Octaviar Investment Notes Ltd, Re - [2008] QSC 342

[2008] QSC 342

SUPREME COURT OF QUEENSLAND

CIVIL JURISDICTION

MCMURDO J

No 5183 of 2008

RE: OCTAVIAR INVESTMENT NOTES LIMITED (FORMERLY MFS INVESTMENT NOTES LIMITED)

No 5194 of 2008

RE: OCTAVIAR LIMITED (FORMERLY MFS LIMITED)

No 5185 of 2008

RE: OCTAVIAR INVESTMENTS BONDS LIMITED (FORMERLY MFS INVESTMENT BONDS LIMITED)

No 5186 of 2008

RE: OCTAVIAR FINANCIAL SERVICES LIMITED

No 9922 of 2008

OCTAVIAR LIMITED AND OTHERS

and

JOHN LETHBRIDGE GRIEG AND ANOTHER

No 12963 of 2008

OCTAVIAR INVESTMENTS NOTES LIMITED AND OTHERS

and

JOHN LETHBRIDGE GRIEG AND ANOTHER

BRISBANE

..DATE 18/12/2008

ORDER

HIS HONOUR: The Public Trustee of Queensland is the applicant to wind up four companies. Each of those applications has been adjourned for further hearing today.

Yesterday, at meetings of creditors, the scheme of arrangement was put by administrators to the meeting. In relation to two of these companies, creditors did not accept the proposal and Public Trustee today seeks orders for their liquidation. They are Octaviar Investment Notes Limited and Octaviar Investment Bonds Limited.

The only creditors of those companies are the Public Trustee representing certain note holders and the interest which I have previously described as Challenger. Challenger supports the application for the winding up of these two companies and supports the appointment of the Public Trustee's nominees as liquidators, who are two people from Ferrier Hodgson.

The companies, that is, Octaviar Investment Notes Ltd and Octaviar Investment Bonds Ltd, do not now oppose the applications for their winding up. Nor is there any opposition from any other party to that course.

At a previous hearing, there was a question as to whether the Public Trustee or the note holders that he represents were creditors or, instead, contingent creditors. I've been told by counsel for the Public Trustee that the position according to the evidence is that the note holders are now indisputably creditors and nothing is said against that submission.
The applications are made, of course, upon the insolvency ground. It is plain that that ground is established. Again, there is no suggestion to the contrary.

The only issue in relation to these two companies to be wound up has been one concerning the identity of the liquidators. On behalf of the companies, an affidavit of an officer of the company has been read, setting out a number of matters said to be relevant to that issue. The companies' arguments are that the administrators or someone else from the same firm are the appropriate liquidators, essentially for reasons of economy and convenience, having regard to the work done by administrators or their firm so far in the administration of these companies and others and the ongoing work, at least for the time being pending further litigation by people from that firm in the administration of the deed, which was approved for other companies. That is a relevant consideration but it is not the only one.

There is, undoubtedly, a dispute between the Public Trustee or the interests he represents and the administrators, which is likely…

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: [2008] QSC 342
Decision Date: 18 December 2008

CaseChat Overview and Summary

In the case of Octaviar Investment Notes Limited, Octaviar Limited, Octaviar Investments Bonds Limited, and Octaviar Financial Services Limited, the Public Trustee of Queensland applied to wind up the companies. The applications were adjourned, with the winding up of Octaviar Investment Notes Limited and Octaviar Investments Bonds Limited proceeding as the creditors did not accept the scheme of arrangement. The primary legal issue was the appointment of liquidators for the two companies, with the Public Trustee and the creditors supporting the appointment of liquidators from Ferrier Hodgson, while the companies proposed the administrators or someone from their firm due to economy and convenience. The court considered the dispute between the Public Trustee and the administrators, the creditors' preference, and potential preferential payments. The court concluded that the creditors' preference for Ferrier Hodgson's nominees was a significant factor and granted the orders for winding up the two companies with the appointment of the Ferrier Hodgson liquidators.

The court ruled that the winding up of Octaviar Investment Bonds Ltd and Octaviar Investment Notes Ltd would proceed on the insolvency ground. It ordered the appointment of Mr W M Colwell, Mr G M Maloney, and Mr Gothard of Ferrier Hodgson as liquidators. The court rejected OPI Pacific Finance Ltd's request for costs in the winding up of these companies, as it was not a creditor and had opposed the winding up. The court also granted the Public Trustee's request for a further adjournment and extension of time for the winding up applications for Octaviar Ltd and Octaviar Financial Services Ltd. This adjournment allowed the Public Trustee to challenge the deed of company arrangement approved at the creditors' meetings. The court further ordered that the Public Trustee's costs of and incidental to the hearing be the applicant's costs in the winding up, reserving the administrators' costs in the Octaviar Ltd application and the costs of OPI Pacific Finance Ltd in both applications.

Orders