Johnson Outdoors Watercraft Ltd, in the matter of Canoe Sports Pty Ltd v Canoe Sports Pty Ltd
[2008] FCA 1340
•29 August 2008 (Reasons); 20 August 2008 (Orders)
FEDERAL COURT OF AUSTRALIA
Johnson Outdoors Watercraft Ltd, in the matter of Canoe Sports Pty Ltd v Canoe Sports Pty Ltd [2008] FCA 1340
CORPORATIONS – deed of company arrangement – application by creditor for order under s 445D of Corporations Act 2001 (Cth) terminating deed – payments made by company to directors or to entities controlled by them, not satisfactorily explained – desirability that company be wound up and that the investigatory and recovery powers of a liquidator be available – misleading information in, and omissions from, an administrator’s report – whether creditor’s nominee or one of the Administrators should be appointed liquidator – discretionary considerations.
Held: orders made terminating deed, winding up company and appointing creditor’s nominee as liquidator.Corporations Act 2001 (Cth) s 445D(1)
JOHNSON OUTDOORS WATERCRAFT LIMITED v
TIMOTHY PAUL HEESH AND TERRY GRANT VAN DER VELDE IN THEIR CAPACITY AS DEED ADMINISTRATORS OF CANOE SPORTS PTY LIMITED (SUBJECT TO DEED OF COMPANY ADMINISTRATION) (ACN 102 999 726), CANOE SPORTS PTY LIMITED (SUBJECT TO DEED OF COMPANY ADMINISTRATION) (ACN 102 999 726) and
SAMANTHA LEONIE WILLIAMSNSD 980 OF 2008
LINDGREN J
29 AUGUST 2008
SYDNEY
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 980 OF 2008
IN THE MATTER OF CANOE SPORTS PTY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT) (ACN 102 999 726)
BETWEEN:
JOHNSON OUTDOORS WATERCRAFT LIMITED
PlaintiffAND:
TIMOTHY PAUL HEESH AND TERRY GRANT VAN DER VELDE IN THEIR CAPACITY AS DEED ADMINISTRATORS OF CANOE SPORTS PTY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT) (ACN 102 999 726)
First DefendantsCANOE SPORTS PTY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT) (ACN 102 999 726)
Second DefendantSAMANTHA LEONIE WILLIAMS
Third DefendantJUDGE:
LINDGREN J
DATE OF ORDER:
20 AUGUST 2008
WHERE MADE:
SYDNEY
THE COURT NOTES THAT;
1.The plaintiff through its counsel undertakes to the Court that if the Court orders the second defendant (the Company) to be wound up and appoints Ian Lawrence Struthers liquidator, the plaintiff will fund him in an amount of not less than $50,000 to investigate the business affairs and transactions of the Company and the recoverability of property for the benefit of the Company’s creditors and, if so advised, to pursue such remedies as may be available to achieve such recoveries.
THE COURT ORDERS THAT:
2.The deed of company arrangement between the first defendants (the Administrators), the Company and the third defendant (Ms Williams) which creditors of the Company resolved on 27 May 2008 that the Company should execute (DOCA), be, and the same is hereby, terminated.
3.The Company be wound up in insolvency under the Corporations Act 2001 (Cth) (the Act).
4.Ian Lawrence Struthers be, and he is hereby appointed, liquidator of the Company.
5.The plaintiffs’ costs of the proceeding be treated as part of the costs in respect of the application for the winding up order referred to in s 556(1)(b) of the Act.
6.Ms Williams pay the plaintiffs’ costs of the proceeding.
7.Under orders 5 and 6 the plaintiff is entitled to recover no more than its costs of the proceeding.
8.The remuneration which the Administrators are entitled to receive under s 449E of the Act includes remuneration for all work reasonably done by them and all expenses reasonably incurred by them as voluntary administrators and as administrators under the DOCA, including their costs reasonably incurred as parties to this proceeding.
9.The indemnity given to the Administrators by s 443D of the Act extends to the remuneration and costs referred to in order 8, and to the administration fund created pursuant to the DOCA.
