Crowe-Maxwell v Frost

Case [2016] NSWCA 46


Court of Appeal
Supreme Court

New South Wales

Case Name: 

Crowe-Maxwell v Frost

Medium Neutral Citation: 

[2016] NSWCA 46

Hearing Date(s): 

17 September 2015

Decision Date: 

16 March 2016

Before: 

Beazley P at [1];
Macfarlan JA at [129];
Gleeson JA at [130]

Decision: 

(1)   Extend time for the filing and service of the appellants’ notice of appeal to 20 November 2014;
 
(2)   Appeal dismissed.

Catchwords: 

CORPORATIONS – winding up – relief under Corporations Act 2001 (Cth), ss 588FE and 588FF – unreasonable director-related transactions within s 588FDA – s 588FDA(1)(c) – whether it may be expected that a reasonable person in the company’s circumstances would not have entered into the transaction
 
EVIDENCE – challenge to evidential basis of primary judge’s reasoning – whether pleadings can constitute evidence
 
EVIDENCE – challenge to evidential basis of primary judge’s reasoning – whether statements at bar table relied on as evidence – statements by way of explanation
 
PRACTICE & PROCEDURE – appeals – notice of intention to appeal served out of time – Uniform Civil Procedure Rules 2005, r 1.12 – whether extension of time should be granted – no evidence respondents prejudiced by delay

Legislation Cited: 

Corporations Act 2001 (Cth)
Evidence Act 1995 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited: 

Apollo Shower Screens Pty Ltd & Anor v Building and Construction Industry Long Service Payments Corporation (1985) 1 NSWLR 561
Bhagat v Global Custodians Ltd [2002] FCA 223
Blatch v Archer (1774) 1 Cowp 63; 98 ER 969
Brogden v Metropolitan Railways Co (1876-77) 2 App Cas 666
Campbell v Illawarra Golf Club Pty Limited (In Liquidation) (No 3) [2014] NSWSC 341
Fisher v Divine Homes Pty Ltd [2011] NSWSC 8; 85 ACSR 512
Gibbons v Deputy Commissioner of Taxation [2003] NSWSC 936
Hawksford v Hawksford [2005] NSWSC 463; 191 FLR 173
ICM Agriculture Pty Ltd v Young [2009] FCA 109
Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR [97326]
Jingalong Pty Ltd v Todd [2014] NSWCA 330
Laidlaw v Hillier Hewitt Elsley Pty Ltd [2009] NSWCA 44
Lumbers v W Cook Builders Pty Ltd (in liquidation) [2008] HCA 27; 232 CLR 635
McDonald v Hanselmann [1998] NSWSC 171; 144 FCR 470
Mulherin v Bank of Western Australia Ltd; McCann v Bank of Western Australia Ltd [2006] QCA 175
Pavey & Matthews Pty Ltd v Paul [1987] HCA 5; 162 CLR 221
Progressive Pod Properties Pty Ltd v A & M Green Investments Pty Ltd [2012] NSWCA 225
Randwick City Council v Fuller [1996] NSWCA 444; 90 LGERA 380
Re Lesvos Pty Ltd [2012] NSWSC 1288
Smith (in his capacity as liquidator of Action Paintball Games Pty Ltd) v Starke (No 2) [2015] FCA 1119; 109 ACSR 145
Vasudevan v Becon Constructions (Australia) Pty Ltd [2014] VSCA 14; 41 VR 445
Weaver v Harburn [2014] WASCA 227; 103 ACSR 416

Texts Cited: 

RP Austin and IM Murray, Ford Austin & Ramsay's Principles of Corporations…

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AGLC
Crowe-Maxwell v Frost [2016] NSWCA 46
Case
[2016] NSWCA 46
Decision Date

CaseChat Overview and Summary

The appeal concerned an application for relief under sections 588FE and 588FF of the *Corporations Act 2001* (Cth) concerning alleged unreasonable director-related transactions. The primary judge had found that certain transactions were voidable as unreasonable director-related transactions under section 588FDA(1)(c) of the Act, which requires consideration of whether a reasonable person in the company's circumstances would not have entered into the transaction.

The legal issues before the Court of Appeal included whether the primary judge erred in finding that the transactions were unreasonable director-related transactions, and whether the primary judge's reasoning was based on a sound evidential foundation. Specifically, the appellants challenged whether pleadings and statements made at the bar table could properly constitute evidence for the purposes of the primary judge's findings. The appellants also sought an extension of time to file their notice of appeal, arguing that the respondents would not be prejudiced by any delay.

The Court of Appeal considered the nature of evidence in the context of such applications, noting that while pleadings can define the issues, they do not generally stand as evidence of the facts pleaded. Similarly, statements made at the bar table, unless agreed to be evidence or formally tendered, are not typically relied upon as proof of facts. The Court ultimately found no error in the primary judge's determination that the transactions were voidable under section 588FDA(1)(c), applying the objective test of what a reasonable person in the company's circumstances would have done.

The Court of Appeal granted the extension of time for the filing and service of the notice of appeal. However, the appeal itself was dismissed.

Orders

Orders of the court

(1) Extend time for the filing and service of the appellants’ notice of appeal to 20 November 2014;

(2) Appeal 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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