Edwards & Ors v Attorney General & Anor [2004] NSWCA 272 revised - 6/08/2004
HEARING DATE(S):
23/07/04
JUDGMENT DATE:
6 August 2004
JUDGMENT OF:
Spigelman CJ at 1; Mason P at 30; Young CJ in Eq at 35
DECISION:
(1) The application under s 63 of the Trustee Act is dismissed; (2) Order that each of the first plaintiffs be relieved in whole from liability for any negligence, default, breach of trust or breach of duty in his capacity as a director of the second plaintiff, Amaca Pty Ltd (ABN 49 000 035 512) and/or Amaba Pty Ltd (ABN 98 000 387 342) arising out of the payment on or after 24 June 2004 up to the date of this order by those companies of their debts, as and when they fall due, including debts arising in respect of claims made for asbestos-related liabilities; (3) No order as to costs; (4) Refer the matter to the Equity Division to deal with any further aspects of the proceedings; (5) Liberty to the plaintiffs to apply on or before 6 December 2004 for similar orders to order (2) in respect of any payments made between the date of this order and 6 December 2004; (6) Like liberty to apply to a Judge to vary the date of 6 December 2004 referred to in the previous order
CATCHWORDS:
CORPORATIONS- Directors- Intending to act in a way where personal liability might attach- Directors unable to obtain insurance- Whether Court can give protection for past and future "breaches" under s 1318 of the Corporations Act- Whether provisions of s 197 of that Act relevant. CORPORATIONS- Difference between (a) potential unliquidated claim and (b) prospective or contingent debt. CORPORATIONS- Construction of Corporations Act- Preferable approach. TRUSTS- Partly charitable trust- Trustees also directors of trading companies- Problems with possible solvency of companies- Whether Court should give judicial advice.
LEGISLATION CITED:
Acts Interpretation Act 1901 (Cth), s 15AA Charitable Trusts Act 1993 (NSW), s 23 Conveyancing Act 1919 (NSW), s 37D Companies Act 1948 (Imp) s 448 Companies Act 1985 (Imp) s 727 Companies Code 1981 (Cth) Corporations Act 2001 (Cth), ss 5C, 9, 197, 411, 419A(7), 510, 1318 Judicial Trustees Act 1896 (Imp), s 3 Limited Liability Act 1855 (Imp) Trustee Act 1925 (NSW) ss 63, 85
[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.
Continue reading Edwards v Attorney General
Sign in free to access the full text
Details
AGLC
Edwards v Attorney General [2004] NSWCA 272
Case
[2004] NSWCA 272
Decision Date
CaseChat Overview and Summary
The case of *Edwards v Attorney General* concerned an application by directors of two companies, Amaca Pty Ltd and Amaba Pty Ltd, seeking judicial protection. The directors were concerned about potential personal liability arising from the companies' payment of debts, particularly those related to asbestos-related liabilities, at a time when they were unable to obtain directors' and officers' insurance. The application was heard by Spigelman CJ, Mason P, and Young CJ in Eq.
The central legal issues before the court were whether it had the power to grant relief to the directors under section 1318 of the *Corporations Act 2001* (Cth) for past and future actions, and whether section 197 of the *Corporations Act 2001* (Cth) was relevant to the determination of the application. The court was also asked to consider the distinction between a potential unliquidated claim and a prospective or contingent debt, and the appropriate approach to the construction of the *Corporations Act 2001* (Cth). Furthermore, the court was asked to provide judicial advice concerning the trustees' position, given that the trustees of a partly charitable trust were also directors of the companies facing solvency issues.
The court dismissed the application made under section 63 of the *Trustee Act*. However, it granted relief to the directors, ordering that they be relieved in whole from liability for any negligence, default, breach of trust, or breach of duty in their capacity as directors of Amaca Pty Ltd and Amaba Pty Ltd. This relief specifically covered payments made by the companies of their debts, as and when they fell due, including those arising from asbestos-related liabilities, from 24 June 2004 up to the date of the order. The court made no order as to costs and referred the matter to the Equity Division for further consideration, granting the plaintiffs liberty to apply for similar orders in respect of payments made up to 6 December 2004, and allowing a Judge to vary that date.
Orders
Orders of the court
(1) The application under s 63 of the Trustee Act is dismissed; (2) Order that each of the first plaintiffs be relieved in whole from liability for any negligence, default, breach of trust or breach of duty in his capacity as a director of the second plaintiff, Amaca Pty Ltd (ABN 49 000 035 512) and/or Amaba Pty Ltd (ABN 98 000 387 342) arising out of the payment on or after 24 June 2004 up to the date of this order by those companies of their debts, as and when they fall due, including debts arising in respect of claims made for asbestos-related liabilities; (3) No order as to costs; (4) Refer the matter to the Equity Division to deal with any further aspects of the proceedings; (5) Liberty to the plaintiffs to apply on or before 6 December 2004 for similar orders to order (2) in respect of any payments made between the date of this order and 6 December 2004; (6) Like liberty to apply to a Judge to vary the date of 6 December 2004 referred to in the previous order