Re Quality Blended Liquor Pty Ltd - [2014] QSC 234

SUPREME COURT OF QUEENSLAND

CITATION:

Re Quality Blended Liquor Pty Ltd [2014] QSC 234

PARTIES:

In the matter of QUALITY BLENDED LIQUOR PTY LTD ACN 129 020 739

BS2133/14

INTERNATIONAL NETWORK CONSULTANTS PTY LTD ACN 071 377 190
(applicant)
v
WARREN ERIC TSCHANNEN IN HIS CAPACITY AS CONTROLLER OF QUALITY BLENDED LIQUOR PTY LTD ACN 129 020 739, POWER BEER AND LIQUOR PTY LTD ACN 164 195 108, POWER BEER AND LIQUOR OPEARTIONS PTY LTD ACN 166 999 239, ROMA SECURITIES PTY LTD ACN 137 882 976 AND TCHG SECURE FREIGHT PTY LTD
(first respondent)
and
QUALITY BLENDED LIQUOR PTY LTD ACN 129 020 739, POWER BEER AND LIQUOR PTY LTD ACN 164 195 108, POWER BEER AND LIQUOR OPERATIONS PTY LTD ACN 166 999 239, ROMA SECURITIES PTY LTD ACN 137 882 976 AND TCHG SECURE FREIGHT PTY LTD
(second respondent)
and
TOYCO AUSTRALIA PTY LTD ACN 055 774 439
(third respondent)

BS3073/14

INTERNATIONAL NETWORK CONSULTANTS PTY LTD ACN 071 377 190
(applicant)
v
QUALITY BLENDED LIQUOR PTY LTD ACN 129 020 739
(respondent)

BS3213/14

TOYCO AUSTRALIA PTY LTD ACN 055 774 439
(applicant)
v
QUALITY BLENDED LIQUOR PTY LTD ACN 129 020 739
(respondent)

FILE NO/S:

BS2133/2014, BS3073/2014 and BS3213/2014

DIVISION:

Trial

PROCEEDING:

Application

DELIVERED ON:

8 October 2014

DELIVERED AT:

Brisbane

HEARING DATE:

12, 13, 14, and 15 May 2014, and 24 July 2014

JUDGE:

Alan Wilson J

ORDERS:

BS2133/14 and BS3073/14

1.   The application filed on 1 April 2014 (proceeding 3073/14) be set down for hearing in the Applications List on Wednesday, 22 October 2014;

2.   The Court is to inquire into the conduct of Warren Eric Tschannen in connection with the performance and exercise of his powers as controller of Quality Blended Liquor Pty Ltd ACN 129 020 739, Power Beer & Liquor Pty Ltd ACN 164 195 108, Power Beer & Liquor Operations Pty Ltd ACN 166 999 239, Roma Securities Pty Ltd ACN 137 882 976 and TCHG Secure Freight Pty Ltd ACN 166 952 058 (receivers and managers appointed) (the Companies);

3.   On or before 17 October 2014, the first respondent is to deliver to the Court all books and records of the Companies, and the controller’s books;

4.   On or before 17 October 2014, the second respondents and third respondents are to deliver to the Court all books and records of the Companies;

5.   Anne Meagher and Terry Tose of SV Partners (the Provisional Liquidators) are to undertake an investigation of the conduct of Warren Eric Tschannen in connection with the performance and exercise of his powers as controller of the Companies (the Investigation) and prepare a report outlining the findings of the Investigation (the Report);

6.   In undertaking the Investigation, the Provisional Liquidators are to have access to the books and records delivered to the Court pursuant to orders 3 and 4 (the books and records), and the documents filed in court in proceedings 2133/14 and 3073/14;

7.   The Provisional Liquidators are…

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: [2014] QSC 234
Decision Date: 8 October 2014

CaseChat Overview and Summary

In the case of Re Quality Blended Liquor Pty Ltd, the applicants sought various declarations and orders concerning the appointment of a controller over several companies, the conduct of the controller, and the registration of security documents. The respondents were Warren Eric Tschannen, the second and third respondents, and the receivers and managers of the second respondents. The applicants alleged that Tschannen was not validly appointed as controller of the second respondents, and that he had not properly performed his duties. They also sought an investigation into his conduct and the appointment of a provisional liquidator to one of the second respondent companies. Additionally, the third respondent sought an extension of time to register security documents.

