Dolores Correa and The Spanish Club Limited (subject to Deed of Company Arrangement) v Kenneth Michael Whittingham (No 3) [2012] NSWSC 526

Supreme Court New South Wales

Medium Neutral Citation: Dolores Correa and The Spanish Club Limited (subject to Deed of Company Arrangement) v Kenneth Michael Whittingham (No 3) [2012] NSWSC 526 Hearing dates: 13-16, 20-23, 27-28 March 2012 Decision date: 21 May 2012 Jurisdiction: Equity Division - Corporations List Before: Black J Decision: Parties to bring in Short Minutes of Order to give effect to judgment in agreed form within 7 days, or respective drafts if no agreement is reached. Parties to be heard as to costs. Catchwords: CORPORATIONS - External administration - Administration under deed of company arrangement - Validity of appointment of administrator - Whether appointment invalid by reason of lack of number of directors as required by articles of association - Whether appointment invalid by reason of lack of quorum for directors meeting - Indoor management rule - Whether appointment valid by reason of statutory assumptions under ss 128-129 of Corporations Act 2001 (Cth) - Whether appointment should be validated under s 447A and s 1322 of Corporations Act 2001 (Cth) - Factors relevant to validation application brought when administration largely complete - Relevance of delay on part of party challenging validity of administrator's appointment - Whether exposure to statutory regime for assessment of remuneration under s 449E of Corporations Act 2001 (Cth) amounts to substantial injustice. Legislation Cited: - Corporations Act 2001 (Cth) Pts 5.3, 5.3A, ss 128(1), 128(4), 128-129, 129, 129(1), 201A(2), 435C(1), 435C(3)(b)(i), 436A, 439A, 439A(1), 439A(5), 439A(6), 445A, 445C(b), 445C, 445CA, 445D, 445G, 447, 447A, 447C, 447E, 447E(1), 447G, 448A, 448C, 449E, 449E(2), 1308, 1322, 1322(4), 1322(4)(a) - Corporations Regulations 2001 (Cth) Sch 8 - Registered Clubs Act 1976 (NSW) ss 41, 41A, 41(a), 41J, 57F - Registered Clubs Regulation 1996 (NSW) reg 19, cl 471 - Supreme Court (Corporations) Rules 1999 (NSW) r 9.2 - Uniform Civil Procedure Rules 2005 (NSW) Pt 20, rr 14, 31.28 Cases Cited: - Amautovic v Kukulovski [2009] NSWSC 1444 - Application of Kenneth Michael Whittingham; Re The Spanish Club Ltd (subject to deed of company arrangement) [2009] NSWSC 1426 - Australian Capital Television Pty Ltd v Minister for Transport and Communications (1989) 17 ALD 658; 86 ALR 119; 7 ACLC 525 - Australasian Memory Pty Ltd v Brien [2000] HCA 30; (2000) 200 CLR 270 - Bank of New Zealand v Fiberi Pty Ltd (1993) 14 ACSR 736; 12 ACLC 48 - Barclays Finance Holdings Ltd v Sturgess (1985) 3 ACLC 662 - Bell Resources Holdings Pty Ltd v Commissioner for ACT Revenue Collections (1990) 22 FCR 178; 2 ACSR 211 - Brick and Pipe Industries Ltd v Occidental Life Nominees Pty Ltd (1990) 3 ACSR 649; 9 ACLC 324 - Brick and Pipe Industries Ltd v Occidental Life Nominees Pty Limited [1992] VR 279; (1991) 6 ACSR 464; 10 ACLC 253 - Calabretta v Redpen Developments Pty Ltd (in liq) [2010] FCA 81; (2010) 183 FCR 47 - Cheerine Group (International) Pty Ltd v Yeung [2006] NSWSC 1047 - Coad v Wellness Pursuit Pty Ltd (in liq) [2009] WASCA 68; (2009) 40 WAR 53; 71 ACSR 250 - Commonwealth Bank of Australia v Hamilton [2012] NSWSC 242 - Correa v Spanish Club Ltd [2009] NSWSC 1225 - County of Gloucester Bank v Rudry Merthyr Steam and House Coal Colliery Co [1895] 1 Ch 629 - CSG Ltd v Fuiji Xerox Australia Pty Ltd [2011] NSWCA 335 - Deputy Commissioner of Taxation v Portinex Pty Ltd (No 2) [2000] NSWSC 557; (2000) 34 ACSR 422 - Deputy Commissioner of Taxation v Portinex Pty Ltd [2000] NSWSC 99; (2000) 156 FLR 453; 34 ACSR 391 - Galea v Bagtrans Pty Ltd [2010] NSWCA 350 - Gosford Christian School Ltd v Totonjian [2006] NSWSC 725; (2006) 201 FLR 424 - Gould v Companies Auditors and Liquidators Disciplinary