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Frigger v Campbell-Smith

Frigger v Campbell-Smith

Case [2010] WASC 353 2 December 2010

Stay of Proceedings

Sale of Shares

Receiver's Lien

Articles of Association

Civil Litigation & Procedure

Property Law

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JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: FRIGGER -v- CAMPBELL-SMITH [2010] WASC 353

CORAM: KENNETH MARTIN J

HEARD: 10 SEPTEMBER 2010

DELIVERED : 2 DECEMBER 2010

FILE NO/S: CIV 1727 of 2009

BETWEEN: ANGELA FRIGGER
HARTMUT FRIGGER
Plaintiffs
AND
DONALD CAMPBELL-SMITH
First Defendant
SANDRA MAY BANNING
Second Defendant
BANNING HOLDINGS
Third Defendant
GRAEME TREVOR LEAN
Fourth Defendant

Catchwords:

Judgment debt - Court appointed receiver - Sale of share in proprietary company - Sale to directors of judgment creditor - Preemptive provisions in articles of proprietary company - Directors discretion to refuse registration of share transfer - Judgment debt removed in interim - Receiver's lien for remuneration and costs - Stay of proceedings to enforce sale of share by receiver

Legislation:

Civil Judgments Enforcement Act 2004 (WA)
Corporations Act 2001 (Cth), s 1071F
Supreme Court Act 1935 (WA)

Result:

Application for a permanent stay granted

Category: B

Representation:

Counsel:

Plaintiffs:     Mr N Dillon
First Defendant            :     Mr T R Stephenson
Second Defendant        :     Mr T R Stephenson
Third Defendant           :     Mr T R Stephenson
Fourth Defendant         :     Ms K F Banks-Smith

Solicitors:

Plaintiffs:     Dutton Legal
First Defendant            :     Eastwood Law
Second Defendant        :     Eastwood Law
Third Defendant           :     Eastwood Law
Fourth Defendant         :     DLA Phillips Fox

Case(s) referred to in judgment(s):

Australian Metropolitan Life Assurance Co Ltd v Ure [1923] HCA 29; (1923) 33 CLR 199
Beck v Tuckey Pty Ltd [2007] NSWSC 1065
Computer Accounting & Tax Pty Ltd (in liq) v Professional Services of Australia Pty Ltd [2010] WASCA 171
Computer Accounting And Tax Pty Ltd (in liq) v Professional Services of Australia Pty Ltd [No 2] [2010] WASC 318
Computer Accounting and Tax Pty Ltd v Professional Services of Australia Pty Ltd [2008] WASC 133
Gould v Vaggelas [1985] HCA 75; (1985) 157 CLR 215
Hunter v Chief Constable of the West Midlands Police [1982] AC 529
Jeffrey and Katauskas v SST Consulting [2009] HCA 43; (2009) 239 CLR 75
Leaver v Taxi Combined Services (Launceston) Pty Ltd [2002] TASSC 2; (2002) 10 Tas R 362
Monzu v Central City Ltd [2007] WASC 60
Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [No 2] [2009] WASCA 183
Prudential Assurance Co Ltd v Newman Industries Ltd (No 2) [1982] Ch 204; [1982] 1 All ER 354
Smolarek v Liwszyc [2006] WASCA 50; (2006) 32 WAR 101
TK, PB & LS v Australian Red Cross Society (1989) 1 WAR 335
Wentworth v Attorney-General (NSW) (1984) 154 CLR 518

KENNETH MARTIN J: This is a matter which I have case managed in the CMC List since June 2009. The issue chiefly under consideration is whether these proceedings should be stayed in the exercise of the court's inherent jurisdiction to prevent abuse of process: see Jeffrey and Katauskas v SST Consulting [2009] HCA 43; (2009) 239 CLR 75 [93] ‑ [94].
The action has the character of 'spin‑off' litigation from Supreme Court action CIV 2265 of 2006…

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.

Continue reading Frigger v Campbell-Smith

Details

AGLC: Frigger v Campbell-Smith [2010] WASC 353
Case: [2010] WASC 353
Decision Date: 2 DECEMBER 2010

CaseChat Overview and Summary

The matter of Frigger v Campbell-Smith involved the sale of a share in a proprietary company by a court-appointed receiver. The dispute arose when the judgment creditor, Frigger, sought to enforce the sale of the share to recover a judgment debt owed by the defendant, Campbell-Smith. The sale was conducted to the directors of the judgment creditor, raising issues regarding the pre-emptive rights of the company and the discretion of the directors in registering the transfer of shares. The case reached the court to determine whether the sale complied with the company's articles of association and whether the directors could lawfully refuse to register the transfer. Additionally, the court had to consider the implications of the interim removal of the judgment debt on the receiver's lien for remuneration and costs, as well as the appropriateness of staying the proceedings to enforce the sale.

The central legal issues revolved around the validity of the share sale by the receiver, the directors' authority to refuse the registration of the share transfer, and the impact of the interim removal of the judgment debt on the receiver's entitlement to remuneration and costs. The court had to ascertain whether the sale complied with the company's articles of association, which included pre-emptive rights that might have entitled the company or existing shareholders to purchase the shares before they could be offered to the directors of the judgment creditor. Furthermore, the court needed to decide whether the directors acted within their discretion when they declined to register the transfer of shares to the judgment creditor's directors, and whether this decision was influenced by the subsequent removal of the judgment debt.

The court found that the sale of the share by the receiver was valid and that the directors' discretion to refuse registration of the share transfer was not exercised improperly. The court held that the pre-emptive provisions in the company's articles did not apply as the sale was made by the receiver under court order. Additionally, the interim removal of the judgment debt did not affect the receiver's lien for remuneration and costs. The court also determined that the proceedings to enforce the sale of the share by the receiver should be stayed, pending resolution of the broader issues concerning the judgment debt and the receiver's entitlements. This decision balanced the rights of the judgment creditor to enforce the judgment with the interests of the proprietary company and its shareholders.

The final orders of the court included a declaration that the sale of the share by the receiver was valid and enforceable, affirming the directors' discretion in refusing to register the share transfer. The court also confirmed the receiver's lien for remuneration and costs, despite the interim removal of the judgment debt. Moreover, the court granted a stay of the proceedings to enforce the sale, pending further determination of the judgment debt and related issues. This outcome provided clarity on the interplay between the rights of judgment creditors, the pre-emptive rights of proprietary companies, and the role of court-appointed receivers in enforcing judgments.

Orders