Case: Australasian Memory Pty Ltd v Brien [2000] HCA 30 ; (2000) 200 CLR 270
Outcome: cited
In Australasian Memory Pty Ltd v Brien [2000] HCA 30 ; (2000) 200 CLR 270, the joint judgment of Gleeson CJ, McHugh, Gummow, Hayne and Callinan JJ acknowledged the width of the powers conferred by s 447A. Their Honours made the following general propositions about its operation: 1. Section 447A is not properly described as a general power standing apart from Pt 5.3A. It is an integral part of the legislative scheme for which that Part provides. In particular it can apply to alter timetables prescribed by other provisions of Pt 5.3A (at 281 [24]). 2. The words of s 447A do not suggest that it cannot be used if, by operation of the provisions of Pt 5.3A , the administration of the relevant company has come to an end. The section deals with a 'particular company' and the operation of Pt 5.3A in relation to it (at 282 [26]). 3. The words of the section 'how this Part is to operate' look to the future but do not preclude the making of orders with future effect but in respect of past matters or events ( at 282 [26]). 4. In connection with the effect of an order under s 447A on accrued or vested rights, two types of case may arise following termination of an administration: (i) Steps are taken by members or officers of the company or by third parties predicated upon termination of the administration other than by entering a deed of company arrangement or going into liquidation eg shares in the company are traded; directors resume the management of the company and deal with its assets or take other like steps on the assumption that the administration is at an end and there is neither a deed of company arrangement nor a winding up. (ii) Steps are taken that are predicated upon the company having validly entered a deed of company arrangement or gone into liquidation (at 283 [30]). To the extent that any steps have been taken following the termination of the Deed in this case and the winding up resolution, they fall into the second category of case identified by the High Court. The court left open the question whether there is power to make an order under s 447A in the first case where the administration has ended (at 284 [32]). In the second kind of case however: '... there would be no inconsistency between the varied operation of Pt 5.3A and the rights that have accrued in the intervening period, if the order gave legal validity to the premise for the parties' conduct.' It may be accepted that in this case there is a possibility, however small, that accrued rights may be affected by an order terminating the winding up, setting aside the termination of the Deed and giving effect to the proposed variation. Under that variation however, the Deed is to be terminated in any event after its conditions have been fulfilled. There is no suggestion of any third party dealings which could be adversely affected by the orders proposed. In any event, they can be accommodated by liberty to apply, limited in time, to vary the orders made to ensure the protection of any accrued right. 40 I am satisfied that I can set aside the termination of the Deed on the basis that the order operates prospectively. The order setting aside the termination will take effect so that the rights and obligations of all parties will be determined as though the Deed continued in effect from the meeting of creditors and had not been terminated. To the extent that there may be any particular direction necessary to take account of any rights or obligations that have accrued since the Deed was terminated, there will be liberty to apply within the next 28 days for a suitable qualifying order. Given that all creditors have been given notice and none has expressed an objection, I regard the probability of such an application as small, but nevertheless will allow such an application within that time.