Lindholm (liquidator), in the matter of Aviation 3030 Pty Ltd (in liq)

The case of Lindholm (liquidator), in the matter of Aviation 3030 Pty Ltd (in liq) involved a request for approval of a settlement agreement on behalf of four defendants by the liquidators of Aviation 3030, a land development company. The court was asked to determine the legality and appropriateness of the proposed settlement agreement, as well as whether the supporting affidavit annexing the deeds of settlement should be suppressed under s 37AF of the Federal Court of Australia Act 1976 (Cth).

The primary legal issue the court had to address was whether the liquidators were entitled to approval for the proposed settlement agreement and whether the information contained within the supporting affidavit annexing the deeds of settlement should be kept confidential. The court considered whether the settlement agreement was in the best interests of the minority investors, the Aviation Entities, and the orderly liquidation of the Aviation Entities. Furthermore, the court had to evaluate whether there was any basis to doubt the prudence of the liquidators' commercial judgment in approving the settlement agreement.

The court ruled that the liquidators were entitled to approval for the proposed settlement agreement. It found that the settlement agreement was in the best interests of the minority investors, the Aviation Entities, and the orderly liquidation of the Aviation Entities. The court concluded that the benefits of having certainty in relation to the settlement with the Taing Parties, balanced against the probability of obtaining any better result through continued litigation, weighed in favour of the proposed settlement. The court also granted the suppression of the supporting affidavit annexing the deeds of settlement, as the liquidators claimed that the information was confidential, as these deeds of settlement did not resolve the entirety of the proceeding.

ORDERS:

1. Pursuant to s 477(2B) of the Corporations Act 2001 (Cth), Messrs Lindholm and Georges as joint and several Liquidators of the Aviation Entities have approval to enter into, and cause the Aviation Entities to enter into, the proposed deeds of settlement, which are exhibited at JRL-15 and JRL-16 to the second (confidential) affidavit of John Ross Lindholm dated 18 August 2021.
2. Pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth), the second (confidential) affidavit of John Ross Lindholm dated 18 August 2021 and the (confidential and privileged) advice of Hamish Austin QC and William Newland dated 22 September 2021:
(a) be placed in a sealed envelope marked: “Confidential – not to be accessed for inspection without order of a Judge or Registrar of the Court”;
(b) not be made available for inspection except so far as the Court otherwise orders; and
any application to inspect the affidavit or advice is to be referred to a Judge or Registrar of the Court with three business days’ notice thereof to be provided to the solicitors for the Plaintiffs.
3. The Plaintiffs be indemnified in respect of their costs of this application from the funds of the liquidation.