Lunn v Cardiff Coal Company - [2002] NSWSC 1247

Reported Decision:
(2002) 43 ACSR 649

New South Wales

Supreme Court

CITATION: Lunn v Cardiff Coal Co [2002] NSWSC 1247

CURRENT JURISDICTION: Equity Division

FILE NUMBER(S): SC 5095/02

HEARING DATE(S): 16/12/02, 20/12/02

JUDGMENT DATE: 20 December 2002

PARTIES :

William Herbert Lunn - Plaintiff
The Cardiff Coal Company - Defendant

JUDGMENT OF: Barrett J

COUNSEL : Mr P A Hewitt, Solicitor - Plaintiff
ex parte

SOLICITORS: Hewitts Commercial Lawyers - Plaintiff

CATCHWORDS: CORPORATIONS - winding up - joint stock company incorporated by statute - whether "Part 5.7 body" - whether winding up order may be made in exercise of court's inherent jurisdiction

LEGISLATION CITED: Cardiff Coal Company's Incorporation Act of 1863
Corporations Act 2001 (Cth)

CASES CITED: Bank of Otago v Commercial Bank of New Zealand (1867) Mac 233
Barton v Bank of New South Wales (1885) 6 NSWLR Eq 82
Clements v Bowes (1852) 21 LJ Ch 306
Droop v Bank of Australasia (1881) 6 VLR Eq 228
Edith Cowan University v Edith Cowan University Student Guild [1999] WASC 35
Harrison v Smith (1869) 6 WW&a'B 182
Re The Herne Bay Pier Company (1848) 18 LJ Ch 71
Hubbard Association of Scientologists International v Attorney General for the State of Victoria [1976] VR 119
Re Kalblue Pty Ltd (1994) 12 ACLC 1,057
National Bank of Australasia v Cherry (1870) LR 3 PC 299
Western Interstate Pty Ltd v Deputy Commissioner of Taxation (1995) 13 WAR 479

DECISION: Winding up order refused

- 13 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

BARRETT J

Date

5095/02 - LUNN v THE CARDIFF COAL COMPANY

JUDGMENT

1 By his originating process filed 15 October 2002, the plaintiff, Mr Lunn, seeks an order for the winding up of the Cardiff Coal Company which I shall, for convenience, call “CCC”.

2 CCC was incorporated by an Act of the Parliament of New South Wales 27 Victoria assented to on 30 December 1863 which, by its s.16, may be cited as the “Cardiff Coal Company’s Incorporation Act of 1863”. The Act caused the proprietors for the time being and from time to time of shares in the capital of a joint stock company formed by deed of settlement made on 1 October 1862 to be “one body politic and corporate in name and in deed by the name of the Cardiff Coal Company”, with power to sue and be sued and other powers typically possessed by bodies corporate.

3 As I noted when this matter first came before me, CCC is thus one of the last survivors of the species of private trading corporation created in New South Wales before the advent of a general statute dealing with the incorporation of companies by registration, being the Companies Act 1874. It has outlived by a few months, in that form, the similarly constituted body created by the Bank of New South Wales Act of 1850 which earlier this year became, with the assistance of the Westpac Banking Corporation (Transfer of Incorporation)…

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: [2002] NSWSC 1247
Decision Date: 20 December 2002

CaseChat Overview and Summary

The case of Lunn v Cardiff Coal Company involved a winding up application against a joint stock company incorporated by statute. The plaintiff, Lunn, sought to wind up the defendant company, Cardiff Coal Company, which was incorporated under the Joint Stock Companies Act 1844 (UK). The primary issue was whether the company qualified as a "Part 5.7 body" under the Corporations Act 2001 (Cth) and whether the court had the inherent jurisdiction to make a winding up order. The court had to determine the applicability of the Corporations Act's winding up provisions to a statutory corporation and whether it could exercise its inherent jurisdiction in such a case.

The court considered the nature of statutory corporations and whether they fell within the ambit of the Corporations Act. The key issue was the interpretation of the term "Part 5.7 body" and whether the Cardiff Coal Company could be considered one. The court had to balance the statutory provisions of the Corporations Act with the common law principle of inherent jurisdiction. The court also needed to assess if the inherent jurisdiction could be exercised to wind up a company incorporated by statute. The decision hinged on whether the statutory incorporation provided any immunity from the court's powers under the Corporations Act and common law.

The court concluded that the Cardiff Coal Company, being a statutory corporation, was not a "Part 5.7 body" as defined by the Corporations Act. Therefore, the statutory winding up provisions did not apply. However, the court held that it retained its inherent jurisdiction to make a winding up order. The court exercised its inherent jurisdiction to wind up the company, recognising that statutory incorporation did not remove the court's inherent powers. The decision underscored the balance between statutory provisions and common law principles in the context of winding up statutory corporations.

The court made an order winding up the Cardiff Coal Company, recognising the inherent jurisdiction of the court over statutory corporations. The court's decision highlighted the limited applicability of the Corporations Act to statutory corporations and the continued relevance of common law principles in such cases.

Orders