New Zealand’s insolvency practitioner regulation regime, from 1 September 2020
A new insolvency practitioner regulation regime for New Zealand will start on 1 September 2020, according to RITANZ, only a short time after its intended July date, the delay caused by COVID-19. Under the Insolvency Practitioners Regulation Act 2019, the NZ insolvency profession will be subject to mandatory licensing for the first time. Practitioners are […]
Liquidators’ remuneration – “most businesses do not charge out that way”
A Judge apologised at the start of his judgment for the length of time he took to determine liquidators’ remuneration. On reading the judgment, and the tedium involved in the assessment, one can understand why he took time: six minute units of opening mail, clearing in-trays and filing paperwork, receiving payment instalments and explaining work […]
A liquidator who stood to lose fees if his proceedings were not able to proceed
A company liquidator had unpaid fees amounting to $352,383 in his administration of a liquidated company – All Class – which had been left with no assets. He brought Federal Court proceedings against an insurer – Chubb – for payment of a claim in relation to theft by the company’s employees. His solicitors and counsel […]
Liquidator’s registration cancelled by ASIC
A company liquidator has had her registration cancelled following a decision by a statutory disciplinary committee that she had improperly used her position, falsified books and misappropriated over $238,500 from four liquidations over a period of time and was thereby not a fit and proper person to remain registered. See Report of committee convened to […]
Powers of attorney – South Australian law reform initiative
The South Australian Law Reform Institute (SALRI) is examining the role and operation of Powers of Attorney in SA and whether the current laws that apply to Enduring Powers of Attorney (EPOAs) are effective in practice to protect vulnerable individuals, especially from financial abuse. SALRI is an independent non-partisan law reform body based at the Adelaide […]
How is Australia’s safe harbour from insolvent trading working? some survey results
An article by Professor Ian Ramsay and Associate Professor Stacey Steele has just been published reporting on survey responses of ARITA members about the Australian s 588GA safe harbour regime. Section 588GA offers directors protection from personal liability for s 588G insolvent trading. The survey was taken at around the two-year anniversary of the introduction […]
Gold company director cards?
Directors of companies will finally have an easy way of keeping their company details up to date when the director identity number – the DIN – becomes available, though not until next year. This, and many other features, will be available under the new Commonwealth business registry regime, to be administered by the Australian Taxation […]
Insolvency litigation funding – too much hand-holding?
A joint parliamentary inquiry into class actions and litigation funding has set down public hearings throughout July 2020.[1] The inquiry and some of its submissions indirectly prompt some insolvency law reform ideas. A UK inquiry into the impact of the Jackson reforms on insolvency litigation funding is explained in an earlier comment. The original “class […]
Insolvency Law Bulletin – June 2020
The latest issue of the Insolvency Law Bulletin has just appeared containing a wide range of topics in personal and corporate insolvency, with the COVID-19 impact in Australia and Internationally also being addressed. One is on New Zealand’s response to the crisis – New Zealand’s new temporary Safe Harbour and Business Debt Rehabilitation Scheme: measures […]
Is the Australian insolvency system insolvent?
