Albarran v Young
[2005] FCA 1905
•30 NOVEMBER 2005
FEDERAL COURT OF AUSTRALIA
Albarran v Young [2005] FCA 1905
RICHARD ALBARRAN & ANOR v YOUNG & ORS
NSD2255 OF 2005
EMMETT J
30 NOVEMBER 2005
SYDNEY
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD2255 OF 2005
BETWEEN:
RICHARD ALBARRAN
FIRST APPLICANTGEOFFREY MCDONALD
SECOND APPLICANTAND:
DUNCAN THOMAS YOUNG
FIRST RESPONDENTPETER RUSSELL WEEKS
SECOND RESPONDENTBEAU QUARRY
THIRD RESPONDENTTRACEY PEACOCK
FOURTH RESPONDENT13 GRENFELL STREET PTY LIMITED (ACN 089 324 416)
(RECEIVERS AND MANAGERS APPOINTED)
FIFTH RESPONDENTP.O.P.A. PTY LIMITED (ACN 070 071 251)
(RECEIVERS AND MANAGERS APPOINTED)
SIXTH RESPONDENTBRIDGECORP FINANCE LIMITED (ACN 095 328 948)
SEVENTH RESPONDENTPERPETUAL NOMINEES LIMITED (ACN 000 733 700)
EIGHT RESPONDENTJUDGE:
EMMETT J
DATE OF ORDER:
30 NOVEMBER 2005
WHERE MADE:
SYDNEY
THE COURT DECLARES THAT:
1.The plaintiffs were not validly appointed administrators of 13 Grenfell Street Pty Limited pursuant to Part 5.3A of the Corporations Act 2001 (Cth) on Tuesday, 15 November 2005 or at all.
2.The purported resolutions passed on 15 November 2005 by POPA Pty Limited as shareholder of 13 Grenfell Street Pty Limited and, subsequently the appointments of Beau Quarry and Tracey Peacock as directors of 13 Grenfell Street Pty Limited were void and of no effect.
THE COURT ORDERS THAT:
1.The proceeding otherwise be dismissed and orders that the hearing on 2 December 2005 be vacated.
2. There be no order as to costs of the proceeding
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD2255 OF 2005
BETWEEN:
RICHARD ALBARRAN
FIRST APPLICANTGEOFFREY MCDONALD
SECOND APPLICANTAND:
DUNCAN THOMAS YOUNG
FIRST RESPONDENTPETER RUSSELL WEEKS
SECOND RESPONDENTBEAU QUARRY
THIRD RESPONDENTTRACEY PEACOCK
FOURTH RESPONDENT13 GRENFELL STREET PTY LIMITED (ACN 089 324 416)
(RECEIVERS AND MANAGERS APPOINTED)
FIFTH RESPONDENTP.O.P.A. PTY LIMITED (ACN 070 071 251)
(RECEIVERS AND MANAGERS APPOINTED)
SIXTH RESPONDENTBRIDGECORP FINANCE LIMITED (ACN 095 328 948)
SEVENTH RESPONDENTPERPETUAL NOMINEES LIMITED (ACN 000 733 700)
EIGHT RESPONDENT
JUDGE:
EMMETT J
DATE:
30 NOVEMBER 2005
PLACE:
SYDNEY
REASONS FOR JUDGMENT
The applicants seek declarations that they are not administrators of the fifth respondent, 13 Grenfell Street Pty Limited (‘the Company’). They were purportedly appointed as administrators. They have subsequently made inquiries that indicate that their appointment was invalid.
On 11 November 2005, the applicants and their partner, Mr Elliot, were appointed receivers and managers of several companies including the sixth respondent, POPA Pty Limited (‘POPA’). Prior to their appointment, those receivers conducted inquiries and investigations concerning the assets of POPA. Amongst the material examined by them was an extract from the database maintained by Australian Securities and Investment Commission (‘the Commission’), dated 10 August 2005. That extract showed that POPA was the holder of all of the issued shares in the Company and that the directors of the Company were Donald Fleming and Kim Sing Koo.
