Rappas v Ansett Australia Limited - [2001] FCA 1348

FEDERAL COURT OF AUSTRALIA
In the matter of Ansett Australia Limited; Rappas v Ansett Australia Limited
[2001] FCA 1348
CORPORATIONS LAW – application for orders under ss 447A, 448C and 449C of the Corporations Act 2001 (Cth) – appointment of union representatives as attorneys of employees at creditors meeting – appointment of substitute administrators upon resignation of current administrators.
Corporations Act 2001 (Cth): Pt 5.3A, s 435C, s 436E, s 447A, s 449C(1) & (6)
Australasian Memory Pty Ltd v Brien (2000) 200 CLR 270 applied
IN THE MATTER OF ANSETT AUSTRALIA LIMITED (ACN 004 209 410) & ORS (ALL ADMINISTRATORS APPOINTED)
FAYE RAPPAS & ORS v ANSETT AUSTRALIA LIMITED (ACN 004 209 410) & ORS (ALL ADMINISTRATORS APPOINTED)
V 3027 of 2001
GOLDBERG J
17 SEPTEMBER 2001
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

V 3027 of 2001

IN THE MATTER OF ANSETT AUSTRALIA LIMITED (ACN 004 209 410) & ORS (ALL ADMINISTRATORS APPOINTED)

BETWEEN:

FAYE RAPPAS & ORS
(see attached Schedule)
Applicants

AND:

ANSETT AUSTRALIA LIMITED
(ACN 004 209 410) & ORS (All Administrators Appointed)
(see attached Schedule)
Respondents

JUDGE:

GOLDBERG J

DATE OF ORDER:

17 SEPTEMBER 2001

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:
1.Pursuant to r (3)(1) of the Federal Court Rules service of this originating process on the respondents in accordance with r 2.7 of the Federal Court (Corporations) Rules 2000 be abridged to 2.15pm today.

2.Pursuant to s 447A of the Corporations Act 2001 (Cth) (“the Act”) Pt 5.3A of the Act is to operate in relation to each of the first to forty‑third respondents (“the Ansett Group”) as if it provided that at the meeting or meetings held pursuant to s 436E of the Act, each employee of the said respondents who is a member of any of the following unions:

2.1 Ansett Pilots Association (“APA”);
2.2Association of Professional Engineers, Scientists & Managers, Australia (“APESMA”);

2.3      Australian Liquor, Hospitality & Miscellaneous Workers Union (“LHMU”)
2.4      Australian Federation of Airline Pilots (“AFAP”)
2.5      Australian Licensed Aircraft Engineers Association (“ALAEA”)
2.6      Australian Services Union (“ASU”)
2.7      Australian Workers Union (“AWU”)
2.8Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (“AMWU”)

2.9      Communication, Electrical and Plumbing Union (“CEPU”)
2.10     Flight Attendants’ Association of Australia (“FAAA”)
2.11     National Union of Workers (“NUW”)
2.12     Transport Workers Union of Australia (“TWU”)
had duly appointed the person whose name appears in column 2 of Appendix 1 to be their attorney pursuant to reg 5.6.31A for the purpose of that meeting or those meetings save for:
(a)       any employee who attends any meeting in person; or
(b)any employee who signs a proxy appointing some other person to attend any meeting on his or her behalf.

3.Pursuant to s 448C and s 447A(1) of the Act leave is granted to Mark Francis Xavier Mentha and Mark Anthony Korda of Arthur Andersen, 360 Elizabeth Street, Melbourne, Victoria, 3000 to seek to be, to consent to be appointed as, and to act as, joint and several administrators of the Ansett Group…

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: [2001] FCA 1348
Decision Date: 17 SEPTEMBER 2001

CaseChat Overview and Summary

The case of Rappas v Ansett Australia Limited arose from the collapse of Ansett Australia, a major Australian airline. The plaintiff, Rappas, who is a member of one of the unions representing Ansett employees, brought the proceeding against Ansett Australia Limited and others involved in the administration of the company. The dispute centred around the process by which administrators were appointed to manage the affairs of Ansett during its administration and liquidation, particularly in relation to the union members' rights to appoint their own representatives at meetings concerning the company's administration.

The legal issues before the court included whether the administrators had the authority to act on behalf of certain union members who had not explicitly appointed an attorney, and whether the union members had the right to appoint their own representatives at meetings concerning the administration of the company. The court had to determine whether the statutory provisions governing the appointment of administrators and the rights of union members were correctly applied in this case.

