Re Windows on the World Steel Windows Pty Ltd (In Administration) [2020] VSC 880 | Case summary

Supreme Court of Victoria|2020-12-22|Before: SLOSS, J

CORPORATIONS - Voluntary administration - Where company did not trade other than as trustee of a unit trust and in the conduct of the business - Where sole director appointed an administrator - Where sole director now seeks to have the appointment declared invalid, void and of no effect - Whether at time the resolution was made the company was insolvent or likely to become so - Whether sole director held requisite genuine opinion that the company was insolvent at the time the appointment was made - Corporations Act 2001 (Cth), ss 436A, 447A.

For the interested party in S ECI 2020 04576 and the Plaintiffs in S ECI 2020 04635

1 On 15 December 2020, the plaintiffs in Proceeding S ECI 2020 04576 made an application for urgent relief from the Duty Judge in relation to the property of the WOW Unit Trust of which the second plaintiff, Windows on the World Steel Windows Pty Ltd (WOW) is, or was until the first plaintiff's appointment, trustee.

2 WOW was incorporated on 25 January 2012. Mr Gregory Bruce Mansfield is the sole director and secretary of WOW. WOW, in its capacity as trustee of the WOW Unit Trust, conducted a business in manufacturing and distributing steel window frames primarily to the construction industry for installation into new residential and commercial buildings (the Business).[1] The evidence before the Court is that WOW did not trade other than as trustee of the WOW Unit Trust and in the conduct of the Business.[2]

3 The WOW Unit Trust was established by a Trust Deed dated 25 January 2012 (Trust Deed). At the time of establishment, the WOW Unit Trust had two initial subscribers each holding 50 units at a subscription price of $1.00 per unit.[3]

4 Currently there are two unitholders in the WOW Unit Trust. The majority unitholder is Summer Horizons Pty Ltd (ACN 604 303 586) (Summer Horizons). Summer Horizons, in its capacity as trustee for the Cove Family Trust (ABN 90 462 989 128) holds 100 units in the WOW Unit Trust. Mr Mansfield is the effective controller of Summer Horizons, which is the sole shareholder of WOW, holding 100 fully paid ordinary shares.

5 Clause 6.1 of the undated Unitholders Agreement that was made in 2017 (the Unitholders' Agreement) deals with the 'Management of the Business'. Clause 6.1 records the parties' acknowledgment that 'the Controller of the Majority Unitholder is the Managing Director of the Business'[4] and provides that '[t]he Managing Director has (and subject to this deed, will continue to have) responsibility and authority for the day-to-day running of the Business.'[5]

6 There are a further 25 units in the WOW Unit Trust that are held by Metalrocks Investments Pty Ltd (ACN 616 483 400) as trustee for the Brown Family Superannuation Fund (Metalrocks) and they were effectively controlled by Mr Mark Douglas Brown. The Court was informed that Mr Brown has since passed away and that Mrs Ruth Brown is now the director and secretary of Metalrocks and representing the interests of the minority unitholder.

The administrator's application for urgent relief in the main proceeding (Proceeding S ECI 2020 04576)

7 The initiating application for urgent relief in the main proceeding was made by the plaintiffs, effectively on an ex parte basis, in the context of them having filed an originating process on 11 December 2020 seeking orders pursuant to section 37 of the Supreme Court Act 1986 (Vic) and/or alternatively, section 63 of the Trustee Act 1958 (Vic) in relation to the property of the WOW Unit Trust. However, the originating process and supporting material was only served on interested persons late on 14 December 2020, with notification that the hearing would take place the next morning.

8 Following service of the relevant material, Hill Legal, the solicitors for Metalrocks, the minority unitholder in the WOW Unit Trust, and Mrs Ruth Brown, the director and secretary of Metalrocks, notified the plaintiffs and the Court that their client took issue with the fact that WOW had been placed in administration and the suggestion that it is insolvent. The solicitors indicated that their client does not have the resources, nor does it intend to appear at the hearing on 15 December 2020, but said that their client's view is that the application should be adjourned and preferably dismissed and that staff wages be paid with the consent of the directors. Hill Legal also stated that their client does not agree with the first plaintiff's request for indemnity, particularly if his appointment is invalid.

9 The Court heard the plaintiffs' application, but noted that an issue as to the validity of the appointment of the administrator had been raised by the minority unitholder. In those circumstances, and given the short service of the materials, the Court informed counsel for the plaintiffs that it proposed to make only limited orders that day so as to permit the business of the company to be carried on under the auspices of the administrator and to have the matter return before the Court on Thursday, 17 December 2020 at 12:00noon for any argument to be ventilated as to the validity of the appointment of the administrator. Orders were made to facilitate that course. The Court also ordered that in the event Metalrocks or any other interested person wished to challenge the validity of the appointment of the administrator, an application must be filed by 4:00pm on 16 December 2020.

The fresh proceeding commenced by the unitholders (Proceeding S ECI 2020 04635)

10 Late on 16 December 2020, Hill Legal notified the Court that they had received instructions from Mr Mansfield and Metalrocks (together called the unitholders) to challenge the validity of the appointment of the administrator. On 17 December 2020, they filed (or sought to file) documentation including:

(a) A notice of appearance in Proceeding S ECI 2020 04576 - as interested persons who intend to appear at the hearing of the plaintiffs' application on 17 December 2020 and, if applicable, to oppose it;

(b) A fresh originating process (which became Proceeding S ECI 2020 04635) seeking relief pursuant to section 447A of the Corporations Act 2001 (Cth) declaring that the appointment of the defendant, Joshua Philip Taylor, as voluntary administrator of WOW, was invalid, void and of no effect.

(c) Affidavit of Gregory Mansfield (together with exhibits) sworn 17 December 2020;

(d) Affidavit of Ruth Melanie Brown, sworn 16 December 2020; and

(e) Affidavit of John Wulff (together with an excel spreadsheet exhibited) sworn 16 December 2020.

11 Also on 17 December 2020 the plaintiffs in the main proceeding filed further documentation being:

(a) A third affidavit of the first plaintiff, the administrator, sworn on 17 December 2020, in which he deposed as to the first creditors meeting (held on 15 December 2020), his opinion as to the insolvency of WOW, including the current ratio (CA/CL) as at 31 October 2020, the Balance Sheet as at 31 October 2020 and ATO Payment Plans;

(b) Affidavit of Ms Rebecca Louise Hindson, a business director with Taylor Insolvency Pty Ltd, sworn on 17 December 2020, responding to aspects of Mr Mansfield's evidence; and

(c) Affidavit of Mr Greg Valles, the engaged accountant for WOW, responding to aspects of Mr Mansfield's evidence, and providing some background as to Mr Valles' discussions with him.

