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Re Alora Davies Developments 104 Pty Ltd

Re Alora Davies Developments 104 Pty Ltd

Case [2021] NSWSC 1583 7 December 2021

Winding Up & Liquidation

Admissibility of Evidence

Insolvency Law

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Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: In the matter of Alora Davies Developments 104 Pty Ltd [2021] NSWSC 1583
Hearing dates: 7 June 2021
Date of orders: 7 December 2021
Decision date: 07 December 2021
Jurisdiction: Equity - Corporations List
Before: Williams J
Decision:
Proceedings dismissed.

Catchwords:
CORPORATIONS — winding up — liquidator’s adjudication of proof of debt — appeal to Court from liquidator’s decision — whether plaintiff has discharged its onus of establishing that the debts were true liabilities of the Company as at the date of winding up — whether the plaintiff has adduced sufficient evidence to discharge said onus – no issue of principle

Legislation Cited:
Corporations Act 2001 (Cth), s 1321, Sch 2 (Insolvency Practice Schedule) s 90-15

Cases Cited:
In the matter of Azmac Pty Ltd (in liq) (2020) 146 ACSR 113; [2020] NSWSC 204
In the matter of Fixed Interest Pty Ltd [2017] NSWSC 1872
In the matter of St Gregory’s Armenian School Inc (2015) 109 ACSR 27; [2015] NSWSC 1465
Lawrence v Ciantar [2020] NSWCA 89
Warner v Hung; In the matter of Bellpac Pty Ltd (recs and mgrsapptd) (in liq) (No. 2) (2011) 297 ALR 56; [2011] FCA 1123

Category: Principal judgment
Parties: Alora Property Group Pty Ltd (ACN 168 323 153) ATF Alora Property Group Trust (Plaintiff)
Henry McKenna as Liquidator of Alora Davies Developments 104 Pty Ltd (Defendant)
Representation:
Counsel:
Ms I J King (Plaintiff)
N/A (Defendant)
Solicitors:
Wilshire Webb Staunton Beattie (Plaintiff)
N/A (Defendant)

File Number(s): 2021/66035
Publication restriction: N/A

Judgment

Mr Henry McKenna was appointed as the liquidator of Alora Davies Developments 104 Pty Ltd (the Company) on 6 May 2020 (the Liquidator).
By originating process filed on 8 March 2021, the plaintiff, Alora Property Group Pty Ltd (as trustee for the Alora Property Group Trust), appeals against the Liquidator’s determination of its proof of debt submitted in the winding up of the Company in the amount of $1,084,983.82.
The Liquidator accepted the plaintiff’s proof of debt in part and rejected the proof in part. During the hearing it emerged that the plaintiff appealed against the Liquidator’s rejection of three components of the proof of debt in respect of which the plaintiff claimed a total amount of $918,165.

Applicable principles

An appeal against a liquidator’s decision in relation to a proof of debt was previously brought under s 1321 of the Corporations Act 2001 (Cth) but is now made under s 90-15 of the Insolvency Practice Schedule in Schedule 2 to the Corporations Act. However, the case law in relation to appeals under the now repealed s 1321 remains relevant: Re Azmac Pty Ltd (in liq) (2020) 146 ACSR 113; [2020] NSWSC 204 at [41] and the authorities there cited. I respectfully adopt Black J’s summary of the principles emerging from those authorities in Re St Gregory’s Armenian School Inc (2015) 109 ACSR 27; [2015] NSWSC 1465 at [34]-[35]:

“34 In Tanning Research Laboratories Inc…

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.

Continue reading Re Alora Davies Developments 104 Pty Ltd

Details

AGLC: Re Alora Davies Developments 104 Pty Ltd [2021] NSWSC 1583
Case: [2021] NSWSC 1583
Decision Date: 07 December 2021

CaseChat Overview and Summary

The appellant company, Alora Davies Developments 104 Pty Ltd, was wound up and the liquidator was appointed. A creditor, who had not been paid the full amount of their debt, appealed to the Court from the liquidator’s decision to adjudicate a proof of debt. The creditor sought to establish that their debts were true liabilities of the company as at the date of winding up. The court was required to determine whether the creditor had discharged the onus of establishing the validity of their debts and whether the creditor had adduced sufficient evidence to meet this burden.

The court examined the evidence presented by the creditor and found that it was insufficient to discharge the onus of proof. The creditor had failed to provide evidence that the debts were true liabilities of the company as at the date of winding up. The court held that the creditor had not established that the debts were incurred prior to the winding up, and the liquidator was correct in rejecting the proof of debt. The creditor had not provided sufficient evidence to meet the standard of proof required to discharge the onus.

The court dismissed the appeal and upheld the liquidator’s decision to reject the proof of debt. The court held that the creditor had not discharged the onus of establishing that the debts were true liabilities of the company as at the date of winding up, and the liquidator was correct in rejecting the proof of debt. The liquidator’s decision was affirmed, and the creditor’s appeal was dismissed with costs.

Orders