New South Wales Supreme Court CITATION : Hewlett Packard Australia Pty Ltd v Siltek Holdings Pty Ltd [2005] NSWSC 672 HEARING DATE(S) : 06/06/05 JUDGMENT DATE : 8 July 2005 Equity Division JURISDICTION : Corporations List JUDGMENT OF : Barrett J DECISION : Leave to proceed granted CATCHWORDS : CORPORATIONS - winding up - leave to proceed against company in liquidation - apparently arguable case - relief of a proprietary nature sought - no opposition by liquidator - leave granted LEGISLATION CITED : Corporations Act 2001 (Cth), ss.471B, 500(2) CASES CITED : Ogilvie-Grant v East (1983) 7 ACLR 669 Hewlett Packard Australia Pty Limited - Plaintiff Siltek Holdings Pty Limited - First Defendant Siltek Asia Pacific Pty Limited - Second Defendant PARTIES : Peter William Marsden in his capacity as liquidator of Siltek Holdings Limited - Third Defendant Stephen James Parbery in his capacity as liquidator of Siltek Asia Pacific Pty Limited - Fourth Defendant FILE NUMBER(S) : SC 1502/05 COUNSEL : Mr R.A. Dick - Plaintiff SOLICITORS : Blake Dawson Waldron - Plaintiff LOWER COURT JURISDICTION : IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST BARRETT J FRIDAY, 8 JULY 2005 1502/05 HEWLETT PACKARD AUSTRALIA PTY LIMITED v SILTEK HOLDINGS PTY LIMITED & 3 ORS JUDGMENT 1 The plaintiff seeks leave under s.471B of the Corporations Act 2001 (Cth) to proceed with a claim against Siltek Holdings Pty Limited ("SHL") and leave under s.500(2) to proceed with a related claim against Siltek Asia Pacific Pty Limited ("SAP"). A winding up order was made by this court in respect of SHL on 22 September 2003. SAP became subject to creditors voluntary winding up on 19 October 2001, consequent upon earlier Part 5.3A administration. 2 The claims against SHL and SAP are pleaded in an amended statement of claim filed on 6 June 2005. By that statement of claim, the plaintiff seeks principally declaratory relief against SHL (first defendant), SAP (second defendant), the liquidator of SHL (third defendant) and the liquidator of SAP (fourth defendant). The statement of claim pleads an agreement made between 8 February 2001 and 29 June 2001 whereby, in consideration of the plaintiff, first, foregoing a guarantee from a related company of SAP in respect of indebtedness of SAP to the plaintiff for goods sold and delivered and, second, continuing to extend credit to SAP, it was agreed by Siltek Limited (the ultimate holding company of both SHL and SAP) that the plaintiff would receive in respect of the obligations of SAP an assignment of a "loan debt" owed by SAP "to another or other entities in the Siltek Group. Under that agreement, it is said, the "loan debt" would be "payable to the Plaintiff to the extent required to discharge obligations of Siltek Asia Pacific to the Plaintiff in the event that Siltek Holdings or Siltek Asia Pacific were placed into voluntary administration or liquidation". It is further pleaded that the loan debt was owed by SAP to SHL and that SAP remains indebted to the plaintiff and is not able to meet the obligations in full. The relevant agreement is said to have arisen from spoken words and conduct. 3 An alternative claim alleges estoppel and unconscionable conduct. There is a further alternative claim based on alleged misleading or deceptive conduct. Oral statements and conduct form the main basis for all these claims. 4 The relief claimed by the plaintiff is (a) a declaration that the loan debt owed by SAP to SHL is held on trust for the plaintiff to the extent necessary to discharge the plaintiff's claim against SAP; (b) alternatively, a declaration that any dividend or distribution paid by SAP to SHL referable to the loan debt is held on trust for the plaintiff to the extent necessary to discharge the plaintiff's claim against SAP; (c) alternatively, a declaration that the loan debt and any dividend or distribution to SHL referable to the loan debt has been assigned to the plaintiff; and (d) a declaration that SAP and SHL are estopped from denying the matters the subject of these declarations; and (e) a declaration that the plaintiff and only the plaintiff is entitled to prove for the loan debt in the winding up of SAP or, in the alternative, in the winding up of SHL. 5 The evidence shows the plaintiff lodged a proof of debt in the winding up of SAP for the