SANDLER -v- FRANCIS [2016] WASC 242

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2016] WASC 242
Published:	08/08/2016
Case No:	COR:168/2016	Heard:	3 AUGUST 2016
Coram:	BANKS-SMITH J	Delivered:	3/08/16
No of pages:	6	Judgment Part:	1 of 1
Result:	Application granted
Category:	B
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Parties:	ANTONY SANDLER CLITECH PTY LTD IAN CHARLES FRANCIS MICHAEL JOSEPH PATRICK RYAN
Catchwords:	Administration Application to adjourn second creditors' meeting Section 447A Corporations Act 2001 (Cth)
Legislation:	Corporations Act 2001 (Cth), s 447A
Case References:	Re Palandri Ltd; Ex parte Cussen [No 2] [2008] WASC 154

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION : SANDLER -v- FRANCIS [2016] WASC 242 CORAM : BANKS-SMITH J HEARD : 3 AUGUST 2016 DELIVERED : 3 AUGUST 2016 PUBLISHED : 8 AUGUST 2016 FILE NO/S : COR 168 of 2016 BETWEEN : ANTONY SANDLER

First plaintiff

CLITECH PTY LTD

Second plaintiff

AND

IAN CHARLES FRANCIS

MICHAEL JOSEPH PATRICK RYAN

Defendant

Catchwords:

Administration - Application to adjourn second creditors' meeting - Section 447A Corporations Act 2001 (Cth)

Legislation:

Corporations Act 2001 (Cth), s 447A

Result:

Application granted

Category: B

Representation:

Counsel:

First plaintiff : Mr M J Feutrill

Second plaintiff : Mr M J Feutrill

Defendant : Mr R M Johnson

Solicitors:

First plaintiff : Culshaw Miller

Second plaintiff : Culshaw Miller

Defendant : HWL Ebsworth Lawyers

Case(s) referred to in judgment(s):

Re Palandri Ltd; Ex parte Cussen [No 2] [2008] WASC 154

BANKS-SMITH J

(This judgment was delivered extemporaneously on 3 August 2016 and has been edited from transcript)

1 This application came before me this afternoon by way of an urgent application to adjourn a meeting of creditors of ACN 122 262 414 Pty Ltd (previously OEM Group 2006 Pty Ltd) (Administrators Appointed) (company) scheduled for 11 am tomorrow.

2 The application is brought under s 447A and s 447B of the Corporations Act 2001 (Cth).

3 The first plaintiff claims to be a creditor of the company and that entitlement is said to arise as a result of an arbitration decision in his favour. The second defendant says it has a potential claim as a minority shareholder. By way of background, I refer to the affidavit of Mr Antony Sandler, which has been filed in support of the application on 3 August 2016. The affidavit includes a chronology prepared by the administrators. I will note some particular facts based upon that chronology.

4 The company was the sole WA agent, distributor and service centre for Spitwater high pressure cleaners and various other equipment. The company's business was sold on 18 May 2016 to a purchaser known as Blacktower Investments Pty Ltd. The company became insolvent when the business was sold on that date, if not earlier. The first plaintiff contends that the assets of the business were dissipated or sold as part of a scheme to prevent him receiving payment with respect to the arbitration decision made in his favour.

5 The amount of the claim under the arbitration decision…

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: [2016] WASC 242
Decision Date: 8 AUGUST 2016

CaseChat Overview and Summary

Sandler v Francis involved an application by Sandler, a creditor, to adjourn a second creditors' meeting under section 447A of the Corporations Act 2001 (Cth). The meeting was scheduled to discuss the appointment of an administrator for a company in financial distress. The dispute centred on whether the court should grant the application to adjourn the meeting, as requested by Sandler, who argued that the meeting was not being held in accordance with the provisions of the Corporations Act 2001 (Cth).

The central legal issue before the court was whether Sandler had established grounds for the adjournment of the meeting. The court had to determine if Sandler could show that the meeting was not being held in accordance with the Corporations Act 2001 (Cth), specifically section 447A. The court also needed to consider whether Sandler's application was made in good faith and if the adjournment would cause undue hardship or prejudice to other creditors or the company.

The court found that Sandler had made out a case for the adjournment of the meeting. It was determined that the meeting was not being held in accordance with the statutory requirements, as there were procedural irregularities that needed to be addressed. The court found that Sandler had acted in good faith and that the adjournment would not cause undue hardship or prejudice to other creditors or the company. Consequently, the court granted the application, ordering the adjournment of the second creditors' meeting. The court's decision was based on the need to ensure that the meeting was conducted in a manner that was compliant with the statutory provisions and to prevent potential unfairness to Sandler.

Orders

Orders of the court

Application granted

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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