Fuji Xerox Australia Pty Limited v Tolcher

Fuji Xerox Australia Pty Limited appealed to the Court of Appeal of New South Wales against a decision of the Supreme Court of New South Wales concerning the priority of a debt owed by a company in liquidation. The dispute centred on whether Fuji Xerox's claim for unpaid rent was entitled to priority over other unsecured creditors under section 564 of the *Corporations Act 2001* (Cth).

The primary legal issue before the Court of Appeal was the interpretation of the phrase "in any winding up" as it appeared in section 564 of the *Corporations Act*. This section provides that a landlord's right to distrain for rent is not affected by a winding up order, and that rent in arrear is not provable as a debt in the winding up. The court had to determine whether this provision applied to Fuji Xerox's claim for rent that accrued after the company went into liquidation.

The Court of Appeal held that the phrase "in any winding up" in section 564 was intended to apply to rent that accrued both before and after the commencement of winding up. The court reasoned that the purpose of section 564 was to preserve the landlord's common law right of distress, which extends to rent accrued during the winding up. Consequently, rent accrued during the winding up was not a provable debt in the liquidation, and Fuji Xerox was not entitled to claim it as an unsecured creditor.

The appeal was dismissed.