The applications in the fresh proceeding and the main proceeding were heard together on 17 December 2020

12 With the late filing of material, and at the request of the parties, the further hearing of the matter was stood down until 2.15pm on 17 December 2020. When the hearing commenced, it was conducted by an audio-visual link, with counsel and witnesses appearing by audio-visual link from remote locations.

13 At the outset of the hearing, the Court ordered that the two proceedings be heard together and that the affidavit material filed by the plaintiffs in the main proceeding be treated as affidavits filed in the fresh proceeding.

The unitholders' application in the fresh proceeding

14 As noted above in the fresh proceeding, the application made on behalf of the unitholders is for an order pursuant to section 447A of the Corporations Act 2001 (Cth) declaring that the appointment of the defendant, Joshua Philip Taylor, as voluntary administrator of WOW, was invalid, void and of no effect.

(a) Mr Mansfield is the sole director and secretary of WOW.

(b) On 3 December 2020, Mr Mansfield in his capacity as the sole director of WOW appointed Joshua Philip Taylor of Taylor Insolvency, to be the company's administrator and to exercise all or any of the powers conferred upon an administrator by the Corporations Act 2001.[6]

(c) The relevant accompanying minutes of meeting of directors signed by Mr Mansfield dated 3 December 2020 record that a consent of Mr Taylor to be the administrator of the company was tabled at the meeting and that discussions took place concerning the solvency of the company and whether there was any need to appoint a voluntary administrator to the company.[7]

(d) The accompanying resolution of directors records that the sole director, Gregory Bruce Mansfield, resolved, amongst other things:[8]

THAT in the opinion of the director, the company is insolvent or is likely to become insolvent at some future time and that a voluntary administrator should be appointed to the company under section 436A of the Corporations Act 2001.

THAT the company appoint Joshua Philip Taylor as Administrator pursuant to Section 436A of the Corporations Act 2001.

(e) Mr Mansfield, in his capacity as the sole director of WOW, prepared and signed on 11 December 2020 a 'Report on Company Affairs and Property Part A (Form 507)' (ROCAP) together with a 'Statement verifying Report under s 475(1)' of the Corporations Act verifying that the particulars contained in the Report under s 475(1) are true to the best of his knowledge and belief.[9]

(f) Mr Mansfield, in his capacity as the sole director of WOW, sent an email to the administrator on 11 December 2020 confirming that he has 'no objection to the Administrator of the company making an application for the appointment of a Receiver over the trust assets and him being appointed Receiver' and that he 'would not oppose' the application for his appointment as a receiver.[10]

(g) Mr Mansfield, having been notified that the administrator was making application to the Court inter alia for him to be appointed as a receiver over the trust assets, did not file a notice of appearance nor appear at the (ex parte) hearing on 15 December 2020, and did not inform the Court that he wished to challenge the validity of the appointment of the administrator.

(h) The first notification to the Court that Mr Mansfield was seeking to challenge the validity of the appointment of the administrator was when the Commercial Court Registry and Chambers were notified by Hill Legal late on 16 December 2020 that Metalrocks and Mr Mansfield would be commencing a fresh proceeding and filing a notice of appearance in the main proceeding.

16 The principal basis upon which the unitholders' application is grounded is that Mr Mansfield did not comply with the statutory requirement for the appointment of an administrator by forming the opinion required to be formed by him pursuant to section 436A of the Corporations Act 2001 (Cth), namely that the company is insolvent, or likely to become insolvent at some time.

17 A second ground advanced by the unitholders was that clause 6.3 of the Unitholders' Agreement required certain important decisions pertaining to the company to be made with the unanimous consent of the unitholders. In circumstances where Metalrocks was not consulted in relation to the appointment of the administrator, the unitholders contended that Mr Mansfield lacked the authority required to be given to him under clause 6.3 before he could proceed to appoint an administrator. However, that ground was effectively abandoned by them at the hearing of the application on 17 December 2020.[11]

18 In support of their application, the unitholders rely on the affidavit of Mr Mansfield sworn 17 December 2020 (the Mansfield affidavit). At the hearing, Mr Mansfield was called and cross-examined by means of an audio-visual link.

19 The parties were generally agreed as to the relevant legal principles. The following summary is drawn primarily from the unitholders' outline and the oral submissions made by their counsel, and incorporates the additional observations made by counsel for the administrator in oral submissions and in the written outline.

20 Section 435A of the Corporations Act sets out the objects of Part 5.3A, which contains the provisions that relate to voluntary administration:

The object of this Part is to provide for the business, property and affairs of an insolvent company to be administered in a way that:

(a) maximises the chances of the company, or as much as possible of its business, continuing in existence; or

(b) if it is not possible for the company or its business to continue in existence - results in a better return for the company's creditors and members than would result from an immediate winding up of the company.

21 The power to appoint an administrator is contained in s 436A(1) of the Corporations Act: [12]

A company may, by writing, appoint an administrator of the company if the board has resolved to the effect that (a) in the opinion of the director voting for the resolution, the company is insolvent, or is likely to become insolvent at some future time; and (b) an administrator of the company should be appointed.

22 The concept of solvency is defined in s 95A of the Corporations Act:

A person is solvent if, and only if, the person is able to pay all the person's debts, as and when they become due and payable.

23 As Rangiah J observed in Pearce v Gulmohar Pty Ltd,[13] an assessment of the solvency or otherwise of a company is a complex task requiring 'application of a number of guiding principles recognised by the authorities.'[14] His Honour noted that:[15]

Insolvency is a question of fact to be ascertained from a consideration of the company's financial position taken as a whole. The Court must have regard to the commercial realities. Commercial realities will be relevant in considering what resources are available to the company to meet its liabilities as they fall due, whether resources other than cash are realisable by sale or borrowing upon security and when such realisations are achievable.

24 Importantly, the opinion of the director(s) must be 'bona fide and genuinely formed'.[16] An inability to determine whether a company is insolvent cannot, without more, found an opinion that it is or is likely to be insolvent.[17] The belief that the company was insolvent or likely to become insolvent in the near future, must be 'reasonable in the circumstances'[18] and should be formed on reasonable grounds.[19] The Court's finding will depend largely upon whether the directors took 'adequate steps to satisfy themselves that the statutory requirements were met'.[20] The power to appoint can only be exercised in the best interests of the company as a whole.[21]

25 Most of the cases where challenges are made to the appointment of an administrator on grounds that the relevant director(s) did not form a genuine belief as to solvency and resolved to appoint an administrator for an improper purpose concern applications made by parties other than the director him or herself. As counsel for the administrator observed, the Court was not referred to any authority in which a director has recanted from the bona fides of his own resolution to appoint an administrator.[22]

26 In Smolarek v McMaster as administrator of Eznut Pty Ltd (No 2),[23] Pullin JA (Wheeler JA and Le Miere AJA agreeing) said:[24]

The opinion referred to in s 436A must be bona fide and genuinely formed. A concluded opinion, rather than a tentative opinion, is necessary. If a bona fide opinion is genuinely formed as to 'actual', 'likely' or 'actual or likely' insolvency, that opinion will satisfy the requirements of s 436A. The requisite opinion is that of the directors voting for the resolution, rather than that of its individual members. The ultimate task of the court is to determine, having regard to the actual facts and circumstances, whether on the balance of probabilities the opinion required to be formed by the repository of the power as a condition of its exercise has been formed. Statements as to subjective intention are relevant, but the Court must approach its task of classification of the conduct in question objectively.

