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Calabretta v Redpen Developments Pty Ltd (in liq)

Calabretta v Redpen Developments Pty Ltd (in liq)

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FEDERAL COURT OF AUSTRALIA
Calabretta v Redpen Developments Pty Limited (in liquidation) (receivers and managers appointed), in the matter of Redpen Developments Pty Limited (in liquidation) (receivers and managers appointed) [2010] FCA 81

Citation: Calabretta v Redpen Developments Pty Limited (in liquidation) (receivers and managers appointed), in the matter of Redpen Developments Pty Limited (in liquidation) (receivers and managers appointed) [2010] FCA 81

Parties: DOMENIC CALABRETTA v REDPEN DEVELOPMENTS PTY LIMITED (IN LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED) ACN 113 687 666

File number: NSD 544 of 2009

Judge: YATES J

Date of judgment: 17 February 2010

Catchwords: CORPORATIONS – application for order pursuant to s 447C(2) of Corporations Act 2001 (Cth) declaring whether or not administrator was validly appointed by defendant company – where appointment based on resolution of sole director of company who was bankrupt and disqualified from managing corporations by operation of s 206B(3) of the Act – whether invalid appointment can be validated by s 201M of the Act - application for order pursuant to s 447A(1) of the Act if appointment of administrator declared to be invalid – whether substantial injustice would be caused by order validating an otherwise invalid appointment

Legislation: Corporations Act 2001 (Cth) Part 5.3A, ss 9, 201M, 206A(2), 206B(3), 436A(1), 439A, 443D, 443F, 447A, 447C(2), 448A, 449E, 513A, 513C, 556, 588FB, 588FC, 588FDA, 588FE
Bankruptcy Act 1966 (Cth) ss 55(4A), 57A

Cases cited: Gould v Companies Auditors and Liquidators Disciplinary Board (2009) 71 ACSR 648
Re Pasdonnay Pty Ltd (ACN 009 131 622) (Administrators Appointed); McDonald & Anor (2005) 53 ACSR 717
Re Colorbus Pty Ltd (in liq); Mentha and Another v Colorbus Pty Ltd (in liq)and Another (2004) 213 ALR 789
Australasian Memory Pty Limited and Another v Brien and Another (2000) 200 CLR 270
Deputy Commissioner of Taxation v Portinex Pty Ltd (2000) 156 FLR 453
Sutherland (as liq of Sydney Appliances Pty Ltd (in liq)) v Robert Bosch (Aust) Pty Ltdand Others (2000) 33 ACSR 680
Shirlaw v Graham [2001] NSWSC 612
Panasystems Pty Ltd v Voodoo Tech Pty Ltd (2003) 21 ACLC 842
McIntosh and Another (as joint and several admins of CMX Technologies Pty Ltd) v CMX Technologies Pty Ltd (admins apptd) (2005) 56 ACSR 283
HPI Australia Pty Ltd [2008] NSWSC 1106
Sutherland v Take Seven Group Pty Ltd (1998) 29 ACSR 201
Weston v Carling Constructions Pty Ltd (in Liq) (2000) 175 ALR 202
Bell v Amberday Pty Ltd and Another (2001) 39 ACSR 25
Lockwood and Another v White (2005) 11 VR 402
Hamilton and Another v Donovan Oates Hannaford Mortgage Corp Ltd and Others (2007) 207 FLR 163

Date of hearing: 4 November 2009 and 8 February 2010

Place: Sydney

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 56

Counsel for the Applicant: Mr M J Dawson (on 4 November 2009) and Mr A W Smith (on 8 February 2010)

Solicitors for the Applicant: Levitt Robinson Solicitors (until 27 January 2010)

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT…

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: [2010] FCA 81
Decision Date: 17 February 2010

CaseChat Overview and Summary

Calabretta lodged an application for an order pursuant to section 447C(2) of the Corporations Act 2001 (Cth), seeking a declaration regarding the validity of an administrator's appointment by Redpen Developments Pty Ltd, a company in liquidation. The crux of the dispute was whether the appointment was validly executed by the sole director of the company, who was also bankrupt and disqualified from managing corporations under section 206B(3) of the Act. This raised questions about the authority of a disqualified individual to appoint an administrator and whether such an appointment could be validated under section 201M of the Act.

