Legal updates

The innocuously named Treasury Laws Amendment (2017 Enterprise Incentives No 2) Bill 2017 (Cth) (the Bill) makes only a small number of amendments to the Corporations Act 2001 (Cth) insofar as the safe harbour reforms of Australia’s insolvent trading law are concerned.

Members of the Senate have temporarily put aside considerations of postal votes, plebiscites and dual citizens to approve the safe harbour and related laws.

On 3 August 2017 Nippon Yusen Kabushiki Kaisha (NYK) was fined $25 million in the first ever criminal cartel prosecution commenced in Australia. Cartel conduct became criminal under Australian competition law in 2009. This is the second highest monetary penalty for cartel conduct in Australia. The decision of the Federal Court in this case outlines how the Court will determine penalties for criminal cartel conduct including discounts available for early cooperation and the little assistance offered by penalties in civil cartel cases.

In the recent decision of the Federal Court in Josa Constructions Pty Ltd (Administrators Appointed) and Equipment Hire Pty Ltd (Administrators Appointed) [2017] FCA 822, JWS was successful in encouraging the Court to strike a balance between the legislative intention that an administration under Part 5.3A of the Corporations Act 2001 (Cth) (Act) be conducted with relative speed, and the overall objective of Part 5.3A to maximise the return for creditors and any return to shareholders.

The Queensland Supreme Court in the case of Scott & Ors v Port Hinchinbrook Services Limited & Ors [2017] QSC 92 has again confirmed the utility of a Deed of Company Arrangement (DOCA) in respect of director appointments and members’ rights as part of a restructure.

There have been a number of significant developments in the Dispute Resolution team.

The Full Bench of the Fair Work Commission recently determined to make a number of amendments to modern awards relating to casual and part-time employees. 

The Federal Court has released its judgment in favour of Brickworks Limited and Washington H. Soul Pattinson and Company Limited, in its proceedings with Perpetual.

A recent court decision is a timely reminder of the limitations that can affect a person’s ability to rely on set-off rights when a debtor or contract counterparty becomes insolvent.

The decision of Tottle J of the Supreme Court of Western Australia in Hamersley Iron Pty Ltd v Forge Group Power Pty Ltd (in liquidation) (receivers and managers appointed) has given much needed clarification of the operation of the statutory set-off provision in section 553C of the Corporations Act 2001 and the effect of the attachment of a security interest under section 19 of the Personal Property Securities Act 2009 (PPSA).

It is not uncommon for administrators to be appointed in the period between a company being served with a creditor’s winding up application and the date on which that application is to be heard. Despite their appointment, and unless the administrator attempts to intervene, the Court can and often will hear the winding up application and, if appropriate, order that the company be wound up and terminate the administration.

Administrators may apply to adjourn an application to wind up a company which is under administration pursuant to s 440A(2) of the Corporations Act 2001 (Cth) (Act). In order to do so, they must satisfy the Court that the continuation of the administration is in the best interests of creditors.

On 9 March 2017, the Federal Court of Australia dismissed allegations brought by the Australian Competition and Consumer Commission (ACCC) against Australia’s largest cable manufacturers, Olex Australia Pty Limited and Prysmian Power Cables & Systems Australia Pty Limited (together the Manufacturers), three electrical cable wholesalers, Rexel Electrical Suppliers Pty Ltd, Australian regional Wholesalers Pty Limited and Lawrence & Hanson Group Pty Ltd, (together the Wholesalers) and six individual respondents for cartel conduct – a cartel that the ACCC considered so serious that it, in consultation with the CDPP, deliberated prosecuting as a criminal action initially.

The Australian Competition Tribunal has given competition approval for the $11bn merger of Tabcorp and Tatts. Although the Tribunal was the first instance decision maker in this case, under proposed changes to the Competition and Consumer Act 2010 (Cth) (CCA) recommended by the Harper Review, the ACCC will become the first instance decision maker in merger authorisations in the future and empowered to authorise mergers on the basis that they either will not substantially lessen competition or will result in net public benefits.