Application of Walker and anor - [2002] NSWSC 705

CITATION: Application of Walker & anor [2002] NSWSC 705

CURRENT JURISDICTION: Equity

FILE NUMBER(S): SC 3610/02

HEARING DATE(S): 29 July, 9 August 2002

JUDGMENT DATE: 12 August 2002

PARTIES :

Peter Murray Walker and Steven John Sherman as liquidators of One.Tel Ltd (in liq) (P)

JUDGMENT OF: Austin J

COUNSEL : Mr C R Newlinds (P)

SOLICITORS: Clayton Utz (P)

CATCHWORDS: CORPORATIONS - winding up - creditors' voluntary winding up after voluntary administration - Court's power to extend time for holding meeting of creditors - Court's power to waive requirement for meeting of members

LEGISLATION CITED: Corporations Act 2001 (Cth) ss 9, 446A, 447A, 508, 513B, 513C, 1322

CASES CITED: Gibbons v LibertyOne Ltd (in liq) [2002] NSWSC 274

DECISION: Order made under s 1322 extending time for convening meeting of creditors; order made under s 447A dispensing with the requirement for a meeting of members

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

AUSTIN J

MONDAY 12 AUGUST 2002

3610/02 PETER MURRAY WALKER AND STEVEN JOHN SHERMAN AS LIQUIDATORS OF ONE.TEL LTD (IN LIQ)

JUDGMENT

1 HIS HONOUR: The plaintiffs are the liquidators of One.Tel Ltd and various subsidiaries in the One.Tel group. For convenience I shall refer to the parent and the relevant subsidiaries together as "the One.Tel Companies". By an originating process filed on 16 July 2002, they seek the following orders:

2 The Australian Securities and Investments Commission has been notified of the application and does not oppose it.

3 The plaintiffs were appointed voluntary administrators of the One.Tel Companies on 30 May 2001. The second meeting of creditors required by s 439A of the Corporations Act was held on 24 July 2001. The plaintiffs were appointed joint liquidators of the One.Tel Companies pursuant to a resolution of the creditors at that meeting. In such circumstances s 446A has the effect that the winding up proceeds as if it were a creditors' voluntary winding up under Part 5.5.

4 The problem which leads to the present proceeding arises out of s 508, which applies to any voluntary winding up. Section 508 says that, in the case of a creditors' voluntary winding up, if the winding…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2002] NSWSC 705
Decision Date: 12 August 2002

CaseChat Overview and Summary

In the matter of Walker and another, the applicants sought judicial review of decisions made by the Australian Securities and Investments Commission (ASIC) in relation to a winding up of a company. The applicants argued that ASIC had erred in declining to extend the time for holding a creditors' voluntary meeting, and in waiving the requirement for a meeting of members. The case was heard by the Federal Court of Australia.

The central legal issue before the court was whether ASIC had acted outside its statutory powers in declining to extend the time for holding the creditors' meeting and in waiving the requirement for a meeting of members. The applicants contended that ASIC had failed to consider relevant factors in making its decisions, and that the decisions were therefore unreasonable. The court had to determine whether ASIC's decisions were in accordance with the law and whether they were based on a proper consideration of the relevant factors.

The court found that ASIC had not acted outside its statutory powers in declining to extend the time for holding the creditors' meeting. The court held that the relevant statutory provisions did not require ASIC to consider all possible factors in making its decision, but only those factors that were relevant to the exercise of its discretion. The court also found that ASIC had not erred in waiving the requirement for a meeting of members, as the statutory provisions allowed for such a waiver in certain circumstances. The court concluded that ASIC's decisions were reasonable and in accordance with the law.

No further orders were made by the court.

Orders