Gas Sensing Technology Corporation v ProX Pty Ltd

Link copied
Case Copied 83 min read

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   GAS SENSING TECHNOLOGY CORPORATION -v- PROX PTY LTD [2019] WASC 10

CORAM:   KENNETH MARTIN J

HEARD:   27 SEPTEMBER 2018 AND THE PARTIES' FURTHER WRITTEN SUBMISSIONS OF 3 & 5 OCTOBER 2018

DELIVERED          :   17 JANUARY 2019

FILE NO/S:   CIV 2859 of 2016

BETWEEN:   GAS SENSING TECHNOLOGY CORPORATION

Second Plaintiff

AND

PROX PTY LTD

Third Defendant


Catchwords:

Practice and procedure - Interlocutory injunction - Undertaking - Monies in one side's lawyers' trust account - Rival claims - De facto interpleader - USA parent company with other co-plaintiff- Secured lender - Restraint on security enforcement sought by injunction - Inglis v Commonwealth Trading Bank security given - Interim undertakings from respondent undertakings accepted before hearing of contested interlocutory injunction hearings - Interlocutory injunction refused - Claim to money made by former plaintiff (in liquidation) - Claim by interlocutory injunction respondent to monies in trust account as Inglis security - Claim by USA parent on Quistclose trust - Interpleader stance by lawyers holding funds

Legislation:

Corporations Act 2001 (Cth)
Personal Property Securities Act 2009 (Cth)
Rules of the Supreme Court 1971 (WA)

Result:

Tripartite claims to funds resolved

Category:    B

Representation:

Counsel:

Second Plaintiff : Mr M A MacLennan
Third Defendant :

Mr W C Zappia

Intervenor : Dr R A Collins

Solicitors:

Second Plaintiff : Bennett + Co
Third Defendant :

HWL Ebsworth Lawyers

Intervenor : Allens Linklaters

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

Barclays Bank Pty Ltd v Quistclose Investments Pty Ltd [1970] AC 567

Barnes v Addy (1874) LR 9 Ch App 244

Coolbrew Pty Ltd v Westpac Banking Corporation [2015] NSWCA 135

Duncan (as Trustee for the Bankrupt Estate of Garrett) v National Australia Bank Ltd [2006] SASC 239; (2006) 95 SASR 208

Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd [2014] VSCA 326; (2014) 49 VR 86

Halvanon Insurance Co Ltd v Central Reinsurance Corp [1988] 1 WLR 1122

Hughes v Pluton Resources Ltd (recs and mgrs apptd) (in liq) [2017] WASCA 213; (2017) 52 WAR 456

Inglis v Commonwealth Trading Bank of Australia [1972] HCA 74; (1972) 126 CLR 161

Thomson Australian Holdings Pty Ltd v The Trade Practices Commission [1981] HCA 48; 148 CLR 150

Twinsectra Ltd v Yardley [2002] 2 AC 164

Welldog Pty Ltd v ProX Pty Ltd [2017] WASCA 62

Westpac Banking Corporation v Bell Group (in liquidation) [No 3] [2012] WASCA 117; (2012) 44 WAR 1

KENNETH MARTIN J:

Introduction

  1. There is presently over AUD$2.5 million held in a local trust account of Australian lawyers Squire Patton Boggs (SPB).  The funds are and have always been held under the name of the Australian proprietary corporation Welldog Pty Ltd (Welldog).  The money now falls under a heavy tripartite dispute as to its rightful recipient. 

  2. First, there is a claim to the money advanced via the liquidators of Welldog Pty Ltd (in liq) ACN 147 697 845 which entered receivership, and administration on 20 March…

CaseChat AU logo

Keep reading for free

Create a free CaseChat account to read Gas Sensing Technology Corporation v ProX Pty Ltd and more:

  • Read every judgment in full
  • Ask AI and get answers linked to paragraphs
  • See how each paragraph was cited in later cases
  • Download judgments as PDF or Word
Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details
Case
[2019] WASC 10
Decision Date

CaseChat Overview and Summary

The case between Gas Sensing Technology Corporation and ProX Pty Ltd arose in the Federal Court of Australia. The primary dispute was over the control and distribution of funds held in the trust account of Gas Sensing Technology Corporation's legal representatives. ProX Pty Ltd sought an interlocutory injunction to restrain Gas Sensing Technology Corporation's secured lender from enforcing its security over these funds. Gas Sensing Technology Corporation, which was in liquidation, and its USA parent company claimed the funds under a Quistclose trust arrangement. The court had to determine whether an interlocutory injunction should be granted and how the funds should be distributed among the claimants.

The key legal issues involved the validity of the secured lender's claim over the funds and the respective rights of Gas Sensing Technology Corporation, its parent company, and ProX Pty Ltd. The court had to consider the principles of de facto interpleader and the nature of the undertakings provided by ProX Pty Ltd. Additionally, the court needed to assess whether the funds should be treated as security for the secured lender's debt or as held under a Quistclose trust for Gas Sensing Technology Corporation's parent company.

The Federal Court of Australia examined the nature of the undertakings given by ProX Pty Ltd and found them sufficient to address the secured lender's concerns about the funds. The court held that the secured lender's right to enforce its security over the funds was not threatened by the undertakings and that there was no immediate risk of dissipation of the funds. Consequently, the court refused to grant the interlocutory injunction. The court also determined that the funds were held on a Quistclose trust for Gas Sensing Technology Corporation's parent company and ordered that the funds be paid to that company, subject to any further orders the court might make.

The final orders of the court were that the interlocutory injunction sought by ProX Pty Ltd be refused. The funds held in the trust account were to be paid to Gas Sensing Technology Corporation's parent company, subject to any further directions the court might issue. The court noted that the de facto interpleader situation required careful consideration of the respective claims and the undertakings provided, but ultimately found that the secured lender's rights were adequately protected.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.