Purcell v Public Curator of Queensland

The appeal concerned the priority of claims between a landlord and debenture-holders of a company. The appellants, debenture-holders of the Rockhampton Newspaper Co. Ltd., appointed a receiver who took possession of the company's assets due to default in payments. Subsequently, the respondent, the Public Curator of Queensland, acting as executor for a deceased landlord, initiated distress proceedings for over two years of unpaid rent. The debenture-holders sought a declaration that the landlord's claim for rent was limited to three months prior to the receiver's appointment and rent accrued thereafter, and an injunction to restrain the distress.

The central legal issue before the court was whether the appointment of a receiver by debenture-holders, under a floating charge, and the receiver's subsequent taking of possession of the company's assets, extinguished or limited the landlord's common law right to distrain for arrears of rent. This involved interpreting the interplay between the landlord's statutory and common law rights and the provisions of the *Companies Acts Amendment Act 1909* (Qd.), the *Companies (Winding-up) Act 1892* (Qd.), and the *Insolvency Act 1874* (Qd.).

The court held that section 18 of the *Companies Acts Amendment Act 1909* (Qd.) did not alter the landlord's right to distrain. This section, which mandates preferential payments by a receiver, was found not to adopt the distribution scheme of a winding-up or insolvency, nor did it affect the general rights of creditors inter se. Instead, it imposed a specific obligation on the receiver to pay certain debts in priority to the debenture-holders' claims, with a right to recoupment from the company's assets. The court reasoned that this section did not take away any existing right or prescribe a new one for other creditors, but merely fixed a special obligation on those availing themselves of its provisions. Furthermore, the court determined that section 21 of the *Companies (Winding-up) Act 1892* (Qd.), which refers to insolvency rules for determining creditor priorities, did not import section 145 of the *Insolvency Act 1874* (Qd.) into this context, as section 145 deals with the landlord's rights in insolvency, not general creditor priorities. A landlord's right to distrain was considered a common law privilege, not a secured debt, and was not affected by the statutory provisions concerning preferential payments or the appointment of a receiver when the company was not in liquidation.

The appeal was dismissed, affirming the decision of the Supreme Court of Queensland. The landlord was therefore entitled to proceed with the distress for the full amount of rent due, notwithstanding the appointment of the receiver and the debenture-holders' claims.