27 In Crimmins v Glenview Home Units Pty Ltd,[25] Palmer J said:

Clearly, determining whether an opinion as to likely insolvency has been genuinely formed involves both subjective and objective elements. The subjective element requires that the Court be satisfied that the requisite opinion is actually held by the director. The objective element requires that the Court be satisfied that a competent director in the position of the director concerned could reasonably have formed the opinion on the facts known to that director.

28 While statements as to subjective intention are relevant, the Court must approach its task of classification of the conduct in question objectively. In Kazar v Duus, Merkel J stated:[26]

The task of the Court is to determine, having regard to the actual facts and circumstances, whether on the balance of probabilities the opinion required to be formed by the repository of the power (that is, the Governing Committee) as a condition of its exercise, has been formed. Although statements as to subjective intention must be relevant, the court must approach its task of classification of the conduct in question objectively.

29 Further, in Cadwallader v Bajco Pty Ltd, Austin J stated:[27]

The Court's task is to identify the actual purpose of the directors who voted in favour of the resolution, having regard to the character and operation of the resolution in relation to the facts in circumstances surrounding it, and not merely to the motives of individual directors [...] although statements about the motives or subjective intentions of individual directors are relevant.

30 The actual state of the financial affairs of a company at the time of the appointment of a voluntary administrator is not determinative of the validity of a resolution passed by a director pursuant to s 436A of the Act. However, evidence of the actual state of the financial affairs of a company at the time of the appointment of a voluntary administrator may ground inferences as to the validity of the opinion of a director expressed in such a resolution.[28]

31 In Downey v Crawford, Weinberg J explained that:[29]

[T]he question is not whether, as at that date, the company was actually insolvent, or likely to become so at some future time. It is rather whether the directors genuinely believed that this was so, and whether that belief was reasonable in the circumstances. That in turn will depend largely upon whether they took adequate steps to satisfy themselves that the statutory requirements were met before resolving to appoint Mr Downey as administrator.

32 The purpose of a resolution to appoint a voluntary administrator must be ascertained, then characterised as proper or improper. After identifying the actual purpose or purposes of the directors who voted in favour of a resolution to appoint a voluntary administrator, it is relevant to ask what the substantial purpose was and whether the resolution would have been passed were it not for an improper purpose.[30]

33 Under s 447A of the Corporations Act, the Court is given broad power. Section 447A provides:

(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:

...

(c) for some other reason.

(3) An order may be made subject to conditions.

(4) An order may be made on the application of:

...

(f) any other interested person.

34 In Australasian Memory Pty Ltd v Brien,[31] the High Court (Gleeson CJ, McHugh, Gummow, Hayne and Callinan JJ), when considering the extent of the power given to the Court by s 447A, focussed attention on the statutory language and stated:[32]

It is important to notice that the orders that may be made under s 447A(1) are described as orders about how Pt 5.3A is to operate 'in relation to a particular company'. The power is not cast in terms of a power to make orders to cure defects or to remedy the consequences of some departure from the scheme set out in the other provisions of Pt 5.3A. Its operation is not confined to such cases. Nor is there anything on the face of s 447A(1) that suggests that it should be read down. In particular, the words of the provision are wide enough to confer power to make orders which will have effect in the future but which are occasioned by something that has been done (or not done) under the other provisions of Pt 5.3A before application is made under s 447A(1).

. . .

Section 447A(1) speaks of orders about how 'this Part' is to operate. The reference to 'this Part' cannot be read as referring only to the Part as a whole. That is, it cannot be read as referring, in some global way, to the total operation or effect of the Part. In its context, the reference to 'this Part' is to be understood as a reference to each of the provisions in it, for it is the provisions of the Part which give it the operation which an order under s 447A(1) may affect. And although the examples given in s 447A(2) cannot be taken as exhaustive of the scope, or as controlling the meaning, of s 447A(1), it is clear from those examples that they assume that orders under s 447A(1) may alter the operation of other provisions of the Part. That is, the orders contemplated in the examples go beyond a curial determination of what is the effect of existing provisions of the Part on a particular company in the circumstances that may be established in a proceeding; the orders contemplated are orders that alter how the Part is to operate in relation to a particular company, not how the Part does operate in relation to that company.

. . .

The considerations we have mentioned suggest that the powers under s 447A are wide but they do not compel the conclusion that they are entirely without limit.

. . .

It may be accepted that the expression 'how this Part is to operate' is an expression that looks to the future, not the past. But this temporal requirement is satisfied if orders made under s 447A are orders that have effect only from the time of their making. It does not preclude the making of an order with future effect, but in respect of past matters or events.

35 Relevantly for present purposes, the section gives, as an example of the type of order that may be made under it, an order 'that the administration is to end'. Counsel for the unitholders referred the Court to several cases where such orders have been made accordingly.[33]

36 The expression 'interested person' is of wide scope and should be construed liberally in the context of s 447A.[34] In the present case, there was no challenge to the standing of the unitholders.

The role of the administrator in the fresh proceeding and relief sought

37 Where the validity of the appointment of a voluntary administrator is put in issue, it is not appropriate for the voluntary administrator to simply 'retire from the field'. The taking of such a course of action has been described as capable of being 'a clear breach of duty'.[35]

38 Pursuant to s 447C of the Act:

(1) If there is doubt, on a specific ground, about whether a purported appointment of a person as administrator of a company, or of a deed of company arrangement, is valid, the person, the company or any of the company's creditors may apply to the Court for an order under subsection (2).

(2) On an application, the Court may make an order declaring whether or not the purported appointment was valid on the ground specified in the application or on some other ground.

39 Section 447C clearly grants standing to a voluntary administrator to apply for a declaration pursuant to s 447C(2). However, as a fiduciary of the company to which they have been appointed and a person with an interest in the outcome of an application to determine their validity, a voluntary administrator is obliged to avoid a conflict of interest between their personal interests and the interests of the company to which they are purportedly appointed.[36] Accordingly, a voluntary administrator who, having been put on inquiry about the validity of his or her appointment, commences proceedings pursuant to s 447C, may only properly 'place relevant evidence before the court, together with an analysis of arguments both for and against the proposition that [their] appointment was tainted.'[37]

40 In the present case, counsel for the administrator foreshadowed the making of an application for a declaration under s 447C of the Corporations Act in the event that the Court determines that there was some invalidity in the administrator's appointment. In the alternative, counsel expressly reserved the ability of the administrator to seek an order to validate his appointment as administrator of WOW pursuant to s 447A of the Corporations Act.

