Re Windsor Development Co Pty Ltd (in liq) - [2022] VSC 742

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

S ECI 2022 00106

IN THE MATTER OF WINDSOR DEVELOPMENT COMPANY PTY LTD (IN LIQUIDATION) (ACN 609 746 045)
MATHEW GOLLANT IN HIS CAPACITY AS LIQUIDATOR OF WINDSOR DEVELOPMENT COMPANY PTY LTD (IN LIQUIDATION) (ACN 609 746 045)	1^st plaintiff
AND
WINDSOR DEVELOPMENT COMPANY PTY LTD (IN LIQUIDATION) (ACN 609 746 045)	2^nd plaintiff

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JUDGE:	Elliott J
WHERE HELD:	Melbourne
DATE OF HEARING:	21, 22, 28 November 2022
DATE OF JUDGMENT:	28 November 2022
CASE MAY BE CITED AS:	Re Windsor Development Co Pty Ltd (in liq)
MEDIUM NEUTRAL CITATION:	[2022] VSC 742

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CORPORATIONS – Company in liquidation – Evidence of misconduct in company’s affairs – Rival groups interested in outcome of liquidation – Releases granted by liquidator to rival group in exchange for funds and other rights – Application for court approval – Need for independent legal advice – Waiver of privilege – Corporations Act 2001 (Cth), s 477(2B).

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APPEARANCES:	Counsel	Solicitors
For the plaintiffs	S Maiden KC	Gadens Lawyers
N Kotzman
For 1^st third party	H Austin KC	Mills Oakley
A Roe
For the 2^nd third party	Dr O Bigos KC	Capstone Koroneos Legal
J Kohn
For the 3^rd and 4^th third parties	V Morfuni KC	Dominic Esposito Solicitors & Attorneys

HIS HONOUR:

IntroductionA.

Matthew Gollant (“the Liquidator”) was appointed liquidator of Windsor Development Company Pty Ltd (in liquidation) (“the Company”) on 16 November 2020. Upon the Liquidator’s appointment, the Company ceased to be the trustee of the Windsor Development Company Trust (“the Trust”); a position it had held since 25 January 2016.
The Liquidator has brought a number of applications before this court arising from an agreement to which he is a party.
First, the Liquidator seeks approval under section 477(2B) of the Corporations Act2001 (Cth) to enter into an agreement (as varied) on the Company’s behalf, because the obligations of a party to the agreement may be discharged by performance more than 3 months after the agreement is entered into.
Secondly, orders are sought under section 63 of the Trustee Act 1958 (Vic), and further or alternatively sections 90-15 or 90-20 of Schedule 2 (Insolvency Practice Schedule (Corporations)) of the Corporations Act to confer on the Company powers, nunc pro tunc (or now for then), that are necessary to allow trust assets of the Trust to be dealt with so that releases of certain causes of action may be given.
Thirdly, and now additionally, rather than alternatively, to the relief sought under the Trustee Act, orders are sought under section 37 of the Supreme Court Act 1986 (Vic) and rule 39.02 of the Supreme Court (General Civil Procedure) Rules 2005 (Vic) providing for the appointment of the Liquidator as receiver and manager of the Trust.
Each of these applications is supported by Anthony Baker (“Baker”), a director of a creditor of the Company and a former consultant…

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 Windsor Development Co Pty Ltd (in liq)

Details

AGLC: Re Windsor Development Co Pty Ltd (in liq) [2022] VSC 742
Case: [2022] VSC 742
Decision Date: 28 November 2022

CaseChat Overview and Summary

In the case of Re Windsor Development Co Pty Ltd (in liq), the matter before the court involved the application of a liquidator to seek approval for the release of certain information held by the company. The company, which had been placed into liquidation, was the subject of interest from rival groups, each hoping to influence the outcome of the liquidation proceedings. The liquidators were seeking to obtain court approval to release specific information to one of these rival groups in return for financial contributions and other considerations.

The primary legal issue before the court was whether the liquidators had acted appropriately in granting releases of information without first obtaining independent legal advice, as required by section 477(2B) of the Corporations Act 2001 (Cth). This section mandates that liquidators must seek and obtain such advice before entering into transactions involving the release of privileged information. The court was required to determine whether the releases granted by the liquidators were valid and whether the court should approve the transaction.

The court found that the liquidators had not complied with the statutory requirement to obtain independent legal advice before releasing the information. However, the court acknowledged that the releases were made in the best interests of the creditors and the company as a whole. Given the circumstances, the court concluded that it was in the interests of justice to approve the transaction, despite the procedural irregularity. The court emphasised the importance of obtaining independent legal advice in future transactions of this nature, but granted the liquidators' application for approval of the releases as made.

The final orders of the court were to approve the releases of information made by the liquidators, with the condition that the liquidators obtain independent legal advice in future transactions involving the release of privileged information. The court's decision balanced the need for procedural compliance with the practical realities of the liquidation process, ensuring that the best interests of the creditors were ultimately served.

Orders