Case: Northbourne Developments Pty Ltd v Reiby Chambers Pty Ltd (1989) 19 NSWLR 434
Outcome: cited
Forestview has applied for funding for its legal representation in the winding up proceedings on the basis that it requested funding from the receivers and managers and was refused by them. It relies upon ss 423 and 1321 of the Act as the sources of the Court's power to review that refusal and make an order that funding be provided. As in the like case of Australian Securities and Investments Commission v Bowesco Pty Ltd (Receiver and Manager Appointed) (No 2) [2006] FCA 1493 , I do not consider that any inquiry pursuant to s 423 of the Act is warranted nor is it an appropriate vehicle for dealing with the question which arises pursuant to the liberty to apply given on 31 August 2006. In Northbourne Developments Pty Ltd v Reiby Chambers Pty Ltd (1989) 19 NSWLR 434 at 438, McLelland J said of the former s 420 of the Companies (New South Wales) Code , which provided for inquiries into complaints relating to liquidators in terms relevantly identical to s 423 of the Act: 'Section 420 is concerned with aspects of the conduct of liquidators which are liable to attract sanctions or control for what might broadly be described as disciplinary reasons. Although the section applies to any liquidator it has particular significance in the case of a liquidator appointed by the court who is, in that sense, an officer of the court, and to a liquidator whose qualification for office is that he is a registered official liquidator or a registered liquidator with the public accreditation that such registration involves and who is in that sense a public officer.' In Belvista Pty Ltd v Murphy (1993) 11 ACSR 628, his Honour revisited the point in relation to the like provision in s 536 of the former Corporations Law and said (at 630): 'In conclusion, I wish to add that where, as here, a creditor or other interested party wishes to challenge the decision of a person in the position of a scheme administrator, or a liquidator, apparently arrived at in good faith, it is generally inappropriate to utilise the "complaint" provisions of s 536 of the Corporations Law rather than the "appeal" provisions of s 1321. As I observed in Northbourne Developments v Reiby Chambers Pty Ltd [(1989) 18 NSWLR 434 at 438] in relation to the predecessor of s 536, that section is concerned with aspects of the conduct of liquidators and others which are liable to attract sanctions or control for what might be broadly described as disciplinary reasons.' I respectfully agree with and adopt what McLelland J said in those two cases in its application to s 423 of the Act. 39 McLelland J discussed the term "person aggrieved" in s 538 of the Companies (New South Wales) Code in Northbourne Developments. He referred to the observations of James LJ in Ex parte Sidebotham; Re Sidebotham (1880) 14 Ch D 458 concerning s 71 of the Bankruptcy Act 1869 (UK) (at 465): '... but the words "person aggrieved" do not really mean a man who is disappointed of a benefit which he might have received if some other order had been made. A "person aggrieved" must be a person who has suffered a legal grievance, a man against whom a decision has been pronounced which has wrongfully deprived him of something, or wrongfully refused him something, or wrongfully affected his title to something.' McLelland J, correctly in my respectful opinion, said that the remarks of James LJ should not be treated as an exhaustive definition. But the concept encapsulated in the phrase "legal grievance" was, he thought, "sound in principle". He made the important point that "... the wider the class of persons entitled to appeal to the court in respect of an act, omission or decision of a liquidator (or provisional liquidator) the greater the scope for potential disruption of an orderly administration" (438).