What’s News - Banking, Financial Services, Insolvency

Man jailed for GST fraud
A Liverpool man has been sentenced to five years and four months jail in the Campbelltown District Court for fraudulently claiming over $130,000 in GST refunds. Andrew Joseph Thorn, 26, was found guilty of 11 counts of obtaining property by deception, one count of attempting to obtain a financial advantage by deception and one count of dealing in proceeds of crime

 

Former agribusiness accountant jailed
The former accountant and company secretary for the Bustan Group, Ms Claire Horsman, has been sentenced today in the County Court of Victoria to two years and six months imprisonment after pleading guilty to three criminal charges brought by ASIC (03 April 2009)

http://www.asic.gov.au/ASIC/asic.nsf/byHeadline/AD09-56%20Former%20Agribusiness%20accountant%20jailed?opendocument

 

Failed high-profile Sunshine Coast builder is vowing to pay back creditors. He has also told customers that arrangements are being made for other builders to take over their contracts. The Building Service Authority has suspended Mr Miller’s licences (01 April 2009)

 

Court hears phone recordings of a Gold Coast businessman asking people to destroy or hide evidence. A Gold Coast businessman Stoten told the court he did not realise the offshore tax structure used by the phone directories company he ran with brothers was illegal until the raid took place (03 April 2009)

 

Former Director of Newcastle and Sydney-based roofing company pleads guilty
Mr Whitehouse, an undischarged bankrupt, entered a guilty plea to breaching his duty as a director of MGW Roofing (Newcastle) Pty Ltd, in that he dishonestly used his position with the intention of directly or indirectly gaining an advantage for MGW Roofing (Sydney) Pty Ltd by transferring funds from MGW Roofing (Newcastle) Pty Ltd to MGW (Sydney) Pty Ltd (30 March 2009)

http://www.asic.gov.au/ASIC/asic.nsf/byHeadline/AD09-53%20Former%20Director%20of%20Newcastle%20and%20Sydney-based%20roofing%20company%20pleads%20guilty?opendocument

 

Former Melbourne director in court on ASIC insolvent trading charges
Former director of International Consulting Group Pty Ltd, Dr Anula Daui Kumari Kauye, has appeared in the Melbourne Magistrates' Court on charges brought by ASIC. ASIC specifically alleges that Dr Kauye ran up debts to contractors and retail and service providers and stole approximately $1.5 million from US based companies (31 March 2009)

http://www.asic.gov.au/ASIC/asic.nsf/byHeadline/AD09-54%20Former%20Melbourne%20director%20in%20court%20on%20ASIC%20insolvent%20trading%20charges?opendocument

 

A Group of aggrieved consumers have lost a NSW Federal Court bid to sue credit risk reporting giant Veda Advantage prompting concern among privacy advocates. The consumers individually sued Veda Advantage on grounds that its credit reporting activities were defamatory and that the company acted negligently when handling their credit information. In a summary judgment handed down Justice Lindgren said that Veda could not be sued for defamation as its role as a credit reporting agency gave it qualified privilege (02 April 2009)

 

Westpoint founder tries to disqualify judge
Attempts to wind up a company linked to the collapsed Westpoint Group have hit a snag, with disgraced Westpoint founder Norm Carey seeking to disqualify a Federal Court judge from hearing the matter (31 March 2009)

 

The G20 summit's resolution to impose tougher regulations on executive salaries has resulted in some confusion over how the new rules would bring those pay levels down. Mr Rudd says those principles will change the way Australians do business (03 April 2009)

 

The nation's corporate undertakers are preparing for a wave of insolvencies over the next three months as the economic crisis deepens. Insolvency firm PKF predicts more than one in every six companies could fail when the recession hits bottom. The bulk of collapses have included the manufacturing industry, pubs and clubs, concreters and home builders. Most were unable to service their debts when revenues started to fall (04 April 2009)

 

The growing dominance of Westpac, the Commonwealth, ANZ and the National Australia Bank on the world stage has brought with it some worrying signs for customers at home. Behind all those names stand fewer and fewer players - RAMS, St George, Aussie Home Loans, BankWest and Wizard were all mopped up by the majors in the past 18 months (04 April 2009)

 

