Case: Re GB Nathan &amp; Co Pty Ltd (In liq) (1991) 24 NSWLR 674
Outcome: cited
The facilities provided by ss 479(3) and 511 have a long ancestry. Section 479(3) of the former Corporations Law was considered by McLelland J in Re GB Nathan &amp; Co Pty Ltd (In liq) (1991) 24 NSWLR 674. He traced its origins back to the Joint Stock Companies Winding Up Act 1848 (UK) which allowed an official manager to apply for directions from the Master from time to time. A similar facility has long existed for trustees, administrators and executors. As McLelland J said (at 677): These various statutory provisions for directions were a development from the practice of the Court of Chancery under the general law in giving directions to those entrusted with the administration of property under the control of the court. Two main classes of such persons were (1) trustees of trust property, or executors or administrators of a deceased estate, under administration by the court pursuant to a decree for general administration, and (2) receivers (and managers) appointed by the court in respect of property the subject of litigation. 48 A direction given or a question determined under s 479(3) or s 511, as the case may be, will protect the liquidator who acts in accordance with the direction or determination. In relation to a determination under s 511 it may be an open question whether it establishes a res judicata between the liquidator and any parties affected by it who are named as defendants in the application but neither direction nor determination gives rise to a res judicata as between parties who may have competing interests affected by it: Equity Funds of Australia (In Liq) (1977-78) CLC 40-303 at 29,253-29,254 (Bowen CJ (in Eq)). McLelland J said in GB Nathan &amp; Co 24 NSWLR 674 (at 677): The protection of the official administrator, acting under a direction of the court, from personal liability would not however affect the rights of creditors and beneficiaries as between themselves. So far as s 479(3) is concerned, McLelland J was of the view that it does not enable the court to make binding orders in the nature of judgments and that the function of an application for directions under that section is to give the liquidator advice about the proper course of action in the liquidation and not to determine rights and liabilities arising from pre-liquidation transactions (at 679). See also Re JW Murphy and PC Allen (1996) 19 ACSR 569 at 570 (McLelland CJ). 49 On the other hand there is sufficient flexibility in the procedures of the Court to enable proceedings begun as an application for directions to be converted into proceedings for the determination of substantive rights: Re GB Nathan &amp; Co 24 NSWLR 674 at 680. In Melbourne Asset Management Nominees 49 FCR 334, Northrop J said (at 352): It has been accepted that Courts have power to make final orders in preference claims on an application by a liquidator under sections similar to s 479(3) of the Corporations Law . There is no logical reason why final orders binding on other persons cannot be made on applications under s 479(3) with respect to other subject matters. And further (at 352): I can see no reason why binding orders cannot be made where the parties affected have been given the opportunity to be heard.