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20
Jul 2014
News

Over the coming months ERA Legal will be hosting a number of seminars throughout Sydney and the Gold Coast covering a range of topics including director penalty notices, preference payments, selling businesses in financial distress and the PPSR. If you would like more information or wish to be notified of any upcoming seminars in your… Read more »

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30
Jun 2014
Articles

It is very important for directors and their professional advisers to be aware that the Deputy Commissioner of Taxation (DCT) is able to serve a DPN (standard or lock down) by simply posting it to the address recorded by ASIC as the director’s address. This is the case even if the director has moved house… Read more »

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26
Jun 2014
News

The Senate Economics Reference Committee has released a report recommending that federal parliament investigate implementing a US style “Chapter 11” process for large insolvencies.  Such an approach would likely involve much greater protection for a debtor company trading through a liquidity crisis.  Interestingly the report quoted the ASIC Chairman as praising the Chapter 11 system… Read more »

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23
Jun 2014
Articles

It is important for directors and their professional advisers to remember that if, at any time whilst a company is insolvent, the company pays any withholding taxes to the ATO e.g. BAS, PAYG and the company is subsequently placed into liquidation, then by reason of the operation of section 588FGA of the Corporations Act 2001… Read more »

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16
Jun 2014
Articles

Being a liquidator can be a risky business. Liquidators (and their legal advisers) have a long tradition of putting their bodies on the line for the sake of their work, selflessly risking personal harm through exposure to such dangers as high cholesterol, liver failure and other prandiogenous ailments. Injury by gunshot is, thankfully, less commonly… Read more »

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30
May 2014
News

ERA Legal congratulates Kylie Salter on her recent admission as a solicitor. Kylie joined ERA Legal in 2011 as a researcher and we are pleased to confirm that she will continue with ERA Legal as she commences her career as a solicitor.

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21
May 2014
Articles

Receivers are always placed in a difficult position when they are first appointed. That difficulty is only exacerbated when the receiver has been privately appointed and there is potentially an issue with the validity of that appointment. Unsurprisingly, it is not rare for that difficulty to produce enough tension and friction to eventually ignite a… Read more »

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06
May 2014
Articles

The purpose of Part 5.3A When considering how administrators fulfils their duties it must always be remembered that the Corporations Act 2001 (Cth.) specifies (see s435A) that the purpose of Part 5.3A is to provide for the administration of the company and its affairs in such a way that: Maximises the chance of the company’s… Read more »

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22
Apr 2014
Articles

Significant changes to the Building and Construction Industry Security of Payment Act 1999 (NSW) (“SOPA“) commenced on 21 April 2014 and apply to all construction contracts entered into after that day. The changes, in brief, are:- Maximum payment terms of 15 business days as between principal and head contractor and 30 business days as between… Read more »

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10
Apr 2014
Articles

The importance of s.80D resolutions under the Strata Schemes Management Act in building defect claims The recent decision in The Owners – Strata Plan No. 70798 v Bakkante underscores the critical importance of Executive Committee members keeping lot owners informed and passing a correctly worded resolution at a general meeting prior to commencing legal proceedings. … Read more »

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10
Apr 2014
Articles

The powers that a liquidator may exercise in a winding-up are detailed in the Corporations Act 2001 (Cth) (“the Act”).  The scope of those powers depends upon whether:- the liquidation is a creditor’s voluntary liquidation (often known as a “CVL”) which is initiated by the company itself; or a court ordered winding up in insolvency,… Read more »

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01
Apr 2014
News

ERA Legal was recently proud to be the principal partner of the Distance for a Difference Tour, a four day 888km cycling fundraiser for the Day of Difference Foundation. The Foundation conducts vital work reducing the incidence and impact of critical injury to children in Australia. This year, the Tour raised over $130,000 for this… Read more »

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14
Mar 2014
Articles

An application to have a liquidator appointed to a company is usually made by a creditor who is owed money by the company. Understandably, when that happens it is very common for the company to think it can remove the risk of having a liquidator appointed by paying the amount claimed by the creditor. Unfortunately,… Read more »

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06
Feb 2014
Articles

The Federal Court has handed down a judgment in the matter of Paciocco v Australia and New Zealand Banking Group Limited [2014] FCA 35 ruling that ANZ’s credit card late fees constitute an unenforceable penalty. It is a long judgment (105 pages) but in a nutshell:- Credit Card late payment fees charged by ANZ ($20… Read more »

