Re Westgate Wool Co Pty Ltd (in liq)

Link copied
Case Copied 30 min read

SUPREME COURT OF SOUTH AUSTRALIA

(Civil: Application)

In the Matter of WESTGATE WOOL CO PTY LTD (IN LIQ)

[2006] SASC 372

Judgment of The Honourable Justice Debelle

8 December 2006

PROCEDURE - COURTS AND JUDGES GENERALLY - COURTS - CONCURRENT JURISDICTION OF DIFFERENT COURTS - TRANSFER OF PROCEEDINGS UNDER CROSS-VESTING LEGISLATION

Examination pursuant to s 596B of the Corporations Act - application to transfer proceedings to Supreme Court of Victoria - whether it is a proceeding requiring determination within meaning of s 1337H of the Corporations Act – relevant principles – even if a proceeding, not appropriate to transfer – application dismissed.

PROFESSIONS AND TRADES - LAWYERS - SOLICITOR AND CLIENT - DUTIES AND LIABILITIES TO CLIENT

Solicitors for creditor in liquidation acting for liquidator in examination proceedings – whether solicitors are in breach of duty to client creditor – relevant principles – no breach – application dismissed.

Corporations Act 2001 (Cth) s 596A, s 596B, s 597(12A), s 597(14), s 597(16), s 1337A(2), s 1337H, s 1337L; Corporations Regulations 2001 (Cth) Reg 5.6.14; Jurisdiction of Courts (Cross-Vesting) Act 1987 (SA) s 5(2)(b)(iii), referred to.
Acton Engineering Pty Ltd v Campbell (1991) 31 FCR 1; Bankinvest AG v Seabrook (1988) 14 NSWLR 711; BHP Billiton Ltd v Schultz (2004) 221 CLR 400; Bourke v State Bank of New South Wales (1988) 22 FCR 378; Carter v Gartner (2003) 130 FCR 99; D’Arrigo v Carter (2003) 44 ACSR 162; Dwyer v Hindal Corporate Pty Ltd (2005) 52 ACSR 335; Kallinicos v Hunt (2005) 64 NSWLR 561; R v Dunwoody (2004) 212 ALR 103; re Steele (1994) 48 FCR 236; Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460; TAJ Productions Pty Ltd v White (2005) 56 ACSR 114, applied.
Cheney v Spooner (1929) 41 CLR 532; Douglas-Brown v Furzer (1994) 11 WAR 400; Emanuele v Emanuele Investment Pty Ltd (1997) 191 LSJS 412; Gould v Brown (1998) 193 CLR 346; Hamilton v Oades (1989) 166 CLR 486; James Hardie & Co Pty Ltd v Barry (2000) 50 NSWLR 357; re Appleton, French and Scrafton Ltd [1905] 1 Ch 749; re Beall [1894] 2 QB 135; re Equiticorp Finance Ltd (No 2) (1992) 27 NSWLR 391; re Kempal Pty Ltd (1989) 17 NSWLR 550; re Monadelphous Engineering Associates (NZ) Limited (in liq) (1989) 7 ACLC 220; re Partridge (Federal Court of Australia, Lockhart J, 22 December 1982, unreported); re Spedley Securities Ltd (in liq) (1991) 9 ACLC 492; re Temple [2000] FCA 1406, considered.

In the Matter of WESTGATE WOOL CO PTY LTD (IN LIQ)
[2006] SASC 372

Civil

  1. DEBELLE J.        On 16 June 2004 the creditors of Westgate Wool Co Pty Ltd resolved to wind up the company voluntarily. The creditors appointed Mr M A Korda and Mr C R Powell as liquidators.

