In the matter of Warwick Keneally as administrator of Australian Blue Mountain International Cultural & Tourist Group Pty Ltd (admin apptd) [2015] NSWSC 937

In the matter of Warwick Keneally as administrator of Australian Blue Mountain International Cultural & Tourist Group Pty Ltd (admin apptd) [2015] NSWSC 937

The administrator was not validly appointed because less than reasonable notice was given for the directors' meeting contrary to the Company's constitution, and the appointing directors did not genuinely hold the statutory opinion that the company was insolvent or likely to become insolvent under s 436A of the Corporations Act. There was further substantial injustice to Ms Lam caused by the way the meeting was convened. Curative powers under s 1322(4) and s 447A of the Corporations Act were not exercised, and the appointment remains invalid.

Parties
Plaintiff: Cheng Lam; First Defendant: Australian Blue Mountain International Cultural & Tourist Group Pty Ltd (admin apptd); Second Defendant: Warwick Keneally as administrator of Australian Blue Mountain International Cultural & Tourist Group Pty Ltd (admin apptd)
Jurisdiction
Australia
Judgment Date
16 July 2015
Procedural Posture
Principal Judgment / Final Judgment After Hearing
Outcome
Declaration that the administrator of the Company was not validly appointed.
Legal Topics
Meetings of Directors, Notice Requirements for Board Meetings, Voluntary Administration, Appointment and Validity of Administrators, Insolvency, Directors' Duties and Opinions, Curative Remedial Powers Under Corporations Act, Procedural Defects in Board Meetings
Corporations Law Meetings of Directors Notice Requirements for Board Meetings Voluntary Administration Appointment and Validity of Administrators Insolvency Directors' Duties and Opinions Curative Remedial Powers Under Corporations Act +1 more

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Parties

Cheng Lam

Plaintiff

Australian Blue Mountain International Cultural & Tourist Group Pty Ltd (admin apptd)

First Defendant

Warwick Keneally as administrator of Australian Blue Mountain International Cultural & Tourist Group Pty Ltd (admin apptd)

Second Defendant

Procedural Posture

Principal Judgment / Final Judgment After Hearing

Legal Issues

  1. 1 Whether the appointment of Warwick Keneally as administrator was valid under the Corporations Act 2001 (Cth) and the Company's constitution.
  2. 2 Whether reasonable notice of the directors' meeting appointing the administrator was given.
  3. 3 Whether the appointing directors held a genuine opinion as to insolvency or likely insolvency under s 436A of the Corporations Act.

Ratio Decidendi

The administrator was not validly appointed because less than reasonable notice was given for the directors' meeting contrary to the Company's constitution, and the appointing directors did not genuinely hold the statutory opinion that the company was insolvent or likely to become insolvent under s 436A of the Corporations Act. There was further substantial injustice to Ms Lam caused by the way the meeting was convened. Curative powers under s 1322(4) and s 447A of the Corporations Act were not exercised, and the appointment remains invalid.

Court Disposition

Declaration that the administrator of the Company was not validly appointed.

Orders

  • Declare that the administrator was not validly appointed.
  • Parties to bring in short minutes of order to give effect to this judgment within 14 days.