City of Swan v Lehman Bros Australia Ltd [2009] FCA 784

FEDERAL COURT OF AUSTRALIA

City of Swan v Lehman Bros Australia Ltd [2009] FCA 784

HIGH COURT AND FEDERAL COURT –– order for separate questions –– Federal Court Rules –– O 29 r 2 –– separate questions –– voluntary administration –– deed of company arrangement –– questions of construction, validity and power to provide for releases by creditors of third parties in deed under Corporations Act 2001 (Cth) –– factors to consider in ordering separate questions –– whether questions would be hypothetical –– nature of evidence to be led by parties –– importance of the Court ensuring efficient use of time and minimising costs in litigation –– full hearing of all issues at trial including those associated with the separate questions would involve substantial costs that may be avoided by ordering separate determination –– public interest in the prompt determination of questions of administrators' and creditors' rights and obligations –– separate questions are self-contained questions of construction and statutory interpretation not calling for extensive evidence –– answers to questions may provide definitive answer to one substantial element of controversy HIGH COURT AND FEDERAL COURT –– Federal Court of Australia Act 1976 (Cth) –– s 25(6) –– separate questions –– whether separate questions should be reserved for consideration by a Full Court sitting in the original jurisdiction –– importance of minimising potential for delay and expense –– utility of separate questions –– public interest in the prompt determination of questions concerning administrators' and creditors' rights and obligations –– reserving questions for consideration by a Full Court will ensure expeditious resolution of separate questions CORPORATIONS –– voluntary administration –– deeds of company arrangement –– Pt 5.3A Corporations Act 2001 (Cth) –– questions of construction and validity of deed under Pt 5.3A to be decided on a separate question –– clause providing that upon payment under deed creditors release third parties and other creditors from liability –– clauses prohibiting, or providing moratorium inhibiting, creditors from pursuing rights against third parties including statutory rights to enforce charges over insurance money payable in respect of company –– power under Pt 5.3A for deed of company arrangement to provide for creditors to release third parties Held: Order reserving separate questions for consideration by the Full Court sitting in the original jurisdiction Corporations Act 2001 (Cth) Pt 5.3A, ss 445D, 445G, 447A, 600A Federal Court of Australia Act 1976 (Cth) ss 24(1), 24(1A), 25(6) Federal Court Rules O 29 r 2 AWB Limited v Cole [No 2] (2006) 233 ALR 453 followed Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 discussed Bowen Investments Pty Ltd v Tabcorp Holdings Ltd (2008) 166 FCR 494 cited Henderson v Pioneer Homes Pty Ltd (1979) 142 CLR 294 followed Pukallus v Cameron (1982) 180 CLR 447 cited Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 186 ALR 289 cited Tepko Pty Ltd v Water Board (2001) 206 CLR 1 discussed Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 cited Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515 distinguished CITY OF SWAN, PARKES SHIRE COUNCIL and WINGECARRIBEE SHIRE COUNCIL v LEHMAN BROTHERS AUSTRALIA LIMITED (SUBJECT TO A DEED OF COMPANY ARRANGEMENT), NEIL SINGLETON, STEPHEN PARBERY, LEHMAN BROTHERS ASIA HOLDINGS LIMITED (IN LIQUIDATION) and LEHMAN BROTHERS HOLDINGS INC.