Foti v P & S Investments Pty Ltd [2009] FCA 1409

FEDERAL COURT OF AUSTRALIA

Foti v P & S Investments Pty Ltd [2009] FCA 1409

CORPORATIONS – application that administration be brought to an end under s 447A of Corporations Act 2001 (Cth) because administrators appointed for improper purpose – where administrators appointed by director by reason of that director discharging company debt and acquiring a charge over the company's assets – where director proposed Deed of Company Arrangement in which he would contribute funds and forgo debts in exchange for shares in the company – where application to end administration made by only other director and shareholder – whether predominant purpose of appointing administrators was to gain control of company or to avoid investigation by liquidator

Held: application dismissed – not surprising that director required shares in return for funds – unlikely that there would be any net equity in assets available to shareholders – evidence that director intended to provide return to creditors and secure orderly sale of assets

Corporations Act 2001 (Cth) Part 5.3A, ss 435, 436, 439A, 447, 459A, 459P, 461, 462, 447A Aloridge Pty Ltd (prov liq apptd) v Christianos (1994) 13 ACSR 99 discussed Blacktown City Council v Macarthur Telecommunications Pty Ltd (admins apptd) (2004) 47 ACSR 391 discussed Cawthorn v Keira Constructions Pty Ltd (1994) 33 NSWLR 607 referred to Milankov Nominees Pty Ltd v Roycol Ltd (1994) 52 FCR 378 referred to Spacorp Australia Pty Ltd v Fitzgerald (2001) 19 ACLC 979 discussed St Leonards Property Pty Ltd v Ambridge Investments Pty Ltd (admins apptd) (2004) 50 ACSR 443 discussed Williams v Spautz (1992) 174 CLR 509 referred to

PASQUALE ALFREDO FOTI v P & S INVESTMENTS PTY LTD ACN 094 734 988

SAD 128 of 2009

BESANKO J

2 DECEMBER 2009

ADELAIDE

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY