What to make of a clause in a contract specifying that an amount owing following a breach can be calculated according to the terms of the contract?

The decision in Break Fast Investments Pty Ltd v Sclavenitis [2022] VSC 288 involved a plaintiff, as corporate trustee in liquidation, claiming to be assignee of a right to recover a debt paid for by a guarantor and seeking to enforce that right. In ruling on the question of whether or not the plaintiff had standing to bring its action, the Court addressed the law governing the power of a former trustee as bare trustee to deal with trust assets and the powers of a liquidator of a bare trustee in similar respects.

The New South Wales Court of Appeal has allowed an appeal against orders for distribution from a co-mingled fund held by insolvent entities and, in doing so, has provided guidance for liquidators and creditors alike on the various methods for distribution and the principles of tracing.

An administrator appointed over a company is entitled to payment of his or her remuneration, expenses and costs incurred in carrying out the role. To that end, an administrator can be indemnified out of the company’s property and can hold a lien over that property to secure the indemnity if the company is subsequently wound up.

The Supreme Court has recently ruled on two questions arising from such a scenario: does the lien extend to all the company’s property, or only that which the administrator caused the company to hold? And where does the administrator’s indemnity rank with the company’s other debts?

In Ramsay Health Care Australia Pty Ltd v Compton [2017] HCA 28, the High Court has affirmed the position that a court’s discretion to go behind a judgment is not restricted to situations of fraud, collusion or a miscarriage of justice occurring at trial. In doing so, the majority was mindful of the importance of protecting in bankruptcy proceedings the interests of third parties — particularly other creditors — who do not participate in the trial and who later seek to rely on the bona fides of a judgment debt when a sequestration order is made.

The Full Court of the Federal Court has recently clarified the law regarding the ability of a secured creditor of a bankrupt estate to commence proceedings against the bankrupt pursuant to the Bankruptcy Act 1966 (Cth). In Morris Finance Ltd v Brown [2017] FCAFC 516 the Full Court considered the provisions of the Act and held that, as an exception to the general rule that a creditor requires leave of a court to bring a claim for a provable debt against a bankrupt, proceedings to enforce an equitable charge do not require leave.

When applying to set aside a statutory demand, one of the ways to do so is to show the existence of a ‘genuine offsetting claim’. The recent Federal Court decision in Gucce Holdings Pty Ltd v Bank of Queensland Limited [2017] FCA 12 illustrates a set-aside application made on such grounds, and is worth noting for the interface it has with the law of evidence and parties’ procedural obligations.

The Federal Court has recently considered an appeal relating to the circumstances in which a court of bankruptcy can and should 'go behind' a judgment made against a debtor in order to ascertain whether a party facing bankruptcy in fact owes a debt being pursued.