New South Wales Supreme Court CITATION : Rupert Co Ltd v Chameleon Mining NL [2005] NSWSC 719 HEARING DATE(S) : 18/07/05 JUDGMENT DATE : 18 July 2005 Equity Division JURISDICTION : Corporations List JUDGMENT OF : Barrett J DECISION : Leave granted under s.436B(2) CATCHWORDS : CORPORATIONS - winding up - application by liquidator for leave to appoint himself administrator - applicable principles - court's interest in seeing that some purpose will be served LEGISLATION CITED : Corporations Act 2001 (Cth) ss.436B(1) and (2), 448C(1) Dean-Willcocks re Yeshiva Properties (No 1) Pty Ltd (2003) 48 ACSR 525 Deputy Commissioner of Taxation v Foodcorp Pty Ltd (1994) 13 ACSR 796 John R Turk & Sons (Artarmon) Pty Ltd v Newmont Television Pty Ltd [1999] NSWSC 622 Re Cobar Mines Pty Ltd (1998) 30 ACSR 125 CASES CITED : Re Depsun Pty Ltd (1994) 13 ACSR 644 Re Nardell Coal Corporation Pty Ltd (2003) 47 ACSR 122 Re Parkes Leagues Club Co-op Ltd [2004] NSWSC 16 Re Taylor; Origin Internet Solutions Pty Ltd [2004] FCA 382 Rupert Company Limited - Plaintiff PARTIES : Chameleon Mining NL (In Liquidation) - Defendant FILE NUMBER(S) : SC 4822/04 COUNSEL : Mr D.R. Pritchard - Applicant SOLICITORS : Dibbs Barker Gosling - Applicant LOWER COURT JURISDICTION : IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST BARRETT J MONDAY 18 JULY 2005 4822/04 RUPERT COMPANY LIMITED v CHAMELEON MINING NL JUDGMENT 1 This is an application by Mr John Vouris, the liquidator of Chameleon Mining NL. He seeks an order under s.436B(2) of the Corporations Act 2001 (Cth) granting leave for him to appoint himself as voluntary administrator of that company pursuant to s.436B(1). 2 The considerations applicable to such an application have been dealt with in a number of cases. Those cases show that the main question is whether the proposed appointee is an appropriate person to be appointed administrator, with particular reference to the absence of disqualifying characteristics contemplated by s.448C(1) and of positions or allegiances that might give rise to a conflict of interest: see Re Depsun Pty Ltd (1994) 13 ACSR 644; Deputy Commissioner of Taxation v Foodcorp Pty Ltd (1994) 13 ACSR 796; Re Cobar Mines Pty Ltd (1998) 30 ACSR 125; John R Turk & Sons (Artarmon) Pty Ltd v Newmont Television Pty Ltd [1999] NSWSC 622; Re Nardell Coal Corporation Pty Ltd (2003) 47 ACSR 122; Dean-Willcocks re Yeshiva Properties (No 1) Pty Ltd (2003) 48 ACSR 525; Re Parkes Leagues Club Co-op Ltd [2004] NSWSC 16; Re Taylor; Origin Internet Solutions Pty Ltd [2004] FCA 382. In the Cobar case, Bryson J said that the "test for leave is not a high one", with the result that a liquidator who has already embarked on an administration should be allowed to continue it as administrator unless there are clear grounds for a decision refusing him or her leave to do so. 3 The present application is advanced in circumstances where Chameleon Mining has entered into a conditional agreement with a company called Centrebright Pty Ltd. The agreement is dated 10 June 2005 and provides, in essence, for Centrebright to recapitalise Chameleon by subscribing a sum of $1.53 million for new shares, subject to shareholder approval and satisfaction of other conditions. 4 Mr Vouris says in his affidavit that if Chameleon remains in liquidation, he cannot issue the further shares required by the conditional agreement. He is of the opinion that if the agreement can be completed, the unsecured creditors will receive a dividend of approximately 57 percent of the amounts of their debts, whereas if the subscription agreement cannot be completed, it is his estimate that the unsecured creditors will receive no dividend. 5 Although the main consideration upon an application such as the present is, as I have said, as to the suitability of the appointee, the court is nevertheless interested in a general sense to see that there is some point in the move from winding up to voluntary administration. The circumstances involving the agreement with Centrebright provide that foundation in this case. 6 Mr Vouris has confirmed that he is not affected by any of the disqualifying or excluding factors applicable to administrators under s.448C(1) and has no conflicting interests that would make it inappropriate for him to be appointed administrator. 7 There is a committee of creditors which, at a meeting on 11 April 2005, discussed the proposed agreement with Centrebright and agreed that the proposal should be pursued. It was after that, of course, that the agreement of 10 June was entered into. 8 The members of the committee of creditors have been given notice of today's hearing by Mr Vouris' solicitors. One of them, Mr Whitbread, responded to the notification and said that he did not have a problem with Mr Vouris being the administrator. Mr Whitbread has appeared in court this morning and has confirmed that attitude on his part. 9 The case is one in which there should be a grant of leave for Mr Vouris to appoint himself as administrator. Consequential orders are sought under s.447A truncating the administration process to avoid duplication of steps already effectively taken in the antecedent winding up. Orders of that kind are now an established part of this kind of case. They were first made, I think, by Bryson J in Cobar Mines and most recently made by Hamilton J in Parkes Leagues Club. Having regard to what has already occurred by way of creditor consultation and meetings in the context of the present winding up, those orders are sensible and appropriate and should be made here also. 10 I make orders in accordance with the short minutes which I initial and date. ********** 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.