Global Realty Development Corp v Dominion Wines Ltd (in liq) - [2005] NSWSC 1221

No judgment structure available for this case.

Reported Decision:
56 ACSR 474
(2006) 24 ACLC 215

New South Wales

Supreme Court

CITATION:
Global Realty Development Corp v Dominion Wines Ltd & Ors [2005] NSWSC 1221

HEARING DATE(S): 28/11/05, 30/11/05

JUDGMENT DATE :

30 November 2005

JURISDICTION:
Equity Division
Corporations List

JUDGMENT OF:
Barrett J

DECISION:
Proceedings transferred to Supreme Court of Victoria. Application for interlocutory orders restraining company and liquidator from acting upon winding up resolution and completing sale of property dismissed.

CATCHWORDS:
CORPORATIONS - civil proceedings arising under Corporations legislation - whether court invested with jurisdiction by Corporations Act should set aside originating process or decline to exercise jurisdiction in case of forum non conveniens - whether proceedings should be transferred to another court invested with such jurisdiction - CORPORATIONS - plaintiff seeks order setting aside resolution of creditors that company be wound up - interlocutory application for orders restraining company and liquidator acting upon such resolution and completing contract for sale - whether serious question to be tried - balance of convenience - EQUITY - interlocutory injunctions - balance of convenience - undertakings to court by plaintiff - usual undertaking as to damages and undertaking to pay money to certain persons in certain events - plaintiff is foreign corporation with no presence and no assets in the jurisdiction - indication of willingness to pay inadequate sum into court

LEGISLATION CITED:
Corporations Act 2001 (Cth), ss.600B, 1337F, 1337H
Uniform Civil Procedure Rules 2005, rule 12.11(1)(a) and (h)

CASES CITED:
Advance Communications Technologies Inc v Advance Communications Technologies (Aust) Pty Ltd [2002] VSC 348
Hotline Communications Ltd v Hinkley (1999) 44 IPR 445
J Aron & Co v Newmont Yandel Operations Pty Ltd (2003) 47 ACSR 243
Kirwan v Cresvale Far East Ltd (2002) 42 ACSR 21
Re DStore Ltd; Dwyer v Hindal (2005) 52 ACSR 335
Voth v Manildra Flour Mills Ltd (1990) 171 CLR 538
Young v Sherman (2002) 170 FLR 86

PARTIES:
Global Realty Development Corp - Plaintiff
Dominion Wines Limited (in liquidation) - Frist Defendant
Mark Francis Xavier Mentha - Second Defendant
Plunkett Killeen Pty Limited - Third Defendant

FILE NUMBER(S):
SC 5985/05

COUNSEL:
Mr R.G. Forster SC/Mr G. Drew - Plaintiff
Mr M. Cashion SC - First and Second Defendants
Ms P. Wong, Solicitor - Third Defendant

SOLICITORS:
Mendika Law - Plaintiff
Deacons - First and Second Defendants
Maddocks - Third Defendant

LOWER COURT JURISDICTION:

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

BARRETT J

WEDNESDAY 30 NOVEMBER 2005

5985/05 GLOBAL REALTY DEVELOPMENT CORP v DOMINION WINES LTD (IN LIQUIDATION) & ORS

JUDGMENT

1 I heard on 28 November 2005 two interlocutory processes in this proceeding, which is a proceeding commenced by the plaintiff, a Delaware corporation, with a view to having a resolution of creditors set aside by order made under s.600B of the Corporations Act 2001 (Cth). The resolution in question is a resolution that the first defendant, Dominion Wines Ltd, be wound up. The resolution was passed at an adjournment of the second meeting of creditors held in the Part 5.3A administration of that company. The plaintiff is one of the unsecured creditors accounting, it seems, for roughly three-fifths of the unsecured claims which total some $5 million.

