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Patterson v Humfrey [No 2]

Patterson v Humfrey [No 2]

Case [2016] WASC 343 28 October 2016

Standing

Set Off

Order Made

Civil Litigation & Procedure

Type to search within this case.

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION: PATTERSON -v- HUMFREY [No 2] [2016] WASC 343

CORAM: LE MIERE J

HEARD: 19 OCTOBER 2016

DELIVERED : 28 OCTOBER 2016

FILE NO/S: COR 134 of 2013

MATTER :Skybow Holdings Pty Ltd
Section 232 and 233 of the Corporations Act

BETWEEN: CRAIG PATTERSON
First Plaintiff
LYNDA PATTERSON
Second Plaintiff
RODALE NOMINEES PTY LTD
Third Plaintiff
AND
BARRY HUMFREY
First Defendant
MARY HUMFREY
Second Defendant
KENESTA PTY LTD
Third Defendant

Catchwords:

Practice and procedure - Liberty to apply - Scope of liberty to apply - Principles relevant to liberty to apply - Whether order sought is within liberty to apply - Order made - Turns on own facts

Equity - Set off - Whether court can order debt owed by plaintiff to defendant can be set off against costs judgment owed by defendant to plaintiff - Appropriateness of order - Turns on own facts

Legislation:

Corporations Act 2001 (Cth)

Result:

Order sought by plaintiffs should be made

Category: B

Representation:

Counsel:

First Plaintiff                :     Mr M L Bennett & Mr D Banda
Second Plaintiff            :     Mr M L Bennett & Mr D Banda
Third Plaintiff               :     Mr M L Bennett & Mr D Banda
First Defendant             :     Mr C S Williams
Second Defendant         :     Mr C S Williams
Third Defendant           :     Mr C S Williams

Solicitors:

First Plaintiff                :     Bennett + Co
Second Plaintiff            :     Bennett + Co
Third Plaintiff               :     Bennett + Co
First Defendant             :     Solomon Brothers
Second Defendant         :     Solomon Brothers
Third Defendant           :     Solomon Brothers

Case(s) referred to in judgment(s):

Abigroup Ltd v Abignano [1992] FCA 567; (1992) 39 FCR 74
Australian Hardboards Ltd v Hudson Investment Group Ltd [2007] NSWCA 104; (2007) 70 NSWLR 201
Cameron v Renouf [2008] WASC 60
Corbett v Nguyen [No 2] [2012] NSWSC 673
Cristel v Cristel (1951) 2 KB 725
El‑Saeidy v NSW Land & Housing Corporation [No 8] [2014] NSWSC 191
Mainteck Services Pty Ltd v Stein Heurtey SA and Stein Heurtey Australia Pty Ltd [2013] NSWSC 1165
Patterson v Humfrey [2014] WASC 446
Wilden Pty Ltd v Green [2009] WASCA 38 (S)
Wilden Pty Ltd v Green [No 2] [2012] WASCA 34
LE MIERE J:

Summary

On 28 November 2014 I delivered reasons for judgment in which I found that the conduct of the affairs of Skybow Pty Ltd by the first defendant, Mr Humfrey, and the third defendant Kenesta Pty Ltd, was oppressive to, unfairly prejudicial to and unfairly discriminatory against the plaintiffs in their capacity as members of Skybow: Patterson v Humfrey [2014] WASC 446. I found that the court had power to make an order under Corporations Act 2001 (Cth) and that the appropriate relief was that either the plaintiffs or the defendants buy out the shares held by the other in Skybow. I determined that it was appropriate that the defendants acquire the plaintiffs' shares rather than the plaintiffs acquire the defendants' shares and that if the defendants fail…

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 Patterson v Humfrey [No 2]

Details

AGLC: Patterson v Humfrey [No 2] [2016] WASC 343
Case: [2016] WASC 343
Decision Date: 28 OCTOBER 2016

CaseChat Overview and Summary

In Patterson v Humfrey, the dispute revolved around the scope of a court's liberty to apply in the context of a set-off of debts between the parties. The case was heard and determined in the Supreme Court of Victoria. The plaintiff, Patterson, sought to set off a debt owed by the defendant, Humfrey, against a costs judgment that Patterson owed to Humfrey. The central legal issue was whether the court had the authority to order such a set-off in equity, and if so, whether it was appropriate to do so in the circumstances of this case.

The court examined the principles relevant to the liberty to apply and considered whether the order sought by the plaintiff fell within the court's discretion. It noted that the scope of the court's power to order a set-off is determined by the specific facts of each case, and that the court's role is to balance the equities between the parties. In this instance, the court found that the principles of equity supported the notion of a set-off where it would be just and equitable to do so, and that the court had the discretion to make such an order. The court concluded that, given the particular facts and circumstances, it was appropriate to order the set-off of the debts between the parties.

The court's decision was grounded in the equitable principle that allows for a set-off of mutual debts, provided it is just and fair to do so. The court found that the equities between the parties were balanced, and that ordering a set-off would not prejudice either party. As a result, the court granted the plaintiff's application to set off the debts, leading to the final orders that the debt owed by Patterson to Humfrey was set off against the costs judgment owed by Humfrey to Patterson.

Orders