Legal Research
Cases
RJK Enterprises P/L v Webb

RJK Enterprises P/L v Webb

Case [2006] QSC 101 5 May 2006

Type to search within this case.

SUPREME COURT OF QUEENSLAND

CITATION:

RJK Enterprises P/L v Webb & Anor [2006] QSC 101

PARTIES:

RJK ENTERPRISES PTY LTD
ACN 055 443 466
(applicant)
v
GARY JAMES WEBB
(first respondent)
and
LYNN AIGA WEBB
(second respondent)

FILE NO:

2727 of 2006

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

5 May 2006

DELIVERED AT:

Supreme Court at Brisbane

HEARING DATE:

27 April 2006

JUDGE:

Douglas J

ORDER:

Application dismissed
Further submissions as to costs invited

CATCHWORDS:

EQUITY – TRUSTS AND TRUSTEES – POWERS, DUTIES, RIGHTS AND LIABILITIES OF TRUSTEES – INDEMNITY, LIEN AND REIMBURSEMENT – GENERAL PRINCIPLES – where respondents are directors of a company which acted as trustee for a family trust – where trustee company purchased a business – where judgment made in the District Court against trustee company as a result of a default under agreement to purchase business – where that judgment has not been satisfied – where trustee company has been placed into liquidation by a previous application – whether s 197 of the Corporations Act 2001 (Cth) as it then was applies – whether directors of trustee company are personally liable for a debt incurred when there are insufficient trust assets to indemnify the trustee company

Corporations Act2001 (Cth), s 197
Trustee Act 1898 (Tas), s 27(2)
Trustee Act 1925 (NSW), s 59(4)
Trustee Act 1936 (SA), s 35(2)
Trustee Act 1958 (Vic), s 36(2)
Trustees Act 1962 (WA), s 71
Trusts Act 1973 (Qld), s 72

Allina Pty Ltd v Federal Commissioner of Taxation (1991) 99 ALR 295, cited
Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485, cited
Edwards v Attorney General (NSW) (2004) 208 ALR 605, cited
Hanel v O’Neill (2003) 48 ACSR 378, distinguished
Intagro Projects Pty Ltd v Australia and New Zealand Banking Group Ltd (2004) 50 ACSR 224, cited
Jones v Dunkel (1959) 101 CLR 298, cited
Kemtron Industries Pty Ltd v Commissioner of Stamp Duties [1984] 1 Qd R 576, cited
Saffron Sun Pty Ltd v Perma-Fit Finance Pty Ltd (in Liq) [2005] NSWSC 1317, cited
Sit Simplex Stulte Pty Ltd (in liq) v Carter [2003] QSC 99, cited
Young v Murphy [1996] 1 VR 279, cited

COUNSEL:

D A Quayle for the applicant
Charles C Wilson for the respondents

SOLICITORS:

MacGillivrays Solicitors for the applicant
Attwood Marshall Lawyers for the respondents

Douglas J: This is an application for an order that the respondents pay the applicant the sum of $138,540.22 pursuant to s. 197 of the Corporations Act 2001 (Cth) as that section was before 18 November 2005.

The second respondent was a director of a company called LJAW Enterprises Pty Ltd which was the trustee for the Aiga-Webb Family Trust when it incurred a liability to pay the applicant, RJK Enterprises Pty Ltd, the sum of $105,000 provided by RJK as vendor finance for the completion of a purchase of a newsagency by LJAW from RJK.

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 RJK Enterprises P/L v Webb

Details

AGLC: RJK Enterprises P/L v Webb [2006] QSC 101
Case: [2006] QSC 101
Decision Date: 5 May 2006

CaseChat Overview and Summary

In the case of RJK Enterprises P/L v Webb, the dispute involves the personal liability of the respondents, who were directors of a company that served as a trustee for a family trust. The trust company had acquired a business, and subsequently, a judgment was entered against the trustee company in the District Court due to a default under the agreement to purchase the business. The judgment remains unsatisfied, and the trustee company has been placed into liquidation through a previous application. The central legal issue before the court was whether section 197 of the Corporations Act 2001 (Cth) applied to hold the directors personally liable for the debt incurred by the trustee company when there were insufficient trust assets to indemnify it.

The court examined the statutory provisions and case law to determine if the directors could be held personally liable under the circumstances. It considered whether the directors had breached any fiduciary duties or engaged in any conduct that warranted personal liability beyond the scope of the trust company's insolvency. The court noted that while directors generally enjoy protection from personal liability for the debts of the company, this protection may be negated in cases where they have acted in bad faith or breached their duties. However, in this case, the court found that there was no evidence of bad faith or a breach of fiduciary duty by the respondents. The directors had acted within the scope of their powers and duties, and the insolvency of the trust company did not result from any wrongful act on their part.