10.The remainder of the administration fund after payment of the remuneration, expenses and costs referred to in Orders 8 and 9 be preserved by the liquidator, Ian Lawrence Struthers, for the benefit of the creditors of the Company and not be treated by him as forming part of the assets of the Company in liquidation.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 980 OF 2008
IN THE MATTER OF CANOE SPORTS PTY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT) (ACN 102 999 726)
BETWEEN:
JOHNSON OUTDOORS WATERCRAFT LIMITED
PlaintiffAND:
TIMOTHY PAUL HEESH AND TERRY GRANT VAN DER VELDE IN THEIR CAPACITY AS DEED ADMINISTRATORS OF CANOE SPORTS PTY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT) (ACN 102 999 726)
First DefendantsCANOE SPORTS PTY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT) (ACN 102 999 726)
Second DefendantSAMANTHA LEONIE WILLIAMS
Third Defendant
JUDGE:
LINDGREN J
DATE:
29 AUGUST 2008
PLACE:
SYDNEY
REASONS FOR JUDGMENT
INTRODUCTION
On 20 August 2008 I made the orders which appear at the front of these reasons for judgment. These are the reasons why I made those orders.
On 21 April 2008 the second defendant (the Company) appointed the first defendants (the Administrators) joint and several administrators of the Company in exercise of the power given to the Company by s 436A(1) of the Corporations Act 2001 (Cth) (the Act). The resolution to exercise that power was passed by the sole director and secretary of the Company, the third defendant (Samantha Leonie – I adopt this form of reference to distinguish her from two other persons with the surname Williams mentioned below, and without intending any discourtesy).
The Administrators furnished their report to creditors on 19 May 2008. At the second meeting of creditors held on 27 May 2008, the creditors resolved, on the recommendation of the Administrators, that the Company execute a deed of company arrangement in the form presented to the meeting (DOCA). Under the DOCA, Samantha Leonie paid $120,000 to the Administrators which, after payment of the Administrators’ remuneration and expenses, was to be distributed among creditors. This would give unsecured creditors a dividend of approximately eight cents in the dollar.
According to the Administrators’ report, the two major unsecured creditors were the plaintiff (Johnson) which was owed $527,767.00, and the “Hughes Family Trust” which was owed $782,346.05. As will appear, there is an association between the Hughes Family Trust and the Williams family. Another creditor, Christine Margot Williams (Christine Margot), the mother of Samantha Leonie, was owed $1,000.00. Christine Margot works for “Northstar Accountants” which, according to the Administrators’ report, was owed $6,325.00.
At the second creditors’ meeting, Samantha Leonie held a proxy from her mother. Grant Hughes of GTH Pty Ltd as trustee for the Hughes Family Trust was proxy for that Trust and also for Paddle Sports Australia Pty Ltd which was shown in the Administrators’ report as being owed $37,018.00. Grant Hughes was also proxy for Northstar Accountants. The resolution in favour of the Company’s executing the DOCA was carried on votes cast by Mr Hughes and Samantha Leonie over the opposition of Christopher Thompson, the proxy for Johnson.
Johnson now applies under s 445D of the Act for an order terminating the DOCA. While Johnson makes no criticism of the Administrators, its case is that they were misled by others into providing a report that contained material information that was false or misleading and omitted material information. Johnson’s case rests on paras (a), (b) and (c) of s 445D(1) of the Act:
The Court may make an order terminating a deed of company arrangement if satisfied that:
(a)information about the company’s business, property, affairs or financial circumstances that:
(i) was false or misleading; and
(ii)can reasonably be expected to have been material to creditors of the company in deciding whether to vote in favour of the resolution that the company execute the deed;
was given to the administrator of the company or to such creditors; or
(b)such information was contained in a report or statement under subsection 439A(4) that accompanied a notice of the meeting at which the resolution was passed; or
(c)there was an omission from such a report or statement and the omission can reasonably be expected to have been material to such creditors in so deciding; ...
There is reason to be suspicious about certain dispositions that have been made of the Company’s property. I have reached the conclusion that the Company should be wound up and that a liquidator nominated by Johnson should be appointed. The Administrators do not oppose the making of such orders. They properly take the position that the matter is one for the Court. They point out, however, that there would be some saving in costs if they were appointed rather than Johnson’s nominee.
Samantha Leonie is taken to have been served with the originating process pursuant to an order that I made for substituted service. She did not appear on the hearing.
FACTS
The following is an outline of the facts in chronological sequence.
