Carter, in the matter of Australian Vocational Learning Institute Pty Ltd (in liq) [2019] FCA 1638

Carter, in the matter of Australian Vocational Learning Institute Pty Ltd (in liq) [2019] FCA 1638

Approval under s 477(2B) was granted because further investigation of AVLI's affairs was warranted, the funding agreement was the only mechanism by which prospective recoveries could be pursued given the limited assets and sizeable contingent liabilities, the agreement did not contain unusual or onerous terms, no better funding terms were likely, there was no evidence of bad faith or error of law, and entry into the agreement was within the proper exercise of the liquidator's powers. Suppression orders were warranted to preserve confidentiality of the funding agreement and to ensure that the proposed investigations were not prejudiced by becoming known to their subjects.

Jurisdiction
Australia
Judgment Date
20 September 2019
Procedural Posture
Application by a Liquidator for Approval Under S 477(2 B) of the Corporations Act 2001 (cth) to Enter Into a Funding Agreement on Behalf of a Company in Liquidation, and for a Suppression Order Under S 37 AF of the Federal Court of Australia Act 1976 (cth). / Application Heard and Orders Made in the Federal Court of Australia.
Outcome
Application granted.
Legal Topics
['liquidator Powers' 'approval to Enter Funding Agreement' 'suppression Order' 'proper Administration of Justice' 'investigation of Company Affairs']
['corporations' 'corporate Insolvency' 'practice and Procedure'] ['liquidator Powers' 'approval to Enter Funding Agreement' 'suppression Order' 'proper Administration of Justice' 'investigation of Company Affairs']

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Procedural Posture

Application by a Liquidator for Approval Under S 477(2 B) of the Corporations Act 2001 (cth) to Enter Into a Funding Agreement on Behalf of a Company in Liquidation, and for a Suppression Order Under S 37 AF of the Federal Court of Australia Act 1976 (cth). / Application Heard and Orders Made in the Federal Court of Australia.

Legal Issues

  1. 1 ['Whether approval should be granted under s 477(2B) of the Corporations Act 2001 (Cth) for the plaintiffs to enter into the funding agreement.' 'Whether suppression orders should be made under s 37AF of the Federal Court of Australia Act 1976 (Cth) to protect confidential information concerning the funding agreement and proposed investigations.']

Ratio Decidendi

Approval under s 477(2B) was granted because further investigation of AVLI's affairs was warranted, the funding agreement was the only mechanism by which prospective recoveries could be pursued given the limited assets and sizeable contingent liabilities, the agreement did not contain unusual or onerous terms, no better funding terms were likely, there was no evidence of bad faith or error of law, and entry into the agreement was within the proper exercise of the liquidator's powers. Suppression orders were warranted to preserve confidentiality of the funding agreement and to ensure that the proposed investigations were not prejudiced by becoming known to their subjects.

Court Disposition

Application granted.

Orders

  • ['Pursuant to s 477(2B) of the Corporations Act 2001 (Cth), the first and second plaintiffs are granted approval to enter into the funding agreement in the form exhibited to the confidential affidavit of Moira Kathleen Carter sworn on 20 August 2019.' 'Pursuant to s 37AF of the Federal Court of Australia Act 1976...