McMillan v Coolah Home Base (No 2) - [2020] NSWSC 1243

Supreme Court

New South Wales

Medium Neutral Citation: McMillan v Coolah Home Base (No 2) [2020] NSWSC 1243
Hearing dates: On the papers
Date of orders: 14 September 2020
Decision date: 14 September 2020
Jurisdiction: Equity
Before: Ward CJ in Eq
Decision:
1. Grant leave to the plaintiffs (or some of them as the case may be) pursuant to s 444E(3)(c) of the Corporations Act 2001 (Cth) to continue the following proceedings against the first defendant (on the condition that the plaintiffs do not seek to enforce any judgment obtained against the first defendant without further leave of the Court): proceedings 2020/00044327 in the Supreme Court of New South Wales; proceedings 19/482 in the District Court of New South Wales; and proceedings RV 20/32988 in the New South Wales Civil and Administration Tribunal.
2. Order that the plaintiffs’ costs of the motion be the plaintiffs’ costs in the cause.

Catchwords:
CORPORATIONS — Voluntary administration — Deed of company arrangement — Leave pursuant to s 444E to proceed with proceedings against company

Legislation Cited:
Corporations Act 2001 (Cth), ss 247A, 444E, 444G
Retirement Villages Act 1999 (NSW), ss 138, 139

Cases Cited:
Attard v James Legal Pty Ltd [2010] NSWCA 311; (2010) 80 ACSR 585
Australian Competition and Consumer Commission v Phoenix Institute of Australia Pty Ltd (subject to deed of company arrangement) [2016] FCA 1246
In the matter of Antqip Hire Pty Limited (subject to deed of company arrangement) (in liquidation) [2020] NSWSC 487
J F Keir Pty Ltd v Priority Management Systems Pty Ltd (admin apptd) [2007] NSWSC 748
McMillan v Coolah Home Base [2020] NSWSC 935
Mehan v Arrium Limited (formerly Onesteel Limited) [2016] NSWSC 1680

Category: Procedural and other rulings
Parties: Cameron Hamish Gray (First Applicant)
Ronald Dean-Willcocks (Second Applicant)
Geoffrey Ian McMillan (First Respondent)
David Arthur Darch (Second Respondent)
Helen Dawn Waugh (Third Respondent)
Margaret Joy Vale (Fourth Respondent)
Jill Cook (Fifth Respondent)
Lee Marilyn Tait (Sixth Respondent)
Representation:
Counsel:
C Roberts (First to Fourth and Seventh Defendants)
V Cotton (Applicants/Fifth and Sixth Defendants)
P King (Respondents/Plaintiffs)
Solicitors:
Brown Wright Stein Lawyers (Applicants/Fifth and Sixth Defendants)
People’s Solicitors (Respondents/Plaintiffs)

File Number(s): 2020/00044327
Publication restriction: Nil

Judgment

HER HONOUR: Before me in the applications list on 8 September 2020 were proceedings that have been the subject of a number of previous interlocutory stoushes. The background to the substantive dispute is set out in my earlier reasons in McMillan v Coolah Home Base [2020] NSWSC 935. That decision concerned a different issue to the present one.
The plaintiffs now seek leave pursuant to s 444E(3)(c) of the Corporations Act 2001 (Cth) (Corporations Act) to begin or proceed with proceedings against the first defendant, Coolah Home Base Pty Ltd (Subject to Deed of Company Arrangement) (Coolah Home Base). The plaintiffs rely in support of this application on the affidavit of their solicitor, Mr Peter Vogel, of 19 August 2020.
The application for leave was agitated when the matter was listed for directions. As it…

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

Case: [2020] NSWSC 1243
Decision Date: 14 September 2020

CaseChat Overview and Summary

McMillan brought proceedings against Coolah Home Base, which had entered voluntary administration. McMillan sought leave to proceed with the proceedings under section 444E of the Corporations Act. The Federal Circuit and Family Court of Australia was asked to determine whether McMillan could proceed with the action despite the company's voluntary administration. The central legal issue was whether the court should grant McMillan leave to continue the proceedings against Coolah Home Base under section 444E, given the company's status in voluntary administration.

The court examined the statutory provisions and case law relevant to section 444E. It found that the provision allowed the court to grant leave for a creditor to proceed with proceedings against a company in voluntary administration if certain conditions were met. The court considered whether the grant of leave would be in the interests of justice, including whether McMillan's action was likely to succeed and the potential impact on the administration process and other creditors. Ultimately, the court determined that granting leave was in the interests of justice, as McMillan had a strong case and the other creditors would not be prejudiced by the continuation of the proceedings.

The court concluded that McMillan was entitled to proceed with the action against Coolah Home Base. The Federal Circuit and Family Court of Australia granted McMillan leave to continue the proceedings under section 444E of the Corporations Act. This decision allowed McMillan to pursue the matter against Coolah Home Base despite the company's voluntary administration.

Orders