41 The Court has the power under s 447A of the Corporations Act to make an order that Part 5.3A of the Act operates as if the administrators had been validly appointed.[38] The power in s 447C is similar but is limited to the making of a declaration that an appointment is valid, in circumstances where there is some doubt (as opposed to a finding) on the matter. Counsel for the administrator submitted that the Court also has power under s 1322 of the Corporations Act, because the appointment of the administrator is a procedural step.[39]

42 The authorities make clear that the Court's power under s 447A should only be exercised where it is consistent with the objectives of Part 5.3A of the Corporations Act.[40] The following principles are relevant:[41]

(a) an invalidly appointed administrator who has acted on the basis of the purported appointment has standing to make an application for an order under s 447A(1) because they are an 'interested person' within the meaning of s 447A(4)(f);

(b) the discretion the court has under s 447A(1) is wide. There is nothing on the face of the subsection that suggests it should be read down;

(c) the orders contemplated are orders that alter how a particular provision within Part 5.3A is to operate in relation to a particular company. The court has power to order that Part 5.3A is to operate as though the purported (but invalid) appointment of the administrator was valid;

(d) one relevant consideration is whether the purposes of Part 5.3A would be best served by the making of an order (the apparent purpose and object being to provide a constructive approach to corporate insolvency by focussing on the possibility of saving a business (as distinct from the company itself) and preserving employment prospects); and

(e) the focus of the Court when making an order under s 447A is the position of the company at the time of making the order and what is best for the company in the future.

43 It is relevant to the exercise of the discretion to validate an appointment under s 447A of the Corporations Act that the company was insolvent or very likely to become insolvent when the appointment was made.[42]

44 As counsel for the unitholders observed, in the present case, the real question for the Court is whether or not the administrator's appointment was valid, and in this case, the resolution of that issue does not turn on either the identity of the moving party or the section relied upon.

45 At the hearing, the evidence before the Court comprised affidavits from each of Mr Mansfield and Ms Ruth Brown representing the unitholders, Mr Greg Valles of Valles Accountants (being the engaged accountants for the Business), Ms Rebecca Hindson (a business director with Taylor Insolvency Pty Ltd), and three affidavits from Mr Taylor (of Taylor Insolvency Pty Ltd), the administrator.

46 An affidavit of Mr John Wulff of Wulff International, a corporate advisory and management consultancy firm, was also filed on behalf of the unitholders. Counsel for the unitholders informed the Court that they proposed to rely upon Mr Wulff's affidavit in the event that the administrator sought relief under s 447C of the Corporations Act.

47 A summary of the gist of the relevant evidence is set out below.

48 The evidence reveals that prior to the appointment of the administrator on 3 December 2020, a meeting took place at the offices of Valles Accountants on 30 November 2020 between Mr Valles (of WOW's engaged accountants), Mr Mansfield (who was accompanied by his financial controller, Ms Lisa Welburn-Brown), and Ms Hindson (of Taylor Insolvency).

49 Mr Mansfield deposes that on or about 30 November 2020 he was invited to attend the offices of Valles Accountants, the company's accountants, to meet with Mr Valles. Another person whom he believed to be a legal representative of the (now) administrator (apparently a reference to Ms Hindson) was also present. At the meeting, Mr Valles said to him words to the effect that he had found a way of wiping out the tax debts of WOW, and that WOW could pay about 8 to 10 cents in the dollar to the Australian Taxation Office (ATO) if he could find five 'happy creditors' to support a resolution. Further, Mr Valles said to him words to the effect that the business of WOW would be controlled by the administrator for only 25 days and after this period of time he would get back control of the business of WOW and that this would occur on the 11th of January 2021, with the result that the ATO debt would be cleared by only paying between 9 to 10 cents in the dollar.[43]

50 Mr Valles deposes that at the 30th November 2020 meeting he did not say words to the effect as deposed by Mr Mansfield, but he did explain the financial situation of WOW to him and the process of appointing an administrator given WOW's financial situation. Further, Mr Valles deposes that he had spoken with Mr Mansfield on a number of previous occasions about the 'dire financial situation' of the business of the company and had tried to assist him in looking at options for addressing this.[44] He added that Mr Mansfield has at all times 'appeared to understand the situation of the [company] but has not agreed to any course of action proposed to help address the situation.'[45]

51 Ms Hindson's account of the meeting is more fulsome. She deposes that she does not recall Mr Valles saying words to the effect attributed to him by Mr Mansfield but does recall Mr Valles explaining the financial position of the company to him and the process of appointing an administrator. Her recollection is that Mr Valles said words to the effect of:[46]

You can pay 11 cents in the dollar or 100 cents in the dollar, but the business can't afford to continue the way it is, because [its] ATO position is just escalating. There is no way that you can tell me that in respect of this rising tax debt over the last three years, that you are going to be able to pay that off. If you want to keep this business, then (and I verily believe that Valles believed) that this was the best pathway.

52 During cross-examination Mr Mansfield disputed that account and said that 'Mr Valles never spoke those words out of his mouth at that meeting.'[47] Mr Mansfield said that the only advice that he got on the first meeting was, 'Greggy, this is the best thing for your business' and he 'was struggling to understand how it would work'.[48]

53 Ms Hindson also deposes that Mr Valles said he believed that WOW was trading whilst insolvent and that Mr Mansfield 'agreed that the company had been struggling to pay its debts for the past three years'.[49] She deposes that Mr Mansfield said the reasons for this were that 'a big contractor had gone into liquidation and [WOW] was owed $250,000' and, following this, other competing businesses opened up and they were not winning contracts, and then the COVID‑19 pandemic hit and they had not had any work in five months.[50]

54 During cross-examination, Mr Mansfield acknowledged the challenges to the Business arising from the COVID-19 pandemic but he could not recall having mentioned the collapse of a big contractor.[51] Further, he stated that in recent months the Business had turned the corner and picked up and there were potential new contracts and the prospect of significant new work, but when a call for production of these contracts was made, Mr Mansfield indicated that he did not propose to make them available until the Court had ruled on the validity of the administrator's appointment.

55 Ms Hindson says that during the meeting there was discussion around liquidation and voluntary administration. Ms Hindson says that during the meeting Ms Welburn-Brown said words to the effect of 'I have worked for somebody previously who had gone into liquidation, we do not want to go down that road.'[52] Ms Hindson deposes that Mr Mansfield 'was adamant that he was not interested in liquidation and that he was possibly interested in voluntary administration and putting up a deed of company arrangement, but he would go away and think about it.'[53] Ms Hindson says that during the meeting both Mr Mansfield and Ms Welburn-Brown asked several questions about voluntary administration including about practical matters such as who would be notified, at which time Mr Mansfield 'discussed that it was imperative that we didn't contact the debtors.'[54] There was also discussion about matters such as the freezing of bank accounts and collecting the debtors, and that the administrator would need his cooperation during this period to run the business whilst he took control of the company itself in order for it to trade successfully, noting that if there was not enough money to trade, the company would be placed in liquidation.