APRA blocks Bendigo Bank's AYT takeover protects depositors
Australia's banking regulator has stepped in to protect Bendigo and Adelaide Bank Ltd depositors by blocking the bank's $174 million takeover bid for the listed Adelaide Managed Funds Asset Backed Yield Trust (AYT) it sponsors. Australian Prudential Regulation Authority (APRA) told Bendigo that the transaction was not being conducted on market terms and amounted to providing credit support to AYT

 

Fed govt admits laundering laws a burden on small business
The federal government says it will consider the impact of the global financial crisis in enforcing new requirements for small businesses to report suspicious transactions. Current laws require banks, casinos and other designated businesses to take steps to prevent money laundering and the funding of terrorist organisations. The scope of the laws is to be extended this year to include small businesses like real estate agents, jewellers and accountants

 

The corporate watchdog ASIC will request a court injunction to stop BrisConnections collecting the next $1 instalment payment on its units on April 29, and a further order to delay any meeting of unit holders until after an independent report on the toll road builder's finances is completed (02 April 2009)

 

Legal action initiated by BrisConnections to have major shareholder Australian Style Investments wound-up and two planned meetings of unit holders cancelled may have backfired as the builder of Brisbane's $4.8 billion Airport Link now faces the prospect of proving its own solvency (31 March 2009)

OZ Mins receives $US1.2bln alternative proposal from Minmetals
OZ Minerals Ltd has received a $US1.2 billion ($A1.74 billion) proposal from its Chinese suitor to acquire a suite of the miner's assets and received an extension to its debt refinancing obligations (01 April 2009)

 

E-biz leader joins ranks of payment card industry elite
Brisbane's Intabill confirmed as world’s best practice after gaining Payment Card Industry Data Security Standard (DSS) compliance. In a landmark achievement, Brisbane-based Intabill is one of the first companies in Australia to conform to PCI performance standards (01 April 2009)

 

Senator Nick Sherry, Minister for Superannuation and Corporate Law, announced regulatory changes that will require superannuation funds to report long-term returns prominently in member statements. The disclosure of long-term super fund returns in member periodic statements would assist super funds to better communicate the fund's performance over a market cycle, including rising, falling and flat markets to their members (01 April 2009)

 

Financial planners are facing the increasing likelihood of restraint of trade provisions being imposed against them as their employers look to protect their client lists and revenue streams (02 April 2009)

 

Record Realty Trust has become the latest Allco Finance-related business to collapse after its secured foreign lender called in a $186 million loan, triggering a potential fire sale of properties worth up to $1.8 billion (01 April 2009)

 

Two former Allco executives have been accused of financially hijacking 68 international jet airliners worth about $3 billion in a bid to get themselves a bargain deal from the receivers of collapsed leasing company Allco Finance Group (02 April 2009)

 

Tax fraud task force reaps cash, charges
Australia's tax fraud task force has reaped hundreds of millions of dollars, new figures show

Operation Wickenby revealed $287 million in tax liabilities, and had collected $90 million in direct revenue and restrained $75 million in assets, by February 9, the Australian Tax Office (ATO) (31 March 2009)

 

The Real Estate Institute of Australia welcomes decision to exempt trust accounts from Commonwealth’s Guarantee Scheme for Large Depots. In the case of real estate agents this cost cannot be offset against interest earned as all interest accrued on trust accounts is automatically transferred to the state and territory governments (31 March 2009)

 

Bankruptcies and liquidations on the rise
Bankruptcies and liquidations have increased as the economic downturn continues to bite, says Australia's tax chief. Australian Tax Office (ATO) commissioner Michael D'Ascenzo told a federal parliamentary committee in Brisbane the number of bankruptcies and those that have gone into liquidation are on the rise, with the ATO initiating bankruptcies in 2.5 per cent of all bankruptcy cases, and 8.3 per cent of total liquidation cases (31 March 2009)

 

Australian taxpayers splurging on luxury goods and seeking tax havens are under the international spotlight. ATO investigations into 216 tax haven cases last year yielded $151 million and 1,122 disclosures retrieved $11.4 million in liabilities, while 477 reviews reaped $2.9 million (31 March 2009)

 

Coutts customers were advised to invest in AIG and lost millions. More than 500 of the richest people in Britain are planning legal action against Royal Bank of Scotland (RBS) for losses of more than £200m from investments through Coutts, the Queen’s bankers, which it bought in 2000.

