Emanuele v Australian Securities Commission

HIGH COURT OF AUSTRALIA

BRENNAN CJ, DAWSON, TOOHEY, GAUDRON AND KIRBY JJ

EMANUELE & ANOR v AUSTRALIAN SECURITIES COMMISSION & ORS; FC 97/018, A23/1996
Companies

(1997) 188 CLR 114

5 June 1997
Companies

Companies—Winding up in insolvency—Failure to obtain leave to apply to wind up a company in insolvency—Whether order can be made granting leave nunc pro tunc—Whether requirement of leave in s 459P(2) of Corporations Law is procedural or substantive in nature. ss 459A, 459P Corporations Law s 42(3) Corporations (South Australia) Act 1990 (SA) n

Orders

Order:
1. Appeal and cross-appeal dismissed.

2. The appellants pay the respondents' costs of the appeal.

3. No order as to costs of the cross-appeal.

Decision

BRENNAN CJ:

1.The appellants were directors of a number of companies that were members of the Emanuel Group. Among that group were companies that, for the purposes of proceedings in the Full Court of the Federal Court, were identified as the "Group A Companies". They were insolvent at all relevant times. The Australian Taxation Office ("the ATO") was owed a considerable amount by some of these companies and made an application for their winding up. After that application was made, a deed of company arrangement was entered into, binding the ATO. Accordingly, by force of s 444E(2)(b) of the Corporations Law ("the Law"), the ATO was unable to "proceed with such an application made before the deed became binding on [it]". The Australian Securities Commission ("the ASC") had become a party to those proceedings by intervening therein in exercise of the power to do so conferred by s 1330 of the Law. It gave notice of an intention to apply for an order for the winding up of the companies in insolvency pursuant to s 459A of the Law which reads:

"On an application under section 459P, the Court may order that an insolvent company be wound up in insolvency."

2. The ASC was neither a creditor nor a contributory of any of the companies but, subject to the provisions of s 459P, it was competent to apply to the Court for a company to be wound up in insolvency. Section 459P reads as follows:

" (1) Any one or more of the following may apply to the Court for a company to be wound up in insolvency:

(a) the company;

(b) a creditor (even if the creditor is a secured creditor or is only a contingent or prospective creditor);

(c) a contributory;

(d) a director;

(e) a liquidator or provisional liquidator of the company;

(f) the Commission;

(g) a prescribed agency.

(2) An application by any of the following, or by persons including any of the following, may only be made with the leave of the Court:

(a) a person who is a creditor only because of a contingent or prospective debt;

(b) a contributory;

(c) a director;

(d) the Commission.

(3) The Court may give leave if satisfied that there is a prima facie case that the company is insolvent, but not otherwise.

(4)…