The IMF has injected fuel into the debate over the timing of the peak of banks' bad debts by warning Australian banks could lose $33 billion due to household and corporate defaults. In two reports on Australasian banks' vulnerabilities, the world's financial system watchdog advocates both Australian and New Zealand banks undergo tougher stress tests to mitigate a potential surge in defaults and ensure they can roll-over short-term external debt ( 16 October 2009)

 

A new report has called for a rethink of Australia's financial regulations in the wake of the global financial crisis, flagging potential new rules to govern the shadow banking system and a ''strengthening'' of links between the corporate and banking regulators. The Access Economics commissioned report by FINSIA has warned that the crisis had exposed “weaknesses'' in Australia's regulations and that the country needed to re-examine its regulatory structure (13 October 2009)

 

A leading judge has taken aim at litigation funders, saying courts "should not be delayed or distracted by claims which are brought only because there are profits in their promotion". Justice Patrick Keane of the Queensland Court of Appeal also says the "easy and lucrative" reliance on information technology is hampering efforts to streamline litigation (16 October 2009)

 

The business lobby has been warned that tax deductibility for corporate legal costs will have to go if it succeeds in securing taxpayer funding of public interest litigation. Business groups, such as the Australian Chamber of Commerce and Industry and the Forest Industry Association of Tasmania, are pushing for public funding of litigation judged to be in the public interest (16 October 2009)

 

The Federal Government has approved the activation of the scheme used to accommodate policyholders when an insurance company fails – the Financial Claims Scheme Policyholder Compensation Facility – in relation to a small general insurer, Australian Family Assurance Limited (16 October 2009)

 

Macquarie Private Wealth has appointed Craig Boss as an insurance specialist. He will be responsible for strengthening Macquarie’s personal and business insurance services (15 October 2009)

 

Litigation funder IMF Australia Ltd says it will provide funding to the administrators of ABC Learning for public examinations. The examinations will principally address charges granted by ABC Learning to a syndicate of banks shortly prior to ABC Learning entering external control IMF said in a statement to the stock exchange (13 October 2009)

 

Financial planner warns investors of 'riskier' investment landscape, yet forecasts recovery for Gold Coast. An aggressive rebound in domestic and international equity markets has created a new riskier, high return investment landscape, according to Gold Coast-based AXA (13 October 2009)

 

The issue of professional indemnity (PI) insurance has shifted up a gear with a jump in premiums for financial planners. With QBE Insurance no longer providing cover for new clients, along with a compressed market of domestic insurers, there are rumours potential claims from the fall of Storm Financial, Great Southern and Timbercorp will push a second, and possibly a third, insurer to follow suit (12 October 2009)

 

Finance Minister Lindsay Tanner has promised to press for nationally consistent laws on the legal liability of directors of private companies, warning that "overly onerous" laws are discouraging qualified people from standing for board positions (15 October 2009)

 

The Commonwealth Bank CBA has paid a $100,000 penalty to ASIC for failing to meet its continuous disclosure obligations under the Corporations Act. The regulator announced the imposition of the penalty today claiming the big banking group had failed to notify the Australian Securities Exchange (ASX) after it became aware of information about its expected loan impairment expense to gross loans and acceptances ratio for the financial year ending June 30 (14 October 2009)

 

Different regulatory regimes governing charities across state borders are wasting donations through costly compliance regimes that need radical reform (15 October 2009)

 

A new master class,one of three being held in Queensland, will help ensure councillors were able to fulfill their obligations under the Bligh Government’s Sustainability and Reporting initiative which is helping councils achieve better planning, asset management and sustainability outcomes (15 October 2009)

 

One in six Australians is already having problems repaying their debt even without the added burden of rising interest rates, a new survey has found. Veda Advantage general manager Russell Evans said in releasing the Galaxy Research survey, that under current laws, this group can be invisible until it's too late (13 October 2009)

 

The ALRC has welcomed the announcement by the federal Government that it will implement a large portion of the recommendations of the ALRC's review of Australian privacy laws. The first stage response focuses on the foundations including a redrafting of the Privacy Act to make it more accessible with new comprehensive credit reporting framework improvements and enhanced powers for the Privacy Commissioner (14 October 2009)

 

The ABA said today that it disagrees with economist Professor Ross Garnaut’s comments on banks. The evidence is that the Australian banks were not insolvent and the wholesale funding guarantee was introduced as a means of ensuring banks could maintain lending growth, not restore the solvency of banks (13 October 2009)

 

The Australian Bankers’ Association (ABA) is reminding consumers that deposits up to $1 million or less are automatically guaranteed under the Government’s Financial Claims Scheme (12 October 2009)

 

A mortgage broker already accused of fraud involving up to $5 million has been charged with new offences involving a further $1.1 million.He allegedly used false documents to entice the victims into thinking they were engaging in a legitimate investment (13 October 2009)

 

ASIC has foiled an attempt by a financial services licensee to enable purchasers of the business to bypass ASIC checks. Licensees should be vigilant in ensuring they comply with the Corporations Act and the conditions of their AFSL. In particular, licensees have a legal obligation to ensure they are competent to provide the financial services authorised under their AFSL. 21st Century has the right to lodge an application with the Administrative Appeals Tribunal for a review of ASIC’s decision (13 October 2009)

 

Guarantee and indemnity – Surety – Right to subrogation to securities – Three separate loans made to company, each secured by mortgage over company's property – Appellants guarantors of each loan – Appellants sold personal properties and used proceeds to reduce first loan – First mortgagee exercised power of sale over company's property to satisfy outstanding amounts owing under first loan and transferred surplus to second mortgagee – Whether appellants have right to subrogation to securities in priority to puisne mortgagees – Whether appellants' right to subrogation excluded by terms of guarantees to puisne mortgagees – Whether rule in Otter v Lord Vaux (1856) 2 K & J 650 [1856] EngR 694; [69 ER 943] applied to prevent appellants from exercising right to subrogation or should be extended to so apply – Whether transfer of surplus required to be unconscionable for doctrine of subrogation to apply.

Equity – Remedies – Constructive trust – Nature of constructive trust – Surplus transferred by first mortgagee to second mortgagee – Whether first mortgagee constructive trustee of surplus – Whether obligation to account – appeal allowed.

 

BANKRUPTCY – Bankruptcy Notice – Application to set aside Bankruptcy Notice – whether debt payable at the time – whether applicants have a counter-claim, set-off or cross demand – whether abuse of process – comity – cost order not due and payable – Bankruptcy Notice set aside.

 

BANKRUPTCY - undischarged bankrupt – where a Statement of Affairs is not on record - filing a Statement of Affairs pursuant to a sequestration order - meaning of ‘file’ in s 54(1) of the Bankrupcty Act 1966 (Cth) - discharge of bankruptcy

 

BANKRUPTCY – where principal asset of a bankrupt is real property – failure of bankrupt to vacate property – granting of orders pursuant to ss 30 and 77(1)(g) of the Bankruptcy Act 1966 (Cth)

 

TRADE PRACTICES – misleading or deceptive conduct, false or misleading representations, loss and damage, characterisation of representations, reliance on statements made, no causal connection between statements made and damage suffered.

 

No obvious factor weighing against the termination of the company’s winding up - Court satisfied that the winding up of the company should be terminated subject to the costs order

 

MORTGAGES – Sale by mortgagee – Statutory power of sale – Failure to have regard to mortgagor’s interests – Section 77(1) Transfer of Land Act 1958 (TLA) – Damages assessment