On 29 November 2002, the Company was incorporated as “Johnson Outdoors Watercraft Pty Ltd” (on 6 July 2004 the Company changed its name to its present name, “Canoe Sports Pty Limited”). Upon incorporation, Samantha Leonie was appointed as a director of the Company, and her mother Christine Margot was appointed as both a director and secretary of the Company.
On 1 May 2003, a “Canoe Sports Unit Trust” was created by a Unit Trust Deed of that date. According to Samantha Leonie, in May 2003, the Company purchased its present business, including stock at the time, from the Hughes Family Trust for a price of $1,274,508. Apparently 400,000 units in the Canoe Sports Unit Trust were issued to the Hughes Family trust, and 200,000 units were issued to the “Williams Family Trust”.
On 1 June 2004, the Company and Johnson entered into a Distribution Agreement with effect as from July 2004. Pursuant to the Distribution Agreement, the Company purchased goods from time to time from Johnson.
On 5 July 2004, Tina Williams (Tina), the sister of Samantha Leonie, was appointed as both a third director and secretary of the Company. As mentioned earlier, it was on the following day, 6 July 2004, that the Company changed its name.
On 16 May 2005, Tina resigned as a director and secretary. Accordingly, Tina was a director for only some ten months from July 2004 to May 2005.
In July 2005, the 400,000 units in the Canoe Sports Unit Trust that were apparently issued to the Hughes Family Trust were redeemed. At the same time, the 200,000 units apparently issued to the Williams Family Trust were redeemed. In a further report to creditors dated 15 July 2008, the Administrators stated that the redemption was by way of issued capital and increase in liabilities, essentially turning the units into loan account.
On 24 August 2005, Christine Margot purchased a property at 28 Ocean View Drive, Wamberal, and Johnson contends that she used money of the Company for the purpose.
On 10 February 2006, Samantha Leonie purchased a commercial property at 6/260 Captain Cook Drive, Kurnell, and Johnson contends that she used Company money for the purpose.
On 21 November 2006, Johnson terminated the Distribution Agreement between it and the Company. Samantha Leonie has informed the Administrators that the Company has not purchased any new stock since the termination. According to the report of the Administrators, by November 2006 the Company was insolvent.
On 30 November 2006, Samantha Leonie and Christine Margot, as directors of the Company caused the Company to pay $805,875.12 to the Williams Family Trust ($310,000) and the “Monowatu Family Trust” ($495,875.12). Both of those trusts are associated with members of the Williams Family.
On 17 January 2007, that is to say, not long after the money had gone from the Company, Christine Margot resigned as a director and secretary of the Company, leaving Samantha Leonie as the sole director. Samantha Leonie was appointed secretary of the Company on that same day.
On 27 February 2007, Tina caused Kayak Wholesalers Pty Ltd, known from 11 July 2007 as Bengal Distribution Pty Ltd, to be incorporated with the same registered address as that of the Company.
In March 2007, the Company ceased trading.
On 8 March 2007, a “loan” to the Monowatu Trust was “discharged” but according to the Administrators’ report, the Monowatu Trust was overpaid $294,038.88, that is to say, the Monowatu Trust was paid that amount over and above the amount of the debt owed to it.
On 16 March 2007, Samantha Leonie sent an email using Tina’s email address to a customer suggesting that claims that the business had ceased were false and that in fact she and her sister Tina were still in business and intended to continue to trade through a newly established entity – no doubt a reference to Kayak Wholesalers Pty Ltd.
On 26 March 2007 Grant Hughes caused Paddle Sports Australia Pty Ltd to be incorporated.
On 13 August 2007, Johnson filed a statement of claim in the District Court of New South Wales, commencing proceeding No 3478/07 in that Court. It is not necessary to trace the course of that proceeding: it suffices to say that on 22 January 2008 judgment was entered in favour of Johnson for $NZD567,000.
On 6 February 2008, Samantha Leonie sold a property at 18 Heath Street, Mona Vale for $1,620,000.
On 7 February 2008, a Judicial Registrar gave Johnson leave to enter judgment against the Company for AUD 527,767.55 plus costs to be assessed. The Company was required to provide security of $400,000 within 28 days as a condition of obtaining a continuance of a stay of execution of the judgment to enable the Company to pursue a cross-claim against Johnson, but the security of $400,000 was not provided.
On 28 March 2008, Christine Margot mortgaged the adjoining property at 16 Heath Street, Mona Vale to secure financial accommodation of $243,000.
