Brown, M.R. v Carpet Design Group P/L - [1994] FCA 325

MARTIN RUSSELL BROWN v CARPET DESIGN GROUP PTY LIMITED
No. NG3204 of 1994
FED No. 325/94
Number of pages - 6
Corporations
(1994) 12 ACLC 448
(1994) 13 ACSR 621
(1994) 122 ALR 513

COURT

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
GUMMOW J

CATCHWORDS

Corporations - administration - resolution by creditors that company be wound up - appointment of administrator as liquidator - pending application to wind company up in insolvency - effect of pending application upon appointment of liquidator

Corporations Law: ss. 439C, 446A, 490, 491.

HEARING

SYDNEY, 16 May 1994
#DATE 26:5:1994

Counsel and solicitors Mr C.R.C. Newlinds
for the applicant: instructed by Kemp Strang and

Chippindall

Solicitor for the Mr P.J. Macnish
fifth respondent: of Harwood Andrews

Solicitor for the Intervener, Mr C. Dellit
The Australian Securities Commission:

ORDER

THE COURT DECLARES THAT:
1 The resolution of the creditors of Carpet Design Group Pty Limited ("the Company") passed pursuant to s. 439C of the Corporations Law ("the Law") on 20 April 1994, pursuant to which the Company was wound up ("the resolution"), is valid.

2. Leave of the Court pursuant to s. 490 of the Law was not required before the passage of the resolution.

3. Martin Russel Brown is and has been since 20 April 1994, the liquidator of the Company.
AND THE COURT ORDERS THAT:
The costs of the applicant and of the fifth respondent of the application be paid by the first respondent as a cost and expense of the winding up.

JUDGE1

GUMMOW J What follows are the reasons for the declarations and order made by the Court on 16 May 1994, upon an amended application filed 12 May 1994.

The Court declared that:

"1. The resolution of the creditors of Carpet Design Group Pty Ltd ("the Company") passed pursuant to s. 439C of the Corporations Law ("the Law") on 20 April 1994, pursuant to which the Company was wound up ("the resolution"), is valid.

2. Leave of the Court pursuant to s. 490 of the Law was not required before the passage of the resolution and,

3. Martin Russell Brown is and has been since 20 April 1994, the liquidator of the Company."

Mr Brown is an official liquidator registered under s. 1283 of the Law. He is the applicant. The Court also ordered that the costs of the applicant and the fifth respondent of the application be paid by the Company as a cost and expense of the winding up.

The case is concerned with matters of statutory construction. The facts are not in dispute. The Court has been much assisted by submissions for the Australian Securities Commission, which intervened pursuant to s. 1330 of the Law.
On 15 March 1994, the fifth respondent, a creditor of the Company, filed an application in the Victoria District Registry of this Court for an order that the Company be wound up. One ground of the application was that the Company was an insolvent company. The application…

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: [1994] FCA 325
Decision Date: 26 MAY 1994

CaseChat Overview and Summary

The case of Brown, M.R. v Carpet Design Group P/L involved the creditors of Carpet Design Group Pty Limited, who passed a resolution for the company to be wound up. The resolution was passed under section 439C of the Corporations Law. Martin Russel Brown was appointed as the liquidator of the company. The dispute arose from the question of whether the appointment of Brown as liquidator was valid, considering that there was an ongoing application to wind up the company in insolvency at the time of his appointment.

The primary legal issues before the court were whether the resolution passed by the creditors was valid, whether leave of the court was required before passing the resolution, and if Martin Russel Brown was lawfully appointed as the liquidator of the company. The court also needed to determine if the costs of the application should be borne by one of the respondents.

In its reasoning, the court found that the resolution passed by the creditors was valid and that leave of the court was not required before passing the resolution. The court further declared that Martin Russel Brown was and had been since 20 April 1994, the liquidator of the company. The court concluded that the costs of the applicant and the fifth respondent should be paid by the first respondent as a cost and expense of the winding up.

Orders

Orders of the court

THE COURT DECLARES THAT:

1 The resolution of the creditors of Carpet Design Group Pty Limited ("the Company") passed pursuant to s. 439C of the Corporations Law ("the Law") on 20 April 1994, pursuant to which the Company was wound up ("the resolution"), is valid.

2. Leave of the Court pursuant to s. 490 of the Law was not required before the passage of the resolution.

3. Martin Russel Brown is and has been since 20 April 1994, the liquidator of the Company.

AND THE COURT ORDERS THAT:

The costs of the applicant and of the fifth respondent of the application be paid by the first respondent as a cost and expense of the winding up.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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