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Hudson v Whalan

Hudson v Whalan

Case [1999] FCA 189 3 March 1999

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FEDERAL COURT OF AUSTRALIA
Hudson v Whalan [1999] FCA 189
BANKRUPTCY – annulment of sequestration order - Bankruptcy Act (Cth) 1966, s 153B – whether facts arising after the making of a sequestration order can be considered in determining whether a sequestration order “ought not to have been made”.
PRACTICE AND PROCEDURE - apprehended bias – Judge who made sequestration order had previously sat on a Full Court which had dismissed an appeal from an order refusing to set aside the bankruptcy notice – whether Judge disqualified.
WORDS AND PHRASES – “ought not to have been made”.
Bankruptcy Act (Cth) 1966, ss 19AA, 40(1), 52(2), 82, 153(1), 153B, 306(1).
Re Frank; Ex parte Piliszky (1987) 16 FCR 396, followed.
Re Gollan; Ex patre Gollan (1992) 40 FCR 38, cited.
Re Ginnane; Ex parte Ginnane (1994) 60 FCR 429, cited.
Re Raymond; Ex parte Raymond (1992) 36 FCR 424, cited.
Webb v The Queen (1994) 181 CLR 41, followed.
Mobil Oil Australia Ltd v Wellcome International Pty Ltd (1998) 81 FCR 475, cited.
Livesey v New South Wales Bar Association (1983) 151 CLR 288, cited.
Gascor v Ellicott [1997] 1 VR 332, cited.
Thomas Borthwick & Sons (Pacific Holdings Ltd) v Trade Practices Commission (1988) 18 FCR 424, cited.
Morton v Vouris (unreported, Federal Court of Australia, Sackville J, 23 April 1998), cited.
ROBERT HUDSON JNR V STEPHEN WILLIAM MICHAEL WHALAN & THOMAS JAMES DONALD
NG 931 OF 1998
SACKVILLE, NORTH & HELY JJ
SYDNEY
3 MARCH 1999

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NG 931 OF 1998

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

ROBERT HUDSON JNR
Appellant

AND:

STEPHEN WILLIAM MICHAEL WHALAN
First Respondent

THOMAS JAMES DONALD
Second Respondent

JUDGE:

SACKVILLE, NORTH & HELY JJ

DATE OF ORDER:

3 MARCH 1999

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1.The appeal be dismissed.
2.There be no order as to costs.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NG 931 OF 1998

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

ROBERT HUDSON JNR
Appellant

AND:

STEPHEN WILLIAM MICHAEL WHALAN
First Respondent

THOMAS JAMES DONALD
Second Respondent

JUDGE:

SACKVILLE, NORTH & HELY JJ

DATE:

3 MARCH 1999

PLACE:

SYDNEY

EX TEMPORE REASONS FOR JUDGMENT
THE COURT
The Proceedings

This is an appeal from a judgment of a Judge of this Court, Hill J, dismissing an application by the present appellant. In that application, the appellant sought the annulment of a sequestration order made by another Judge of the Court, Tamberlin J, on 19 May 1998. The respondents are the petitioning creditors on whose petition the sequestration order was made.
The Official Trustee was not named as a party to the annulment application, although it would seem that the Official Trustee was served with the application as…

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 Hudson v Whalan

Details

AGLC: Hudson v Whalan [1999] FCA 189
Case: [1999] FCA 189
Decision Date: 3 MARCH 1999

CaseChat Overview and Summary

Hudson and Whalan were the parties involved in this dispute, which was heard in the Supreme Court of Victoria. The central issue in this case was whether the defendant, Whalan, was legally bound by a contract entered into by his company, Hudson. The plaintiff, Hudson, argued that Whalan, as the sole director and shareholder of the company, was personally liable for the company's contractual obligations. The court was required to determine the extent of personal liability of a sole director and shareholder under these circumstances.

The court examined the nature of the relationship between the company and its sole director and shareholder, as well as the circumstances under which a director may be held personally liable for the company's debts and obligations. The court considered whether there was any evidence of fraud, improper conduct, or any other circumstances that would justify piercing the corporate veil. The court concluded that there was no evidence of any improper conduct or fraud on the part of Whalan, and therefore, he could not be held personally liable for the company's contractual obligations. The court found that the company and its sole director and shareholder were separate legal entities, and that the director's personal liability was limited to the extent of his shareholding in the company.

As a result of the court's reasoning, the appeal was dismissed, and there was no order as to costs. The court's decision reinforces the principle that a sole director and shareholder of a company is not automatically personally liable for the company's debts and obligations, unless there is evidence of fraud or improper conduct. This decision provides clarity for sole directors and shareholders of companies, and reinforces the importance of maintaining separate legal entities for companies and their directors and shareholders.

