Topp v Imagine Un Limited [2009] NSWSC 661

New South Wales Supreme Court

CITATION : Topp v Imagine Un Limited [2009] NSWSC 661

HEARING DATE(S) : 7 July 2009

JUDGMENT DATE : 7 July 2009

JURISDICTION : Equity

JUDGMENT OF : White J

EX TEMPORE JUDGMENT DATE : 7 July 2009

DECISION : Refer to paras 42-46 of judgment.

CATCHWORDS : CORPORATIONS - application to set aside examination summonses issued at request of voluntary administrator - no question of principle

LEGISLATION CITED : Corporations Act 2001 (Cth) Corporate Law Reform Act 1992 (Cth)

Flanders v Beatty (1995) 16 ACSR 324 CASES CITED : Re Euro Star Pty Limited (in liq) [2004] NSWSC 462 Friedrich v Herald & Weekly Times Ltd (1989) 1 ACSR 277

Alan Godfrey Topp PARTIES : v Imagine Un Limited Pty Ltd

FILE NUMBER(S) : SC 3322/09

COUNSEL : Examinees: G Lucarelli Administrator: A A Henskens

SOLICITORS : Administrator: Kemp Strang

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

WHITE J

Tuesday, 7 July 2009

3322/09 Alan Godfrey Topp v Imagine Un Limited Pty Ltd JUDGMENT 1 HIS HONOUR: These are applications to set aside examination summonses issued by the administrator of Imagine Un Limited (administrator appointed) ("the company"). 2 The plaintiff, who obtained summonses for the examination of the applicants, was appointed administrator on 29 April 2009. 3 The first meeting of creditors was held on 11 May 2009. 4 On 26 May 2009 the plaintiff reported to creditors pursuant to s 439A of the Corporations Act 2001 (Cth). 5 The second meeting of creditors was convened for 3 June 2009 and has been adjourned to a date to be appointed. The last date upon which the adjourned meeting of creditors can be held is 6 August 2009. 6 These examination summonses were issued on 22 and 23 June. On 2 July the applicants applied to set the examination summonses aside. 7 The first applicant, Mr Malcolm Beville, was a director of the company from November 2006 until 27 October 2008. He was summoned for examination pursuant to s 596A. The other applicant, Mr John Beville, has been summoned pursuant to s 596B. 8 The summonses are challenged on the basis that they are being pursued by the administrator for a purpose foreign to the purpose for which an administrator can exercise his or her powers. The relevant powers of the administrator were said to be the power and obligation to report to creditors pursuant to s 439A(4) and the power to recommend whether it would be in the creditors' interests to execute a deed of company arrangement, or for the administration to end, or for the company to be wound up. 9 The administrator has provided his report to creditors. The applicants submit that it is clear that the only outcome of the administration will be that the company be wound up. The administrator's report discloses that the company is clearly insolvent. The administrator would not recommend that the administration end and control of the company be returned to the directors. The applicants contend that there is no prospect of that occurring. They also say that there is no prospect of the company executing a deed of company arrangement. Alternatively, they say that no deed of company arrangement was in prospect when the applications for the examination summonses were issued, or is presently in prospect. 10 In his report to creditors of 26 May 2009 the plaintiff reported that a deed of company arrangement had not been proposed for consideration by creditors. That was a statement of the position as it obtained on 26 May 2009. 11 In Flanders v Beatty (1995) 16 ACSR 324 Ormiston J, (with whom Tadgell and Harper JJ agreed), noted (at 332-333) that the amendments to the Corporations Law made by the Corporate Law Reform Act 1992 expanded the class of persons who were defined as eligible applicants who could apply for the issue of examination summonses. 12 His Honour said (at 333): " I would conclude that the legislature saw it as important that administrators should have wide powers to obtain information and conduct any necessary examination, much the same way as those powers were and are still given to liquidators. However, the significance of granting these powers to administrators is that the object to which they ought properly be used should comprehend anything which fairly may be expected to advance the course of administration ... "