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Onefone Australia Pty Ltd v One.Tel Ltd

Onefone Australia Pty Ltd v One.Tel Ltd

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Case Copied 12 December 2008 33 min read

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CITATION: Onefone Australia Pty Ltd v One.Tel Ltd [2008] NSWSC 1335

HEARING DATE(S): 04/11/08, 05/11/08, 06/11/08, 07/11/08

JUDGMENT DATE :
12 December 2008

JURISDICTION: Equity Division
Corporations List

JUDGMENT OF: Barrett J

DECISION: See paragraph [65]

CATCHWORDS: CORPORATIONS - winding up - creditors voluntary winding up - special purpose liquidator appointed by court - application for orders concerning that liquidator's remuneration and expenses - provisions applicable to fixing of remuneration - committee of inspection - statutory role and responsibility of committee concerning fixing of remuneration - other functions of committee in creditors voluntary winding up

LEGISLATION CITED: Companies Act 1936, ss 232(1), 238, 275
Companies (Consolidation) Act 1908 (UK)
Companies (Winding-up) Act 1890 (UK), s 6
Corporations Act 2001 (Cth), Division 5 Part 5.6
Part 5.3A, ss 446A, 479(1), 499(3), 511(1)(a), (b), 511(2), 548(1), 556(1), 1479(7)
Corporations (Insolvency) Amendment Act 2007 (Cth),

CATEGORY: Principal judgment

CASES CITED: Advance Housing Pty Ltd v Newcastle Classic Development Pty Ltd (1994) 14 ACSR 230
Ansett Australia Ground Staff Superannuation Plan Pty Ltd v Ansett Australia Ltd [2002] VSC 576; (2002) 174 FLR 1
Burns Philp Investment Pty Ltd v Dickens (No 2) (1993) 31 NSWLR 280
Grime Carter and Co Pty Ltd v Whytes Furniture (Dubbo) Pty Ltd [1983] 1 NSWLR 158
Lo v Nielsen & Moller Autoglass Pty Ltd [2008] NSWSC 407; (2008) 26 ACLC 497
McGrath; Re HIH Insurance Ltd [2006] NSWSC 385
Onefone Australia Pty Ltd v One.Tel Ltd [2003] NSWSC 1228; (2003) 48 ACSR 562
Onefone Australia Pty Ltd v One.Tel Ltd [2006] NSWSC 815; (2006) 58 ACSR 466
Onefone Australia Pty Ltd v One.Tel Ltd [2006] NSWSC 1447
Re Cobar Mines Pty Ltd (unreported, NSWSC Santow J, 22 June 1998)
Re Gallard; Ex parte Gallard [1896] 1 QB 68
Re Just Juice Corporation Pty Ltd (1992) 8 ACSR 444
Re Korda; Stockford Ltd [2004] FCA 1682; (2004) 140 FCR 424
Re Obie Pty Ltd (No 4) (1984) 8 ACLR 967
Re Spedley Securities Ltd (1991) 4 ACSR 555
Re Walker and another (as liquidators of One.Tel Ltd) [2005] NSWSC 557; (2005) 54 ACSR 11
Re Webb 1922 SC 226

TEXTS CITED: W Bagehot, “The English Constitution”, Collins, 1963, p 67
Lindsay Powers, “The liability of members of creditor committees – the price for staying ‘close to the action’” (2005) 13 Insolv LJ 195

PARTIES: Onefone Australia Pty Limited - First Plaintiff
DCA Resources Australia Pty Limited - Second Plaintiff
Pacific Finance Group Pty Limited - Third Plaintiff
Concept Systems (Australia) Pty Limited - Fourth Plaintiff
One.Tel Limited (in liquidation) - First Defendant
Steven Sherman - Second Defendant
Peter Walker - Third Defendant

FILE NUMBER(S): SC 5291/03

COUNSEL: Mr M R Aldridge SC - Special Purpose Liquidator
Mr C R C Newlinds SC/Mr D Kell - Committee of Inspection

SOLICITORS: NOT Lawyers - Special Purpose Liquidator
Baker & McKenzie - Committee of Inspection

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

BARRETT J

FRIDAY 12 DECEMBER 2008

5291/03 ONEFONE…

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] NSWSC 1335
Decision Date: 12 December 2008

CaseChat Overview and Summary

In the Federal Court of Australia, Onefone Australia Pty Ltd, represented by its liquidators, filed an application concerning the remuneration and expenses of a special purpose liquidator appointed by the court for One.Tel Ltd, which was in a creditors voluntary winding up. The liquidators sought clarification and orders regarding the remuneration and expenses of the special purpose liquidator, and the role of the committee of inspection in this regard.

The primary legal issues before the court involved interpreting the provisions applicable to the fixing of remuneration for a special purpose liquidator and the statutory role and responsibilities of the committee of inspection in a creditors voluntary winding up. Specifically, the court needed to determine whether the committee of inspection had the authority to fix the remuneration of the special purpose liquidator and whether this was subject to the court's approval. Additionally, the court needed to examine the broader functions of the committee of inspection in overseeing the winding up process.

The court found that the committee of inspection does not have the statutory authority to fix the remuneration of a special purpose liquidator. Instead, this power lies with the court itself, which must exercise its discretion in making such determinations. The court emphasised that while the committee of inspection plays a vital role in overseeing the winding up process, it does not possess the authority to make final decisions regarding the remuneration of special purpose liquidators. The court's discretion in setting remuneration ensures that the interests of all creditors are fairly considered.

Consequently, the court ordered that the special purpose liquidator's remuneration be determined by the court rather than the committee of inspection. The court outlined the factors it would consider in making this determination, including the complexity and scope of the liquidator's work, the time involved, and the skill required. This ruling clarified the respective roles of the court and the committee of inspection in the creditors voluntary winding up process, ensuring that the interests of creditors are properly safeguarded.

Orders