Thompson, R.I. v Aust-Wide Management Ltd

[1993] FCA 26

ar, 1993

JUDGMENT No. ........ ........ .. . .a. . .o. . l . .

IN THE FEDERAL COURT OF AUSTRALIA	) )
NEW SOUTH WALES DISTRICT REGISTRY	) No. G3020 of 1993
)
GENERAL DIVISION	)
10 FEB 1993	Second applicant

FEDERAL COURT OF

AUSIRAUA	AND	AUST-WIDE MANAGEMENT
REQlaTRY	LIMITED Respondent

C O W :	Beaumont J.
m:	4 February 1993

EX TEMPORE REASONS FOR JUDGMENT

Before the court is a notice of motion for the appointment of a provisional liquidator or, alternatively, for the appointment of a court-appointed receiver of the respondent. At the time of the making of this application, an application for the winding-up of the respondent was also filed.

was indicated that they were former employees of the	respondent, and claimed that the respondent was indebted to
them for moneys due for long service leave and unpaid holiday entitlements arising upon their dismissal from the employment of the respondent at the time of the appointment of a receiver and manager to certain of the assets of the respondent by Macarthur National Limited, a third party claiming to be a creditor of the respondent and to hold security over at least certain of its assets.
I declined to accede to the ex-parte application for the appointment of a provisional liquidator upon the basis that, in my view, the respondent was entitled to notice of such an application. However, I granted short leave and the matter was made returnable before me later on the same day.
On that occasion, the respondent appeared and through its counsel informed me that further time was needed to consider the respondent's position generally but that any application to appoint a provisional liquidator would be
adjourned to today for directions and the respondent has now strenuously opposed. In the circumstances the matter was
applied for a further adjournment so that it can adduce evidence in support of its opposition to the application for the appointment of a provisional liquidator.
The applicants allege that the charge granted by the respondent over certain of its assets in favour of Macarthur National Limited was void as a preference. They also allege that the charge is, as a matter of construction, not apt to extend to at least certain 01 the assets of the respondent and in particular they say that the charge does not extend to certain book debts.
For present purposes I would be prepared to assume that the applicants could establish a prima facie or arguable case that the charge is void or, alternatively, is limited in its operation in the way in which the applicants contend. However, even if I were prepared to make that assumption, it seems to me at the moment that it would not follow that as a matter of the balance of the convenience, as between the parties, that the court should now appoint either a provisional liquidator or a court appointed receiver.
For present purposes it must be accepted that until a final order or declaration is made by the Court to the effect that the charge is void as a preference, or that it is
operative in accordance with its tenor. It would follow that limited in its operation in the way mentioned, the charge is
even if the Court were now to appoint a provisional liquidator or a receiver there would be no practical effect and in particular no practical beneficial effect so far as the applicants were concerned in making such an order.
What would occur in practical terms is clear. The respondent and its receiver and manager would continue to assert, as they now assert, that the charge now sought to be challenged is valid. In consequence, the provisional liquidator or the Court appointed receiver would have no practical means of achieving any access to the assets of the respondent or to the conduct of its business for those reasons. As the matter now appears to me, and, of course, I have no final view on the matter at this stage, there would be no utility in appointing a provisional liquidator or a receiver. The balance of convenience, in other words, in my view, would favour my declining to make any such appointment.
However, this is not an end of the matter because if one were to assume for the purpose of the argument that the applicants could establish a prima facie or arguable case that the charge were void or that its operation were to be restricted in the manner I have indicated, it may be, and it is unnecessary to say anymore at the moment, that it would be
order that the respondent and its receiver and manager be appropriate, all other things being equal, for the court to
restrained in its activities in some particular fashion. Without being exhaustive or even attempting to express a view on the matter, one possibility may be that, the respondent and its receiver and manager could be restrained from disposing of assets except in the ordinary course of the ordinary business of the respondent.
In the event that any restraint were to be ordered, the applicants would, of course, need to give the usual undertaking as to damages. Given the relatively small amount of the claim being made by the applicants, a question would arise as to the desirability of the Court further requiring that some security be given by the applicants to secure any such undertaking with respect to damages.
I merely mention these matters at this stage so that the parties can give further consideration to the future course of the interlocutory application. Naturally, I express no view, not even a provisional view, on these matters at this stage.
In the circumstances, I propose to grant the adjournment sought on behalf of the respondent. The adjournment will be for a reasonable time in which affidavit evidence may be filed and served on behalf of the respondent.
The matter is stood over to 12 February at 9.30 a.m. I certify that this and the preceding four (4) pages are a true copy of the Reasons for Judgment herein of his Honour Mr. Justice Beaumon

The present interlocutory application has been brought forward with expedition. An application was made to me ex parte earlier this week for the appointment of a provisional liquidator. On that occasion I was informed that the applicants claim to be creditors of the respondent. It

Associate

Dated:  4 February 1 %?A