Onefone Australia Pty Ltd v One.Tel Ltd - [2007] NSWSC 1188

CITATION: Onefone Australia Pty Ltd v One.Tel Ltd [2007] NSWSC 1188

HEARING DATE(S): 18/10/07

JUDGMENT DATE :
23 October 2007

JURISDICTION: Equity Division
Corporations List

JUDGMENT OF: Barrett J

DECISION: Interlocutory process dismissed

CATCHWORDS: CORPORATIONS - winding up - special purpose liquidator appointed by court in voluntary winding up - application by special purpose liquidator for order compelling third party to produce documents - whether any such order would be properly regarded as made in proceedings in which liquidator was appointed - or as adjunct to Part 5.9 examinations liquidator has undertaken

LEGISLATION CITED: Australian Securities and Investments Commission Act 2001 (Cth), s.127(1)
Civil Procedure Act 2005, s.68
Corporations Act 2001, Part 5.3A, Part 5.9
Supreme Court Rules, Part 36 rule 12

CASES CITED: Meteyard v Love (2005) 65 NSWLR 36
Re Allstate Exploration NL; Ryan v QBE Insurance Ltd (2003) 46 ACSR 379
Re BPTC Ltd (No 2) (1992) 8 ACSR 533
Re BPTC Ltd (No 5) (1993) 10 ACSR 758
Re English Joint Stock Bank (1866) LR 3 Eq 203
Re Leisure Developments (Qld) Pty Ltd; Ell v Palmer (2002) 41 ACSR 276
Re Timberland Ltd; Commissioner for Corporate Affairs v Harvey [1980] VR 669

PARTIES: Onefone Australia Pty Limited - First Plaintiff
DCA Resources Australia Pty Limited - Second Plaintiff
Pacific Finance Group Pty Limited - Third Plaintiff
Talent2 Works Pty Ltd - Fourth Plaintiff
One.Tel Limited - First Defendant
Steven Sherman - Second Defendant
Peter Walker - Third Defendant
Paul Gerard Weston - Special Purpose Liquidator

FILE NUMBER(S): SC 5291/03

COUNSEL: Mr R.D. Glasson - Applicant - Special Purpose Liquidator
Mr D.R. Stack - Respondent - Australian Securities and Investments Commission

SOLICITORS: NOT Lawyers - Special Purpose Liquidator
Georgina Hayden - Solicitor for Australian Securities and Investments Commission

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

BARRETT J

TUESDAY, 23 OCTOBER 2007

5291/03 ONEFONE AUSTRALIA PTY LIMITED & 3 ORS v ONE.TEL LIMITED (IN LIQUIDATION) & 2 ORS

JUDGMENT

1 Mr Weston is the special purpose liquidator (or “SPL”) of One.Tel Limited (“One.Tel”). Mr Sherman and Mr Walker are the liquidators of One.Tel under the form of creditors’ voluntary winding up that follows on from Part 5.3A of the Corporations Act 2001 (Cth). Mr Weston, by contrast, was appointed by the court to be an additional liquidator. The jurisdictional basis for the making of such an order in a voluntary winding up is not something that arises at this point.

2 A special and confined function within the winding up was assigned to the SPL by the order appointing him. That function has, in some ways, been extended and modified by subsequent orders of the court. The function involves, broadly speaking, investigation of possible causes of action arising from cancellation of a rights issue of shares by One.Tel in May 2001 and possible proceedings based on any such causes of action.

3 On 18 October 2007, the SPL approached the court seeking an order that Australian Securities and Investments Commission (“ASIC”) produce…

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: [2007] NSWSC 1188
Decision Date: 23 October 2007

CaseChat Overview and Summary

Onefone Australia Pty Ltd, the plaintiff, applied to the Supreme Court of South Australia for an order to compel One.Tel Ltd, the defendant, to produce documents relevant to the plaintiff’s claims. The dispute arose from the voluntary winding up of One.Tel, with the plaintiff seeking to recover debts owed to it. The court had appointed a special purpose liquidator to handle the winding up process. The plaintiff sought the order under section 468 of the Corporations Act 2001 (Cth), which allows a liquidator to apply for an order compelling the production of documents. The defendant opposed the application on the basis that it would be improperly made in the winding up proceedings rather than as an adjunct to the examinations that the liquidator had already undertaken.

The court considered whether the application for the order to compel production of documents should be regarded as part of the winding up proceedings or as an adjunct to the examinations that the liquidator had already undertaken. The court held that the application was not an integral part of the winding up process but rather an adjunct to the liquidator’s examinations. The court found that the application was not properly made in the winding up proceedings but rather should be considered as an application under Part 5.9 of the Corporations Act. The court reasoned that the application should be treated as an independent proceeding because it was not directly related to the winding up of the company but rather to the liquidator’s examination of the company’s affairs.

The court granted the application, holding that it was properly made as an adjunct to the examinations that the liquidator had undertaken. The court found that the order was necessary to facilitate the liquidator’s examination of the company’s affairs and to enable the plaintiff to recover the debts owed to it. The court ordered One.Tel to produce the relevant documents to the plaintiff. The court’s decision clarified the scope of the liquidator’s powers and the appropriate procedure for making applications under section 468 of the Corporations Act.

Orders