In the matter of Addstone Pty Ltd (in liq) Macks, Peter Ivan [1998] FCA 1568

In the matter of Addstone Pty Ltd (in liq) Macks, Peter Ivan [1998] FCA 1568

The Funding Arrangement, assigning a portion of recoveries from litigation but not the cause of action itself, is a proper exercise of the liquidator’s power to deal with company property under s 477(2)(c) of the Corporations Law. The arrangement is bona fide, necessary because no alternative funding is available, and does not prejudice creditors. The Court’s direction is warranted and approval is given.

Parties
Applicant / Liquidator: Peter Ivan Macks; Companies in Liquidation: Emanuel Group of Companies (Addstone Pty Ltd and others) (In Liquidation); Creditor / Defendant in Related Action: Thomsons Barristers & Solicitors
Jurisdiction
Australia
Judgment Date
08 December 1998
Procedural Posture
Liquidator's Application for Directions / Interlocutory Application for Approval of Funding Arrangement
Outcome
Application granted; directions and approvals given.
Legal Topics
Liquidator Powers, Funding of Litigation, Assignment of Proceeds of Action, Creditors' Rights, Maintenance and Champerty
Corporations Law Insolvency Liquidator Powers Funding of Litigation Assignment of Proceeds of Action Creditors' Rights Maintenance and Champerty

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Parties

Peter Ivan Macks

Applicant / Liquidator

Emanuel Group of Companies (Addstone Pty Ltd and others) (In Liquidation)

Companies in Liquidation

Thomsons Barristers & Solicitors

Creditor / Defendant in Related Action

Procedural Posture

Liquidator's Application for Directions / Interlocutory Application for Approval of Funding Arrangement

Legal Issues

  1. 1 Whether the proposed funding arrangement falls under the liquidator's statutory power of sale under s 477(2)(c) of the Corporations Law
  2. 2 Whether the assignment of proceeds constitutes dealing with 'property'
  3. 3 Standing and rights of creditors to be heard in the application

Ratio Decidendi

The Funding Arrangement, assigning a portion of recoveries from litigation but not the cause of action itself, is a proper exercise of the liquidator’s power to deal with company property under s 477(2)(c) of the Corporations Law. The arrangement is bona fide, necessary because no alternative funding is available, and does not prejudice creditors. The Court’s direction is warranted and approval is given.

Court Disposition

Application granted; directions and approvals given.

Orders

  • The affidavit of Peter Ivan Macks sworn on 10 August 1998 and the annexures thereto be confidential and not available to any person except by leave of the Court or a Judge.
  • Liberty to any party to apply for access to the documents.