In the matter of Meco Australia Pty Limited [2016] NSWSC 1952

Supreme Court New South Wales

Medium Neutral Citation: In the matter of Meco Australia Pty Limited [2016] NSWSC 1952 Hearing dates: Monday, 2 May 2016 Date of orders: 02 May 2016 Decision date: 02 May 2016 Jurisdiction: Equity - Corporations List Before: Brereton J Decision: Refer para 7 Catchwords: CORPORATIONS – voluntary administration – leave to continue proceedings against company – where defendant company went into voluntary administration days before hearing of proceedings due to commence Legislation Cited: (CTH) Corporations Act 2001, s 440D, 440J Category: Procedural and other rulings Parties: Kludi GmbH & Co KG (plaintiff) MECO Australia Pty Limited (administration appointed) (first defendant) Nicholas Dimitri Kroopin (second defendant) Representation: Counsel: D L Cook (plaintiff) D Neggo (defendant)

Solicitors: Polczynski Lawyers (plaintiff) Stacks Law Firm (first defendant) File Number(s): 2016/134678

Judgment (EX TEMPORE) 1. HIS HONOUR: The present application is brought by the plaintiff Kludi GmbH & Co KG for leave pursuant to (CTH) Corporations Act 2001, s 440D, to continue proceedings in the District Court of New South Wales, which are set down for hearing for four days commencing tomorrow, in circumstances where, at the eleventh hour last Friday, 29 April 2016, the company Meco Australia Pty Ltd (which is the defendant in the District Court proceedings) went into voluntary administration. 2. The District Court proceedings comprise a claim by the plaintiff for a sum of money, to which the pleadings in that Court disclose no defence other than a set-off or cross-claim by the defendant. The plaintiff has retained counsel for the proceedings, and has arranged for experts to attend and give evidence. No doubt the administrator consented to act as administrator when he was appointed. One assumes that he would have made some enquiries to ascertain the surrounding circumstances. In any event, nothing is put before the Court to suggest that he was unaware of the impending hearing. 3. In my view, the eleventh-hour appointment of an administrator affords no reason in these circumstances to interfere with the progress of the matter before the District Court tomorrow, at least so far as the plaintiff's claim – which is what is relevant to the proceedings today – is concerned. The administrator is at liberty to take his own course so far as the cross-claim is concerned. For that matter, the administrator can apply to the District Court, if so advised, for an adjournment of the proceedings generally, or of the cross-claim alone. But as it seems to me, with the proceedings in the state they are in, that is a matter properly left for the District Court to determine. There may well be utility for the plaintiff in obtaining a judgment, because it holds bad debt insurance, and recovery of a judgment will at least assist, if not be essential to, a claim under that policy. 4. The plaintiff accepts that it would not be entitled to enforce any judgment recovered in the District Court proceedings except with the further leave of this court. 5. The plaintiff also seeks an order pursuant to Corporations Act, s 440J, granting leave to proceed against the second defendant (a director of the company), in respect of an undertaking given by him to the District Court as a condition of dismissal of an application for security for costs of the cross-claim. However, it is properly pointed out by Mr Cook for the plaintiff that notice to the director of this application has been short and informal. That part of the application may be dealt with on a later occasion. 6. The Court therefore orders that: 1. Upon the undertaking of Claire Latham, solicitor, to pay the appropriate filing fees, the plaintiff Kludi GMBH & Co KG have leave to file an originating process in the form initialled by me, dated this day & placed with the papers. 2. The originating process be returnable instanter. 3. The appearance of Mr Neggo on behalf of the first Defendant Meco Australia Pty Limited (administrator appointed) is noted. 4. The requirements of UCPR Part 10, insofar as they would otherwise prevent the immediate hearing of this application, be dispensed with. 5. Pursuant to Corporations Act, s440D, the plaintiff have leave to proceed with a claim against the first defendant in the District Court in proceedings 2013/22698, upon condition that no step is taken to enforce any judgment against the first defendant without the further leave of this court. 6. The balance of the proceedings be adjourned to 23 May 2016 at 10:00am in the Corporations List Judge's directions list. 7. Notice of these orders and the date, time and place of the adjourned hearing be served on the second defendant together with the originating process.