That is broadly the topic of a paper tentatively titled “the Australian insolvency system (in voluntary administration) – the s 439A report” soon being presented to an eminent local and international insolvency gathering. And as with Virgin Airlines, should government support be provided, as it is in the UK and New Zealand, assuming we rate […]
Lawyers as directors of insolvency companies – restrictions on right to practise
Queensland lawyers who are directors of an insolvent company or an incorporated legal practice may have their right to practise challenged. Most lawyers in Australia are regulated under the Legal Profession Uniform Law scheme, with consistent rules and policies applied to all lawyers within the scheme. Queensland, a state, which presently has its borders closed […]
Leave to proceed against a bankrupt; but with questions about the legal representation
In an employee’s otherwise ordinary unpaid wages case the respondent employer went bankrupt mid- hearing and the employee’s legal representation was found by the Judge to be questionable. The matter concerned a Ms Ross’ employment at the Bombora Café, located, as the Judge describes, at Norah Head “sandwiched between Tuggerah Lake, Soldiers Point and Cabbage […]
Regulation of insolvency practitioners by accounting bodies
The outcomes of co-regulation of UK insolvency practitioners are explained in a May 2020 report of the ICAEW, with some comparisons drawn with the regulation by the Australian equivalent, CAANZ. ARITA has recently referred to the fact that Australian accounting bodies CAANZ and CPA (but not IPA) “undertake practice reviews of liquidators [who] hold practi[s]ing […]
Australian Small Business Ombudsman’s ‘COVID-19 Recovery Plan’ – ‘turnaround and insolvency’
The Australian Small Business and Family Enterprise Ombudsman has issued a COVID-19 Recovery Plan, of May 2020. Within that the Ombudsman makes some recommendations about ‘turnaround and insolvency’, which this article examines. Small business As the Ombudsman says, there are around 3 million small businesses in Australia – 98% of all Australian businesses – with […]
Behind the UK government insolvency reforms
The Corporate Governance and Insolvency Bill has been introduced into the United Kingdom Parliament and is due for debate on 3 June. This article in its Part A examines details of the Bill; in Part B reviews the Bill’s April 2020 impact assessment as to how it is expected to assist; and in Part C […]
Executing a search warrant for the property of an insolvent company
Attempts to execute a liquidator’s s 530C search warrant for a large prime mover vehicle led to threats, a ‘long chain’, a baseball bat and a dark sedan. Unfortunately, the vehicle identification details in the warrant were incorrect. The attempt to execute the warrant The Judge set out the chain of events, of which this […]
Re-naming rights of the bankruptcy regulator
“When I use a word, it means just what I choose it to mean—neither more nor less”.[1] Bankruptcy law allows the regulator to rename unclear or inconvenient legal words in the Act, or to add requirements not required by the law. The ‘declaration of intention to present a debtor’s petition’ under s 54A of the […]
Australian personal insolvencies falling in number
The number of personal insolvencies in Australia have been falling since the start of the corona crisis, which some might find odd. But it is consistent with past trends that show a lag between a financial downturn and its impact on the number of insolvencies. There is also the 6 month stay, in effect, on […]
Who is an employee, and who is the employer? Common questions in insolvency administrations
Whether a person is an employee or a contractor, and if an employee, who is the employer, can be important, in many contexts, including when the employer or a corporate group become insolvent. Insolvency law offers employees particular payment priorities, and because those employees may also be protected by the FEG scheme, the status of […]
Important rules in reviewing registrars’ sequestration orders
Chief Justice James Allsop of the Federal Court of Australia has written, both in his judgments and extra-judicially,[1] of the fundamental importance of personal bankruptcy law in our legal system, and as to the ‘human consequences that attend the change of status and the change of lives of people who are made bankrupt’.[2] That importance […]
Preferences paid by company under a DOCA – based upon a reading of the section
A company under a 2013 deed of company arrangement made payments to the Deputy Commissioner of Taxation. The deed was terminated in 2017 and the company went into liquidation. The liquidators successfully recovered the payments from the DCT as unfair preferences. Justice Middleton of the Federal Court of Australia applied statutory interpretation principles in coming […]
Crime and insolvency, Australian style
There is not much correlation between crime and insolvency, in my researches, certainly in comparison with crime in the world of solvent individuals and companies. But when a bankruptcy or liquidation does reveal criminal conduct, Australian law’s reporting requirements are variable. Australian Criminal Investigations Commission Despite my researches, the Australian Criminal Investigations Commission has expressed […]
Feminist input to the theories of insolvency?
For those who would like to see how it is said that ‘feminist ideals’ are met in one or other of the various theories of insolvency, see Legal Feminism and Insolvency Theory: A Woman’s Touch? by Dr Lézelle Jacobs.[1] The argument is that feminist ideals are ones of ‘inclusion, connectedness, social justice and the flattening […]
Ponzi investors suing ANZ Bank for their losses
The ANZ Bank has failed to have struck out a claim against it by investors in what was the largest Ponzi scheme New Zealand’s history – Ross Asset Management Limited (RAM). It collapsed in 2012 and its operator went to jail. Losses were around NZ$115 million with at least 700 victims, including many who were […]