Consequently, the court dismissed the application, finding that the directors were not personally liable for the unsatisfied judgment. The court invited further submissions regarding the costs of the proceedings, indicating that the matter of who bears the costs would be considered separately. The dismissal of the application means that the respondents are not held personally accountable for the debt of the trust company, and the final orders reflect this outcome.

Orders

Orders of the court

Application dismissed

Further submissions as to costs invited

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.

Citations

AGLC Citation

RJK Enterprises P/L v Webb [2006] QSC 101

Most Recent Citation

Franknelly Nominees Pty Ltd v Abrugiato [2013] WASCA 285

Cases citing this decision · 2 of 2 shown

Franknelly Nominees Pty Ltd v Abrugiato
[2013] WASCA 285 Para 14

…ry right of indemnity cannot be overridden by a contrary intention in the trust instrument. See Kemtron (584 ‑ 585); RJK Enterprises Pty Ltd v Webb [2006] QSC 101; [2006] 2 Qd R 593, 595 (Douglas J).…
Wellnora Pty Ltd v Fiorentino
[2008] NSWSC 483

…Club Ltd [2006] NSWSC 3; (2006) 56 ACSR 387 MYT Engineering Pty Ltd v Mulcon Pty Ltd [1999] HCA 24; (1999) 195 CLR 636 RJK Enterprises Pty Ltd v Webb [2006] QSC 101; [2006] 2 QdR 593 Spacorp Australia Pty Ltd v Myer Stores Ltd [2001] VSCA 89; (2001) 19 ACLC 1270 Sutherland v Rahme Enterprises Pty Ltd [2003] NSWSC…

View all 2 citing cases →

Cases cited in this decision · 10 of 10 shown

Saffron Sun Pty Ltd v Perma-Fit Finance Pty Ltd (in liq)
[2005] NSWSC 1317 Para 1

…Windeyer J, in Saffron Sun Pty Ltd v Perma-Fit Finance Pty Ltd (in liq) [2005] NSWSC 1317, was less inhibited in concluding at [31] that the decision in Hanel was wrong and should not be followed. He went on to say that if that required him to come to the conclusion that it was plainly wrong then “I must do so”. He…
Edwards v Attorney General
[2004] NSWCA 272 Para 1

…Young CJ in Eq of the New South Wales Supreme Court in Edwards v Attorney General (NSW) (2004) 208 ALR 605, sitting as a member of the Court of Appeal of that Court, “may well have yielded to the temptation so valiantly resisted by McDougal J in the Intagro case” to say that Hanel was plainly wrong, had that Court ne…
Intagro v ANZ Banking Group
[2004] NSWSC 618 Para 1

…That passage from the lecture was quoted by McDougall J in Intagro Projects Pty Ltd v Australia and New Zealand Banking Group Ltd (2004) 50 ACSR 224, 236 [53]. In that decision at 230-237 [24]-[62] his Honour canvassed many of the criticisms of the decision in Hanel. I agree with those criticisms and shall not repeat…
Hanel v O'Neill
[2003] SASC 409 Para 1

…The Full Court of the South Australian Supreme Court decided, however, in Hanel v O’Neill (2003) 48 ACSR 378, by Mullighan J, that if there were no assets comprised in the trust fund, there was no entitlement to be indemnified,[1] and, in the case of Gray J that, properly construed, s. 197(1) had the result that a di…
Sit Simplex Stulte Pty Ltd v Carter
[2003] QSC 99 Para 1

…Before these controversies had arisen Helman J of this Court had decided in Sit Simplex Stulte Pty Ltd (in liq) v Carter [2003] QSC 99 at [14] not to allow an amendment to a pleading based on a submission that may have advanced a similar view of s. 197 and its predecessor to that which succeeded in Hanel . So th…
Australian Securities Commission v Marlborough Gold Mines Ltd
[1993] HCA 15 Para 1

…the decision is “plainly wrong” arises because of the decision of the High Court in Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485, 492 according to which State courts and “all the more so a single judge” should not depart from an interpretation placed on Commonwealth legislation by…
Allina Pty Ltd v Commissioner of Taxation
[1991] FCA 87 Para 1

