In the matter of Advanced Communications Technologies (Australia) Pty Ltd

[2005] VSC 455

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION
CORPORATIONS LIST

No. 6935 of 2005

IN THE MATTER of ADVANCED COMMUNICATIONS TECHNOLOGIES (AUSTRALIA)
PTY LTD (ACN 086 856 617) (Subject to Deed of Company Arrangement) (Receivers and Managers Appointed)

JOHN ROSS LINDHOLM and
GEORGE GEORGES Plaintiffs

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JUDGE:	WHELAN J
WHERE HELD:	Melbourne
DATE OF HEARING:	3 and 7 November 2005
DATE OF JUDGMENT:	7 November 2005
CASE MAY BE CITED AS:	In the Matter of Advanced Communications Technologies (Australia) Pty Ltd
MEDIUM NEUTRAL CITATION:	[2005] VSC 455

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CORPORATIONS – Receivers, managers and controllers – Deed of settlement – Declaration not granted at this stage – Possibility of persisting controversy – Direction to implement, perform and give effect to deed – Corporations Act 2001 (Cth) s 424 – Exchange of undertakings between principal parties.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr D J Williams	Gadens Lawyers
For Mr G Rathner, the Deed Administrator of Advanced Communications Technologies (Australia) Pty Ltd	Mr D Andrews (solicitor)	Robert James Lawyers
For Newpage Pty Ltd, Springwell Australia Pty Ltd, Mr Graeme William Shearer, Mr Martin Yong Yii and Mr Allen Christopher George Roberts	Mr N McAteer (solicitor)	Allens Arthur Robinson

HIS HONOUR:

1. In proceeding 6935 of 2005 a declaration and directions are sought concerning a deed of settlement dated 16 June 2005. 

1. I have expressed reservations as to the declaration sought without finally deciding whether it ought to be granted.  I am concerned as to whether there is a persisting controversy.[1]

   [1]As to which see Mentha v GE Capital Ltd (1997) 27 ACSR 696, especially at 705-6.

1. I am also concerned that a critical aspect of an issue raised by the declaration, being the nature and extent of Mr Rathner’s interest in the relevant shares, if any, remains to be finally resolved.[2]

   [2]See Rathner v Lindholm [2005] VSC 399.

1. I am of the view that a direction should be given at this stage to the receivers and managers, Mr Lindholm and Mr Georges, in the following terms: 

“Pursuant to s 424 of the Corporations Act 2001 (Cth), the plaintiffs, as receivers and managers, are directed that they may properly implement, perform and give effect to the deed of 16 June 2005, a copy of which is exhibit “JRL-49” to the affidavit of John Ross Lindholm sworn 30 June 2005 and filed herein.”

1. There remain potential problems in the implementation of the deed.  The principal parties have exchanged undertakings concerning two of those problems, being the terms of condition precedent 2(a), and the fact that the deed has not been executed by one of the parties named in it, being Global Communications Technologies Pty Ltd.  It seems to me that the undertakings exchanged substantially deal with those two issues.

1. There does remain a further problem in that another of the Global companies, Global Investments Fund Pty Ltd, which has executed the deed, is now in a position where it has no officers, and, accordingly, there is a potential for some argument concerning condition precedent 2(a) to be agitated in some forum by some person on behalf of Global Investments Fund Pty Ltd.  Counsel for Newpage Pty Ltd, Springwell Australia Pty Ltd and related parties, and counsel for Mr Lindholm and Mr Georges, have advised me that they are confident that that circumstance can be dealt with, and that it is not, in their view, an impediment to proceeding with the deed. 

1. I have reached the view that the direction should be given in the light of the undertakings which the parties have exchanged.  A direction in those terms will enable implementation of the 16 June 2005 deed by Mr Lindholm and Mr Georges, which is an appropriate course for these reasons:

(a) It is an outcome no relevant party is concerned to oppose, and which all relevant parties who have made submissions, save for Mr Rathner, in substance, support.  Mr Rathner is the only party who has ever foreshadowed opposition to the deed, but at the hearing before me his representative has expressly disavowed opposition and advised that he has no submissions that he wishes to make. 

(b) On the material before me, the deed is an appropriate commercial resolution of the current disputes in so far as they concern Newpage Pty Ltd and Springwell Australia Pty Ltd and their related parties, and which should bring to an end at least those court proceedings which involve Newpage Pty Ltd and Springwell Australia Pty Ltd and their related parties. 

(c) The deed is, in my view, consistent with the conclusions which I have already reached in Rathner v Lindholm.[3]

[3][2005] VSC 399.

1. On the material before me, the settlement embodied in the deed of 16 June 2005 is in the interests of all relevant parties, including Mr Rathner and the creditors whose interests he is seeking to advance.  The direction I have referred to will enable Mr Lindholm and Mr Georges to implement the deed without further delay.

1. Therefore in proceeding 6935 of 2005 I direct pursuant to s 424 of the Corporations Act 2001 (Cth) that the plaintiffs, as receivers and managers, may properly implement, perform and give effect to the deed of 16 June 2005, a copy of which is exhibit “JRL-49” to the affidavit of John Ross Lindholm sworn 30 June 2005 and filed herein.