Walker, in the matter of ZYX Learning Centres Limited (Formerly ABC Learning Centres Limited) (In Liquidation) (Receivers and Managers Appointed)
[2011] FCA 1284
•16 September 2011
FEDERAL COURT OF AUSTRALIA
Walker, in the matter of ZYX Learning Centres Limited (Formerly ABC Learning Centres Limited) (In Liquidation) (Receivers and Managers Appointed) [2011] FCA 1284
Citation: Walker, in the matter of ZYX Learning Centres Limited (Formerly ABC Learning Centres Limited) (In Liquidation) (Receivers and Managers Appointed) [2011] FCA 1284 Parties: PETER WALKER AND GREGORY MOLONEY (IN THEIR CAPACITY AS LIQUIDATORS OF ZYX LEARNING CENTRES LIMITED (FORMERLY ABC LEARNING CENTRES LIMITED) (IN LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED) ACN 079 736 664 and ZYX LEARNING CENTRES LIMITED (FORMERLY ABC LEARNING CENTRES LIMITED) (IN LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED) ACN 079 736 664 File number(s): NSD 1562 of 2011 Judge: JACOBSON J Date of judgment: 16 September 2011 Legislation: Corporations Act 2001 (Cth), ss 511 and 1041I
Australian Securities and Investments Commission Act 2001 (Cth) s 12 GFCases cited: Walker, in the matter of ZYX Learning Centres Limited (Formerly ABC Learning Centres Limited) (In Liquidation) (Receivers and Managers Appointed) [2011] FCA 462 Date of hearing: 16 September 2011 Place: Sydney Division: GENERAL DIVISION Category: No Catchwords Number of paragraphs: 6 Counsel for the First and Second Plaintiffs: Mr M Oakes SC Solicitors for the First and Second Plaintiffs: Kemp Strang
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 1562 of 2011
IN THE MATTER OF ZYX LEARNING CENTRES LIMITED (FORMERLY ABC LEARNING CENTRES LIMITED) (IN LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED) ACN 079 736 664
BETWEEN: PETER WALKER AND GREGORY MOLONEY (IN THEIR CAPACITY AS LIQUIDATORS OF ZYX LEARNING CENTRES LIMITED (FORMERLY ABC LEARNING CENTRES LIMITED) (IN LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED) ACN 079 736 664
First PlaintiffZYX LEARNING CENTRES LIMITED (FORMERLY ABC LEARNING CENTRES LIMITED) (IN LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED) ACN 079 736 664
Second Plaintiff
JUDGE:
JACOBSON J
DATE OF ORDER:
16 SEPTEMBER 2011
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.DIRECTS, pursuant to section 511(1) of the Corporations Act 2001 (“the Act”), that the First Plaintiffs as Liquidators of the Second Plaintiff, for and on behalf of the Second Plaintiff, are justified:
(a) in entering into an agreement which is in, or substantially to the effect of, the document that is Confidential Exhibit GMM3 in the proceeding; and
(b) in performing their obligations under an agreement which is in, or substantially to the effect of, the document that is Confidential Exhibit GMM3; and
(c) in causing the Second Plaintiff to perform its obligations under an agreement which is in, or substantially to the effect of, the document that is Confidential Exhibit GMM3.
2.ORDERS, pursuant to section 477 (2B) of the Act, that the making by the First Plaintiffs as Liquidators for and on behalf of the Second Plaintiff, of an agreement which is in, or substantially to the effect of, the document that is Confidential Exhibit GMM3 be approved.
3.ORDERS, pursuant to section 50 of the Federal Court of Australia Act 1976 (Cth), that Confidential Exhibits GMM2, GMM3 and GMM4 be kept in the Court file in this proceeding in a sealed envelope marked “Confidential – Not to be opened by any person without further order of a judge of this Court and giving the Plaintiffs, care of their Solicitors, Kemp Strang, at least 48 hours’ prior notice of any application seeking an order”, or alternatively, those exhibits be returned.
4.ORDERS that the costs of this application be costs and expenses in the winding up of the Second Plaintiff.
Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 1562 of 2011
IN THE MATTER OF ZYX LEARNING CENTRES LIMITED (FORMERLY ABC LEARNING CENTRES LIMITED) (IN LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED) ACN 079 736 664
BETWEEN: PETER WALKER AND GREGORY MOLONEY (IN THEIR CAPACITY AS LIQUIDATORS OF ZYX LEARNING CENTRES LIMITED (FORMERLY ABC LEARNING CENTRES LIMITED) (IN LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED) ACN 079 736 664
First PlaintiffZYX LEARNING CENTRES LIMITED (FORMERLY ABC LEARNING CENTRES LIMITED) (IN LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED) ACN 079 736 664
Second Plaintiff
JUDGE:
JACOBSON J
DATE:
16 SEPTEMBER 2011
PLACE:
SYDNEY
REASONS FOR JUDGMENT
This application is, in substance, the same as the application made to Emmett J and dealt with in his Honour’s reasons for judgment: see Walker, in the matter of ZYX Learning Centres Limited (Formerly ABC Learning Centres Limited) (In Liquidation) (Receivers and Managers Appointed) [2011] FCA 462. The only difference is that this matter arises out of a different set of legal proceedings filed against the second plaintiff.
The first plaintiffs are the liquidators of the second plaintiff. The application is an application for directions under s 511(1) of the Corporations Act 2011 (“the Act”). The separate proceedings are proceedings in the commercial list of the Supreme Court of New South Wales, matter number 2007/275826, defined as the Morgan Stanley proceedings, Morgan Stanley Private Equity Asia III Holdings (Cayman) Limited, in which that company has applied for damages pursuant to s 12GF of the Australian Securities and Investments Commission Act 2001 (Cth), or alternatively, s 1041I of the Corporations Act 2001 (Cth).
As in the proceedings before Emmett J, the second plaintiff has certain insurance. The insurer has advised the liquidators that it wishes to assume conduct of the defence of the Morgan Stanley proceedings on behalf of the second plaintiff. The policy does not grant this right to the insurer, but the policy requires the second plaintiff to defend any claims. The circumstances that arise are therefore virtually identical to those that were considered by Emmett J. The provisions of the draft agreement are summarised in the written submissions of Mr Oakes SC, which I will mark as MFI-1.
The application is supported by an affidavit of Mr Gregory Moloney sworn on 9 September 2011. Two important points are noted in Mr Oakes’ written submissions. First, the liquidators do not delegate beyond the existing cover of the policy, and the insurer to whom the delegation is made is spending its own money in the event that it settles the proceeding.
Second, the only other interested parties are ASIC, the secured creditor and Morgan Stanley. They have been informed of this application and have indicated they do not wish to appear for the reasons explained in Mr Oakes’ written submissions and in the reasons given by Emmett J.
I will make orders in terms of the draft orders, which I will sign and date and place with the papers.
I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson. Associate:
Dated: 16 September 2011
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