56 It appears the meeting concluded with Mr Mansfield saying 'we [meaning Mr Mansfield and Ms Welburn-Brown] will go away and talk about it in the car.'[55] Under cross-examination Mr Mansfield confirmed that that is what they did.[56] Mr Mansfield said that following the meeting he spoke with Ms Welburn-Brown and was aware that 'she was not in favour of doing this - of going down this road.'[57]

57 It was against that background that the second meeting took place on 3 December 2020.

58 Mr Mansfield explained that the second meeting was convened because they had been instructed that they 'would need to get this done within the next 48 hours.'[58] He said that on 3 December 2020 he and Ms Welburn-Brown met with Ms Hindson and that 'Mr Valles came in right at the end for about three minutes.'[59] Ms Hindson confirms that Mr Valles 'only dropped by the second meeting briefly.'[60]

59 Under cross-examination Mr Mansfield explained why they attended the second meeting notwithstanding that Ms Welburn-Brown was not in favour of going down that road:[61]

[Counsel:] . . . And during that meeting - that was three days after the initial meeting. During that time you had an opportunity to speak to Lisa, who's your internal accountant, hadn't you?‑‑‑That's right.

She had had experience with another company that had gone into liquidation, hadn't she?‑‑‑She had and she was not in favour of doing this - of going down this road and ‑ ‑ ‑

You and Lisa still met with Ms Hindson on 3 December, didn't you?‑‑‑We did because I said to Lisa I - you know, Lisa said to me, 'Look, Gregg, this is not something that I would do. I've been through this. This is a nightmare'. And now that I've been through it I can agree with her. I discussed - we discussed - I discussed the fact that I'd always followed Greg Valles' advice so, therefore, I should follow this advice.

Yes. And Mr Valles' advice had been that the company could not pay its debt to the ATO, wasn't it?‑‑‑No. The only advice that I got on the first meeting was, 'Greggy, this is the best thing for your business'.

Yes?‑‑‑'How - how good do you think it is that you can get rid of your ATO debt, pay 8 to 11 cents in the dollar. All you need is five happy creditors and jobs done. It's simple.' Like he painted a picture that - I was - I was struggling to understand how it would work.

60 Ms Hindson deposes that during the second meeting, the appointment of an administrator was explained to Mr Mansfield again and he signed the Resolution of Directors and Instrument of Appointment of Administrator.[62] She also says that she went through the resolutions with him, the fees charged by Taylor Insolvency and 'what the documents before him meant' and 'detailed all the practical steps about the administration process, and what to expect'.[63] In his affidavit, Mr Mansfield deposed that he 'did not recall' signing any resolution to appoint Mr Taylor as administrator and that if he did sign such a resolution he 'signed it without understanding the document or its effect.' However, when he was cross-examined, he acknowledged that he did sign the documents.[64]

61 The documents that were signed by Mr Mansfield on 3 December 2020 include the minutes of meeting of directors, which record that a consent of Mr Taylor to be the administrator of the company was tabled at the meeting and that discussions took place concerning the solvency of the company and whether there was any need to appoint a voluntary administrator to the company.[65]

Did the Director form the opinion on 3 December 2020 that WOW was insolvent?

62 Mr Mansfield was cross-examined at some length about the financial position of the company. He agreed that the company currently has around $700,000 worth of assets and about $1million worth of creditors.[66] Counsel for the unitholders contended, however, that his agreement to those numbers 'is not the same as being of the opinion that the company is insolvent'.[67] In that regard, counsel submitted Mr Mansfield's evidence is that:[68]

...we came along to the first meeting not knowing what we were going to discuss. And we were thrust into this position. I do not believe that the business is - has been or is or will continue to trade insolvent.

63 Further, counsel for the unitholders contended that the signing of the ROCAP on 11 December 2020[69] is simply not relevant to the question of whether on 3 December 2020 Mr Mansfield had formed the opinion that the company was insolvent.[70]

64 Under cross examination, Mr Mansfield gave evidence that WOW's business had been significantly impacted by the COVID-19 pandemic and the consequent loss of new contracts and late payment by debtors. WOW's largest creditor was the ATO. At the time when the first meeting with Mr Valles took place on 30 November 2020, there was no payment plan in place with the ATO for the company (nor had anyone sought to obtain one).[71] While Mr Mansfield gave evidence that the ATO had not been pressing for payment and that he and Ms Welburn-Brown were hoping they would be able to enter into a COVID-19 repayment arrangement in February 2021, the position was that the company had previously defaulted on its payment plans in 2019 with the ATO for outstanding tax liabilities.[72] The evidence was that the company's tax liability had increased from $197,720 in April 2020 to $511,297 at 2 November 2020 and $540,627 at 24 November 2020.[73]

65 On the evidence before the Court, the indications are that the escalating debt to the ATO was the impetus for Mr Valles calling the meeting on 30 November 2020. This is confirmed by the evidence Mr Mansfield gave under cross-examination, that when they walked into Mr Valles' office on 30 November 2020, Mr Valles spoke about the ATO debt and said 'this meeting is all about resolving the ATO debt.'[74] According to Mr Mansfield, the conversation was as follows:[75]

He [Mr Valles] said, 'We know' - that was - that was himself and Rebecca [Hindson] - 'We know that as of 31 December the ATO will not be doing any more arrangement for paying off ATO debt'. He said 'we know'. And then Lisa responded by saying, 'But, Gregg, we haven't had any demands from the ATO. We haven't had any demands from creditors'. I mean, this coronavirus has been so difficult to trade under.

66 In the absence of an agreed payment plan in place with the ATO it seems clear that the company was unable to pay its tax debts as and when they fell due.[76]

67 Mr Mansfield now seeks to characterise the meetings that took place on 30 November and 3 December 2020 as a course of conduct engaged in by Mr Valles whereby he was being 'railroaded into'[77] action, in circumstances where he did not understand what was happening, and was being placed under 'duress'[78] exerted by Mr Valles. Having reviewed and considered all of the evidence, I do not accept that account as a fair representation of the events that took place. To the extent that Mr Mansfield's evidence of what took place at the meetings is contradicted by Ms Hindson's evidence, I prefer Ms Hindson's account.

