Lean v Tumut River Orchard Management Ltd [2002] FCA 1419

FEDERAL COURT OF AUSTRALIA

Lean v Tumut River Orchard Management Ltd

[2002] FCA 1419

CORPORATIONS LAW – application under s 500(2) of the Corporations Act for leave to commence proceedings against a company in liquidation – whether a serious or substantial question to be tried – whether applicant has satisfied onus of showing that it is more appropriate for the claims to proceed by action rather than by proof of debt procedure – part of relief sought by applicant in proposed proceedings only obtainable by litigation – whether the balance of convenience lies in granting leave – leave granted subject to conditions aimed to minimise interference with the orderly winding up of the company and the interests of unsecured creditors.

Corporations Act 2001 (Cth), s 500(2)

Executive Director of the Department of Conservation and Land Management v Ringfab Environmental Structures Pty Ltd (Federal Court of Australia, unreported, 6 November 1997) applied Vagrand Pty Ltd (In Liquidation) v Fielding (1993) 11 ACLC 411 applied Ogilvie-Grant v East (1983) 1 ACLC 742 applied GRAEME TREVOR LEAN v TUMUT RIVER ORCHARD MANAGEMENT LIMITED (LIQUIDATORS APPOINTED) W3017 of 2002 CARR J 20 NOVEMBER 2002 PERTH

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY W3017 OF 2002

BETWEEN: GRAEME TREVOR LEAN

Applicant

AND: TUMUT RIVER ORCHARD MANAGEMENT LIMITED

(LIQUIDATORS APPOINTED) (ACN 003 501 611)

Respondent

JUDGE: CARR J

DATE OF ORDER: 20 NOVEMBER 2002

WHERE MADE: PERTH

THE COURT ORDERS THAT: 1. The applicant be granted leave, pursuant to s 500(2) of the Corporations Act 2001 (Cth), to commence proceedings against the respondent in respect of the claims described in the draft application and statement of claim annexed to the applicant's affidavit sworn and filed on 16 September 2002, subject to the following conditions: (a) such leave does not extend to taking any steps to enforce any monetary judgment which may be obtained in the proposed proceedings against the property of the respondent, without the further leave of the Court; (b) such leave is confined to commencement of the proposed proceedings by filing an application and statement of claim and prosecuting all claims other than the breach of contract claims in those proceedings to the point at which the issues of liability and relief other than damages have been decided. Should the docket judge, or any other judge responsible for the conduct of the proposed proceedings, consider that the issues in respect of those claims as between liability and relief other than damages on the one hand and damages on the other hand should not be split, the applicant may apply for further leave; (c) in relation to the proposed breach of contract claims, leave is confined to the commencement of proceedings (in the manner referred to above) which include those claims with liberty also to apply further in the event that any directions by the docket judge or other judge responsible for the conduct of those proceedings require the applicant to take further steps; (d) the applicant undertaking, in the form of a written undertaking to the Court to be filed with the proposed application, to pay one half of the costs which the Liquidators may incur in complying with their discovery obligations (if any) to the applicant in the proposed application, such costs to be agreed or taxed in default of agreement and paid at such time as the docket judge or other responsible judge considers appropriate. 2. Subject to any contrary order by the docket judge or other responsible judge in the proposed proceedings, the respondent be excused from filing any pleadings in that application (subject to obtaining legal advice that such a course is appropriate). 3. There be liberty to either party to apply in relation to these orders [including to seek a release from the undertaking referred to in paragraph 1(d) above], and also generally, on giving seven days written notice to the other. 4. The costs of the application be costs in the cause in the proposed application as between the applicant and the respondent. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.