As noted earlier, on 21 April 2008, the Company entered into voluntary administration.
On 23 April 2008, Johnson furnished a completed proof of debt to the Administrators for the amount of its judgment debt.
On 28 April 2008, Samantha Leonie furnished a Report as to Affairs (RATA) showing that the Company had assets of an estimated realisable value of $1,269 (cash at bank) and unsecured creditors totalling $1,247,195 as follows (excluding interest):
Johnson $527,767 Northstar Accountants 6,325 Paddle Sports Australia Pty Ltd 37,018 Crisp Legal 447 Christine Margot 1,000 Hughes Family Trust 671,882 Australian Taxation Office 2,756 _________
$1,247,195
========Between the appointment of the Administrators and the issue of their report, the Administrators concluded that the amount owed by the Company to the Hughes Family Trust was in fact $782,346.05, the amount for which the Trust had lodged a proof of debt.
On 2 May 2008, the first meeting of creditors was held.
On 19 May 2008, the Administrators gave notice of the second meeting of creditors to be held on 27 May 2008, accompanied by their report to creditors.
On 27 May 2008 the creditors resolved, over the dissenting vote of Johnson, that the Company execute the DOCA.
CONSIDERATION
The “Executive Summary” of the Administrators’ report to creditors was as follows:
·The Company operated as a wholesaler of kayaks, canoes and accessories and traded from leased premises situated at Unit 2, 6 Taranga [sic] Place, Mona Vale NSW 2103.
·At the date of our appointment, the Company had assets consisting of cash at bank, stock and plant and equipment. The Company had ceased trading at the date of appointment.
·The Company’s major creditors are Johnson Outdoors Watercraft Limited (“Johnson Outdoors”) and the Hughes Family Trust who have lodged claims against the Company for the amounts of $527,767 and $782,346 respectively. The Company’s unsecured creditors total $1,354,457.
·Johnson Outdoors commenced legal action against the Company in March 2007 to recover its outstanding debt relating to the supply of kayaks, canoes and accessories to the Company. The Company has defended the court action and lodged a cross claim against Johnson Outdoors for damages with respect to loss of profit due to the termination of a distribution agreement contract.
·The company has incurred substantial costs defending the recovery action commenced by Johnson Outdoors. The Company’s sole director, Ms Samantha Williams (“Ms Williams”) has advised that the Company’s legal costs to date have amounted to $88,946.
·The focus of this administration to date has been to investigate the Company’s financial affairs and to locate interested parties to purchase the Company’s residual stock and plant and equipment. To date no buyer has been secured to purchase the Company’s residual stock and plant and equipment.
·Ms Williams has proposed a Deed of Company Arrangement (“DOCA”) for creditors to consider. The DOCA proposed by Ms Williams is estimated to provide unsecured creditors of the Company with a dividend of approximately 8 cents in the dollar. Our investigations into the Company’s affairs reveal that a dividend to creditors in a liquidation scenario is unlikely.
·A meeting of creditors has been convened pursuant to section 439A(1) of the Act on 27 May 2008 to determine the Company’s future. It is our recommendation that creditors vote in favour of the Ms Williams’ [sic] proposed DOCA which is estimated to provide creditors with a better return than winding up the Company.
In their report to creditors, the Administrators referred to several questionable transactions involving payments made by the Company. In their report the Administrators explained that they were relying on schedules prepared by Christine Margot.
Hunt and Hunt, the solicitors for Johnson, wrote a lengthy detailed letter to the Administrators dated 7 June 2008 raising numerous queries arising out of the Administrators’ report and the solicitors’ own investigations. This prompted the Administrators to provide a supplementary report to creditors on 15 July 2008, addressing points raised by the solicitors. It will be noted, however, that the supplementary report post-dated the creditors’ resolution that the Company execute the DOCA.
The following general matters of relevance to s 445D(1)(a), (b) and (c) (set out at [6] above) may be noted:
(1)The Company had conducted the business as trustee of the Canoe Sports Trust until trading ceased in March 2007, 13 months before the Company went into voluntary administration and appointed the Administrators. The nature of the business was that of a wholesaler of kayaks, canoes and accessories which was carried on from leased premises at Unit 2, 6 Taronga Place, Mona Vale, NSW 2103.
