Australian Innovation Limited v. Ronald John Dean-Willcocks and Ors [2002] NSWSC 24

New South Wales Supreme Court

CITATION : Australian Innovation Limited v. Ronald John Dean-Willcocks and Ors [2002] NSWSC 24 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 5953/01 HEARING DATE(S) : 28 December, 2001 JUDGMENT DATE : 28 December 2001

Australian Innovation Limited - Plaintiff Ronald John Dean-Willcocks & Ian James Purchase as Joint Administrators of Powerline GES Pty Ltd - First Defendant PARTIES : Powerline GES Pty Limited - Second Defendant CMC Power Systems Ltd - Third Defendant Powerline GES, Inc - Fourth Defendant JUDGMENT OF : Palmer J

P.K. Andronos - Plaintiff COUNSEL : M. Cashion SC, P. Parker - First and Second Defendants P. Stern (Sol) - Third Defendant Aitken McLachlan & Thorpe - Plaintiff SOLICITORS : Kemp Strang - First and Second Defendants Ernst & Young Law - Third Defendant CATCHWORDS : CORPORATIONS - ADMINISTRATION - Whether appointment of administrators under s.436C(1) Corporations Act by a chargee is a step in the enforcement of the charge for the purposes of s.267(1). LEGISLATION CITED : Corporations Act - Part 5.3A, s.267, s.435A, s.436C, s.440B, s.440F, s.441A, s.441B, s.447C Companies Code - s.205A. CASES CITED : - 400 Lonsdale Pty Limited v Southern Cross Airlines Limited 10 ACSR 739 - Salcedo v Mawarie Mining Co Pty Limited (1991) 6 ACSR 197 DECISION : Declaration that the appointment of the administrators was valid.

Introduction

1 The Plaintiff ("AIL") seeks declarations under s.447C of the Corporations Act as to the validity of the appointment of the First Defendants as joint administrators of the Second Defendant ("PGPL"). The Third Defendant ("CMC") is a creditor of PGPL. The Fourth Defendant ("PGI") is the parent company of PGPL. 2 The administrators were appointed on 13 November 2001 by AIL, purportedly pursuant to s.436C(1) of the Corporations Act which provides that a person who is entitled to enforce a charge on the whole or substantially the whole of a company's property may, by writing, appoint administrators of a company if the charge has become, and still is, enforceable. 3 AIL says that as at 13 November 2001 it was the chargee of the whole of PGPL's property pursuant to a Deed of Charge dated 3 August 2001, that an Event of Default, as defined in the Deed, had occurred and that it was therefore entitled to enforce the Charge within the meaning of s.436C(1) of the Corporations Act . 4 CMC challenges the appointment of the administrators on two grounds: first, it says that as at 13 November 2001 no Event of Default had occurred under the Deed of Charge so that the Charge was not enforceable and AIL was not entitled to appoint the administrators under s.436C(1). Second, CMC says that the Charge is void by virtue of s.267 of the Corporations Act . The legislation