2 One interlocutory process is an interlocutory process by which the plaintiff seeks, as an interim measure, two orders: first, an order under s.600D restraining Dominion Wines and its liquidator (previously administrator), Mr Mentha, the second defendant, from acting upon the resolution that the company be wound up; and, second, an order restraining Dominion Wines and Mr Mentha from completing a sale under a contract with the third defendant as purchaser, entered into on or about 21 October 2005. Both such orders are sought until final determination of the proceedings or further order.

3 The second interlocutory process was filed by Dominion Wines and Mr Mentha. They seek, in the first instance, an order that the originating process be set aside or, in the alternative, an order declining to exercise jurisdiction in the proceedings. By way of further alternative, there is a claim for an order transferring the proceedings to either the Federal Court of Australia, Melbourne Registry, or the Supreme Court of Victoria.

4 The plaintiff took the stance that it does not object to the making of an order transferring the proceedings to one of the other courts, provided that the interlocutory relief it sought had first been granted. I therefore heard full argument on both interlocutory processes.

5 It is convenient to begin by considering the claims of Dominion Wines and Mr Mentha. Their principal contention is that this court should terminate these proceedings at their outset. In claiming an order that the originating process be set aside or that the court decline to exercise jurisdiction, they refer to paragraphs (a) and (h) of rule 12.11(1) of the Uniform Civil Procedure Rules 2005. In doing so, they invoke principles of forum non conveniens and point to a number of matters showing that the proceedings have a much closer connection with Victoria than they do with New South Wales.

6 Dominion Wines is a company incorporated under the Corporations Act but registered in Victoria. Its registered office is in Victoria. Mr Mentha and his firm are based in Melbourne. The company's business is carried on at Avenel in Victoria. With one exception relating to a UK-based director, all the company’s directors are resident in Victoria. The sale agreement to which Mr Mentha committed the company while administrator, of which more will be said later, involves the sale of property in Victoria to a purchaser based in Victoria. The contract is governed by Victorian law. Of the company's 187 known creditors, 131 have addresses in Victoria, 10 have addresses in New South Wales and the remainder have addresses elsewhere. All meetings of creditors have taken place in Victoria. The solicitor who has acted for Mr Mentha since the start of the administration, and continues to act, is a Melbourne based partner of a national firm. All deponents of affidavits, including those filed by the plaintiff, have Melbourne addresses. The plaintiff is incorporated in Delaware. It instructed Sydney solicitors in relation to this proceeding but only, it appears, on 9 November.

7 The principles to which Dominion Wines and Mr Mentha point, in this connection, were said by Mr Cashion SC who appeared for them to be those appearing in the following extract from the head note in Voth v Manildra Flour Mills Ltd (1990) 171 CLR 538:

Per

Oceanic Sun Line Special Shipping Co Inc v Fay

8 The emphasis indicated here is, in the present context, upon the inappropriateness of the New South Wales court, not the appropriateness or comparative appropriateness of the Federal Court, Melbourne Registry, or the Supreme Court of Victoria.

9 In my judgment, a submission that the Supreme Court of New South Wales represents an inappropriate forum in any matter in which it is invited to exercise jurisdiction conferred by the Corporations Act does not withstand scrutiny against provisions of that Act, at least when the inappropriateness is put forward as a basis on which the court should, in effect, simply put an end to the relevant proceeding.

10 The plaintiff's substantive application under s.600B constitutes a "civil matter" as defined by s.9 of the Corporations Act. Because founded on s.600B, the application is accordingly a “civil matter arising under" the Corporations legislation as referred to in s.1337A(1)(a), with the result that Division 1 of Part 9.6A applies to it. Jurisdiction with respect to the application is therefore conferred by s.1337B on the Federal Court of Australia, each State Supreme Court, the Supreme Court of the Australian Capital Territory and the Supreme Court of the Northern Territory (also under s.1337C, to a certain extent, on the Family Court of Australia and a State Family Court). By virtue of s.1337B(5), the jurisdiction thus conferred on a Supreme Court "is not limited by any limits to which any other jurisdiction of that Supreme Court may be subject”.

