Dolores Correa and The Spanish Club Limited (subject to Deed of Company Arrangement) v Kenneth Michael Whittingham (No 4) [2012] NSWSC 677

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 4) [2012] NSWSC 677 Hearing dates: 13-16, 20-23, 27-28 March 2012 Decision date: 21 June 2012 Jurisdiction: Equity Division - Corporations List Before: Black J Decision: Detailed orders made to give effect to judgment. Catchwords: PRACTICE AND PROCEDURE - Orders - Agreed orders to give effect to judgment. Legislation Cited: - Corporations Act 2001 (Cth) Pt 5.3A, ss 128-129, 436A, 443D, 443F, 447A, 449E, 1322, 1322(4)(a) Registered Clubs Act 1976 (NSW) s 41 Cases Cited: - Correa v Whittingham (No 3) [2012] NSWSC 526 Category: Costs Parties: Dolores Correa (First Plaintiff) The Spanish Club Limited (subject to Deed of Company Arrangement) (Second Plaintiff) Kenneth Michael Whittingham (Defendant) Representation: Counsel: 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

Judgment 1On 21 May 2012, I delivered my judgment in these proceedings ("Primary Proceedings") ([2012] NSWSC 526). In summary, I found that the Board of The Spanish Club Limited (subject to Deed of Company Arrangement) ("Club") did not comply with the requirements as to the minimum number of directors specified in its constitution at the time of the appointment of Mr Whittingham as administrator. The Plaintiffs, Ms Dolores Correa and the Club were not successful in several other challenges to the validity of Mr Whittingham's appointment. I also dealt with the application of the statutory assumptions under ss 128-129 of the Corporations Act 2001 (Cth) in respect of Mr Whittingham's appointment. I was also satisfied that I should make orders under ss 447A and 1322 of the Corporations Act validating Mr Whittingham's appointment, to the extent necessary, as administrator of the Club on 17 November 2008. 2I also found that Mr Whittingham did not obtain consent to his appointment under s 41 of the Registered Clubs Act 1976 (NSW) until 11 days after his appointment, but that section did not invalidate the appointment of an administrator where such consent was in fact given, albeit not prior to the appointment. I dealt with numerous other criticisms of Mr Whittingham's conduct in my judgment. In the result, I held that Mr Whittingham was entitled to pursue a claim for remuneration under s 449E of the Corporations Act, which is the subject of separate proceedings 10/40769 ("Section 449E Proceedings") which he had commenced, and that it was not necessary for me to determine a quantum meruit claim which he had, in the alternative, brought in the Primary Proceedings. 3I directed the parties to submit Short Minutes of Order to give effect to my judgment as agreed or, if no agreement was reached between them, their respective drafts of those Short Minutes and short written submissions as to the orders which they contended should be made, and extended the time for such submissions at the parties' request. Orders in the Primary Proceedings 4The parties have now reached agreement as to the orders which should be made to give effect to my judgment in the Primary Proceedings, while reserving the Plaintiffs' position as to any appeal against my judgment. I make the following orders and note the following matter in the Primary Proceedings: ORDERS: 1. Pursuant to the Defendant's Amended Interlocutory Process filed 20 February 2012 ("Amended Interlocutory Process"), order under s 447A of the Corporations Act (Cth) 2001 (Act), that Pt 5.3A of the Act is to operate in relation to the Second Plaintiff as if the Defendant was validly appointed as administrator of the Second Plaintiff on 17 November 2008 pursuant to s 436A of the Act. 2. Pursuant to the Amended Interlocutory Process, order under s 1322(4)(a) of the Act declaring the Defendant's appointment as administrator of the Second Plaintiff on 17 November 2008 and all acts, matters or things purporting to have been done, or any proceedings purporting to have been instituted or taken, under the Act or in relation to the Second Plaintiff pursuant to that appointment are not invalid by reason of any contravention of a provision of the Act or a provision of the constitution of the Second Plaintiff. 3. The Second Further Amended Originating Process filed pursuant to leave granted on 13 March 2012 be dismissed. 4. Declare that the Defendant is entitled to be reimbursed and indemnified in respect of his remuneration, legal costs and disbursements as administrator and deed administrator, including in connection with these proceedings out of the assets of the Second Plaintiff and that the Defendant has a right to exercise a lien over the assets of the Second Plaintiff to secure this right of reimbursement and indemnity pursuant to clauses 19.4, 20.1 and 20.5 of the Deed of Company Arrangement executed by the Second Plaintiff and the Defendant and ss 443D and 443F of the Act. 5. Order that the First Plaintiff pay the Defendant's costs of and incidental to these proceedings as agreed or assessed. 6. Exhibits and subpoenaed material may be returned forthwith; any exhibits returned must be retained intact by the party or person that produced the material until the expiry of the time to file an appeal, or until any appeal has been determined. Notation 1. The Court notes that the Plaintiffs' consent to these orders is without prejudice to the Plaintiffs' rights to appeal from the decision of Black J to the intent that if the Court of Appeal reverses or sets aside the judgment of Black J and makes an order that the Defendant is only entitled to his remuneration, legal costs and disbursements assessed on a quantum meruit or incontrovertible benefit basis, the Plaintiffs shall be entitled to have the Defendant's remuneration, legal costs and disbursements reassessed and to claim back any overpayment paid to the Defendant pursuant to these orders. 5The parties have also agreed that certain orders should be made in the Section 449E Proceedings (which were also listed before me although no substantive submissions were made in them) consequential on my judgment, and again on a basis which reserves the Plaintiffs' position as to the result of any appeal against my judgment in the Primary Proceedings. I have made the agreed orders in the Section 449E Proceedings in Chambers.