Cribb, in the matter of Shields Contracting Pty Ltd (ACN 059 029 506) (In Liquidation) [2008] FCA 1116

Cribb, in the matter of Shields Contracting Pty Ltd (ACN 059 029 506) (In Liquidation) [2008] FCA 1116

The agreement was approved because the evidence disclosed no absence of good faith, no error of law or principle, and no real and substantial grounds for doubting the prudence of the liquidators' entry into the agreement, particularly given the difficulties in disposing of the company's interest in the tenements and the liquidators' judgment that the agreement was in creditors' best interests. Relief under s 1322(4)(a) was granted because the prior approval requirement was essentially procedural, the plaintiffs acted honestly and failed to obtain approval through inadvertence, no substantial injustice was shown or likely, the agreement could benefit creditors through a $370,000 payment if...

Jurisdiction
Australia
Judgment Date
17 June 2008
Procedural Posture
Corporations Application by Liquidators for Approval of Agreement and Validation of Acts Under the Corporations Act 2001 (cth) / First Instance Orders and Reasons for Judgment
Outcome
Application granted; agreement approved, direction given, and declaration made under s 1322(4)(a).
Legal Topics
["liquidators' Powers" 'approval Under S 477(2 B) of the Corporations Act 2001 (cth)' 'validation Under S 1322(4)(a) of the Corporations Act 2001 (cth)' 'disposal of Company Interest in Mining Tenements']
['corporations' 'insolvency'] ["liquidators' Powers" 'approval Under S 477(2 B) of the Corporations Act 2001 (cth)' 'validation Under S 1322(4)(a) of the Corporations Act 2001 (cth)' 'disposal of Company Interest in Mining Tenements']

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Procedural Posture

Corporations Application by Liquidators for Approval of Agreement and Validation of Acts Under the Corporations Act 2001 (cth) / First Instance Orders and Reasons for Judgment

Legal Issues

  1. 1 ['Whether the agreement entered into by the liquidators without prior approval should be approved under s 477(2B) of the Corporations Act 2001 (Cth).' 'Whether the plaintiffs should be directed that they may act on the agreement as though it had been approved by the Court pursuant to s 477(2B) of the Corporations Act 2001 (Cth).' 'Whether the entry into the agreement and the agreement itself are not invalid by reason of the failure to obtain prior approval required by s 477(2B) of the Corporations Act 2001 (Cth), pursuant to s 1322(4)(a).']

Ratio Decidendi

The agreement was approved because the evidence disclosed no absence of good faith, no error of law or principle, and no real and substantial grounds for doubting the prudence of the liquidators' entry into the agreement, particularly given the difficulties in disposing of the company's interest in the tenements and the liquidators' judgment that the agreement was in creditors' best interests. Relief under s 1322(4)(a) was granted because the prior approval requirement was essentially procedural, the plaintiffs acted honestly and failed to obtain approval through inadvertence, no substantial injustice was shown or likely, the agreement could benefit creditors through a $370,000 payment if...

Court Disposition

Application granted; agreement approved, direction given, and declaration made under s 1322(4)(a).

Orders

  • ['The agreement dated 27 January 2005 between the plaintiffs on behalf of Shields Contracting Pty Ltd (In Liq) and Meteore Minerals Limited (formerly known as Select Minerals Pty Ltd), Renwick Nominees Pty Ltd and Donald Stephen McManus (Agreement) is approved.' 'The plaintiffs are directed that they may act on the...