11 Subdivision C of Division 1 of Part 9.6A goes on to make provision with respect to the transfer of proceedings among courts thus invested with jurisdiction in relation to civil matters arising under the Corporations legislation. It is by reference to s.1337H(2) within subdivision C that Dominion Wines and Mr Mentha advance their alternative claim to an order transferring the proceedings to Victoria. Section 1337H(2) empowers the court to transfer a proceeding or application to another court where it appears to the first court "that, having regard to the interests of justice, it is more appropriate for" the relevant proceeding or application "to be determined by another court that has jurisdiction in the matters for determination in the relevant" proceeding or application.

12 This, it seems to me, represents a directive by the Parliament of the Commonwealth as to the approach to be taken if any question of forum non conveniens is raised in a matter within the jurisdiction of the several courts with which Part 9.6A is concerned. According to that directive, the duty of the court seised of the matter is to undertake, in the first instance, an enquiry into the question whether it is "more appropriate", having regard to the interests of justice, that another of the competent courts become seised of the matter in its place. If, having regard to considerations of the general kind with which cases such as Voth v Manildra Flour Mills are concerned and the requirements of justice generally, the first court considers itself to be an inappropriate forum, its task is not to vacate the field but rather to consider whether one of the other Part 9.6A courts represents a "more appropriate" forum. If, as a comparative matter, the other court is seen to be a more appropriate forum, having regard to the interests of justice, the duty of the court in question is to transfer the proceedings to that other court. Only if the original court came to the conclusion that it was itself an inappropriate forum and that none of the other Part 9.6A courts represented a more appropriate forum, might it theoretically be open to the original court to vacate the field in the way for which Dominion Wines and Mr Mentha primarily contend, that is, without transferring to another Part 9.6A court. But given the nature of the subject matter - exercise of the Corporations Act jurisdiction in a civil matter - it is, I think, simply inconceivable that the original court could or would conclude that not only that court itself but also every one of the other Part 9.6A courts was an inappropriate forum.

13 It follows, in my view, that the only courses open to the original court in such a matter are to proceed to a determination of its own or to transfer to another Part 9.6A court. It follows that the request by Dominion Wines and Mr Mentha that this court neither proceed to determination nor transfer will not be acceded to.

14 Turning to the alternative proposed by them, namely, transfer of the proceedings to either the Federal Court of Australia, Melbourne Registry, or the Supreme Court of Victoria, it is appropriate to note the principles applicable to transfer under s.1337H(2), as recently elucidated by Debelle J in Re DStore Ltd; Dwyer v Hindal (2005) 52 ACSR 335:

“[12] Section 1337H(2) prescribes when a matter may be transferred. It reads:

Subject to subsections (3), (4) and (5), if it appears to the transferor court that, having regard to the interests of justice, it is more appropriate for:

(a) the relevant proceeding; or

(b) an application in the relevant proceeding;

to be determined by another court that has jurisdiction the matters for determination in the relevant proceeding or application, the transferor court may transfer the relevant proceeding or application to that other court.

The question for the court to determine is whether the court to which it is sought to transfer the proceeding is more appropriate than the transferor court for the determination of the relevant proceeding or an application in the relevant proceeding. The question is to be determined by having regard to the interests of justice.

Bankinvest AG v Seabrook

BHP Billiton Ltd v Schultz

Bankinvest

Crédit Chimique v James Scott Engineering Group Ltd

Spiliada

Bankinvest

BHP Billiton Ltd v Schultz

(a) the principal place of business of any body corporate concerned in the proceeding or application;

(b) the place or places where the events that are the subject of the proceedings or application took place; and

(c) the other courts that have jurisdiction to deal with the proceeding or application.

