Onefone Australia Pty Ltd v One.Tel Ltd - [2003] NSWSC 1228

Reported Decision:
48 ACSR 562

Supreme Court

CITATION: Onefone Australia Pty Limited v One.Tel Limited (In Liquidation) [2003] NSWSC 1228

HEARING DATE(S): 5 December 2003

JUDGMENT DATE:
19 December 2003

JURISDICTION:
Equity Division

JUDGMENT OF: Windeyer J at 1

DECISION: Special Purposes Liquidator Appointed

CATCHWORDS: CORPORATIONS - winding up - application for appointment of special purpose liquidator to investigate renounceable rights issues - whether liquidator in a position of conflict - whether any possible claim - whether imminent expiry of limitation period for one suggested claim justified appointment - whether appointment should be restricted to avoid expense in enquiries on a matter which would be determined in other proceedings

LEGISLATION CITED: Corporations Act 2001 s9, s588FB, s588FC, s588FE, s588FF, s600C

CASES CITED: Re Obie Pty Limited (In liq) (No 4) (1984) 8 ACLR 867
Re Spedley Securities Ltd (In Liq) (1991) 4 ACSR 555

PARTIES :
Onefone Australia Pty Limited (First Plaintiff)
DCA Resources Australia Pty Limited (Second Plaintiff)
One.Tel Limited (In Liquidation) (First Defendant)
Steven Sherman and Peter Walker (Second and Third Defendants)

FILE NUMBER(S): SC 5991 of 2003

COUNSEL: Mr R Newlinds SC with him Mr H Stowe (Second Plaintiff)
Mr M Slattery QC with him Mr R Dick (Defendants)

SOLICITORS: H Ekes (First Plaintiff - discontinued)
Gilles Delaney and Brown (Second Plaintiff)
Kemp Strang (Defendants)

- 10 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

WINDEYER J

FRIDAY 19 DECEMBER 2003.

5291/03 ONEFONE AUSTRALIA PTY LIMITED & ORS V ONE.TEL LIMITED (IN LIQUIDATION) AND ORS

JUDGMENT

1 This is an application for the appointment of a special liquidator in respect of a particular aspect of the winding up of One.Tel Limited.

2 The plaintiffs, DCA Resources Australia Pty Limited and Pacific Finance Group Pty Limited are creditors in the winding up of One Tel Limited (In Liquidation) (One.Tel). Messrs Sherman and Walker, the second and third defendants are the liquidators of One.Tel having been so appointed on 24 July 2001 at a meeting of creditors. Prior to that they were administrators appointed by resolution of the directors on 25 May 2001.

3 Prior to the appointment of the administrators, One.Tel had determined to raise additional capital through what has been referred to as a renounceable rights issue under which capital of $132 million was to be sought from shareholders through the issue of new shares. It was proposed that companies associated with Publishing and Broadcasting Limited and News Limited would underwrite the issue. For the purposes of this claim I proceed on the basis that there was a binding underwriting agreement. That is not a finding of fact nor a finding as to its terms express or implied. Any such underwriting agreement was obviously subject to the rights issue proceeding in accordance with a prospectus which would be required to be lodged in relation to the issue. The company announced the rights issue to the Australian Stock Exchange and through the media on 17 May 2001.

4 A meeting of directors of the company…

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.

Keep reading for free

Create a free CaseChat account to read Onefone Australia Pty Ltd v One.Tel Ltd and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2003] NSWSC 1228
Decision Date: 19 December 2003

CaseChat Overview and Summary

In this case, Onefone Australia Pty Ltd applied for the appointment of a special purpose liquidator to investigate certain renounceable rights issues. The application was made to the Supreme Court of New South Wales. The primary respondent, One.Tel Ltd, opposed the application, raising concerns about the potential conflict of interest and the lack of any identifiable claim that could be pursued by the liquidator. The application was made against One.Tel and several other defendants, including individuals who had been directors of One.Tel at relevant times.

The court was required to determine whether the liquidator could be appointed without being in a position of conflict, whether there was a possible claim that the liquidator could pursue, and whether the imminent expiry of a limitation period for one potential claim justified the appointment. Additionally, the court needed to consider whether the appointment should be restricted to avoid unnecessary expense in investigating matters that would be addressed in other proceedings.

The court found that the liquidator could be appointed without being in a position of conflict, as the potential claims did not involve direct conflicts of interest with the liquidator's role. The court also determined that there was a potential claim related to the renounceable rights issues that the liquidator could investigate. However, the court was not satisfied that the imminent expiry of the limitation period for one potential claim justified the appointment of a liquidator. The court further held that the appointment should be restricted to avoid unnecessary expense in investigating matters that would be addressed in other proceedings. Consequently, the court declined to appoint a special purpose liquidator but directed the parties to provide further information to facilitate the resolution of the underlying dispute.

The court's final orders were that the application for the appointment of a special purpose liquidator be dismissed, with directions for the parties to provide further information to the court to assist in resolving the underlying dispute. The court also ordered that the respondents pay the applicant's costs of the application, to be taxed if not agreed.

Orders