Highup Pty Ltd (in Liquidation) v Gubas - [2014] FCA 1170

FEDERAL COURT OF AUSTRALIA
Highup Pty Ltd (in Liquidation) v Gubas [2014] FCA 1170

Citation: Highup Pty Ltd (in Liquidation) v Gubas [2014] FCA 1170

Parties: HIGHUP PTY LTD (ACN 119 418 423) (IN LIQUIDATION) v VESNA GUBAS

File number(s): ACD 18 of 2014

Judge(s): BUCHANAN J

Date of judgment: 5 November 2014

Catchwords:
CORPORATIONS – liquidator of a company seeking order to recover from related entity benefit resulting from insolvent transactions of the plaintiff – where plaintiff alleged to have assumed a liability for the defendant and paid money to the defendant to discharge a debt owed by the defendant – whether plaintiff presumed to be insolvent during the relevant period – whether the transactions were insolvent transactions – whether the transactions were uncommercial – whether the transactions were voidable transactions

EVIDENCE – no evidence given by the defendant – whether Court can accept that any evidence that might have been given would not have assisted the defendant’s case – whether the Court may draw other adverse inferences against the defendant – onus remains on plaintiff to prove the elements of its case

Legislation: Corporations Act 2001 (Cth), ss 9, 286(1), 286(2), 588E(1)(b), 588E(2), 588E(4), 588E(5), 588FB, 588FB(1), 588FC, 588FC(a)(i), 588FE, 588FE(3), 588FE(4), 588FH(1), 588FH(1)(a), 588FH(1)(b), 588FH(1)(c), 588FH(2), 588G, 588G(2), 588G(3), 588J
Evidence Act 1995 (Cth), ss 67, 81, 87

Cases cited: ABN AMRO Bank NV v Bathurst Regional Council [2014] FCAFC 65; (2014) 309 ALR 445
Blatch v Archer [1774] EngR2; (1774) 98 ER 969
Capital Finance Australia Ltd v Tolcher (2007) 164 FCR 83
Hawkins v Bank of China (1992) 26 NSWLR 562
Jones v Dunkel (1959) 101 CLR 298
Morgan v Babcock & Wilcox Ltd (1929) 43 CLR 163
Tosich Construction Pty Ltd (In Liq) v Tosich (1997) 78 FCR 363
Vetter v Lake Macquarie City Council (2001) 202 CLR 439
Wardley Australia Ltd v Western Australia (1992) 175 CLR 514
Western Australia v Wardley Australia Ltd (1991) 30 FCR 245
Weissensteiner v R (1993) 178 CLR 217

Date of hearing: 16 October 2014

Place: Canberra

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 79

Counsel for the Plaintiff Dr G Dempsey with Mr G Watson

Solicitor for the Plaintiff Colquhoun Murphy

Counsel for the Defendant Mr DS Weinberger

Solicitor for the Defendant Deutsch Partners

IN THE FEDERAL COURT OF AUSTRALIA

AUSTRALIAN CAPITAL TERRITORY

DISTRICT REGISTRY

GENERAL DIVISION

ACD 18 of 2014

BETWEEN:
HIGHUP PTY LTD (ACN 119 418 423) (IN LIQUIDATION)
Plaintiff

AND:
VESNA GUBAS
Defendant

JUDGE:

BUCHANAN J

DATE OF ORDER:

5 NOVEMBER 2014

WHERE MADE:

SYDNEY VIA VIDEOLINK TO CANBERRA

THE COURT ORDERS THAT:
1.The application be dismissed.
2.The plaintiff pay the defendant’s costs as taxed if not agreed unless, within 14 days, a contrary order is sought supported by written submissions.
3.If a contrary costs order is sought, submissions in response are to be filed within 7 days.
4.Any application for costs will be dealt with on the papers unless a party seeks a further oral hearing.

Note: Entry of orders…

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] FCA 1170
Decision Date: 5 November 2014

CaseChat Overview and Summary

Highup Pty Ltd (in Liquidation) v Gubas was a case in which the liquidator of a company sought to recover benefits from a related entity that resulted from transactions conducted by the insolvent company. The defendant, Gubas, was alleged to have received payments from the plaintiff, which were intended to discharge a debt owed by Gubas to the plaintiff. The dispute was heard in the Federal Court of Australia, where the court had to determine whether the plaintiff was presumed to be insolvent during the relevant period, whether the transactions were insolvent, and whether they were uncommercial and therefore voidable.

The legal issues before the court included whether the plaintiff was presumed to be insolvent during the relevant period, whether the transactions were insolvent, and whether they were uncommercial and voidable. Additionally, the court had to consider the impact of the defendant's failure to provide evidence, and whether the court could draw adverse inferences against the defendant based on that failure.