debt for goods sold and delivered "plus the amount of any dividend payable to Siltek Holdings P/L up to an amount to extinguish HP's claim in full". The liquidator of SAP indicated that the plaintiff's proof relating to goods sold and delivered would be admitted in a reduced amount but that, as to the element related to any SHL dividend, the proof was rejected. The liquidator said that only SHL could prove in that connection. Thereafter, the plaintiff's solicitors wrote to the liquidator's solicitors accepting that the latter claim "is not necessarily a claim that is required to be made by way of formal debt or claim". The letter described it as "a proprietary claim to any dividend payable to Holdings, of which your clients are on notice". Thereafter, the plaintiff, through its solicitors, put SHL's liquidator on notice of the plaintiff's claim to any dividend receivable by SHL in the winding up of SAP; and SHL lodged as proof of debt in the winding up of SAP. 6 The considerations relevant to a decision whether to grant leave under ss.471B or 500(2) are discussed in the often cited judgment of McPherson J (with whom Campbell CJ and Sheahan J concurred) in Ogilvie-Grant v East (1983) 7 ACLR 669. As that judgment makes clear, each section is designed to ensure that a company in liquidation is not "subjected to a multiplicity of actions which would be both expensive and time-consuming, as well in some cases as unnecessary". Unless there is some good reason to the contrary, claims against such companies should be pursued by means of a proof of debt under the system that permits appeal to the court against a liquidator's decision. As McPherson J observed, the effect of provisions such as ss.471B and 500(2) is "to require the claimant to adopt the course of lodging a proof of debt unless he can demonstrate that there is some good reason why a departure from that procedure is justified in the case of the claim in dispute". An assessment of the strength and viability of the case the applicant for leave wishes to pursue plays a part in the decision whether to allow such a departure. 7 In the present case, the claims of the plaintiff against SHL and SAP are of an essentially proprietary nature. This is something that has already been put to the liquidator of SAP. The plaintiff says, in effect, that certain property and rights ostensibly owned by SHL are in truth owned by the plaintiff. Claims of that nature go beyond the money-based concepts relevant to proof of debts in a winding up. They entail an inquiry into the asset base available to the liquidator. There are accordingly features which take the case outside the province of the proof of debt system. 8 The strength of the plaintiff's case can, at this stage, be judged only by reference to the correspondence put into evidence by the plaintiff and the account of events in the principal affidavit filed by the plaintiff. That evidence, if uncontradicted and ultimately accepted, appears capable of forming the basis of an arguable case in favour of the several contentions the plaintiff will seek to advance. I put it no higher than that at this point, but such a conclusion is, in my view, sufficient for present purposes. 9 It is, I think, noteworthy that neither the liquidator of SHL nor the liquidator of SAP opposes the grant of the leave sought. Since it is part of the function of the court to be concerned about the possibility that the company in liquidation may be subjected to expensive, time-consuming and possibly unnecessary litigation, the court cannot but be influenced by the fact that the liquidator, having notice of the application, does not seek to say that any such untoward imposition is involved. 10 I am satisfied that, having regard to the three factors I have mentioned, this is an appropriate case for the grant of leave to proceed against both companies. I therefore make the following orders: 1. Order that leave be granted to the plaintiff under s.471B of the Corporations Act 2001 (Cth) to proceed with this proceeding 1502/05 against Siltek Holdings Pty Limited. 2. Order that leave be granted to the plaintiff under s.500(2) of the Corporations Act 2001 (Cth) to proceed with this proceeding 1502/05 against Siltek Asia Pacific Pty Limited. ********** 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.