Morgan, H. v Anglis Pty Ltd

[1992] FCA 630

I N TRE FEDERAL COURT OF AUSTRALIA	)
1
NEW SOUTH WALES DISTRICT REGISTRY )	NO. 3129 of 1992
GENERAL D M s I o N	j
I N THE MAT!CER OF ANGLIS PTY LIMITED
(A.C.N. 008 637 705)

HAROLD MORGAN

Applicant

ANGLIS PTP LIMITED

JUDGE :	Heerey J
DATE:	26 June 1992  2 SEP 1992
PLACE :	Sydney

I have decided not to grant this application for the appointment of a provisional liquidator. I will be fairly brief in stating my reasons because of the time constraints and the fact that the matter has been fully debated.

asset of Anglis, namely, a potential claim against PPL and its	former directors. This could conceivably include Mr Morgan
himself, although it is said that he will endeavour to show that because of his absence in the United States he was not involved with the conduct complained of.
Anglis was not a party to the Supreme Court litigation but it seems that there is at least some overlap between the Supreme Court action and the proposed action to be taken by a provisional liquidator in that both would concern moneys paid out by Anglis to or for the benefit of Jiffy Lube (Aust) Pty Ltd (Jiffy Lube) a company of which Mr Morgan and the potential defendants were directors. Mr Thomson took me in some detail through the accounts of Anglis and also the shareholders' agreement between Jiffy Lube and PPL and he certainly did show a prima facie basis on which such advances could be said to be in breach of the shareholders' agreement and breach of duties by the directors of Anglis. Mr Nicholas, however, outlined briefly the case that PPL is seeking to make in the Supreme Court proceedings which, in essence, is that
directors, including Mr Morgan. all this was done with the knowledge and consent of the It is obvious enough that I am in no position to adjudicate
upon the respective merits of the respective claim and answer to that claim which has been outlined by counsel before me. It is clear, however, that a substantial part of that dispute will be litigated in the Supreme Court proceedings which were fixed in October last year for a trial to commence on 6 July. The winding up application is returnable on 24 July. It is common ground that Anglis is insolvent and no reason has been suggested why a liquidator would not be appointed on that date.
Therefore, it seems to me that the present applicant has to make out a case that there is some reason why the Court should appoint a provisional liquidator in the meantime. I am not satisfied that any sufficient reason has been shown. At worst, there might be a delay of a month or six weeks before the contemplated proceedings were launched, if the liquidator appointed were to take the view that course should be taken.
But there is nothing to suggest that the proposed respondents to that claim are likely to dissipate assets or leave the jurisdiction or that in some other way Mr Morgan will be worse off if the proceeding were to be brought in the ordinary way by a liquidator after appointment.
In the course of his reply, M r Thomson pointed to the value of
having a liquidator appointed so that somebody could represent the company should any settlement proceedings emerge in the
course of the Supreme Court proceedings. There is no evidence to suggest that any particular settlement negotiations are in contemplation and, in any event, Anglis is not a party to the Supreme Court proceedings. To the extent that M r Morgan and the other directors and PPL and, I think, Westpac are parties to the Supreme Court proceedings, should settlement negotiations arise I do not see why they will not be able to look after their own interests.
~f one looks at it from the commercial point of view, there
does not seem to be any separate interest in Anglis which might need to be protected in such negotiations and, as I say, it is really no more than speculation that negotiations might take place anyway. I should say that Mr Nicholas very frankly conceded that he could not point to any particular prejudice to his client were a provisional liquidator to be appointed but I think he is essentially correct in pointing out that it is up to the applicant to make out a case for appointment. I do not think this has been done. For those reasons I dismiss the application with costs, including reserved costs.

The main reason which leads me to this decision is the time table against which this matter has unfolded. There was litigation launched in the Supreme Court of New South Wales in July of last year against, amongst others, the present applicant, Mr Morgan based on a guarantee of a liability of Anglis Pty Limited (Anglis) to Partnership Pacific Limited (PPL). The present application seeks the appointment of a provisional liquidator to get in what apparently is the only

I certify that this and the preceding (3) three pages are a true copy of the reasons for judgment of his Honour Mr Justice Heerey.

Appearances

Counsel for the applicant:	Mr J E Thomson
Solicitors for the applicant:	MrCrohon Bergseng Partners
Counsel for the respondent:	Mr J Nicholas

Solicitors for the respondent: Feez Ruthning by their town
agents Allen Allen and Hemsley