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Willmott Forests: An incomplete picture

Earlier this year, the Victorian Court of Appeal handed down a decision that gave the liquidator in that case the green light to disclaim leasehold interests in land (Re Willmott Forests Limited (in liquidation)).

What the Court did not consider was the application of s568B of the Corporations Act 2001 (Cth) (Act), which allows lessees to challenge in Court the liquidator’s disclaimer.

The challenge is on the basis that the prejudice caused to the lessee by the loss of the leasehold interest in the land is ‘grossly out of proportion to the prejudice that setting aside the disclaimer would cause to the company’s creditors’. More…