The central legal issues before the court were whether Tschannen’s appointment as controller was valid, whether there was a prima facie case for an inquiry into his conduct, and whether the third respondent’s application to extend the registration time for security documents should be granted. The court had to consider the validity of Tschannen’s appointment based on the executed documents and the alleged agreement regarding the loan, as well as the applicants’ allegations about his conduct during his controllership. Furthermore, the court had to assess the third respondent’s application for an extension of time to register the security documents under the relevant statutory provisions.

The court found that Tschannen’s appointment as controller was validly effected by the executed documents, despite the applicants' contentions to the contrary. It determined that there was a sufficient basis to order an inquiry into Tschannen’s conduct, given the allegations made by the applicants. The court accepted that the applicants had established a prima facie case warranting such an inquiry. Regarding the registration of security documents, the court was satisfied that the failure to register within the stipulated time was due to inadvertence, and therefore granted the extension of time sought by the third respondent.

The court ordered an inquiry into Tschannen’s conduct and directed that a report be prepared by the provisional liquidators. It also fixed a date for the registration of the security interest sought by the third respondent. Furthermore, the court set down a date for the hearing of the application and made several orders regarding the delivery of books and records, the conduct of the investigation, and the costs of the proceedings.

Orders

Orders of the court

BS2133/14 and BS3073/14

1. The application filed on 1 April 2014 (proceeding 3073/14) be set down for hearing in the Applications List on Wednesday, 22 October 2014;

2. The Court is to inquire into the conduct of Warren Eric Tschannen in connection with the performance and exercise of his powers as controller of Quality Blended Liquor Pty Ltd ACN 129 020 739, Power Beer & Liquor Pty Ltd ACN 164 195 108, Power Beer & Liquor Operations Pty Ltd ACN 166 999 239, Roma Securities Pty Ltd ACN 137 882 976 and TCHG Secure Freight Pty Ltd ACN 166 952 058 (receivers and managers appointed) (the Companies);

3. On or before 17 October 2014, the first respondent is to deliver to the Court all books and records of the Companies, and the controller’s books;

4. On or before 17 October 2014, the second respondents and third respondents are to deliver to the Court all books and records of the Companies;

5. Anne Meagher and Terry Tose of SV Partners (the Provisional Liquidators) are to undertake an investigation of the conduct of Warren Eric Tschannen in connection with the performance and exercise of his powers as controller of the Companies (the Investigation) and prepare a report outlining the findings of the Investigation (the Report);

6. In undertaking the Investigation, the Provisional Liquidators are to have access to the books and records delivered to the Court pursuant to orders 3 and 4 (the books and records), and the documents filed in court in proceedings 2133/14 and 3073/14;

7. The Provisional Liquidators are entitled to take a copy of the books and records and the documents filed in court in proceedings 2133/14 and 3073/14 for the purpose of undertaking the Investigation;

8. The first respondent, the second respondents, the third respondent and the receivers and managers of the second respondents provide all reasonably required assistance as requested by the Provisional Liquidators in conducting the Investigation;

9. The Provisional Liquidators are to file the Report with the Court on or before 14 November 2014;

10. The Provisional Liquidators are entitled to apply for further time to file the Report in the event that the required co-operation, particularly in producing books and records, is not supplied;

11. The Provisional Liquidators are to serve a copy of the Report on the applicant, the first respondent and the second respondents within 1 business day of filing the Report;

12. The inquiry be listed for further orders on a date not before 21 November 2014;

13. Until further order of the Court, the receivers and managers of the second respondents may not make any payment to the applicant, the first respondent or the third respondent from funds which they presently hold as receivers;

14. By 4:00 pm on 10 October 2014, the receivers and managers of the second respondents file and serve on the applicant any written submissions on which the receivers and managers of the second respondents rely on the question of costs of the hearing on 24 July 2014;

15. By 4:00 pm on 15 October 2014, the applicant file and serve on the receivers and managers of the second respondents any written submissions on which the applicant relies on the question of costs of the hearing on 24 July 2014;

16. By 4:00 pm on 17 October 2014, the receivers and managers of the second respondents file and serve on the applicants any written submissions in reply on the question of costs of the hearing on 24 July 2014;

17. By 4:00 pm on 15 October 2014, the applicant file and serve on the first and third Respondents any written submissions on which the applicant relies on the question of costs in these proceedings;