The court found that the plaintiff had not satisfied the requirements of section 588FH(1)(c) of the Corporations Act 2001 (Cth), and therefore, the plaintiff had failed to establish its case for the orders sought. Consequently, the application was dismissed. The court noted that the plaintiff had not indicated whether it wished to be heard on costs if it lost, but the court was inclined to order the plaintiff to pay the defendant's costs, as taxed if not agreed. Any submissions to the contrary should be filed within fourteen days, with any answering submissions within seven days thereafter. The court indicated that any application for costs would be dealt with on the papers unless a party sought a further oral hearing, which could be at that party's cost if found not to be justified.

Orders

Orders of the court

1. The application be dismissed.

2. The plaintiff pay the defendant’s costs as taxed if not agreed unless, within 14 days, a contrary order is sought supported by written submissions.

3. If a contrary costs order is sought, submissions in response are to be filed within 7 days.

4. Any application for costs will be dealt with on the papers unless a party seeks a further oral hearing.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

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

As a result, the plaintiff in my view has also failed to satisfy s 588FH(1)(c). Conclusion For those reasons, the plaintiff has failed to make out its case for the orders which it seeks. The application will be dismissed. The plaintiff indicated that it wished to be heard on costs, but not whether it wished to be so heard if it lost. I am inclined to think that the appropriate order is that the plaintiff pay the defendant’s costs, as taxed if not agreed. Any submission to the contrary should be filed within fourteen days, with any answering submission within seven days thereafter. Any application for costs will be dealt with on the papers unless either party seeks a further oral hearing, which may be at that party’s cost, if found not to be justified.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Citation:	Highup Pty Ltd (in Liquidation) v Gubas [2014] FCA 1170
Parties:	HIGHUP PTY LTD (ACN 119 418 423) (IN LIQUIDATION) v VESNA GUBAS
File number(s):	ACD 18 of 2014
Judge(s):	BUCHANAN J
Date of judgment:	5 November 2014
Catchwords:	CORPORATIONS – liquidator of a company seeking order to recover from related entity benefit resulting from insolvent transactions of the plaintiff – where plaintiff alleged to have assumed a liability for the defendant and paid money to the defendant to discharge a debt owed by the defendant – whether plaintiff presumed to be insolvent during the relevant period – whether the transactions were insolvent transactions – whether the transactions were uncommercial – whether the transactions were voidable transactions EVIDENCE – no evidence given by the defendant – whether Court can accept that any evidence that might have been given would not have assisted the defendant’s case – whether the Court may draw other adverse inferences against the defendant – onus remains on plaintiff to prove the elements of its case
Legislation:	Corporations Act 2001 (Cth), ss 9, 286(1), 286(2), 588E(1)(b), 588E(2), 588E(4), 588E(5), 588FB, 588FB(1), 588FC, 588FC(a)(i), 588FE, 588FE(3), 588FE(4), 588FH(1), 588FH(1)(a), 588FH(1)(b), 588FH(1)(c), 588FH(2), 588G, 588G(2), 588G(3), 588J Evidence Act 1995 (Cth), ss 67, 81, 87
Cases cited:	ABN AMRO Bank NV v Bathurst Regional Council [2014] FCAFC 65; (2014) 309 ALR 445 Blatch v Archer [1774] EngR2; (1774) 98 ER 969 Capital Finance Australia Ltd v Tolcher (2007) 164 FCR 83 Hawkins v Bank of China (1992) 26 NSWLR 562 Jones v Dunkel (1959) 101 CLR 298 Morgan v Babcock & Wilcox Ltd (1929) 43 CLR 163 Tosich Construction Pty Ltd (In Liq) v Tosich (1997) 78 FCR 363 Vetter v Lake Macquarie City Council (2001) 202 CLR 439 Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 Western Australia v Wardley Australia Ltd (1991) 30 FCR 245 Weissensteiner v R (1993) 178 CLR 217
Date of hearing:	16 October 2014
Place:	Canberra
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	79
Counsel for the Plaintiff	Dr G Dempsey with Mr G Watson
Solicitor for the Plaintiff	Colquhoun Murphy
Counsel for the Defendant	Mr DS Weinberger
Solicitor for the Defendant	Deutsch Partners

BETWEEN:	HIGHUP PTY LTD (ACN 119 418 423) (IN LIQUIDATION) Plaintiff
AND:	VESNA GUBAS Defendant

JUDGE:	BUCHANAN J
DATE OF ORDER:	5 NOVEMBER 2014
WHERE MADE:	SYDNEY VIA VIDEOLINK TO CANBERRA