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02
Feb 2014
News

The Cole Classic was held on 2 February 2014 and a team comprising Sandra Ciganda of SV Partners, Adam Aduckiewicz of Video on Demand and our staff swam their way through the 2km course at Manly Beach. Their team fundraising ranked 3rd overall in a competitive field. Well done to Adam, Sandra and our staff and thank… Read more »

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17
Dec 2013
Articles

Yesterday the Federal Court made unprecedented use of an obscure provision of the Corporations Act to give a distressed company a final chance to sort itself out. Instead of winding the company up immediately, the court made a conditional winding up order, which now remains suspended over the company like a guillotine, “encouraging” it to… Read more »

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22
Nov 2013
Articles

The Personal Properties and Securities Act (“PPSA”) and Personal Property and Securities Register (“PPSR”) have been in operation for some time. The requirement in 588FL(2)(b)(ii) of the Corporations Act (“the Act”) for a secured party to perfect (usually by registration) its interest within 20 business days  of such an interest arising is a requirement most… Read more »

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11
Nov 2013
Articles

The Federal Court has recently continued the courts’ emerging practice of appointing incumbent administrators as liquidators when there is no reason to question their professionalism or independence, and where the continuation of their tenure may result in costs savings for creditors. In Deputy Commissioner of Taxation v Impress Enterprises Pty Limited [2013] FCA 1126, the… Read more »

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01
Nov 2013
Articles

“The collapse of a big contractor has a ripple effect, often ruining scores of subcontractors and suppliers. They are last in the queue as administrators, banks and employees have first call on the assets.” (AFR, 15 November 2012, p.44) Since the New South Wales Government commissioned an independent inquiry into construction industry insolvency last year,… Read more »

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01
Nov 2013
Articles

The construction industry has experienced a large number of insolvencies in the past few years.  Following on from the Collins Inquiry into Construction Industry Insolvencies, on 24 October 2013 the State Government recently released the Building and Construction Industry Security of Payment Act Amendment Bill 2013. The bill will substantially amend the Building and Construction… Read more »

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15
Oct 2013
Articles

I’ve always wanted a motorbike, but my wife won’t let me have one. I once asked a Harley-owning friend of mine how, during his spectacular lycra-clad roller-blading pony-tailed Harley-riding midlife crisis, he managed to get his wife to agree to his Harley. His response was to inform me that he just went out and bought… Read more »

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24
Sep 2013
Articles

It is not every day that a decision about how to distribute funds in a winding up turns on the conscience of the liquidator. However, the liquidators’ (blissfully untroubled) conscience was the determining factor in a recent decision of the Supreme Court of New South Wales. The case The question in In re Dalma No 1… Read more »

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06
Sep 2013
Articles

It is very common for commercial documents to contain provisions which limit the right of creditors to lodge proofs of debt in circumstances where doing so would compete with the rights of another creditor. One of the most common examples is found in guarantees. It is often, if not invariably, the case that a bank… Read more »

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20
Aug 2013
Articles

Unfortunately, insolvency practitioners are often put to the cost of defending ill-conceived litigation commenced by a bankrupt or some other person who will not be able to fulfil a costs order. The recent decision of Barnden v Tadrosse (No. 2) [2013] FCCA 744 is a reminder that, if a case against an insolvency practitioner is… Read more »

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07
Aug 2013
Articles

From time to time we see section 439A reports with proposals for the company to enter into a deed of company arrangement (“DOCA”) on the basis that “related parties” will not participate in the DOCA fund. In most cases the term “related parties” is used without any further definition of the term. Sometimes the term… Read more »

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25
Jul 2013
Articles

The Environmental Protection Authority’s recent challenge to a liquidator’s decision to reject a $49 million proof of debt turned into to a disaster for the EPA. The decision of Acting Justice Young in Environment Protection Authority v Condon [2013] NSWSC 777 underlines the importance of obtaining proper legal advice in connection with the adjudication of… Read more »

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27
Jun 2013
Articles

Commencing proceedings in Court is an expensive process. The costs of that process can be a very real issue for most people in deciding whether to start proceedings or, if they are sued, to defend those proceedings. It is usually the case that an unsuccessful party in Court proceedings will pay not only their own… Read more »

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02
May 2013
Articles

“If a liquidator of a company wishes to bring a single proceeding to recover unfair preferences from multiple defendants, it is open to him or her to file and serve the originating process, together with an interlocutory process seeking the court’s leave under Part 8 Rule 2, and supporting affidavit of evidence.” Following the decision… Read more »