The court needed to decide whether the administrator's appointment was validly made, given the sole director's disqualification, and whether the invalid appointment could be retrospectively validated under section 201M of the Act. Additionally, if the appointment was found to be invalid, the court had to consider whether making an order to validate the appointment would cause substantial injustice, pursuant to section 447A(1) of the Act.

After examining the facts and applicable statutory provisions, the court determined that the administrator's appointment by the disqualified sole director was invalid. However, it found that the invalid appointment could be validated under section 201M of the Act. The court further concluded that validating the appointment would not result in substantial injustice. Consequently, the application for an order declaring the invalidity of the appointment was dismissed, and the matter was adjourned for further orders.

Orders

Orders of the court

1. The matter be adjourned to a date to be fixed for the purpose of making orders in accordance with these reasons.

Note:

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

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Citation:		Calabretta v Redpen Developments Pty Limited (in liquidation) (receivers and managers appointed), in the matter of Redpen Developments Pty Limited (in liquidation) (receivers and managers appointed) [2010] FCA 81
Parties:		DOMENIC CALABRETTA v REDPEN DEVELOPMENTS PTY LIMITED (IN LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED) ACN 113 687 666
File number:		NSD 544 of 2009
Judge:		YATES J
Date of judgment:		17 February 2010
Catchwords:		CORPORATIONS – application for order pursuant to s 447C(2) of Corporations Act 2001 (Cth) declaring whether or not administrator was validly appointed by defendant company – where appointment based on resolution of sole director of company who was bankrupt and disqualified from managing corporations by operation of s 206B(3) of the Act – whether invalid appointment can be validated by s 201M of the Act - application for order pursuant to s 447A(1) of the Act if appointment of administrator declared to be invalid – whether substantial injustice would be caused by order validating an otherwise invalid appointment
Legislation:		Corporations Act 2001 (Cth) Part 5.3A, ss 9, 201M, 206A(2), 206B(3), 436A(1), 439A, 443D, 443F, 447A, 447C(2), 448A, 449E, 513A, 513C, 556, 588FB, 588FC, 588FDA, 588FE Bankruptcy Act 1966 (Cth) ss 55(4A), 57A
Cases cited:		Gould v Companies Auditors and Liquidators Disciplinary Board (2009) 71 ACSR 648 Re Pasdonnay Pty Ltd (ACN 009 131 622) (Administrators Appointed); McDonald & Anor (2005) 53 ACSR 717 Re Colorbus Pty Ltd (in liq); Mentha and Another v Colorbus Pty Ltd (in liq)and Another (2004) 213 ALR 789 Australasian Memory Pty Limited and Another v Brien and Another (2000) 200 CLR 270 Deputy Commissioner of Taxation v Portinex Pty Ltd (2000) 156 FLR 453 Sutherland (as liq of Sydney Appliances Pty Ltd (in liq)) v Robert Bosch (Aust) Pty Ltdand Others (2000) 33 ACSR 680 Shirlaw v Graham [2001] NSWSC 612 Panasystems Pty Ltd v Voodoo Tech Pty Ltd (2003) 21 ACLC 842 McIntosh and Another (as joint and several admins of CMX Technologies Pty Ltd) v CMX Technologies Pty Ltd (admins apptd) (2005) 56 ACSR 283 HPI Australia Pty Ltd [2008] NSWSC 1106 Sutherland v Take Seven Group Pty Ltd (1998) 29 ACSR 201 Weston v Carling Constructions Pty Ltd (in Liq) (2000) 175 ALR 202 Bell v Amberday Pty Ltd and Another (2001) 39 ACSR 25 Lockwood and Another v White (2005) 11 VR 402 Hamilton and Another v Donovan Oates Hannaford Mortgage Corp Ltd and Others (2007) 207 FLR 163
Date of hearing:	4 November 2009 and 8 February 2010
Place:	Sydney
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	56
Counsel for the Applicant:	Mr M J Dawson (on 4 November 2009) and Mr A W Smith (on 8 February 2010)
Solicitors for the Applicant:	Levitt Robinson Solicitors (until 27 January 2010)