After Killarnee: Another look at the Corporations Act priority regime

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After Killarnee: Another look at the Corporations Act priority regime

The Supreme Court of New South Wales recently had cause to give consideration to the Full Federal Court’s decision in Killarnee. The question before the Court in the matter of O’Keeffe Heneghan Pty Ltd (in liquidation); Aus Life Pty Ltd (in liquidation) and Rocky Neill Construction Pty Ltd (in liquidation) (KNF Construction) was whether the priorities prescribed by sections 433, 556 and 561 of the Corporations Act 2001 (Cth) (the Act) applied to the payment of debts or claims in the winding up of companies trading together as partners of a partnership.

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An Introduction to AFCA – the new ‘one stop shop’ for dispute resolution in the financial services industry

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An Introduction to AFCA – the new ‘one stop shop’ for dispute resolution in the financial services industry

The Australian Financial Complaints Authority (AFCA) is the new external dispute resolution scheme for the financial services industry. It replaces three previous schemes, namely the Financial Ombudsman Service (FOS), Credit and Investments Ombudsman and Superannuation Complaints Tribunal.

This article will provide a high level overview of the new AFCA scheme, highlighting some of the important differences from its predecessor schemes, particularly FOS.

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Clarification on the application of Killarnee and Re Amerind to companies in administration

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Clarification on the application of Killarnee and Re Amerind to companies in administration

Since the publication of decisions by the Full Federal Court in Jones (in his capacity as liquidator of Killarnee Civil & Concrete Contractors Pty Ltd (ACN 085 230 486 (in liq)) v Matrix Partners Pty Ltd (2018) 354 ALR 436 and by the Victorian Court of Appeal in Commonwealth v Byrnes (2018) 330 FLR 149 (Re Amerind), consequential questions have arisen about how these decisions apply to other forms of external administration.

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Creditors’ Best Interests: Have they Changed?

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Creditors’ Best Interests: Have they Changed?

Section 440A of the Corporations Act 2001 (Cth) (the Act) provides that a Court is to adjourn the hearing of a winding up application if the company is under administration and the Court is satisfied that it is in the interests of the company’s creditors for the company to continue under administration rather than be wound up. The authorities on this section are well established and the principles to be applied in such an application are well known. Despite this, there is a tendency for the outcome of these applications to be unpredictable.

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Understanding Personal Guarantees: What you should know before signing

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Understanding Personal Guarantees: What you should know before signing

It is not uncommon for us to be approached by potential clients concerned about their financial position, after signing a personal guarantee.  However, what is particularly concerning is that most of these individuals did not (and continue not to) have a proper understanding of the nature and effect of that guarantee at the time of signing it.

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Penalties Revisited: When Protective Measures Become Punishing Measures

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Penalties Revisited: When Protective Measures Become Punishing Measures


The recent case of Melbourne Linh Son Buddhist Society Inc v Gippsreal Ltd [2017] VSCA 161 (Melbourne Linh) may have served to revisit (and possibly change) the Australian legal landscape regarding penalties.  In Melbourne Linh, the Court of Appeal found that a loan establishment fee of $26,625 constituted a penalty in circumstances where the fee did not represent the protection of the respondent’s legitimate commercial interests. The case is interesting because it potentially paves the way for Courts to, in future cases, adopt a broader approach when determining penalty cases.

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Safe Harbour: A Guide For Accountants

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Safe Harbour: A Guide For Accountants

By now, most accountants are likely to have heard about, and perhaps have some familiarity with, the new “safe harbour” laws.  But for those accountants who still feel unsure about their knowledge of these new provisions, the following article will help you get your head around what safe harbour means for your accounting practice.   

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Payment Clauses In Construction Contracts - How the Addition of a Simple Clause Could Save You Time and Money

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Payment Clauses In Construction Contracts - How the Addition of a Simple Clause Could Save You Time and Money

Consider this hypothetical.  You perform construction work or provide related goods and services on a site in WA under a written construction contract.  You render a progress claim, but before the progress claim falls due for payment, the contract is terminated, whether by mutual consent or otherwise.

In this unpalatable, but entirely conceivable scenario, the situation can be potentially dire. Clearly, payment is critical for the maintenance of cash flow, liquidity and solvency.  The inability to recover progress claims in a timely and cost-effective manner can often mean the difference between the business surviving, and having to close its doors.

 

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New data breach laws: Will your organisation be affected?

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New data breach laws: Will your organisation be affected?

We all know that technology is continually developing. That development has resulted in vast amounts of personal information being collected and stored digitally by organisations. With that comes an increased risk of cyber threat. Yet, few organisations’ security procedures are as sophisticated as they ought to be, and there are gaps where workplace practices are out of step with the technical controls in place. It is against this background that the Privacy Amendment (Notifiable Breaches) Act 2017 (the Act) was born.

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Levelling the Playing Field: The legislative response to unfair terms in small business contracts

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Levelling the Playing Field: The legislative response to unfair terms in small business contracts

Commercial Law | By Paul Pascoe and Paul Mac

A recent change to the Australian Consumer Law (ACL) aims to alter the landscape of contracts entered into between small and large businesses for the supply of goods or services.
Historically, there has been a trend for large businesses to exert a certain level of clout to effectively push smaller businesses, with less bargaining power, to sign contracts on terms highly favourable to the more powerful parties. However, the scope of protection now afforded under section 23 of the ACL has been expanded to include parties to small business contracts, as well as individual consumers.

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A Safe Harbour for Directors? Shielding against personal liability for insolvent trading

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A Safe Harbour for Directors? Shielding against personal liability for insolvent trading

The Australian Government’s Productivity Commission, tasked with independent research and advisory on various economic, social and environmental issues, has recommended amendments to the Corporations Act 2001 (Cth) (Act) which will introduce a ‘safe harbour’ for company directors facing personal liability for insolvent trading.

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Badran v Public Transport Authority of Western Australia

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Badran v Public Transport Authority of Western Australia

In 2009, Mr Badran was travelling on a return concession train ticket from Perth to Rockingham when he was approached by two Public Transport Authority Revenue security officers and asked to provide proof of his concession entitlement. Mr Badran produced an expired concession card containing his full name and address, but not his date of birth. One of the officers asked Mr Badran to supply his date of birth so that an infringement notice could be issued. Mr Badran refused to do so, asking instead that the notice be mailed to him.

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Most Unfair - the Expansion of the Uncommercial Transaction

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Most Unfair - the Expansion of the Uncommercial Transaction

The liquidator of Ashala Model Agency Pty Ltd (Company) commenced recovery proceedings against Featherstone, the Company’s shadow director. Relevantly, Featherstone had paid himself using the Company account to clear a loan that he provided to the Company. Featherstone ultimately used that money to purchase a residential property for his de facto partner, who was also the main shareholder of Ashala. The monies paid to Featherstone rendered the Company insolvent.

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Extraordinary Drivers Licence Applications - A Practical Guide

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Extraordinary Drivers Licence Applications - A Practical Guide

If you lose your drivers licence as a consequence of a driving offence, you have a right to apply for a special licence - an extraordinary driver’s licence (EDL) in certain circumstances.

This article is designed those considering applying for an EDL to understand the procedures involved in making such an application. However, it is always a good idea to seek legal advice because what will be required to satisfy a magistrate will be different in each individual case. Specifically, an applicant will need advice as to what evidence will be required to determine whether it is appropriate for an EDL application to be granted.

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