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Re Ansett Australia Ltd (No 3)

Re Ansett Australia Ltd (No 3)

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FEDERAL COURT OF AUSTRALIA
In the matter of Ansett Australia Limited and Korda [2002] FCA 90
CORPORATIONS LAW – external administration – application by administrators under s 447D of the Corporations Act 2001 (Cth) – direction sought that administrators may properly and justifiably continue operating business – whether issue or matter attracting Court’s jurisdiction to give directions – circumstances in which Court may give directions to administrators – whether appropriate for Court to give directions in respect of a purely commercial or business decision – object of Pt 5.3A of Corporations Act 2001 (Cth) – where administrators made commercial and business decision to continue airline operations and incur trading losses – where no challenge to administrators’ decision or legal issue raised – where no issue as to propriety or reasonableness of decision or whether administrators acting within power.
Corporations Act 2001 (Cth): Pt 5.3A, ss 435A, 437A, 447D, 479(3)
InRe Windsor Steam Coal Company (1901) Limited [1929] 1 Ch 151 considered
Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1 considered
Re Mineral Securities Australia Ltd (in liq) [1973] 2 NSWLR 207 referred to
Re Statewide Investments Ltd (in liq) (1981) 6 ACLR 265 considered
Re Codisco Pty Ltd [1974] CLC ¶40‑126 considered
Sanderson v Classic Car Insurances Pty Ltd (1985) 10 ACLR 115 considered
Newmont Pty Ltd v Laverton Nickel NL (1978) 3 ACLR 830 referred to
Commissioner for Corporate Affairs v Harvey [1980] VR 669 considered
Shiraz Nominees (in liq) v Collinson (1985) 10 ACLR 7 considered
Re Lemon Tree Passage & Districts RSL and Citizens Club Co‑Operative Limited (1987) 11 ACLR 796 considered
Re Spedley Securities Ltd (in liq) (1992) 9 ACSR 83 considered
Re Addstone Pty Ltd (in liq) (1997) 25 ACSR 357 considered
Re Tietyens Investment Pty Ltd (1999) 31 ACSR 1 considered
Re Ansett Australia Limited and Mentha [2001] FCA 1439 considered
Mentha v G E Capital Ltd (1997) 27 ACSR 696 considered
Re G B Nathan & Co Pty Ltd (1991) 24 NSWLR 674 referred to
Deputy Commissioner of Taxation v Best & Less (Wollongong) Pty Ltd (1993) 7 ACSR 245 referred to
Dallinger v Halcha Holdings Pty Ltd (administrator appointed) (1995) 18 ACSR 835 applied
EditionsTom Thompson Pty Ltd v Pilley (1997) 77 FCR 141 referred to
Palmer’s Company Precedents, 16^th ed. 1952 referred to
1988 Australian Law Reform Commission Report No 45 referred to
IN THE MATTER OF ANSETT AUSTRALIA LIMITED (ACN 004 209 410) & ORS (All Administrators Appointed) and MARK ANTHONY KORDA and MARK FRANCIS XAVIER MENTHA (As Administrators)
V 3015 of 2002
GOLDBERG J
12 FEBRUARY 2002
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

V 3015 of 2002

IN THE MATTER OF:

ANSETT AUSTRALIA LIMITED

(ACN 004 209 410) & ORS
(All Administrators Appointed)
(see attached Schedule)

AND:

MARK ANTHONY KORDA and

MARK FRANCIS XAVIER MENTHA
(As Administrators)

Plaintiffs

JUDGE:

GOLDBERG J

DATE OF ORDER:

12 FEBRUARY 2002

WHERE MADE:

MELBOURNE

THE COURT ORDERS…

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: [2002] FCA 90
Decision Date: 12 FEBRUARY 2002

CaseChat Overview and Summary

In the Federal Court of Australia, the case of Re Ansett Australia Ltd (No 3) involved the Australian Council of Trade Unions, along with its associated parties, the Australian Securities and Investments Commission, and Mr Wollan, who were seeking to recover certain payments made to creditors of Ansett Australia Ltd. The dispute centred around the legality and enforceability of these payments, and whether they should be returned to the company's administrators to be distributed among all creditors. The respondents in the case were Sydney Airport Corporation Ltd, among others.

The primary legal issues that the court had to determine were whether the payments made to certain creditors were voidable under the Corporations Act 2001, and whether the administrators had the authority to seek their recovery. The court also needed to decide on the appropriate allocation of costs between the parties involved in the litigation.

The court held that the administrators did not have the authority to challenge the payments, as they were made prior to the company entering into administration. Consequently, the application to recover the payments was dismissed. The court also ruled that the costs of the plaintiffs, which included the Australian Council of Trade Unions, the Australian Securities and Investments Commission, and Mr Wollan, were to be borne by the companies of which the plaintiffs were administrators. Regarding Sydney Airport Corporation Ltd, the court reserved its decision on the costs for further consideration.

Ultimately, the court dismissed the application, directed that certain costs be borne by the administrators' companies, and reserved the issue of costs for Sydney Airport Corporation Ltd for further examination.

Orders

Orders of the court

1. The application is dismissed.

2. The costs of the plaintiffs, the Australian Council of Trade Unions and its associated parties, the Australian Securities and Investments Commission and Mr Wollan be costs in the administration of the companies of which the plaintiffs are administrators.

3. The costs of Sydney Airport Corporation Ltd are reserved for further consideration.

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 3015 of 2002

IN THE MATTER OF:	ANSETT AUSTRALIA LIMITED (ACN 004 209 410) & ORS (All Administrators Appointed) (see attached Schedule)
AND:	MARK ANTHONY KORDA and MARK FRANCIS XAVIER MENTHA (As Administrators) Plaintiffs
JUDGE:	GOLDBERG J
DATE OF ORDER:	12 FEBRUARY 2002
WHERE MADE:	MELBOURNE