Supreme Court of New South Wales COMMERCIAL EQUITY SEMINAR 26 April 2016 Practice and procedure in the Corporations List

Structure of the Corporations List Proceedings or applications under the Corporations Act 2001 (Cth), the Australian Securities & Investments Commission Act 2001 (Cth), the Cross-Border Insolvency Act 2008 and the Supreme Court (Corporations) Rules 1999 (NSW) are heard in the Corporations List Motions and directions in more complex corporations matters are listed in the Corporations List heard before the Corporations Judge on Monday mornings Matters suitable for short hearings (usually less than two hours) can also be listed in the Monday Corporations Motions List Hearing dates can be fixed before proceedings are filed in schemes of arrangement and other matters where it is commercially important to obtain fixed hearing dates Urgent corporations matters are listed by approaching the Corporations Duty Judge in Court or in chambers – preferable to give notice to the Judge’s Associate by telephone or

Derivative actions, administrations and deeds of company arrangement Derivative actions (Sundara, Rinfort) Administrations and deeds of company arrangement – whether stay of proceedings against a company in administration extends to an arbitration (Re THO Services) – whether secured creditor’s debt (as distinct from its security) survives a deed of company arrangement that purports to extinguish it (Australian Gypsum, Bluenergy) – applications to extend convening period and facilitate electronic communications – termination of deed of company arrangement (Recycling Holdings, Eastmark Holdings, Tesrol Walsh Bay)

Statutory demands, termination of winding up and voidable transactions Statutory demands – Graywinter points – Cases referring to Britten-Norman – cross-examination may more readily be permitted – Interaction with the Building and Construction Industry Security of Payment Act (Re Douglas Aerospace, J Group Constructions) Termination of a winding up – Relevant factors summarised in Re Glass Recycling (Brereton J) – The importance of solvency – Several applications have been adjourned to allow further evidence or dismissed with a stay of the dismissal Voidable transaction proceedings - power to make shelf orders confirmed; procedural rules do not allow extensions beyond time limit in s 588FF(3); directors are affected by extension orders for voidable transaction claims against the Commissioner of Taxation

Insolvency Law Reform Act Expected to commence March 2017 Introduction of Insolvency Practice Schedule (Corporations) and proposed rules – deal with registration, regulation and discipline of insolvency practitioners Introduction of common rules regarding: 1.remuneration and benefits received by external administrators; 2.provision of information by external administrators; 3.meetings of creditors during an external administration; 4.committees of inspection; and 5.external review of the administration of an insolvency. Range of matters that presently require Court applications may be addressed by creditors or ASIC Several commonly used sections are repealed and other sections are significantly amended Complex transitional provisions

Insolvency Law Reform Act – Court’s powers Several commonly used sections are repealed – s 479 (exercise and control of a court-appointed liquidator’s powers) – ss 502–505 (appointment and removal of a liquidator in a voluntary winding up, review of a liquidator’s remuneration) – s 511 (questions determined or powers exercised in a voluntary winding up) – s 536 (supervision of liquidators) – ss 600A–600E (resolutions passed at creditors’ meetings) Court has powers under Insolvency Practice Schedule (Corporations): Div 45 - specified powers in relation to registered liquidators, on Court’s own initiative in proceedings or on application by liquidator or ASIC Div 60 Subdiv B - external administrator can claim remuneration specified in a “remuneration determination” made by, inter alia, the Court. The Court can review an external administrator’s remuneration Div 70 Subdiv G - Court (and ASIC) can direct an insolvency practitioner to provide information, including information requested by creditors. Div 90 Subdivs B and C - Court retains power to inquire into external administration Div external administrator can assign right to sue conferred on him or her by the Corporations Act, but court approval is required after any action brought by the external administrator has begun

Procedural issues, Cross-border insolvency Corporations Rules – Form of applications and interlocutory processes – Notice to ASIC – r 2.8 – Leave to be heard – r 2.13 Disclosure – Practice Note SC Eq 11, "Disclosure in the Equity Division" applies to proceedings in the Corporations List, as to proceedings in the Equity Division generally – Application for an order for disclosure, must be supported by an affidavit setting out specified matters – Extended application to notices to produce Court books Late affidavits – CPA s 61(3), UCPR r 10.2 Cross-border insolvency – Practice Note and future developments