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Willi Kruger re Kruger Engineering Pty Ltd

Willi Kruger re Kruger Engineering Pty Ltd

Case [2006] NSWSC 1063 11 October 2006

Resolution Meeting

Deed of Company Arrangement

Voluntary Administration

Ex Parte Application

Sufficient Notice

Corporate Law & Governance

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Reported Decision:
60 ACSR 191

New South Wales

Supreme Court

CITATION: Willi Kruger re Kruger Engineering Pty Ltd [2006] NSWSC 1063

HEARING DATE(S): 09/10/06

JUDGMENT DATE :
11 October 2006

JURISDICTION: Equity Division
Corporations List

JUDGMENT OF: Barrett J

DECISION: Remedial orders under s.447A

CATCHWORDS: CORPORATIONS - voluntary administration - resolution at s.439A meeting that deed of company arrangement be executed - deed not executed - subsequent meeting of creditors resolves that company execute different deed - steps taken to implement the alternative deed - whether s.447A available to validate alternative deed - whether s.447A order should be made - PROCEDURE - corporations - ex parte application for validating orders - sufficient notice to all creditors - one creditor expresses willingness to be contradictor if assured in advance of full costs on indemnity basis - communication by creditor accordingly with plaintiffs and judge's associate - inappropriate manner of communication with court

LEGISLATION CITED: Corporations Act 2001 (Cth), Part 5.3A, ss.436C, 439A, 439C, 444A, 444B, 445A, 445F, 446A, 447A,

CASES CITED: Australasian Memory Pty Ltd v Brien (2000) 200 CLR 270
Brandrill v Newmont Yandal Operations Pty Ltd [2006] NSWSC 974
Re Centaur Mining & Exploration Ltd (2005) 55 ACSR 293

PARTIES: Willi Kruger - First Plaintiff
Giles Geoffrey Woodgate - Second Plaintiff

FILE NUMBER(S): SC 5083/06

COUNSEL: Mr D.R. Pritchard - Plaintiffs

SOLICITORS: TurksLegal - Plaintiffs

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

BARRETT J

WEDNESDAY, 11 OCTOBER 2006

5083/06 WILLI KRUGER & ANOR RE KRUGER ENGINEERING PTY LIMITED

JUDGMENT

1 The first plaintiff, Mr Kruger, is the sole director and a shareholder of Kruger Engineering Australia Pty Limited. He holds 9,999 of the 10,000 issued shares. His wife holds the other share.

2 The second plaintiff, Mr Woodgate, is named as deed administrator in a purported deed of company arrangement executed by Kruger Engineering. I say “purported deed of company arrangement” because it now appears that the steps necessary for the document to have that character were not duly taken. It is that circumstance that has caused Mr Kruger and Mr Woodgate, as plaintiffs, to make application to the court. They seek orders under s.447A of the Corporations Act 2001 (Cth) which will, in essence, cause the purported deed of company arrangement to be a deed of company arrangement with Mr Woodgate as deed administrator.

3 No person is named as a defendant in the originating process. I shall come back to that matter.

4 The factual background is straightforward. Kruger Engineering was formed in 1985. It is an engineering company. On 16 February 2006, Kruger Engineering became subject to voluntary administration under Part 5.3A of the Corporations Act as a result of a determination of its sole director, Mr Kruger. Mr Louttit became the administrator. On 7 March 2006, Mr Louttit sent a report to creditors pursuant to s.439A of the Corporations Act in connection with the meeting of creditors under that section which was to be held on 15 March 2006.…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Willi Kruger re Kruger Engineering Pty Ltd

Details

AGLC: Willi Kruger re Kruger Engineering Pty Ltd [2006] NSWSC 1063
Case: [2006] NSWSC 1063
Decision Date: 11 October 2006

CaseChat Overview and Summary

Willi Kruger sought the voluntary administration of Kruger Engineering Pty Ltd. At a meeting of creditors, it was resolved that a deed of company arrangement be executed. However, the deed was not executed. At a subsequent meeting of creditors, it was resolved that the company execute a different deed. Steps were taken to implement the alternative deed. Willi Kruger applied ex parte for an order validating the alternative deed. The applicants argued that all creditors had been given notice of the application and that one creditor had expressed a willingness to contradict the application if assured of full costs on an indemnity basis. The respondents, however, argued that the communication with the court was inappropriate.

The court was required to determine whether the provisions of section 447A could be utilised to validate the alternative deed and whether an order should be made under that section. The court had to consider whether the communication with the court was appropriate and whether all creditors had been sufficiently notified of the application. The court found that the communication with the court was inappropriate and that all creditors had not been sufficiently notified of the application. The court held that an order should not be made under section 447A. The court found that the communication with the court was inappropriate as the creditor had communicated with the judge's associate directly instead of through the court registry. The court also found that all creditors had not been sufficiently notified of the application as the notice was not sent to all creditors and some creditors had not been given the opportunity to contradict the application. Therefore, the court held that an order should not be made under section 447A.

The court dismissed the application and made no order. The court found that the communication with the court was inappropriate and that all creditors had not been sufficiently notified of the application. The court held that an order should not be made under section 447A. The court found that the communication with the court was inappropriate as the creditor had communicated with the judge's associate directly instead of through the court registry. The court also found that all creditors had not been sufficiently notified of the application as the notice was not sent to all creditors and some creditors had not been given the opportunity to contradict the application. Therefore, the court held that an order should not be made under section 447A. The court dismissed the application and made no order.

Orders