Lehman Brothers Holdings Inc v City of Swan & Ors [2010] HCATrans 7 - [2010] HCATrans 7

2010] HCATrans 007

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S1 of 2010

B e t w e e n -
LEHMAN BROTHERS HOLDINGS INC
Appellant
and
CITY OF SWAN
First Respondent
PARKES SHIRE COUNCIL
Second Respondent
WINGECARRIBEE SHIRE COUNCIL
Third Respondent
LEHMAN BROTHERS AUSTRALIA LIMITED (SUBJECT TO A DEED OF COMPANY ARRANGEMENT)
Fourth Respondent
NEIL SINGLETON
Fifth Respondent
STEPHEN PARBERY
Sixth Respondent
LEHMAN BROTHERS ASIA HOLDINGS LIMITED (IN LIQUIDATION)
Seventh Respondent

Office of the Registry
Sydney No S362 of 2009

B e t w e e n -
LEHMAN BROTHERS ASIA HOLDINGS LIMITED (IN LIQUIDATION)
Appellant
and
CITY OF SWAN
First Respondent
PARKES SHIRE COUNCIL
Second Respondent
WINGECARRIBEE SHIRE COUNCIL
Third Respondent
LEHMAN BROTHERS AUSTRALIA LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT)
Fourth Respondent
NEIL SINGLETON
Fifth Respondent
STEPHEN PARBERY
Sixth Respondent
LEHMAN BROTHERS HOLDINGS INC
Seventh Respondent

FRENCH CJ
GUMMOW J
HAYNE J
HEYDON J
KIEFEL J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 10 FEBRUARY 2010, AT 10.19 AM

(Continued from 9/2/10)

__________________

FRENCH CJ: Yes, Mr Hutley.

MR HUTLEY: Your Honours will find before you, I hope, a document entitled “Addendum to the first and third respondents’ written submissions” to take up the point that your Honour Justice Gummow asked us to address shortly in writing. We have also arranged your Honours to have the Butterworths, Australian Corporations Law: Principles and Practice as at 1991 dealing with committees of inspection in liquidation. I will not take your Honours to them, just for your Honours’ convenience because it showed – I am sorry, it is the current one, I do apologise. It is called 1991; it is the current one.

Just to make the point if your Honours peruse that the contrast between committees of inspection and their powers in liquidation, compared to the creditors committee in an administration and the very narrow scope of its role reflecting, what we say, is the contemplated structure of the conduct of administration. I will not take your Honours any further with that.

Your Honours, I reached yesterday Division 5 and particularly section 439A. It was referring to the report called for under section 439A(4) and its relationship to the duties of the administrators identified in 438A. Now, to the extent that there was a possibility of a claim against the company by third parties, whether for contribution or indemnity of the nature contemplated in the submissions of our learned friend, Mr Bathurst, one might accept that could be described as part of the affairs of the company and that the powers under sections 438B and 438C, together with the management by the administrator, could assist in addressing those potential contingent claims for contribution, as your Honour Justice Hayne described them. One might accept that.

HAYNE J: The contingent claims would be matters to take to account in determining the solvency of the entity, would they not?

MR HUTLEY: Quite; I accept that. One might also accept…

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

AGLC: Lehman Brothers Holdings Inc v City of Swan & Ors [2010] HCATrans 7 [2010] HCATrans 7
Case: [2010] HCATrans 7
Decision Date

CaseChat Overview and Summary

The High Court of Australia heard an application for special leave to appeal in the matter of Lehman Brothers Holdings Inc (in liquidation) and the City of Swan and others. The dispute concerned the validity of certain charges registered against the assets of Lehman Brothers Australia Limited.

The primary legal issue before the High Court was whether the City of Swan and other local government entities had validly registered charges over the assets of Lehman Brothers Australia Limited under the Corporations Act 2001 (Cth). This involved determining whether the registration of these charges was effective to secure the payment of rates and charges owed by Lehman Brothers Australia Limited to the local government entities.

The High Court granted special leave to appeal. The Court's reasoning, as indicated by the granting of special leave, suggests a view that there were arguable points of law concerning the interpretation and application of the Corporations Act 2001 (Cth) in relation to the registration of charges by local government bodies. The underlying dispute likely involved complex questions of corporate insolvency law and the priority of creditors.

The High Court granted special leave to appeal, indicating that the appeal would proceed to a full hearing.

Orders