Chalker v Clark - [2006] VSC 457

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

CORPORATIONS LIST

No. 8256 of 2005

IN THE MATTER OF the Corporations Act2001 (Cth)

AND

IN THE MATTER OF Chalky’s in the Dunes Pty Ltd (in liquidation) (ACN 066 041 843)

BETWEEN

JOHN LEONARD CHALKER	Plaintiff
and
GRAHAM JOHN CLARK	Defendants
and
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

AND

No. 6131 of 2006

IN THE MATTER OF the Corporations Act2001 (Cth)

AND

IN THE MATTER OF Chalky’s in the Dunes Pty Ltd (in liquidation) (ACN 066 041 843)

BETWEEN

JOHN LEONARD CHALKER	Plaintiff
and
GRAHAM JOHN CLARK	Defendants
and
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

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JUDGE:	WHELAN J
WHERE HELD:	Melbourne
DATE OF HEARING:	21 November 2006
DATE OF JUDGMENT:	6 December 2006
CASE MAY BE CITED AS:	Chalker v Clark & Anor
MEDIUM NEUTRAL CITATION:	[2006] VSC 457

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CORPORATIONS – Corporations Act 2001 s 601AH – reinstatement of company – whether applicant is a “person aggrieved” – whether proposal for assignment of cause of action justifies reinstatement – attitude of secured creditor – proposed proceeding statute barred – application dismissed.

CORPORTIONS – Corporations Act 2001 ss 511 and 1322 – final meeting of creditors and members not convened in accordance with the Act – procedural irregularity – whether meeting should be declared void – application dismissed.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr G. Herbert	V.M. Roccisano
For the Secondnamed Defendant	Mr A. Molnar, solicitor	Australian Securities and Investments Commission
For the Objectors	Mr M.R. Scott	Tress Cox

HIS HONOUR:

I have before me two related applications.

The first, in proceeding 8256 of 2005, is an appeal from an order of Master Efthim made 9 March 2006 whereby he dismissed the originating process in the proceeding. The relief sought in that originating process was an order under s 601AH(2) of the Corporations Act 2001 (“the Act”) requiring the Australian Securities and Investment Commission (“ASIC”) to restore Chalky’s in the Dunes Pty Ltd (“the company”) to the register.

The second proceeding, which is 6131 of 2006, seeks an order under ss 511 and 1322 of the Act that a meeting of creditors and contributories of the company held on 17 August 2002 and the proceedings at that meeting are void by reason of the fact that the meeting, which was the final meeting of creditors and members pursuant to s 509 of the Act, had not been duly convened.

On the hearing before me the plaintiff in each proceeding, Mr Chalker, was represented by counsel, and I also heard submissions on behalf of ASIC, and on behalf of Barwon Coast Community of Management Incorporated and the State of Victoria who are the prospective defendants to a proceeding which Mr Chalker wishes to institute should he be successful in having the company restored to the register and should he be successful in procuring an assignment to himself of what he contends to be the company’s cause of action.

The subject matter of the proposed…

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.

Continue reading Chalker v Clark

Details

AGLC: Chalker v Clark [2006] VSC 457
Case: [2006] VSC 457
Decision Date: 6 December 2006

CaseChat Overview and Summary

The case of Chalker v Clark involved an application for the reinstatement of a company, Axion Mining NL, and the convening of a final meeting of creditors and members. The applicant, Chalker, sought to reinstate the company pursuant to section 601AH of the Corporations Act 2001, arguing that he was a "person aggrieved" by the company's winding up and that a proposal for the assignment of the cause of action justified the reinstatement. The applicant also sought to convene a final meeting of creditors and members under sections 511 and 1322 of the Act, claiming that the previous meeting had not been convened in accordance with the requirements of the Act.

The primary legal issues for the court to determine were whether the applicant was a "person aggrieved" and if the proposal for the assignment of the cause of action justified the reinstatement of the company. Additionally, the court had to decide whether the procedural irregularity in the convening of the previous meeting of creditors and members warranted the declaration of that meeting as void.

The court found that the applicant did not meet the threshold of being a "person aggrieved" as required by section 601AH of the Corporations Act 2001. The court further held that the proposal for the assignment of the cause of action did not justify the reinstatement of the company. Regarding the procedural irregularity in the convening of the previous meeting, the court concluded that the irregularity was not sufficient to declare the meeting void. As a result, the application for reinstatement and the convening of a final meeting of creditors and members was dismissed.

The court did not make any orders in relation to the application for reinstatement or the convening of the final meeting of creditors and members. The decision effectively left the company in its existing state of liquidation.

Orders