New South Wales Supreme Court CITATION : Sambah Holdings Pty Ltd v Lord [2001] NSWSC 1004 CURRENT JURISDICTION: Equity FILE NUMBER(S) : SC 4009/01 HEARING DATE(S) : 6 & 7 November 2001 JUDGMENT DATE : 7 November 2001 Sambah Holdings Pty Limited (P1) Lynne E Clarke (P2) Marion Hammill (P3) PARTIES : Desmond Wilcox (P4) Steven Nolan Constructions Pty Limited (P5) John Frederick Lord (D1) Builders Associated Pty Limited (In Liq) (D2) JUDGMENT OF : Hamilton J COUNSEL : B A J Coles QC (Ps) S D Robb QC & D Studdy (Ds) SOLICITORS : Kemp Strang (Ps) Le Compte Davey (Ds) CATCHWORDS : CORPORATIONS [176] - Voluntary administration - Jurisdiction and powers of Court - General power to make orders - Power to make such order as it thinks appropriate - Order that resolutions at creditors' meeting be treated as void and ineffective. LEGISLATION CITED : Corporations Act 2001 (Cth) s 447A CASES CITED : Australasian Memory Pty Limited v Brien (2000) 200 CLR 270 DECISION : Orders that resolutions at creditors' meeting (including resolution that company be wound up) should be treated as void and ineffective. IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION HAMILTON J WEDNESDAY, 7 NOVEMBER 2001 4009/01 SAMBAH HOLDINGS PTY LTD & 4 ORS v JOHN FREDERICK LORD & ANOR JUDGMENT 1 HIS HONOUR: These proceedings essentially arise out of great confusion that took place at a meeting of the creditors of Builders Associated Pty Ltd (in Liquidation) ("the company") while the company was under voluntary administration. It is not necessary for me to go into the detail of what occurred at the meeting, but substantial doubts were raised as to whether resolutions at that meeting refusing an adjournment of the meeting and for the winding up of the company were validly passed. Suffice it to say that the form of draft minutes produced after the meeting and the other evidence left grave doubts as to whether the votes had been taken on the voices or upon a poll and that led to a serious contention of the invalidity of the resolutions. It is fair to say that there is a respectable argument that the resolutions are invalid. 2 The parties have now come to a sensible solution under which, if a sum be provided towards the implementation of a proposed deed of company arrangement ("DCA"), the company would be taken out of liquidation and the first defendant, the liquidator, reconverted into a voluntary administrator who would conduct a meeting to see whether or not the creditors wish to accept a DCA. The first defendant, Mr Lord, has very properly conveyed to the Court that he thinks it appropriate for this course to be followed, provided that the Court deems it appropriate to make the orders which would allow the course to be implemented. 3 The High Court has made it plain in Australasian Memory Pty Limited v Brien (2000) 200 CLR 270 that the discretion under s 447A of the Corporations Act 2001 (Cth) ("the CA") is very wide. It is clear to me that the resolutions in question were put to the meeting and purported to be passed in the course and for the purposes of a voluntary administration under Part 5.3A of the CA. The orders proposed may in my view be characterised as orders "about how this Part is to operate in relation to a particular company". There is therefore power to make those orders. In those circumstances, and bearing in mind that the course has Mr Lord's endorsement, subject to the Court's view as to its appropriateness, I am minded to make orders under s 447A which will have the effect of treating as invalid the resolutions as a result of which the company was wound up, so that Part 5.3A will again apply to the company and the DCA may be taken forward according to the provisions of Part 5.3A. I shall give further consideration in private Chambers to short minutes of orders appropriate to effect this result. *********************************** Last Modified: 11/15/2001 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.