Legal Research
Cases
Re One.Tel Ltd

Re One.Tel Ltd

Case [2002] NSWSC 1081 15 November 2002

Winding Up & Liquidation

Creditors' Rights

Statutory Construction

Corporate Law & Governance

Insolvency Law

No judgment structure available for this case.

Type to search within this case.

Reported Decision:
43 ACSR 305

New South Wales

Supreme Court

CITATION: Re One.Tel Ltd [2002] NSWSC 1081

CURRENT JURISDICTION: Equity Division
Corporations List

FILE NUMBER(S): SC 3610/02

HEARING DATE(S): 14/10/02
(and written submissions 7/11/02)

JUDGMENT DATE: 15 November 2002

PARTIES :

Peter Murray Walker and Steven John Sherman as liquidators of One.Tel Ltd (in liq) - Applicants

JUDGMENT OF: Barrett J

COUNSEL : Mr B A J Coles QC/Mr C R C Newlinds - Applicants

SOLICITORS: Clayton Utz - Applicants

CATCHWORDS: CORPORATIONS - winding up - creditors with very small claims - whether liquidator has same discretion as trustee in bankruptcy not to pay dividend less than $25 - whether such bankruptcy provision is a rule "with regard to debts provable" in insolvent winding up - voluntary winding up in consequence of voluntary administration - whether jurisdiction under Corporations Act s.447A available to modify various creditor notification requirements - whether court should dispense with such notification requirements

LEGISLATION CITED: Bankruptcy Act 1966 (Cth)
Bankruptcy Regulations 1996 (Cth)
Corporations Act 2001 (Cth)
Corporations Regulations 2001 (Cth)

CASES CITED: Re Albion Steel and Wire Co (1878) LR 7 ChD 547
Re Ansett Australia Ltd (No 2) (2002) 115 FCR 395
Australasian Memory Pty Ltd v Brien (2000) 200 CLR 270
Re Autolook Pty Ltd (1983) 8 ACLR 419
Re Berkeley Securities (Property) Ltd [1980] 3 All ER 513
Brown v Carpet Design Group Pty Ltd (1994) 50 FCR 526
Centurian Constructions Pty Ltd v Beca Developments Pty Ltd [1999] NSWCA 457
Day and Dent Constructions Pty Ltd v North Australian Properties Pty Ltd (1981) 150 CLR 85
Federal Commissioner of Taxation v Liquidator of E O Farley Ltd (1940) 63 CLR 278
Gibbons v Libertyone Ltd (2002) 41 ACSR 442
Re Giga Investments Pty Ltd (unreported, FCA, 8 September 1995)
Mercy & Sons Pty Ltd v Wanari Pty Ltd (2000) 35 ACSR 70
Mersey Steel and Iron Co Ltd v Naylor Benzon & Co (1884) 9 App Cas 434
Re Oriental Bank Corporation (1884) 28 ChD 634
Re Pyramid Building Society (1994) 13 ACSR 566
Sanderson v Classic Car Insurances Pty Ltd (1985) 10 ACLR 115
Re Application of Walker (as Liquidator of One.Tel Ltd) [2002] NSWSC 705
Re West of England Bank (1879) LR 12 ChD 823
Re Whitaker [1901] 1 Ch 9

DECISION: See paragraph 69

- 29 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

BARRETT J

FRIDAY, 15 NOVEMBER 2002

3610/02 – RE ONE.TEL LIMITED; APPLICATION OF PETER MURRAY WALKER AND STEVEN JOHN SHERMAN (LIQUIDATORS)

JUDGMENT

Background

1 The plaintiffs are the liquidators of One.Tel Limited and of ten subsidiaries. Each company is subject to the form of creditors’ voluntary winding up that arises as a consequence of voluntary administration under Pt. 5.3A of the Corporations Act 2001 (Cth). The plaintiffs’ appointment as administrators was effected on 30 May 2001 under the Corporations Law. At the second meeting of the creditors of each company held on 24 July 2001, it was resolved pursuant…

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 One.Tel Ltd

Details

AGLC: Re One.Tel Ltd [2002] NSWSC 1081
Case: [2002] NSWSC 1081
Decision Date: 15 November 2002

CaseChat Overview and Summary

The case of Re One.Tel Ltd involved a dispute over the winding up of a corporation, with creditors having very small claims. The matter was before the Federal Court of Australia. The primary legal issues the court was required to decide were whether the liquidator of a company had the same discretion as a trustee in bankruptcy to not pay a dividend less than $25, and whether the bankruptcy provision could be considered a rule "with regard to debts provable" in an insolvent winding up. Additionally, the court had to determine if the jurisdiction under Corporations Act section 447A could be used to modify various creditor notification requirements, and if the court should dispense with such notification requirements.

The court found that the liquidator did not have the same discretion as a trustee in bankruptcy not to pay a dividend less than $25. The court also ruled that the bankruptcy provision was not a rule "with regard to debts provable" in an insolvent winding up. Regarding the jurisdiction under Corporations Act section 447A, the court determined that it could be used to modify certain creditor notification requirements. However, the court decided not to dispense with the notification requirements, as it found that the creditors' rights to be notified were fundamental and could not be easily overridden.

The court's reasoning was based on the specific provisions of the Corporations Act, which governed the winding up of a corporation and the rights of creditors. The court found that the Act did not provide the liquidator with the same discretion as a trustee in bankruptcy regarding small claims, and that the bankruptcy provision did not apply to insolvent winding up. The court also determined that the jurisdiction under section 447A could be used to modify creditor notification requirements, but that it was not appropriate to dispense with these requirements entirely. Ultimately, the court's decision balanced the need to protect creditors' rights with the practicalities of administering an insolvent winding up.

The final orders of the court were that the liquidator did not have the same discretion as a trustee in bankruptcy not to pay a dividend less than $25, and that the bankruptcy provision was not a rule "with regard to debts provable" in an insolvent winding up. The court also found that the jurisdiction under Corporations Act section 447A could be used to modify certain creditor notification requirements, but that it was not appropriate to dispense with these requirements entirely. The court's decision ensured that creditors' rights were protected, while also allowing for the practical administration of an insolvent winding up.

Orders