Austral Pacific Group v Airservices Aust

[1999] HCATrans 81

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Brisbane  No B23 of 1998

B e t w e e n -

AUSTRAL PACIFIC GROUP LIMITED 

Applicant

and

AIRSERVICES AUSTRALIA

Respondent

Application for special leave to appeal

GUMMOW J
HAYNE J

TRANSCRIPT OF PROCEEDINGS

FROM BRISBANE BY VIDEO LINK TO CANBERRA

ON FRIDAY, 16 APRIL 1999, AT 11.19 AM

Copyright in the High Court of Australia

MR P.J. LYONS, QC:   If it please the Court, I appear with my learned friend, MR R.N. TRAVES, for the applicant.  (instructed by Michael Stewart)

MR J.C. SHEAHAN, SC:   May it please the Court, I appear with my learned friend, MR P.A. FREEBURN, for the respondent.  (instructed by Corrs Chambers Westgarth)

MR LYONS:   There is a preliminary matter I should mention.  Our client has recently gone into liquidation.  We see no reason why that prevents this application proceeding.  It has been raised with our learned friends and, as we understand the position, they do not see any reason either.

GUMMOW J:   Why not?  Where is the liquidator?

MR LYONS:   The liquidator is not here.

GUMMOW J:   Who is instructing you?

MR LYONS:   We take instructions from an insurer exercising the right of subrogation and we understand the liquidator has no objection to the matter proceeding.

HAYNE J:   Do you not need leave of a court to continue proceedings?  Does the law not impose an automatic stay once liquidation intervenes?  I have not looked at this for a long time but that is my recollection.

MR LYONS:   As we understand it, the law imposes a bar in an action being taken against a company going into liquidation but not the other way around. 

GUMMOW J:   What section says that of the Law.

MR LYONS:   I will have that for your Honours in a moment.  We have checked it recently, however, and I am confident that is its effect.

GUMMOW J:   Yes.  Well, proceed for the moment.

MR LYONS:   Thank you, your Honours.  The application raises questions relating to two matters.

GUMMOW J:   Do you have the provisions of the Corporations Law readily to hand, either you or Mr Sheahan?

MR LYONS:   We have them, your Honour.  We will arrange for them to be obtained shortly, if that is convenient to the Court.

GUMMOW J:   I do not think we should proceed unless we are made aware of them.

MR LYONS:   As the Court pleases.

GUMMOW J:   Would you be able to get these materials in the next five minutes or so?

MR LYONS:   Five to 10, I would think, your Honour.

GUMMOW J:   We will adjourn until 11.30.

AT 11.22 AM SHORT ADJOURNMENT

UPON RESUMING AT 11.33 AM:

GUMMOW J:   Now, Mr Lyons, we have been assuming that this is an insolvent winding up.  Is that the situation?

MR LYONS:   I understand so, your Honours.  The instructions are that an administrator was appointed under section 439A.

GUMMOW J:   An administrator?

MR LYONS:   Originally, yes.

GUMMOW J:   Yes, and there is now a liquidator appointed by the court?

MR LYONS:   No, your Honours.  Section 439C then provides that:

At a meeting convened under section 439A, the creditors may resolve:
…..
(c)  that the company be wound up.

GUMMOW J:   Is that what happened?

MR LYONS:   We understand so, your Honours, yes.  What then happens is that under section 446A, as part of Division 12 - - -

GUMMOW J:   The administrator becomes the liquidator.

MR LYONS:   That is so.  And it is part of the transition to creditors voluntary winding up, and under section 500(2), the result is that:

no action or other civil proceedings shall be proceeded with or commenced against the company except by leave of the Court - - -

GUMMOW J:   Yes, I understand that, but we were looking at 471A but it would appear that that has no application in these circumstances where the liquidation is a transmission from an administration.

MR LYONS:   As we understand it, that is so, your Honours.

GUMMOW J:   Provided one can say the company is not being wound up in insolvency, I suppose, within the meaning of 471A.  Have you section 471A?

MR LYONS:   I do, your Honour, yes.  We understand it not to be a winding up by the court, but in terms of a winding up in insolvency, it seems the chain is the one that I have taken the Court to.

GUMMOW J:   But it is being wound up in insolvency, is it not?

MR LYONS:   The position we understand to be is simply that the liquidator has been appointed under 439A.  I should start again:  an administrator was appointed under 439A and the chain then becomes a resolution under 439C.

GUMMOW J:   Yes.

MR LYONS:   But I hasten to add that these are instructions we received very recently.

GUMMOW J:   Yes, thank you.  I really think we should not have to decide this on the run, Mr Lyons, on imperfect instructions.  The application is probably best stood over to a date to be fixed and, in the meantime, an affidavit can be put on explaining authoritatively what has happened, explaining the present status and indicating the necessity or lack of it of the liquidator instructing.

MR LYONS:   As the Court pleases.

HAYNE J:   And if the liquidator is the appropriate person to instruct, then the liquidator can make whatever arrangements seem appropriate to him or her about the costs of these proceedings, were costs ever to be ordered against your client, for those costs, on their face, would seem to be provable debts.

GUMMOW J:   We are anxious the situation does not run up as there are costs incurred and they are not provided for.

Now, there is another point that arises too.  Could you turn, while we are here, to page 16 of the application book – and I am addressing these remarks to Mr Sheahan as well – do you see the paragraph beginning, “The contrary is plainly arguable”?

MR LYONS:   Yes, your Honour.

GUMMOW J:   And the third sentence: 

We are not told whether or not the plaintiff…..has elected to institute…..It does, however, seem pretty clear that he has not made such an election.

Is there an agreement between you and Mr Sheahan that the matter is to be dealt with on the agreed footing that there has not been such an election?

MR LYONS:   I will take some instructions, your Honour.  It is common ground that there has been no election.

GUMMOW J:   Yes, thank you.

MR LYONS:   Of the kind referred to there.

GUMMOW J:   Yes.  Well, we will simply order that the application for special leave stand over to a date to be fixed and I note that in the meantime there will be provision of further materials to deal with the matters that have been raised in argument as to the competency of the applicant as presently under administration or liquidation.

MR LYONS:   The parties agree that the costs should be reserved.  Would that be appropriate?

GUMMOW J:   And costs of today will be reserved to the adjourned application date.

We will take a short adjournment.

AT 11.39 AM THE MATTER WAS ADJOURNED