Weeks v Elan Trading Corporation

[2006] QSC 44

SUPREME COURT OF QUEENSLAND

CITATION:

Weeks v Elan Trading Corporation [2006] QSC 044

PARTIES:

TRACEY HOWARD WEEKS
(applicant)
v
ELAN TRADING CORPORATION ACN 080 484 902 (IN LIQUIDATION)
(respondent)

FILE NO/S:

BS7322 of 2005

DIVISION:

Trial Division

PROCEEDING:

Interlocutory application

ORIGINATING COURT:

Supreme Court

DELIVERED ON:

2 March 2006

DELIVERED AT:

Brisbane

HEARING DATE:

2 March 2006

JUDGE:

Byrne J

ORDER:

Application dismissed with costs

CATCHWORDS:

CORPORATIONS – WINDING UP – WINDING UP VOLUNTARILY – RESOLUTIONS – whether resolution effective to bring about winding up – whether leave of Court required

Corporations Act 2001, s 439A, s 439C, s 446A, s 490

Brown v Carpet Design Group Pty Ltd (1994) 50 FCR 526 followed

Mercy & Sons Pty Ltd v Wanari Pty Ltd (2000) 35 ACSR 70 considered

Re One.Tel Ltd [2002] NSWSC 1081 considered

Re Van Fox Pty Ltd (1994) 13 ACSR 825 not followed

COUNSEL:

MA Taylor for the applicant Weeks

SC Fisher for the respondent Elan Trading Corporation

SOLICITORS:

Redmond van de Graaff for the applicant

Gadens Lawyers for the respondent

1. On 1^st September 2005, the applicant filed an application seeking an order for the winding up of the respondent company.

1. On 17^th November, administrators were appointed.  On 14^th December, before a final hearing of the applicant’s application for winding up, at a meeting of creditors convened under section 439A of the Corporations Act 2001 (“the Act”), it was resolved that, “Pursuant to section 439C the company be wound up”.

1. The applicant contends that the resolution was ineffective to bring about the winding up or the appointment of the administrators as liquidators on the footing that the company had not obtained the leave of the Court under section 490 of the Act that it be wound up voluntarily.

1. The respondent contends that, in the circumstances, no such leave was required, relying on the decision of Gummow J in Brown v Carpet Design Group Pty Ltd (1994) 50 FCR 526 (“Brown”) – a case which is distinct authority for that proposition.

1. The applicant points out, however, that in Re Van Fox Pty Ltd (1994) 13 ACSR 825 (“Van Fox”), Thomas J said (at page 828):

“[Section] 490 can be read comfortably with the mechanism by which creditors may in the course of an administration resolve that a company be wound-up (under s 446A and other related sections). Section 490 simply requires the leave of the court before a company may resolve to wind-up voluntarily, in circumstances where a winding-up application has already been filed. That does not seem to be an unreasonable requirement and the sections may comfortably be read together in this way.”

1. If that approach is correct, the applicant will have established that the leave of the Court was required pursuant to section 490 before the resolution which is said to have achieved the liquidation of the applicant was agreed.

1. Van Fox was argued a week before Brown was decided, and decided about a week after Brown.  Unsurprisingly for litigation in 1994, when access to cases in other jurisdictions was not as swift as nowadays, Van Fox contains no reference to Brown, which is a distinct indication that Thomas J was not aware of the case.

1. I have set out the brief reasons Thomas J gave for his view of the inter-relationship between ss 446A and 490. I shall not set out the reasoning of Gummow J in Brown which, it suffices for present purposes to observe, contains a careful, persuasive analysis of the pertinent statutory provisions and the legislative policies the sections implement.

1. Gummow J’s decision is not only more extensively and better reasoned, it has also been applied or referred to with apparent approval: see, for example, Mercy & Sons Pty Ltd v Wanari Pty Ltd (2000) 35 ACSR 70, 74; Re One.Tel Ltd [2002] NSWSC 1081, [50].

1. Thomas J’s opinion on the inter-relationship between ss 446A and 490 has not received subsequent consideration judicially. Nor is it supported in the commentaries.

1. In the circumstances, I ought to follow Brown, which makes it unnecessary to dwell upon the importance of uniformity in decisions of courts of coordinate jurisdiction in the interpretation of this statute of national uniform operation.

1. The application is dismissed with costs.