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Eighty Second Agenda Pty Ltd v Handberg

Eighty Second Agenda Pty Ltd v Handberg

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Case Copied 22 December 2014 36 min read

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT

No. S CI 2014 3254

EIGHTY SECOND AGENDA PTY LTD (in its capacity as trustee of the Rice Family Trust) & ANOR (according to the attached Schedule)	Plaintiff
v
GEOFFREY NIELS HANDBERG & ORS (according to the attached schedule	Defendant

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JUDGE:	CROFT J
WHERE HELD:	Melbourne
DATE OF HEARING:	16 October 2014
DATE OF JUDGMENT:	22 December 2014
CASE MAY BE CITED AS:	Eighty Second Agenda Pty Ltd (in its capacity as trustee of the Rice Family Trust) v Handberg
MEDIUM NEUTRAL CITATION:	[2014] VSC 665

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PRACTICE AND PROCEDURE – Leave to proceed against a liquidator – Is the test different against a court-appointed liquidator as opposed to a voluntary liquidator – Aston v Heron (1934) 2 My & K 390; 39 ER 993 - Australian Securities and Investment Commission v Edge (2007) 211 FLR 137 – Sydlow Pty Ltd (in liq) v T G Kotselas Pty Ltd (1996) 65 FCR 234 – Re Biposo Pty Ltd (1995) 120 FLR 399 – McDonald v Dare [2001] QSC 405.

SUMMARY JUDGMENT – No real prospects of success – Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd [2013] VSCA 158 – Supreme Court (General Civil Procedure) Rules 2005, Rule 23.03 – Civil Procedure Act 2010, ss 63 & 64.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr P. Nugent	Charles Fice
For the First and Second Defendant	Mr J.P. Moore QC Ms C. Van Proctor	Mills Oakley Lawyers

The Third Defendant appeared on her own behalf.

HIS HONOUR:

Introduction

This application has been brought by summons filed on 22 August 2014 by the first and second defendants, Geoffrey Niels Handberg (“Handberg”) and Brent Leigh Morgan (“Morgan”) (collectively, “the Liquidators”), who seek orders, inter alia, that:[1]

(a) the proceeding by the Liquidators be stayed pursuant to rule 23.01 of the Supreme Court (General Civil Procedure) Rules 2005 (“the Rules”) pending the hearing and determination of any application for leave nunc pro tunc to commence the proceeding; and

(b) judgment be entered for the Liquidators pursuant to rule 23.03 of the Rules and/or s 63 of the Civil Procedure Act 2010.

[1]Liquidators’ Summons dated 22 August 2014.

On 19 September 2014 the Plaintiffs, Eighty Second Agenda Pty Ltd (in its capacity as trustee of the Rice Family Trust)(“Eighty Second Agenda”) and G.J.R. Investments Pty Ltd (in its capacity as Trustee of the G.J.R. Investments Unit Trust (“G.J.R. Investments”) (collectively, “the Plaintiffs”), filed a summons seeking that leave be granted to commence the proceeding nunc pro tunc.[2]
[2]Plaintiffs’ Summons dated 19 September 2014.

This hearing dealt with both of the applications.

Background

The Plaintiffs are secured creditors of Traditional Values Management Limited (TVM), which is the responsible entity of the Blue Diamond Deposits Trust No. 1 (BDT), a registered managed investment scheme within the meaning of Part 5C of the Corporations Act 2001 (Cth).[3] The only business of TVM was the operation of BDT as responsible entity.

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: [2014] VSC 665
Decision Date: 22 December 2014

CaseChat Overview and Summary

Eighty Second Agenda Pty Ltd sought leave to proceed against Handberg, who was the liquidator of a company, for alleged breaches of fiduciary duty and breaches of statutory duty. The application was heard in the Supreme Court of New South Wales. The central legal issue in this case was whether the test for granting leave to proceed against a court-appointed liquidator differs from that against a voluntary liquidator, and if so, how it should be applied. This issue was considered in light of various precedents, including Aston v Heron, Australian Securities and Investment Commission v Edge, Sydlow Pty Ltd (in liq) v T G Kotselas Pty Ltd, Re Biposo Pty Ltd, and McDonald v Dare.

The court examined the relevant legal principles and authorities, including the application of summary judgment rules and the requirement to demonstrate no real prospects of success. The court concluded that the test for granting leave to proceed against a court-appointed liquidator remains consistent with that for a voluntary liquidator. The determination hinges on whether the plaintiff has established a credible case that, if successful, would result in a judgment against the liquidator. The court found that the plaintiff had not demonstrated a credible case against Handberg, and accordingly, the application for leave to proceed was dismissed.

The court's reasoning was grounded in the authorities cited, which emphasise the importance of demonstrating a credible case before leave can be granted. The court found that the plaintiff's claims did not meet the threshold required to establish a credible case against Handberg. The orders of the court were that the application for leave to proceed was dismissed, and costs were awarded to Handberg.

Orders