Insolvency Law Update

A recent decision of the Queensland Supreme Court may have serious consequences for many existing secured financing arrangements.

Legislation designed to modernise personal insolvency laws has been introduced.

The amendments to the bankruptcy laws recognise that the majority of bankruptcies relate to consumer debts, and involve people with few assets and little income.

it was commonplace for ‘off the plan’ contracts of sale to include clauses granting the vendor a reasonable extension of time to register the subdivision plan upon giving notice to the purchaser. However, the recent decision of Clifford & Anor v Solid Investments Australia Pty Ltd (2009) VSC 223 seems to suggest that such extensions are invalid.

With the Fair Work Bill receiving Royal Assent on 7 April 2009, the Federal Government has followed through on its election promise to do away with 'Workchoices'.

Director's penalty notice

In Deputy Commissioner of Taxation v Falzon the Queensland Court of Appeal considered whether it was appropriate to set aside a director's penalty notice.

It is common for lenders (creditors/mortgagees) to take security of a charge over the debtors/borrowers’ assets to protect their exposure to debtors/borrowers.

Section 262 of the Corporations Act requires certain charges over company assets to be registered with the Australian Securities & Investments Commission (‘ASIC’). These charges include:

• Floating Charges;
• Charges on personal chattels;
• Changes over goodwill and patents or trademarks;
• Charges over book debts; and
• A charge over crops, wool or stocks.

The charge gives the lender tangible security over the property of a company should the loan fall into default. It is a form of insurance.

A mortgage is different and does not require registration with the ASIC.

A fixed and floating charge over all of a company’s assets would also cover any real property owned by the company.

Charges must be lodged with the ASIC within 45 days of creation. A charge is voidable against a Liquidator or Administrator if it is registered outside the 45 day period, unless it is registered more than 6 months before an appointment.

It is possible for a lender to apply to have the Court extend the 45 day period, but a creditor will need a very good reason why it was not registered in time and these applications are not automatically granted.

The Bankruptcy Act has no provisions for the registration of charges and there is no standard national position regarding the registration of securities over personal assets or property (not including real property). This position is being rectified with the release by the government’s draft “Personal Property Securities Bill 2009”. In the mean time, creditors wishing to take security over personal assets or property must navigate the different provisions in each State or Territory.

If you would like to find out more about charges, please telephone Alan of our office today.

Please note that the advice in this communication is general advice only and you should not rely on this advice unless you obtain legal advice specific to your own requirements.

Most people know that copyright protects written content, but are less clear about the precise requirements of copyright protection, and just what amounts to copyright infringement. The basics are:

To stop former employees using confidential information, you should meet four crucial requirements:

This article provides general information on insolvency for directors whose companies are in financial difficulty.

At Rosendorff Lawyers, we understand the complexity of your tax problems and will work hard to get you the tax relief you deserve. Recently, we helped Mr. and Mrs. Smith achieve a $115,000 tax relief. With the savings, they can now afford to adopt another child!

We have experienced tax lawyers who can help you with your individual and business tax debt and work towards stopping ATO collection activity. Our tax lawyers aggressively pursue the best possible tax relief solution for each client, saving them thousands of dollars along the way.

We can help you:

• Settle or contest an existing tax debt;

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