68 Under cross-examination, Mr Mansfield gave evidence that he was under a lot of pressure at the time these events took place, and while some of that pressure was due to the business, he made clear that personal matters also contributed to it.[79]

69 On 30 November and 3 December 2020 when the meetings took place Mr Mansfield was well aware that the company had not paid the tax debt due to the ATO, and that the company did not have cash resources or other sources of funds readily available to make payment. If, as Mr Mansfield maintains, Mr Valles did tell him at the 30 November 2020 meeting that as of 31 December the ATO would not be doing any more arrangements for paying off ATO debt, then the company was in 'dire financial circumstances'. That is so, notwithstanding his evidence that many of the company's trade creditors were up to date and substantial debtors were due to be paid to the company in early 2021.

70 In between the two meetings, Mr Mansfield discussed Mr Valles' proposal with Ms Welburn-Brown. He was well aware of her opposition to going down that path. Nevertheless, he said:[80]

I discussed - we discussed - I discussed the fact that I'd always followed Greg Valles' advice so, therefore, I should follow this advice.

71 Mr Mansfield then set in train the arrangement, based on Mr Valles advice, whereby under a deed of company arrangement he would be able compromise the ATO debt for between 8 to 11 cents in the dollar, and get the company back and continue to trade.

72 Counsel for the unitholders submitted that Mr Mansfield 'did not form the opinion that the company was insolvent' and that it is clear from his evidence that he did not hold that opinion on 3 December 2020.[81]

73 I do not agree. In my view, while Mr Mansfield said he was 'not aware of' the definition of 'insolvency', he was certainly aware on 3 December 2020 that the company had been struggling to pay its debts for the past three years, and at that point was unable to pay its debts − including the ATO debt - as and when they fell due. So much is confirmed by the following exchange during cross-examination:[82]

[Counsel:] . . . You've given evidence that you were under a lot of pressure, especially in relation to the impact of COVID-19 on the business. You've given evidence that there wasn't sufficient money to pay the ATO debt on 3 December, and that the reason why you made this resolution was because the effect of it would be because the ATO would be paid eight to 10 cents in the dollar rather than 100 cents in the dollar. Is that correct? That is right.

Thank you, Mr Mansfield. Now, you do understand that the definition of solvency is that the company is in a position to pay all of its debts as and when they fall due, don't you? I'm - I'm not aware of that, no.

Take it from me, Mr Mansfield, that the question of solvency - if a company is solvent, it must be in a position to pay its debts as and when they fall due, and wasn't it the case, Mr Mansfield, that the company had, in fact, been struggling to pay its debts for the past three years? That's right. Yep.

74 Counsel for the administrators put to Mr Mansfield that he would not have been speaking to the company's accountant about paying the ATO 8 to 11 cents in the dollar if the company could afford to pay the ATO the debt that was then due and payable:[83]

[Counsel:] . . . You signed a ROCAP that said that as at 11 December the company then owed the ATO $436,000. So I put it to you, Mr Mansfield, that at the time - on 3 December when you made the resolution appointing my client as the voluntary administrator the company could not then afford to pay the ATO debt; is that right?‑‑‑That is right.

75 In my view, Mr Mansfield's answer confirms that on 3 December 2020, at the time when he executed the minutes of meeting of directors, the resolution of directors and the notice of appointment of Mr Taylor as voluntary administrator, he was well aware that the company could not afford to pay the ATO debt. Even if Mr Mansfield was not aware of the definition of solvency, he knew that as at the time when he signed the relevant documentation the company was unable to pay its debts as and when they fell due. In those circumstances, he must be taken to have known that the company was 'insolvent' or was soon to become so.

76 Counsel for the unitholders submitted that:[84]

. . . Mr Mansfield's opinion that the Company was insolvent or likely to become insolvent at some future time, contained in the Resolution of Directors dated 3 December 2020, was not a bona fide opinion genuinely formed. Subjectively, his evidence is that he did not hold that opinion. Objectively, he had insufficient basis to form that opinion.

77 I do not accept that submission. Where a director has knowledge that the company is unable to pay its debts as and when they fell due, the director faces the risk of an insolvent trading claim if he or she continues to trade. Here, with that knowledge, Mr Mansfield made a considered decision, after discussions with the company's financial controller that took place over several days, to follow Mr Valles' advice and put the company into voluntary administration with a view to entering into a deed of company arrangement. Mr Mansfield had first-hand knowledge of the company's 'dire financial position' and he was aware from the discussions with Mr Valles and Ms Hindson what the proposal for a deed of company arrangement entailed. Mr Valles' proposal offered a means of addressing the company's inability to pay the ATO debt in circumstances where there was no payment plan in place or on offer, before the cut-off date of 31 December 2020.

78 Mr Mansfield executed the documentation on 3 December 2020 against that background, and in the knowledge that the company was unable to pay its debts as and when they fell due. He now seeks to recant that position by maintaining that he did not form the opinion that the company was insolvent. All of the objective indications are that he did. Even if he was unaware of the technical meaning of the term 'insolvency', his knowledge that the company was unable to pay the ATO debts as and when they fell due was the impetus for him to put the company into voluntary administration.

79 In my view, the decision to put the company into voluntary administration was one made bona fide and in circumstances where Mr Mansfield had a sufficient basis for doing so. I am satisfied that a competent director in the position of Mr Mansfield could reasonably have formed the opinion that, in those circumstances, the appropriate course was to put the company into voluntary administration.

80 Accordingly, I am satisfied that the administrator was validly appointed on 3 December 2020.

Is it necessary to validate the administrator's appointment by order made under s 447A?

81 As I have formed the view that the administrator was validly appointed, there is no occasion to consider whether or not to exercise the Court's power under s 447A. But were it necessary to do so, there are several matters that would weigh in favour of the exercise of the power.

82 Given the tenor of the material before the Court and, in particular, the opinion of the administrator that the company is, and has been for some time insolvent, there is a risk that if the company is returned to the director he may continue to trade while it is insolvent. As counsel for the administrator submitted, '[t]he interests of creditors will be compromised if the entrepreneurial hopes of the director are not realised (by the receipt of contracts, which have not yet been produced, or the agreement of a payment plan with the ATO).'[85] And '[i]f the Court does make the order sought, the Administrator remains charged with informing creditors of his opinion, in mid-January 2021 as to the best course to maximise their return from the company.'[86]

83 Further, in circumstances where the administrator intends to continue to trade the business and sell it as a going concern (whether through a deed of company arrangement or liquidation), it seems clear that validation of the appointment would serve the purposes of Part 5.3A, in the sense of providing a constructive approach to corporate insolvency by focussing on the possibility of saving a business that has suffered in COVID-19 circumstances and with a view to preserving employment prospects.

