McMillan Investment Holdings Pty Ltd v Morgan [2023] FCAFC 9

McMillan Investment Holdings Pty Ltd v Morgan [2023] FCAFC 9

The majority (Yates and Beach JJ) held that the precondition in s 579E(1)(b)(iv)—the existence of presently existing 'particular property' used or for use in a joint undertaking—was not met because the alleged chose in action arose only after the business was sold and no joint undertaking was carried on jointly by the companies at that time. The requirements of the section were not satisfied. Accordingly, the appeal was allowed and the pooling order set aside.

Parties
Appellant: McMillan Investment Holdings Pty Ltd; First Respondent: John Maxwell Morgan; Second Respondent: Sydney Allen Printers Pty Ltd (in liquidation); Third Respondent: Sydney Allen Manufacturing Pty Ltd (in liquidation); Fourth Respondent: Australian Securities and Investments Commission
Jurisdiction
Australia
Judgment Date
16 February 2023
Procedural Posture
Corporations/bankruptcy and Insolvency Appeal / Appeal From Orders of Primary Judge in Application for Pooling Order Under S 579 E(1) Corporations Act
Outcome
Appeal allowed
Legal Topics
Pooling Orders, Chose in Action, Company Liquidation, Corporate Deregistration and Reinstatement
Corporations Law Insolvency Law Bankruptcy Pooling Orders Chose in Action Company Liquidation Corporate Deregistration and Reinstatement

Case Brief

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Parties

McMillan Investment Holdings Pty Ltd

Appellant

John Maxwell Morgan

First Respondent

Sydney Allen Printers Pty Ltd (in liquidation)

Second Respondent

Sydney Allen Manufacturing Pty Ltd (in liquidation)

Third Respondent

Australian Securities and Investments Commission

Fourth Respondent

Procedural Posture

Corporations/bankruptcy and Insolvency Appeal / Appeal From Orders of Primary Judge in Application for Pooling Order Under S 579 E(1) Corporations Act

Legal Issues

  1. 1 Whether s 579E(1)(b)(iv) Corporations Act applies to support a pooling order in relation to the companies
  2. 2 Meaning of 'particular property' and its use or past use in connection with a joint business/scheme/undertaking for s 579E(1)(b)(iv)
  3. 3 Whether a presently existing chose in action is sufficient property for s 579E 'gateway'

Ratio Decidendi

The majority (Yates and Beach JJ) held that the precondition in s 579E(1)(b)(iv)—the existence of presently existing 'particular property' used or for use in a joint undertaking—was not met because the alleged chose in action arose only after the business was sold and no joint undertaking was carried on jointly by the companies at that time. The requirements of the section were not satisfied. Accordingly, the appeal was allowed and the pooling order set aside.

Court Disposition

Appeal allowed

Orders

  • The appeal be allowed.
  • The respondents' application to extend time within which to file their proposed notice of contention be refused.