Chamberlain v RG&H Investments Pty Limited, in the matter of Hardy Bros (Earthmoving) Pty Limited (in liq) [2009] FCA 1214

Chamberlain v RG&H Investments Pty Limited, in the matter of Hardy Bros (Earthmoving) Pty Limited (in liq) [2009] FCA 1214

The Court would not grant s 477(2B) approval nunc pro tunc until the liquidator adequately explained both the original failure to obtain approval before entering the two indemnities and the delay in seeking to remedy that omission. The s 564 application was premature because the final fund for distribution, the liquidator's further costs and expenses, and RGH's status and quantum as a creditor were all uncertain pending related Supreme Court proceedings; there were too many unknowns to make a just order.

Jurisdiction
Australia
Judgment Date
29 October 2009
Procedural Posture
Corporations Application Under Ss 477(2 B), 1322(4), 479(3) and 564 of the Corporations Act 2001 (cth) Concerning Litigation Funding Agreements and Creditor Priority in a Winding Up / Reasons for Judgment on Application; Proceeding Stood Over for Further Evidence and the S 564 Application Held Premature
Outcome
Proceeding stood over to allow further evidence addressing the liquidator's delay; s 477(2B) approval not granted at this stage; s 564 application not determined because premature.
Legal Topics
['court Approval of Liquidator Agreements Under S 477(2 B)' 'approval Nunc Pro Tunc' 'validation Under S 1322(4)' 'liquidator Directions Under S 479(3)' 'creditor Advantage for Indemnifying Creditor Under S 564' 'proof of Debt Dispute' 'distribution of Recovered Property in Winding Up']
['corporations' 'insolvency' 'liquidation' 'litigation Funding'] ['court Approval of Liquidator Agreements Under S 477(2 B)' 'approval Nunc Pro Tunc' 'validation Under S 1322(4)' 'liquidator Directions Under S 479(3)' 'creditor Advantage for Indemnifying Creditor Under S 564' 'proof of Debt Dispute' 'distribution of Recovered Property in Winding Up']

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Procedural Posture

Corporations Application Under Ss 477(2 B), 1322(4), 479(3) and 564 of the Corporations Act 2001 (cth) Concerning Litigation Funding Agreements and Creditor Priority in a Winding Up / Reasons for Judgment on Application; Proceeding Stood Over for Further Evidence and the S 564 Application Held Premature

Legal Issues

  1. 1 ['Whether the liquidator should receive approval nunc pro tunc under s 477(2B) for two funding and indemnity agreements entered into with the DCT without prior Court approval.' 'Whether the agreements should be declared not invalid under s 1322(4)(a) and whether related ancillary orders should be made.' 'Whether the liquidator should be directed under s 479(3) that he was justified in entering into the agreements.' 'Whether it was premature to determine the application under s 564 for the DCT to receive an advantage over other unsecured creditors from recovered funds.']

Ratio Decidendi

The Court would not grant s 477(2B) approval nunc pro tunc until the liquidator adequately explained both the original failure to obtain approval before entering the two indemnities and the delay in seeking to remedy that omission. The s 564 application was premature because the final fund for distribution, the liquidator's further costs and expenses, and RGH's status and quantum as a creditor were all uncertain pending related Supreme Court proceedings; there were too many unknowns to make a just order.

Court Disposition

Proceeding stood over to allow further evidence addressing the liquidator's delay; s 477(2B) approval not granted at this stage; s 564 application not determined because premature.

Orders

  • ['The proceeding be stood over to Wednesday 4 November 2009 at 9.30am.']