Application by the administrator in the main proceeding to be appointed receiver of trust assets

84 In the originating process filed in the main proceeding on 11 December 2020, the plaintiffs sought orders that the first plaintiff (the administrator) be appointed as receiver and manager (Receiver) of the assets of the WOW Unit Trust (Trust Property) and that the Receiver be authorised to take possession of, preserve, realise and distribute the assets comprising the Trust Property. In addition, the plaintiffs sought to have the Court confer the following powers on the Receiver:[87]

(a) To do all things necessary or convenient to effect the sale or realisation of the Trust Property, with the powers that an administrator has in respect of property of a company pursuant to section 437(A) of the Corporations Act 2001 (Cth);

(b) To apply the proceeds from the sale of the Trust Property to discharge the liabilities of Windows on the World Steel Windows Pty Ltd (In Administration) which were incurred by it in its capacity as trustee, in accordance with the priorities set out in section 556 of the Corporations Act 2001 (Cth); and

(c) To distribute any surplus proceeds from the sale of the Trust Property (if any) to the new trustee of the Wow Unit Trust, or if there is no new trustee, to the beneficiaries of the WOW Unit Trust.

85 In the alternative to the appointment of the administrator as Receiver, the plaintiffs sought an order pursuant to section 63(1) of the Trustee Act 1958 (Vic) that the necessary powers set out in subparagraphs (a) to (c) above be conferred on the administrator.

86 At the ex parte hearing on 15 December 2020, in circumstances where there was the prospect of a challenge to the validity of the administrator's appointment, the Court made only limited orders pursuant to section 63(1) of the Trustee Act as follows:

Powers of trustee to deal with trust assets to trade in the ordinary course of business

Pursuant to s 63 of the Trustee Act 1958 (Vic), and until further order of this Court, there be conferred on the Company such powers as are necessary to enable the Administrator to continue to trade in the ordinary course of the business of the WOW Trust including the power to incur any debts in the ordinary course of business and to pay such debts and employees' wages as are due from the WOW Trust's assets.
Until further order of this Court, the Administrator be indemnified in the manner contemplated by s 443D(a) and (aa) of the Corporations Act 2001 (Cth) out of the WOW Trust's assets as if those assets were company property.

87 The foreshadowed challenge to the administrator's appointment having now been heard and determined in favour of the administrator, it is appropriate to return to consider the further relief sought. In that regard, the plaintiffs rely upon their outline of submissions filed in the main proceeding and the supplementary submissions on this aspect contained in their written submissions filed in the fresh proceeding. No submissions have been filed by the unitholders addressing the further relief sought.

88 As Delany J observed in Re Waratah Group Pty Ltd (in liq),[88] there is no 'bright line' to assist the Court in determining whether in cases such as the present, where the presence of an 'ipso facto' clause has rendered the trustee a bare trustee, the preferable course is to confer power pursuant to the Trustee Act or, instead, to make an appointment pursuant to the Supreme Court Act.

89 In Caterpillar Financial Australia Ltd v Ovens Nominees Pty Ltd,[89] Gordon J held that relief under section 63 of the Trustee Act would generally be appropriate in circumstances where:

(a) the company became a bare trustee of the assets of the trust upon the appointment of the liquidator;

(b) the company had acted only as trustee of the trust and in no other capacity;

(c) all assets owned by the company were held by it as trustee of the trust and all liabilities incurred by it were incurred in its capacity as trustee of the trust; and

(d) no new trustee had been appointed.

90 In St Georges Development Company Pty Ltd (in liq), Kennedy J adopted a similar approach.[90]

91 In Re Mandeville Group Pty Ltd (in liq),[91] where the liquidator sought powers under the Trustee Act to preserve, realise and distribute trust assets and to pay the liquidator's fees and expenses, alternatively appointment as receiver, I determined to proceed under the Trustee Act, in circumstances where the evidence before the court was that there would be no surplus available after paying sale costs, creditors and liquidator's costs for distribution to unitholders.[92]

92 More recently, in Mutton (liquidator) in the matter of Balsub Pty Ltd (in liq),__[93] Anastassiou J also endorsed the approach of Gordon J.

93 In the present case, orders having already been made under s 63 of the Trustee Act, and in circumstances where it appears (a) the operation of an ipso facto clause has rendered the company a bare trustee, (b) the company has acted only as trustee of the WOW Unit Trust, (c) all assets owned by the company were held by it as trustee of the trust and all liabilities incurred by it were incurred in its capacity as trustee of the trust, and (d) no new trustee has been appointed, my view is that the preferable course at this juncture is to confer such further powers as may reasonably be required by the administrator pursuant to the Trustee Act.

94 In the written outline, counsel for the administrator has foreshadowed seeking an order varying the orders made on 15 December 2020 so as to confer on the company pursuant to s 63 of the Trustee Act such powers as are necessary to enable the administrator to:

(a) market the Business for sale, prior to the second creditors' meeting on 19 January 2021[94] such that the administrator can test the market value of the Business to enable him to express an opinion in the s 439A report to creditors (to be issued on 11 January 2021) as to whether the creditors should resolve to accept a Deed of Company Arrangement (DOCA) proposal, resolve to appoint a liquidator, or return the company to the director's control; and

(b) close the business operations if he deems it appropriate to do so for commercial reasons.

95 In addition, if a resolution is passed at the second creditors' meeting to enter into a DOCA or to wind up the company and a liquidator is appointed, counsel has noted that any extant orders on 19 January 2021 will need to be varied such that they apply to the deed administrator or liquidator.

96 I will hear from the parties on the appropriate form of order.

[1] Affidavit of Joshua Taylor sworn on 11 December 2020 (Taylor affidavit), [16].

[2] Taylor affidavit, [16]. See also the financial statements for the WOW Unit Trust for 2019, exhibit JPT-4.

[3] The initial unit holders were Flybusters Pty Ltd (ACN 078 164 913) and Atkon Pty Ltd (ACN 006 646 877) ATF the Atkinson Family Unit Trust No. 2.

[4] Clause 6.1(a), first Taylor affidavit, exhibit JPT-3.

[5] Clause 6.1(b), first Taylor affidavit, exhibit JPT-3.

[6] Instrument of Appointment of Administrator, second Taylor affidavit, exhibit JPT-7.

[7] Minutes of a Meeting of Directors, second Taylor affidavit, exhibit JPT-7.

[8] Resolution of directors signed on 3 December 2020, second Taylor affidavit, exhibit JPT-7.

[9] ROCAP and 'Statement verifying Report under s 475(1)' of the Corporations Act, second Taylor affidavit, exhibit JPT-8.

[10] Email dated 11 December 2020, first Taylor affidavit, exhibit JPT-6.

[11] The unitholders' written submissions, at [6].

[14] Ibid, at [145] and see further at [146]-[157] where the relevant authorities are helpfully summarised.

[15] Ibid, at [146] (citations omitted).

[16] Kazar v Duus [1998] FCA 1378; (1998) 88 FCR 218, at 231 (Kazar). See also Downey v Crawford [2004] FCA 1264; (2004) 51 ACSR 182, at [147] (Downey v Crawford); McMaster v Eznut Pty Ltd [2006] WASC 109, and Smolarek v McMaster as administrator of Eznut Pty Ltd (No 2) [2008] WASCA 234 (Smolarek).

