ASIC’s data – the sale is off; now for some decisions….
The government has announced that it is not proceeding with the private sector bids to upgrade and operate ASIC’s registry functions. The bids were said not to have delivered “a net financial benefit for the Commonwealth”. Indeed, though how the government measured that benefit in the first place is problematic. This outcome was expected in light […]
What insolvency practitioners and lawyers and regulators need to know before too long …
The new insolvency reforms commence in about 9 weeks, on Wednesday 1 March 2017, under the Insolvency Law Reform Act 2016. This is a perspective on how the new laws will affect you as a trustee, a prospective trustee, a lawyer, a professional body, and a regulator. These March 2017 reforms primarily concern the […]
Review of APES 330 – Insolvency Services
When the Accounting Professional & Ethical Standards Board (APESB) updates APES 330 – Insolvency Services to take account of the new insolvency laws, it may need to give guidance on the responsibilities of accountants sitting on disciplinary committees and on their handling and use of confidential disciplinary information. The APESB originally issued APES 330 in September 2009. Since […]
Are accountants, and lawyers, prepared for NOCLAR?
The APESB has released a draft of new section 225 of the Code of Ethics for Professional Accountants, APES 110, for comment by 15 March 2017. This section deals with NOCLAR, “non-compliance with laws and regulations”, and the obligation on an accountant to report or respond to that non-compliance detected in a client or third party. […]
Prepacks – useful for law and accounting firms going under?
ASIC was recently asked in parliament for its views on “prepacks”, or pre-packaged insolvency administrations, with understandably cautious responses given. A law reform recommendation to allow pre-appointment sales remains with government. When or if it comes to decide, the government will need to see how other countries have progressed on this issue, with the possibility […]
Leave to sue despite a cross-border insolvency stay
Leave has been given by the English High Court for a claimant to continue proceedings against STX, a Korean ship building company despite its entry into bankruptcy protection under Korean insolvency law. The proceedings were well advanced and raised complex issues where English law was not clear – as to the legality of ‘side agreements’ […]
Sharing contempt penalties with liquidators and trustees
New Zealand courts will divide up fines imposed on directors or bankrupts for contempt for failure to assist insolvency practitioners, half going to the government and half to the practitioner, in recognition of the need to compensate the estate for the time and cost occasioned by the conduct on which the finding of contempt is […]
Senator Williams and the Finnish model of insolvency
A group of small insolvency practitioners has had raised in parliament its project aiming at a universal and consistent approach to the insolvency reforms commencing in 2017, described by Senator John Williams as “an industry first”. The need for insolvency to adopt efficient computer based processes was raised in my earlier comment, saying that now that there […]
UNCITRAL’s 50 Years – Cross-border insolvency of corporate groups; recognition of insolvency judgments – UNCCA
A conference in celebration of the 50th anniversary of UNCITRAL was held in Brisbane on 2 December 2016. Among other issues discussed was the UNCITRAL meeting in Vienna commencing 12 December 2016 of Working Group V which is developing a code for the cross-border insolvency of corporate groups; and for the recognition of foreign insolvency […]
Employees’ super – why trust the employer?
The Economics References Committee is to report by 22 March 2017 on various issues concerning the non-payment of superannuation by employers for their employees. The superannuation guarantee charge (SGC) is levied on employers who fail to make payment of superannuation contributions to their employees’ designated funds. A Melbourne University report, discussed below, reveals that […]
Red Tape Committee and the words of Montesquieu
Montesquieu’s words from the 18th century – “les lois inutiles affaiblissent les lois nécessaires” – are often quoted in the modern context of the need to reduce “red tape”. That is, the idea of “useless laws weakening the necessary ones” is said to be an impact of too much red tape clutter in our laws that only […]
Another new co-regulation regime for insolvency practitioners – NZ, following the UK and India
Just as India has introduced co-regulation of its new breed of insolvency practitioners, so has New Zealand acted on a recent recommendation to introduce a co-regulatory licensing regime, both along the English model. Australia is now the odd country out in this area, despite the changes commencing in March 2017. This follows a recent recommendation in […]
India’s new insolvency professionals regime
A major new insolvency regime commenced in India in May 2016. It introduces co-regulation of insolvency practitioners – IPs – through direct regulation by their professional bodies – IPAs – which themselves are regulated by a government agency, the Insolvency and Bankruptcy Board of India. This is the English model, and likely to be the New Zealand model of insolvency […]
An expansion of the Banking Code, or is a change in the law needed?
