In the matter of CGH Engineering Pty Ltd [2014] NSWSC 1132

In the matter of CGH Engineering Pty Ltd [2014] NSWSC 1132

Corporations Act 2001 (Cth), s 237 was not available because CGH Engineering Pty Limited was in voluntary administration, but the Court had power, including under s 447E(1) and by analogy with its inherent jurisdiction concerning companies in liquidation, to authorise a contributory to sue in the company's name. Leave was appropriate because the administrator neither consented nor objected, the administrator was also the liquidator of the proposed defendant and therefore in a conflicted position, the administrator was not likely to bring the proceedings, and the proposed claim satisfied the relevant considerations including good faith, best interests of the company, a serious question to...

Jurisdiction
Australia
Judgment Date
11 August 2014
Procedural Posture
Application for Leave to Bring Proceedings in the Name and on Behalf of a Company in Voluntary Administration / Interlocutory Application
Outcome
Application granted; orders made permitting the plaintiff to bring proceedings in the name and on behalf of CGH Engineering Pty Limited and granting any required leave under s 440D and s 500(2).
Legal Topics
['voluntary Administration' 'statutory Derivative Action' 'leave to Sue in Company Name' 'leave to Proceed Against Company in Administration' 'leave to Proceed Against Company in Liquidation' 'supervisory Jurisdiction Over Administrators']
['corporations Law' 'external Administration'] ['voluntary Administration' 'statutory Derivative Action' 'leave to Sue in Company Name' 'leave to Proceed Against Company in Administration' 'leave to Proceed Against Company in Liquidation' 'supervisory Jurisdiction Over Administrators']

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Procedural Posture

Application for Leave to Bring Proceedings in the Name and on Behalf of a Company in Voluntary Administration / Interlocutory Application

Legal Issues

  1. 1 ['Whether Corporations Act 2001 (Cth), s 237 is available where the company is in voluntary administration but not liquidation.' "Whether the Court has inherent, supervisory or statutory power to authorise a contributory of a company in administration to sue in the company's name." 'Whether leave should be granted where the administrator of the proposed plaintiff company is also the liquidator of the proposed defendant company.' 'Whether leave under Corporations Act 2001 (Cth), s 440D and s 500(2) was required and should be granted.']

Ratio Decidendi

Corporations Act 2001 (Cth), s 237 was not available because CGH Engineering Pty Limited was in voluntary administration, but the Court had power, including under s 447E(1) and by analogy with its inherent jurisdiction concerning companies in liquidation, to authorise a contributory to sue in the company's name. Leave was appropriate because the administrator neither consented nor objected, the administrator was also the liquidator of the proposed defendant and therefore in a conflicted position, the administrator was not likely to bring the proceedings, and the proposed claim satisfied the relevant considerations including good faith, best interests of the company, a serious question to...

Court Disposition

Application granted; orders made permitting the plaintiff to bring proceedings in the name and on behalf of CGH Engineering Pty Limited and granting any required leave under s 440D and s 500(2).

Orders

  • ["The plaintiff Gary John Hird may bring proceedings in the name and on behalf of the third defendant CGH Engineering Pty Limited (administrator appointed) for the relief claimed in the draft originating process attached to the affidavit of Paul Lesley O'Sullivan sworn 2 July 2014 herein." 'Insofar as it be...