Johnson v Hancock re Meditech Nursing Service & Skillforce Agency Pty Ltd [2009] NSWSC 685

Johnson v Hancock re Meditech Nursing Service & Skillforce Agency Pty Ltd [2009] NSWSC 685

The fund created under the deed of company arrangement was not held on trust by the deed administrator, but was property of the company. Upon commencement of creditors' voluntary winding up, s 501 requires the fund to be placed under the control of the liquidators for distribution in accordance with statutory priorities. The deed administrator must deliver the fund to the liquidators, subject to any unresolved issue of lien.

Parties
Plaintiff: Andrew Johnson; First Defendant: Geoffrey Trent Hancock; First Defendant: Laurence Andrew Fitzgerald; Second Defendant: Meditech Nursing Service & Skillforce Agency Pty Limited; Interested Party: Edward Anthony Oliva
Jurisdiction
Australia
Judgment Date
23 July 2009
Procedural Posture
Application for Directions in Corporate Insolvency / Judgment Following Application for Directions by Deed Administrator
Outcome
Direction to be given to the deed administrator to put the deed fund into possession of the liquidators; terms of direction to be settled after considering deed administrator's lien and whether deed should be terminated.
Legal Topics
Voluntary Administration, Deed of Company Arrangement, Creditors' Voluntary Winding Up, Property of Company in Liquidation
Corporations Law Insolvency Law Voluntary Administration Deed of Company Arrangement Creditors' Voluntary Winding Up Property of Company in Liquidation

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Parties

Andrew Johnson

Plaintiff

Geoffrey Trent Hancock

First Defendant

Laurence Andrew Fitzgerald

First Defendant

Meditech Nursing Service & Skillforce Agency Pty Limited

Second Defendant

Edward Anthony Oliva

Interested Party

Procedural Posture

Application for Directions in Corporate Insolvency / Judgment Following Application for Directions by Deed Administrator

Legal Issues

  1. 1 Whether a fund created under a deed of company arrangement is 'property of' the company within s 501 of the Corporations Act upon commencement of creditors' voluntary winding up
  2. 2 Whether the deed fund was held on trust or otherwise vested in the deed administrator or the company
  3. 3 Whether the deed administrator is obliged to deliver the fund to the liquidators

Ratio Decidendi

The fund created under the deed of company arrangement was not held on trust by the deed administrator, but was property of the company. Upon commencement of creditors' voluntary winding up, s 501 requires the fund to be placed under the control of the liquidators for distribution in accordance with statutory priorities. The deed administrator must deliver the fund to the liquidators, subject to any unresolved issue of lien.

Court Disposition

Direction to be given to the deed administrator to put the deed fund into possession of the liquidators; terms of direction to be settled after considering deed administrator's lien and whether deed should be terminated.