Wallabah Pty Ltd v Navillo Pty Ltd & Anor [1997] FCA 142

Wallabah Pty Ltd v Navillo Pty Ltd & Anor [1997] FCA 142

Leave under ss 440D and 440J was refused because the factors relevant to the Court's discretion did not justify allowing the applicant to proceed. The applicant itself, as chargee and only secured and major creditor, appointed the administrators under s 436C and thereby triggered the operation of ss 440D and 440J; the second respondent director disputed both the guarantee and the alleged indebtedness; the company was no longer trading, had limited funds to contest proceedings, and its administrator was seeking to sell its major asset; and the applicant had not demonstrated that it would or might suffer disadvantage if leave were refused.

Jurisdiction
Australia
Judgment Date
05 March 1997
Procedural Posture
Application for Leave Under Ss 440 D and 440 J of the Corporations Law / Motion for Leave Heard on 28 February 1997; Reasons and Orders Delivered on 5 March 1997
Outcome
The applicant's motion for leave under sections 440D and 440J of the Corporations Law was dismissed.
Legal Topics
['voluntary Administration' 'moratorium on Proceedings' 'leave to Continue Proceedings Against Company Under Administration' 'leave to Enforce Guarantee' 'chargee Appointed Administrators']
['corporations Law'] ['voluntary Administration' 'moratorium on Proceedings' 'leave to Continue Proceedings Against Company Under Administration' 'leave to Enforce Guarantee' 'chargee Appointed Administrators']

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Procedural Posture

Application for Leave Under Ss 440 D and 440 J of the Corporations Law / Motion for Leave Heard on 28 February 1997; Reasons and Orders Delivered on 5 March 1997

Legal Issues

  1. 1 ['Whether leave should be granted under s 440D of the Corporations Law to continue proceedings against the first respondent while it was under administration.' 'Whether leave should be granted under s 440J of the Corporations Law to enforce a guarantee against the second respondent.' "What factors were relevant to the exercise of the Court's discretion under ss 440D and 440J."]

Ratio Decidendi

Leave under ss 440D and 440J was refused because the factors relevant to the Court's discretion did not justify allowing the applicant to proceed. The applicant itself, as chargee and only secured and major creditor, appointed the administrators under s 436C and thereby triggered the operation of ss 440D and 440J; the second respondent director disputed both the guarantee and the alleged indebtedness; the company was no longer trading, had limited funds to contest proceedings, and its administrator was seeking to sell its major asset; and the applicant had not demonstrated that it would or might suffer disadvantage if leave were refused.

Court Disposition

The applicant's motion for leave under sections 440D and 440J of the Corporations Law was dismissed.

Orders

  • ["The applicant's motion for leave under sections 440D and 440J of the Corporations Law be dismissed." 'The costs of hearing the motion on 28 February 1997 be reserved.' 'The directions hearing be adjourned to 8 May 1997 at 9.30am.']