Ross Andrew Blakeley and Australian Music Pty Ltd v Yamaha Music Australia Pty Ltd

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST

S CI 2015 04399

IN THE MATTER OF AUSTRALIAN MUSIC PTY LTD (ACN 125 007 561)

BETWEEN:

ROSS ANDREW BLAKELEY IN HIS CAPACITY AS LIQUIDATOR OF AUSTRALIAN MUSIC PTY LTD (ACN 125 007 561) (IN LIQUIDATION)	First Plaintiff
- and -
AUSTRALIAN MUSIC PTY LTD (ACN 125 007 561)	Second Plaintiff
v
YAMAHA MUSIC AUSTRALIA PTY LTD (ACN 004 259 527)	Defendant

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JUDGE:	Gardiner AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	29 January 2016 (last submissions filed 12 February 2016)
DATE OF JUDGMENT:	10 May 2016
CASE MAY BE CITED AS:	Ross Andrew Blakeley & Australian Music Pty Ltd v Yamaha Music Australia Pty Ltd
MEDIUM NEUTRAL CITATION:	[2016] VSC 231

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CORPORATIONS – Voidable transaction claim under Part 5.7B of Corporations Act 2001 (Cth)- allegation that defendant was unsecured creditor at the time of each of the payments – defendant contends that plaintiff was aware that defendant secured under instrument registered under the Personal Property Securities Act 2009 (Cth) and plaintiffs therefore not entitled to plead matters which defendant contends are to the knowledge of the plaintiffs untrue and unsupportable – application pursuant to rule 23.01 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (‘Rules’), or section 18 of the Civil Procedure Act 2010 (Vic) (‘CP Act’), that plaintiffs’ claim be stayed, alternatively there be judgment for the defendant – alternatively, pursuant to section 62 of the CP Act, that there be summary judgment for the defendant, alternatively, pursuant to rule 23.02(c) or (d) of the Rules, or section 19 of the CP Act, that parts of the claim be struck out on the ground that they may prejudice, embarrass or delay the fair trial of the proceeding or because they are an abuse of process – application dismissed save for order that plaintiff replead allegation in respect of solvency of the company at the time of the payments the subject of the claim.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M McKillop	Maddocks
For the Defendant	Dr A T Trichardt	Hall & Wilcox

HIS HONOUR:

Background

In this proceeding, the plaintiffs, by their Amended Statement of Claim (‘ASOC’), claim that payments totalling $3,652,317.70 (‘the payments’) made by Australian Music Pty Ltd (‘Australian Music’) between February 2012 and 23 August 2012 are voidable transactions within the meaning of Part 5.7B of the Corporations Act 2001 (Cth) (‘the Act’) by reason that the payments are unfair preferences pursuant to s 588FA of the Act and insolvent transactions pursuant to s 588FC of the Act.

Section 588FA of the Act provides relevantly:

(1)A transaction is an unfair preference given by a company to a creditor of the company if, and only if:
(a)the company and the creditor are parties to the transaction (even if someone else is also a party); and
(b)the transaction results in the creditor receiving from the company, in respect of an unsecured debt that the company owes to the…

CaseChat Overview and Summary

The case of Ross Andrew Blakeley and Australian Music Pty Ltd v Yamaha Music Australia Pty Ltd involves a dispute over a voidable transaction claim under Part 5.7B of the Corporations Act 2001 (Cth). The plaintiffs sought to recover payments made to the defendant, alleging that the defendant was an unsecured creditor at the time of each payment. In response, the defendant argued that the plaintiffs were aware that it was secured under an instrument registered under the Personal Property Securities Act 2009 (Cth) and therefore the plaintiffs should not be permitted to plead matters that the defendant contends are untrue and unsupportable. The defendant made an application under rule 23.01 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) or section 18 of the Civil Procedure Act 2010 (Vic) for the plaintiffs’ claim to be stayed or for judgment to be entered in its favour. Alternatively, the defendant sought summary judgment under section 62 of the CP Act or for parts of the claim to be struck out under rule 23.02(c) or (d) of the Rules or section 19 of the CP Act on the basis that they may prejudice, embarrass or delay the fair trial of the proceeding or because they are an abuse of process.

The court was required to decide whether the plaintiffs’ claim should be stayed or dismissed, whether summary judgment should be entered in the defendant’s favour, or whether parts of the claim should be struck out. The court considered the nature of the dispute and the legal principles applicable to the case. The court noted that the plaintiffs’ claim was based on allegations that the defendant was an unsecured creditor at the time of the payments, but that the defendant had a security interest registered under the Personal Property Securities Act. The court found that the plaintiffs’ allegation that the defendant was an unsecured creditor at the time of the payments was not supported by the evidence and was therefore unsupportable. However, the court found that the plaintiffs were not estopped from repleading the allegation of the defendant’s solvency at the time of the payments, as this was a matter of fact that could be proven or disproven.

The court dismissed the defendant’s application save for an order that the plaintiffs replead the allegation in respect of the defendant’s solvency at the time of the payments the subject of the claim. The court found that the plaintiffs’ claim was not an abuse of process and did not prejudice, embarrass or delay the fair trial of the proceeding. The court found that the plaintiffs’ allegation that the defendant was an unsecured creditor at the time of the payments was not supported by the evidence and was therefore unsupportable, but that the allegation of the defendant’s solvency at the time of the payments was a matter of fact that could be proven or disproven.

No further orders were made by the court. The plaintiffs were required to replead the allegation in respect of the defendant’s solvency at the time of the payments the subject of the claim. The court did not grant any other relief sought by the defendant.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established