Supervac Australia Pty Ltd and Anor v Australasian Memory Pty Ltd Australian Gold Pty Ltd and Anor v Australasian Memory Pty Ltd

[1997] FCA 704

IN THE FEDERAL COURT OF AUSTRALIA	)
)
NEW SOUTH WALES DISTRICT REGISTRY	)   NG 3111 of 1997
)
GENERAL DIVISION	)

IN THE MATTER OF SUPERVAC AUSTRALIA PTY LIMITED
ACN 050 097 222

BETWEEN:             

SUPERVAC AUSTRALIA PTY LIMITED
First Applicant

BARRY CHARLES AMOR
Second Applicant

  AND:  

AUSTRALASIAN MEMORY PTY LIMITED
Respondent

IN THE FEDERAL COURT OF AUSTRALIA

)

)

NEW SOUTH WALES DISTRICT REGISTRY

)   NG 3115 of 1997

)

GENERAL DIVISION

)

IN THE MATTER OF AUSTRALIAN GOLD PTY LIMITED
ACN 066 196 272

BETWEEN:             

AUSTRALIAN GOLD  PTY LIMITED
First Applicant

BARRY CHARLES AMOR
Second Applicant

  AND:  

AUSTRALASIAN MEMORY PTY LIMITED
Respondent

JUDGE:

WHITLAM J

PLACE:

SYDNEY

DATED:

19 JUNE 1997

MINUTES OF ORDER

THE COURT ORDERS THAT:

IN THE FEDERAL COURT OF AUSTRALIA	)
)
NEW SOUTH WALES DISTRICT REGISTRY	)   NG 3111 of 1997
)
GENERAL DIVISION	)

IN THE MATTER OF SUPERVAC AUSTRALIA PTY LIMITED
ACN 050 097 222

BETWEEN:             

SUPERVAC AUSTRALIA PTY LIMITED
First Applicant

BARRY CHARLES AMOR
Second Applicant

  AND:  

AUSTRALASIAN MEMORY PTY LIMITED
Respondent

IN THE FEDERAL COURT OF AUSTRALIA

)

)

NEW SOUTH WALES DISTRICT REGISTRY

)   NG 3115 of 1997

)

GENERAL DIVISION

)

IN THE MATTER OF AUSTRALIAN GOLD PTY LIMITED
ACN 066 196 272

BETWEEN:             

AUSTRALIAN GOLD  PTY LIMITED
First Applicant

BARRY CHARLES AMOR
Second Applicant

  AND:  

AUSTRALASIAN MEMORY PTY LIMITED
Respondent

JUDGE:

WHITLAM J

PLACE:

SYDNEY

DATED:

19 JUNE 1997

REASONS FOR JUDGMENT (EX TEMPORE)

The Court has before it two matters which have been heard together. Each of them involves an application under section 459G of the Corporations Law by a company seeking to set aside a statutory demand served upon it. In both cases the creditor serving the statutory demand was the same person, the respondent in these proceedings, named as Australasian Memory Pty Limited, a company in liquidation. There is a second applicant in each of the proceedings too, Barry Charles Amor, and in each of the applications relief was sought in the form of declarations concerning the validity of a meeting purporting to have been held as a meeting under Div 5 of Pt 5.3A of the Corporations Law to decide a company's future.

When the matter came before the Court on an expedited basis on Friday, 30 May 1997, the parties asked that a preliminary question be determined. Counsel then appearing for the respondent accepted that, if that question was answered adversely to his client, that would substantially dispose of the proceedings.  The applicants’ counsel asked that the separate question be directed to the matters raised in the paragraphs 2, 3, 4, 5 and 6 of each of the applications which sought declarations.  I acceded to that proposition indicating at the time that, if necessary, I would revoke that order later on.  When I came to give judgment in this matter on Friday 6 June 1997, I did not attend to revoking that order but pronounced two orders which were inconsistent with the order made on 30 May.  That is, I framed the separate question somewhat more narrowly but directed it in terms to the validity of the meeting held on 3 March 1997.  I propose therefore to make an order revoking the order made on 30 May.  That will leave in place the orders as to the separate question pronounced on 6 June. 

On the last occasion I stood the matters over until today for the purposes of making orders disposing of the proceedings.  In the meantime the respondent has filed a cross-claim in matter NG 3111 of 1997, the proceedings commenced by Supervac Australia Pty Ltd (“Supervac”). 