The story about the conduct of bank officers in the Sydney Insolvency News prompts my suggestion for a widening of the banking code, or even a banking code. Similar “stories”, including my own, support this. SiN reported the story as “Grant Thornton Excoriated over Arrium”, GT being an accounting firm and Arrium being a mining company in […]
European Commission proposes new approach to business rescue in Europe
On 22 November 2016, the European Commission presented a set of new European rules for business insolvency which member states are to implement. These include similar restructuring approaches to those being considered in Australia, a focus on fostering entrepreneurial business conduct, and a need for the proper regulation and training of insolvency practitioners, including their […]
the Sakr Nominees appeal and well beyond …
Whatever is said in the pending NSW Court of Appeal decision in Sakr Nominees, it is timely to propose that, just as the government is assessing how to fund ASIC’s insolvency role, a similar but broader assessment is needed in relation to the funding of the insolvency system itself, from an economic perspective. Any developed country […]
Mad Dogs could not legally perform its contract in breach of insolvent trading laws
An insolvent company cannot legally continue to perform its contract by which debts are incurred. Hence it has no claim for repudiation of the contract by the other party. Gilligan’s Backpackers conducted a hotel business in Cairns. Mad Dogs was under contract to supply food and catering services at the hotel. On 26 September 2007 […]
One of the dark arts…..
A court appointed receiver applying to the court for determination of his remuneration was subjected to 2 days cross-examination on his evidence “in excruciating detail”, with “thousands of pages” of documents being filed. In saying that the assessment of remuneration and costs is “one of the dark arts”, the Judge cut the remuneration substantially, but […]
Liquidator’s remuneration approved, and power of sale confirmed
In yet another decision on remuneration, and the power of a liquidator to sell trust assets to recoup that remuneration, a Court has found that remuneration was properly claimed on a time basis, and that the liquidator’s exercise of the power of sale over trust assets were not unreasonable. No drama. See In the matter of […]
A lesson in Chinese law from Donald Trump
President-elect Donald Trump is, apparently, litigious, with, it is said, at least 3500 in the US federal and state courts. He has also been a litigant in China – indeed the first president elect of the United States as litigant – where he lost. Some years ago, Trump had attempted to register his TRUMP trademark […]
Trusts and liquidators’ rights of indemnity – whose decision is “universally regarded as incorrect?”
In determining that liquidators had a right of indemnity, and priority, over trust property for payment of their remuneration and expenses, the Victorian Supreme Court has said it was “bound to follow” the long established South Australian decision in Re Suco Gold, and to decline to follow the recent NSW decision in Independent Contractor Services. […]
Late payers – what to do? and the ATO wants to know as well
An inquiry into late payments to creditors has been commenced by the Australian Small Business and Family Enterprise Ombudsman. A report is due by March 2017. The inquiry aims to establish an accurate picture of the trends in payment terms that have emerged in recent years in commercial arrangements between large and small businesses as […]
Pre-packaged insolvencies – new English standards from 1 December 2016
Australia’s law reform aversion to pre-packaged insolvencies – “pre-packs” – compares with a process of their cautious acceptance and continual refinement in England. A new Statement of Insolvency Practice has been issued in the UK – SIP 13 – Disposal of Assets to Connected Parties in an Insolvency Process, which supports the guidance and rules […]
Is an ipso facto contract termination “unfair” on a small insolvent business?
New laws have commenced under the ASIC Act and Australian Consumer Law extending unfair contract term protections to small businesses. The law allows “unfair” and “standard form” contract terms to be declared void and allows for the contract to continue to bind a supplier, for example, if the contract can operate without the unfair term. An argument may […]
