Onefone Australia Pty Ltd v One.Tel Ltd [2006] NSWSC 815

Reported Decision : 58 ACSR 466

New South Wales Supreme Court

CITATION : Onefone Australia Pty Ltd v One.Tel Ltd [2006] NSWSC 815

HEARING DATE(S) : 31/07/06

JUDGMENT DATE : 15 August 2006

JURISDICTION : Equity Division Corporations List

JUDGMENT OF : Barrett J

DECISION : Directions to liquidators

CATCHWORDS : CORPORATIONS - winding up - special purpose liquidator appointed by court - whether principal liquidators should have oversight of expenditures by special purpose liquidator - whether special purpose liquidator should have fund for payment of expenses

LEGISLATION CITED : Corporations Act 2001 (Cth), Part 5.3A

Burns Philp Investment Pty Ltd v Dickens (No 2) (1993) 31 NSWLR 280 CASES CITED : Re Obie Pty Ltd (No 4) (1984) 8 ACLR 967 Re Spedley Securities Ltd (1991) 4 ACSR 555

Onefone Australia Pty Limited - First Plaintiff DCA Resources Australia Pty Limited - Second Plaintiff Pacific Finance Group Pty Limited - Third Plaintiff PARTIES : Concept Systems (Australia) Pty Limited - Fourth Plaintiff One.Tel Limited - First Defendant Steven Sherman - Second Defendant Peter Walker - Third Defendant

FILE NUMBER(S) : SC 5291/03

COUNSEL : Ms V. Whittaker - Principal Liquidators Mr R.D. Glasson - Special Purpose Liquidator

SOLICITORS : Kemp Strang - Principal Liquidators NOT Lawyers - Special Purpose Liquidator

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST

BARRETT J

TUESDAY, 15 AUGUST 2006

5291/03 ONEFONE AUSTRALIA PTY LIMITED & 3 ORS v ONE.TEL LIMITED (IN LIQUIDATION) & 2 ORS JUDGMENT 1 One.Tel Limited is subject to the form of creditors' voluntary winding up that follows on from voluntary administration under Part 5.3A of the Corporations Act 2001 (Cth). Mr Sherman and Mr Walker are the liquidators, having been appointed at the second meeting of creditors held in the Part 5.3A administration. 2 There is also in office, however, a so-called "special purpose liquidator", Mr Weston. He was appointed a liquidator of One.Tel Limited by order of the court. The appointment was made for a specific purpose, namely, to investigate a particular series of events that had occurred shortly before the voluntary administration began and to make recommendations to creditors as to whether any rights of action existed in relation thereto. It was perceived that Mr Sherman and Mr Walker might possibly be made parties to any resultant litigation. 3 The court's power to appoint an additional liquidator to perform a particular function was, in this case, exercised in a creditors' voluntary winding up (cf Re Obie Pty Ltd (No 4) (1984) 8 ACLR 967; Re Spedley Securities Ltd (1991) 4 ACSR 555). 4 On 31 July 2006, I heard two interlocutory processes, one filed by Mr Sherman and Mr Walker (whom I shall call "the principal liquidators") and the other filed by Mr Weston ("the special purpose liquidator"). The principal liquidators seek a direction that they, as liquidators, are justified in paying $250,000 to the special purpose liquidator in order for him to comply with orders made on 26 April 2006. The special purpose liquidator, by contrast, seeks a direction that the principal liquidators are justified in paying to him a sum of $750,000 in order for him to comply with the orders made on 26 April 2006. There is thus acceptance by both the principal liquidators and the special purpose liquidator that the former should pay the latter something in order that he might comply with the orders made on 26 April 2006. But there is disagreement about the amount.