CB Darvall and Darvall v Moloney - [2006] QSC 345

SUPREME COURT OF QUEENSLAND

CITATION:

CB Darvall & Darvall v Moloney & Anor [2006] QSC 345

PARTIES:

AUSTRALIAN SECURITIES AND INVESTMENT COMMISSION
(applicant)
v
ATLANTIC 3 FINANCIAL (AUST) PTY LTD
(first respondent)
and
FREDERICK MICHAEL ACKER
(second respondent)
and
GERILYN MARIE POLANSKI
(third respondent)

CB DARVALL & DARVALL (A FIRM)
(appellants)
v
GREGORY MICHAEL MOLONEY and PETER IVAN FELIX GEROFF AS COURT APPOINTED LIQUIDATORS AND TRUSTEES OF THE UNREGISTERED MANAGED INVESTMENT SCHEMES KNOWN AS THE MACKAY LEAGUES CLUB LIMITED SCHEME, THE NUMINKO PTY LTD SCHEME AND THE CLEARVIEW PROPERTIES SCHEME, FORMERLY CONDUCTED BY ATLANTIC 3 FINANCIAL (AUST) PTY LTD ACN 056 262 723 (IN LIQUIDATION)
(respondents)

FILE NO:

S4426 of 2003

DIVISION:

Trial Division

PROCEEDING:

Appeal against rejection of proofs of debt - determination of preliminary questions

DELIVERED ON:

9 November 2006
Consent order regarding costs made 16 November 2006

DELIVERED AT:

Supreme Court, Brisbane

HEARING DATE:

31 July, 1 August 2006

JUDGE:

Wilson J

ORDER:

1) The answers to the preliminary questions are contained in the reasons for judgment.

2) By consent, the appellant, CB Darvall & Darvall, is to pay the respondent liquidators’ costs of and incidental to the determination of the preliminary questions, including the hearing on 31 July and 1 August 2006, to be assessed on the standard basis.

CATCHWORDS:

CORPORATIONS – MANAGED INVESTMENT SCHEMES – PROOFS OF DEBT REJECTED BY LIQUIDATORS – APPEALS AGAINST LIQUIDATORS’ DECISIONS – where the liquidators of a company which had conducted unregistered managed investment schemes rejected the proofs of debt of a solicitors’ firm – where the firm appeals those decisions – where the appellants are asking the court to answer preliminary questions

ESTOPPEL – FORMER ADJUDICATION – JUDGMENT INTER PARTES – ISSUE ESTOPPEL – RESPECTING WHAT MATTERS DECISION CONCLUSIVE – MATTERS NECESSARY TO THE DECISION – where this court previously determined that the appellants did not have a solicitor’s lien over title deeds for outstanding legal fees allegedly owed by company which had conducted an unregistered managed investment scheme – whether the liquidators were estopped or otherwise prevented from now asserting that the company does not have a right of indemnity out of the trust property of other schemes, and that the appellant is not entitled to be subrogated to that claim for indemnity

PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – TRIAL – OTHER MATTERS – SUMMARY DETERMINATION OF ISSUES – where the court was asked to answer two sets of preliminary questions – where, for one set of questions, the parties agreed on the facts upon which the court should base its answers – where, for the other set of questions of mixed fact and law, the court was asked to assume certain facts and contentions – whether there was sufficient evidence before the court to determine some of the questions

Corporations Act 2001 (Cth), s 601ED(5), s 601EE
Uniform Civil Procedure Rules 1999 (Qld), rr 482-486

Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334, cited
Brewer v Brewer (1953) 88 CLR 1,…

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: [2006] QSC 345
Decision Date: 9 November 2006 Consent order regarding costs made 16 November 2006

CaseChat Overview and Summary

In the case of CB Darvall and Darvall v Moloney, the dispute arose between a solicitors' firm and liquidators of a company involved in unregistered managed investment schemes. The liquidators had rejected proofs of debt submitted by the solicitors' firm, prompting an appeal from the latter. The primary issue before the court was whether the liquidators could assert that the company lacked a right of indemnity from trust property of other schemes and that the solicitors' firm was not entitled to be subrogated to this claim for indemnity, given a previous determination that the solicitors' firm did not have a solicitor's lien over title deeds for outstanding legal fees.

The court was also required to determine whether the liquidators were estopped from making these assertions due to a prior judgment that conclusively determined certain matters. The legal questions hinged on the scope of the former adjudication and whether the matters necessary to the decision were also concluded. Additionally, the court had to consider whether the liquidators could rely on an issue estoppel based on the previous adjudication.

