Rosecell Pty Ltd v Antqip Pty Ltd - [2015] NSWSC 1803

Supreme Court

New South Wales

Case Name:	Rosecell Pty Ltd v Antqip Pty Ltd
Medium Neutral Citation:	[2015] NSWSC 1803
Hearing Date(s):	12 November 2015
Date of Orders:	12 November 2015
Decision Date:	12 November 2015
Jurisdiction:	Equity
Before:	White J
Decision:	1. The first plaintiff is granted leave to proceed against the thirteenth defendant pursuant to s 444E(3) of the Corporations Act 2001 (Cth). 2. Order that the costs of the application be the plaintiff’s costs in the proceedings.
Catchwords:	CORPORATIONS – insolvency – application for leave to proceed against a company subject to a deed of company arrangement – where plaintiff seeks damages and delivery up of goods – where issues in the substantive claim are reasonably complex – where there is a doubt as to whether the deed administrators have power to deliver up the goods – no sufficient evidence of prejudice to creditors by reason of delay in bringing the application – application allowed
Legislation Cited:	Civil Procedure Act 2005 (NSW) Corporations Act 2001 (Cth)
Cases Cited:	Rosecell Pty Ltd v JP Haines Plumbing Pty Ltd [2015] NSWSC 1238 Henaford Pty Ltd v Strathfield Group Ltd [2009] NSWSC 539; (2009) 72 ACSR 240 Meehan v Stockmans Australian Cafe (Holdings) Pty Ltd (1996) 22 ACSR 123 Re Gordon Grant and Grant Pty Ltd [1983] 2 Qd R 314 Vagrand Pty Ltd (in liq) v Fielding (1993) 41 FCR 550 McKeown v Cavalier Yachts Pty Limited (1988) 13 NSWLR 303
Category:	Procedural and other rulings
Parties:	Rosecell Pty Ltd (Plaintiff) Antqip Pty Ltd (13th Defendant)
Representation:	Counsel: D A Allen (Plaintiff) P Afshar (13th Defendant) Solicitors: Kemp Strang (Plaintiff) Spinks Eagle Lawyers (13th Defendant)
File Number(s):	2011/229171

JUDGMENT

HIS HONOUR: The plaintiff, Rosecell Pty Limited, ("Rosecell") seeks leave to proceed against the 13th defendant, Antqip Pty Limited, subject to Deed of Company Arrangement (“Antqip”) pursuant to s 444E(3) of the Corporations Act 2001 (Cth). Antqip was joined to these proceedings on the filing of an amended statement of claim on 12 September 2011. The proceedings have had a long history involving numerous defendants. The claims against all defendants other than Antqip have been resolved.
On 3 February 2014, administrators were appointed to Antqip. On 8 May 2014 Antqip entered into a deed of company arrangement. Earlier this year, at a hearing before me, the plaintiff sought judgment against Antqip in default of its appearance. I then declined to give the judgment as sought and expressed the view that Rosecell needed leave pursuant to s 444E of the Corporations Act to proceed against Antqip. (See Rosecell Pty Ltd v JP Haines Plumbing Pty Ltd [2015] NSWSC 1238 at [77]-[82].) Rosecell accepts that leave to proceed against Antqip is required. The deed administrators neither consented to nor opposed Rosecell’s application for leave to proceed. Antqip opposed the application acting through its director to whom control of the company has reverted pursuant to the deed of company arrangement.
Section 444E provides:
“444E Protection of company’s property from persons bound…

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: [2015] NSWSC 1803
Decision Date: 12 November 2015

CaseChat Overview and Summary

In the case of Rosecell Pty Ltd v Antqip Pty Ltd, the plaintiff, Rosecell, sought leave to proceed with legal action against the defendant, Antqip, which was under a deed of company arrangement. The plaintiff's claim involved both damages and the delivery of goods. The defendant had raised objections to the application due to the complexity of the issues and the potential impact on the deed administrators' ability to manage the company's affairs. The primary focus of the case was to determine whether the court should grant the plaintiff's application for leave to proceed with the claim, given the ongoing insolvency proceedings and the implications for the deed administrators.

The court needed to address whether the plaintiff's application was appropriate under the circumstances, particularly considering the complexity of the issues and the potential constraints on the deed administrators' authority. Additionally, the court examined whether there was any evidence that the creditors would suffer prejudice if the application was granted. The court also considered the balance between the plaintiff's right to seek redress and the need to protect the interests of the creditors and the deed administrators.

The court found that, while the issues in the substantive claim were indeed complex, there was no clear evidence that the deed administrators lacked the power to deliver up the goods in question. Furthermore, the court determined that there was insufficient evidence to suggest that the creditors would be prejudiced by any delay in bringing the application. Consequently, the court decided to allow the plaintiff's application for leave to proceed with the legal action against Antqip, noting that the balance of convenience favoured permitting the claim to go forward. This decision was based on the lack of prejudice to creditors and the need to resolve the substantive issues in the case.

As a result of this decision, Rosecell was granted leave to proceed with its claim against Antqip, despite the latter's status as a company under a deed of company arrangement. The court's ruling allowed the plaintiff to seek both damages and the delivery of goods, subject to the ongoing management of the company's affairs by the deed administrators.

Orders