Metal Manufactures Pty Limited v Gavin Morton as liquidator of MJ Woodman Electrical Contractors Pty Ltd (in liquidation) & Anor

Metal Manufactures Pty Limited appealed to the High Court of Australia against a decision of the Full Court of the Supreme Court of Victoria, which had affirmed a judgment in favour of Gavin Morton, the liquidator of MJ Woodman Electrical Contractors Pty Ltd (in liquidation), and a third party, Mr. John Woodman. The dispute concerned the recovery of alleged voidable transactions, specifically payments made by MJ Woodman Electrical Contractors Pty Ltd to Metal Manufactures Pty Limited during the period leading up to the company's liquidation.

The High Court was required to determine whether the liquidator's claim for recovery of the payments, brought under section 588FF of the Corporations Act 2001 (Cth), was barred by the defence of unjust enrichment, as argued by Metal Manufactures Pty Limited. Specifically, the court had to consider whether the equitable doctrine of unjust enrichment could operate as a defence to a statutory claim for the recovery of voidable transactions, and if so, whether the circumstances of the case gave rise to such a defence.

The High Court unanimously dismissed the appeal, holding that the defence of unjust enrichment was not available to Metal Manufactures Pty Limited. The Court reasoned that section 588FF of the Corporations Act provides a comprehensive statutory regime for the recovery of voidable transactions, and that Parliament did not intend for equitable defences, such as unjust enrichment, to undermine or qualify these statutory powers. The Court affirmed that the purpose of section 588FF is to facilitate the orderly winding up of insolvent companies by enabling liquidators to recover assets for the benefit of all creditors, and that allowing such a defence would frustrate this purpose. The Court distinguished the present case from situations where equitable principles might otherwise be relevant in insolvency proceedings, emphasizing the specific statutory framework governing voidable transactions.