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Pitt-Owen v Lenin

Pitt-Owen v Lenin

Case [2006] NSWSC 748 28 July 2006

Winding Up & Liquidation

Assignment of Claims

Set-off

Corporate Law & Governance

Insolvency Law

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Reported Decision:
(2006) 24 ACLC 964

New South Wales

Supreme Court

CITATION: Pitt-Owen v Lenin [2006] NSWSC 748
This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S): 21/06/06
Written submissions - 05/07/06, 06/07/06

JUDGMENT DATE :
28 July 2006

JURISDICTION: Equity Division
Corporations List

JUDGMENT OF: Barrett J

DECISION: Leave to proceed to be granted

CATCHWORDS: CORPORATIONS - winding up - whether leave to proceed against company should be granted - proceedings upon company's causes of action against its landlord - such causes of action assigned - where landlord claims unpaid rent against company - whether claim for rent alone can be proved - nature of subject matter of assignment of causes of action having regard to set-off at commencement of winding up

LEGISLATION CITED: Corporations Act 2001 (Cth), ss.500(2), 553C, Part 5.3A,

CASES CITED: Barton v Atlantic 3 Financial (Australia) Pty Ltd (2004) 212 ALR 348
Gye v McIntyre (1991) 171 CLR 609
Ogilvie-Grant v East (1983) 7 ACLR 669
Stein v Blake [1996] AC 243

PARTIES: David Albert Pitt-Owen - Plaintiff
Michael Lenin - Defendant

FILE NUMBER(S): SC 2304/06

COUNSEL: Ms N.C. Bearup - Plaintiff
Mr M.A. Ashhurst - Defendant

SOLICITORS: Levitt Robinson - Plaintiff
Hicksons - Defendant

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

BARRETT J

FRIDAY, 28 JULY 2006

2304/06 DAVID ALBERT PITT-OWEN v MICHAEL LENIN

JUDGMENT

1 I have before me an application for leave under s.500(2) of the Corporations Act 2001 (Cth) to proceed by way of cross-claim against a company which is subject to creditors voluntary winding up as a consequence of voluntary administration under Part 5.3A of that Act. The company is Sydney Accommodation Group Pty Limited (“SAG”).

2 An associated company, Diamondgaze Pty Limited, is involved in the proceedings and is also in the course of being wound up. However, the application for leave to proceed is made in respect of SAG only.

3 That application is made by Mr Lenin, the sole defendant in the proceedings. The sole plaintiff is Mr Pitt-Owen. He, as the alleged assignee of causes of action said to have accrued to SAG, sues Mr Lenin in relation to certain representations said to have been made by Mr Lenin to SAG at the time SAG took a lease of certain premises at Kirribilli from Mr Lenin. Mr Pitt-Owen, as assignee, also sues Mr Lenin for alleged breaches of the covenant for quiet enjoyment contained in the lease.

4 Mr Lenin, by way of defence to the claims advanced by Mr Pitt-Owen, denies the validity of that the alleged assignment by SAG to Mr Pitt-Owen, denies the making of the alleged representations and denies breach of the covenant for quiet enjoyment.

5 By the proposed cross-claim (a copy of which was produced to the court and initialled and dated by Austin J on 29 May 2006), Mr Lenin proposes to proceed against four cross-defendants, being SAG, Mr Albarran (the liquidator…

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 Pitt-Owen v Lenin

Details

AGLC: Pitt-Owen v Lenin [2006] NSWSC 748
Case: [2006] NSWSC 748
Decision Date: 28 July 2006

CaseChat Overview and Summary

In the matter of Pitt-Owen v Lenin, the respondent sought leave to bring proceedings against the company, which was in liquidation, on causes of action that had been assigned to the respondent by the company. The company had brought proceedings against its landlord, seeking compensation for breaches of the lease and seeking to recover costs and expenses incurred in the proceedings. The landlord subsequently sought to recover unpaid rent from the company. The respondent argued that the assignment of the causes of action was valid and that the company's claim against the landlord could be pursued despite the company's liquidation. The legal issues for the court to determine were whether the assignment of the causes of action was valid and whether the claim for unpaid rent could be pursued against the company.

The court considered the nature of the assignment of the causes of action and the effect of the set-off at the commencement of the winding up. The court held that the assignment of the causes of action was valid and that the respondent was entitled to proceed with the proceedings on the assigned causes of action. The court also held that the claim for unpaid rent could be pursued against the company, as it was a separate cause of action from the company's claim against the landlord. The court found that the nature of the subject matter of the assignment of causes of action was not affected by the set-off at the commencement of the winding up.

The court granted the respondent leave to proceed with the proceedings against the company on the assigned causes of action. The court also held that the claim for unpaid rent could be pursued against the company, as it was a separate cause of action from the company's claim against the landlord. The court found that the nature of the subject matter of the assignment of causes of action was not affected by the set-off at the commencement of the winding up. The court ordered that the respondent be granted leave to proceed with the proceedings against the company on the assigned causes of action, and that the claim for unpaid rent could be pursued against the company.

Orders