The claimants include five members of the House of Lords and up to 10 chief executives and finance directors of FTSE 100 companies

 

Smaller banks to agree not to charge ATM fees
The ACCChas proposed toauthorize an agreement between asub-network of ATMsnot to charge transaction fees to their cardholders.The ACCC has issued a draft determination proposing to authorise an agreement between participants in a 'Feesmart' branded sub-network not to charge each others customers fees for ATM transactions (30 March 2009)

 

The Australian Industrial Relations Commission (AIRC) has today released the second tranche of revised Awards including details of their default superannuation funds.
(03 April 2009)

 

Author: Yap, Brandon

Source: Australian Construction Law Newsletter, No 124, January/February 2009: p58-59

Quarterly Life Insurance Performance Statistics for December 2008
The Australian Prudential Regulation Authority has released the statistics publication, Quarterly Life Insurance Performance Statistics for December 2008 (01 April 2009) more info

 

These Rules amend the Federal Magistrates Court Rules 2001.

Date Registered: 06/04/2009

 

Conflicts of Interest Consultation Package
APRA has released for public consultation draft guidance on managing conflicts of interest for APRA-supervised superannuation trustees more info (03 April 2009)

 

Foreign investment regulations amended
Regulations have been made to simplify the process for foreign property investors to purchase real estate that is not contrary to the national interest.

The Explanatory Statement is available at:

 

NSW: More accountability for incorporated associations
Large incorporated associations in New South Wales will be required to undertake financial audits under amendments passed by the Legislative Council, and 35,000 incorporated associations will benefit from improved accountability and increased participation under the Associations Incorporation Bill 2008 (01 April 2009)

 

 

These Regulations amend the Corporations Regulations 2001 to assist superannuation fund (other than self managed superannuation fund) members to engage with the long-term performance of their superannuation by requiring the disclosure of five and ten year average returns in periodic member statements. Date Registered: 30/03/2009

 

These Regulations amend the Corporations Regulations 2001 to name New Zealand as a foreign country to which the mutual disqualification of company director provisions contained in the Corporations Amendment (No. 1) Act 2009 apply. Date Registered: 30/03/2009

 

Legislative Instrument Compilation (current) - F2009C00234 Number: SR 2001 No. 193

Date Registered: 01/04/2009 Incorporating Amendments to: SLI 2009 No. 52

Administering Department: Treasury - Prepared by: Office of Legislative Drafting and Publishing (OLDP) Unincorporated Amendments: Corporations Amendment Regulations 2009 (No. 3)

 

PRACTICE AND PROCEDURE – documents – inspection and access to documents by non-parties – whether access should be granted in interests of open administration of justice – access should be granted subject to limitations – (CTH) Federal Court Rules 1979 O 46 r 6

 

DEFAMATION – credit reporting agency’s reports to credit providers – reports allegedly defamatory of applicants in respect of their creditworthiness – allegation that they were refused credit by credit providers who relied on erroneous credit reports – respondent’s computerised database – credit providers who subscribe (respondent’s customers) enter information in the database electronically and extract information from it electronically, in each case without respondent’s intervention – whether respondent credit reporting agency communicated to subscribing credit provider the information that that credit provider extracted electronically – in some cases credit provider’s computer rejects application for credit automatically upon receipt of adverse credit report – essential to cause of action in defamation that the defamatory publication be published to a human mind – whether publication to a human mind proved – qualified privilege – whether credit reports of credit reporting agency attracted defence of qualified privilege.

NEGLIGENCE – credit reporting agency’s reports to credit providers – allegation that applicants refused credit by credit providers who relied on erroneous credit reports – respondent’s computerised database – credit providers who subscribe (respondent’s customers) enter information into the system electronically and extract information from it electronically, in each case without respondent’s intervention – whether respondent credit reporting agency communicated to subscribing credit provider the information that that credit provider extracted electronically – in some cases credit provider’s computer rejects application for credit automatically upon receipt of adverse credit report – whether credit reporting agency owed a duty of care to persons seeking credit to ensure that information stored in database was accurate – if so, whether breach of duty established.

