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Responsible Lending Obligations to be Wound Back

The Federal Government’s has recently announced a plan to wind back responsible lending obligations on lenders to boost Australia’s economic recovery. This article explains the key changes and how this proposed streamlining will change the current regulatory landscape.

What to do if you settle a court action and the other party defaults?

Recently, the Supreme Court of Victoria heard the case of Australian Xinyangfeng Fertilizer Pty Ltd v Freshwater [2020] VSC 450 which provides an example of one of the mechanisms available to parties when another party defaults on a settlement agreement to hold the defaulting party to the bargain struck. The re-opening of the old case fast-tracked enforcement of the original agreement, saving time and the cost of initiating new proceedings.

Directors’ Obligations to Furnish Information to Administrators

On 30 July 2020, the Federal Court of Australia (‘Federal Court’) issued orders In the matter of Union Standard International Group Pty Ltd (Administrators Appointed) (No 2) [2020] FCA 1111, restraining the director of a company in voluntary administration from handling company information that was requested by the Administrators. This case serves as a reminder to companies in administration to ensure full compliance with reasonable information requests from administrators while also demonstrating the complexities in document management and the risks improper data handling can have on the work of administrators.

Can a payment made by a related third-party be an unfair preference?

On 5 August 2020 the Victorian Court of Appeal handed down its judgment in Cant & Anor v Mad Brothers Earthmoving Pty Ltd [2020] VSCA 198. In this case, the liquidator of Eliana Construction and Developing Group, Mr Cant, was pursuing Mad Brothers Earthmoving Pty Ltd for an alleged unfair preference. A related company to Eliana had paid $220,000 to Mad Brothers in satisfaction of Eliana’s debt. The Court of Appeal, in finding that the transaction was not an unfair preference as it did not come ‘from the company’ provides useful guidance on how to deal with a third-party paying the debt of an insolvent company. The decision touches on the operation of the good faith defence to voidable transactions contained in the Corporations Act 2001 (Cth).