Hoath v Comcen Pty Ltd [2003] NSWSC 746

Hoath v Comcen Pty Ltd [2003] NSWSC 746

The damages claims against the director and administrator were struck out because the alleged statutory, civil penalty and fiduciary duties were not owed to individual creditors and did not give the plaintiffs a damages cause of action as creditors. The claims under ss.445G and 445D were not struck out because the plaintiffs' asserted creditor status was not so obviously hopeless as to warrant summary termination. Security for costs was refused because an order against the impecunious corporate plaintiff would stultify arguable claims, and impecuniosity alone did not justify security against the individual plaintiff under Part 53.

Jurisdiction
Australia
Judgment Date
15 August 2003
Procedural Posture
Corporations List Proceedings Concerning a Deed of Company Arrangement, Alleged Duties in Voluntary Administration, and Damages Claims / Interlocutory Application to Strike Out Parts of an Amended Originating Process and for Security for Costs
Outcome
Parts of the amended originating process were struck out; the application for security for costs was refused; specified claims in the interlocutory process were stood over.
Legal Topics
['voluntary Administration' 'deed of Company Arrangement' "directors' Statutory Duty to Assist Administrator" "administrator's Duties" 'creditor Standing' 'strike Out' 'security for Costs']
['corporations Law' 'civil Procedure'] ['voluntary Administration' 'deed of Company Arrangement' "directors' Statutory Duty to Assist Administrator" "administrator's Duties" 'creditor Standing' 'strike Out' 'security for Costs']

Case Brief

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Procedural Posture

Corporations List Proceedings Concerning a Deed of Company Arrangement, Alleged Duties in Voluntary Administration, and Damages Claims / Interlocutory Application to Strike Out Parts of an Amended Originating Process and for Security for Costs

Legal Issues

  1. 1 ["Whether the director's statutory duty under s.438B(2) of the Corporations Act 2001 (Cth) to give a statement about the company's affairs to the administrator was owed to individual creditors and could found a damages claim by them" 'Whether the voluntary administrator owed duties to individual creditors that could found a damages claim by the plaintiffs' "Whether the plaintiffs' claims under ss.445G and 445D should be struck out on the basis that they were not creditors of Comcen Pty Ltd" 'Whether the first and second plaintiffs should be ordered to provide security for costs']

Ratio Decidendi

The damages claims against the director and administrator were struck out because the alleged statutory, civil penalty and fiduciary duties were not owed to individual creditors and did not give the plaintiffs a damages cause of action as creditors. The claims under ss.445G and 445D were not struck out because the plaintiffs' asserted creditor status was not so obviously hopeless as to warrant summary termination. Security for costs was refused because an order against the impecunious corporate plaintiff would stultify arguable claims, and impecuniosity alone did not justify security against the individual plaintiff under Part 53.

Court Disposition

Parts of the amended originating process were struck out; the application for security for costs was refused; specified claims in the interlocutory process were stood over.

Orders

  • ['Strike out paragraphs 18, 19 and 20 of the amended originating process filed on 4 July 2003 and the words "and placing Comcen Pty Limited into liquidation" where they appear in paragraph 17.' 'Claims in paragraphs 4 and 5 of the interlocutory process of the first and third defendants filed on 13 June 2003 stood...