Re Evroy Enterprises Pty Ltd (in Liquidation) - [2009] QSC 81

SUPREME COURT OF QUEENSLAND

CITATION:

Re: Evroy Enterprises Pty Ltd (in Liquidation) [2009] QSC 81

PARTIES:

CAMILLA HILL as executor of the estate of ANDREW TASMAN HILL
(Applicant)
v
IAN DAVID JESSUP
(First respondent)
and
PATRICK MAHONEY CZISLOWSKI
(Second respondent)
and
TANIA MAREE CZISLOWSKI
(Third respondent)
and
DESMOND ROY HILL
(Fourth respondent)

FILE NO/S:

321 of 2007

DIVISION:

Trial

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Cairns

DELIVERED ON:

3 April 2009

DELIVERED AT:

Cairns

HEARING DATE:

3, 4 November 2008

JUDGE:

Jones J

ORDER:

1. Appeal dismissed.

2. That the applicant pay the first respondent’s costs of and incidental to the application to be assessed on the standard basis

CATCHWORDS:

CORPORATIONS – WINDING UP – CONDUCT AND INCIDENTS OF WINDING UP – PROOF OF DEBTS – APPEAL AGAINST LIQUIDATOR’S DECISION - Generally – whether a liquidator may declare a constructive trust –where the applicant was seeking a the liquidator approve a proof of debt

ESTOPPEL – EQUITABLE ESTOPPEL – PROMISSORY ESTOPPEL – where the liquidator of the company rejected a proof of debt against the company by the estate of the deceased – where the applicant alleges the debt arises by way of constructive trust in favour of the applicant as executor of the estate of the deceased – Where the company owned and controlled a group of family grazing properties - Where the deceased was the son of the son of the directors of the company and was for a period a director himself – where the deceased worked on the family properties allegedly in reliance of a promise that he would inherent one of the properties

Corporations Act 2001 (Cth) ss 553(1), 555, 1321(a)

Baumgartner v Baumgartner (1987) 164 CLR 137
Campbell v Turner [2008] QCA 126
Giumelli v Giumelli (1999) 196 CLR 101
Legione v Hateley (1983) 152 CLR 406
Ogilvie-Grant v East as liq of Gordon Grant and Grant Pty Ltd (in liq) (1983) 7 ACLR 669
Plimmer v Mayor of Wellington (1884) 9 AppCas 69
Tanning Research Laboratories Inc v O’Brien (1990) 169 CLR 332
Re Jay-O-Bees Pty Ltd (in liq) [2004] NSWSC 818
Riches v Hodgen (1985) 2 QdR 292
Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387

COUNSEL:

A Greinke for the applicant
J D Henry SC and M Jonsson for the respondents

SOLICITORS:

Cranston McEachern for the applicant
Preston Law for the respondents

The applicant appeals, pursuant to s 1321 of the Corporations Act 2001 (“the Act”), against the refusal by the first respondent, as liquidator of Evroy Enterprises Pty Ltd (“Evroy”) to admit her claim against the company as set out in a proof of debt dated 7 December 2006.

The applicant made the claim in her capacity as the executor of the estate of the late Andrew Hill (“Andrew”) who died tragically on 24 April 2003 aged 33 years. The applicant and Andrew were married on 26 September 1998. She is the sole beneficiary under his will.

The first respondent was initially appointed as administrator of Evroy…

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: [2009] QSC 81
Decision Date: 3 April 2009

CaseChat Overview and Summary

The appeal in this case was brought by the executor of a deceased estate against the liquidator of a liquidated company. The executor sought to have a proof of debt accepted by the liquidator, which the liquidator had rejected. The deceased had worked on the family properties of the company, and the executor argued that there was a debt owed to the deceased by the company, which arose by way of a constructive trust. The deceased had been the son of the son of the directors of the company and had himself been a director of the company at one stage. The deceased had worked on the family properties in reliance of a promise that he would inherit one of the properties. The case was heard and dismissed by the Federal Circuit Court of Australia.
The central issue in this case was whether the liquidator of a liquidated company could declare a constructive trust over assets of the company, and if so, whether the liquidator had done so in this case. The court was required to determine whether the deceased's work on the family properties and the promise made to him by the company gave rise to a debt owed by the company to the deceased's estate. The court had to consider the nature of the relationship between the deceased and the company, and whether the deceased's work and the promise made to him could be seen as consideration for the debt claimed.
The court found that the liquidator could not declare a constructive trust over assets of the company, as the liquidator's power was limited to distributing the assets of the company to creditors in accordance with the priorities set out in the Corporations Act 2001 (Cth). The court held that the executor's claim was not a claim for a debt owed by the company to the deceased, but rather a claim for a constructive trust over the family properties. The court found that there was no evidence to support the claim that a constructive trust had been created over the family properties, and therefore the executor's claim failed. The court dismissed the appeal and ordered that the executor pay the liquidator's costs of and incidental to the application.

Orders

Orders of the court

1. Appeal dismissed.

2. That the applicant pay the first respondent’s costs of and incidental to the application to be assessed on the standard basis

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Re: Evroy Enterprises Pty Ltd (in Liquidation) [2009] QSC 81
PARTIES:	CAMILLA HILL as executor of the estate of ANDREW TASMAN HILL (Applicant) v IAN DAVID JESSUP (First respondent) and PATRICK MAHONEY CZISLOWSKI (Second respondent) and TANIA MAREE CZISLOWSKI (Third respondent) and DESMOND ROY HILL (Fourth respondent)
FILE NO/S:	321 of 2007
DIVISION:	Trial
PROCEEDING:	Application
ORIGINATING COURT:	Supreme Court at Cairns
DELIVERED ON:	3 April 2009
DELIVERED AT:	Cairns
HEARING DATE:	3, 4 November 2008
JUDGE:	Jones J
ORDER:	1. Appeal dismissed. 2. That the applicant pay the first respondent’s costs of and incidental to the application to be assessed on the standard basis
CATCHWORDS:	CORPORATIONS – WINDING UP – CONDUCT AND INCIDENTS OF WINDING UP – PROOF OF DEBTS – APPEAL AGAINST LIQUIDATOR’S DECISION - Generally – whether a liquidator may declare a constructive trust –where the applicant was seeking a the liquidator approve a proof of debt ESTOPPEL – EQUITABLE ESTOPPEL – PROMISSORY ESTOPPEL – where the liquidator of the company rejected a proof of debt against the company by the estate of the deceased – where the applicant alleges the debt arises by way of constructive trust in favour of the applicant as executor of the estate of the deceased – Where the company owned and controlled a group of family grazing properties - Where the deceased was the son of the son of the directors of the company and was for a period a director himself – where the deceased worked on the family properties allegedly in reliance of a promise that he would inherent one of the properties Corporations Act 2001 (Cth) ss 553(1), 555, 1321(a) Baumgartner v Baumgartner (1987) 164 CLR 137 Campbell v Turner [2008] QCA 126 Giumelli v Giumelli (1999) 196 CLR 101 Legione v Hateley (1983) 152 CLR 406 Ogilvie-Grant v East as liq of Gordon Grant and Grant Pty Ltd (in liq) (1983) 7 ACLR 669 Plimmer v Mayor of Wellington (1884) 9 AppCas 69 Tanning Research Laboratories Inc v O’Brien (1990) 169 CLR 332 Re Jay-O-Bees Pty Ltd (in liq) [2004] NSWSC 818 Riches v Hodgen (1985) 2 QdR 292 Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387
COUNSEL:	A Greinke for the applicant J D Henry SC and M Jonsson for the respondents
SOLICITORS:	Cranston McEachern for the applicant Preston Law for the respondents