Mobil Oil Australia Pty Ltd v Eugene Transport Pty Ltd
[2001] NSWSC 783
•23 August 2001
CITATION: Mobil Oil Australia Pty Ltd v Eugene Transport Pty Ltd [2001] NSWSC 783 CURRENT JURISDICTION: Equity FILE NUMBER(S): SC 3714/01 HEARING DATE(S): 23 August 2001 JUDGMENT DATE:
23 August 2001PARTIES :
Mobil Oil Australia Pty Ltd (P)
Eugene Transport Pty Ltd (D)JUDGMENT OF: Hamilton J
COUNSEL : H Freedman, Solicitor (P)
G Carolan (D)SOLICITORS: Milne Berry & Berger (P)
McDonald Johnson (D)CATCHWORDS: CORPORATIONS [182] - Voluntary administration - Protection of company property during administration - Winding up company - Power of Court to adjourn hearing of winding up application - Relevant considerations. LEGISLATION CITED: Corporations Act 2001 (Cth) s 440A(2) CASES CITED: Creevey v Deputy Commissioner of Taxation (1996) 19 ACSR 456
TCS Management Pty Limited v CTTI Solutions Pty Limited [2001] NSWSC 830DECISION: Adjournment granted.
IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
HAMILTON J
THURSDAY, 23 AUGUST 2001
3714/01 MOBIL OIL AUSTRALIA LIMITED v EUGENE TRANSPORT PTY LIMITED
JUDGMENT
1 HIS HONOUR: This is an application under s 440A(2) of the Corporations Act 2001 (Cth) (“the CA”) in respect of the defendant, Eugene Transport Pty Limited. The administrator, Anthony Christopher Matthews, was appointed, as often occurs, only shortly before the return of the liquidation proceedings before the Court. Indeed, Mr Matthews' appointment occurred only two days ago, 21 August 2001. Despite the shortness of time, Mr Matthews' investigations have permitted him to indicate that a liquidation is likely to lead to nil distribution to creditors. He has found that he will be able to prepare profit and loss statements and cash flow budgets for the next twelve months within seven days, and he has formed a provisional view that the company may, over a period of two years, be able to trade out of its difficulties with a hope of paying 100 cents in the dollar. Beyond stating the likelihood of a nil return on liquidation, he does not set out in his affidavit the actual assets or actual debts of the company. The period of adjournment applied for is fourteen days, which would permit Mr Matthews to prepare the document that I have referred to and bring the matter back before the Court, if he deems it appropriate, on an application for a further adjournment supported by more ample material.
2 The question under s 440A(2) of the CA is whether it is in the interests of the creditors that there be an adjournment of the liquidation proceedings. Various things have been said in various cases concerning what is involved in that. In my view it is important for the court not to be diverted by those various formulations from the test embedded in the words of the statute. However, it was made clear in the judgment of McPherson JA in the Queensland Court of Appeal in Creevey v Deputy Commissioner of Taxation (1996) 19 ACSR 456 that, in general, for an adjournment of any length to be granted there must be material that indicates that the creditors will receive either a greater or a more accelerated payment than they would under a liquidation. The various other authorities in which the section has been discussed have recently been gathered by me in my judgment in TCS Management Pty Limited v CTTI Solutions Pty Limited [2001] NSWSC 830. The amount of material to justify the adjournment will be less in the case of a short adjournment, particularly a short adjournment in early days, which the administrator will use to gather and bring forward more ample material as to the possible benefits of an administration.
3 The submissions opposing even this short adjournment, made by Mr Freeman, the solicitor for the plaintiff, are, however, not without force. He points to the late appointment of the administrator, to the paucity of the material presented and to the fact that the administrator chosen is in Adelaide, whereas the company is registered in New South Wales, and says that any benefit to creditors is so much in the realm of speculation that even a short adjournment should not be granted. On the other hand I must bear in mind that Mr Matthews is a registered company liquidator, that he has made some investigation of the matter and has formed a view that a substantially better result is at least possible, dependent on the results of his further investigations, and that he is moving swiftly to bring more concrete material before the Court. As to the lack of his condescending to detail in his affidavit, whilst that may be criticised, it may equally be said that it would be pointless and perhaps irresponsible to bring forward partial material when fuller material can be brought forward in a short time.
4 Bearing in mind the length (or shortness) of the adjournment sought, I have come to the view that it is in the interests of the creditors that the administration proceed rather than that the company be placed immediately into liquidation, which would appear to be the inevitable result if the adjournment is refused. In those circumstances I propose to adjourn the hearing of the liquidation proceedings to 6 September 2001 at 9.30am. Costs of today's application are reserved.
2
2
1