Auzhair Supplies Pty Limited v Roy Gerace

[2014] HCASL 231

AUZHAIR SUPPLIES PTY LIMITED

v

ROY GERACE & ORS

[2014] HCASL 231
S144/2014

1. The applicant seeks special leave to appeal against orders of the Court of Appeal of the Supreme Court of New South Wales (Beazley P, Meagher and Emmett JJA) allowing an appeal against orders of the Supreme Court of New South Wales (Brereton J).

2. The first, second and third respondents were the directors and shareholders of the applicant.  Between July 2002 and July 2003, Mr and Mrs Greenaway advanced $600,000 to the applicant.  In July 2004, the applicant entered into a written loan agreement with the Greenaways, under which the applicant agreed to repay the Greenaways by July 2007.

3. The fourth respondent was incorporated in June 2003.  The first, second and third respondents, their wives and the Greenaways were the shareholders of the fourth respondent.  In or before February 2005, the first, second and third respondents, their wives and the Greenaways agreed to transfer the assets of the applicant to the fourth respondent.

4. In June 2005, the applicant was deregistered on the application of the first respondent.  At the time he made the application, the first respondent declared that the applicant had no liabilities.  In fact, the applicant remained liable to repay the Greenaways.

5. In November 2010, on the application of the Greenaways, the Supreme Court of New South Wales (Ward J) made orders for the reinstatement and winding up of the applicant[1]. 

   [1]In the matter of Auzhair Supplies Pty Ltd (a deregistered company) and Auzhair 1 Pty Ltd - Greenaway v Auzhair 1 Pty Ltd [2010] NSWSC 1339.

6. In December 2011, the applicant brought proceedings against the respondents, alleging that the first, second and third respondents had breached their equitable duties as directors by transferring away the company's assets.  The respondents argued that the claim for breaches of equitable duties was barred, on the basis that the six-year limitation period for claims for breaches of the equivalent statutory duties[2] applied by analogy.

   [2]See Corporations Act 2001 (Cth), ss 180-183 and 1317K.

7. The primary judge held that the applicant's claim was not barred by statute or by laches.  The Court of Appeal allowed the respondents' appeal, holding that the applicant's claim for breaches of equitable duties was barred by analogy.  The applicant now seeks special leave to appeal from that decision.

8. We see no reason to doubt the correctness of the decision of the Court of Appeal.  An appeal to this Court would enjoy insufficient prospects of success to warrant a grant of special leave to appeal.

9. Pursuant to r 41.11.1 we direct the Registrar to draw up, sign and seal an order dismissing the application with costs.

K.M. Hayne
10 December 2014 S.M. Crennan