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Wells Fargo v Virgin: Update on the High Court appeal

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Written by John Canning and Cameron Mew.

Following our previous alert here on the Full Federal Court’s decision in VB Leaseco Pty Ltd (Administrators Appointed) v Wells Fargo Trust Company, National Association (trustee) [2020] FCAFC 168, Wells Fargo obtained special leave from the High Court to appeal the Full Federal Court’s decision, with the High Court appeal heard on 4 November 2021.  The transcript of the High Court appeal is available here.

At the hearing, quite different approaches were adopted by the counsel for Wells Fargo and the Virgin administrators in putting forward their submissions on the proper scope of an insolvency administrator’s obligation to “give possession” under the Cape Town Convention.  While Wells Fargo’s counsel generally focused on high level issues such as the purpose and policy of the Cape Town Convention being to facilitate aircraft financing by establishing clear rules to govern them and promoting the autonomy of contracting parties, the administrators’ counsel focused on more specific technical issues, in particular what the legal concept of “possession” involves in different jurisdictions.

From the transcript, it is difficult to discern whether the High Court is inclined to Wells Fargo’s or the administrators’ interpretation of “give possession”.  Given the upcoming Christmas period, we expect that the High Court will not be delivering judgment until early next year.  We will provide a further update once judgment has been delivered.
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