What's New in Banking, Financial Services & Insolvency

News

Budget and Funding Announcements

Attorney-General Robert McClelland has announced a number of 2009/2010 budget and funding policies in relation to the following areas:

ITSA

An increase of $14.3 million over two years for the Insolvency and Trustee Service Australia (ITSA) in light of the global economic downturn

Personal Property Securities Register

An additional $1.4 million will be applied to the development of the information technology requirements of a new Personal Property Securities Register

Budget 2009 http://www.theaustralian.news.com.au/specials/0,,5017014,00.html or http://www.budget.gov.au/

The Australian Competition and Consumer Commission has called on the debt collection and debt buying industry to help crackdown on unscrupulous practices (14 May 2009)

http://www.accc.gov.au/content/index.phtml/itemId/872404/fromItemId/142

The capital raising game that bankers play

The wave of equity raisings in recent weeks has allowed the industry to engage in an almighty fee heist amounting to hundreds of millions of dollars at shareholders' expense (16 May 2009)

http://www.theaustralian.news.com.au/story/0,25197,25489466-5013408,00.html

Forgery claims sent to police
The police intend to subject the original documents to forensic testing," the bank's solicitor said in an affidavit tendered to the Queensland Supreme Court. Mrs Perrin did not refer her forgery allegations to police before starting her court action against the bank. Mrs Perrin made the claim in a restraining order she has sought to stop the bank repossessing her $15 million Surfers Paradise mansion (13 May 2009) http://business.smh.com.au/business/forgery-claims-sent-to-police-20090512-b1ux.html

Law Institute trust account audit records immune from disclosure
The Supreme Court of Victoria has ruled that records of an audit of a solicitor's trust accounts held by the Law Institute of Victoria (LIV) are not required to be disclosed to the Commissioner because they attract the doctrine of public interest immunity.

[2009] VSC 179 (Pagone J), 12 May 2009, Melbourne.

FX trader guilty of $360k fraud

Investor fury grows over dud advisers

With investment portfolios shrinking, investors are furious about the advice they have received with accusations about bad advice sharply on the rise (13 May 2009)

http://business.smh.com.au/business/investor-fury-grows-over-dud-advisers-20090513-b3d3.html

New York Lawyer Pleads Guilty to Fraud Scheme 

A high-profile New York lawyer pleaded guilty to criminal charges of running an investment fraud in the hundreds of millions of dollars involving fake promissory notes (11 May 2009)

http://www.nytimes.com/reuters/2009/05/11/nyregion/business-dreier.html?_r=2&hp

Desperate to recover money amid the global economic upheaval, investors are discovering frauds against foreign companies (12 May 2009)

http://business.timesonline.co.uk/tol/business/markets/japan/article6261356.ece

Cases

Gould v Companies Auditors and Liquidators Disciplinary Board [2009] FCA 475

ADMINISTRATIVE LAW – appeal from Administrative Appeals Tribunal (AAT) on questions of law and application under s 39B of Judiciary Act 1903 (Cth) for relief in respect of AAT’s decision – AAT affirmed decision Companies Auditors and Liquidators Disciplinary Board (Board) suspending registration of applicant (G) as a liquidator for three months – Board had found that G had failed to carry out “adequately and properly” duties as liquidator and as administrator of certain companies, so that the power given by s 1292(2)(d) of Corporations Law (Law) and of Corporations Act 2001 (Cth) (Act) was enlivened – proceeding before Board and later before AAT had proceeded on Contentions as formulated by Australia Securities and Investments Commission (ASIC) – each of Board and AAT found some Contentions established and others not established

http://www.austlii.edu.au/au/cases/cth/FCA/2009/475.html

Warne and Australian Securities and Investments Commission [2009] AATA 340

CORPORATIONS – Applicant an officer of two or more corporations wound-up within preceding seven years – inability to pay debts – banning order - disqualification from managing corporations for a period of 18 months – whether disqualification is correct and preferable decision - grounds for disqualification – whether applicant responsible for or contributed to failure of corporation - director's duties – due diligence – due care and skill - failure to properly monitor management - failure to properly inform himself of the financial position of the company - failure to have proper systems in place for the reporting of financial information - failure to take steps to prevent insolvency or winding up – interest free and unsecured loans – trade creditors – superannuation entitlements - whether period of disqualification is appropriate - public interest – good corporate governance

http://www.austlii.edu.au/au/cases/cth/AATA/2009/340.html

THE CHIEF EXECUTIVE, OFFICE OF FAIR TRADING, DEPARTMENT OF EMPLOYMENT, ECONOMIC DEVELOPMENT & INNOVATION v MARJESCAR PTY

LTD (IN LIQUIDATION) & FLOYD [2009] CCT PD025-08

ADMINISTRATIVE LAW – Professions – Disciplinary proceedings – Disciplinary grounds – Penalty – Jurisdiction of Tribunal to make orders where company in liquidation

http://www.tribunals.qld.gov.au/PAMD/pamdDecisions/PD025-08%20DEC%2001-05-09.pdf

Lake Coogee Estate Management Pty Ltd ACN 115 352 504 v Australian Securities and Investments Commission [2009] FCA 471

