Austin, G.F. & ors v Kern Corporation Ltd Beard, R.A. & ors v Kern Corporation Ltd Anthony, L.B. & ors v Kern Corporation Ltd

[1992] FCA 760

: ,

IN THE FEDERAL COURT OF AUSTRALIA )	No. QG 4 of 1992
PUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION	)

BETWEEN:

13 OCT 1992

Applicants

AND:  KERN CORPORATION LIMITED (A.C.N. 010 339
321) (IN LIOUIDATIONL

Respondent

MINUTES OF ORDERS

JUDGE MAKING ORDER:	Drummond J
DATE OF ORDER:	28 September, 1992
WHERE MADE:	Brisbane
THE COURT ORDERS THAT:
NOTE :
-	Settlement and entry of orders is dealt with in
Order 36 of the Federal Court Rules.

1.        The Court grants its approval to the settlement reached in relation to this action.

IN THE FEDERAL COURT OF AUSTRALIA )	No. QG 5 of 1992
IJUEENSLAND DISTRICT REGISTRY	1
GENERAL DIVISION	1

Applicants

AND :  KERN CORPORATION LIMITED (A.C.N. 010 339
321) ( IN LIOUIDATIONL

Respondent

MINUTES OF ORDERS

JUDGE MAKING ORDER:	Drummond J
DATE OF ORDER:	28 September, 1992
WHERE MADE:	Brisbane
THE COURT ORDERS THAT:

1.        The Court grants its approval to the settlement reached in relation to this action.

NOTE:	Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA )	No. QG 7 of 1992
QUEENSLAND DISTRICT REGISTRY	1
GENERAL DIVISION	1

BETWEEN: LEONARD BENJAMIN ANTHONY, JACOUELINE
CATHERINE BATLEY, JOHN FRANCIS BRADY,

LLOYD JAMES BULLOCK, DIANE W E E ELDRIDGE,

Applicants

AND:	KERN CORPORATION LIMITED (A.C.N. 010 339
321) !IN LIOUIDATION1

Respondent

MINUTES OF ORDERS

JUDGE MAKING ORDER:	Drummond J
DATE OF ORDER:	28 September, 1992
WHERE MADE:	Brisbane
THE COURT ORDERS THAT:

1.         The Court grants its approval to the settlement reached in relation to this action.

NOTE:	Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA )	No. QG 4 of 1992

-	Q	)	No. QG 5 of 1992
)	No. QG 7 of 1992
No. QG 4 of 1992

BETWEEN:

Applicants

AND:	KERN CORPORATION LIMITED (A.C.N. 010 339
321) (IN LIOUIDATION)

Respondent

No. QG 5 of 1992

BETWEEN: RACHEL ANNE BEARD, LYNETTE SYLVIA BOLLAND,
ANTONY FREDERICK BOTT, RODNEY BOXALL,

STEVEN NORMAN BROCKWELL, HENRY ROBERT

, N O T Y M E R E J , N A W O C CHRISTOPHER

JOHN FOOKS , N , -

CHRISTINE ANN HAY, JOY LORRAINE JACOBSEN, NARELLE LEE, MALCOLM BARRY McKENZIE, LORRAINE CHERYLD MARSHALL, MALCOLM GODFREY NICHOLLS, ALWYN DALE PATTERSON, GREGORY DONAtD RODIOS, ALAN VINCENT SMITH, MARILYN

CLAIRE STEWART, - ,

WILLIAM ERNEST SUTER, TREVOR JOHN WHELAN

and PATRICIA MARY WILDSOET

Applicants

AND :	KERN CORPORATION LIMITED (A.C.N. 010 339
321) (IN LIOUIDATIONl

Respondent

No. QG 7 of 1992

BETWEEN:

Applicants

AND :	KERN CORPORATION LIMITED (A.C.N. 010 339
3211 (IN LIOUIDATIONL

Respondent

Coram:	Drummond J
Date:	28 September, 1992

Place: Brisbane

EX TEMPORE REASONS FOR JUDGMENT

I have before me three notices of motion each filed by the applicants in actions QG 4, QG 5 and QG 7 of 1992. The notices of motion all seek the court's sanction of a compromise provisionally reached in each action between the applicants and the respondent, who is the same in each of the applications. It is necessary for the liquidators of the respondent company to obtain the court's approval before entering into the respective compromises: see 477(1)(c) of the Corporations Law.

The position is that the applicants in each of the three actions have brought proceedings under the Trade Practices Act 1974 (Cthl seeking to set aside what can be compendiously described as employee share schemes. The intent of the applicants is to avoid liability for moneys which are alleged to have fallen due since 1989 and which will, from time to time, in relation to the various applicants, fall due up to June of 1999 or thereabouts, in respect of shares taken up by or allocated to the various applicants pursuant to the employee share scheme operated by the respondent. Whether they succeed or fail will turn in large part on questions of credibility.

It is apparent from the material before me that what is quite a small amount in total is at best likely to be recoverable from each applicant over the whole of the ten-year period. It is also clear from the material before me that if any of these moneys were to be gathered in they would fall within the ambit of the charge granted by the respondent to

the Commonwealth Trading Bank of Australia. I have an affidavit from one of the receivers and managers appointed by	the Commonwealth Trading Bank of Australia, Mr. Tuttle, in
which he records that he has released the applicants in these three actions from the ambit of the security. The significance of the release is that the payment, small though it is in total, that the applicants propose in the deed of settlement to pay to the liquidators of the respondent company, will inure for the benefit of the company's unsecured creditors when, but for the release by the receivers and managers, any moneys recoverable from the applicants in respect of their participation in the employee share scheme would have fallen into the hands of those receivers and managers.
The proposal, in effect, is that the applicants in all three actions - 74 applicants in total - will pay a total sum of $20,000.00 forthwith upon the deed of settlement being sanctioned by the court to the liquidators in return for a release by the liquidators from all further liability on the part of each applicant in respect of the shares issued to the various applicants under the employee share scheme.
It seems to me that in the rather unusual circumstances reflected in the material before me, I can readily hold that this is a compromise which should be approved. I therefore grant my approval to the parties in each of the three actlons entering into the compromise recorded in the deed of settlement which is in the material be£ ore me.
I certify that this and the preceding three pages is a true copy of the reasons for judgment herein of the Honourable Mr. Justice Drummond.
Associate: )!fJbfv"*
Date:  v8 September, 1992