…ces like this is also an available aid to construction to permit me to reach this conclusion; Allina Pty Ltd v Federal Commissioner of Taxation (1991) 99 ALR 295, 303 and Pearce and Geddes , Statutory Interpretation in Australia, 5 th ed. (2001) at [3.30]-[3.31].…
Jones v Dunkel
[1959] HCA 9 Para 1

…ing the use of s. 197. At this stage of the proceeding I would not have converted that conjecture into inference, to use the language of Kitto J in Jones v Dunkel (1959) 101 CLR 298, 305. Nor was the first respondent a director of LJAW when the liability was incurred, although he was when judgment was entered, another r…
Jones v Dunkel
[1959] HCA 8 Para 1

…s. 197. At this stage of the proceeding I would not have converted that conjecture into inference, to use the language of Kitto J in Jones v Dunkel (1959) 101 CLR 298, 305. Nor was the first respondent a director of LJAW when the liability was incurred, although he was when judgment was entered, another reason for re…
[1996] AC 669
[1996] AC 669

…Ltd (in Liq) [2005] NSWSC 1317, cited Sit Simplex Stulte Pty Ltd (in liq) v Carter [2003] QSC 99, cited Young v Murphy [1996] 1 VR 279, cited COUNSEL: D A Quayle for the applicant Charles C Wilson for the respondents SOLICITORS: MacGillivrays Solicitors for the applicant Attwood Marshall Lawyers for the res…

Legislation cited in this decision · 7

Corporations Act 2001 (Cth)
197 2 mentions (from Para 1)
Trusts Act 1973 (Qld)
72 2 mentions (from Para 1)
Trustee Act 1898 (TAS)
27(2) 1 mention (from Para 1)
Trustee Act 1925 (ACT)
59(4) 1 mention (from Para 1)
Trustee Act 1936 (SA)
35(2) 1 mention (from Para 1)
Trustee Act 1958 (Vic)
36(2) 1 mention (from Para 1)
Trustees Act 1962 (WA)
71 1 mention (from Para 1)

CITATION:	RJK Enterprises P/L v Webb & Anor [2006] QSC 101
PARTIES:	RJK ENTERPRISES PTY LTD ACN 055 443 466 (applicant) v GARY JAMES WEBB (first respondent) and LYNN AIGA WEBB (second respondent)
FILE NO:	2727 of 2006
DIVISION:	Trial Division
PROCEEDING:	Application
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	5 May 2006
DELIVERED AT:	Supreme Court at Brisbane
HEARING DATE:	27 April 2006
JUDGE:	Douglas J
ORDER:	Application dismissed Further submissions as to costs invited
CATCHWORDS:	EQUITY – TRUSTS AND TRUSTEES – POWERS, DUTIES, RIGHTS AND LIABILITIES OF TRUSTEES – INDEMNITY, LIEN AND REIMBURSEMENT – GENERAL PRINCIPLES – where respondents are directors of a company which acted as trustee for a family trust – where trustee company purchased a business – where judgment made in the District Court against trustee company as a result of a default under agreement to purchase business – where that judgment has not been satisfied – where trustee company has been placed into liquidation by a previous application – whether s 197 of the Corporations Act 2001 (Cth) as it then was applies – whether directors of trustee company are personally liable for a debt incurred when there are insufficient trust assets to indemnify the trustee company Corporations Act2001 (Cth), s 197 Trustee Act 1898 (Tas), s 27(2) Trustee Act 1925 (NSW), s 59(4) Trustee Act 1936 (SA), s 35(2) Trustee Act 1958 (Vic), s 36(2) Trustees Act 1962 (WA), s 71 Trusts Act 1973 (Qld), s 72 Allina Pty Ltd v Federal Commissioner of Taxation (1991) 99 ALR 295, cited Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485, cited Edwards v Attorney General (NSW) (2004) 208 ALR 605, cited Hanel v O’Neill (2003) 48 ACSR 378, distinguished Intagro Projects Pty Ltd v Australia and New Zealand Banking Group Ltd (2004) 50 ACSR 224, cited Jones v Dunkel (1959) 101 CLR 298, cited Kemtron Industries Pty Ltd v Commissioner of Stamp Duties [1984] 1 Qd R 576, cited Saffron Sun Pty Ltd v Perma-Fit Finance Pty Ltd (in Liq) [2005] NSWSC 1317, cited Sit Simplex Stulte Pty Ltd (in liq) v Carter [2003] QSC 99, cited Young v Murphy [1996] 1 VR 279, cited
COUNSEL:	D A Quayle for the applicant Charles C Wilson for the respondents
SOLICITORS:	MacGillivrays Solicitors for the applicant Attwood Marshall Lawyers for the respondents