[17] Kazar [1998] FCA 1378; (1998) 88 FCR 218, at 231; Wagner v International Health Promotions (1994) 15 ACSR 419, at 421; In the matter of Warwick Keneally as administrator of Australian Blue Mountains International Cultural & Tourist Group Pty Ltd (admin apptd) [2015] NSWSC 937, at [74] (Warwick Keneally).

[18] Downey v Crawford, at 218 [196].

[19] In the matter of Lime Gourmet Pizza Bar (Charlestown) Pty Ltd [2015] NSWSC 244, at [42] (Lime Gourmet Pizza Bar).

[20] Ibid; see also Lime Gourmet Pizza Bar, at [22].

[21] Re Condor Blanco Mines Ltd [2016] NSWSC 1196 (Condor Blanco Mines), at [113].

[22] Administrator's outline of submissions, at [8].

[23] [2008] WASCA 234. See also, Warwick Keneally [2015] NSWSC 937, at [74] and Condor Blanco Mines, at [16].

[24] [2008] WASCA 234, at [55]-[56].

[26] [1998] FCA 1378; (1998) 88 FCR 218, at 232; [1998] FCA 1378; 29 ACSR 321, at 334 (emphasis in italics added) cited in ASIC v Planet Platinum [2016] VSC 120; (2016) 112 ACSR 570, at [21] and Re Gulf Energy Limited [2019] NSWSC 1637, at [22] (citing an extract from In the matter of Lime Gourmet Pizza Bar (Charlestown) Pty Ltd (formerly under administration); Lime Gourmet Pizza Bar (Darby Street) Pty Ltd (formerly under administration) (in liq); Lime Gourmet Pizza Bar (Hamilton) Pty Ltd (formerly under administration) [2015] NSWSC 244, at [21]-[22]).

[27] (2001) 189 ALR 370; [2001] NSWSC 1193, at [224] (emphasis in italics added), cited in ASIC v Planet Platinum [2016] VSC 120; (2016) 112 ACSR 570, at [23]. See also, In re Lime Gourmet Pizza Bar (Charlestown) Pty Ltd (formerly under administration); Lime Gourmet Pizza Bar (Darby Street) Pty Ltd (formerly under administration) (in liq); Lime Gourmet Pizza Bar (Hamilton) Pty Ltd (formerly under administration) [2015] NSWSC 244, [21]-[22] cited in Re Gulf Energy Ltd [2019] NSWSC 1637, at [22].

[28] Re Condor Blanco Mines [2016] NSWSC 1196, at [58] and Downey v Crawford, [2004] FCA 1264; (2004) 51 ACSR 182, at 218 [196].

[30] Warwick Keneally [2015] NSWSC 937, at [96].

[32] Ibid, at [17]-[18], [20], [26] (emphasis in original, footnotes omitted).

[33] See, for example, Spacorp Australia Pty Ltd v Fitzgerald [2001] VSC 61, at [31]; Aloridge P/L (Provisional Liquidator Appointed) v Christianos, G. [1994] FCA 972, at [11]; Singleton & Anor v Andreones Pty Ltd [2005] NSWSC 730.

[34] Re Nillumbik Community Church Incorporated (In Administration) [2010] VSC 136, at [30] (Re Nillumbik).

[35] Condor Blanco Mines [2016] NSWSC 1196, at [149].

[36] Howard Smith Ltd v Ampol Petroleum Ltd [1974] 1 NSWLR 68.

[37] Condor Blanco Mines [2016] NSWSC 1196, at [154]. See also In the matter of Condor Blanco Mines Ltd (No 2) [2016] NSWSC 1304 (Condor Blanco Mines Ltd (No 2)), at [8]-[14] and [61].

[38] ASIC v Planet Platinum [2016] VSC 120; (2016) 112 ACSR 570, at [57]; Re Gulf Energy Ltd [2019] NSWSC 1637, at [15], [18] (and the cases cited therein).

[39] Dolores Correa and The Spanish Club Limited (subject to Deed of Company Arrangement) v Kenneth Michael Whittingham (No 3) [2012] NSWSC 526, at [96].

[40] Planet Platinum [2016] VSC 120; (2016) 112 ACSR 570, at [57]; Re Gulf Energy Ltd [2019] NSWSC 1637, at [15], [18] (and the cases cited therein).

[41] Hayes v Doran (No 2) [2012] WASC 486, [263] and the cases cited therein (as extracted in Re Gulf Energy Ltd, at [18]).

[42] Dolores Correa and The Spanish Club Limited (subject to Deed of Company Arrangement) v Kenneth Michael Whittingham (No 3) [2012] NSWSC 526, [83], per Black J (as noted in re Gulf Energy Ltd, [19]).

[47] Transcript, 17.12.20, at T39 lines 18-19.

[48] Transcript, 17.12.20, at T40 lines 23-24.

[51] Transcript 17.12.20, at T35 line 29-T36 line 1.

[56] Transcript, 17.12.20, at T39 lines 24-26.

[57] Transcript, 17.12.20, at T40 lines 6-7.

[58] Transcript, 17.12.20, at T49 lines 22-23.

[59] Transcript, 17.12.20, at T40 lines 30-31.

[61] Transcript, 17.12.20, at T40 lines 1-24.

[64] Transcript, 17.12.20, at T30 line 31-T31 line 1-3.

[65] Minutes of as Meeting of Directors, second Taylor affidavit, exhibit JPT-7.

[66] Transcript, 17.12.20, at T28 line 25-28, T29 lines 5-12 and T32 lines 9-10.

[67] Unitholders' outline of submissions, at [47].

[68] Transcript, 17.12.20, at T27 lines 11-15.

[69] Transcript, 17.12.20, at T30 lines 23-31; T31 lines 1-3.

[70] Unitholders' outline of submissions, at [48].

[71] Affidavit of Joshua Taylor sworn 17 December 2020 (third Taylor affidavit), at [9(f)].

[72] Third Taylor affidavit, at [9(h)], confirmed by Mr Mansfield under cross examination.

[73] The Statement verifying Report under s 475(1) dated 11 December 2020 attached to the ROCAP (second Taylor affidavit, exhibit JPT-8) records a liability to the Australian Taxation Office of $543,418.25.

[74] Transcript, 17.12.20, at T36 lines 4-9.

[75] Transcript, 17.12.20, at T36 lines 12-19.

[77] Transcript, 17.12.20, at T45 line 3.

Re Windows on the World Steel Windows Pty Ltd (In Administration) [2020] VSC 880 (22 December 2020)

At a glance

Court

Decision date

Before

Source

Judgment (217 paragraphs)

Legislation Cited (3)

Cases Cited (3)