Jahani (liquidator) v Alfabs Mining Equipment Pty Ltd, in the matter of Delta Coal Mining Pty Ltd (in liq) (No 3) [2021] FCA 1195

Federal Court of Australia

Jahani (liquidator) v Alfabs Mining Equipment Pty Ltd, in the matter of Delta Coal Mining Pty Ltd (in liq) (No 3) [2021] FCA 1195 File number: NSD 577 of 2020

Judgment of: STEWART J

Date of judgment: 7 October 2021

Catchwords: CORPORATIONS – application for adoption of referee's report as to solvency – where liquidators sought to have the referee's report varied – where solvency is in respect of a group of companies – whether referee erred by assuming that debts of the companies were only payable on 60 days rather than 30 days – whether treating as due and payable taxation debts which were due but were subject to a payment arrangement was in error – whether referee's treatment as liquid assets all receivables then overdue for payment was founded on an assumption without foundation that overdue trade debts could be treated as imminently convertible to cash – whether the referee erred as a matter of law in not having regard, at any point in time, to the ability of the group to meet future debts when they fell due and focused rather on the ability of the group to meet current debts

Legislation: Federal Court of Australia Act 1976 (Cth) s 54A(3) Corporations Act 2001 (Cth) s 95A(1) Taxation Administration Act 1953 (Cth) ss 255-10, 255-15, 255-20

Cases cited: Anchorage Capital Master Offshore v Sparkes (No 3); Bank of Communications v Sparkes (No 2) [2021] NSWSC 1025 ASIC v Plymin [2003] VSC 123; 46 ACSR 126 Bell Group Ltd (in liq) v Westpac Banking Corporation (No 9) [2008] WASC 239; 70 ACSR 1 Chocolate Factory Apartments Ltd v Westpoint Finance Pty Ltd [2005] NSWSC 784 Clifton (Liquidator) v Kerry J Investment Pty Ltd trading as Clenergy [2020] FCAFC 5; 379 ALR 593 Deputy Commissioner of Taxation v Clark [2003] NSWCA 91; 57 NSWLR 113 Hall v Poolman [2007] NSWSC 1330; 65 ACSR 123 Keith Smith East Transport Pty Ltd (in liq) v ATO [2002] NSWCA 264; 42 ACSR 501 Re Custom Bus Australia Pty Ltd (in liq) [2021] NSWSC 1036 Sandell v Porter [1966] HCA 28; 115 CLR 666 Sheehan v Lloyds Names Munich Re Syndicate Ltd [2017] FCA 1340 Southern Cross Interiors Pty Ltd v Deputy Commissioner of Taxation [2001] NSWSC 621; 53 NSWLR 213 Weston in his capacity as liquidator of Starcom Group Pty Ltd (in liq) v Rajan [2019] FCA 1455 Xu v Megaward [2018] NSWCA 232; 130 ACSR 412