SUPREME COURT OF QUEENSLAND
CITATION:
Re Octaviar Ltd (No 8) [2009] QSC 202
PARTIES:
THE PUBLIC TRUSTEE OF QUEENSLAND
(Applicant)
v
OCTAVIAR LTD (SUBJECT TO A DEED OF COMPANY ARRANGEMENT) (RECEIVERS AND MANAGERS APPOINTED) ACN 107 863 436
FORTRESS CREDIT CORPORATION (AUSTRALIA) II PTY LTD AND S J PARBERY AND A M SIMS AS RECEIVERS AND MANAGERS OF OCTAVIAR LTD (SUBJECT TO A DEED OF COMPANY ARRANGEMENT) (RECEIVERS AND MANAGERS APPOINTED) ACN 114 624 958
OPI PACIFIC FINANCE PTY LTD
OCTAVIAR INVESTMENT HOLDINGS NO. 3 PTY LTD and SUNLEISURE GROUP PTY LTD
COMMISSIONER OF TAXATION
WELLINGTON CAPITAL LTD AS RESPONSIBLE ENTITY OF THE PREMIUM INCOME FUND
CHALLENGER MANAGED INVESTMENTS LIMITED AS RESPONSIBLE ENTITY OF THE CHALLENGER HIGH YIELD FUND
(Respondents)
THE PUBLIC TRUSTEE OF QUEENSLAND
(Applicant)
v
OCTAVIAR ADMINISTRATION PTY LTD (SUBJECT TO A DEED OF COMPANY ARRANGEMENT) ACN 101 069 390
FORTRESS CREDIT CORPORATION (AUSTRALIA) II PTY LTD AND S J PARBERY AND A M SIMS AS RECEIVERS AND MANAGERS OF OCTAVIAR LTD (SUBJECT TO A DEED OF COMPANY ARRANGEMENT) (RECEIVERS AND MANAGERS APPOINTED) ACN 107 863 436
OPI PACIFIC FINANCE PTY LTD
OCTAVIAR INVESTMENT HOLDINGS NO. 3 PTY LTD and SUNLEISURE GROUP PTY LTD
COMMISSIONER OF TAXATION
WELLINGTON CAPITAL LTD AS RESPONSIBLE ENTITY OF THE PREMIUM INCOME FUND
CHALLENGER MANAGED INVESTMENTS LIMITED AS RESPONSIBLE ENTITY OF THE CHALLENGER HIGH YIELD FUND
(Respondents)
FORTRESS CORPORATION (AUSTRALIA) II PTY LIMITED ACN 114 624 958
(Applicant)
v
OCTAVIAR LIMITED (SUBJECT TO A DEED OF COMPANY ARRANGEMENT) (RECEIVERS AND MANAGERS APPOINTED) ACN 107 863 436
JOHN LETHBRIDGE GREIG AND NICHOLAS HARWOOD IN THEIR CAPACITY AS DEED ADMINISTRATORS OF OCTAVIAR LIMITED (SUBJECT TO A DEED OF COMPANY ARRANGEMENT) (RECEIVERS AND MANAGERS APPOINTED) ACN 107 863 436
(Respondents)
FILE NO/S:
BS 1848 of 2009
BS 1850 of 2009
BS 3650 of 2009DIVISION:
Trial Division
PROCEEDING:
Application
ORIGINATING COURT:
Supreme Court at Brisbane
DELIVERED ON:
31 July 2009
DELIVERED AT:
Brisbane
HEARING DATE:
5-8 May 2009, 11-13 May 2009
JUDGE:
McMurdo J
ORDER:
In BS 1848/09, it is ordered that:
1. Part 5.3A of the Corporations Act 2001 (Cth) operate in relation to Octaviar Limited (Administrators Appointed) (Receivers and Managers Appointed) so that s 446B and reg 5.3A.07 do not operate with any effect in relation to the company.
2. Pursuant to s 445D of the Corporations Act 2001 (Cth), the Deed of Company Arrangement between that company, Fortress Credit Corporation (Australia) II Pty Limited, John Lethbridge Greig and Nicholas Harwood, and Stephen James Parbery and Anthony Milton Sims be terminated.
3. John Lethbridge Greig and Nicholas Harwood be appointed as provisional liquidators until further order.
In BS 1850/09, it is ordered that:
1. Pursuant to s 445D of the Corporations Act 2001 (Cth), the Deed of Company Arrangement between Octaviar Administration Pty Limited (Administrators Appointed), and John Lethbridge Greig and Nicholas Harwood be terminated.
2. John Lethbridge Greig and Nicholas Harwood be appointed as liquidators until further order.
In BS 3650/09, it is ordered that the Application be dismissed.
CATCHWORDS:
CORPORATIONS – VOLUNTARY…
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- AGLC
- Re Octaviar Ltd (No 8) [2009] QSC 202
- Case
- [2009] QSC 202
- Decision Date
CaseChat Overview and Summary
The court found that the deed of company arrangement was contrary to the interests of the creditors as a whole, as there was a reasonable prospect of recovering significant funds from preference claims and uncommercial transactions only in the event of liquidation. The court also found that the representations made to creditors by the administrators prior to the execution of the deed of company arrangement were misleading, as they did not accurately reflect the potential returns from liquidation. Furthermore, the court determined that the Commissioner of Taxation's statutory charge was not affected by the crystallisation of the charge, and that part payments made by the guarantor did not affect the state of the account between the creditor and debtor.
The court also found that there was a serious question to be tried as to the group's insolvency, as the group needed $43 million to meet its commitments and there was evidence that it was unlikely to raise the necessary capital. The court further found that it was appropriate to have regard to the public interest in liquidation in exercising the discretionary power to terminate the deed of company arrangement. The court also held that the power under s 447A of the Corporations Act 2001 (Cth) to make orders about "how this Part is to operate" includes not only the sections within the Part but also the regulations made under them.
In terms of the registration and extension of charges, the court found that it retains the power to extend time under s 266(4) of the Corporations Act 2001 (Cth) despite the intervention of a winding up or administration. The court also found that ignorance or misunderstanding of the law may amount to "inadvertence" under s 266(4) of the Corporations Act 2001 (Cth), and that it is just and equitable to grant relief by way of an extension if there would be some prejudice to the chargee if the extension were not granted.
Finally, the court found that s 451C of the Corporations Act 2001 (Cth) does not preserve or extinguish the position under the general law, and that a transaction that is already void is "liable to be set aside in a winding up." The court also found that a condition seeking to ensure that any extension of time granted to a chargee be without prejudice to the creditor's rights should not be imposed if the creditor's rights are not prejudiced in any case.
The court ordered that Part 5.3A of the Corporations Act 2001 (Cth) operate in relation to Octaviar Limited so that s 446B and reg 5.3A.07 do not operate with any effect in relation to the company. The court also terminated the Deed of Company Arrangement between Octaviar Limited and certain parties, and appointed provisional liquidators and liquidators to the company. Finally, the court dismissed an application.
Orders
Orders of the court
In BS 1848/09, it is ordered that:
1. Part 5.3A of the Corporations Act 2001 (Cth) operate in relation to Octaviar Limited (Administrators Appointed) (Receivers and Managers Appointed) so that s 446B and reg 5.3A.07 do not operate with any effect in relation to the company.
2. Pursuant to s 445D of the Corporations Act 2001 (Cth), the Deed of Company Arrangement between that company, Fortress Credit Corporation (Australia) II Pty Limited, John Lethbridge Greig and Nicholas Harwood, and Stephen James Parbery and Anthony Milton Sims be terminated.
3. John Lethbridge Greig and Nicholas Harwood be appointed as provisional liquidators until further order.
In BS 1850/09, it is ordered that:
1. Pursuant to s 445D of the Corporations Act 2001 (Cth), the Deed of Company Arrangement between Octaviar Administration Pty Limited (Administrators Appointed), and John Lethbridge Greig and Nicholas Harwood be terminated.
2. John Lethbridge Greig and Nicholas Harwood be appointed as liquidators until further order.
In BS 3650/09, it is ordered that the Application be dismissed.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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