In the matter of Octaviar Limited (in liq); In the matter of Octaviar Administration Pty Limited (in liq) [2015] NSWSC 1621

Supreme Court New South Wales

Medium Neutral Citation: In the matter of Octaviar Limited (in liq); In the matter of Octaviar Administration Pty Limited (in liq) [2015] NSWSC 1621 Hearing dates: 28 August 2015 Date of orders: 03 November 2015 Decision date: 03 November 2015 Before: Brereton J Decision: In proceedings 2011/397200: judicial advice given; In proceedings 2012/89484: application stood over to a date to be fixed. Catchwords: CORPORATIONS – winding up – liquidators – special purpose liquidators – application for advice as to distribution of funds – funds advanced by general purpose liquidator to special purpose liquidator to fund litigation – where funds no longer required – whether funds should be returned to general purpose liquidator – whether general purpose liquidator disqualified to act as liquidator under (CTH) Corporations Act 2001, s 532(2)(c)(ii) – where no opposition to special purpose liquidator retaining funds – payment of funds under funding deed – whether deed terminated – effect of deed absent court's approval under Corporations Act, s 477(2B) – where arguable that special purpose liquidator entitled to treat deed as terminated – whether special purpose liquidator justified in applying for expanded powers to represent Octaviar Ltd's interests in respect of claim as creditor of Octaviar Administration – where pursuing appeal of liquidator's rejection of proof of debt places liquidators in position of conflict – where special purpose liquidator strong candidate to pursue appeal.

CORPORATIONS – winding up – liquidators – approval of funding deed entered into by liquidators under Corporations Act 2001, s 477(2B) – whether funding litigation of related company "necessary" for winding up affairs of company under s 477(2)(m) – where some nexus between litigation and benefit in winding up beyond mere commercial return required. Legislation Cited: (CTH) Corporations Act 2001, s 477(2), 477(2A), 477(2B), s 479(3), s 532(2) (NSW) Court Suppression and Non-Publication Orders Act 2010, s 7, s 8(1) Cases Cited: Alli v Premier Timber Co 1952 (1) SA 689 Barnet v Fortress Credit Corp (Australia) II Pty Ltd [2012] HCATrans 33 Daemar v Opeskin (1985) 10 ACLR 67 Dublin City Distillery Limited v Doherty [1914] AC 823 Fletcher and Barnet, in the matter of Octaviar Limited (receivers and managers appointed) (in liq) and Octaviar Administration Pty Ltd (in liq) [2011] FCA 132 Fletcher and Barnet, in the matter of Octaviar Limited (receivers and managers appointed) (in liq) and Octaviar Administration Pty Ltd (in liq) (No 2) [2011] FCA 315 Fortress Credit Corporation (Australia) II Pty Ltd v Fletcher [2011] FCAFC 89; (2011) 85 ACSR 38 Fortress Credit Corporation (Australia) II Pty Ltd v Fletcher [2015] NSWCA 85; (2015) 105 ACSR 581 Fortress Credit Corporation (Australia) II Pty Ltd v HIH Casualty [2002] NSWSC 1036 Lord Corporation Pty Ltd v Green (1991) 22 NSWLR 532, 541 Re Antard Pty Ltd; ex parte Cohen (1976) 2 ACLR 108 Re English & Scottish Marine Insurance Co (1870) 23 LT 685 Re HIH Insurance Limited [2004] NSWSC 5 Re Home Counties Life Insurance Co (1862) 6 LT 374 Re McGrath (as liquidators of HIH Insurance Ltd) [2009] NSWSC 1244 Re McGrath [2010] NSWSC 404; 78 ACSR 405 Re One.Tel Limited [2014] NSWSC 457; 99 ACSR 247 Re WA Holiday Resorts Ltd (in liq) [1961] WAR 152 Waisbrod v Potgeiter 1953 (4) SA 502 Wilde v Australian Trade Equipment Co Pty Ltd [1981] HCA 13; (1981) 145 CLR 590 Category: Principal judgment Parties: In proceedings 2011/397200: William John Fletcher & Katherine Elizabeth Barnet (first plaintiffs) Octaviar Limited (Receivers & Managers Appointed) (in liq) (second plaintiff) Octaviar Administration Pty Ltd (in liq) (third plaintiff) David John Kerr (applicant)