In the matter of AT Air Group Pty Limited (in liq) [2012] NSWSC 1508

In the matter of AT Air Group Pty Limited (in liq) [2012] NSWSC 1508

Approval under s 477(2B) was appropriate because the liquidator had acted in good faith, made no error of law, could not fund the proceedings, had been unable to obtain third party funding or a competing offer, and the proposed assignment was the only available means to realise some value for AT Air's creditors while preserving any set-off available to the Siewarts. However, the undertakings should not be varied in the form sought because the proposed security under the Deed of Assignment could adversely affect the Siewarts' claimed security interests in the Mosman Property in circumstances where the Security Agreement and associated securities might not be set aside.

Jurisdiction
Australia
Judgment Date
07 December 2012
Procedural Posture
Interlocutory Applications / Application for Approval Under S 477(2 B) of the Corporations Act 2001 (cth) to Enter Into a Proposed Deed of Assignment and for Release From Undertakings; Parties to Be Heard Further Before Orders Are Made.
Outcome
The Court indicated it would grant approval under s 477(2B) for the liquidator to enter into the Deed of Assignment, but would not release the Plaintiffs from the undertakings to permit the security contemplated by clause 11.2 in its present form. The Plaintiffs and liquidator were to be heard further before orders...
Legal Topics
['winding Up' 'liquidator Powers' 'approval of Agreement Under S 477(2 B)' 'assignment of Causes of Action' 'release From Undertakings' 'interlocutory Injunctions' 'set Off in Winding Up']
['corporations' 'equity'] ['winding Up' 'liquidator Powers' 'approval of Agreement Under S 477(2 B)' 'assignment of Causes of Action' 'release From Undertakings' 'interlocutory Injunctions' 'set Off in Winding Up']

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Procedural Posture

Interlocutory Applications / Application for Approval Under S 477(2 B) of the Corporations Act 2001 (cth) to Enter Into a Proposed Deed of Assignment and for Release From Undertakings; Parties to Be Heard Further Before Orders Are Made.

Legal Issues

  1. 1 ['Whether entry into the proposed Deed of Assignment by the liquidator should be approved under s 477(2B) of the Corporations Act 2001 (Cth).' "Whether the liquidator's proposed entry into the Deed of Assignment was a proper exercise of power and not ill advised or improper." 'Whether the application for approval under s 477(2B) could be brought by Aquatic rather than by the liquidator.' "Whether the proposed assignment would prejudice the Siewarts' position concerning set-off under s 553C of the Corporations Act 2001 (Cth)." 'Whether the Plaintiffs should be released from undertakings given to the Court on 25 June 2012 to permit security to be granted over the Mosman Property.']

Ratio Decidendi

Approval under s 477(2B) was appropriate because the liquidator had acted in good faith, made no error of law, could not fund the proceedings, had been unable to obtain third party funding or a competing offer, and the proposed assignment was the only available means to realise some value for AT Air's creditors while preserving any set-off available to the Siewarts. However, the undertakings should not be varied in the form sought because the proposed security under the Deed of Assignment could adversely affect the Siewarts' claimed security interests in the Mosman Property in circumstances where the Security Agreement and associated securities might not be set aside.

Court Disposition

The Court indicated it would grant approval under s 477(2B) for the liquidator to enter into the Deed of Assignment, but would not release the Plaintiffs from the undertakings to permit the security contemplated by clause 11.2 in its present form. The Plaintiffs and liquidator were to be heard further before orders...

Orders

  • ['Parties to be heard further before orders are made.']