In delivering the judgment, the court found that the administrators had the authority to act on behalf of union members who had not explicitly appointed an attorney, provided those members did not attend the meetings in person or appoint another person to attend on their behalf. The court also held that union members had the right to appoint their own representatives at meetings concerning the administration of the company. The court granted the orders sought by the plaintiff, allowing for the operation of the relevant statutory provisions in relation to the appointment of administrators and the rights of union members. The court appointed joint and several administrators for the Ansett Group, excluding certain Hazelton entities, and an administrator for those Hazelton entities. The court also reserved the right for the directors of the Ansett Group to apply to amend, vary or revoke the orders made within a specified timeframe.

The court's decision provided clarity on the process by which administrators were appointed and the rights of union members in the administration of Ansett Australia. The orders made by the court ensured that the statutory provisions governing the administration of companies in Australia were correctly applied in this case. The outcome of the case is significant for future proceedings involving the administration of companies and the rights of union members in such proceedings.

Orders

Orders of the court

1. Pursuant to r (3)(1) of the Federal Court Rules service of this originating process on the respondents in accordance with r 2.7 of the Federal Court (Corporations) Rules 2000 be abridged to 2.15pm today.

2. Pursuant to s 447A of the Corporations Act 2001 (Cth) (“the Act”) Pt 5.3A of the Act is to operate in relation to each of the first to forty‑third respondents (“the Ansett Group”) as if it provided that at the meeting or meetings held pursuant to s 436E of the Act, each employee of the said respondents who is a member of any of the following unions:

2.1 Ansett Pilots Association (“APA”);

2.2 Association of Professional Engineers, Scientists & Managers, Australia (“APESMA”);

2.3 Australian Liquor, Hospitality & Miscellaneous Workers Union (“LHMU”)

2.4 Australian Federation of Airline Pilots (“AFAP”)

2.5 Australian Licensed Aircraft Engineers Association (“ALAEA”)

2.6 Australian Services Union (“ASU”)

2.7 Australian Workers Union (“AWU”)

2.8 Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (“AMWU”)

2.9 Communication, Electrical and Plumbing Union (“CEPU”)

2.10 Flight Attendants’ Association of Australia (“FAAA”)

2.11 National Union of Workers (“NUW”)

2.12 Transport Workers Union of Australia (“TWU”)

had duly appointed the person whose name appears in column 2 of Appendix 1 to be their attorney pursuant to reg 5.6.31A for the purpose of that meeting or those meetings save for:

(a) any employee who attends any meeting in person; or

(b) any employee who signs a proxy appointing some other person to attend any meeting on his or her behalf.

3. Pursuant to s 448C and s 447A(1) of the Act leave is granted to Mark Francis Xavier Mentha and Mark Anthony Korda of Arthur Andersen, 360 Elizabeth Street, Melbourne, Victoria, 3000 to seek to be, to consent to be appointed as, and to act as, joint and several administrators of the Ansett Group other than Hazelton Airlines Limited (ACN 061 965 624); Hazelton Air Services Pty Ltd (ACN 000 242 928), Hazelton Air Charter Pty Ltd (ACN 065 221 356).

4. Pursuant to s 449C(6) and s 447A of the Act:

4.1 Mark Francis Xavier Mentha and Mark Anthony Korda of Arthur Andersen, 360 Elizabeth Street, Melbourne, Victoria 3000 be appointed joint and several administrators of the Ansett Group other than Hazelton Airlines Limited (ACN 061 965 624), Hazelton Air Services Pty Ltd (ACN 000 242 928) and Hazelton Air Charter Pty Ltd (ACN 065 221 356).

4.2 Michael James Humphris of Sims Lockwood, 461 Bourke Street, Melbourne, Victoria 3000 be appointed administrator of Hazelton Airlines Limited (ACN 061 965 624), Hazelton Air Services Pty Ltd (ACN 000 242 928) and Hazelton Air Charter Pty Ltd (ACN 065 221 356)

with effect as and from the date and time that the forty‑fourth to forty‑sixth named respondents give notice in writing of their resignation as administrators of the Ansett Group pursuant to s 449C(1)(c) of the Act.

5. Liberty is reserved to the directors of the first to forty‑third respondents to apply to amend, vary or revoke the orders made in par 4 hereof on twelve hours written notice to the applicants, but such application must be made no later than 4.00pm on 19 September 2001.

6. The costs of this application are costs in the administration of the Ansett Group.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

GOLDBERG J

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Ratio Decidendi

Legal Principle Established

Established by: GOLDBERG J

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IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 3027 of 2001

BETWEEN:	FAYE RAPPAS & ORS (see attached Schedule) Applicants
AND:	ANSETT AUSTRALIA LIMITED (ACN 004 209 410) & ORS (All Administrators Appointed) (see attached Schedule) Respondents
JUDGE:	GOLDBERG J
DATE OF ORDER:	17 SEPTEMBER 2001
WHERE MADE:	MELBOURNE