Case: Bank of Melbourne Ltd v HPM Pty Ltd (in liq) (1997) 26 ACSR 110
Outcome: applied
One of the powers which the Court might exercise if Pan were being wound up by the Court is the power to apply to the Court for directions in relation to any particular matter arising under the winding up. This Court has previously heard and granted similar applications under both ss 479(3) and 511(1). A useful example of this is the decision of Lee J in Bank of Melbourne Ltd v HPM Pty Ltd (in liq) (1997) 26 ACSR 110. See also the decision of Hansen J in UTSA Pty Ltd (in liq) v Ultra Tune Australia Pty Ltd (1996) 21 ACSR 251 , affirmed on appeal by the Court of Appeal in (1996) 21 ACSR 457 (per Hayne JA, Brooking and Phillips JJA concurring). 34 A number of decisions have confirmed that the power under s 477(2)(c) includes the power to cause the company to assign a cause of action to a third party. The leading authorities were referred to by Lee J in Bank of Melbourne at 112. 35 His Honour observed at 112 that the power of sale under s 477(2)(c) is similar to that conferred on a trustee in bankruptcy by ss 134(1)(a) and 135(1)(a) of the Bankruptcy Act 1966 (Cth) to dispose of the property of a bankrupt. His Honour observed that it entitles the liquidator to sell a bare right of action to a stranger, whether for a cash payment or on terms that the stranger will pay to the company part of the proceeds of the litigation provided only that the right of action is property. His Honour also observed at 112 that s 9 of the Corporations Law (which was then in force) defined "property" to include a chose in action. 36 Unlike the Bankruptcy Act , the Corporations Law did not vest the property of the company in liquidation in the liquidator unless an order to this effect was made by the Court. However, as Lee J pointed out, the lack of such an order will not limit the liquidator's power to assign a company's right of action provided that in such a case the company remains the assignor for the purposes of the transaction. 37 In the present case the agreement in cl 10.1 of the Deed is that the liquidators will cause Pan to assign the causes of action against the Commonwealth. The assignment is an absolute one. 38 It seems to me to follow from what was said by Lee J and from the various authorities to which his Honour referred that in the present case the proposed assignment of the causes of action is within the power of the liquidator. See also the comparatively recent decision of the High Court in Campbells Cash &amp; Carry Pty Ltd v Fostif Pty Ltd [2006] HCA 41 ; (2006) 229 CLR 386. 39 The second question is whether the liquidators are justified in entering into the assignment. Lee J pointed out in Bank of Melbourne that in determining whether a liquidator should be directed to make an assignment, a Court should consider whether the assignment would lead to vexatious or improper litigation. His Honour observed that there is no obligation on either the Court or the liquidator to conduct an investigation of the likelihood of success of the proceeding and that it will be quite impractical to do so in an application of this nature. 52 I should mention that the application before me has been made ex parte . In Bank of Melbourne , Lee J observed at 112 to 113 that this is an appropriate course. His Honour referred to a number of leading authorities including decisions of McClelland CJ in Re BPTC Limited (1996) 14 ACLC 845 at 846 and Re G B Nathan v Co Pty Ltd (1991) 24 NSWLR 674.