News

Case Note: LCM Operations Pty Ltd, in the matter of 316 Group Pty Ltd

In LCM Operations Pty Ltd, in the matter of 316 Group Pty Ltd (In Liquidation) [2021] FCA 324, the Federal Court of Australia provided guidance as to when the Harmon undertaking is not applicable. This case clarified the purposes for which a party to proceedings is permitted to use documents produced in another proceeding, and when leave is not required to do so. More specifically, clarification is provided as to when the Harman undertaking is not operative.

To appear or not to appear – the costly exercise of default in insolvency proceedings

The recent decision Owens as Liquidator of Davey SG Pty Ltd (in liq) v Davey involved an application by the liquidator seeking an order for payment of compensation by the sole director in accordance with s 588G and s 588M regarding debts incurred during insolvency. The Court found Mr Davey in default after he did not appear at the hearing nor did he comply with pre-trial programming orders. After considering the liquidator’s submissions, he made a default judgement in favour of the plaintiffs, ordering Mr Davey to pay $931,024 plus interest of $70,718.32. This case involves a relatively straightforward application of the Corporations Act 2001 (Cth) (Act) in the context of a director’s liability for debts incurred during insolvency. However, it serves as a reminder of the importance of following court processes and adequately considering any offers of compromise made by a party.

A Question of Law: The Court’s Discretion to Give Directions to Liquidators

By Alicia Hill, Principal and Evangeline Yong, Law Clerk In the recent case of Knight, in the matter of GMG Victoria Holdings Pty Ltd (In Liq) [2021] FCA 86, the Federal Court considered the circumstances in which the Court can give directions to liquidators in the process of winding up a company. Background Tracey Knight and…

A Warning to Company Directors: Discharge from Personal Bankruptcy will not Necessarily Absolve Liabilities for Insolvent Trading

In the recent case of Taylor (liquidator) v Trustee, bankrupt estate of Heading, in the matter of Heading [2020] FCA 1450, the Federal Court considered the circumstances in which leave will be granted for an insolvent trading action against a company director who has previously been released from debts provable in bankruptcy.