Evans v Mullumbimby News Pty Ltd - [2008] NSWSC 240

CITATION: Evans v Mullumbimby News Pty Ltd [2008] NSWSC 240

HEARING DATE(S): 19/03/08

JUDGMENT DATE :
19 March 2008

JURISDICTION: Equity Division
Corporations List

JUDGMENT OF: Barrett J

EX TEMPORE JUDGMENT DATE: 19 March 2008

DECISION: Leave to file originating process in amended form

CATCHWORDS: CORPORATIONS - company under voluntary administration - member wishes to commence proceeding seeking winding up order in respect of company and other orders against company and a natural person defendant - whether leave needed under s 440D

LEGISLATION CITED: Corporations Act 2001 (Cth), Part 5.3A, ss 440A, 440D

CATEGORY: Principal judgment

CASES CITED: Australian Prudential Regulation Authority v Rural & General Insurance Ltd (2004) 136 FCR 149
Watts v Albany Marine Centre Pty Ltd [2007] WASC 22

PARTIES: Robyn Lorraine Evans and Anthony David Johnston - Plaintiffs
Mullumbimby News Pty Limited amd David William Smith - Defendants

FILE NUMBER(S): SC 1936/08

COUNSEL: Mr M L Brabazon - Plaintiffs
Mr M G Streeter - Administrator

SOLICITORS: Baker Mannering & Hart - Plaintiffs
Nv Lawyers - Administrator

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

BARRETT J

WEDNESDAY 19 MARCH 2008

1936/08 ROBYN LORRAINE EVANS & ANOR v MULLUMBIMBY NEWS PTY LIMITED & ANOR

JUDGMENT

1 The plaintiffs seek leave to file in court an originating process which seeks as principal relief an order that the first defendant, Mullumbimby News Pty Ltd, be wound up. There is a claim for interlocutory relief by way of an order for the appointment of a provisional liquidator and claims against both defendants for orders for access to documents and certain other interlocutory relief.

2 The plaintiffs are, I am told, a person who is registered as the holder of 50 per cent of the shares in Mullumbimby News and another person who is the beneficial owner of those shares. The defendants are Mullumbimby News itself and the holder of the remaining 50 per cent of the shares, who is also the sole director.

3 When the matter came before me this morning, I was informed by counsel for the plaintiffs that the sole director had yesterday appointed an administrator under Pt 5.3A of the Corporations Act 2001 (Cth). Mr Streeter has appeared this morning on the instructions of the administrator.

4 A threshold question arising is whether, in the absence of leave under

s 440D of the Corporations Act, the originating process may be filed so as to initiate the winding up proceedings. I am of the opinion that leave under that section is not needed so far as the winding up application is concerned. This is because of the existence of s 440A which makes specific provision with respect to winding up proceedings.

5 The relationship between the two provisions has been considered in a number of cases. There is discussion of them in the judgment of Gyles J in Australian Prudential Regulation Authority v Rural & General Insurance Ltd (2004) 136 FCR 149. His Honour concluded that a winding up proceeding…

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: [2008] NSWSC 240
Decision Date: 19 March 2008

CaseChat Overview and Summary

Evans, a creditor, sought to initiate legal proceedings against Mullumbimby News Pty Ltd, a company that had entered voluntary administration, and against a natural person defendant. The primary aim was to obtain a winding up order against the company and other reliefs against both the company and the individual defendant. The dispute centred on whether Evans needed to obtain leave from the court to proceed with the action, as stipulated under section 440D of the relevant legislation.

The court had to determine whether section 440D applied to Evans' situation, thereby requiring leave before proceeding with the action. This section typically mandates that leave be sought if proceedings are against a company under administration and if there is an associated person, such as the natural person defendant in this case. The court's analysis involved assessing the interplay between the provisions of the Corporations Act and the specific circumstances of the case, including the status of the company under administration and the nature of Evans' claims.

In reaching its decision, the court found that section 440D did apply, necessitating that Evans obtain leave before proceeding with the action. The court reasoned that given the company's status under voluntary administration and the presence of a natural person defendant, the statutory requirement for leave was triggered. Consequently, the court determined that Evans needed to apply for leave under section 440D before continuing with the proceedings. This decision underscored the importance of adhering to the statutory requirements when initiating legal actions involving companies under administration.

Orders