In brief
The Federal Court has ordered that an insolvency professional be appointed to act as a referee and to decide questions of insolvency in relation to a series of alleged unfair preferences, rather than have the judge undertake that task.
Key takeaways
Predicting the future in restructuring and insolvency work is currently a difficult, albeit topical, pastime. One thing is certain – we can expect more new liquidations next year than is currently the case. A recent Federal Court decision may give us a glimpse of the future for companies where there are sizeable and numerous preference claims to be pursued. And the future may be more work for insolvency practitioners.
In the recent case of Jahani (liquidator) v Commissioner of Taxation, in the matter of Delta Coal Mining Pty Ltd (in liq) [2020] FCA 1642, Justice Stewart in the Federal Court ordered that an insolvency practitioner decide the question of when a company was insolvent, acting as a referee and reporting on that factual issue, rather than have the judge consider herself or himself the evidence to reach a conclusion on solvency.
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