Board [2009] FCA 475; (2009) 71 ACSR 648 - Honest Remark Pty Ltd v Allstate Explorations NL [2006] NSWSC 735; (2006) 234 ALR 765 - RCHPI Australia Pty Ltd [2008] NSWSC 1106 - John J Starr (Real Estate) Pty Ltd v Robert R Andrew (A'Asia) Pty Ltd (1991) 6 ACSR 63 - Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 - Kazaar v Duss [1998] FCA 1378; (1998) 88 FCR 218; 29 ACSR 321 - Kirwan v Cresvale Far East Ltd (in liq) [2002] NSWCA 395; (2002) 44 ACSR 21 - Khoury v Zambena Pty Limited (1997) 23 ACSR 344 - Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11; (2011) 243 CLR 361 - Mentha v Colorbus Pty Ltd (in liq) [2004] VSC 486; (2004) 51 ACSR 677 - Molit (No 55) Pty Ltd v Lam Soon Australia Pty Ltd (1996) 63 FCR 391; 19 ACSR 160 - Monks v Poynice Pty Ltd (1987) 8 NSWLR 662; 11 ACLR 637 - Morris v Kanssen [1946] AC 459 - Natarajan v ACIB Accumulus Pty Ltd [2006] VSC 22; (2006) 56 ACSR 356 - National Australia Bank Ltd v Horne [2011] VSCA 280; 253 FLR 205; 85 ACSR 639 - National Mutual Fire Insurance Co Ltd v Commonwealth of Australia [1981] 1 NSWLR 400 - Naumoski v Parbery [2002] NSWSC 1097; (2002) 171 FLR 332 - Northside Developments Pty Ltd v Registrar-General [1990] HCA 32; (1990) 170 CLR 146; 2 ACSR 161 - NZI Securities Australia Ltd v Poignand (1994) 51 FCR 584 - Panasystems Pty Ltd v Voodoo Tech Pty Ltd [2003] FCA 428; (2003) 21 ACLC 842 - Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No 3) [1998] HCA 30; (1998) 195 CLR 1; 27 ACSR 535 - Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 - Re Australian Art Investment Pty Ltd [2012] VSC 18 - Re Australian Property Custodian Holdings Limited (admin apptd) (recs and mgrs apptd) [2010] VSC 492 - Re Bank of Syria [1900] 2 Ch 272 - Re Bank of Syria [1901] 1 Ch 115 - Re Chilia Properties Pty Ltd (1997) 73 FCR 171 - Re Clynton Court Pty Ltd [2005] FCA 543; (2005) 53 ACSR 432 - Re Colorbus Pty Ltd (In liq); Mentha v Colorbus Pty Ltd (in liq) [2004] VSC 486; (2004) 51 ACSR 677 - Re Darin (as administrators of Palamedia Ltd) [2010] NSWSC 451 - Re Ethan Minerals Ltd (admins apptd) [2011] NSWSC 899 - Re GIGA Investments Pty Ltd (in admin) (1995) 17 ACSR 472 - Re Pan Pharmaceuticals Ltd (admins apptd); Selim v McGrath [2003] FCA 855 - Re Pasdonnay Pty Ltd (admins apptd) (2005) 53 ACSR 717 - Re Scottish Petroleum Co (1883) 23 Ch D 413 - Re Sly, Spink & Co [1911] 2 Ch 430 - Re The Spanish Club Limited [2009] NSWSC 1426 - Re Vouris; Epromotions Australia Pty Ltd & Relectronic-Remech Pty Ltd (in liq) [2003] NSWSC 702; (2003) 47 ACSR 155 - Re Wood Parsons Pty Ltd (in liq) [2002] NSWSC 1058; (2002) 43 ACSR 257 - Sherred v McDonald [2004] QSC 332 - Sherred v McDonald [2005] QSC 153 - Shirlaw v Graham [2001] NSWSC 612 - Singh v Singh [2008] NSWSC 386 - Skafcorp Limited v Jarol Pty Limited [2002] NSWSC 1183; (2002) 44 ACSR 138 - Smolarek v McMaster [2006] WASCA 216 - Story v Advance Bank Australia Ltd (1993) 31 NSWLR 722; 10 ACSR 699; 11 ACLC 629 - Sutherland (as liquidator of Sydney Appliances Pty Ltd (in liq)) v Robert Bosch (Australia) Pty Ltd [2002] NSWSC 32; (2000) 33 ACSR 680 - Sutherland v Take Seven Group Pty Ltd (1998) 29 ACSR 201 - Wagner v International Health Promotions (admin apptd) (1994) 15 ACSR 419 - Wilson v Manna Hill Mining Company Pty Ltd [2004] FCA 1663; (2004) 51 ACSR 404 - Young v ACN 081 162 512 Pty Ltd [2005] NSWSC 139; (2005) 218 ALR 449 - Xie v Crisp [2011] VSC 154] Texts Cited: - Halsbury's Laws of Australia - Ford's Principles of Corporations Law Category: Principal judgment Parties: Dolores Correa (First Plaintiff) The Spanish Club Limited (subject to Deed of Company Arrangement) (Second Plaintiff) Kenneth Michael Whittingham (Defendant) Representation: Defendant: V.R.W. Gray/M. Stevens (Plaintiffs) S.D. Robb QC/N. Bearup (Defendants) Solicitors: Somerset Ryckmans (Plaintiffs) Norton Rose Group (Defendants) File Number(s): 09/290732