Why has the Australian government not yet decided on any further insolvency law changes for small business?
Australia MSE insolvency reform process seems to have halted, perhaps because of a poor reception to its January 2021 small company reforms, described as a ‘chimera of restructuring reform.’ Although consultation has proceeded on further small business reforms, including in personal insolvency, nothing has been announced. We suggest a range of reasons for this – […]
Employees’ loss of FEG redundancy payments through their misguided “acts of decency and loyalty” to assist
The AAT has described its decision confirming a lack of government assistance under fair entitlements guarantee (FEG) for “two dedicated, loyal, hardworking, long-term employees of a company which was placed into liquidation” as “both unfair and unjust” but one which had to be made because that was the legal outcome. The company’s business was sold […]
Service of insolvency documents by email
With law well into the process of change to accommodate electronic communications and dealings, following COVID-19 in particular, we should expect some legislative consistency and co-ordination. It turns out we shouldn’t. In insolvency law, communications with creditors are necessary but the costs of doing so can be prohibitive. Under the old ways, back in 2001, […]
Is bankruptcy a life and death issue?
I was startled to be reminded of a regular question in the well-known US General Social Survey whether contemplating or going bankrupt was something that might prompt a person to take their own life. I would like to think not, indeed bankruptcy has a positive protective and cleansing effect such as to try to avoid […]
Costs against ASIC in its [“illegal phoenix activity”] claim against a liquidator
ASIC has been unsuccessful in resisting a costs order against it in its “illegal phoenix activity” proceedings against a liquidator following Justice Greenwood’s earlier judgment pointing out “there is no such thing, per se, as ‘illegal phoenix activity’”. In fact, throughout the law, the word ‘phoenix’ appears only in some wildlife protection laws, and laws […]
Peak indebtedness and other insolvency law views from New Zealand
The decision of the Full Federal Court in Badenoch Integrated Logging v Bryant[1] agreeing with New Zealand’s view about the “peak indebtedness rule” that favoured liquidators’ preference recovery actions is currently being debated by insolvency lawyers and practitioners. As I have commented before, New Zealand case law often provides a useful external oversight of Australian […]
Deregistered companies – UK reforms and some Australian comparisons
The UK Insolvency Service is to be given powers to investigate directors of companies that have been dissolved, or in our terms, deregistered, in order to prevent misuse of the process, it is said, “as a method of fraudulently avoiding repayment of Government backed loans given to businesses to support them during the Coronavirus pandemic”.[1] […]
Australia’s limited insolvency reforms for small business
With our international trading partners recently meeting to examine ways to handle micro to small enterprise (MSE) insolvency impacted by COVID-19,[1] the Australian government – through the Treasurer and the Assistant Treasurer, Minister for Housing, and Minister for Homelessness, Social and Community Housing – has announced some partial reforms to “improve Australia’s insolvency framework for […]
Bankruptcy trustee independence
The Australian personal insolvency regulator and government trustee, AFSA, has produced a useful report – Practitioner Independence in the Personal Insolvency System Best Practice Report 2021. This article elaborates further on some independence issues and examples from the insolvency case law; looks at the position of AFSA and the Official Trustee; and notes some potential re-thinking […]
An insolvency safe harbour based on culture and tradition?
For years Australia had no ‘safe harbour’ protection for directors from insolvent trading. In 2017, one was introduced, then three more, but a fifth has not been recommended. Australia’s lack of a ‘safe harbour’ protection from insolvent trading for directors changed in 2017 with the introduction of s 588GA of the Corporations Act, which protects […]
Australian lawyers attending UNCITRAL’s Working Group V on MSME insolvency – May 2021
UNCITRAL’s Working Group V – Insolvency is reconvening this week 4-7 May 2021, following its last meeting in December 2020. Australian lawyers are attending, remotely, on behalf of UNCCA. While Australia does not usually attend WGV, Australian representatives from UNCCA on behalf of Lawasia are attending, remotely – Assistant Professor Casey Watters of Bond University […]
World Bank insolvency principles – how does Australia compare?
