David Grant & Co Pty Ltd v Westpac Banking Corporation [1995] HCA 43

High Court of Australia Brennan CJ Dawson, Gaudron, McHugh and Gummow JJ David Grant & Co Pty Ltd v Westpac Banking Corporation [1995] HCA 43

ORDER Appeal dismissed with costs

The following written reasons for judgment were published:—

11 October 1995 Brennan CJ.

I agree with Gummow J.

Dawson J.

I agree with Gummow J.

Gaudron J.

I agree with Gummow J.

McHugh J.

I agree with Gummow J.

Gummow J.

These three appeals from the Supreme Court of Victoria (Appeal Division) were heard together, as they had been in the Supreme Court [13] . They raise a short but important issue of construction of the Corporations Law (the Law).

1. David Grant & Co Pty Ltd v Westpac Banking Corporation [1995] 2 VR 495.

At the conclusion of the hearing in this Court, the Court announced that the appeals were to be dismissed for reasons to be given later. What follows are those reasons.

Chapter 5 of the Law is headed "External Administration". Section 57 of the Corporate Law Reform Act 1992 Cth (the 1992 Act) inserted in Ch 5 a new Pt 5.4(ss 459A-459T) headed "Winding Up in Insolvency". Part 5.4A (ss 461-464) is headed "Winding Up by the Court on Other Grounds" and Pt 5.4B (ss 465A-489) is headed "Winding Up in Insolvency or by the Court". Voluntary winding up is dealt with in Pt 5.5 (ss 490-512) and provisions dealing with winding up generally are found in Pt 5.6 (ss 513-581).

Section 58 of the 1992 Act repealed s 460 of the Law. This had provided that the court might order the winding up of a company that was unable to pay its debts and that the company would be deemed to be unable to do so if, as stated in par (a) of s 460(2):

a creditor by assignment or otherwise to whom the company is indebted in a sum exceeding $1,000 then due has served on the company a demand, signed by or on behalf of the creditor, requiring the company to pay the sum so due and the company has, for 3 weeks after the service of the demand, failed to pay the sum or to secure or compound for it to the reasonable satisfaction of the creditor. In the Explanatory Memorandum published at the time of the introduction into the Parliament of the Bill for the 1992 Act, reference was made to the Law Reform Commission Report No 45, General Insolvency Inquiry (the "Harmer Report"), when dealing with what became Div 3 of Pt 5.4 (ss 459G-459N). Paragraph s 685, 688, 689 and 690 of the Explanatory Memorandum were as follows: