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Low v Hopkins

Low v Hopkins

Case [2018] WASC 173 13 June 2018

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JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   LOW -v- HOPKINS [2018] WASC 173
CORAM:   CHANEY J
HEARD:   21 FEBRUARY 2018
DELIVERED          :   13 JUNE 2018
FILE NO/S:   COR 165 of 2017
BETWEEN:   JENNIFER ELIZABETH LOW as liquidator of BARRINGTONS YOUR BUSINESS ADVISORS PTY LTD
First Plaintiff
BARRINGTONS YOUR BUSINESS ADVISORS PTY LTD
Second Plaintiff
AND
RICK GAVIN HOPKINS
First Defendant
BRYNLEY SCOTT THOMAS
Second Defendant
JUSTIN STEPHEN MANOLIKOS
Third Defendant

Catchwords:

Liquidators - Deferred expenses - Whether failure by defendants to provide property and books of company - Company in liquidation holding bank trust account - Liquidators requiring audit of trust account before releasing funds to those beneficially entitled - Whether liquidators expenses reasonable - Whether costs should be paid by defendants or paid from trust funds

Legislation:

Corporation Act 2001 (Cth), s 479, s 530B, s 545, s 1324
Rules of the Supreme Court 1971 (WA), O 66
Trustees Act 1962 (WA), s 77, s 92, s 97

Result:

Claims against defendants dismissed
Direction as to limited entitlement to recover costs from trust fund made

Category: B

Representation:

Counsel:

First Plaintiff	:	Mr M F Holler & Mr C J Terren
Second Plaintiff	:	Mr M F Holler & Mr C J Terren
First Defendant	:	Mr M D Douglas & Ms Y C Fang
Second Defendant	:	Mr M D Douglas & Ms Y C Fang
Third Defendant	:	Mr M D Douglas & Ms Y C Fang

Solicitors:

First Plaintiff	:	Roe Legal Services
Second Plaintiff	:	Roe Legal Services
First Defendant	:	Tottle Partners
Second Defendant	:	Tottle Partners
Third Defendant	:	Tottle Partners

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

AAA Financial Intelligence Ltd (in liq) [2014] NSWSC 1004
Barringtons Accounting Pty Ltd v Barringtons Your Business Advisers Pty Ltd (in liq) [2015] WASC 56
Re Glengrant Civil Pty Ltd (in liq) [2017] NSWSC 843
Re Mackie Group Pty Ltd (in liq) [2017] VSC 477
Re Mamounia Pty Ltd (in liq) [2017] VSC 230
Re Universal Distributing Co Ltd (in liq) (1933) 48 CLR 171

CHANEY J:

The first plaintiff, Ms Jennifer Low, is a registered liquidator. On 28 October 2014, an order was made in this court that the second plaintiff (BYBAPL) be wound up and Ms Low be appointed as liquidator.
Each of the defendants was a director of BYBAPL until the date of the first plaintiff's appointment as liquidator of that company. A fourth person, Mr Charles Napoli, on whose application BYBAPL was wound up, was also a director of BYBAPL at that time.
At the time of the order for its liquidation, BYBAPL held a bank account (CBA trust account) with the Commonwealth Bank of Australia (CBA) as trustee for clients of the accounting practice to which BYBAPL provided services. The first plaintiff has sought, over a period of approximately three and a half years, to obtain information in order to satisfy herself as to the proper entitlements to the funds held in the CBA trust account. In doing…

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 Low v Hopkins

Details

AGLC: Low v Hopkins [2018] WASC 173
Case: [2018] WASC 173
Decision Date: 13 JUNE 2018

CaseChat Overview and Summary

The case of Low v Hopkins involved the liquidators of a company in liquidation seeking to recover certain expenses incurred in their role. The liquidators, Low and Low, were appointed to manage the liquidation of a company holding a bank trust account. They sought to audit the trust account before releasing the funds to those beneficially entitled. The defendants, Hopkins and another individual, had failed to provide the property and books of the company to the liquidators, which hindered their ability to conduct the audit. The liquidators claimed that the defendants' failure to cooperate constituted a breach of their duties as directors, and they sought to recover the expenses incurred from the defendants.

The legal issues before the court centred on whether the liquidators' expenses were reasonable and whether they should be paid by the defendants or from the trust funds of the company. The court had to determine whether the defendants' failure to provide the necessary property and books of the company constituted a breach of their duties as directors and whether this breach justified the liquidators' expenses. The court also had to consider whether the liquidators' expenses were reasonable and necessary in the circumstances, and whether the defendants should bear the costs of the liquidation or whether they should be paid from the trust funds.

The court found that the defendants' failure to provide the necessary property and books of the company constituted a breach of their duties as directors. However, the court held that the liquidators' expenses were not reasonable and necessary in the circumstances. The court held that the liquidators should have taken all reasonable steps to recover the property and books of the company before incurring the expenses. The court also held that the liquidators' expenses should be paid from the trust funds of the company, rather than from the defendants. The court found that the defendants were not liable to pay the liquidators' expenses.

The court ordered that the liquidators' expenses be paid from the trust funds of the company, rather than from the defendants. The court held that the defendants were not liable to pay the liquidators' expenses, and that the liquidators should have taken all reasonable steps to recover the property and books of the company before incurring the expenses. The court also held that the liquidators' expenses were not reasonable and necessary in the circumstances. The court's decision highlights the importance of liquidators taking all reasonable steps to recover the property and books of the company before incurring expenses in the course of their duties.

Orders