Parkard Computers Pty Ltd v Flexible Manufacturing Systems Pty Ltd - [1997] FCA 291

NOT SUITABLE FOR GENERAL DISTRIBUTION

IN THE FEDERAL COURT OF AUSTRALIA     )
  )
NEW SOUTH WALES DISTRICT REGISTRY     )          No. G3731 of 1996
  )
GENERAL DIVISION  )

BETWEEN: PARKARD COMPUTERS PTY LIMITED

Applicant

AND: FLEXIBLE MANUFACTURING SYSTEMS PTY LIMITED (RECEIVER AND MANAGER APPOINTED)

Respondent

CORAM:       Burchett J
PLACE:         Sydney
DATE:           23 April 1997

MINUTE OF ORDER OF THE COURT

THE COURT ORDERS THAT:

The respondent’s motion seeking a prompt hearing of the application separate from the hearing of the other issues between the parties be dismissed with costs.

NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA     )
  )
NEW SOUTH WALES DISTRICT REGISTRY     )          No. G3731 of 1996
  )
GENERAL DIVISION  )

BETWEEN: PARKARD COMPUTERS PTY LIMITED

Applicant

AND: FLEXIBLE MANUFACTURING SYSTEMS PTY LIMITED (RECEIVER AND MANAGER APPOINTED)

Respondent

CORAM:       Burchett J
PLACE:         Sydney
DATE:           23 April 1997

REASONS FOR JUDGMENT

BURCHETT J:

This is a motion seeking an order for the prompt hearing, separately from and in advance of the hearing of a plethora of other disputes involving the parties, of an application under s.459G of the Corporations Law.

The circumstances are unusual. Court proceedings over the disputes go back to 10 December 1991, when action number G3178 of 1991 was commenced in the court between parties initially including the applicant Parkard Computers Pty Limited and subsequently (by motion for joinder of an additional party) the respondent Flexible Manufacturing Systems Pty Limited. Over a lengthy period, the action was adjourned from time to time to permit Flexible Manufacturing Systems Pty Limited to proceed

unhampered with litigation in California. That litigation was eventually concluded last year, after an appeal, in the company’s favour, when it became entitled to well over US$2,000,000. The company then made a call dated 20 September 1996, through its receiver and manager, on approximately 90,000 partly paid shares held by the applicant, and on 22 October 1996 it issued a Creditor’s Statutory Demand for Payment of Debt in respect of that call. The immediate response was action number G3718 of 1996 brought by the applicant and its director Barry Charles Amor against Flexible Manufacturing Systems Pty Limited, two other companies and Royce Bruce Ritchie, claiming relief under ss. 260 and 461 of the Corporations Law, and the bringing of the application under s.459G with which I am concerned followed on 4 November 1996.

In urging me to order that the proceeding under s. 459G proceed to an immediate hearing, Mr Bennett QC relies on two main points: the proposition that such an application, of its nature, should be heard promptly; and a contention that the applicant’s own affidavits did not raise a reasonably arguable answer to the call on the partly paid shares. I accept the first proposition as a general rule from which there would be few exceptions. However, in the present case, the very creation of the alleged…

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 Parkard Computers Pty Ltd v Flexible Manufacturing Systems P... 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: [1997] FCA 291
Decision Date: 23 Apr 1997

CaseChat Overview and Summary

Parkard Computers Pty Ltd sought to expedite the hearing of an application under section 459G of the Corporations Law against Flexible Manufacturing Systems Pty Ltd, a company that had been placed under receivership and management. The application arose from a call made by the respondent on partly paid shares held by the applicant, a call which Parkard contested as being part of a broader dispute between the parties. The Federal Court of Australia was tasked with determining whether the application should be heard separately and promptly or if it should be deferred until the broader issues were resolved.

The court had to decide whether the application for relief under section 459G should be heard separately and promptly, as requested by the applicant, or if it should be heard in conjunction with the other disputes between the parties. Additionally, the court needed to assess if the applicant had a reasonably arguable defence to the call made by the respondent on the partly paid shares. The court considered the general principle that applications under section 459G should be heard promptly but also evaluated the specific circumstances of this case, where the creation of the debt was intertwined with the larger disputes between the parties.

Justice Burchett dismissed the motion for a prompt separate hearing, holding that it was not appropriate to consider the application in isolation from the fundamental issues that surrounded the ability of Flexible Manufacturing Systems Pty Ltd to make the call and the context in which it was made. The judge found that the creation of the debt was inextricably linked with the broader disputes, particularly concerning whether the applicant was a shareholder suffering from oppression by those in control of the company. The court concluded that hearing the application separately would not be just, as the resolution of the call might be influenced by the outcome of the larger disputes. Therefore, the motion was dismissed with costs.

The court ordered that the respondent's motion seeking a prompt hearing of the application separate from the hearing of the other issues between the parties be dismissed with costs. This decision ensured that the application would be heard in the context of the broader disputes, maintaining the integrity of the legal process and ensuring that all relevant issues were considered together.

Orders