Crimmins v. Glenview Home Units Pty Ltd and Anor [2001] NSWSC 699

New South Wales Supreme Court

CITATION : Crimmins v. Glenview Home Units Pty Ltd and Anor [2001] NSWSC 699 CURRENT JURISDICTION: Equity FILE NUMBER(S) : SC 2996/01 HEARING DATE(S) : 13, 14 & 16 August, 2001 JUDGMENT DATE : 17 August 2001

Patricia Louise Crimmins [Plaintiff] PARTIES : Glenview Home Units Pty Ltd (In liquidation) [First Defendant] Manfred Holzman [Second Defendant] JUDGMENT OF : Palmer J

COUNSEL : L.J. Aitken [Plaintiff] C.A. Needham SC [Defendant] SOLICITORS : Garrett Walmsley Madgwick [Plaintiff] Morgan Lewis Alter [Defendant] CATCHWORDS : CORPORATIONS - VOLUNTARY ADMINISTRATION - WINDING UP - Residential building held under company title - substantial expenditure on repairs required - shareholders unable to fund repairs - company incurring ongoing legal costs in litigation with shareholder - shareholders unable or unwilling to fund further legal costs - directors resolve that company is likely to become insolvent - company placed in voluntary adminstration pursuant to s.436A Corporations Law - company has no present legal obligation to undertake repairs or pay further legal costs - whether directors can take into account debts or liabilities which are neither actual nor contingent in assessing whether company "likely to become insolvent at some future time" - held - directors may take into account debts or liabilities which they actually foresee are likely to be incurred - a debt or liability is likely to be incurred if a competent and reasonable director would say that there is a probability or a real, not remote, chance that it will be incurred - CORPORATIONS - DIRECTORS - Whether resolution to place company in voluntary administration valid - whether opinion that company likely to become insolvent formed genuinely and in good faith - subjective and objective elements of test - factors to be taken into account when company's sole business is holding residential home unit building - held - resolution valid. CORPORATIONS - VOLUNTARY ADMINISTRATION - Whether possibility that company may avoid liquidation is precondition to appointment of voluntary administrator - scope of ss.435A, 436A Corporations Law. WORDS AND PHRASES - "likely to become insolvent at some future time". LEGISLATION CITED : Corporations Law ss.95A, 435A, 436A, 439A, 439B, 439C, 446A, 588G - ASC v. McLeod 34 ACSR 135 - Dallinger v. Halcha Holdings Pty Ltd (Administrator Appointed) (1995) 60 FCR 594 - Kazar v. Duus 29 ACSR 321 - Re New World Alliance Pty Ltd; Sycotex v. Baseler (1994) 51 FCR 425 CASES CITED : - Re Newark Pty Ltd (In liq); Taylor v. Carroll (1991) 6 ACSR 255 - Sandell v. Porter (1966) 115 CLR 666 - Shapowloff v. Dunn (1981) 148 CLR 72 - Taylor v. ANZ Banking Group Ltd (1988) 6 ACLC 808 - 3M Australia Pty Ltd v. Kemish (1986) 10 ACLR 371 DECISION : Administrator validly appointed; subsequent winding up valid; plaintiff's application refused.