The court found that the liquidators were indeed estopped from asserting that the company lacked a right of indemnity out of the trust property of other schemes and that the solicitors' firm was not entitled to be subrogated to that claim for indemnity. This was based on the principle that matters necessary to the decision in the former adjudication were conclusively determined and thus could not be re-litigated. The court concluded that the liquidators were precluded from making these assertions due to the issue estoppel stemming from the prior judgment. The court provided detailed answers to the preliminary questions, which were integral to its reasoning and final determination.

In terms of costs, the court ordered that the appellant, CB Darvall & Darvall, would pay the respondent liquidators' costs of and incidental to the determination of the preliminary questions. This was to be assessed on the standard basis, as agreed by consent between the parties.

Orders

Orders of the court

1) The answers to the preliminary questions are contained in the reasons for judgment.

2) By consent, the appellant, CB Darvall & Darvall, is to pay the respondent liquidators’ costs of and incidental to the determination of the preliminary questions, including the hearing on 31 July and 1 August 2006, to be assessed on the standard basis.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	CB Darvall & Darvall v Moloney & Anor [2006] QSC 345
PARTIES:	AUSTRALIAN SECURITIES AND INVESTMENT COMMISSION (applicant) v ATLANTIC 3 FINANCIAL (AUST) PTY LTD (first respondent) and FREDERICK MICHAEL ACKER (second respondent) and GERILYN MARIE POLANSKI (third respondent) CB DARVALL & DARVALL (A FIRM) (appellants) v GREGORY MICHAEL MOLONEY and PETER IVAN FELIX GEROFF AS COURT APPOINTED LIQUIDATORS AND TRUSTEES OF THE UNREGISTERED MANAGED INVESTMENT SCHEMES KNOWN AS THE MACKAY LEAGUES CLUB LIMITED SCHEME, THE NUMINKO PTY LTD SCHEME AND THE CLEARVIEW PROPERTIES SCHEME, FORMERLY CONDUCTED BY ATLANTIC 3 FINANCIAL (AUST) PTY LTD ACN 056 262 723 (IN LIQUIDATION) (respondents)
FILE NO:	S4426 of 2003
DIVISION:	Trial Division
PROCEEDING:	Appeal against rejection of proofs of debt - determination of preliminary questions
DELIVERED ON:	9 November 2006 Consent order regarding costs made 16 November 2006
DELIVERED AT:	Supreme Court, Brisbane
HEARING DATE:	31 July, 1 August 2006
JUDGE:	Wilson J
ORDER:	1) The answers to the preliminary questions are contained in the reasons for judgment. 2) By consent, the appellant, CB Darvall & Darvall, is to pay the respondent liquidators’ costs of and incidental to the determination of the preliminary questions, including the hearing on 31 July and 1 August 2006, to be assessed on the standard basis.
CATCHWORDS:	CORPORATIONS – MANAGED INVESTMENT SCHEMES – PROOFS OF DEBT REJECTED BY LIQUIDATORS – APPEALS AGAINST LIQUIDATORS’ DECISIONS – where the liquidators of a company which had conducted unregistered managed investment schemes rejected the proofs of debt of a solicitors’ firm – where the firm appeals those decisions – where the appellants are asking the court to answer preliminary questions ESTOPPEL – FORMER ADJUDICATION – JUDGMENT INTER PARTES – ISSUE ESTOPPEL – RESPECTING WHAT MATTERS DECISION CONCLUSIVE – MATTERS NECESSARY TO THE DECISION – where this court previously determined that the appellants did not have a solicitor’s lien over title deeds for outstanding legal fees allegedly owed by company which had conducted an unregistered managed investment scheme – whether the liquidators were estopped or otherwise prevented from now asserting that the company does not have a right of indemnity out of the trust property of other schemes, and that the appellant is not entitled to be subrogated to that claim for indemnity PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – TRIAL – OTHER MATTERS – SUMMARY DETERMINATION OF ISSUES – where the court was asked to answer two sets of preliminary questions – where, for one set of questions, the parties agreed on the facts upon which the court should base its answers – where, for the other set of questions of mixed fact and law, the court was asked to assume certain facts and contentions – whether there was sufficient evidence before the court to determine some of the questions Corporations Act 2001 (Cth), s 601ED(5), s 601EE Uniform Civil Procedure Rules 1999 (Qld), rr 482-486 Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334, cited Brewer v Brewer (1953) 88 CLR 1,…