Evans v Mullumbimby News Pty Ltd [2008] NSWSC 240

New South Wales Supreme Court

CITATION : Evans v Mullumbimby News Pty Ltd [2008] NSWSC 240

HEARING DATE(S) : 19/03/08

JUDGMENT DATE : 19 March 2008

JURISDICTION : Equity Division Corporations List

JUDGMENT OF : Barrett J

EX TEMPORE JUDGMENT DATE : 19 March 2008

DECISION : Leave to file originating process in amended form

CATCHWORDS : CORPORATIONS - company under voluntary administration - member wishes to commence proceeding seeking winding up order in respect of company and other orders against company and a natural person defendant - whether leave needed under s 440D

LEGISLATION CITED : Corporations Act 2001 (Cth), Part 5.3A, ss 440A, 440D

CATEGORY : Principal judgment

CASES CITED : Australian Prudential Regulation Authority v Rural & General Insurance Ltd (2004) 136 FCR 149 Watts v Albany Marine Centre Pty Ltd [2007] WASC 22

PARTIES : Robyn Lorraine Evans and Anthony David Johnston - Plaintiffs Mullumbimby News Pty Limited amd David William Smith - Defendants

FILE NUMBER(S) : SC 1936/08

COUNSEL : Mr M L Brabazon - Plaintiffs Mr M G Streeter - Administrator

SOLICITORS : Baker Mannering & Hart - Plaintiffs Nv Lawyers - Administrator

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

BARRETT J

WEDNESDAY 19 MARCH 2008

1936/08 ROBYN LORRAINE EVANS & ANOR v MULLUMBIMBY NEWS PTY LIMITED & ANOR

JUDGMENT

1 The plaintiffs seek leave to file in court an originating process which seeks as principal relief an order that the first defendant, Mullumbimby News Pty Ltd, be wound up. There is a claim for interlocutory relief by way of an order for the appointment of a provisional liquidator and claims against both defendants for orders for access to documents and certain other interlocutory relief. 2 The plaintiffs are, I am told, a person who is registered as the holder of 50 per cent of the shares in Mullumbimby News and another person who is the beneficial owner of those shares. The defendants are Mullumbimby News itself and the holder of the remaining 50 per cent of the shares, who is also the sole director. 3 When the matter came before me this morning, I was informed by counsel for the plaintiffs that the sole director had yesterday appointed an administrator under Pt 5.3A of the Corporations Act 2001 (Cth). Mr Streeter has appeared this morning on the instructions of the administrator. 4 A threshold question arising is whether, in the absence of leave under s 440D of the Corporations Act, the originating process may be filed so as to initiate the winding up proceedings. I am of the opinion that leave under that section is not needed so far as the winding up application is concerned. This is because of the existence of s 440A which makes specific provision with respect to winding up proceedings. 5 The relationship between the two provisions has been considered in a number of cases. There is discussion of them in the judgment of Gyles J in Australian Prudential Regulation Authority v Rural & General Insurance Ltd (2004) 136 FCR 149. His Honour concluded that a winding up proceeding is not within the purview of s 440D and that s 440A alone operates in relation to such a proceeding. I quote from the judgment at [11] and [12]: "[11] In my opinion the better view is that a winding up proceeding is not caught by s 440D. If attention is only paid to the text of s 440D, there would be force in the opinion of Stone J that a winding up proceeding is "against the company". There is also force in the submissions for Rural & General as to inconsistency. However, a different conclusion follows from consideration of the whole of Div 6, bearing in mind the place it occupies in Pt 5.3A, which in turn is to be considered in the overall context of Pt 5. Part 5.3A administration is one form of external administration in insolvency, winding up is another. Neither is necessarily entitled to precedence. That interrelation needed to be dealt with and it is dealt with by s 440A. In each form of external administration it is necessary to have a moratorium for what might be called external claims. That is the role played by s 440D (compare s 471B in relation to winding up in insolvency, s 444E in the case of a deed of company arrangement and s 500(2) in the case of voluntary winding up).