Australasian Memory Pty Limited v Brien [2000] HCA 30 25 May 2000 S84/1999
ORDER
Appeal dismissed.
Second appellant to pay the respondents' costs.
On appeal from the Supreme Court of New South Wales
Representation:
B W Rayment QC with J G Duncan for the appellants (instructed by Gillis Delaney Brown)
S D Robb QC with G L Raffell for the respondents (instructed by Barker Gosling)
Notice: This copy of the Court’s Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
CATCHWORDS
Australasian Memory Pty Limited v Brien
Corporations – External administration – Administration with a view to executing a deed of company arrangement – Power of court to make such order as it thinks appropriate about how Pt 5.3A is to operate in relation to a particular company – Whether power to remedy defect caused by convening of creditors meeting prior to specified period – Whether power to alter time periods fixed by Pt 5.3A where specific provisions for extension of time – Whether power retrospectively to vary the operation of Pt 5.3A – Whether power to affect vested rights.
Words and phrases – "is to operate".
Corporations Law, s 447A, Pt 5.3A.
GLEESON CJ, McHUGH, GUMMOW, HAYNE AND CALLINAN JJ. The Corporate Law Reform Act1992 (Cth) made many amendments to "the Corporations Law set out in section 82" of the Corporations Act1989 (Cth)[1]. By operation of s 7 of the Corporations (New South Wales) Act1990 (NSW), and equivalent provisions of other State Corporations Acts, those amendments changed not only the Corporations Law set out in s 82 of the Commonwealth Corporations Act, but also the Corporations Law of each State. (There being no relevant difference between the provisions of the various Corporations Laws, it is convenient to refer simply to the "Corporations Law" or "the Law".)
The Corporate Law Reform Act introduced a new Part (Pt 5.3A, ss 435A451D) into the Corporations Law. It was headed "Administration of a Company's Affairs with a View to Executing a Deed of Company Arrangement". The object of Pt 5.3A was said, by s 435A, to be
"to provide for the business, property and affairs of an insolvent company to be administered in a way that:
(a)maximises the chances of the company, or as much as possible of its business, continuing in existence; or
(b)if it is not possible for the company or its business to continue in existence–results in a better return for the company's creditors and members than would result from an immediate winding up of the company."
Part 5.3A contains elaborate and detailed provisions about how and when the administration of a company is to begin and end[2], about the consequences of administration[3], and about how and when a company may pass from administration…
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
AGLC
Australasian Memory Pty Ltd v Brien [2000] HCA 30
Case
[2000] HCA 30
Decision Date
CaseChat Overview and Summary
Australasian Memory Pty Ltd appealed to the High Court of Australia against a decision concerning the administration of the company under Part 5.3A of the *Corporations Act 2001* (Cth). The dispute arose from the convening of a creditors' meeting before the statutory period had elapsed, creating a defect in the administration process.
The High Court was required to determine whether the Court had the power under section 412(1) of the *Corporations Act 2001* (Cth) to make orders that would remedy defects in the administration process, specifically by altering time periods fixed by Part 5.3A. This included considering whether such power could be exercised retrospectively to vary the operation of the Part and affect vested rights.
The Court reasoned that section 412(1) grants broad discretion to the Court to make such orders as it thinks appropriate for the purpose of ensuring that Part 5.3A operates effectively in relation to a particular company. However, this discretion is not unfettered and must be exercised within the confines of the statutory scheme. The Court held that while the power to make orders under section 412(1) is wide, it does not extend to retrospectively altering time periods fixed by the Act where specific provisions for extension of time do not exist, nor does it permit the Court to override the clear operation of the statutory provisions or affect vested rights.
The appeal was dismissed, and the second appellant was ordered to pay the respondents' costs.
Orders
Orders of the court
1.
Appeal dismissed.
2.
Second appellant to pay the respondents' costs.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
HUGH, GUMMOW, HAYNE AND CALLINAN JJ
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
Established by:
HUGH, GUMMOW, HAYNE AND CALLINAN JJ