Reported Decision: (2000) 35 ACSR 1
(2000) 49 NSWLR 513
(2000) 157 FLR 204
New South Wales
Court of Appeal
CITATION: CINEMA PLUS LTD (ADMINISTRATORS APPOINTED) & ANOR v ANZ BANKING GROUP LIMITED [2000] NSWCA 195 revised - 1/08/2000 FILE NUMBER(S): CA 40530/00 HEARING DATE(S): 21 July 2000 JUDGMENT DATE:
28 July 2000PARTIES :
Cinema Plus Limited (Adminstrators Appointed) - First Appellant
Steven John Sherman and Ian Doublas Ferrier - Second Appellants
Australia and New Zealand Banking Group Limited - RespondentJUDGMENT OF: Spigelman CJ at 1; Sheller JA at 71; Giles JA at 140
LOWER COURT JURISDICTION : Supreme Court - Equity Division LOWER COURT
FILE NUMBER(S) :3002/2000 LOWER COURT
JUDICIAL OFFICER :Windeyer J
COUNSEL: P M Wood - Appellants
J C Sheahan SC/J E Thomson/H N Newton - RespondentSOLICITORS: Henry Davis York - Appellants
Blake Dawson Waldron - RespondentCATCHWORDS: BANKING AND FINANCIAL INSTITUTIONS - Banker and customer - Debtor and creditor - Banker's rights to combine accounts - Whether banker entitled to consolidate current account and loan account - Where contract provided for consolidtion - Whether charge created, s440B Corporations Law - Priority of administrator's lien, s443E Corporations Law - CONTRACTS - Sale and lease back agreement - Whether clause void for uncertainty - Whether clause penal in nature - CORPORATIONS - Corporations Law - Where administrators appointed - Meaning of 'charge' under s440B - Whether, in consolidating accounts, banker acted 'on behalf of' customer pursuant to s437D - Meaning of 'recover' under s440C - Administrator's indemnity and lien pursuant to ss443E, 443F - Priority - EQUITY - Equitable charges and liens - Creation of charge over debt where chargee owes debt to chargor - D LEGISLATION CITED: Corporations Law 1991 CASES CITED: Associated Alloys Pty Ltd v ACN 001 452 106 Pty Ltd (2000) 74 ALJR 862
Bradford Old Bank Limited v Sutcliffe [1918] 2 KB 833
Broad v Commissioner of Stamp Duties (NSW) [1980] 2 NSWLR 40
Capital and Counties Bank Ltd v Rhodes [1903] 1 Ch 631
Cooper v Federal Commissioner of Taxation (1954-57) 97 CLR 397
EMCL Pty Ltd v Esanda Finance Corporation Limited (2000) FCA 612 and (1999) FCA 978
Esanda Finance Corporation Ltd v Jackson (1992) 59 SASR 416
Esanda Finance Corporation Ltd v Plessnig (1989) 166 CLR 131
Estate Planning Associates (Australia) Pty Ltd v Commissioner of Stamp Duties (1985) 2 NSWLR 495
Evans v Rival Granite Quarry Ltd [1910] 2 KB 979
Griffiths v Commonwealth Bank of Australia (1994) 123 ALR 120
Halesowen Presswork & Assemblies Ltd v Westminster Bank Ltd [1971] 1QB 1
In re Bank of Credit and Commerce International SA (No 8) [1998] AC 214
In re Bourne [1906] 1 Ch 697
In re Charge Card Services Ltd [1987] Ch 150
In re Ross; ex parte Attorney General for the Northern Territory of Australia (1979) 54 ALJR 145
Lewis v Keene (1936) 36 SR(NSW) 493
Matthews v Geraghty (1986) 4 ACLC 727
National Provincial and Union Bank of England v Charnley…
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Details
- Case
- [2000] NSWCA 195
- Decision Date
CaseChat Overview and Summary
Cinema Plus Ltd (Administrators Appointed) (the appellant) appealed to the Court of Appeal of New South Wales against a decision of Windeyer J concerning the rights of ANZ Banking Group Limited (the respondent) to combine accounts of Cinema Plus Ltd following the appointment of administrators. The dispute arose from the respondent's actions in consolidating Cinema Plus Ltd's current account and loan account, and the priority of the respondent's claim against the administrator's lien.
The Court of Appeal was required to determine whether the respondent bank was entitled to consolidate the current and loan accounts of Cinema Plus Ltd, notwithstanding the appointment of administrators. This involved considering whether the contractual terms permitted such consolidation, and crucially, whether the respondent's actions constituted the creation of a charge under s 440B of the Corporations Law. Further issues included the interpretation of "recover" under s 440C of the Corporations Law and the priority of the administrator's indemnity and lien under ss 443E and 443F of the Corporations Law. The court also considered whether a sale and lease-back agreement clause was void for uncertainty or penal in nature.
The Court of Appeal held that the respondent bank was not entitled to consolidate the accounts in the manner it did. The court reasoned that the act of consolidation, in the context of the appointment of administrators, did not create a charge within the meaning of s 440B of the Corporations Law. The court found that the respondent's actions were not taken "on behalf of" the company as contemplated by s 437D of the Corporations Law. Furthermore, the court determined that the administrator's lien under s 443E of the Corporations Law had priority over the respondent's claim. The court allowed the appeal, set aside the orders of Windeyer J, and dismissed the respondent's notice of contention.
The Court of Appeal was required to determine whether the respondent bank was entitled to consolidate the current and loan accounts of Cinema Plus Ltd, notwithstanding the appointment of administrators. This involved considering whether the contractual terms permitted such consolidation, and crucially, whether the respondent's actions constituted the creation of a charge under s 440B of the Corporations Law. Further issues included the interpretation of "recover" under s 440C of the Corporations Law and the priority of the administrator's indemnity and lien under ss 443E and 443F of the Corporations Law. The court also considered whether a sale and lease-back agreement clause was void for uncertainty or penal in nature.
The Court of Appeal held that the respondent bank was not entitled to consolidate the accounts in the manner it did. The court reasoned that the act of consolidation, in the context of the appointment of administrators, did not create a charge within the meaning of s 440B of the Corporations Law. The court found that the respondent's actions were not taken "on behalf of" the company as contemplated by s 437D of the Corporations Law. Furthermore, the court determined that the administrator's lien under s 443E of the Corporations Law had priority over the respondent's claim. The court allowed the appeal, set aside the orders of Windeyer J, and dismissed the respondent's notice of contention.
Orders
Orders of the court
1. Appeal allowed; 2. Notice of contention dismissed; 3. Set aside the orders made by Windeyer J on 10 July 2000; 4. The parties to bring in short minutes of order; 5. The respondent to pay one-half of the appellants' costs of the appeal.
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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