to any of the company's property', and therefore the action did not require consent of the administrator or leave of the court to proceed.
The case confirms that the purpose of s440D is to ensure that where the company is the target of a proceeding or in some relevant way its property is the target of a proceeding, then that proceeding may not be begun or proceeded with, except with the administrator's written consent or with the leave of the court.
In MG Corrosion Consultants Pty Ltd v Gilmour [2012] FCA 383, Justice Barker looked at the question of whether a derivative action brought by a shareholder on behalf of the company for breaches of director's duties was a 'chose of action' and fell within the category of 'in relation to any of the company's property' for the purpose of the section. Justice Barker found that the derivative action was not itself property, nor 'in relation to any of the company's property', and therefore the action did not require consent of the administrator or leave of the court to proceed.
The case confirms that the purpose of s440D is to ensure that where the company is the target of a proceeding or in some relevant way its property is the target of a proceeding, then that proceeding may not be begun or proceeded with, except with the administrator's written consent or with the leave of the court.
Friday, May 25, 2012
Allens Presentation: Proofs of Debt and Voting at Creditors' Meetings in Voluntary Administrations
Partner Michael Quinlan recently presented with Lawyers Yu Zhang and Ben Friis-O'Toole from our Sydney office on the topic of Proofs of Debt and Voting at Creditors' Meetings in Voluntary Administrations.
The notes from their presentation are available at the Allens website.
The notes from their presentation are available at the Allens website.
Thursday, May 24, 2012
Appeal upheld: directors duties to creditors and creditors actions under the Corporations Act
The Queensland Supreme Court of Appeal has upheld an appeal which was mentioned in our 1 May 2012 blog post on the original decision.
On 18 May 2012, in Jarrod McCracken v Phoenix Constructions (Qld) Pty Ltd [2012] QCA 129, the Court of Appeal set aside the previous orders made by Cullinane J. The court held that s1324(10) of the Corporations Act 2001 (Cth), which provides that a court may grant damages in addition to or in lieu of an injunction sought to restrain conduct in contravention of the Act, did not empower the trial judge to award the damages claimed by Phoenix (a creditor) against Mr McCracken (as director).
The court construed s1324(10) in light of Part 9.4B of the Act, which provides that only ASIC or the corporation may seek compensation for a contravention of the Act. Accordingly, while s1324(1) incorporates a broad standing requirement enabling persons whose interests have been affected by conduct in contravention of the Act to apply for an injunction, s1324(10) does not empower a court to award damages of any nature in favour of every person who is entitled to apply for an injunction.
On 18 May 2012, in Jarrod McCracken v Phoenix Constructions (Qld) Pty Ltd [2012] QCA 129, the Court of Appeal set aside the previous orders made by Cullinane J. The court held that s1324(10) of the Corporations Act 2001 (Cth), which provides that a court may grant damages in addition to or in lieu of an injunction sought to restrain conduct in contravention of the Act, did not empower the trial judge to award the damages claimed by Phoenix (a creditor) against Mr McCracken (as director).
The court construed s1324(10) in light of Part 9.4B of the Act, which provides that only ASIC or the corporation may seek compensation for a contravention of the Act. Accordingly, while s1324(1) incorporates a broad standing requirement enabling persons whose interests have been affected by conduct in contravention of the Act to apply for an injunction, s1324(10) does not empower a court to award damages of any nature in favour of every person who is entitled to apply for an injunction.
Thursday, May 17, 2012
Plans to reform and modernise the insolvency framework
The Parliamentary Secretary to the Treasurer has announced the release of draft regulations that will implement a key part of the Federal Government's plans to reform and modernise the Australian Insolvency framework by improving access to the General Employee Entitlements and Redundancy Scheme (GEERS).
For more information, see the media release on Parliamentary Secretary's web page.
For more information, see the media release on Parliamentary Secretary's web page.
Tuesday, May 15, 2012
'Circumstances giving rise' to a claim: when is a creditor not a creditor?
An article written by Allens Partner Michael Quinlan, Lawyer Mitch Riley and Summer Clerk Alistair Oakes has been published in the May 2012 edition of the Company & Securities Law Journal (2012) 30 CS&LJ 188.
The article, titled 'Circumstances giving rise' to a claim: when is a creditor not a creditor?, looks at two recent New South Wales decisions that clarify the requirements for claims to be caught by a deed of company arrangement or provable in liquidation under sections 444D and 553(1) of the Corporations Act 2001 (Cth), respectively. It is worth a read!
The article, titled 'Circumstances giving rise' to a claim: when is a creditor not a creditor?, looks at two recent New South Wales decisions that clarify the requirements for claims to be caught by a deed of company arrangement or provable in liquidation under sections 444D and 553(1) of the Corporations Act 2001 (Cth), respectively. It is worth a read!
Subscribe to:
Posts (Atom)
Posts