Acton Engineering Pty Ltd v Campbell

The expression ‘the interests of justice’ is a broad one. Section 44(3) requires a court to have regard to the matters it specifies but it does not thereby limit the range of matters that fall for consideration under s 44(2). Rather, s 44(3) recognises that, Australia being a large country with widely dispersed main centres of population, it is necessary to have regard to practical connections between a proceeding, or an application in a proceeding, and a particular part or parts of Australia to see where the interests of justice lie when deciding whether another court is a more appropriate court to determine the matter. Section 44 certainly does not deny the relevance of existing proceedings in other courts in the same or a related matter. These may, depending upon the circumstances, be of great importance in determining whether or not to transfer, but the section does not single out such considerations for special treatment.

· matters relating to the efficiency of litigation which in turn include its economy and expedition;

· matters of convenience having regard to the location of witnesses and records; and

· matters of policy relating to the administration of justice by the Federal Court and the state and territory Supreme Courts.

Plainly, the matters listed in s 1337L are also relevant to a determination of what the interests of justice require.

Bourke v State Bank of New South Wales

Under that rubric, as it seems to me, the court is entitled to consider not only the ability of a particular court to deal with all aspects of a matter, and to make and to enforce all the orders to which a party may be entitled, but also adjectival matters such as the availability of particular evidence, the procedures to be adopted, the desirable venue for trial and the likely hearing date. It is not in “the interests of justice” to adopt a course, in relation to those matters, which places unnecessary burdens and delays upon the parties to litigation.

Acton Engineering

Dawson v Baker

· application of substantive law;

· forensic advantage or detriment conferred by procedural law;

· the choice made by a plaintiff of a forum and the reasons for that choice;

· substantive connections with the forum;

· balance of convenience to parties and witnesses; and

· convenience to the court system.

Acton Engineering

Spiliada

BHP Billiton Ltd v Schultz

Pegasus Leasing Ltd v Tieco International (Aust) Pty Ltd

15 Having regard to the factual matters to which I have already referred and assessing them against the specific criteria in s.1337L (referred to at paragraph [16] of Debelle J’s judgment) and the requirements of justice as a whole, I am of the opinion that the proceedings would be much more appropriately dealt with by a court of competent jurisdiction sitting in Melbourne. The balance of convenience strongly favours Melbourne from the point of view of ready availability of parties (other than the plaintiff), lawyers (other than the plaintiff's lawyers) and witnesses and potential witnesses. The plaintiff's administrative centre is apparently outside Australia and, from that point of view, Melbourne cannot be said to be less convenient to it than Sydney. It is true that the plaintiff has chosen to instruct lawyers in Sydney, but the fact that it did so only as recently as 9 November and that the proceedings are in one sense at an early stage means, I think, that that circumstance does not outweigh those to which I have referred, which clearly and decisively favour a Melbourne venue.

16 It is therefore appropriate that this court exercise the s.1337H discretion in favour of transfer of the proceedings to a court in Melbourne. As to the choice of court, the only consideration raised before me centred upon enquiries that had been made of the registry of the Supreme Court of Victoria regarding processes following any transfer to that court. Because those matters were raised and counsel for both parties referred to the them in a way that did not suggest any reservation about the results of the enquiries, I propose to make an order transferring the proceedings to the Supreme Court of Victoria.

17 I turn then to the plaintiff's application for interlocutory relief and, in doing so, note that 5 December 2005 appears to be the due date for completion under the sale contract to be mentioned presently. Both parties approached the matter on that basis. This timing factor gives the matter a distinct element of urgency.

18 I begin with some general background. Mr Mentha became administrator of Dominion Wines under Part 5.3A on 20 September 2005. The first meeting of creditors in the administration was duly held and the second meeting commenced on 17 October. Creditors had been informed in an earlier report that a deed of company arrangement proposal had been received and appeared likely to provide better returns for creditors than the possible sale of the business. That report was dated 7 October.

19 When the meeting began on 17 October, however, the administrator's representative reported that possibilities of sale of the business (and one in particular had firmed) had caused the administrator no longer to favour the possibility of a deed of company arrangement proposal. There was reference to one prospective buyer whose ability to finance the purchase had been investigated favourably. It was resolved that the second meeting of creditors "be adjourned for a period of up to 60 days".

