Andreotti v Ausforest Ltd

[2004] NSWSC 1229

CITATION:	Andreotti & Ors v Ausforest Ltd (Receivers & Managers Appointed) [2004] NSWSC 1229
HEARING DATE(S):	8 December 2004
JUDGMENT DATE:	8 December 2004
JURISDICTION:	Equity Division
JUDGMENT OF:	Palmer J
DECISION:	Termination of administration ordered; no postponement of winding up order.
CATCHWORDS:	CORPORATIONS - WINDING UP - ADMINISTRATION - TIMING OF ORDERS - Whether order terminating administration under s.447A should be made a day before winding up order so as to fix commencement of winding up under s.513A at earliest possible time - whether any need shown to vary scheme of s.513A(b).
LEGISLATION CITED:	Corporations Act 2001 (Cth) - s.447A, s.459A, s.513A, s.556(1)
CASES CITED:	St Leonards Property Pty Ltd v Ambridge Investments Pty Ltd (2004) 50 ACSR 443
PARTIES :	Lidio Amerigo Andreotti - First Plaintiff David John Beer - Second Plaintiff Mark Frederick Ralph Bielecki - Third Plaintiff Brett Boon - Fourth Plaintiff David Henry Brand - Fifth Plaintiff Stephen Gerard Connell - Sixth Plaintiff Malcolm John Davis - Seventh Plaintiff Trevor Paul Edmond - Eighth Plaintiff David George Gaszner - Ninth Plaintiff Kevin Francis Gilchrist - Tenth Plaintiff Philip James Harris - Eleventh Plaintiff Stephen John Heath - Twelfth Plaintiff John Andrew Homburg - Thirteenth Plaintiff James Scott Lumsden - Fourteenth Plaintiff Stephen John Lyons - Fifteenth Plaintiff David Cranston Munt - Sixteenth Plaintiff Michael James O'Donnell - Seventeenth Plaintiff Sian Vaughan Rees - Eighteenth Plaintiff Loretta Anne Reynolds - Nineteenth Plaintiff Anthony John Saint - Twentieth Plaintiff Kenneth Douglas Schurgott - Twenty-first Plaintiff Paul Lewis Tanti - Twenty-second Plaintiff Adrian Alexander Tembel - Twenty-third Plaintiff Stephen Douglas Voss - Twenty-fourth Plaintiff Stephen John White - Twenty-fifth Plaintiff Richard Anthony Wood - Twenty-sixth Plaintiff Ausforest Ltd (Receivers & Managers Appointed) - Defendant
FILE NUMBER(S):	SC 5821/04
COUNSEL:	D. Farrar - Plaintiffs D. Mackay - Defendants
SOLICITORS:	Thomson Playford - Plaintiff Minter Ellison - Defendant

JUDGMENT – Ex tempore

1 The Plaintiffs seek an order winding up the Defendants in insolvency. 2 The Originating Process was filed on 27 October 2004. As at that date, the receivers and managers had been appointed to the Defendant. Subsequently, the Defendant was placed under administration. 3 The evidence which was read on the last occasion satisfies me that it is appropriate to terminate the administration of the Defendant pursuant to s.447A of the Corporations Act 2001 (Cth) and to wind the company up under s.459A of the Act. The evidence demonstrates that there is no point in the administration continuing. 4 There is no opposition either by the receivers and managers or by the administrators to the termination of the administration of the Defendant and the winding up of the Defendant in insolvency. The only point which has arisen is whether the administration should be terminated today and the winding up order made tomorrow. The question arises in this way. 5 It is thought that there may be an advantage in not having the administration cease immediately before the making of a winding up order. If the company is under administration immediately before the making up of a winding up order, s.513A(b) causes the commencement of the winding up to occur on the "s.513C day" in relation to the administration, namely, the day upon which the administration began. 6 However, if no administration is in place immediately before the making of the winding up order, then the Act provides that the relation-back day for the purposes of any recovery of preferences or other voidable transactions is the day upon which the application for the winding up order was first filed. The distinction is adverted to by Barrett J in St Leonards Property Pty Ltd v Ambridge Investments Pty Ltd (2004) 50 ACSR 443 in the context of the problem which arose in that case. 7 In the present case, there is no evidence that causing the relation-back day to occur on the day on which the Originating Process seeking a winding up order was made would necessarily catch any transaction which a liquidator is presently seeking to avoid. There is only the suggestion that there may be such transactions rather than that there are such transactions. 8 In the St Leonards Property case, his Honour was confronted with the situation in which it was clear that the company had been placed under administration for the purpose of shifting the relation-back day in a manner calculated by the sole director of the company to achieve the maximum degree of self-preservation. His Honour found, in effect, that the placing of the company under administration was no more than a ploy to advance the relation-back day so as to avoid the setting aside of transactions in which the sole director was personally interested. His Honour therefore adopted the expedient of terminating the administration on one day and winding up the company on the following day, in order to produce a situation in which the company was not under administration "immediately before" the making of a winding up order. 9    Whether or not that method of proceeding would ultimately be effective in law to achieve the purpose His Honour envisaged is not necessary for me to decide in this application. 10    If there were a real point to making orders in the present case of the same type and for the same purpose as Barrett J did, I would probably do so, leaving the consequences to be determined in whatever litigation might thereafter take place between the liquidator and a party concerned. However, in the present case there is no demonstrated need to engage in the sequencing of orders as was done in the St Leonards Property case. It does not seem to me appropriate that in every case in which an administration is to be terminated for the purpose of placing a company in liquidation there should be an artificial sequencing of orders so as to ensure that the relation-back day occurs at the earliest possible time. 11 In short, the scheme of s.513A(b) of the Act should not be subverted as a matter of course every time an administration is terminated. 12 Accordingly, as the facts of this case do not disclose the necessity or desirability to time the making of orders as was done in the St Leonards case, I propose to make all orders sought in the Interlocutory Application immediately, as follows. 13 I order that the administration of the Defendant be terminated pursuant to s.447A of the Corporations Act . 14 I order that the Defendant be wound up under s.549A of the Corporations Act . 15 I appoint Mr Gregory Winfield Hall as liquidator of the Defendant. I note that Mr Hall has filed a Consent to Act as liquidator. 16 I order that the Defendant pay the Plaintiffs’ costs of the proceedings as taxed or agreed, such costs to be paid in the priority as provided in s.556(1)(b) of the Corporations Act . 17    I direct that these orders be passed and entered forthwith.
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Last Modified: 12/17/2004