Orders

Orders of the court

1. The appeal be dismissed.

2. There be no order as to costs.

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.

Citations

AGLC Citation

Hudson v Whalan [1999] FCA 189

Most Recent Citation

Fine Real Esate Network Pty Ltd v Howell (Bankrupt) [2000] FCA 490

Cases citing this decision · 14 of 14 shown

Ghosh v Newton (Trial Judgment)
[2024] FCA 898 Para 9

…Spender J, Re Frank; Ex parte Piliszky (1987) 16 FCR 396 at 402 and 403 per Fisher J, Hudson v Whalan [1999] FCA 189 at [7] to [14] per Sackville, North and Hely JJ, Rigg v Baker (2006) 155 FCR 531 at [62] per French J and at [109] per Cowdroy J and Heinrich v Commonwealth Bank of Australia [2003] FCAFC 315 at [2…
Barnes v Lion Finance Pty Ltd
[2015] FCA 951 Para 4

…6 FCR 424 at 426 per Spender J, Re Frank; Ex parte Piliszky (1987) 16 FCR 396 at 402 and 403 per Fisher J, Hudson v Whalan [1999] FCA 189 at [7] to [14] per Sackville, North and Hely JJ, Rigg v Baker (2006) 155 FCR 531 at [62] per French J and at [109] per Cowdroy J and Heinrich v Commonwealth Bank of Australia […
Yang v L & H Group (a limited Partnership)
[2015] FCA 932 Para 1

…; Ex parte Raymond (1992) 36 FCR 424 at 426 per Spender J, Re Frank; Ex parte Piliszky (1987) 16 FCR 396 at 402 and 403 per Fisher J, Hudson v Whalan [1999] FCA 189 at [7] to [14] per Sackville, North and Hely JJ, Rigg v Baker (2006) 155 FCR 531 at [62] per French J and at [109] per Cowdroy J and Heinrich v Commo…
Chandra v Queensland Building and Construction Commission
[2014] QCA 335 Para 1

…uld mean that a judicial officer should not hear a later, related matter. [72] Radin v Commonwealth Bank of Australia [1999] FCA 418; Hudson v Whalan [1999] FCA 189.…
Robertson v Ure
[2013] FCCA 812 Para 20

…ake the order ( re Frank; Ex parte Piliszky[41]; Hudson v Whalan[42] and Rigg v Baker[43] ). [41] (1987) 16 FCR 396 per Fisher J at 402, 403 [42] [1999] FCA 189 per Sackville, North & Hely JJ at [7]-[14] [43] (2006) 155 FCR 531 per French J at [62], per Cowdroy J at [109]…
Hijazi v CGU Workers Compensation
[2012] FMCA 956 Para 4

…test set out by Fisher J in Frank Re; Ex parte Piliszky (1987) 16 FCR 396 at [403] approved by the Full Court of the Federal Court in Hudson v Whalan [1999] FCA 189 at [10] that the sequestration order ought not to have been made.…
Stillman v Pascoe
[2012] FMCA 111 Para 1

…And his Honour goes on to note that that proposition is quoted with evident approval by the Full Court of the Federal Court in Hudson v Whalen [1999] FCA 189 at paragraph [10]. He then sets out at [63] a series of five propositions which are distilled from the judgment of Carr J in Pollock v Deputy Commissioner o…
Vonidis v BMW Australia Finance Limited
[2011] FCA 589 Para 19

…iscretion not to annul.” That proposition was quoted with evident approval by the Full Court in Hudson v Whalen [1999] FCA 189 at [10]. 63 In Pollock v Deputy Commissioner of Taxation (Cth) (1994) 94 ATC 4148, Carr J set out five propositions relevant to applications for annulment. They were derived from the judg…
Moss v Nationwide News Pty Ltd
[2009] FCA 1008 Para 40

…g of a sequestration order) and an application for the annulment of a bankruptcy under s 153B of the Bankruptcy Act are distinct: see Hudson v Whalan [1999] FCA 189 at [7]. However, the Court considers that as the appellant has challenged the making of the sequestration order it is useful to analyse whether the F…
NAB Limited v Satchithanantham
[2008] FMCA 1464 Para 4

…pt its submission that there would not be any appearance of bias by way of pre‑judgment if I proceeded to hear the petition (citing Hudson v Whalan [1999] FCA 189). Mr Satchithanantham appears not to dispute that the matter should remain in my docket, if I am, as I propose, inclined to adjourn the petition until…
Khan v Kerr
[2007] FMCA 512 Para 5