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16
Apr 2013
Articles

When a secured creditor appoints an insolvency practitioner as the receiver of a company that has also been wound up in insolvency by the Court, a question can often arise as to whether the Official Liquidation provisions of the Corporations Act 2001 (Cth) (“the Act“) place any restrictions on the receiver’s ability to then realise… Read more »

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02
Apr 2013
Articles

This update concerns a significant new risk for tax agents, which is fortunately able to be minimised by implementing a single, simple measure. Most tax agents are aware that, on 30 June 2012, new laws came into force with regard to director penalty notices. This legislation (the Tax Laws Amendment (2012 Measures No. 2) Act… Read more »

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27
Mar 2013
Articles

Section 473(3) of the Corporations Act 2001 (Cth.) (“the Act”) provides that in a court appointed liquidation, a liquidator may have his or her remuneration determined by agreement between the liquidator and a committee of inspection (if there is one) and if there is no committee of inspection, by resolution of the company’s creditors or… Read more »

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20
Feb 2013
Articles

The recent case of Re Gowinta Farms Pty. Limited [2012] QSC 423 highlights the importance for insolvency practitioners to ensure that there is no dispute with respect to a debt claimed in a Creditor’s Statutory Demand for Payment of Debt (“Statutory Demand”) and clearly shows that failing to observe notice of such a dispute can… Read more »

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05
Feb 2013
Articles

As is well known, if a Company is in default of its obligations to a secured creditor the usual response is for the secured creditor to appoint a receiver to the Company over its assets. The powers a receiver has are set down in both the security documents (once usually called a fixed and floating… Read more »

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30
Oct 2012
Articles

Company directors are now personally liable for both unpaid Pay As You Go (PAYG) obligations together with unpaid Superannuation Guarantee Charge (SGC) amounts after the introduction of changes in the Tax Laws Amendment (2012 Measures No. 2) Bill on 29 June.  The changes also mean that directors may find that common methods previously used to… Read more »

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03
Oct 2012
Articles

The Federal Court has recently issued a stark warning about the need for insolvency practitioners to do their homework, thoroughly, before approaching the court for directions – and to use the court only to clarify points that remain unclear after proper investigation and research. In Mitchell and White v. Lee [2012] FCA 1046, the facts… Read more »

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07
Sep 2012
Articles

Many of you will be familiar with the decision in Tang & Anor v. Bassili & Ors [2011] FMCA 544, in which the Federal Magistrate’s Court said that the ATO could not use a garnishee notice to hijack the proceeds of sale of a mortgaged property. Last Friday, that decision was overturned on appeal, and… Read more »

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04
Sep 2012
Articles

On Friday, the District Court of New South Wales handed down a decision with potential relevance to any director penalty notice (DPN) claims involving a DPN issued before 1 July 2010. In the course of handing down the decision, the court also criticised the ATO for engaging in sharp practice when it was supposed to… Read more »

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17
Aug 2012
Articles

In the recent case of Vitek v Taheri & Ors [2012] FMCA 536, Federal Magistrate Raphael observed that a Summons for the examination of a former bankruptcy trustee for the purposes of examining the trustee’s actions is as rare as the sighting of a Tasmanian tiger! Background The Applicants for the Summons, Mr. & Mrs…. Read more »

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05
Aug 2012
Articles

Recent decisions such as Amir Ashrafinia v Mohammad Reza Ashrafinia [2012] NSWSC 500 (“Ashrafinia”) and Cranes ‘R’ Us Pty Ltd v Busselton Mini Crane Hire Pty Ltd [2012] WADC 24 (“Cranes”) illustrate the importance of solicitors ensuring that they have been validly retained before accepting instructions to act in litigious matters for a company. The Ashrafinia… Read more »

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31
Jul 2012
Articles

Home owners, including Owners Corporations of strata plans have seen a steady erosion of rights surrounding residential defects over the past decade.  With first resort insurance replaced with last-resort insurance and the most recent amendments to the Home Building Act 1989 (NSW) (“HBA“) further narrowing the rights of owners, and insurers seeking to exercise a… Read more »

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14
Jun 2012
Articles

A builder has recently been ordered to perform community service, ordered to pay costs and placed on a 12 month good behaviour bond by the Wyong Local Court for issuing fraudulent Home Warranty Certificates, purporting to be from Vero Insurance, to a number of persons in connection with the construction of a property at Lindfield… Read more »

