Whelan the Wrecker Holdings Pty Ltd (ACN 006 838 633) Summary

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JUDGMENT No. . .. .. .. ... ........ .

IN THE FEDERAL COURT

OF AUSTRALIA )

No. VG 3132 of 1991

VICTORIAN DISTRICT REGISTRY ) )
)
GENERAL DIVISION )

IN THE MATTER OF WHELAN THE WRECKER HOLDINGS PTY LTD

AUSTRALIAN COMPANY NUMBER: 006 838 633

WHELAN THE WRECKER HOLDINGS PTY LTD

Applicant

JUDGE : Heerey J.
PLACE : Melbourne
DATE: 29 November 1991

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EX TEMPORE REASONS FOR JUDGMENT

I have got no hesitation in making the order for the

appointment of a provisional liquidator. This is a sad case and a striking reflection of the seriousness of the times. The company in question, although only incorporated in 1987, has been carrying the business which goes back for 100 years. The business is plainly insolvent, there being a deficiency of assets over liabilities of the sum of $1.3 million.

worse by inevitably incurring debts which could not be paid. Further, there is evidence of a need for the orderly
distribution of the assets of the company amongst competing
creditors.
I will therefore make the order that Graham John Clark of Mann Judd, Chartered Accountants, 111 Lonsdale Street, Melbourne, Victoria, be appointed as provisional liquidator of Whelan the Wrecker Holdings Pty Ltd, pending the hearing and determination of the application herein, or until further order.
Secondly, that the property over which the provisional liquidator may take possession is as follows: all the assets and undertakings of the company. Thirdly, the duties that the provisional liquidator is to perform are to get in a preserve the assets of the company. Fourthly, the powers conferred on the provisional liquidator are all the powers set out in ss.477(l)(a) and 477(2)(a)-(1) of the Corporations Law.
I will reserve the costs of the application.

This has been brought about by a dramatic decline in the amount of work available to the company, compounded by the failure of some of its debtors or disputes with them. The directors have acted responsibly in facing up to the position and realising that further trading would only make matters

I certify that this and the
preceding page are a true copy of the Reasons for Judgment of the Honourable
M r Justice Heerey

Awwarances

Counsel for the Applicant: Mr P J Cosgrave
Solicitors for the Applicant: Corrs Chambers Westgarth

CaseChat Overview and Summary

Whelan the Wrecker Holdings Pty Ltd, a company with a century-long history of business, applied for the appointment of a provisional liquidator due to its current insolvency, as confirmed by Heerey J in the Federal Court of Australia. The company, incorporated in 1987, had assets deficient by $1.3 million compared to its liabilities. The insolvency was exacerbated by the company's inability to pay its debts and the need to distribute its assets among competing creditors. The court found that the company's directors had responsibly acknowledged the dire situation and the potential harm caused by continuing operations.

The legal issues before the court involved whether the company's insolvency justified the appointment of a provisional liquidator and the scope of the liquidator's duties and powers. The applicant argued that the company was unable to meet its financial obligations and that the orderly distribution of assets was necessary to protect creditors' interests. The court was tasked with determining whether the criteria for appointing a provisional liquidator were met under the Corporations Law and what specific duties and powers should be assigned to the liquidator.

Heerey J concluded that the company's insolvency and the need for orderly asset distribution warranted the appointment of a provisional liquidator. The court appointed Graham John Clark of Mann Judd, Chartered Accountants, as the provisional liquidator, granting him possession of all company assets and the duties to get in and preserve the company's assets. The liquidator was also endowed with powers as specified in sections 477(1)(a) and 477(2)(a)-(1) of the Corporations Law. The court reserved the costs of the application, recognising the gravity of the situation and the necessity for prompt action to safeguard creditors' interests.

Whelan the Wrecker Holdings Pty Ltd (ACN 006 838 633)

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established

JUDGE :	Heerey J.
PLACE :	Melbourne
DATE:	29 November 1991

worse by inevitably incurring debts which could not be paid.	Further, there is evidence of a need for the orderly
distribution of the assets of the company amongst competing creditors.
I will therefore make the order that Graham John Clark of Mann Judd, Chartered Accountants, 111 Lonsdale Street, Melbourne, Victoria, be appointed as provisional liquidator of Whelan the Wrecker Holdings Pty Ltd, pending the hearing and determination of the application herein, or until further order.
Secondly, that the property over which the provisional liquidator may take possession is as follows: all the assets and undertakings of the company. Thirdly, the duties that the provisional liquidator is to perform are to get in a preserve the assets of the company. Fourthly, the powers conferred on the provisional liquidator are all the powers set out in ss.477(l)(a) and 477(2)(a)-(1) of the Corporations Law.
I will reserve the costs of the application.

Awwarances
Counsel for the Applicant:	Mr P J Cosgrave
Solicitors for the Applicant:	Corrs Chambers Westgarth