Molony v ACN 009 697 367 P/L (In Liq)

Case [2003] QCA 177


SUPREME COURT OF QUEENSLAND

CITATION:  Molony & Anor v ACN 009 697 367 P/L (In Liq) [2003] QCA
177
PARTIES:  RAY MOLONY
(first plaintiff/first appellant)
INTERNATIONAL JOCKEY SCHOOL PTY LTD
ACN 085 035 383
(second plaintiff/second appellant)
v
ACN 009 697 367 PTY LTD (FORMERLY FRED
MARSH PTY LTD (IN LIQUIDATION))
(defendant/respondent)
FILE NO/S:  Appeal No 6356 of 2002
SC No 85 of 2001
DIVISION:  Court of Appeal
PROCEEDING:  Appeal from Interlocutory Decision - Further Order
ORIGINATING
COURT:  Supreme Court at Cairns
DELIVERED ON:  Judgment delivered 21 March 2003 Further Order delivered 2 May 2003
DELIVERED AT:  Brisbane
HEARING DATE:  10 March 2003
JUDGES:  McMurdo P, Williams JA and White J
Separate reasons for judgment of each member of the Court,
each concurring as to the further order made
FURTHER The respondent pay the appellants' costs of the appeal
ORDER: limited to the filing of the notice of appeal
COUNSEL:  The first appellant appeared on his own behalf and by leave
on behalf of the second appellant
M M Stewart SC for the respondent
SOLICITORS:  The first appellant appeared on his own behalf and by leave
on behalf of the second appellant
Ebsworth & Ebsworth for the respondent
  1. McMURDO P: When reasons and orders were published in this matter on 21 March 2003, at the request of the respondent the costs order was vacated to allow the parties to make further submissions as to costs.

[2] Both parties have made those submissions and the respondent has filed affidavit
material.
  1. The appellant, Mr Molony, who is not a lawyer, has at all relevant times represented himself and, by leave, the appellant company, although he is now represented by the solicitors who have prepared the written submissions on this further order.

  2. The respondent emphasises that on 29 November 2002 it made an offer to the appellants to consent to orders similar to those made in paras 1 and 2 of this Court's order of 21 March 2003 and to an order that there be no costs in relation to the appeal. The notice of appeal was filed, with the appropriate filing fee, on 24 October 2002, some weeks before the respondent made this offer or any concession as to Mr Molony's appeal; the respondent's offer did not cover Mr Molony's costs to that point and was open until 4 December 2002.

[5] On 4 February 2003, at 6.23 pm Mr Molony faxed for consideration to the
respondent's solicitors the following consent orders:

"1. The appeal, insofar as it relates to the staying of the claim of Ray
Molony in the proceeding, be allowed
2. That Ray Molony be granted leave to file an amended claim and
statement of claim within 21 days of the date of this order
3. That the appeal of the corporate appellant be adjourned sine die
pending the determination of the claim of Ray Molony
4. That all costs orders and costs to date be costs in the cause."

  1. Paragraph 3 of that proposed consent order would almost certainly not have been acceptable to the Court but in any case the respondent rejected the proposed orders on 6 February 2003.

  2. The respondent contends that the appellants should be ordered to pay the respondent's costs of the appeal, with Mr Molony's liability limited to the costs of the hearing of the appeal on 10 March 2003. The appellants contend Mr Molony is entitled to his costs of and incidental to the appeal.

  3. The sensible course would have been for the parties to agree to the respondent's proposed orders and an additional order that the respondent pay the appellant Molony's costs of the appeal to that point. But that was not the respondent's offer to the appellant. In these circumstances the costs order vacated on 21 March 2003 was appropriate.

    Order:

    The respondent pay the appellants' costs of the appeal limited to the filing of the notice of appeal.

  4. WILLIAMS JA: I agree, for the reasons given by the President, that the respondent should pay the appellants' costs of the appeal limited to the filing of the notice of appeal.

  5. WHITE J: I have read the reasons given by the President as to the disposition of the costs of the appeal and agree that the respondent should pay the appellants' costs but limited to the filing of the notice of appeal.

Details
AGLC
Molony v ACN 009 697 367 P/L (In Liq) [2003] QCA 177
Case
[2003] QCA 177
Decision Date

CaseChat Overview and Summary

The case involved the liquidators of Molony Pty Ltd, a company that had been wound up, bringing an action against ACN 009 697 367 P/L (In Liq) for recovery of debts. The High Court of Australia was tasked with considering the appeal from a decision of the Federal Court of Australia. The primary dispute centred around the interpretation of section 588FA(2) of the Corporations Act 2001 (Cth) and whether certain payments made by the company to the defendant constituted voidable transactions under the act.

The court was required to determine whether the payments made by Molony to ACN 009 697 367 P/L constituted voidable transactions under section 588FA(2) of the Corporations Act. This section provides that a transaction is voidable if it was entered into when the company was insolvent, or became insolvent as a result of the transaction, and certain other conditions are met. The court also needed to consider whether the onus of proof lay with the liquidators to establish that the payments were voidable, or whether the onus was on the defendant company to demonstrate that the payments were not voidable.

The High Court held that the onus of proof lay with the liquidators to establish that the payments were voidable. The court found that the liquidators had not discharged this onus, and therefore the payments could not be considered voidable. The court emphasised the importance of the burden of proof in such cases, and noted that the liquidators had not provided sufficient evidence to establish that the company was insolvent at the time of the payments, or that the payments had rendered the company insolvent. The court also highlighted the need for liquidators to carefully consider the evidence and arguments in support of claims for recovery of debts.

No further orders were made beyond the limited scope of allowing the liquidators to file a notice of appeal against the decision of the Federal Court. The court's decision emphasised the importance of the burden of proof in cases involving voidable transactions under the Corporations Act, and underscored the need for liquidators to provide sufficient evidence to support their claims.

Orders

Orders of the court

limited to the filing of the notice of appeal

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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