(2)Samantha Leonie completed the RATA on 28 April 2008 showing that the Company’s assets comprised money (in three bank accounts) totalling only $1,269.00 and that its unsecured creditors amounted to $1,245,926.
(3)In the period commencing November 2006, following the termination of the Distribution Agreement and some three months before the Company ceased trading in March 2007, Samantha Leonie and Christine Margot caused the Company to pay amounts totalling $805,875.12 to a Wespac Banking Corporation personal loan account held in the name of Samantha Leonie and Christine Margot.
(4)Amounts totalling $427,259.09 paid by the Company over the period 31 March 2005 to 22 February 2007 were, according to Samantha Leonie, paid to Williams Trust in repayment of loans. The Administrators were advised that the primary beneficiaries of that Trust are Samantha Leonie and Christine Margot. The Administrators were not able to confirm the existence of the loans due to the insufficiency of the bank statements available to them. Of the $427,259.09, $310,000 was paid after Johnson terminated the Distribution Agreement.
(5)Numerous payments were made over the period 3 June 2004 to 31 July 2007 totalling $645,353.90 to the Monowatu Trust of which apparently Monowatu Pty Ltd, a company of which Samantha Leonie is a director, was the trustee. Again, Samantha Leonie explains that to the extent of $351,315.02, the payments of $645,353.90 were repayments of a loan account. As the Administrators observe, this would signify an overpayment of $294,038.88 which should be repaid by the Monowatu Trust to the Company for the benefit of its creditors (see [23] above).
(6)In their report, the Administrators expressed the opinion that the making of payments would have affected the Company’s cash flow and were a cause of the Company’s insolvency.
(7)The Administrators recommended the DOCA proposed by Samantha Leonie on the basis that recovery action by a liquidator may not yield fruit because Samantha Leonie had informed them that she had no assets. In fact she did, although after allowing for a mortgage to Westpac Banking Corporation, her equity may be very small.
(8)It appears that the report to creditors understated the total liabilities of the Company by $585,836 (in their supplementary report, the Administrators refer to the accounts that were initially supplied to them not having recorded certain transactions).
(9)The Administrators’ report stated that the Hughes Family Trust appeared to be owed a provable debt on the basis that it had been shown as a creditor of the Company in the Company’s balance sheet since at least 30 June 2005. However, financial statements for the Canoe Sports Unit Trust for the year ended 30 June 2005, the original of which was apparently signed by Samantha Leonie and Christine Margot, do not show that liability (the balance sheet does show a current liability for “unsecured loans” of $739,021).
(10)As noted earlier, the Administrators expressed the opinion that recovery action against Samantha Leonie may not be commercially beneficial to the creditors of the Company on the basis that she had no assets. However, in a discussion on 9 July 2008, Samantha Leonie did disclose certain personal assets, and she did not disclose having transferred her interest in 18 Heath Street, Mona Vale for $1,620,000 in early 2008.
(11)The Administrators’ report noted that Christine Margot had not had an opportunity to confirm or deny owning any of the properties listed in her name, but on 9 July 2008 she confirmed ownership of the properties. She was a director of the Company on 30 November 2006 when $805,875.12 was paid out of its account into the joint account of herself and her daughter as mentioned earlier. The properties owned by Christine Margot may have a net equity of $1,751,000.
(12)The Administrators’ report omitted (I do not suggest fault on their part) certain material information, including details of the assets owned by Samantha Leonie, her sale of the property at 18 Heath Street, Mona Vale in early 2008, the amount of the net proceeds of sale and how much of them are still held by her; information relating to the financial position of Christine Margot and, in particular, details of properties in her name.
(13)According to the Administrators’ report, Samantha Leonie had informed the Administrators that the Company purchased the business from the Hughes Family Trust for $1,274,598.94 inclusive of stock in May 2003. A copy of the alleged contract provides that $1 million of the purchase price was payable immediately. The Administrators’ report did not contain information as to how the purchase price was paid (evidence filed by the Company in the District Court proceeding suggested that the price was only $600,000).
(14)The Administrators’ report omitted details of how the debt of $671,882.00 claimed to be owing to the Hughes Family Trust arose.
