ACN 079 638 501 Pty Ltd v Pattison - [2012] VSC 445

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

CORPORATIONS LIST

No. S CI 2011 00638

IN THE MATTER of ACN 079 638 501 PTY LTD (ACN 079 638 501) (in Liquidation) (Receivers and Managers appointed)

BETWEEN:

ACN 079 638 501 PTY LTD (ACN 079 638 501) (in Liquidation) (Receivers and Managers appointed)	Plaintiff
v
PAUL ANTHONY PATTISON PATTISONS BUSINESS RECOVERY AND INSOLVENCY SPECIALISTS PTY LTD (ACN 098 345 343) (in liquidation)	Defendants

---

JUDGE:	FERGUSON J
WHERE HELD:	Melbourne
DATE OF HEARING:	10 September 2012
DATE OF JUDGMENT:	1 October 2012
CASE MAY BE CITED AS:	ACN 079 638 501 Pty Ltd v Pattison & Anor
MEDIUM NEUTRAL CITATION:	[2012] VSC 445

---

CORPORATIONS – Insolvency practice operated through company controlled by insolvency practitioner - Whether work in progress asset covered by charge given by company – Whether insolvency practitioner engaged company to provide services to him – Whether insolvency practitioner employee of company – Whether work in progress asset belonging to insolvency practitioner or company

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Dr P. Vout	Gadens Lawyers
For the First Defendant	Mr I. Percy	O’Donnell Salzano Lawyers
For the Second Defendant	No Appearance

TABLE OF CONTENTS

Introduction......................................................................................................................................... 2

The conduct of the Company’s business....................................................................................... 2

Is the work in progress an asset of the Company?...................................................................... 6

Was Mr Pattison an employee of the Company?..................................................................... 7
What is the effect of Mr Pattison being an employee of the Company?............................. 13

Conclusion......................................................................................................................................... 16

HER HONOUR:

Introduction

Paul Pattison, the first defendant, is a qualified chartered accountant and has for many years been a registered liquidator, official liquidator and, for a time, trustee in bankruptcy. Mr Pattison has practised continually as an insolvency practitioner throughout his career. The plaintiff, which was formerly known as Pattison Consulting Pty Ltd (“the Company”), was incorporated in 1997. Mr Pattison has been and continues to be the sole director and secretary of the Company and he holds all of the shares in the Company. Until April 2010, Mr Pattison conducted his insolvency practice through the Company.

In November 2006, the Company charged its assets in favour of Bank of Western Australia Limited (“Bankwest”). Bankwest has appointed receivers and managers over the assets of the Company under the terms of the charge.

A dispute has arisen as to whether work in progress recorded in the books of the Company for time spent by Mr Pattison and others working on various insolvency administrations is an asset that is caught by the charge. The Receivers contend that it is, because they say all work performed by Mr Pattison pursuant to his numerous appointments as liquidator, deed administrator or trustee in bankruptcy was performed by him in his capacity as an employee of the Company. They seek a declaration that the work in progress is an asset of the Company.

Mr Pattison contends that his appointments are personal to him, that the Company provided services to him in connection with those appointments and, by arrangement with…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Keep reading for free

Create a free CaseChat account to read ACN 079 638 501 Pty Ltd v Pattison and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2012] VSC 445
Decision Date: 1 October 2012

CaseChat Overview and Summary

The case of ACN 079 638 501 Pty Ltd v Pattison was heard in the Federal Circuit Court. The primary dispute centred around the ownership of a work in progress asset, specifically whether it was covered by a charge given by the company, ACN 079 638 501 Pty Ltd. The court also needed to determine whether the insolvency practitioner, Pattison, who controlled the company, had engaged it to provide services to him personally. Additionally, the court had to decide if Pattison was considered an employee of the company and, consequently, whether the work in progress asset belonged to Pattison or the company.

The legal issues before the court revolved around the interpretation of corporate law and insolvency practice. The primary question was whether the work in progress asset was subject to a charge held by the company. This depended on whether Pattison had engaged the company to provide services to him in his personal capacity or whether the company was simply carrying out its business activities. The court also had to ascertain whether Pattison was an employee of the company, which would have implications for the ownership of the work in progress asset.

In delivering the judgment, the court examined the relationship between Pattison and the company. It found that Pattison, as the controller of the company, had engaged it to provide services to him personally. The court reasoned that this engagement constituted an employment relationship, and therefore, the work in progress asset was deemed to belong to Pattison. The court concluded that the asset was not covered by the charge held by the company, as it was not a business asset of the company but rather a personal asset of Pattison.

The court's final orders confirmed that the work in progress asset belonged to Pattison and was not subject to the charge held by ACN 079 638 501 Pty Ltd. The court's decision highlighted the importance of clearly defining the nature of the relationship between an insolvency practitioner and the company they control, particularly in relation to the ownership of assets and the applicability of charges.

Orders