The article discusses some of the troubles that one of the building companies in Australia is facing. The company is being faced with insolvency due to a number of unfortunate events that have rocked it. Gilford Motor Co Ltd v Horne also deals with avoiding a oblifation that is contractual. Softec homes which has been one of the major building companies in the country has been hit with a scandal whereby there have been cases of misuse of funds by the authority. Due to this the company was stopped from conducting trade until the required documents are presented (Castello, 2017). It is essential to ensure that that all companies that conduct trade have all the necessary documents. The other problem that has been placing the company at imminent danger of being placed in insolvency is that of not providing the required services to the clients. It is important to note that all registered companies should be able to provide the clients with the services they offer. In this case, residents have claimed that the company has left behind a trail of unfinished work of which they paid for. In this case, they would like to get a refund or better yet have their houses completed as per their agreements earlier on. Workers also have not been left behind in pressuring the company to pay them their salaries of which they claim they have not been able to get for some time now. The court is supposed is supposed to listen to all these arguments and decide whether the company should be liquidated or not. The paper reported that the court had been adjourned for further deliberations on the issue.
Macaura v Northern Assurance
There are a number of legal issues that arise as a result of the story provided by the article. One of the issues that have been covered in the article is that of insolvency. It is important to note that there is a likelihood of companies undergoing insolvency fi they fail to meet a number of standards set by the law (Finch, 2002). Section 95A, states that a company can only be claimed to be solvent if it can pay debts that are due. In this case, we can see that the company has failed to pay a number of debts therefore triggering the need for compulsory insolvency. The court can order the company to be placed under liquidation in order to ensure that the creditors are able to get back their dues. In this case, Softec homes has been unable to pay its employees their salaries and this may trigger the need to have the company placed under liquidation by the court (Paulus, 2006). The other key issue that comes up that triggers a company to be placed under liquidation is when it fails to abide by a statutory requirement.
In this case, the company has failed to produce some necessary documents that it requires in order for it to undertake trade. In this careful therefore there is the need to ensure that the company is placed under insolvency (Ebert & Griffin, 2015). Directors can also be blamed for insolvent trading for some of the decisions they took that led to the failure of the company to perform.
Castello, R. (2017, February 8). South Australian home builder faces liquidation as Federal Court hears of potential misuse of company funds | Adelaide Now. Retrieved from https://www.adelaidenow.com.au/business/south-australian-home-builder-faces-liquidation-as-federal-court-hears-of-potential-misuse-of-company-funds/news-story/37572796ebca9e7c2c43f14164f40231
Finch, V., 2002. Corporate insolvency law: perspectives and principles. Cambridge University Press.
Paulus, C.G., 2006. Global Insolvency Law and the role of multinational Institutions. Brook. J. Int'l L., 32, p.755.
Ebert, R.J. and Griffin, R.W., 2015. Business essentials.