FEDERAL COURT OF AUSTRALIA
Conlan v Pratt [2013] FCA 19
Citation: Conlan v Pratt [2013] FCA 19 Parties: MARK ANTHONY CONLAN v MICHAEL ANTHONY ROBERT PRATT and SOUTHLAND AGRIBUSINESS HOLDINGS PTY LTD ACN 109 068 242 File number: WAD 52 of 2012 Judge: MCKERRACHER J Date of judgment: 17 January 2013 Catchwords: CORPORATIONS – application by liquidator for declaration pursuant to s 468(1) of the Corporations Act 2001 (Cth) that sale of a truck after commencement of winding up was void – consideration of whether it was appropriate to exercise Court’s discretion not to make the declaration – whether purchaser of the truck acted in good faith and made adequate enquiries as to ownership of the truck on the facts – reliance by purchaser on representations made by a third party purportedly acting under power of attorney Legislation: Corporations Act 2001 (Cth) s 468(1) Cases cited: Carringbush Corporation Pty Ltd v Australian Securities and Investments Commission (2008) 72 ATR 17
Jardio Holdings Pty Ltd v Dorcon Constructions Pty Ltd (1984) 3 FCR 311
Pilmer v HIH Casualty & General Insurance Ltd (No 2) (2004) 212 ALR 636
Re Terene Pty Ltd (In Liq) (1992) 7 ACSR 309Date of hearing: 5 November 2012 Place: Perth Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 45 Counsel for the Applicant: PN Poliwka Solicitor for the Applicant: HopgoodGanim Counsel for the Respondents: MRA Pratt appeared in person for the respondents
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
WAD 52 of 2012
BETWEEN: MARK ANTHONY CONLAN
ApplicantAND: MICHAEL ANTHONY ROBERT PRATT
First RespondentSOUTHLAND AGRIBUSINESS HOLDINGS PTY LTD
ACN 109 068 242
Second Respondent
JUDGE:
MCKERRACHER J
DATE OF ORDER:
17 JANUARY 2013
WHERE MADE:
PERTH
THE COURT ORDERS THAT:
1.Within 10 days the applicant file and serve a minute of final orders reflecting these reasons for judgment.
Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
WAD 52 of 2012
BETWEEN: MARK ANTHONY CONLAN
ApplicantAND: MICHAEL ANTHONY ROBERT PRATT
First RespondentSOUTHLAND AGRIBUSINESS HOLDINGS PTY LTD
ACN 109 068 242
Second Respondent
JUDGE:
MCKERRACHER J
DATE:
17 JANUARY 2013
PLACE:
PERTH
REASONS FOR JUDGMENT
INTRODUCTION
The applicant (the Liquidator) seeks a declaration under s 468(1) of the Corporations Act 2001 (Cth) (CA) that the disposition of a truck with former vehicle plate number 1CBA538 (the Truck) from PB Enterprises (WA) Pty Ltd (PB Enterprises) to the second respondent (Southland) is void. By way of interim relief, the Liquidator sought a warrant pursuant to s 530C CA for the seizure of the Truck.
The application is supported by two affidavits of the Liquidator, the first being sworn on 17 February 2012 and the second on 19 April 2012. The application is opposed by the first respondent (Mr Pratt) who supports his opposition with an affidavit sworn on…
Keep reading for free
Create a free CaseChat account to read Conlan v Pratt and more:
- Read every judgment in full
- Ask AI and get answers linked to paragraphs
- See how each paragraph was cited in later cases
- Download judgments as PDF or Word
One click creates your free account or signs you in.
By continuing you agree to the Terms and Privacy Policy.
- Case
- [2013] FCA 19
- Decision Date
CaseChat Overview and Summary
The court considered the principles established in previous cases such as Carringbush Corporation Pty Ltd v Australian Securities and Investments Commission and Pilmer v HIH Casualty & General Insurance Ltd. It noted that the discretion under section 468(1) should be exercised sparingly and typically only in cases where the transaction offers actual or prospective advantage to the company or its creditors. The court also highlighted that the burden of proof lies with Mr Pratt to demonstrate that his transaction fulfilled these criteria and provided a benefit to the company or its creditors.
Upon reviewing the evidence, the court found that Mr Pratt had not successfully demonstrated that his transaction met the necessary criteria for the court to exercise its discretion in his favour. The court concluded that the transaction did not provide a countervailing benefit to the company or its creditors and thus, the automatic voidance under section 468(1) of the Act should stand. Consequently, the court denied Mr Pratt's request to resist the operation of the section.
The court's final order was that Mr Pratt's transaction was void under section 468(1) of the Corporations Act 2001, and no further relief was granted to him.
Orders
Orders of the court
Full text does not contain this section.
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
The Liquidator says in response to the argument about his delay that there was difficulty in securing cooperation from Mr Topping which would appear to have some support from the suggestion of disputation that was occurring. The Liquidator says that, at best, as unfortunate and regrettable as it may be without making any statements as to the conduct of the Representor, Mr Pratt has paid funds to the Representor for a truck which he could not convey to Mr Pratt. Any cause of action that Mr Pratt may have against the Representor is a separate matter but is still preserved. But none of that, the Liquidator says, should bear upon the fact that the Truck should be returned to him. CONSIDERATION In substance, the request by Mr Pratt is for the Court to enable him to resist the operation of s 468(1) CA in the exercise of the Court’s discretion conferred by the expression ‘unless the Court otherwise orders’ appearing in that section. There is discussion by Greenwood J in Carringbush Corporation Pty Ltd v Australian Securities and Investments Commission (2008) 72 ATR 17 (at [23]) where his Honour said that ‘ordinarily the discretion will not be exercised in favour of an order unless the Court is satisfied that the order serves either the interests of the company or its creditors’. In Carringbush the transaction concerned was a transfer of shares before the insertion of s 468A CA on 31 December 2007. The statement of general principle expressed by his Honour was in relation to both the disposition of property and the transfer of shares and is now addressed by s 468A CA. I respectfully agree with the observations of Greenwood J. The Full Court (Woodward, Neaves and Beaumont JJ) considered the nature of the discretion in Jardio Holdings Pty Ltd v Dorcon Constructions Pty Ltd (1984) 3 FCR 311. In discussing the discretion conferred on the Court in similarly worded state legislation, the Full Court expressed the following view (at 317): A transaction entered into in good faith which offers actual or prospective advantage to the company or its general body of creditors would, ordinarily, be sanctioned by the court even if an incidental advantage were obtained by one creditor or one class of creditors. There is no doubt that the onus of persuading the Court to exercise the discretion rests with Mr Pratt and Southland. In Re Terene Pty Ltd (In Liq) (1992) 7 ACSR 309 Hedigan J said (at 314) that it was: incumbent upon [the transferee in that case] to establish facts giving rise to a conclusion that the impugned payments were made in good faith, for valuable consideration and in the ordinary course of business and that there was a countervailing benefit to the company. See also more recently Pilmer v HIH Casualty & General Insurance Ltd (No 2) (2004) 212 ALR 636. Two factors were identified in that case, namely, whether the respondents acted in good faith with honest intentions and, secondly, whether the respondents were aware that the company had been wound up.