Australian Kitchen Industries Pty Ltd v Albarran - [2004] NSWSC 1047

Reported Decision:
51 ACSR 604

Supreme Court

CITATION: Australian Kitchen Industries Pty Ltd v Albarran & Anor [2004] NSWSC 1047

HEARING DATE(S): 24/09/04

JUDGMENT DATE:
11 November 2004

JURISDICTION:
Equity Division
Corporations List

JUDGMENT OF: Barrett J

DECISION: Appeal dismissed with costs

CATCHWORDS: CORPORATIONS - voidable transactions - appeal from decision of Local Court - identification of relevant transaction - whether within statutory provisions

LEGISLATION CITED: Corporations Act 2001 (Cth), ss.588F, 588FA, 588FB, 588FC, 588FD
Local Court (Civil Claims) Act 1970, s.69

CASES CITED: Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139
Bartercard Ltd v Wily (2001) 39 ACSR 94
Hope v Bathurst City Council (1980) 144 CLR 1
Re Emanuel (No 14) Pty Ltd; Macks v Blacklaw & Shadforth Pty Ltd (1997) 24 ACSR 292
Somerset Marine Inc v New Cap Reinsurance Corporation [2003] NSWCA 338

PARTIES :
Australian Kitchen Industries Pty Limited - Plaintiff
Richard Albarran as Liquidator of W&J Kitchens Pty Limited - First Defendant
W&J Kitchens Pty Limited (In Liquidation) - Second Defendant

FILE NUMBER(S): SC 4231/04

COUNSEL: Mr I Mescher - Plaintiff
Mr D R S Creais, Solicitor - Defendants

SOLICITORS: Comino Prassas - Plaintiff
Bartier Perry - Defendants

LOWER COURTJURISDICTION: Local Court

LOWER COURT FILE NUMBER(S): 8776/02

LOWER COURT
JUDICIAL OFFICER : Magistrate P J O'Shane

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

BARRETT J

THURSDAY 11 NOVEMBER 2004

4231/04 – AUSTRALIAN KITCHEN INDUSTRIES PTY LIMITED v RICHARD ALBARRAN & ANOR

JUDGMENT

1 The plaintiff (which I shall call “AKI”) appeals to the court from a decision of the Local Court at the Downing Centre (Magistrate P.J. O’Shane) in which it was ordered on 19 December 2003 that judgment and verdict be entered for the present defendants (plaintiffs in the Local Court) upon a statement of liquidated claim pleading a claim for relief under s.588FF(1) of the Corporations Act 2001 (Cth). The present defendants are Mr Albarran as liquidator of W&J Kitchens Pty Ltd (which I shall call “W&J”) and that company itself.

2 It is common ground that, on 4 March 2002, W&J became subject to the form of creditors voluntary winding up produced by s.446A of the Corporations Act as a sequel to voluntary administration under Part 5.3A. It is also common ground that the antecedent voluntary administration commenced on 5 February 2002 which was accordingly (and by virtue of the provisions of Division 1A of Part 5.6) the “relation-back day” in relation to the winding up. It is accepted that, before 10 December 2001, W&J was a franchisee of and sub-lessee from AKI under contractual arrangements which involved W&J’s supplying to customers kitchens or kitchen renovations sourced from AKI. W&J operated from premises at Blacktown of which AKI was sublessor to W&J. The shop or showroom was identified as a “Nobby Kitchen” outlet, that being a brand name or business name of AKI. It was AKI that manufactured or obtained the components that were delivered to a particular customer to construct or renovate that…

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.

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Details

Case: [2004] NSWSC 1047
Decision Date: 11 November 2004

CaseChat Overview and Summary

The appeal before the court involved Australian Kitchen Industries Pty Ltd, the appellant, and Albarran, the respondent. The dispute centred around a voidable transaction under the Corporations Act 2001, specifically whether a transaction was voidable under section 588FA of the Act. The matter was heard in the Local Court and the appellant sought to appeal the decision made by that court.

The primary legal issue before the court was to determine whether the transaction in question was a voidable transaction under the statutory provisions of the Corporations Act 2001. The court had to consider whether the transaction met the criteria outlined in section 588FA of the Act, which provides that a transaction is voidable if it was entered into at a time when the company was insolvent or became insolvent as a result of the transaction. The court also had to consider whether the transaction was made within the relevant time period as outlined in section 588FB of the Act.

The court found that the transaction in question was indeed voidable under the statutory provisions of the Corporations Act 2001. The court found that the company was insolvent at the time the transaction was entered into and that the transaction rendered the company insolvent. The court also found that the transaction was made within the relevant time period as outlined in section 588FB of the Act. The court held that the appellant had failed to establish that the transaction was not voidable and therefore dismissed the appeal. The court found that the decision of the Local Court was correct and upheld the decision.

The court did not make any specific orders in relation to the appeal. However, the decision of the Local Court that the transaction was voidable remained in place. This meant that the transaction could be set aside and the respondent could recover any money or property transferred as a result of the transaction.

Orders