Re Continental Pacific [2002] NSWSC 789

Re Continental Pacific [2002] NSWSC 789

The purported s.436A resolutions were affected by non-compliance with s.201A(2) and the companies' constitutions because each public company had only one director and the sole director could not constitute a quorum or pass the resolutions under the constitutions. However, the case satisfied s.1322(6): the persons concerned acted honestly, it was just and equitable to make the order, and no substantial injustice had been or was likely to be caused. Because the sole director represented the only operative human mind and will of each company and the creditor and shareholder interests were content with the administration, the court made a validating order under s.1322(4)(a).

Jurisdiction
Australia
Judgment Date
26 August 2002
Procedural Posture
Application for Curative and Validating Orders in Relation to Voluntary Administration Appointments / Originating Process; Judgment on Application
Outcome
Validating order made.
Legal Topics
['voluntary Administration' 'appointment of Administrator' 'board Resolutions' 'minimum Number of Directors' 'quorum' 'validation of Irregularities']
['corporations Law' 'insolvency'] ['voluntary Administration' 'appointment of Administrator' 'board Resolutions' 'minimum Number of Directors' 'quorum' 'validation of Irregularities']

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Procedural Posture

Application for Curative and Validating Orders in Relation to Voluntary Administration Appointments / Originating Process; Judgment on Application

Legal Issues

  1. 1 ['Whether purported board resolutions under s.436A of the Corporations Act 2001 (Cth), passed by the sole director of each public company, were affected by non-compliance with the statutory and constitutional requirements for at least three directors and a quorum of two.' 'Whether the court should make curative orders under s.1322(4)(a) of the Corporations Act 2001 (Cth), or alternatively under s.447A, validating the purported resolutions and subsequent voluntary administration steps.']

Ratio Decidendi

The purported s.436A resolutions were affected by non-compliance with s.201A(2) and the companies' constitutions because each public company had only one director and the sole director could not constitute a quorum or pass the resolutions under the constitutions. However, the case satisfied s.1322(6): the persons concerned acted honestly, it was just and equitable to make the order, and no substantial injustice had been or was likely to be caused. Because the sole director represented the only operative human mind and will of each company and the creditor and shareholder interests were content with the administration, the court made a validating order under s.1322(4)(a).

Court Disposition

Validating order made.

Orders

  • ['Order 2 in the originating process filed on 11 July 2002 was made, with the addition at the end of the words "or of the constitution of either of the companies".']