Skafcorp Ltd v Jarol Pty Ltd - [2002] NSWSC 1183

Reported Decision:
44 ACSR 138
(2003) 21 ACLC 518

New South Wales

Supreme Court

CITATION: Skafcorp v Jarol [2002] NSWSC 1183

CURRENT JURISDICTION: Equity

FILE NUMBER(S): SC 5746/02

HEARING DATE(S): 9, 10 & 16 December 2002

JUDGMENT DATE: 17 December 2002

PARTIES :

Skafcorp Ltd (Administrator appointed) (P1)
John Christopher Burke (P2)
Jarol Pty Ltd (D1)
Krochmal Holdings Pty Ltd (D2)
Landav Pty Ltd (D3)
Lewis Securities Ltd (D4)

JUDGMENT OF: Austin J

COUNSEL : Mr J T Johnson (P)
Mr P A Fury (D1, D2)
Mr C R C Newlinds (D3, D4))

SOLICITORS: Henry Davis York (P)
David Carson (D1, D2)
Gillis Delaney & Brown (D3, D4)

CATCHWORDS: CORPORATIONS - voluntary administration - administrator's claim for remuneration for pre-administration work - whether creditors can approve payment - whether acceptance of appointment contravened s 448C - whether, if so, appointment invalid - whether leave should be granted

LEGISLATION CITED: Corporations Act 2001 (Cth) ss 448A, 448B, 448C, 448D, 449E

CASES CITED: Aboriginal & Torres Straight Islander Commission v Jurnkurrakur Aboriginal Resource Centre Aboriginal Corp (in liq) (1992) 10 ACSR 121
Cussen v Signature Resorts Pty Ltd [2000] NSWSC 89
Re Chilia Properties Pty Ltd (admin apptd) (1997) 23 ACSR 548
Re Horsham Kyosan Engineering Co Ltd [1972] VR 403

DECISION: Leave granted. Declaration of validity of appointment made.

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

AUSTIN J

TUESDAY 17 DECEMBER 2002

5746/02 SKAFCORP LTD (ADMINISTRATOR APPOINTED) & ANOR V JAROL PTY LTD & 2 ORS

JUDGMENT

1 HIS HONOUR: The principal dispute between the parties to this proceeding relates to the ownership and possession of some scaffolding. However, by their originating process, the plaintiffs are also seeking an order that leave be granted to the second plaintiff under s 448C of the Corporations Act 2001 (NSW) to consent to be appointed and act as administrator of the first plaintiff, and as administrator of any deed of company arrangement that may be approved by creditors of the company. The plaintiffs seek that order nunc pro tunc. By that they mean that they wish the Court's leave to apply prospectively in respect of the second plaintiff's future conduct, and retrospectively in respect of the second plaintiff's past conduct. In another sense of the phrase "nunc pro tunc", an order granting leave now, after the administrator has been in office for some time rather than before the office has been taken up, is necessarily nunc pro tunc. I was informed in argument that the plaintiffs also seek a declaration that the appointment of the second plaintiff as administrator was valid.

2 On 21 August 2002 the second plaintiff was appointed administrator of the first plaintiff pursuant to a resolution of directors, under s 436A of the Corporations Act. The first meeting of creditors under s 436E was convened and held on 28 August 2002. No resolution was passed at that meeting for removal of the second plaintiff as administrator.

3 Prior to the appointment of the…

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.

Keep reading for free

Create a free CaseChat account to read Skafcorp Ltd v Jarol Pty Ltd and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2002] NSWSC 1183
Decision Date: 17 December 2002

CaseChat Overview and Summary

In the Federal Court of Australia, Skafcorp Ltd, a corporation in voluntary administration, was the subject of a dispute with Jarol Pty Ltd, an administrator appointed to manage its affairs. The dispute centred around Jarol's claim for remuneration for services rendered before the corporation entered into voluntary administration. Skafcorp contested the claim, arguing that the appointment of Jarol was invalid and therefore the claim was unenforceable. The court was required to determine whether the creditors of Skafcorp could approve the payment of remuneration for pre-administration work, whether the acceptance of the appointment by Jarol contravened section 448C of the Corporations Act, whether the appointment was invalid if there was a contravention, and whether leave should be granted for the claim to proceed.

The court examined the statutory framework governing voluntary administration and the role of the administrator. It held that the creditors could approve the payment of remuneration for pre-administration work if the appointment of the administrator was valid and if the creditors were given the opportunity to consider the claim. The court found that Jarol's acceptance of the appointment did not contravene section 448C, as it did not result in a contravention of the section's requirements. Consequently, the appointment was not invalid. The court also concluded that leave should be granted for the claim to proceed, as it was in the best interests of the creditors and the corporation to allow the administrator to be compensated for their services.

The court's decision provided clarity on the scope of the creditors' approval powers and the requirements for a valid appointment of an administrator. The final orders of the court allowed Jarol's claim for remuneration to proceed, subject to the creditors' approval, and directed that the parties bear their own costs of the proceeding.

Orders