A subsequent extract, obtained by the receivers, dated 10 October 2005, confirmed the same state of affairs, namely that POPA was the holder of all of the issued shares in the company and the directors were Donald Fleming and Kim Sing Koo.
The Company is the owner of a substantial commercial office tower known as 13 Grenfell Street, Adelaide. That property is the subject of securities in favour of the seventh and eighth respondents, Bridgecorp Finance Limited and Perpetual Nominees Limited (‘the Mortgagees’). Upon their appointment, the receivers ascertained that a number of demands had been made by one or other of the Mortgagees on the Company, demanding payment of a sum in excess of $3 million. They also ascertained that Bridgecorp Finance Limited had appointed receivers and managers of the income from the property.
The receivers formed the view, as a consequence of their examination of the books and records of the Company, and from discussions with Mr Fleming, that the Company was insolvent. They therefore concluded that it was in the interests of POPA to obtain control of the Company. They formed the view that it was desirable to do so by removing the directors and resolving that an administrator be appointed.
Accordingly, on 15 November 2005, an extraordinary general meeting of the members of the Company was convened, at which resolutions were passed purporting to remove Messrs Fleming and Koo and purporting to appoint the third and fourth respondents, Messrs Beau Quarry and Tracey Peacock, as directors. Shortly thereafter, Messrs Quarry and Peacock purported to conduct a meeting of the directors of the Company, at which they resolved that the Company was insolvent and that an administrator be appointed pursuant to Part 5.3A of the Corporations Act 2001 (Cth) (‘the Act’). They also resolved that the applicants in the present proceeding, Messrs Richard Albarran and Geoffrey McDonald, be appointed as administrators.
On the following day, the administrators were informed that there may be some question about the validity of the steps that had just been taken. On 18 November 2005, the administrators commenced this proceeding, claiming relief in the form of a declaration that they had been validly appointed as administrators. However, further inquiries conducted by the administrators disclosed that, on 25 October 2005, Messrs Fleming and Koo ceased to be directors of the Company and the first and second respondents, Messrs Duncan Thomas Young and Peter Russell Weeks, were appointed as directors.
They also ascertained that, at the same time, POPA had ceased to be a member of the Company and Mr Young had become the holder of all of the issued shares in the capital of the Company. That information was ascertained from a further extract provided by the Commission, dated 15 November 2005. That extract is prima facie evidence of the matters stated in it and constitutes proof of such matters in the absence of evidence to the contrary by the operation of s 1274B(2) of the Act.
Accordingly, the administrators formed the view that their purported appointment was ineffective, as was the purported appointment of Messrs Quarry and Peacock as directors. The administrators therefore sought and obtained leave to file an amended originating process seeking a declaration that they were not validly appointed administrators of the Company, on 15 November 2005, or at all, and a declaration that the resolutions passed on that day by POPA as shareholder, and subsequently Messrs Quarry and Peacock as directors, were void and of no effect.
That amended originating process has been served on all of the respondents. An Appearances have been filed by Messrs Young and Weeks and the Company. There is evidence before me from their solicitors that they consent to the orders. They did not appear on the hearing of the proceeding today. An appearance has also been filed on behalf of Messrs Quarry and Peacock and POPA. Counsel for the administrators has informed the Court that those three respondents consent to the orders. No appearance has been filed by the Mortgagees, although I have evidence of service of the amended originating process on them. I am by no means persuaded that they are necessary or indeed proper parties.
It is apparent from the circumstances that I have briefly recounted that, notwithstanding that the administrators were appointed in good faith, their appointment was invalid, as were the other resolutions purportedly passed on 15 November 2005 by POPA and by Messrs Quarry and Peacock. It is therefore appropriate to make declarations accordingly.
I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett. Associate:
Dated: 22 December 2005
Counsel for the Applicants: Mr D. Pritchard Solicitor for the Applicants: ERA Spinks Legal Date of Hearing: 30 November 2005 Date of Judgment: 30 November 2005
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