The Importance Of Default Notices On Disclaimer Of Onerous Property
The recent decision of Justice Logan of the Federal Court in Australia and New Zealand Banking Group Limited v State of Queensland  FCA 464 acts as a reminder to directors and insolvency practitioners of the importance of default notices in retaining contractual rights and enforceable securities. It discusses the operation of section 133 of the Bankruptcy Act 1966 (Cth) (Act) and how it can protect security holders against bankruptcy disclaimers and the doctrine of escheat.
Justice Sifris in the recent Supreme Court decision of Eco Heat (Vic) Pty Ltd v the Syndicate Forty Four Pty Ltd (Subject to DOCA) & Ors  VSC 156 used his power under the Corporations Act 2001 (Cth) to terminate a Deed of Company Arrangement executed by creditors. His Honour demonstrated the Court’s power to use such measures where corporate morality or public interest issues arise.
Insolvency practitioners and company directors will be relieved to learn that in general circumstances disclaimers of onerous obligations by a liquidator will have priority over conflicting state laws.
The recent case of Longley & Ors v Chief Executive, Department of Environment and Heritage Protection and Anor  QCA 32 (Longley) overturned a contentious decision of the Brisbane Supreme Court and reiterated the general priority of the Corporations Act (Cth) over State laws.
On 1 March 2017, a significant change was made to the Corporations Act 2001 (Act) involving a liquidator’s powers to sue various parties. This change was the introduction of a new provision into section 100-5 in Schedule 2 of the Act. It inconspicuously sits under “Other Matters” in the Schedule and permits a liquidator to assign actions to others, which historically only a liquidator could bring.