Nicky Thiyavutikan

Case update: Federal Court delivers judgment on creditor-defeating disposition against third party restructuring advisor Contributors: Hannah Griffiths RITP, Partner at Pinsent Masons Phoebe Martin RITP, Senior Associate at Pinsent Masons The Federal Court of Australia recently delivered judgment against a third party restructuring adviser (and a company director) for breaching the creditor-defeating disposition (CDD) provisions, and other provisions of the Corporations Act 2001 (Cth) (Act) and awarded compensation and damages under ss 1317H and 588M(2) of the Act: Connelly (liquidator) v Papadopoulos, in the matter of TSK QLD Pty Ltd (in liq) [2024] FCA 888. Read the takeaways, background and decision (members only) at arita.com.au. https://lnkd.in/gfT88wu7 #restructuring #insolvency #bankruptcy #turnaround #liquidators #fedcourt

28

The High Court has provided guidance as to when the Court will overturn a decision of the Financial Markets Authority (FMA) in a statutory appeal. The FMA cancelled the licence of Rockfort Markets Limited, a derivatives trader, for multiple breaches of its market services licensee obligations under section 531 of the Financial Markets Conduct Act 2013. Our experts discuss the decision and its importance for entities holding a market services licence. Read more: https://lnkd.in/gWG43Yw9 Jane Standage, Andrew Horne, Lloyd Kavanagh, Jeremy Muir and Olivia de Pont #FMA #licence #derivatives

5

Some people tend to think of ASX as a regulator. It is not … a regulator could not be privatised (and in particular, could not be sold to institutions which it regulates, due to the obvious conflicts). As the article says, ASX is simply "an essential piece of infrastructure". The regulator, on the other hand, is ASIC. #law litigation #financialservices #corporationsact #asx

12

When do your OTC derivative obligations come into effect, and when do they cease? Populate fields 'Effective date' and 'Expiration date' for ASIC Rewrite with a date in accordance with ISO 8601 in the yyyy-mm-dd format. #ASIC #ASICRewrite #TransactionReporting #RegulatoryReporting #Regtech

6

Proud to share our recent submission on MBIE's consultation for financial services conduct regulation reform. Our team at DLA Piper raised important concerns about the proposed new powers for the FMA, advocating for evidence-based reforms that enhance market efficiency. Kudos to the brilliant team: Rachel Taylor, Emma Moran, Cameron McCracken, Boston Flanagan-Connors, and Tessa Keenan. Learn more about our insights here: https://lnkd.in/g4j2XUb5 #FinancialMarkets #RegulatoryReform #DLAPiperNZ

32

Today brings new guidance from ASIC on safe harbour provisions! Updated Regulatory Guide 217 follows consultation with directors, professional advisers, registered liquidators, turnaround and restructuring professionals, and other interested parties. Key updates include: • outlining further guidance on s588GA(2) of the Corporations Act; • including practical examples relating to safe harbour; • an additional table with a non-definitive list of course(s) of action or steps ASIC considers may be reasonably likely to lead to a better outcome (than administration or liquidation); • specific additional guidance on the interpretation of legislative terminology, such as ‘reasonably likely’ and ‘better outcome’; and • noting in the guidance that safe harbour protections are available to directors of charities or not-for-profit organisations incorporated under the Corporations Act. RG217 can be accessed in the link in the comments. For those looking for some light weekend reading, I've also linked the response by ASIC to submissions it received regarding the proposed updated guidance through Consultation Paper 372.

36

3 Comments

The Supreme Court handed down its decision in Tongi v Insurance Australia Limited t/as NRMA Insurance [2024] NSWSC 406 on 19 April 2024. Read more in this case note by Senior Associate Qiming Zhou below. #AusLaw #SupremeCourt #NSW #InsuranceLaw #McCabes #LegalInsights

14

ASIC updates guidance for directors on insolvent trading The guidance helps directors understand and comply with their duty under s588G of the Corporations Act to prevent insolvent trading. To review the full report please click on the link below: https://lnkd.in/eFZzt6rS

1

I've had two similar conversations with clients this week about in-house remuneration, particularly the squeeze between the pay of those coming out of private practice and the remuneration level of some far more experienced in-house lawyers. A big company GC, or a CPO, or indeed a CEO will gasp at the demands of a £130-150k newly qualified lawyer looking to match their salary in-house and being far less experienced than someone already in the legal team earning the same. There are scale-up GCs out there earning £150k (perhaps plus a slug of equity) who are being presented with a 3 year PQE lawyer needing to earn more than them, and with nothing like their experience. The obvious question is where does this take in-house salaries? Following this logic to its natural conclusion, will companies have to get used to the fact that their senior lawyers might well need to be benchmarking against their CFOs? Shouldn't they anyway? Newly qualified accountants aren't popping out of the Big4 earning £150k, so maybe (financially at least) GCs ARE the new CFOs? Are you between a rock and a hard place on this? No binary answers here, but would love your own observations, and always happy to speak if you have your own challenges on this... #generalcounsel #legal #executivesearch #odgersberndtson #remuneration

