Re: Pacific Hardware Brokers (Qld) P/L - [1997] QSC 234

IN THE SUPREME COURT
OF QUEENSLAND

Brisbane No.9573 of 1996

Before the Hon. Mr Justice Mackenzie

[re: Pacific Hardware Brokers (Qld) P/L]

IN THE MATTER of the Corporations
Law
- and -
IN THE MATTER of PACIFIC HARDWARE BROKERS (QLD) PTY LTD (IN LIQUIDATION)
ACN 056 564 419

CATCHWORDS: CORPORATIONS LAW - liquidation - void dispositions - solitaire diamond engagement ring and furniture paid for by cheques and debits against company’s assets by director, - whether transactions voidable as insolvent and/or uncommercial transactions - whether company insolvent at those times - whether recipient of the ring is a party to the transaction for the purposes of s.588FG - applicability of defence in s.588FG - whether ring can be recovered from her - whether ring purchased by director with loan from the company - whether purported compromise able to be rescinded.

Counsel:Mr P.A. Looney for the applicant.
Mr P.W. Hackett for the respondent.

Solicitors:MJ Murray & Co for the applicant.
HCF Lawyers for the respondent.

Hearing date: 8 December 1997

JUDGMENT - MACKENZIE J.

Judgment delivered 19 December 1997

This is an application by the liquidator of Pacific Hardware Brokers (Qld) Pty Ltd for orders under the Corporations Law concerning a solitaire diamond ring and furniture paid for by cheques and other debits against the company’s assets.
With respect to the furniture an order is sought under s.483(1) of the Corporations Law that it be delivered to the liquidator or, in the alternative, that Kristopher Hollworth pay $2,519 (the purchase price) to the liquidator. With respect to the ring which was given by Mr Hollworth to the woman whom he subsequently married as an engagement ring the following orders were sought:-
·that Kristopher Hollworth deliver it pursuant to s.588FF or in the alternative s.483(1) of the Corporations Law;
·further or in the alternative to those orders an order under s.588FF against Mrs Hollworth for delivery of the ring;
·in the alternative to all of those orders an order under s.588FF(1)(d) that Mr Hollworth and/or Mrs Hollworth pay $41,926, the value attributed to the ring in a certificate dated 31May 1996 by the jeweller who manufactured the ring;
·in the alternative to an order to pay that sum, an order against Mr Hollworth pursuant to s.588FF(1)(a) that he pay $30,000, the purchase price of the ring.

Mr Hollworth was the sole director of the company. Mrs Hollworth was not in any way concerned with its management or its operations. The furniture was purchased from Freedom Furniture with a cheque drawn on the company account on 10 May 1996. The butt is endorsed “office furniture”. In his evidence Mr Hollworth conceded that he had intended to use that description to gain a tax advantage and the furniture was never situated at the company’s office and that the only use to which it was put was at his residence.
The ring was purchased from a jeweller at Annerley for $30,000. It was paid for by two cheques of $10,000 dated 10 June 1996 and…

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 Re: Pacific Hardware Brokers (Qld) P/L

Details

AGLC: Re: Pacific Hardware Brokers (Qld) P/L [1997] QSC 234
Case: [1997] QSC 234
Decision Date: 19 December 1997

CaseChat Overview and Summary

The Supreme Court of Queensland dealt with an application by the liquidator of Pacific Hardware Brokers (Qld) Pty Ltd concerning the recovery of a solitaire diamond ring and furniture. The liquidator sought orders under the Corporations Law for the delivery of the furniture to the liquidator or for the payment of its purchase price by the director, Kristopher Hollworth, and for the delivery or payment of the value of the ring. The transactions in question involved the purchase of the furniture and the ring using cheques and Bartercard credits drawn on the company's assets. The legal issues before the court included whether the transactions were voidable as insolvent and uncommercial transactions, whether the company was insolvent at the relevant times, and whether the recipient of the ring was a party to the transaction for the purposes of section 588FG of the Corporations Law.

The court found that Mrs Hollworth, the recipient of the ring, was not a party to the transaction and thus protected under section 588FG of the Corporations Law. The court also found that the transactions were uncommercial and that the company was insolvent at the relevant times. Given the director's deficient credibility, the court ruled that an order should be made against Mr Hollworth under section 588FF(a) for the ring and under section 483 for the furniture. The court ordered Mr Hollworth to pay $30,000 to the company and to deliver the furniture within a specified time frame. The court reserved the matter of costs for later determination.

Orders