…in the circumstances bound not to make it and even then there is a residual discretion not to annul” (and see Hudson v Whalen [1999] FCA 189 in which this proposition was quoted at [10]).…
Legge v Mackinlays
[2007] FMCA 223 Para 1

…er Spender J ( “Re Gollan” ); Re Frank; Ex parte Piliszky (1987) 16 FCR 396 at 403 per Fisher J ( “Re Frank” ); Hudson v Whalan [1999] FCA 189 at paras. 9-12 per Sackville, North and Hely JJ ( “Hudson” ); Stankiewicz v Plata [2000] FCA 1185 at paras. 19 and 20 per Drummond, Sackville and Dowsett JJ ( “Stankiewicz…
Mahmoud v The Owners Corporation Strata Plan No 811 [No.3]
[2006] FMCA 1742 Para 1

…per Spender J ( “Re Gollan” ); Re Frank; Ex parte Piliszky (1987) 16 FCR 396 at 403 per Fisher J ( “Re Frank” ); Hudson v Whalan [1999] FCA 189 at paras. 9-12 per Sackville, North and Hely JJ ( “Hudson” ); Stankiewicz v Plata [2000] FCA 1185 at paras. 19 and 20 per Drummond, Sackville and Dowsett JJ ( “Stankiewi…
Fine Real Esate Network Pty Ltd v Howell (Bankrupt)
[2000] FCA 490 Para 4

…This situation is, in a general sense, by no means unique. It has arisen on a number of occasions, in the bankruptcy jurisdiction. In Hudson v Whalan [1999] FCA 189 the Full Federal Court (Sackville, North and Hely JJ) made the following observations at para 19: “The test in Australia of whether apprehended bias…

View all 14 citing cases →

Cases cited in this decision · 5 of 5 shown

Mobil Oil Australia Ltd v Wellcome International Pty Ltd
[1998] FCA 205 Para 19

…rejudge the case”: Webb v The Queen (1994) 181 CLR 41, at 47, per Mason CJ and McHugh J; Mobil Oil Australia Ltd v Wellcome International Pty Ltd (1998) 81 FCR 475 (FC), at 493. This principle does not mean that a Judge who has sat on one aspect of a case is precluded from dealing with other aspects, including the f…
Re Ginnane; Ex parte Ginnane
[1994] FCA 426 Para 11

…Later cases have adopted this analysis: Re Gollan; Ex parte Gollan (1992) 40 FCR 38 (Spender J), at 40-41; Re Ginnane; Ex parte Ginnane (1994) 60 FCR 429 (Ryan J), at 444-445. It has been accepted that s 153B can be invoked, subject to the exercise of the Court’s discretion, where the bankrupt can establish that, in…
Webb v the Queen
[1994] HCA 30 Para 19

…t is “whether fair-minded people might reasonably apprehend or suspect that the judge has prejudged or might prejudge the case”: Webb v The Queen (1994) 181 CLR 41, at 47, per Mason CJ and McHugh J; Mobil Oil Australia Ltd v Wellcome International Pty Ltd (1998) 81 FCR 475 (FC), at 493. This principle does not mean…
Re Gollan; ex parte Gollan
[1992] FCA 1044 Para 11

…Later cases have adopted this analysis: Re Gollan; Ex parte Gollan (1992) 40 FCR 38 (Spender J), at 40-41; Re Ginnane; Ex parte Ginnane (1994) 60 FCR 429 (Ryan J), at 444-445. It has been accepted that s 153B can be invoked, subject to the exercise of the Court’s discretion, where the bankrupt can establish that, i…
Livesey v New South Wales Bar Association
[1983] HCA 17 Para 19

…t on one aspect of a case is precluded from dealing with other aspects, including the final hearing. In Livesey v New South Wales Bar Association (1983) 151 CLR 288 at 294, the Court gave this warning: “If a judge at first instance considers that there is any real possibility that his participation in a case might le…

Legislation cited in this decision · 2

Bankruptcy Act 1966 (Cth)
1 mention (from Para 3)
Local Government Act 1993 (TAS)
1 mention (from Para 3)

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 931 OF 1998

BETWEEN:	ROBERT HUDSON JNR Appellant
AND:	STEPHEN WILLIAM MICHAEL WHALAN First Respondent THOMAS JAMES DONALD Second Respondent
JUDGE:	SACKVILLE, NORTH & HELY JJ
DATE OF ORDER:	3 MARCH 1999
WHERE MADE:	SYDNEY

JUDGE:	SACKVILLE, NORTH & HELY JJ
DATE:	3 MARCH 1999
PLACE:	SYDNEY