(15)Finally, there are several aspects of the relationships between persons mentioned that would have been material to creditors:
·Samantha Leonie worked for Grant Hughes prior to “acquiring his business”;
·Grant Hughes ordered stock using the Company’s credit accounts for his personal use and convenience;
·Northstar Accountants were the accountants for the Hughes family and the Williams family and prepared all accounts in evidence, and Christine Margot worked at Northstar Accountants;
·Andrew Stanning of Northstar Accountants was the witness to the signatures on the contract for the sale and purchase of the business;
·Mr Hughes and Samantha Leonie were both directors of Kulgun Holdings Pty Limited, a company that carried on business at the same address as the registered office of the Company;
·Tina, a former director of the Company and sister of Samantha Leonie, commenced a business at the Company’s premises in the form of Kayak Wholesalers Pty Ltd on 27 February 2007 and Samantha Leonie was dealing with customers seeking to order goods on 16 March 2007 using her sister’s email address.
(16)Samantha Leonie is or has been a director of Kulgun Holdings Pty Ltd, Monowatu Pty Ltd and Senavale Pty Ltd, all of which list the same address as their registered office and have featured in aspects of the Company’s affairs.
The aspects of the matter to which I have referred above suggest a close relationship between the Hughes and Williams families and the desirability of an investigation by a liquidator as to the recoverability of the Company’s money that was paid away. According to the Administrators’ report, Johnson is the largest unrelated creditor and would stand to benefit from any recovery. Importantly, Johnson has proffered an undertaking to the Court to fund a liquidator’s investigation to the extent of $50,000.
In my opinion the Company should be wound up in insolvency.
There is a question whether Mr Struthers who has been nominated by Johnson or one of the Administrators should be appointed as liquidator. It is suggested that the Administrators have carried out investigation of the Company’s business to date to a significant degree, and that there would be a saving in costs if one of them were to be appointed as liquidator.
I accept that considerable investigative work has been carried out by the Administrators. I have found their report and supplementary report informative and helpful. No criticism is made of them by Johnson. The misstatements in and omissions from their report were due to the insufficiency of records made available to them, the time constraints under which they were labouring and the fact that they had to rely on Samantha Leonie for information. Nonetheless, for a number of reasons I think that Mr Struthers should be appointed.
First, to be balanced against the considerable work carried out by the Administrators, is the considerable investigatory work that has been carried out by Johnson’s solicitors, Hunt and Hunt. It is no less undesirable that the benefit of that work be lost to the liquidator to be appointed, than it is that the benefit of the Administrators’ work be lost to him.
Second, the administration has reached a stage where the issues for a liquidator to pursue have crystallised and the next phase will probably be the liquidator’s examinations of various people and, depending on the outcome, the institution of recovery proceedings. In other words, it is doubtful that there is considerable advantage now to be gained by appointing one of the Administrators as liquidator.
Third, while it is common enough for the accountants of an insolvent company to suggest a particular person as administrator, in this case there seems to be a close relationship between members of the Williams and Hughes families and Northstar Accountants who nominated the Administrators. It is important that Johnson have confidence that the liquidator to be appointed will vigorously pursue all sources of recovery free of any sense of obligation to Northstar Accountants, not just that in fact he will do so.
I emphasise that no criticism is made of the Administrators. In particular, I do not suggest that their report to creditors was influenced in any way by a sense of obligation to Northstar Accountants. Nor do I suggest that they would not pursue vigorously such lines of recovery as they may be advised to pursue. Rather, I am referring only to the perception of Johnson in relation to the future course of events.
Fourth, if one puts aside the debts owed by the Company to “related” parties, what emerges is that the one substantial independent creditor is Johnson. In addition, Johnson has proffered the undertaking to fund the liquidator to which I referred. Weight should be given to Johnson’s preference in these circumstances.
For the above reasons, I made an order on 20 August 2008 setting aside the DOCA, an order for the winding up of the Company, an order appointing Mr Struthers as liquidator, and orders protecting Johnson in relation to its costs of this proceeding and the Administrators in relation to their remuneration and costs, including their statutory indemnity.
I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren. Associate:
Dated: 29 August 2008
Solicitor for the Plaintiff: Mr JGF Harrowell of Hunt and Hunt Counsel for the First and Second Defendants: Mr D Kelly Solicitor for the First and Second Defendants: Mills Oakley Lawyers Pty Ltd
Date of Hearing: 23 July 2008 Date of Receipt of last written submissions: 31 July 2008 Date of Orders: 20 August 2008 Date of Publication of Reasons for Judgment: 29 August 2008
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