In the Matter of Unique Doors Pty Ltd [2002] VSC 331 (8 August 2002)

5. Some of the facts are deposed to in the affidavits originally filed in support of the application by the administrator, Andrew Stewart Reed Hewitt, and without purporting to re-state them exhaustively, I record that the administration came about only very recently because of what might be described as a falling out between the directors and shareholders of the company and the wish by some to be repaid the balance of their loan accounts with the company.

8. Section 447A of the Corporations Act provides that -

"General power to make orders (1) The Court may make such order as it thinks appropriate about how this Part is to operate in relation to a particular company. (2) For example, if the Court is satisfied that the administration of a company should end: (a) because the company is solvent; or (b) because provisions of this Part are being abused; or (c) for some other reason; the Court may order under subsection (1) that the administration is to end. (3) An order may be made subject to conditions. (4) An order may be made on the application of: (a) the company; or (b) a creditor of the company; or (c) in the case of a company under administration - the administrator of the company; or (d) in the case of a company that has executed a deed of company arrangement - the deed's administrator; or (e) the Commission; or (f) any other interested person."

12. Thus, s. 447A provides in terms for the termination of the administration of a company if the court is satisfied that the company is solvent. But, in addition to that, it is now well established by authority that s. 447A confers an extremely wide jurisdiction to make any order considered appropriate for the operation of the regime: see, for example, Cawthorn v Keira Constructions Pty Ltd[1]; Milankov Nominees Pty Ltd v Roycol Ltd[2]; Brash Holdings Ltd (Administrator Appointed) v Katile Pty Ltd[3]; Re Brash's Pty Ltd[4] but cf. Australian Memory Pty Ltd v Brien[5]; and, see further, Butterworths Australian Corporation Law Principles and Practice[6].

15. When the matter first came on for hearing before me on 6 August 2002 I was not satisfied that the company was solvent because, although there was hearsay evidence that all directors and shareholders had reached an arrangement whereby some would buy out the interests of others and that the purchasers would not call up their loan accounts, I did not consider that there was sufficient direct evidence to demonstrate to the standard of proof required that those things were likely to occur. The matter was thus adjourned to today to allow an opportunity for further material to be filed and, in the period which has elapsed, further affidavits have been filed by Selahattin Saykan, Antony Elhan, Selfet Cockelek and Nebahat Saykan.

18. Taken together with the material originally put in support of the application, including the investigation of the company's financial affairs to which the administrator has deposed in his affidavit, I am satisfied that an agreement has been entered into between the directors and shareholders of the company which will result in the interests of some being purchased by the others; the repayment of the vendors' loan accounts; and the purchasers forbearing from calling up the remaining loan accounts.

21. Given that those who are to buy out the interests of the others have deposed that they wish to continue the operations of the company and that, upon completion of the purchase, current assets will exceed current liabilities, so that for the foreseeable future the company will be able to pay its debts as they fall due, I think it appropriate to exercise the discretion conferred upon me under s. 447A to terminate the administration.

HIS HONOUR: Mr Robbins, upon the application of the administrator I will make the orders numbered 1 and 2, and I will make an order in terms of 3 but varied by striking out the words "and in so far", etc. to the end, and substituting for them the words "in an amount to be agreed between the administrators and the directors of the company or, failing agreement, as determined by the Taxing Master". After "the costs of this application" I will put "including reserved costs".

[1] (1994) 33 NSWLR 607; 12 ACLC 396 at 399, per Young J.

[2] [1994] FCA 1276; (1994) 124 ALR 391; 12 ACLC 734 at 738, per Lee J.

[3] [1996] VicRp 4; [1996] 1 VR 24 at 26-27.

[4] (1995) 13 ACLC 472 110 at 114, per Hayne J.

[5] (1998) 16 ACLC 1750 at 1759 and 1771 (NSWCA).