Nationwide v Franklins - [2001] NSWSC 1120

Reported Decision:
(2002) 20 ACLC 309

New South Wales

Supreme Court

CITATION: Nationwide v Franklins [2001] NSWSC 1120

CURRENT JURISDICTION: Equity Division

FILE NUMBER(S): SC 5733/01

HEARING DATE(S): 03/12/01, 04/12/01

JUDGMENT DATE:
4 December 2001

PARTIES :

Nationwide Produce Holdings Pty Limited (In Liquidation) - First Plaintiff
John Howard Mann - Second Plaintiff
Franklins Limited - Defendant

JUDGMENT OF: Barrett J

COUNSEL : Mr J.T. Johnson - Plaintiffs
Mr A.J. Bannon SC/Mr D.T. Studdy - Defendant

SOLICITORS: Kemp Strang - Plaintiffs
Gilbert & Tobin - Defendant

CATCHWORDS: CORPORATIONS - standing of creditor to seek provisional liquidation - no standing where claim for unliquidated claim or where amount of liquidated claim tendered and paid into court - PROCEDURE - notice to produce - party called need not produce where object is to seek to discover whether case can be made

LEGISLATION CITED: Corporations Act
Trade Practices Act

CASES CITED: Alcatel Australia Limited v PRB Holdings Pty Ltd (1998) 27 ACSR 708
Australian Mid Eastern Club v Yassim (1989) 1 ACSR 399
Roy Morgan Research Centre Pty Ltd v Wilson Market Research Pty Ltd (1996) 39 NSWLR 311

DECISION: Defendant not required to answer notice to produce

IN THE SUPREME COURT REVISED
OF NEW SOUTH WALES
EQUITY DIVISION

BARRETT J

TUESDAY 4 DECEMBER 2001

5733/01 - NATIONWIDE PRODUCE HOLDINGS PTY LTD (IN LIQUIDATION) v FRANKLINS LIMITED

JUDGMENT

HIS HONOUR:

1 The plaintiff Nationwide Produce Holdings Pty Ltd (In Liquidation) claims to be a creditor or contingent or prospective creditor of the defendant on two bases. In that capacity, it seeks certain relief the nature of which I shall come to in due course.

2 The basis on which the plaintiff claims to be an actual creditor arises from an order for costs made by the court on 5 November 2001. The order was an order for costs as agreed or assessed and, when the plaintiff initiated its present application, there had been neither agreement nor assessment. After the matter came before the court yesterday afternoon, however, there was agreement that the amount of the costs was $14,190. Thereafter I was treated to the spectacle of tender of the defendant’s cheque for that amount by counsel for the defendant to counsel for the plaintiff and rejection of the tender. Counsel for the defendant then tendered a cheque for $14,190 drawn by its solicitors on their office account and that too was rejected. Next, I made, on the application of the defendant, an order for the payment of $14,190 into court by way of unconditional tender of the amount agreed as being payable pursuant to the order for costs. The defendant's solicitors’ cheque, drawn on their office account, was then paid into court and the court's receipt was tendered as an exhibit in the proceedings.

3 The plaintiff’s claim to be a contingent or prospective creditor arises from proceedings commenced against the defendant in the Federal Court. The proceedings are for unliquidated damages for alleged breach of contract and conduct contrary to s.52…

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.

Continue reading Nationwide v Franklins

Details

AGLC: Nationwide v Franklins [2001] NSWSC 1120
Case: [2001] NSWSC 1120
Decision Date: 4 December 2001

CaseChat Overview and Summary

The case of Nationwide v Franklins involved a creditor, Nationwide, seeking provisional liquidation of a debtor, Franklins. The dispute arose from Franklins' alleged insolvency and Nationwide's claim for an unliquidated debt. The case was heard in the Supreme Court of New South Wales. Nationwide argued that it had standing to seek provisional liquidation based on an unliquidated debt, while Franklins contended that the creditor's claim was not sufficient to warrant such a remedy. Additionally, the case raised questions about the procedural requirements for a creditor to seek provisional liquidation, specifically whether a creditor must have a liquidated claim or if an unliquidated claim could suffice.

The court was required to determine whether a creditor could seek provisional liquidation based on an unliquidated claim and whether a creditor must tender a liquidated amount into court before proceeding with such a claim. The court considered whether the creditor's failure to tender a liquidated amount into court or pay the entire amount of a liquidated claim would disqualify it from seeking provisional liquidation. Furthermore, the court had to examine the appropriate procedure for a creditor seeking to discover whether a case for provisional liquidation could be made, specifically whether a party called to produce documents need do so where the objective is to determine if a case can be made.

The court found that a creditor could not seek provisional liquidation based on an unliquidated claim or where the creditor had tendered an amount into court and the debtor had paid it. The court held that the creditor must either have a liquidated claim or tender the full amount of a liquidated claim into court before seeking provisional liquidation. Additionally, the court held that a party called to produce documents need not do so where the objective is to determine if a case for provisional liquidation can be made. The court emphasised the importance of adhering to procedural requirements when seeking provisional liquidation and noted that the remedy should not be granted lightly. The court dismissed Nationwide's application for provisional liquidation and ordered it to pay Franklins' costs.

Orders