Supervisor is of the opinion that the information the investors are required to have to properly consider the progress of the scheme and the risks faced, is insufficiently provided in the reports to date – amendments approved

http://www.austlii.edu.au/au/cases/cth/FCA/2009/471.html

Deputy Commissioner of Taxation v WPS Motorsport Pty Limited [2009] FCA 476

CORPORATIONS — Application to wind-up corporation in insolvency and appoint official liquidator — Failure to comply with a statutory demand — Company not in administration at time of application — Administrator appointed on day prior to hearing of winding up application — Whether court satisfied that it was in the interests of creditors to continue in administration rather than to wind-up the corporation — Where winding up application should be adjourned — Court not satisfied adjournment of winding up application in the interests of creditors or otherwise warranted — Order that company be wound up in insolvency

http://www.austlii.edu.au/au/cases/cth/FCA/2009/476.html

Ferizis v Vaughan [2009] FMCA 453

BANKRUPTCY – Sequestration order – whether sufficient cause to dismiss the petition – stay of proceedings under the order

http://www.austlii.edu.au/au/cases/cth/FMCA/2009/453.html

Investec Bank (Australia) Limited v Glodale Pty Ltd & Ors [2009] VSCA 97

PROPERTY – Appeal – Mortgage – Sale of holiday apartment complexes by mortgagee in possession – Duty to take reasonable care to ensure property sold at market value – Content of mortgagee’s duty under s 85 Property Law Act 1992 (Qld) and s 420A Corporations Act 2001 (Cth) – Breach of duty constituted by appointment of non-local real estate agent – Sale in one line instead of individually not breach of mortgagee’s duty – Whether appropriate remedy damages or taking of accounts

http://www.austlii.edu.au/au/cases/vic/VSCA/2009/97.html

Arthur Andersen Corporate Finance Pty Ltd v Buzzle Operations Pty Ltd (in liq) [2009] NSWCA 104

PROCEDURE - miscellaneous procedural matters - other matters - exercise of discretion to extend time for service of writ - factors relevant to exercise of discretion - where limitation period for underlying action had expired - where deliberate delay in service - influence of litigation funder who undertook to provide the necessary funds to pursue the defendant.
PROCEDURE - miscellaneous procedural matters - other matters - policy considerations - just, quick and cheap resolution of proceedings - objects of case management - avoidance of delay.

http://www.austlii.edu.au/au/cases/nsw/NSWCA/2009/104.html

Fazzari v Henley Partners Pty Ltd [2009] NSWSC 387

CORPORATIONS - winding up application on the just and equitable ground - husband and wife are only members - no suggestion that creditors' interests in jeopardy - proceedings on foot in Family Court with respect to property and otherwise - whether proceedings should be transferred to Family Court http://www.austlii.edu.au/au/cases/nsw/NSWSC/2009/387.html

Autolac Pty Ltd v O & H Distributors Pty Ltd [2009] NSWSC 394

CORPORATIONS - winding up - winding up in insolvency - statutory demand - application for order setting aside -plaintiff alleges genuine dispute about existence of debt - no plausible contention shown - no matter of principle

http://www.austlii.edu.au/au/cases/nsw/NSWSC/2009/394.html

Cufurovic v Coshott [2009] NSWSC 372

COSTS - assessment - costs incurred prior to bankruptcy - effect of discharge from bankruptcy on availability of statutory costs assessment procedure

http://www.austlii.edu.au/au/cases/nsw/NSWSC/2009/372.html

Cremona Bros Pty Ltd v Chris Antico Pty Ltd [2009] NSWSC 390 

CORPORATIONS – winding up – Statutory Demand – Demand of 98 pages made demand with different amount and supporting information to that put forward in earlier communications between parties – extreme complexity and ordinary accounting practices not followed – creditor’s evidence conceded some excesses and if brought forward further claims said to show Demand was too low – found, the Demand was prepared for calculated purpose of swamping the recipient with information that could not be well dealt with in the time available, was an abuse of the statutory process and grossly unfair – Statutory Demand set aside

http://www.austlii.edu.au/au/cases/nsw/NSWSC/2009/390.html

GFB Fisheries Ltd v Nino Pty Ltd t/a Barramundi Waters [2009] QDC 119

APPLICATION - application for freezing order – where there is outstanding judgment against defendant – where defendant has limited assets – where advanced negotiations to sell assets - where court orders defendant to pay money into court upon sale of asset until further order http://www.sclqld.org.au/qjudgment/2009/QDC/119

AAGT Private Loans Pty Ltd v Ferguson & Anor [2009] QSC 113

REAL PROPERTY – TORRENS TITLE – INSTRUMENTS GENERALLY – ATTESTATION AND EXECUTION – EXECUTION UNDER POWER OF ATTORNEY – where letter of offer expressly excluded the taking of security over property

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – HARSH AND UNCONSCIONABLE CONTRACTS AND STATUTORY REMEDIES – where plaintiff sought to execute Power of Attorney clause over defendants’ home

EQUITY – UNCONSCIONABILITY – whether first and second defendant were at a special disadvantage as against the plaintiff – whether the plaintiff had an unfair advantage as against first and second defendant http://www.sclqld.org.au/qjudgment/2009/QSC/113

Equititrust Limited v Gamp Developments P/L & Ors [2009] QSC 115

PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PRACTICE UNDER RULES OF COURT – SUMMARY JUDGMENT – where basis of plaintiff’s claim is not pleaded – whether summary judgment may be given under in respect of a claim not pleaded – whether cause of action is established by creditor against guarantor when a demand is not made

PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PRACTICE UNDER RULES OF COURT – SERVICE – where party allegedly served did not make notation under r 115(2) – whether service is validly effected

http://www.sclqld.org.au/qjudgment/2009/QSC/115

The material contained in this publication is no more than general comment. Readers should not act on the basis of the material without taking professional advice relating to their particular circumstances