|
|
Cross-Border Insolvency Act 2008 |
The Cross-Border Insolvency Act 2008 received royal accent on 26 May 2008 and came into affect on 1 July 2008. The Act provides for the adoption and enactment as a law of Australia, of the Model Law on cross border insolvency, which was adopted by the United Nations Commission on International Trade Law ("UNCITRAL") in May 1997. |
The UNCITRAL Model Law will see Australia joining the US, Great Britain, Japan, Canada, New Zealand, Poland, Romania, Serbia, Mexico and South Africa who have all adopted the Model Law. |
The Cross-Border Insolvency Act recognises that international trade in goods and services is no longer the domain of multi national companies. The Act confers new legal right upon foreign creditors and foreign liquidators over property of a debtor where that property is situated in Australia.
|
The Act allows a foreign creditor or liquidator to bring proceedings in a court in Australia to commence a winding up of Australian assets. To have the foreign proceeding recognised, a foreign creditor or liquidator simply has to apply to an Australian court. |
A recent case in Queensland saw the Federal Court respond to a letter of request in bankruptcy from the English High Court on behalf of an English trustee of a bankrupt estate. The bankrupt debtor owned property in the UK and in Queensland. |
The Federal Court ordered that the bankrupt be restrained from dealing with the property and a Queensland insolvency practitioner was appointed receiver without security of the property and was entitled to lodge caveats on the property with the Registrar of Titles. |