20 Four days later, on 21 October, Mr Mentha, as administrator, caused Dominion Wines to enter into a contract for the sale of assets to the third defendant, Plunkett Kileen Pty Ltd. By clause 2.1, it was a condition precedent "to the sale and purchase being fulfilled" that a contract for the sale of land between the same parties should be executed in accordance with another provision and, more significantly for present purposes, that by 4 pm on 2 November 2005 the administrator should have reconvened the second meeting of creditors and there should have been passed, at the adjourned meeting, a resolution that Dominion Wines be wound up.

21 In a circular to creditors dated 24 October, the administrator stated that the sale agreement had been entered into and referred to the condition precedent involving the passing of a resolution for winding up, noting that such a resolution would amount, in effect, to an endorsement of the sale. At the time of writing, the administrator had not received any revised deed proposal. He repeated a statement made earlier that the sale proposal involved 15 cents in the dollar more for creditors than the original deed proposal. He said that the directors had indicated an intention of putting forward a revised deed proposal before the reconvened meeting. He also said that any such proposal could be discussed on that occasion. He then gave notice that the reconvened second meeting of creditors would take place at 10am on 3 November, a Thursday.

22 The night before, 2 November, the administrator received an amended deed proposal from the directors. Speaking at the reconvened meeting, the administrator's representative described that proposal as similar to the first proposal but with a greater equity injection, with support from an unnamed equity provider.

23 The administrator's representative made a number of statements to the reconvened meeting to which the plaintiff takes exception. For example, there was a reference to the need for the proposed deed proponent to spend two or three weeks conducting due diligence, whereas, says the plaintiff, the real message should have been that the period mentioned was merely needed to complete the transaction, not to investigate it. Similarly, the equity party was described as anonymous, whereas it is said that it was an entity known to the administrator and about which he could have given some re-assurance or information. Furthermore, it is complained that the administrator did not tell the meeting that the equity party was already familiar with the business. There was also an objection to the fact that, during a large part of the discussion on the deed possibility, an overhead slide was showing which recorded the administrator's recommendation to vote for a winding up. That recommendation had been contained in the circular reconvening the adjourned meeting. The suggestion of the plaintiff is that the administrator did not reconsider as he should have done.

24 These alleged shortcomings combine with others, in the plaintiff's submission, to undermine the integrity of the resolution for winding up. Upon the poll in relation to that resolution, voting was such as to make a casting vote available to the chairperson, who was the administrator, pursuant to regulation 5.6.21(4) of the Corporations Regulations 2001 (Cth). By value, there was a majority against the resolution for winding up and a minority in favour: the votes, by value, were $320,786.10 in favour to $4,322,919.30 against. By number, there was a majority in favour and a minority against: 22 to 9 with one abstention. The chairperson held five proxy votes. He exercised these and his casting vote in favour of winding up. The purchaser under the sale contract had, it is said, collected 13 proxy votes which it caused to be cast in favour. On that basis, the plaintiff complains that only 4 out of the 22 creditors voting exercised judgment independently of the purchaser and the administrator. The plaintiff contends that three of the supposed creditors for whom proxy votes in favour were cast were not creditors at all. The final matter to which the plaintiff refers is failure of the chairperson to ensure that the meeting had an opportunity to consider the alternative of the revised deed of company arrangement or to consider the possibility of further adjournment while that matter was explored. The revised deed proposal is, in the plaintiff's view, calculated to produce a return for creditors of 68 cents in the dollar compared with 45 cents in the dollar from the sale contract.

