Cadwallader v Bajco [2001] NSWSC 1193

New South Wales Supreme Court

CITATION : Cadwallader v Bajco [2001] NSWSC 1193 revised - 5/03/2002 CURRENT JURISDICTION: Equity FILE NUMBER(S) : SC 1347/98 HEARING DATE(S) : 1, 5-7, 12 December 2000, 4-7, 25 June 2001 JUDGMENT DATE : 24 December 2001

Alan Norman Cadwallader (P) PARTIES : Bajco Pty Ltd (D) Keith William Skinner and David John Frank Lombe (D2) David Ewart Cadwallader and Marilyn Alice Wintzloff (D3) JUDGMENT OF : Austin J

J B Whittle SC (P) COUNSEL : DJ Hammerschlag SC (D1, D2) J W Stevenson (D3) A R Connolly & Co (P) SOLICITORS : Tress Cocks & Maddox (D1, D2) Watson & Watson (D3) CATCHWORDS : CORPORATIONS - voluntary administration - whether requisitioned meeting of members to replace directors should be abandoned if administration intervenes - directors resolve to appoint administrators for improper purpose of stopping meeting of members - whether member has standing to complain of breach of directors' duty - whether general law right to sue on behalf of company was abolished retrospectively by s 236(3) - whether appointment of administrators should be set aside - whether company was solvent - admissibility of expert evidence of solvency - whether directors adopted resolution about insolvency in bad faith - effect of failure to comply with notice and time requirements of s 439A - effect of failure to provide details of proposed deed of company arrangement - administrators' report materially false and misleading - whether deed should be terminated under s 445D - whether defendants abused Part 5.3A so that order should be made under s 447A Corporations Act 2001 (Cth), ss 236, 237, 435C, 436, 439A, 445D, 446A, 447A, 1322, 1401 LEGISLATION CITED : Corporations Law ss 1472 Supreme Court Rules Pt 8 r 11(3), Pt 20 r 4A Advance Bank Australia Ltd v FAI Insurances Ltd (1987) 9 NSWLR 464 Advent Investors Pty Ltd v Goldhirsch (2001) 37 ACSR 529 Arthur Yates & Co Pty Ltd v Vegetable Seeds Committee (1945) 72 CLR 37 Australasian Memory Pty Ltd v Brien (2000) 200 CLR 270 and (1998) 29 ACSR 344 (Court of Appeal of New South Wales) Cawthorne v Kiera Constructions Pty Ltd (1994) 13 ACSR 337 Darvall v North Sydney Brick & Tile & Co Ltd (1989) 16 NSWLR 260 Deputy Commissioner of Taxation v Portinex Pty Ltd (1999) 156 FLR 453 Foss v Harbottle (1843) 2 Hare 461 [67 ER 189] Howard Smith Ltd v Ampol Petroleum Ltd [1974] AC 821 JW Broomhead (Vic) Pty Ltd (in liq) v JW Broomhead Pty Ltd (1985) 9 ACSR 593 Karam v Australia and New Zealand Banking Group Ltd (2000) 34 ACSR 545 CASES CITED : Kazar v Duus (1998) 29 ACSR 321 Luxton v Vines (1952) 85 CLR 352 Mesenberg v Cord Industrial Recruiters Pty Ltd (1996) 39 NSWLR 128 Powell & Duncan v Fryer, Tonkin & Perry (2000) 18 ACLC 480 Quick v Stoland Pty Ltd (1998) 29 ACSR 130 Re Movitor Pty Ltd (1996) 14 ACLC 587 Re Tosich Constructions Pty Ltd (1997) 143 ALR 18 Re William Felton & Co Pty Ltd (1998) 16 ACLC 1294 Residues Treatment & Trading Co Ltd v Southern Resources Ltd (No 4) (1988) 14 ACLR 569 Sycotex Pty Ltd v Baseler (1994) 13 ACSR 766 Toskas Investments Pty Ltd v Thomas Toskas (Supreme Court of New South Wales, Master McCredie, unreported, 9 June 2000) Whitehouse v Carlton Hotel Pty Ltd (1987) 162 CLR 285 Young v Sherman [2001] NSWSC 1020 DECISION : See under heading 'Conclusions'