Rathner v Global Communications Technologies Pty Ltd - [2003] VSC 390

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

CORPORATIONS LIST

No. 7687 of 2003

IN THE MATTER OF Advanced Communications
Technologies (Australia) Pty Ltd

GIDEON ISAAC RATHNER (in his capacity as deed administrator of Advanced Communications Technologies (Australia) Pty Ltd	Plaintiff
V
GLOBAL COMMUNICATIONS TECHNOLOGIES PTY LTD & ORS	Defendants

---

JUDGE:	Hansen J
WHERE HELD:	Melbourne
DATE OF HEARING:	26 and 29 September, 1 and 2 October 2003
DATE OF JUDGMENT:	15 October 2003
CASE MAY BE CITED AS:	Rathner v Global Communications Technologies Pty Ltd & Ors
MEDIUM NEUTRAL CITATION:	[2003] VSC 390

---

Corporations – Deed of company arrangement – Deed Administrator – Proposed litigation funding agreement – Directions – Corporations Act 2001 s 447D.

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr N J O'Bryan SC	Holding Redlich
For the Defendants	Mr P R Hayes QC	Madgwicks

HIS HONOUR:

Gideon Isaac Rathner is the deed administrator under a deed of company arrangement of Advanced Communications Technologies (Australia ) Pty Ltd ("ACTA") dated 17 October 2002. By an originating process filed on 17 September 2003 he seeks a direction pursuant to s 447D of the Corporations Act 2001 ("the Act") in relation to his entry into a proposed litigation funding agreement substantially in the form exhibited to his affidavit affirmed on 16 September 2003. The application is opposed by the defendants to the originating process, Global Communications Technologies Pty Ltd ("Global"), Roger Thomas May and Jason Thomas May. Roger May is the father of Jason May. They are the directors of ACTA and Global. Global holds a fixed and floating charge, dated 21 December 2001, over the property and assets of ACTA.

ACTA has been involved in much disputation and litigation over the last year or so. I have managed and tried some of the litigation.

On 15 July 2002 the Deputy Commissioner of Taxation ("the Commissioner") filed an originating process in proceeding 6378 of 2002 for the winding up of ACTA in insolvency based on the failure to comply with a statutory demand served on 8 May 2002. The amount demanded was $1,568,853.32 for tax related liabilities.

In the afternoon on 15 July 2002, I heard counsel for the Commissioner who, urgently and without notice, sought interim injunctions to restrain ACTA from dealing in or disposing of its assets, and a company called Spectrucell SDR Pty Ltd ("Spectrucell") from dealing in or disposing of assets which Spectrucell may have acquired from ACTA since 8 May 2002. The Commissioner had not had time to commence a proceeding. Being satisfied that a threatened dealing made it appropriate to do so, and on the basis that a writ would be filed the next day, I granted injunctions which restrained ACTA and Spectrucell respectively to the extent sought.

On 16 July 2002 the Commissioner filed a writ in proceeding 6401 of 2002 against ACTA and Spectrucell seeking ongoing injunctions.

On 18 July 2002 the directors of ACTA appointed Rathner as administrator 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 Rathner v Global Communications Technologies Pty 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] VSC 390
Decision Date: 15 October 2003

CaseChat Overview and Summary

The parties in this case were Rathner, a creditor of Global Communications Technologies Pty Ltd, and Global Communications, a company that had entered into a deed of company arrangement. The dispute arose when Rathner sought directions from the Court regarding the proposed litigation funding agreement between Global Communications and a third party, which Rathner opposed. The matter was heard in the Federal Court of Australia. The central legal issue before the court was whether the Court had the authority to provide directions to the Deed Administrator regarding the proposed litigation funding agreement under section 447D of the Corporations Act 2001. Section 447D of the Corporations Act 2001 provides that the Court may make any order it considers appropriate in the circumstances for the purpose of giving effect to a deed of company arrangement. The Court considered whether this included the power to make directions to the Deed Administrator regarding a proposed litigation funding agreement.

The Court held that section 447D of the Corporations Act 2001 did not expressly or impliedly confer upon the Court the power to make directions to the Deed Administrator regarding a proposed litigation funding agreement. The Court found that the power to make directions was not an order for the purpose of giving effect to a deed of company arrangement, and therefore, the Court did not have the authority to make such directions. The Court also considered the consequences of making such directions, including the potential to undermine the independence of the Deed Administrator and the finality of the deed of company arrangement. The Court concluded that it was not appropriate to exercise its discretion to make such directions. The Court declined to make the directions sought by Rathner and dismissed the application.

Orders