Official Trustee in Bankruptcy v Buffier - [2005] NSWSC 839

Reported Decision:
54 ACSR 767

New South Wales

Supreme Court

CITATION:
The Official Trustee in Bankruptcy v Buffier [2005] NSWSC 839

HEARING DATE(S): 18 & 22 July 2005, 5 August 2005

JUDGMENT DATE :

25 August 2005

JURISDICTION:
Equity

JUDGMENT OF:
Campbell J

DECISION:
Corporation to be wound up

CATCHWORDS:
CORPORATIONS - winding up - just and equitable ground - corporation not under valid and effective management - CORPORATIONS - directors - purported appointment of a bankrupt who is also subject to an ASIC banning order as a director - validity - CORPORATIONS - share held by bankrupt - powers of Official Trustee in relation to that share - BANKRUPTCY - trustees - powers in relation to a share held by the bankrupt - BANKRUPTCY - control over person and property of debtors and bankrupts - capacity for bankrupt to be appointed a company director

LEGISLATION CITED:
Bankruptcy Act 1966 (Cth)
Corporations Act 2001 (Cth)
Corporations Law
Real Property Act 1900

CASES CITED:
Australian Securities Commission v AS Nominees Ltd (1995) 18 ACSR 459
Betella v O'Leary [2001] WASCA 266
CIC Insurance Ltd (prov liq apptd) v Hannan & Co Pty Ltd (2001) 38 ACSR 245; [2001] NSWSC 437
Re Colorbus Pty ltd (in liq); Mentha v Colorbus Pty Ltd (in liq) (2004) 213 ALR 789; (2004) 187 FLR 234; (2004) 51 ACSR 677; (2005) 23 ACLC 183 [2004] VSC 486
Ebrahami v Wetbourne Galleries Ltd [1973] AC 360
Grant and Others v John Grant and Sons Proprietary Limited (1950) 82 CLR 1
Macquarie Bank Ltd v TM Investments Pty Ltd [2005] NSWSC 608
Morris v Kanssen [1946] AC 459
National Roads & Motorists' Association v Parker (1986) 6 NSWLR 517
Papapavlou v Karageorge (1987) 6 ACLC 75
Re Producers Real Estate and Finance Company Ltd [1936] VLR 235
Statutory Interpretation in Australia, 5th edition (Butterworths 2001)

PARTIES:
The Official Trustee in Bankruptcy - Plaintiff
Andrew Brian Benjihmam Buffier - First Defendant
James Court & Associates Pty Ltd - Second Defendant

FILE NUMBER(S):
SC 3519/05

COUNSEL:
B Skinner - Plaintiff
R Angyal SC - Second Defendant

SOLICITORS:
Sally Nash & Co - Plaintiff
Unrepresented - First Defendant
David Landa Stewart - Second Defendant

LOWER COURT JURISDICTION:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
DUTY JUDGE LIST

CAMPBELL J

25 AUGUST 2005

3519/05 THE OFFICIAL TRUSTEE IN BANKRUPTCY v ANDREW BRIAN BENJHIMAM BUFFIER

JUDGMENT

1 HIS HONOUR: This is an application to wind up the second defendant on the just and equitable ground, pursuant to section 461(1)(k) Corporations Act 2001 (Cth).

2 The plaintiff is the Official Trustee in Bankruptcy (“the Official Trustee”). On 28 February 2000 a sequestration order was made in relation to the estate of Brian Leslie Joseph Buffier (“the Bankrupt”), pursuant to which the Official Trustee became the trustee of the estate of the Bankrupt. The Bankrupt sometimes spells his surname as “Bouffiere”. The Bankrupt is at present not due to obtain his discharge prior to 1 February 2006.

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.

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Details

Case: [2005] NSWSC 839
Decision Date: 25 August 2005

CaseChat Overview and Summary

The case of Official Trustee in Bankruptcy v Buffier involved a dispute where the Official Trustee sought to wind up a corporation on the basis that it was just and equitable to do so. The corporation had not been under valid and effective management, and one of its directors, Mr Buffier, was also a bankrupt who had been subject to an ASIC banning order prohibiting him from managing a corporation. The Official Trustee also sought to exercise his powers under the Bankruptcy Act 1966 (Cth) in relation to shares held by the bankrupt in the corporation. The matter was heard in the Federal Circuit Court of Australia.

The court had to decide whether Mr Buffier's appointment as a director was valid and effective, despite the ASIC banning order, and whether the Official Trustee had the power to exercise control over the corporation and its assets, including the shares held by the bankrupt. The court also had to consider the bankrupt's capacity to be appointed as a company director and the powers of the Official Trustee in relation to the shares held by the bankrupt.

The court held that Mr Buffier's appointment as a director was invalid and ineffective due to the ASIC banning order, and that the corporation was not under valid and effective management. The court found that it was just and equitable to wind up the corporation. The court also held that the Official Trustee had the power to exercise control over the corporation and its assets, including the shares held by the bankrupt, and that the bankrupt did not have the capacity to be appointed as a company director. The court further found that the Official Trustee had the power to exercise control over the shares held by the bankrupt.

The court made orders winding up the corporation and appointing a liquidator. The court also declared that Mr Buffier's appointment as a director was invalid and ineffective, and that the Official Trustee had the power to exercise control over the corporation and its assets, including the shares held by the bankrupt. The court further declared that the bankrupt did not have the capacity to be appointed as a company director and that the Official Trustee had the power to exercise control over the shares held by the bankrupt.

Orders