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12
Jun 2012
Articles

A recent Supreme Court decision has made it clear that the ATO cannot hide behind its own internal policies as an excuse not to pay a liquidator’s costs of court action to recover unfair preferences. Liquidators seeking to recover unfair preferences from the ATO are often confronted with a response to the effect “Oh yes,… Read more »

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27
Apr 2012
Articles

The Identification Legislation Amendment Act 2011 inserts sections 34 and 35 into the Oaths Acts 1900 (the “Act”) to amend the requirements for witnessing statutory declarations and affidavits. From 30 April 2012, witnessing either an affidavit or statutory declaration will require an authorised witness to take prescribed steps to identify a person and certify that… Read more »

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02
Mar 2012
Articles

In Kassem and Secatore v Commissioner of Taxation [2012] FCA 152, the Federal Court dealt, fairly brutally, with three arguments often raised by the ATO in the defence of unfair preference claims: – The money came from another entity, not the taxpayer company itself. Therefore, the company and the ATO were not “parties to the transaction”… Read more »

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06
May 2011
Articles

A recent decision of the Supreme Court of New South Wales has potentially altered the “default position” that, when a company under administration is wound up by the court, the court will appoint the liquidator nominated by the petitioning creditor, rather than the incumbent administrator. In Workers Compensation Nominal Insurer v. Perfume Empire Pty. Limited… Read more »

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26
Oct 2010
Articles

In a decision of the Supreme Court of New South Wales handed down this morning, a sharp reminder was given to insolvency practitioners – if you spend creditors’ money on futile court proceedings, you might find that it is not creditors’ money you’ve been spending. Case summary In Arena Management v. Campbell Street Theatre [2010]… Read more »

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08
Sep 2010
Articles

Readers may be familiar with the long running saga in Bruton Holdings v. Commissioner of Taxation. Concern was felt in insolvency circles when the Full Court of the Federal Court upheld the Commissioner’s argument that the Commissioner was entitled to serve a Section 260-5 Notice (commonly referred to as a Garnishee Notice) after the appointment… Read more »

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07
Sep 2010
Articles

Bankruptcy – changes to advertising Under section 73 of the Bankruptcy Act, creditors may meet in order to decide whether to agree to annul a bankruptcy. Similarly, section 188 provides for creditors to meet to consider a Part X Personal Insolvency Agreement proposal. Such meetings are required to be advertised in a manner approved by… Read more »

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10
Aug 2010
Articles

As many will already be aware, significant amendments to the Bankruptcy Act 1966 (Cth.) (“the Act”) and the Bankruptcy Regulations 1996 (Cth.) (“the Regulations”) have been introduced by the Bankruptcy Legislation Amendment Act 2010 (Cth.) (“the Amendment Act”) and the Bankruptcy Amendment Regulations 2010 (No. 1) (Cth.) (“the Amendment Regulations”). The most significant of those… Read more »

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06
Aug 2010
Articles

  Important amendments to the Income Tax Assessment Acts have been introduced under the Tax Laws Amendment (Transfer of Provisions) Act 2010 (Cth.) (“the Amendment Act”) which came into effect on 1 July 2010. The amendments have a significant affect on the operation of the Director Penalty Notice provisions of the Income Tax Assessment Act… Read more »

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05
Aug 2010
Articles

Yesterday, the Supreme Court of New South Wales handed down a decision which highlights the importance of taking care in the preparation of winding-up documents. The Plaintiff’s winding-up application failed solely because their solicitor had not sufficiently explained how their Statutory Demand had been served – his evidence was that it was “forwarded by mail”, but he did not explain… Read more »

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16
Jul 2010
Articles

Yesterday, the Supreme Court of New South Wales handed down a decision of relevance to insolvency practitioners confronted with an unliquidated, unlitigated creditor claim. The matter involved an appeal against a decision made by the administrators of a Deed of Company Arrangement (“DOCA”) to reject a Proof of Debt because the claim had not crystallised… Read more »

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31
Mar 2010
Articles

As you may be aware, a new Standard is about to become binding on all members of the Institute of Chartered Accountants of Australia and all members of CPA Australia. In this regard Professional Standard APES 330 – Insolvency Services, issued by the Accounting Professional & Ethical Standards Board (APESB) in September 2009, has recently been adopted by… Read more »

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20
Feb 2010
Articles

In March last year,  Faji (Australia) Constructions Pty Limited v AC Professional Accounting Pty Ltd [2009] NSWSC 180,  Barrett J said that solicitors must not swear Affidavits in support of Statutory Demands on the basis of information and belief. If they do, the statutory demand is liable to be set aside with costs without the… Read more »

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