Van der Velde v Estate of Sweeney

[2013] FCA 593

FEDERAL COURT OF AUSTRALIA

Van der Velde v Estate of Sweeney [2013] FCA 593

Citation:		Van der Velde v Estate of Sweeney [2013] FCA 593
Parties:		TERRY GRANT VAN DER VELDE, JASON SHANE CRONAN, DAVID MICHAEL STIMPSON, TERRENCE JOHN ROSE, ANNE MEAGHER, STEPHEN WESLEY HATHAWAY, DAVID JAMES LOFTHOUSE, RICHARD JOHN CAUCHI and MICHAEL CARRAFA v THE ESTATE OF THE LATE PAUL DESMOND SWEENEY
File number:		QUD 197 of 2013
Judge:		LOGAN J
Date of judgment:		31 May 2013
Catchwords:		CORPORATIONS – liquidators and administrators – death in office of official liquidator – consequential provision for continuation of insolvency administrations by deceased’s surviving partners
Legislation:		Bankruptcy Act 1966 (Cth) Corporations Act 2001 (Cth) s 1287
Cases cited:		Condon v Watson [2009] FCA 11 followed
Date of hearing:	31 May 2013
Place:	Brisbane
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	8
Solicitor for the Applicants:	Rodgers Barnes & Green Lawyers

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION	QUD 197 of 2013

BETWEEN:

TERRY GRANT VAN DER VELDE
First Applicant

JASON SHANE CRONAN
Second Applicant

DAVID MICHAEL STIMPSON
Third Applicant

TERRENCE JOHN ROSE
Fourth Applicant

ANNE MEAGHER
Fifth Applicant

STEPHEN WESLEY HATHAWAY
Sixth Applicant

DAVID JAMES LOFTHOUSE
Seventh Applicant

RICHARD JOHN CAUCHI
Eighth Applicant

MICHAEL CARRAFA
Ninth Applicant

AND:

THE ESTATE OF THE LATE PAUL DESMOND SWEENEY
Respondent

JUDGE:	LOGAN J
DATE OF ORDER:	31 MAY 2013
WHERE MADE:	BRISBANE

THE COURT ORDERS THAT:

1.The Applicants having:

(a)Published notice of today’s hearing in The Australian newspaper on 24 May 2013; and

(b)Given notice of the proceedings to Larraine Kay Sweeney, the executor of the estate of the late Paul Desmond Sweeney, on 23 May 2013,

the requirements under rule 2.7(1)(b) of the Federal Court (Corporations) Rules 2000 (Cth) to serve the application and its supporting affidavits on each company listed in Annexure B to the application and the creditors of those companies is dispensed with.

2.Pursuant to section 1322(4)(d) of the Corporations Act 2001 (Cth) (the Corporations Act) the period for lodgement of the receiver’s or receivers and manager’s accounts and statements prescribed by section 432 of the Corporations Act be extended in the case of each of the above companies described in Annexure B to the application (where in column 3 of that annexure the company is recorded as having receivers and/or receivers and managers appointed to it) so that the period within which the form prescribed by section 432(1)(b) of the Corporations Act must be lodged after the late Paul Desmond Sweeney ceased to act as receiver or receiver and manager be extended to the date he would otherwise have had to lodge that form had he not ceased to act.

3.The vacancy in the office of deed administrator of Turbo Amusements Pty Ltd (Subject to Deed of Company Arrangement) ACN 054 378 308, caused by the death of Paul Desmond Sweeney, be filled by Terry Grant van der Velde.

4.Pursuant to section 1322(4)(d) of the Corporations Act the period for lodgement of the deed administrator’s accounts and statements prescribed by section 445J of the Corporations Act be extended in the case of each of the companies described by Annexure B to the application (where column 3 the company is recorded as being under a deed of company arrangement) so that the period within which the form prescribed by section 445J(2) of the Corporations Act must be lodged after the Paul Desmond Sweeney ceased to act as deed administrator be extended to the date he would otherwise have had to lodge that form had he not ceased to act.

5.The vacancy in the office of liquidator of the companies listed in Annexure ‘TGV4” to the affidavit of Terry Grant van der Velde filed on 17 April 2013 (Mr van der Velde’s affidavit), caused by the death of Paul Desmond Sweeney, be filled by Terry Grant van der Velde.

6.Anything that is required or authorised by the Corporations Act to be done by the liquidators of the companies listed in Annexure ‘TGV4’ to Mr van der Velde’s affidavit, may be done by all of any one of liquidators appointed to each of these companies.

7.Pursuant to section 1322(4)(d) of the Corporations Act the period for lodgement of the liquidator’s account and statements prescribed by section 539 of the Corporations Act be extended in the case of each of the companies listed in Annexure B to the application (where in column 3 the company is recorded as being either under a creditors voluntary liquidation or a court liquidation) so that:

(a)The period within which the form prescribed by s 539(1) of the Corporations Act must be lodged after the Paul Desmond Sweeney ceased to act as liquidator be extended to the date he would otherwise have had to lodge that form had he not ceased to act; and

(b)The period within which the liquidator appointed by this Order has to lodge the form prescribed by s 539(1) of the Corporations Act be abridged to the date on which the form required to be lodged pursuant to the preceding paragraph of this Order is in fact lodged.