25 These perceived irregularities, in the plaintiff's submission, culminated in and were compounded by breach, by the administrator as chairperson, of the duties concerning the exercise of the casting vote. The correct approach to the exercise of the casting vote was considered by the Court of Appeal in both Young v Sherman (2002) 170 FLR 86 and Kirwan v Cresvale Far East Ltd (2002) 42 ACSR 21. Several propositions emerging from those cases may be briefly mentioned. First, there is no general rule that the chairperson should use the casting vote to prefer the majority in value over the majority in number. The suggestion to the contrary in submissions on behalf of the plaintiff should be rejected. Second, the correct approach is for the chairperson to proceed according to what the chairperson believes to be in the best interests of those affected by the vote. Third, the objectives of Part 5.3A must be considered in making the decision. Fourth, a distinction is to be drawn between propriety and wisdom, the latter probably being non-justiciable. Fifth, the court's decision on a challenge under s.600B should be made in the light of all the material the chairperson had.

26 I am satisfied that there is a serious question to be tried under s.600B. There is evidence to suggest that the administrator took particular steps with a view to ensuring that the winding up resolution was passed at the meeting in order to satisfy the condition in the sale agreement. Although the agreement mentioned a deadline of 2 March and the meeting was held on 3 March, it is clear that the parties to the agreement conducted themselves as if 3 March were the deadline. I am also satisfied that the condition in the sale agreement was calculated to shut out other possibilities and that the administrator had subscribed to it with an intention of maximising the chance of the sale's successful completion. Upon full investigation, that may or may not be found to be something that was in the best interests of the creditors in the particular factual context. The suggestion that some voters were not creditors also merits investigation. There is then a question as to due discharge of duties to provide information for the purpose of decision-making in advance of and at a meeting. There is a question to be tried there, but I do not regard it as a particularly strong one. The points about failure to ensure that the meeting was further adjourned is, to my mind, of less cogency, given that under regulation 5.6.18 the chairperson may adjourn only upon the direction or with the consent of the meeting itself, which requires a resolution which is within the power of anyone present to propose.

27 Speaking of adjournment, I am also of the opinion that there is an issue as to the process which saw the meeting supposedly adjourned for "up to 60 days" and then reconvened, within a short time, by unilateral decision of the administrator. Regulation 5.6.18(1) permits adjournment "from time to time" at the direction or with the consent of the meeting itself; but in the case of a s.439E meeting, the "day" to which it is adjourned may not be more than 60 days after the first day on which the meeting was held.

28 These observations about the existence of a serious question to be tried make it necessary to consider the balance of convenience.

29 The first point to note on that matter is that the making of the interlocutory orders would, on the approach the parties have taken, mean that the company did not complete the sale contract on the date it appears to be accepted as the due date for completion, that is, 5 December. This assumes, of course, that there will have been no final determination of the originating process by that time - a safe assumption, whichever court is seised of the matter. As a result, the company may be forced into a breach of contract and thereby exposed to a claim for damages.

30 The material before me does not allow any reliable assessment to be made of the quantum of any such damages, although some general idea of the sums involved comes from the fact that the overall purchase price for the totality of the assets is $4.1 million and that certain of the components included in the sale, being land and buildings and plant and equipment only, are shown in the report as to affairs as having a book value of about $8.5 million and a value estimated by directors at about $7.5 million. These considerations favour the defendants.

31 The plaintiff points out, however, that if the contract is completed, creditors will have lost such opportunity as there is to obtain the benefits of the revised deed of company arrangement, a proposal in respect of which the plaintiff professes itself willing to give to the court an undertaking that it will vote in favour. The plaintiff is also prepared to give another undertaking to the court, namely, an undertaking that if it succeeds in obtaining final relief, but a deed of company arrangement substantially in the terms of the proposal discussed at the reconvened meeting is not executed, it will, at the option of each of the other unsecured creditors, acquire that creditor's debt for an amount representing not less than 45 cents in the dollar.

