Macintosh v Turner Corporation Ltd (In liq)

In the case of Macintosh v Turner Corporation Ltd (In Liq), the applicant, Alexander MacKay Mackay Macintosh, applied for directions under s.479(3) of the Corporations Law, seeking approval to pay a sum of $1,525,000 to the State Bank of New South Wales, held by the liquidator of Turner Corporation Ltd (In Liq). The Bank argued that the Charge, which secured repayment of certain moneys due or to become due to the Bank by Turner, applied to the sum of $1,525,000 received by Turner, despite the prohibition on assignment contained in the Building Works Contract. Progard Fire Protection Co Pty Ltd, a creditor of Turner, opposed the application, arguing that the Charge did not apply to the sum of $1,525,000 received by the liquidator.

The court held that the prohibition on assignment contained in the Contract rendered the Charge ineffective, insofar as it purported to apply to Turner's right to performance of the Contract and its right to receive benefits accrued under the Contract. However, once Austotel paid Turner an amount due under the Contract, the sum of money received by Turner constituted one of its assets and was subject to the Charge, which was expressed to apply to "all assets whatsoever and wheresoever both present and future held by [Turner] in its own right". The court also held that the Charge applied to the sum of $1,525,000 received by the liquidator, as the language of the Charge was broad and apt to apply to moneys received by Turner after the date of crystallisation of the Charge.

The court rejected Progard's argument that the Charge could not apply to the sum of $1,525,000 received by the liquidator, as it was derived from the Contract. The court held that the prohibition contained in cl.1.04 did not evince an intention that payments made under the Contract to Turner could not be the subject of a charge created by that company. The court also held that the statutory scheme for the realisation and distribution of the company's assets did not operate to divest the company of beneficial ownership of the property, and that nothing in the Corporations Law had the effect that liquidation affected a secured creditor's ownership interest in assets subject to the security.

The court directed that the applicant was justified in paying to the State Bank of New South Wales the balance of the sum of $1,525,000 together with interest thereon, now standing to the credit of an account in the name of the first respondent in account No. 000 156 629 60 with the said Bank, after payment of his proper costs and fees and the expenses of this Application. The parties were given an opportunity to argue the question of costs.