8.Pursuant to section 1322(4)(d) of the Corporations Act the period for lodgement of by Paul Desmond Sweeney giving notice of his ceasing to act as a liquidator, as required by section 1287(2) of the Corporations Act, be extended until 21 days after today’s date and such notice may be signed by any one of the Applicants in lieu of Mr Sweeney.

Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION	QUD 197 of 2013

BETWEEN:

TERRY GRANT VAN DER VELDE
First Applicant

JASON SHANE CRONAN
Second Applicant

DAVID MICHAEL STIMPSON
Third Applicant

TERRENCE JOHN ROSE
Fourth Applicant

ANNE MEAGHER
Fifth Applicant

STEPHEN WESLEY HATHAWAY
Sixth Applicant

DAVID JAMES LOFTHOUSE
Seventh Applicant

RICHARD JOHN CAUCHI
Eighth Applicant

MICHAEL CARRAFA
Ninth Applicant

AND:

THE ESTATE OF THE LATE PAUL DESMOND SWEENEY
Respondent

JUDGE:	LOGAN J
DATE:	31 MAY 2013
PLACE:	BRISBANE

REASONS FOR JUDGMENT

1. The late Paul Desmond Sweeney died on 25 September 2012.  Mr Sweeney was a registered official liquidator, and in terms of repute known to me, a respected one at that.  He also held appointments under the Bankruptcy Act 1966 (Cth) as a trustee. Today’s application relates to various appointments which he held prior to his death under the Corporations Act 2001 (Cth) (Corporations Act). Mr Sweeney’s executor is his widow, Mrs Larraine Kay Sweeney. I am satisfied that the application made today by those with whom Mr Sweeney previously practiced have been drawn to the attention of Mrs Sweeney and that she is aware of the nature of the application and has no objection to it.

2. I am further satisfied that the applicants have complied with orders which I made on 10 May 2013 dispensing with service of the application and its supporting affidavits upon each of the companies listed in annexure B to the application.  The orders made on 10 May 2013 were, materially, also directed to a public notification of the hearing of the application today.  There has been no appearance by or on behalf of any of the creditors of any of the companies listed in annexure B or any other person, save for the solicitor for the applicants today.  I am also satisfied that the Australian Securities and Investments Commission (ASIC) has not only been notified of the proceeding but has also responded to the solicitors for the applicants, advising that it does not propose to appear today and does not oppose the application.

3. Prior to his death, Mr Sweeney and the applicants practiced together under the firm name SV Partners.  As might be expected, the staff at that practice had the day to day conduct of the various company administrations and types of administration under the supervision of both the applicants and, prior to his ceasing work because of a sadly fatal illness, Mr Sweeney.  Mr Sweeney’s illness, on the evidence, came on the sudden with a related, unexpected death. 

4. The long and the short of the case is that the repository of expertise in relation to the various company administrations lies with those who remain in SV Partners.  In that respect, the position is similar to that which confronted Lindgren J in Condon v Watson [2009] FCA 11. In that case, the person concerned had not died unexpectedly, as opposed to leaving the firm concerned. There, the remaining appointee applied for very similar relief to that sought today. In granting that relief, Lindgren J observed, materially, that it would be wasteful and inconvenient for the various groups of creditors to be consulted. That is equally applicable in the present case. The public notification and the absence of response is also eloquent as to at least an indifference on the part of creditors as to the making of orders of the kind sought today.

5. The other consideration, as I have observed already, is that there is an existing repository of expertise in SV Partners.  It would also be wasteful and inconvenient for the various groups of creditors, in my opinion, for others outside of SV Partners to have to assume the burden of the various corporate administrations.  There is no disqualifying conduct or cause for concern about orders which would see a continuum, in effect, of administration.  That being the case, it is then necessary to make a range of orders that will address the delayed lodgement of accounts with the ASIC, which was an understandable sequel to Mr Sweeney’s sudden and unexpected death. 

6. It is also necessary to provide for Mr Sweeney’s replacement in various administrations.  That is necessary particularly because, even where there was provision by various orders or appointments for joint and several administration, Mr Sweeney was the sole Queensland-based appointee.  It is desirable in respect of the various company administrations that there be a Queensland-based insolvency practitioner.  Mr van der Velde will suitably fulfil that role. 

7. It is also necessary to correct the register of liquidators, which is maintained by the ASIC. In that regard, one of the requirements of the Corporations Act is that a liquidator must give notice to ASIC when they cease to act as liquidator, or rather when they cease to practice as a liquidator: s 1287(2)(a). A maxim lex non cogit ad impossibilia applies to that obligation in relation to Mr Sweeney personally discharging that duty.  Provision must nonetheless be made for the correction and updating of the register.  That will be achieved by authorising one of the applicants to sign the requisite form. 

8. For these reasons, I make orders in terms of the draft.

I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan.

Associate:

Dated:       14 June 2013