Macks v Viscariello

[2017] SASCFC 172

SUPREME COURT OF SOUTH AUSTRALIA

(Full Court)

MACKS v VISCARIELLO

[2017] SASCFC 172

Judgment of The Full Court

(The Honourable Justice Lovell, The Honourable Auxiliary Justice Corboy and The Honourable Auxiliary Justice Slattery)

22 December 2017

APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - INTERFERENCE WITH JUDGE'S FINDINGS OF FACT - FUNCTIONS OF APPELLATE COURT

APPEAL AND NEW TRIAL - APPEAL - PRACTICE AND PROCEDURE - SOUTH AUSTRALIA - POWERS OF COURT - OTHER MATTERS

CORPORATIONS - MANAGEMENT AND ADMINISTRATION - DUTIES AND LIABILITIES OF OFFICERS OF CORPORATION - OFFICERS OF INSOLVENT CORPORATIONS - GENERALLY

CORPORATIONS - MANAGEMENT AND ADMINISTRATION - DUTIES AND LIABILITIES OF OFFICERS OF CORPORATION - OFFENCES - CONTRAVENTION OF PROVISIONS OF ACT

CORPORATIONS - WINDING UP - LIQUIDATORS - SUPERVISION OF LIQUIDATORS

Mr Viscariello, the respondent and cross-appellant, was a director of Bernsteen Pty Ltd and Newmore Pty Ltd. The two companies controlled a number of stores that sold linen products. In late 2001 the businesses experienced financial difficulties. Mr Macks was appointed administrator on 5 December 2001.

Negotiations between Mr Viscariello and a potential purchaser of the businesses, Mr Bart, led to the production of a proposed Deed of Company Arrangement (DOCA). The DOCA was not put before the meeting of creditors as Mr Macks considered that the major creditor (ARL) had not agreed to the terms. On 21 December 2001 the companies were placed into liquidation.

Mr Viscariello sued Mr Macks, in his capacity as administrator and liquidator, alleging (inter alia) that he was in breach of various statutory duties both as administrator and liquidator. Mr Viscariello sought damages and declarations.

Mr Viscariello alleged that Mr Macks as administrator (inter alia) failed to carry out and/or adequately and properly perform his duties as Voluntary Administrator; that he made false and misleading statements to creditors, that he breached his duties by failing to administer the companies so as to maximise their prospects of continuing to trade.

The Primary Judge rejected Mr Viscariello’s claims. Mr Viscariello cross-appealed against the findings of the Primary Judge.

Mr Viscariello alleged that Mr Macks, as liquidator, was motivated by personal motives, wishes and intentions that caused him not to act in the best interests of the creditors, members and contributories of the companies and to act unprofessionally. Mr Viscariello also alleged that Mr Macks acted with an improper purpose.

Mr Viscariello’s claims included a declaration that (inter alia) Mr Macks:

a.  Be removed as liquidator of the companies;

b.  Breached the duties imposed by ss 180, 181 and 182 of the Corporations Act (CA);

c.  Be not entitled to charge or retain any fees.

The Primary Judge found that in conducting the liquidation Mr Macks had breached ss 180, 181 and 182 of the CA and issued declarations to that effect. Central to the findings and resultant declarations was a finding that Mr Macks had acted with four substantive and actuating collateral purposes in pursuing litigation in breach of his duties under the CA.

Mr Macks appealed the…