BENNETT & CO -v- CLC CORPORATION & ORS [2001] WASCA 51

Reported Decision:	(2001) 23 WAR 344
Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2001] WASCA 51
Court:	THE FULL COURT (WA)
Case No:	FUL:91/2000	Heard:	15 DECEMBER 2000
Coram:	PIDGEON J WALLWORK J MURRAY J	Delivered:	2/03/01
No of pages:	17	Judgment Part:	1 of 1
Result:	Appeal allowed Appeal pursuant to s 1321 by first respondent dismissed
PDF Version

Parties:	BENNETT & CO CLC CORPORATION SIMON ANDREW READ JEFFREY LAWRENCE HERBERT
Catchwords:	Liens Corporations Law, s 530B(1) Meaning of words "such a lien is not otherwise prejudiced" Solicitors had lien over certificates of title due to costs owing Whether possessory lien lost if documents released to liquidator pursuant to s 530B(1) Whether creditor of company in liquidation aggrieved by liquidator paying the costs owed in return for the certificates of title
Legislation:	Corporations Law, s 530B(1), s 1321
Case References:	Barratt v Gough-Thomas [1951] 1 Ch 242 Bolster v McCallum [1966] 2 NSWR 660 Buddle Findlay v Isaac & Anor (1996) 7 NZCLC 26132 In re Aveling Bathwood Ltd [1989] 1 WLR 360 In re South Essex Estuary and Reclamation Co; ex parte Paine and Layton Vol 4 Ch App 215 In re Toleman v England; Ex parte Bramble [1879-80] 13 Ch 885 Albemarie Supply Company Ltd v Hind & Co [1928] 1 KB 307 Caldwell v Sumpters [1972] 1 Ch 479 Hall v Richards (1961) 108 CLR 84 Hughes v Hughes [1958] 2 All ER 366 Legg v Evans (1890) 6 M & W 36 Mercantile Credits Ltd v Jarden Morgan Australia Ltd [1991] 1 Qd R 407 Patrick Stevedores Operations No. 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1 Re Electronic Learning Systems International Pty Ltd (In liq) [1998] 2 Qd R 144 Re Gleebs Pty Ltd [1993] VLR 293 Re Keever, A Bankrupt [1967] Ch 182 Re Partridge; Ex parte McDonald (1961) SR (NSW) 622 West Wake Price & Co v Ching [1957] 1 WLR 45

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE FULL COURT (WA) CITATION : BENNETT & CO -v- CLC CORPORATION & ORS [2001] WASCA 51 CORAM : PIDGEON J

WALLWORK J

MURRAY J

HEARD : 15 DECEMBER 2000 DELIVERED : 2 MARCH 2001 FILE NO/S : FUL 91 of 2000 BETWEEN : BENNETT & CO

Appellant

AND

CLC CORPORATION

First Respondent

SIMON ANDREW READ

JEFFREY LAWRENCE HERBERT

Second Respondents

Catchwords:

Liens - Corporations Law, s 530B(1) - Meaning of words "such a lien is not otherwise prejudiced" - Solicitors had lien over certificates of title due to costs owing - Whether possessory lien lost if documents released to liquidator pursuant to s 530B(1) - Whether creditor of company in liquidation aggrieved by liquidator paying the costs owed in return for the certificates of title

(Page 2)

Legislation:

Corporations Law, s 530B(1), s 1321

Result:

Appeal allowed

Appeal pursuant to s 1321 by first respondent dismissed

Representation:

Counsel:

Appellant :…

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: [2001] WASCA 51
Decision Date: 2 MARCH 2001

CaseChat Overview and Summary

Bennett and Co, acting as solicitors for a company, sought to recover unpaid costs from CLC Corporation. Their claim was based on a lien held over the company's certificates of title. The dispute arose after the company went into liquidation, and the liquidator released the certificates to Bennett and Co pursuant to section 530B(1) of the Corporations Law. Bennett and Co argued that their possessory lien was not lost and that the liquidator should have paid the costs owed to them instead of releasing the certificates. The court was required to determine whether the release of the certificates under section 530B(1) extinguished the solicitor's lien, and if the liquidator's actions prejudiced the lien. The central issue was whether the words "such a lien is not otherwise prejudiced" in section 530B(1) meant that the lien was lost if the documents were released to the liquidator, even if the creditors were not aggrieved.

The court considered the language of section 530B(1) and the purpose of the provision, which was to facilitate the liquidation process by allowing the liquidator to deal with the assets of the company without unnecessary legal impediments. The court held that the phrase "such a lien is not otherwise prejudiced" did not mean that the lien was lost if the documents were released, but rather that the lien was not lost if the creditor was not aggrieved by the release. The court found that Bennett and Co's lien was not prejudiced because the liquidator's actions did not cause any harm to the solicitors' interests. The court also noted that the liquidator was entitled to release the certificates to Bennett and Co, as they were creditors of the company, and the release did not prejudice their lien.

As a result, the court held that the solicitor's lien over the certificates of title was not lost when the liquidator released the certificates to Bennett and Co pursuant to section 530B(1). The court found that the liquidator's actions did not prejudice the lien, and Bennett and Co's claim for unpaid costs was accordingly dismissed. The appeal was allowed, and the appeal pursuant to section 1321 by the first respondent was dismissed. The court's decision clarified the meaning of the phrase "such a lien is not otherwise prejudiced" in section 530B(1) of the Corporations Law and provided guidance on the relationship between possessory liens and the liquidation process.

Orders

Orders of the court

Appeal allowed

Appeal pursuant to s 1321 by first respondent dismissed

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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