18. By 4:00 pm on 22 October 2014, the first and third respondents file and serve on the applicant any written submissions on which they rely on the question of costs in these proceedings;

19. By 4:00 pm on 24 October 2014, the applicant file and serve on the first and third respondents’ solicitors any written submissions in reply on the question of costs in these proceedings;

20. If any party requires a hearing about the issue of costs, that party notify the others and the Registrar of the Supreme Court of Queensland by 4:00 pm on 27 October 2014 that a hearing is necessary;

BS3213/14

21. Pursuant to s 588FM of the Corporations Act 2001 (Cth) the date 11 February 2014 be fixed as the registration time for the security interest granted to the application by the respondent with respect to the collateral referred to in registration number 201402110067571 in the register established under the Personal Property Securities Act 2009 (Cth).

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

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CITATION:	Re Quality Blended Liquor Pty Ltd [2014] QSC 234
PARTIES:	In the matter of QUALITY BLENDED LIQUOR PTY LTD ACN 129 020 739 BS2133/14 INTERNATIONAL NETWORK CONSULTANTS PTY LTD ACN 071 377 190 (applicant) v WARREN ERIC TSCHANNEN IN HIS CAPACITY AS CONTROLLER OF QUALITY BLENDED LIQUOR PTY LTD ACN 129 020 739, POWER BEER AND LIQUOR PTY LTD ACN 164 195 108, POWER BEER AND LIQUOR OPEARTIONS PTY LTD ACN 166 999 239, ROMA SECURITIES PTY LTD ACN 137 882 976 AND TCHG SECURE FREIGHT PTY LTD (first respondent) and QUALITY BLENDED LIQUOR PTY LTD ACN 129 020 739, POWER BEER AND LIQUOR PTY LTD ACN 164 195 108, POWER BEER AND LIQUOR OPERATIONS PTY LTD ACN 166 999 239, ROMA SECURITIES PTY LTD ACN 137 882 976 AND TCHG SECURE FREIGHT PTY LTD (second respondent) and TOYCO AUSTRALIA PTY LTD ACN 055 774 439 (third respondent) BS3073/14 INTERNATIONAL NETWORK CONSULTANTS PTY LTD ACN 071 377 190 (applicant) v QUALITY BLENDED LIQUOR PTY LTD ACN 129 020 739 (respondent) BS3213/14 TOYCO AUSTRALIA PTY LTD ACN 055 774 439 (applicant) v QUALITY BLENDED LIQUOR PTY LTD ACN 129 020 739 (respondent)
FILE NO/S:	BS2133/2014, BS3073/2014 and BS3213/2014
DIVISION:	Trial
PROCEEDING:	Application
DELIVERED ON:	8 October 2014
DELIVERED AT:	Brisbane
HEARING DATE:	12, 13, 14, and 15 May 2014, and 24 July 2014
JUDGE:	Alan Wilson J
ORDERS:	BS2133/14 and BS3073/14 1. The application filed on 1 April 2014 (proceeding 3073/14) be set down for hearing in the Applications List on Wednesday, 22 October 2014; 2. The Court is to inquire into the conduct of Warren Eric Tschannen in connection with the performance and exercise of his powers as controller of Quality Blended Liquor Pty Ltd ACN 129 020 739, Power Beer & Liquor Pty Ltd ACN 164 195 108, Power Beer & Liquor Operations Pty Ltd ACN 166 999 239, Roma Securities Pty Ltd ACN 137 882 976 and TCHG Secure Freight Pty Ltd ACN 166 952 058 (receivers and managers appointed) (the Companies); 3. On or before 17 October 2014, the first respondent is to deliver to the Court all books and records of the Companies, and the controller’s books; 4. On or before 17 October 2014, the second respondents and third respondents are to deliver to the Court all books and records of the Companies; 5. Anne Meagher and Terry Tose of SV Partners (the Provisional Liquidators) are to undertake an investigation of the conduct of Warren Eric Tschannen in connection with the performance and exercise of his powers as controller of the Companies (the Investigation) and prepare a report outlining the findings of the Investigation (the Report); 6. In undertaking the Investigation, the Provisional Liquidators are to have access to the books and records delivered to the Court pursuant to orders 3 and 4 (the books and records), and the documents filed in court in proceedings 2133/14 and 3073/14; 7. The Provisional Liquidators are…