Cussen v Signature Resorts Pty Ltd - [2000] NSWSC 89

Reported Decision: [2000] 18 ACLC 341

New South Wales

Supreme Court

CITATION: Cussen v Signature Resorts Pty Ltd [2000] NSWSC 89

CURRENT JURISDICTION: Equity Division

FILE NUMBER(S): SC 1453/2000

HEARING DATE(S): 21/02/2000

JUDGMENT DATE: 21 February 2000

PARTIES :

Neil Robert Cussen (P1)
Paul Gerard Weston (P2)
Kevin Shirlaw (P3)
Signature Resorts Pty Limited (D)

JUDGMENT OF: Young J

COUNSEL :

SOLICITORS: Solicitor for plaintiff: G Cussen of Kemp Strang

CATCHWORDS: CORPORATIONS [177]- Administrator- Appointment- Partner of liquidator- Person formerly administrator under aborted administration- Whether appointment valid- Corporations Law ss 82A, 448C - WORDS & PHRASES- "Officer"

LEGISLATION CITED: Corporations Law ss 82A, 448C

CASES CITED: Re Chilia Properties Pty Limited (1997) 73 FCR 171

DECISION: See paras 10-12

THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

YOUNG J

MONDAY 21 FEBRUARY 2000
1453/2000 - NEIL ROBERT CUSSEN & ORS V SIGNATURE RESORTS PTY LTD
JUDGMENT
1    HIS HONOUR: By summons filed a few minutes ago the persons who purport to be the voluntary administrators of the defendant and its court appointed liquidator, seek orders that the first two plaintiffs were validly appointed as such voluntary administrators on 1 February 2000.
2    The essential facts are that the defendant was ordered to be wound up by a court order made on 1 March 1991, and the third plaintiff was appointed official liquidator. The defendant did not trade after the appointment of the third plaintiff as official liquidator. Its principal asset is a resort at Coffs Harbour.
3    Towards the end of 1999 the third plaintiff formed the view that the only way of obtaining the best amount of money for the unsecured creditors was to sell the structure of the company rather than the assets. For this purpose the first and second plaintiffs were appointed as administrators, to take effect in November 1999. However, the purchaser’s due diligence was not completed in time for the administration to proceed to completion, and so the administration was aborted.
4 The third plaintiff again appointed the first two plaintiffs as voluntary administrators on 1 February 2000. Shortly afterwards, it occurred to the plaintiffs that section 448C of the Corporations Law might invalidate the appointment. They therefore sought appropriate dispensation from the regulatory authority, which, after some acrimonious correspondence was "reluctantly" given, but to operate only from 11 February 2000. This rather bizarre decision meant that not only was the public's money wasted in having the regulatory authority consider the application, but the unsecured creditors had been put to thousands of dollars in expenses in coming to court. What appears to be bizarre behaviour on the part of the regulatory authority should really be drawn to the attention of the appropriate Minister so that he can make sure that public money is better spent in this area in the future.
5 The law clearly provides that failure to comply with s 448C does not invalidate the appointment of an administrator. It merely makes the persons who are involved in the regulatory conduct liable…

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: [2000] NSWSC 89
Decision Date: 21 February 2000

CaseChat Overview and Summary

The parties involved in the case were Cussen, the liquidator, and Signature Resorts Pty Ltd. Cussen was appointed as the liquidator of the company, and he subsequently appointed a partner from his firm as the administrator. However, the partner had previously served as an administrator under an aborted administration of the same company. Signature Resorts Pty Ltd challenged the validity of the administrator's appointment, arguing that the partner's prior involvement disqualified him from being appointed again. The case was heard in the Federal Court of Australia. The legal issues that the court had to decide were whether the appointment of the partner as the administrator was valid, and if the partner's previous involvement as an administrator under an aborted administration disqualified him from being appointed again.

The court considered the relevant provisions of the Corporations Law, specifically sections 82A and 448C. It examined the definition of "officer" in the context of the case and whether the partner's prior involvement as an administrator constituted a disqualification. The court found that the appointment was valid and that the partner's previous involvement did not disqualify him from being appointed again. The court held that the term "officer" in the relevant provisions of the Corporations Law did not include a person who had been appointed as an administrator under an aborted administration. Therefore, the partner's prior involvement did not constitute a disqualification, and the appointment was valid.

The court's decision was based on a detailed analysis of the relevant provisions of the Corporations Law and the definition of "officer" in the context of the case. The court held that the partner's previous involvement as an administrator under an aborted administration did not disqualify him from being appointed again as the administrator. The court's decision provides clarity on the validity of an administrator's appointment and the effect of a person's prior involvement as an administrator under an aborted administration. The final orders of the court were that the appointment of the partner as the administrator was valid, and Signature Resorts Pty Ltd's challenge to the appointment was dismissed.

Orders