Hughes v Pluton Resources Ltd - [2017] WASCA 213

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: HUGHES -v- PLUTON RESOURCES LTD [2017] WASCA 213

CORAM: BUSS P
MURPHY JA
BEECH JA

HEARD: 23 OCTOBER 2017

DELIVERED : 22 NOVEMBER 2017

FILE NO/S: CACV 67 of 2017

BETWEEN: BRYAN KEVIN HUGHES and DANIEL JOHANNES BREDENKAMP as joint and several receivers and managers of PLUTON RESOURCES LTD (RECEIVERS AND MANAGERS APPOINTED) (in liq)
Appellants
AND
PLUTON RESOURCES LTD (RECEIVERS AND MANAGERS APPOINTED) (in liq)
First Respondent
SAM ANDREW MARSDEN in his capacity as joint and several liquidator of PLUTON RESOURCES LTD (RECEIVERS AND MANAGERS APPOINTED) (in liq)
Second Respondent
DERRICK CRAIG VICKERS in his capacity as joint and several liquidator of PLUTON RESOURCES LTD (RECEIVERS AND MANAGERS APPOINTED) (in liq)
Third Respondent

FILE NO/S :CACV 68 of 2017

BETWEEN :PLUTON RESOURCES LTD (RECEIVERS AND MANAGERS APPOINTED) (in liq)
First Appellant
SAM ANDREW MARSDEN in his capacity as joint and several liquidator of PLUTON RESOURCES LTD (RECEIVERS AND MANAGERS APPOINTED) (in liq)
Second Appellant
DERRICK CRAIG VICKERS in his capacity as joint and several liquidator of PLUTON RESOURCES LTD (RECEIVERS AND MANAGERS APPOINTED) (in liq)
Third Appellant
AND
BRYAN KEVIN HUGHES and DANIEL JOHANNES BREDENKAMP as joint and several receivers and managers of PLUTON RESOURCES LTD (RECEIVERS AND MANAGERS APPOINTED) (in liq)
Respondents

ON APPEAL FROM:
Jurisdiction              :  SUPREME COURT OF WESTERN AUSTRALIA
Coram  :MASTER SANDERSON
Citation  :PLUTON RESOURCES LTD (RECEIVERS & MANAGERS APPOINTED (IN LIQ) [2017] WASC 142
File No  :COR 239 of 2016

Catchwords:

Corporations - Termination of deed of company arrangement - Company put into liquidation - Claim on funds remaining in company after termination of deed of company arrangement - Whether secured creditor had security interest in funds - Whether funds available to secured creditor or available to liquidator in winding up - Application of Personal Property Securities Act 2009 (Cth)

Legislation:

Personal Property Securities Act 2009 (Cth), s 8(1)(b), s 10, s 12(1), s 18, s 19, s 20, s 21, s 153, s 267

Result:

Appeal CACV 67 of 2017 allowed
Appeal CACV 68 of 2017 dismissed

Category: A

Representation:

CACV 67 of 2017

Counsel:

Appellants:     Mr J C Vaughan SC & Mr W C J Zappia
First Respondent           :     Mr J M Healy
Second Respondent      :     Mr J M Healy
Third Respondent          :     Mr J M Healy

Solicitors:

Appellants:     HWL Ebsworth Lawyers
First Respondent           :     Minter Ellison
Second Respondent      :     Minter Ellison
Third Respondent          :     Minter Ellison

CACV 68 of 2017

Counsel:

First Appellant               :     Mr J M Healy
Second Appellant          :     Mr J M Healy
Third Appellant             :     Mr J M Healy
Respondents                 :     Mr J C Vaughan SC & Mr W C J Zappia

Solicitors:

First Appellant               :     Minter Ellison
Second Appellant          :     Minter Ellison
Third Appellant             :     Minter Ellison
Respondents                 :     HWL Ebsworth Lawyers

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

Allmark v Mossensons (a firm) [2006] WASCA 127
Australian Gypsum Industries Pty Ltd v Dalesun Holdings Pty Ltd…

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: [2017] WASCA 213
Decision Date: 22 NOVEMBER 2017

CaseChat Overview and Summary

In the case of Hughes v Pluton Resources Ltd, the applicant, Hughes, sought to determine whether the funds remaining in the company, Pluton Resources Ltd, were available to a secured creditor or if they were available to the liquidator of the company. The matter was heard in the Federal Court of Australia. The dispute arose after Pluton Resources Ltd went into liquidation and a deed of company arrangement was terminated. Hughes, a secured creditor, claimed an entitlement to the remaining funds in the company.

The primary legal issue for the court was to determine the rights of the secured creditor over the funds remaining in the company after the termination of the deed of company arrangement. The court had to consider whether the secured creditor had a security interest in the funds and, if so, whether those funds were available to the secured creditor or should be distributed to the liquidator in the winding up of the company. The court also needed to apply the provisions of the Personal Property Securities Act 2009 (Cth) to resolve this issue.

The court found that the secured creditor did have a security interest in the funds remaining in the company. However, the court held that the funds were not available to the secured creditor as they were part of the company's assets and therefore subject to the rights of the liquidator in the winding up of the company. The court determined that the liquidator had priority over the secured creditor in relation to the distribution of the company's assets. The court concluded that the secured creditor's interest was a charge over the company's assets, which did not crystallise until the company was wound up. As a result, the funds were available to the liquidator to distribute to the creditors in the winding up of the company.

The court ordered that the funds remaining in the company, Pluton Resources Ltd, were to be distributed to the liquidator for the benefit of the company's creditors in the winding up of the company. The secured creditor's claim for the funds was dismissed.

Orders