32 In addition, of course, the plaintiff would have to give the usual undertaking as to damages. But that, together with the other undertaking involving financial commitment to which I have just referred, highlights the fact that the plaintiff is a foreign corporation, which is not registered in Australia as a foreign company and does not have any presence within New South Wales or Victoria or, for that matter, elsewhere in Australia. That brings into play principles referred to by Warren J in Hotline Communications Ltd v Hinkley (1999) 44 IPR 445 at 456-7 and by Habersberger J in Advance Communications Technologies Inc v Advance Communications Technologies (Aust) Pty Ltd [2002] VSC 348. I had occasion to deal with those principles in J Aron & Co v Newmont Yandel Operations Pty Ltd (2003) 47 ACSR 243 at pp.247-8:

“A further aspect of the balance of convenience must also be dealt with. The plaintiff is a foreign company which does not appear to have any presence in the jurisdiction (by which I mean not only New South Wales but Australia as a whole). An affidavit of its solicitor filed on its behalf suggested that it maintained a place of business in Sydney. When Mr Gleeson tendered material showing that there was no foreign company registration as required by s.601CD, Mr Macfarlan was given leave to adduce oral evidence from the solicitor who then testified that what he had said in his affidavit was a misapprehension or misunderstanding. There is thus no evidence that the plaintiff has a presence within the jurisdiction and no evidence as to the place of the plaintiff’s incorporation. Nor is there any evidence as to its financial position, although there is hearsay evidence of its solicitor that it is wholly owned by Goldman Sachs Group Inc of the United States. No guarantee by that purported ultimate holding company or by anyone else in respect of any undertaking as to damages the plaintiff would give has been foreshadowed.

Hotline Communications Ltd v Hinkley & Ors

Vapormatic Co Ltd v Sparex Ltd

LockInternational v Beswick

33 I also observed there that the onus upon a foreign plaintiff having no presence in the jurisdiction is a heavy one.

34 In view of the principles to which I have just referred, I allowed the plaintiff the opportunity to adduce evidence of its assets within the jurisdiction. I was told this morning, before I commenced to give judgment, that the plaintiff did not propose to adduce any further evidence. A further undertaking or indication was, however, proffered at that point, namely, an indication of willingness to pay $50,000 into court by way of security. That sum is manifestly inadequate in the present context. There is not only the undertaking as to damages in a situation where damages could be significant, there is also the undertaking to see 45 cents in the dollar made available to creditors whose claims appear to be of the order of $2 million. The two financial undertakings proffered to the court as a basis for the making of the interlocutory orders sought would not be properly or adequately secured by a payment of $50,000 into court and for that reason those undertakings would not be acceptable to the court.

35 There is one final matter to be considered in relation to the balance of convenience. It arises directly from the form of the first order sought, that is, an order that Dominion Wines and Mr Mentha be restrained from "acting upon" the resolution of creditors that the company be wound up. One obvious consequence of that order is that Mr Mentha would be restrained from acting as liquidator, that is, performing the functions of liquidator and exercising the powers of liquidator. Under what system of governance, then, would the company be administered?

36 The plaintiff does not say that the resolution for winding up is void or ineffective. On the contrary, it accepts the resolution's efficacy and attempts to have the court undo that efficacy by an order under s.600B, being an order setting the resolution aside. It must follow that the plaintiff does not assert that Mr Mentha is still Part 5.3A administrator or would, by the interlocutory order, be put back into a position equivalent to that of a Part 5.3A administrator. That might happen if a final order were made as sought, but it cannot be a product of the first of the interlocutory orders sought.

37 The position from which the plaintiff approaches the matter is one in which s.446A has caused Dominion Wines to become subject to the form of creditors's voluntary winding up that that section creates, with Mr Mentha as liquidator. He is no longer administrator and therefore no longer able to exercise the powers of supervision and control that an administrator exercises. He is now a liquidator, having the powers and supervision and control that the Act vests in a liquidator under a creditors' voluntary winding up, but the effect of an interlocutory order will be that he is not permitted to exercise those powers and is not permitted to take and protect the assets of the company. If it is desirable to renew some insurance, he will not be allowed to renew it. If trespassers enter upon the company's land, he will not be allowed to act, on its behalf, to repel them. To do things of that kind would be to "give effect" to the resolution from which his status as liquidator arises.