 

BANKRUPTCY – Application for sequestration order – act of bankruptcy – notice of suspension of payment of debts.

 

TAXATION – deductions – bad debt claims – business of lending money – conduct undertaken in the ordinary course of business of lending money – taxpayer, internal financier to a group of companies – Income Tax Assessment Act 1997 (Cth), ss25-35(1)(b), (1)(a), 8-1

 

CORPORATIONS LAW – managed investment scheme – definition of scheme property – whether money taken out of fund containing application fees of members continues to be scheme property – whether money subject to fixed charge in favour of responsible entity – successor responsible entity to exercise rights in relation to charge

 

McBain (Trustee) in the matter of Turner (Bankrupt) v Palffy [2009] FCA 260

BANKRUPTCY – whether a transfer is void against the applicant pursuant to s 120 of the Bankruptcy Act 1966 (Cth) – whether the transfer of property was effected for less than market value – whether the bankrupt was solvent at the date of the transfer

 

Leinad Pty Ltd ACN 003 671 529 be wound up in insolvency.

David Young of Pitcher Partners, an official liquidator, be appointed liquidator of Leinad Pty Ltd ACN 003 671 529 - order under s459P (2) of the Corporations Act 2001 (Cth).

 

SCT Townsville Pty Ltd ACN 101 182 585 be wound up in insolvency under the provisions of the Corporations Act 2001 (Cth).

 

PROCEDURE - Service of Process –substituted service - whether impracticability of current method of service established - whether method of substituted service proposed is reasonably likely to bring proceeding to defendant’s notice
(CTH) Australian Securities and Investment Commission Act 2001, s 12CA, s 12CD, s 12DA
(NSW) Fair Trading Act 1987, s 42

 

Security for costs - undertakings offered by principal person behind company to be responsible for defendants' costs but no evidence of his financial position - combination of undertakings offered and ordering of security.

 

APPEAL AND NEW TRIAL – appeal – general principles – interference with discretion of court below – re-exercise of discretion
CORPORATIONS – winding up – winding up voluntarily – liquidators – supervision of liquidators by the court – inquiry under s 536(1)(a) Corporations Act 2001 (Cth) – faithful performance of duties
CORPORATIONS – winding up – winding up voluntarily – liquidators – supervision of liquidators by the court – inquiry under s 536(1)(b) Corporations Act 2001 (Cth) – complaint – whether a complaint was made
CORPORATIONS – winding up winding up voluntarily – liquidators – supervision of liquidators by the court – inquiry under s 536(3) Corporations Act 2001 (Cth) – liquidators to answer an inquiry
CORPORATIONS – winding up – liquidators – duties and liabilities – in voluntary winding up – factors relevant to the discretion to ordering an inquiry under s 536 Corporations Act 2001 (Cth) – size of anticipated return to creditors – position of creditors – proportionality between cost and recovery – failure to apply for directions before commencement of the proceedings – litigation funding

 

COMMON LAW – CONTRACTS – variation - mortgagee gave undertaking to Land and Environment Court - whether mortgagor could demand compliance with undertaking as a condition of advancing progress payment - whether mortgagor could impose further conditions at its sole discretion

COMMON LAW – CONTRACTS – breach - whether mortgagor's refusal to advance progress payment amounted to breach of contract

CONTRACTS - construction and interpretation of contracts - effect of incorporating letter of offer into mortgage - whether letter of offer constituted a series of discrete offers or whether single approval and settlement process was contemplated

 

CORPORATIONS - winding up - application for winding up in insolvency - plaintiff has benefit of presumption of insolvency - defendant seeks to prove solvency - onus not discharged - no matter of principle
Corporations Act 2001 (Cth), ss 95A, 459C(2)(a), 459G, 459P, 459S

 

Corporations – Debenture – Sale and collection of charged assets by Administrator and Liquidator – application of principle in Universal Distributing – Obligations of a Liquidator under s. 561 of the Corporations Act 2001.

 

Trust and Trustees – Monies held by solicitors for two persons – Terms of settlement of a dispute between the beneficiaries supplied the terms of the Trust – Distribution of trust funds contrary to the terms of settlement – Trustee did not act on the instructions of the plaintiff – Trustee not entitled to the protection of s 67 of the Trustee Act 1958 (Vic) – Equitable compensation.