28

5 Comments

Simons v. ANZ Bank New Zealand Limited & Anor [2024] NZCA 330   On 19 July 2024, the Court of Appeal of New Zealand delivered its judgment in Simons v. ANZ Bank New Zealand Limited & Anor [2024] NZCA 330 (per Cooper P, French and Collins JJ), allowing the plaintiff/appellants’ appeal in part and finding that the High Court had erred by not making a common fund order (CFO) at an early stage of proceedings.   The decision continues the Court’s trend of avoiding making difficulties in the application of r 4.24 (representative actions), and explicitly rejects the majority reasoning of the High Court of Australia in BMW Australia Limited v. Brewster [2019] HCA 45. Unlike the majority of the HC of A, the NZCA said “we consider that the commercial viability of a litigation-funding arrangement enhances access to justice by providing certainty in the way a representative proceeding is funded”.   The Court also saw “no clear benefit in deferring making a CFO at an early stage of the proceeding” – failing to do so only prolongs uncertainty, for the representative plaintiff, class members and the litigation funder – uncertainties which it notes dog cognate jurisdictions. “Critical to this conclusion is that the court will closely scrutinise the CFO and approve any settlement”.   More generally, the key principles for class actions as stated in, e.g., Cridge v Studorp (a decision in which this firm acted for the successful plaintiff/respodents) were again approved, with the defendant/respondents’ cross-appeals challenging the making of representative orders on an “opt-out” being rejected. As were the respondents’ claimed concerns about the ‘efficiencies of aggregation’ not being achieved. https://lnkd.in/dFahg-EY

8

The Chambers and Partners 2024 International Fraud & Asset Tracing Global Practice Guide is out now. HFW's Jo Delaney and Ranjani Sundar authored the Australian chapter of the Guide, providing a detailed overview of the legal framework governing fraud, insolvency and asset tracing in Australia, as well as an in-depth analysis of the latest trends and legal developments. George Lamplough, Lee Landale and Vanessa Cheng authored the Hong Kong chapter of the Guide, which sets out key areas of Hong Kong law and practice, including interim relief, tracing, proprietary claims against property, enforcement, and issues which arise in cross-border fraud claims, plus developing areas of Hong Kong law such as claims involving crypto-currency and "defendants unknown". Read the Australian chapter here: https://lnkd.in/gSjgsms6 Read the Hong Kong chapter here: https://lnkd.in/g_5AvMrP For more information on HFW's expertise in fraud and asset recovery, visit: https://lnkd.in/gkk_AypX #ChambersAndPartners #Fraud #FraudAndAssetTracing #AssetTracing

31

Insolvency Law Update - by Panagiota Pisani. The High Court pronounces on the immunity of a ‘separate entity’ of a foreign state from Australian winding up proceedings. Can a creditor commence winding up proceedings against a separate entity of a foreign State that is registered as a foreign company under Div 2 of Pt 5B.2 (‘Part 5.7 body’) of the Corporations Act 2001 (Cth) (‘Corporations Act’)? Panagiota Pisani considers the High Court’s decision and the possible implications for winding up proceedings in Australia. View the complete article here: https://lnkd.in/g7-4td5X #insolvencylaw #commerciallitigation #disputeresolution #victorianbar

19

Last week the Federal Court (Markovic J) published judgment in Brady v NULIS Nominees (Australia) Ltd in its capacity as Trustee of the MLC Super Fund [2024] FCA 1374. The case is an important decision in fees for no services class actions in the financial services sector and is the first to consider superannuation trustee compliance in a class action context. NULIS is the Trustee of the MLC Super Fund. National Australia Bank is the ultimate holding company of NULIS. The class action made three allegations. First, it alleged NULIS lacked power under the trust deed to charge fees insofar as they represented revenue to NULIS that may ultimately form part of a pool of funds used to pay commissions. Second, it alleged that NULIS breached its duties as trustee under the Superannuation Industry (Supervision) Act 1993 by charging fund members fees to fund commissions to financial services licensees following a transfer of the relevant fund to a successor fund. Third, it alleged that NULIS breached s 963K of the Corporations Act 2001 (Cth) by paying commissions after 1 July 2016 with the consequence that the charging of fees to fund the payment of those commissions was a breach of the Trust Deed because those fees were not for the “administration and operation” of the MLC Super Fund. The Court dismissed each of the claims. Markovic J held at held at [476] that decisions of a superannuation trustee would “only be examined or reviewed by a court for the purpose of determining whether the discretion has been exercised in good faith, upon real and genuine consideration and in accordance with the purposes for which the discretion was conferred.” Fiona Roughley SC appeared for NULIS, together with David Thomas SC and Celia Winnett (6 Selborne), and Eliza Forsyth (12 Wentworth). They were instructed by King & Wood Mallesons Link to judgment: https://lnkd.in/dvuCjqAP

22

This has practical application with regards to an insolvent company undertaking a s588GA Safe Harbour Turnaround or Restructuring, where there is protection for Directors from Insolvent Trading Personal Liability (2017)… …and s588FDB creditor-defeating disposition (2020) which is a voidable action (ASIC order) available to the liquidator or ASIC. No order can be made where the disposition was: 1. For market value and/or 2. part of the Safe Harbour restructuring (“better outcome” test). This needs to be executed with precision and only the most experienced reputable and qualified advisors can be trusted. It’s a highly specialist area and directors should always request references from an advisor’s former clients. #phoenixing #turnaround #preinsolvency #restructuring #safeharbour #insolvent #governance

4

Corporate Wrap-Up / 26 July 2024. // A weekly summary of the key developments in the world of Australian corporate law. In this edition: 🔍 ASIC market cleanliness report ⚖ Enforcement action against AMEX for breach of its Design and Distribution Obligations 💱 Earn-out drafting pitfalls 📃 Draft legislation on merger reforms 🙅🏻‍♂️ Criminal action for alleged market misconduct 💻 Listed@ASX Compliance Update #corporatelaw #corporategovernance #mergersandacquisitions

10