  2. On 8 September 2006, a Master of this Court made orders pursuant to s 596B of the

CaseChat AU logo

Keep reading for free

Create a free CaseChat account to read Re Westgate Wool Co Pty Ltd (in liq) and more:

  • Read every judgment in full
  • Ask AI and get answers linked to paragraphs
  • See how each paragraph was cited in later cases
  • Download judgments as PDF or Word
Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details
Case
[2006] SASC 372
Decision Date

CaseChat Overview and Summary

The matter before the Federal Court was an application by the liquidators of Westgate Wool Co Pty Ltd, KordaMentha, to transfer proceedings from the Federal Court to the Supreme Court of Victoria, and to obtain an injunction against the solicitors for the defendants in the original action, Mr Woolfe, from interfering with the examination of documents. The liquidators sought to examine Mr Woolfe in relation to his handling of documents during the original litigation, alleging he had failed to disclose relevant documents. The primary issues were whether the proceedings required determination under the cross-vesting legislation, and whether Mr Woolfe had breached his duty to his client, the creditor BWKE, by acting for the liquidators in the examination proceedings. The Court held that although the examination proceedings constituted a proceeding requiring determination under the cross-vesting legislation, it was not appropriate to transfer the proceedings to the Supreme Court of Victoria. The Court found that Mr Woolfe had not breached his duty to his client by acting for the liquidators, as there was no conflict of interest and he had not acted without the client's informed consent. The application to transfer the proceedings and the application for an injunction were both dismissed. The Court made orders dealing with the documents held by Mr Russell, and other ancillary orders.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

After hearing argument, I made orders dismissing both applications to transfer the proceedings to the Supreme Court of Victoria and dismissing the application by Mr Woolfe for an injunction. Orders were made dealing with the documents held by Mr Russell for which legal professional privilege might be claimed. In addition, other ancillary orders were made. These are the reasons for those orders.The Factual Background On 12 July 2001 BWK Elders Australia Pty Ltd (“BWKE”) commenced an action in the Federal Court of Australia against Westgate Wool Co Pty Ltd (“Westgate”) and its directors. The action was issued out of the South Australian Registry of the Federal Court. Kelly & Co acted for BWKE and Mr A K Woolfe of Andrew Woolfe & Co, solicitors in a Melbourne suburb, acted as solicitor for the defendants. Mr Woolfe instructed counsel in Melbourne to advise and act for the defendants. They were Mr J Hammond QC and Mr Russell. Both Mr Hammond QC and Mr Russell reside in suburbs of Melbourne and have chambers in the City of Melbourne. By order of Mansfield J made in July 2002, the action was transferred to the Victorian Registry of the Federal Court. The interlocutory proceedings and the trial occupied a period of about three years. On 19 April 2004 the action was listed for trial to commence on 7 June 2004. On 27 May 2004 Mr D R McVeigh was appointed administrator of Westgate. At about that time, the directors of Westgate withdrew Mr Woolfe’s instructions. The trial commenced on 7 June 2004. By order of the Federal Court of Australia made on 11 June 2004, Messrs Korda and Powell were appointed administrators of Westgate to replace Mr McVeigh. The order was made on the application of BWKE. On 16 June 2004 a meeting of creditors of Westgate resolved that Westgate should be wound up voluntarily. The creditors appointed Messrs Korda and Powell as liquidators. On 25 June 2004 judgment was entered against the defendant directors for $1,368,624 plus $464,985.47 interest, a total of $1,833,609. Judgment was not entered against Westgate. BWKE presented a creditor’s petition for bankruptcy against each of the directors of Westgate. On 19 October 2004 sequestration orders were made in the Federal Court against each of the directors. On 22 October 2004 BWKE obtained an order in the Federal Court entitling it to access to Westgate’s books and records. Kelly & Co inspected those books and records on behalf of BWKE. On 1 March 2005 BWKE issued proceedings against Mr Woolfe seeking orders that he pay the costs of BWKE in the action in the Federal Court on an indemnity basis or, alternatively, that he pay the costs wasted or thrown away as a result of the failure of Westgate and its directors to make proper discovery in the Federal Court action. Kelly & Co acted for BWKE in those proceedings. The claim against Mr Woolfe was for $521,990.10. In the course of acting for BWKE, Kelly & Co were provided with all documentation now sought from Mr Woolfe by the liquidators, save and except for the trust account in the name of Mr Woolfe and copies of cheques and receipts. By affidavit of documents sworn on 15 July 2005, Mr Woolfe discovered almost 4,000 documents which comprised all of the documents the subject of the summons issued by the liquidators. On 1 and 2 August 2005 those documents were inspected by solicitors from Kelly & Co. The proceedings against Mr Woolfe were settled on a confidential basis at a mediation on 7 September 2005.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

DEBELLE J

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by: DEBELLE J

Full text does not contain this section.