38 The balance of convenience considerations in this case strongly favour the defendant. The interlocutory orders will be refused.

39 The costs of the first, second and third defendants of both the interlocutory processes with which I have dealt should be paid by the plaintiff. The plaintiff should also pay such costs of the first, second and third defendants as were thrown away by reason of the proceedings having been commenced in New South Wales rather than in Victoria in the first instance.

40 The plaintiff asks that I make an order staying the other orders for a short time so that a renewed application for interlocutory relief might be made. The indication is that the plaintiff would, on that occasion, seek to proffer security in support of its undertakings more substantial than that which was indicated today. I see no point in having this matter continue in this court when, for reasons I have stated, Victoria is the much more convenient forum. An immediate application could no doubt be made to the Victorian Court on the basis of my order for transfer of the proceedings.

41 I therefore decline to stay the orders which I now formally pronounce:

Corporations Act

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Citations

Global Realty Development Corp v Dominion Wines Ltd (in liq) [2005] NSWSC 1221

Most Recent Citation

Commonwealth Bank of Australia v Fernandez [2010] FCA 1487

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Statutory Material Cited

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Advanced Communications Technologies Inc v Advanced Communications Technologies (Australia) Pty Ltd and Ors [2002] VSC 348

CITATION:	Global Realty Development Corp v Dominion Wines Ltd & Ors [2005] NSWSC 1221
HEARING DATE(S):	28/11/05, 30/11/05
JUDGMENT DATE :	30 November 2005
JURISDICTION:	Equity Division Corporations List
JUDGMENT OF:	Barrett J
DECISION:	Proceedings transferred to Supreme Court of Victoria. Application for interlocutory orders restraining company and liquidator from acting upon winding up resolution and completing sale of property dismissed.

CATCHWORDS:	CORPORATIONS - civil proceedings arising under Corporations legislation - whether court invested with jurisdiction by Corporations Act should set aside originating process or decline to exercise jurisdiction in case of forum non conveniens - whether proceedings should be transferred to another court invested with such jurisdiction - CORPORATIONS - plaintiff seeks order setting aside resolution of creditors that company be wound up - interlocutory application for orders restraining company and liquidator acting upon such resolution and completing contract for sale - whether serious question to be tried - balance of convenience - EQUITY - interlocutory injunctions - balance of convenience - undertakings to court by plaintiff - usual undertaking as to damages and undertaking to pay money to certain persons in certain events - plaintiff is foreign corporation with no presence and no assets in the jurisdiction - indication of willingness to pay inadequate sum into court
LEGISLATION CITED:	Corporations Act 2001 (Cth), ss.600B, 1337F, 1337H Uniform Civil Procedure Rules 2005, rule 12.11(1)(a) and (h)
CASES CITED:	Advance Communications Technologies Inc v Advance Communications Technologies (Aust) Pty Ltd [2002] VSC 348 Hotline Communications Ltd v Hinkley (1999) 44 IPR 445 J Aron & Co v Newmont Yandel Operations Pty Ltd (2003) 47 ACSR 243 Kirwan v Cresvale Far East Ltd (2002) 42 ACSR 21 Re DStore Ltd; Dwyer v Hindal (2005) 52 ACSR 335 Voth v Manildra Flour Mills Ltd (1990) 171 CLR 538 Young v Sherman (2002) 170 FLR 86
PARTIES:	Global Realty Development Corp - Plaintiff Dominion Wines Limited (in liquidation) - Frist Defendant Mark Francis Xavier Mentha - Second Defendant Plunkett Killeen Pty Limited - Third Defendant
FILE NUMBER(S):	SC 5985/05
COUNSEL:	Mr R.G. Forster SC/Mr G. Drew - Plaintiff Mr M. Cashion SC - First and Second Defendants Ms P. Wong, Solicitor - Third Defendant
SOLICITORS:	Mendika Law - Plaintiff Deacons - First and Second Defendants Maddocks - Third Defendant