The cross-claim purports to be made under section 1322 of the Corporations Law, which deals with irregularities in proceedings under the Corporations Law. Subsection (4) specifies the orders that the Court may make. Paragraph (a) permits an order declaring that any act purporting to have been done under the Law is not invalid by reason of any contravention of a provision of the Law. Paragraph (d), which may also have some application to the respondent, permits an order abridging the period for doing any act under the Law. The scope of the power under par (4)(a) is not confined because the contravention results in the commission of an offence. Subsection (6) spells out in pars (a) and (c) the requirements for making an order under par (4)(a).

The cross-claim seeks an order “declaring that the meeting of creditors of the [respondent] held on 3 March 1997 purportedly convened under s 439A(2) is not invalid by reason of the fact that it was held on 3 March 1997 before the end of the convening period specified in s 439A(5)”.  The effect of such a declaration would be effectively to contradict, it seems to me, the answer I gave to the separate question on 6 June.  In saying that, I do not say that such an order cannot be made. But the procedural unsatisfactoriness of such a course is pointed up by the very fact that the respondent has chosen to file its cross-claim in one set of proceedings and not in the other. 

Each of the proceedings should have been entitled in the matter of the company affected, that is in NG 3111 of 1997, in the matter of Supervac Australia Pty Limited, and in NG 3115 of 1997, in the matter of Australian Gold Pty Limited. In fact NG 3115 of 1997 is wrongly entitled in the matter of Australasian Memory Pty Limited. These are not mere procedural quibbles. Mr Grieve directs attention to the Court’s undoubted power to dispense with compliance with its rules and to mould procedural orders that are directed to the justice of the case at hand. But it seems to me that there may be very real problems to be addressed in relation to what has happened to the respondent in circumstances where its administration would, as presently advised, seemed to have ended without the Div 5 meeting having been held. The consequences may affect many persons other than simply Supervac and Mr Amor, the applicants in proceedings NG 3111 of 1997.

It is accepted that, the matter having been before the Court for directions on 6 June 1997, the filing of the cross-claim on 10 June was irregular and required leave. In the event, Mr Grieve seeks, therefore, leave on a nunc pro tunc basis so as to meet what he says will be the undoubted public interest in having the affairs of the respondent regularised. However that might be, it seems to me that it would not be desirable that such an application be made in proceedings NG 3111 of 1997. (There is of course provision expressly made in the rules, in r 101 of the Corporations Rules, for applications under s 1322 to be made by notice of motion, but nothing turns particularly on this application having been made by a cross-claim.) The parties in the present case seem to me to be entirely inappropriate. Without getting into difficulties that might arise in any proceedings differently constituted, Mr Rayment flags the very real problems that may flow from the question of the “relevant date” under the Corporations Law in respect of anything that befalls the respondent, that is, having regard to its administration apparently ending without a valid resolution for winding up.

I am by no means, as presently advised anyway, convinced that s 1322 provides the route to “regularise” matters. It seems to me that, in Pt 5.3A of the Law, s 447A itself gives a power to apply to a large number of persons, including “any other interested person”, to make an application to the Court for such orders they think appropriate. That would seem at first blush to include someone who had formerly been, on any view, the administrator of a company.

In any event, I think it is accepted (and it is certainly my view) that the persons who purported to act as liquidators of the respondent were not validly appointed. Accordingly, they could not properly retain solicitors on behalf of the respondent. If there is to be an application by an “interested person” under s 1322, then it is likely that the applicants in any other proceeding will be the former administrators and not the company. Indeed, the company would appropriately be a respondent in such a proceeding. Again, speaking for myself, I would have thought that the Australian Securities Commission should at least be, if not named as a respondent, served with the process ahead of any hearing. Accordingly therefore I do not propose to give leave to file the cross-claim in NG 3111 of 1997. The cross-claim, having been filed, will be summarily dismissed.

That brings me to the disposition of the applications filed in each of the matters.  In each of those matters Mr Rayment presses for the declarations in the applications.  However, I take the view that it is not desirable to make those declarations. Sufficient regard will be paid to what is fair to all parties by making orders under
s 459J of Corporations Law. Accordingly I make orders in terms of paragraph 1 of each of the applications. I will make an order for costs that reflects the fact that the respondent’s former administrators were not in a position to give a retainer to the solicitor who purported to act for the respondent. Accordingly, I order that the applicants’ costs of each of the applications be paid by that solicitor, William Mark Addison. I revoke the procedural order made on 30 May 1997.

I certify that this and the preceding three (3) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Whitlam

Associate:

Dated:  19 June 1997

Counsel for the applicants	B.W. Rayment QC and M.B. Duncan
Solicitors for the applicants:	Gillis Delaney Brown
Counsel for the respondent:	D.E. Grieve QC and G.L Raffell
Solicitors for the respondent:	Barker Gosling
Date of hearing:	19 June 1997
Date of judgment:	19 June 1997