FEDERAL COURT OF AUSTRALIA
Lehman Brothers Australia Limited v Wingecarribee Shire Council [2009] FCAFC 63
PRACTICE AND PROCEDURE – appeal from decision to order appellant to produce insurance documents under s 23 of the Federal Court of Australia Act 1976 (Cth) and the Court’s implied power – whether circumstances gave rise to abuse of process or frustration of the Court’ processes – steps taken pursuant to a Commonwealth statute will not generally be an abuse of process – necessary to establish link between conduct and feared deleterious impact upon proceedings – also necessary to establish that the remedy is a solution to the claimed abuse of process – appeal allowed.
Corporations Act2001 (Cth), ss 435C, 437A, 437D, 438A, 439A, 440D, 562
Federal Court of Australia Act 1976 (Cth), s 23
Law Reform (Miscellaneous Provisions Act) 1946 (NSW), s 6Re A J Benjamin Ltd (in liq) [1969] 2 NSWR 374 referred to
Batistatos v Roads and Traffic Authority of New South Wales (2006) 226 CLR 256 referred to
Beneficial Finance Corporation Limited v Price Waterhouse (1996) 68 SASR 19 distinguished
House v The King (1936) 55 CLR 499 applied
Jackson v Sterling Industries Limited (1987) 162 CLR 612 referred to
Lopez v Star World Enterprises Pty Ltd (1997) FCA 454 distinguished
Meehan v Stockmans Australian Cafe (Holdings) Pty Ltd (1996) 22 ACSL 123 referred to
Radiancy (Sales) Pty Limited v BimatPty Limited (2007) 25 ACLC 1,216 referred to
Re Sydney Formwork Pty Ltd [1965] NSWR 646 referred to
Wingecarribee Shire Council v LehmanBros Australia Ltd [2009] FCA 503 referred toLEHMAN BROTHERS AUSTRALIA LIMITED v WINGECARRIBEE SHIRE COUNCIL
NSD 457 of 2009
JACOBSON, MIDDLETON AND PERRAM JJ
26 MAY 2009
SYDNEY
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 457 of 2009
ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN: LEHMAN BROTHERS AUSTRALIA LIMITED
Appellant
AND: WINGECARRIBEE SHIRE COUNCIL
Respondent
JUDGES:
JACOBSON, MIDDLETON AND PERRAM JJ
DATE OF ORDER:
26 MAY 2009
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.The appeal be allowed.
2.The orders of the trial judge dated 21 May 2009 be set aside.
3.The respondent’s notice of motion dated 30 April 2009 be dismissed.
4.The appellant’s costs of the appeal and of the application be paid by the respondent.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using the Federal Law Search on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 457 of 2009
ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN: LEHMAN BROTHERS AUSTRALIA LIMITED
Appellant
AND: WINGECARRIBEE SHIRE COUNCIL
Respondent
JUDGES:
JACOBSON, MIDDLETON AND PERRAM JJ
DATE:
26 MAY 2009
PLACE:
SYDNEY
REASONS FOR JUDGMENT
INTRODUCTION
The appellant (“Lehman”) appeals from orders made by Rares J on 21 May 2009 ordering Lehman to produce to the respondent (“the Council”) various insurance policies and related correspondence…
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- Case
- [2009] FCAFC 63
- Decision Date
CaseChat Overview and Summary
The Court found that the trial judge had erred in concluding that there was an abuse of process or interference with the Court's processes. The Court reasoned that the trial judge did not properly consider the relevant provisions of Part 5.3A of the Corporations Act, particularly sections 435C, 437A, 437D, 438A, 439A, and 440D, which outline the roles and powers of an administrator, the convening of creditor meetings, and the stay of proceedings during administration. The Court held that the administrator's actions were within their legal powers and there was no abuse of process. Therefore, the appeal was allowed, the orders of the trial judge were set aside, and the respondent's notice of motion was dismissed. Additionally, the Court ordered that the appellant's costs of the appeal and the application be paid by the respondent.
Orders
Orders of the court
1. The appeal be allowed.
2. The orders of the trial judge dated 21 May 2009 be set aside.
3. The respondent’s notice of motion dated 30 April 2009 be dismissed.
4. The appellant’s costs of the appeal and of the application be paid by the respondent.
Note:
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
Established by: JACOBSON, MIDDLETON AND PERRAM JJ
There are a number of provisions of Part 5.3A of the Corporations Act which are relevant to the appeal. They are: 435C When administration begins and ends(1)The administration of a company: (a)begins when an administrator of the company is appointed under section 436A, 436B or 436C; and (b)ends on the happening of whichever event of a kind referred to in subsection (2) or (3) happens first after the administration begins. (2)The normal outcome of the administration of a company is that: (a)a deed of company arrangement is executed by both the company and the deed’s administrator; or (b)the company’s creditors resolve under paragraph 439C(b) that the administration should end; or (c)the company’s creditors resolve under paragraph 439C(c) that the company be wound up. (3)However, the administration of a company may also end because: (a)the Court orders, under section 447A or otherwise, that the administration is to end, for example, because the Court is satisfied that the company is solvent; or …(g)the Court appoints a provisional liquidator of the company, or orders that the company be wound up.…437A Role of administrator(1)While a company is under administration, the administrator: (a) has control of the company’s business, property and affairs; and (b)may carry on that business and manage that property and those affairs; and (c)may terminate or dispose of all or part of that business, and may dispose of any of that property; and (d)may perform any function, and exercise any power, that the company or any of its officers could perform or exercise if the company were not under administration. (2)Nothing in subsection (1) limits the generality of anything else in it.…437D Only administrator can deal with company’s property(1)This section applies where: (a) a company under administration purports to enter into; or (b)a person purports to enter into, on behalf of a company under administration; a transaction or dealing affecting property of the company. (2)The transaction or dealing is void unless: (a) the administrator entered into it on the company’s behalf; or (b)the administrator consented to it in writing before it was entered into; or (c) it was entered into under an order of the Court. …438A Administrator to investigate affairs and consider possible courses of actionAs soon as practicable after the administration of a company begins, the administrator must: (a)investigate the company’s business, property, affairs and financial circumstances; and (b)form an opinion about each of the following matters: (i)whether it would be in the interests of the company’s creditors for the company to execute a deed of company arrangement; (ii)whether it would be in the creditors’ interests for the administration to end; (iii)whether it would be in the creditors’ interests for the company to be wound up. …439A Administrator to convene meeting and inform creditors(1)The administrator of a company under administration must convene a meeting of the company’s creditors within the convening period as fixed by subsection (5) or extended under subsection (6). …(4)The notice given to a creditor under paragraph (3)(a) must be accompanied by a copy of: (a)a report by the administrator about the company’s business, property, affairs and financial circumstances; and (b)a statement setting out the administrator’s opinion about each of the following matters: (i)whether it would be in the creditors’ interests for the company to execute a deed of company arrangement; (ii)whether it would be in the creditors’ interests for the administration to end; (iii)whether it would be in the creditors’ interests for the company to be wound up; and also setting out: (iv) his or her reasons for those opinions; and (v)such other information known to the administrator as will enable the creditors to make an informed decision about each matter covered by subparagraph (i), (ii) or (iii); and (c)if a deed of company arrangement is proposed – a statement setting out details of the proposed deed. …440D Stay of proceedings(1)During the administration of a company, a proceeding in a court against the company or in relation to any of its property cannot be begun or proceeded with, except: (a) with the administrator’s written consent; or (b)with the leave of the Court and in accordance with such terms (if any) as the Court imposes. …