The World Bank has released its updated Principles for Effective Insolvency and Creditor/Debtor Regimes (the Principles), emphasising the needs of micro, small and medium enterprises (MSMEs) in the context of COVID-19. These are said to be a “distillation of international best practice on design aspects of [insolvency] systems”, based on accepted core features of insolvency […]
Penalties and bankruptcy
A person in breach of consumer protection laws concerning the hire of 4 wheel drive vehicles has been ordered to pay a large penalty despite the fact she is bankrupt. Some doubts about the law on this, based on the Australian High Court decision in Foots, and the later UK Supreme Court decision in Nortel, […]
The UK’s Technical Guidance for Official Receivers – a published resource for Australian practitioners and regulators
The Insolvency Service in the UK has issued an updated version of its Technical guidance for Official Receivers[1] in administering corporate and personal insolvencies. Australia has no real equivalent, certainly in corporate insolvency, and useful practice and legal insights and comparisons can be made. The UK Official Receiver’s primary function is to administer and investigate […]
Litigation representatives and bankruptcy
A daughter’s evidence that her mother’s litigation and bankruptcy proceedings had become her mother’s “entire life” with her house “full of stacks of paper” and and that the mother had expressed suspicions that her trustee was bugging her phone was not enough to allow a litigation representative to be appointed to the mother’s legal proceedings. […]
NSW registered clubs (law) in trouble, again
What are described as the “arbitrary powers of the NSW Independent Liquor & Gaming Authority (ILGA)” are the subject of a recent critical comments by Insolvency News Online (INO).[1] Those powers have also been the subject of comment here,[2] not as to their claimed arbitrary nature, but as to why they exist at all. They […]
Virgin Airlines – special leave to appeal granted by the Australian High Court on a matter of the interpretation of the Cape Town Convention
Further to my report of 4 April 2021 below, the High Court of Australia has granted special leave to appeal on a question of the interpretation of the Cape Town Convention as it applies to the voluntary administration of Virgin Airlines in Australia. Leave to a party to appeal to the High Court is granted […]
The new Attorney-General and business bankruptcies
As the new Attorney-General, Senator Michaelia Cash[1] will find her portfolio encompasses the current law reform debate about whether and for how long there should be a period of restriction on a person after the date of their bankruptcy, as opposed to after their corporate failure. Senator Amanda Stoker[2] as Assistant Minister to the Attorney-General, […]
Move bankruptcy from the Attorney-General to Treasury?
In light of the Attorney-General’s need to transfer some matters of his responsibility, a worthy area to transfer is the law and policy of personal insolvency, or ‘bankruptcy’ to most. A matter of economics At the moment, corporate insolvency – company liquidations and the like – is handled broadly as a matter of economic policy […]
Neither a borrower nor a lender be – at least to a friend or a relative …
A guarantee given by a mother to a friend of her son for the son’s business debts ended up in court. There are lessons to again be learned from the outcome; and some law reform suggestions to be considered for SME businesses. Although many people operate their small business through a limited liability company, they […]
Appeals from sequestration orders made by registrars – continued
An appeal from a sequestration order made by a registrar in 2016 is being heard, in 2021. In bankruptcy litigation between a Ms Bechara and a Mr Bates various courts have been found to have made errors in the process of dealing with a purported ‘appeal’ by Bechara from a sequestration order made against her […]
Review of the English Insolvency Rules 2016
The 2016 insolvency rules of England and Wales are being reviewed, in accord with a statutory requirement to do so by 2022. A report on the review must be published within five years of 6 April 2017, the date that the Rules came into force. Australia also (tries to) have statutory reviews of its insolvency […]
‘The Vanishing Criminal – Causes of Decline in Australia’s Crime Rate’ – a book review
This is a very interesting and useful book, trying to explain why Australia’s crime rate has fallen in many areas, and continues to do so. That fall is also found in other comparable countries – Canada, New Zealand and more. I attended the launch of the book by its authors – Don Weatherburn and Sara […]
Double suspension as a liquidator and as a trustee
An experienced Australian insolvency practitioner (IP) has had his right to practise as a liquidator suspended by a Court for 3 years following a finding that, in 2010, he had fabricated documents and forged signatures in the context of an ASIC investigation with the intention of misleading ASIC. This has led to his right to […]
