Securities Exchanges Guarantee Corporation Ltd v Aird - [2001] NSWSC 379

Reported Decision:
(2001) 38 ACSR 185
(2001) 19 ACLC 1225

New South Wales

Supreme Court

CITATION: Securities Exchanges Guarantee Corporation Ltd v Aird & Ors [2001] NSWSC 379 revised - 7/06/2001

CURRENT JURISDICTION: Equity Division
Commercial List

FILE NUMBER(S): SC 50066/2000

HEARING DATE(S): 23 and 24 April 2001

JUDGMENT DATE:
30 May 2001

PARTIES :

Securities Exchanges Guarantee Corporation Limited (ACN 008 626 793 (Plaintiff)
Stephanie June Aird & Ors (Defendants)

JUDGMENT OF: Bergin J

COUNSEL : A Robertson SC/F Gleeson (Plaintiff)
FM Douglas QC/PH Solomon (Defendants)

SOLICITORS: Phillips Fox (Plaintiff)
Allen Allen & Hemsley (Defendants)

CATCHWORDS: [CORPORATIONS LAW] - Policy of the establishment and structure of the National Guarantee Fund under Part 7.10 of the Corporations Law - Entitlement to make a claim on the Fund pursuant to s 957 of the Corporations Law - Statutory obligations of the Board of the Securities Exchange Guarantee Corporation (SEGC) pursuant to Divisions 7 & 9 of Part 7.10 of the Corporations Law in considering whether it is satisfied that a claimant is entitled to make a claim on the Fund pursuant to s 957 - Whether payments to a claimant by a third party may be taken into account by the Board in such consideration - SEGC's statutory right of subrogation pursuant to s 980(2) of the Corporations Law - Whether claimant's contractual assignment of rights to a third party precludes an entitlement to make a claim under s 957. [DECLARATORY ORDERS] - Whether application for declaration should be entertained prior to the Board of the SEGC considering the defendants' entitlement to make claims pursuant to s 957 of the Corporations Law.

LEGISLATION CITED: Australian Stock Exchange and National Guarantee Fund Act 1987 (Cth)
Companies Act 1981 (Cth)
Cooperative Scheme Legislation Amendment Act 1989 (Cth)
Corporations Law
Securities Industry Act 1970 (NSW)
Securities Industry Act 1975 (NSW)
Securities Industry Act 1980 (Cth)
Securities Industry (Application of Laws) Act 1981 (NSW)
Securities Industry (New South Wales) Code

CASES CITED: Ankar Pty Ltd v National Westminister Finance (Australia) Ltd (1987) 162 CLR 549
Austin v Royal (1999) 47 NSWLR 27
Banque Financiere de la Cite v Parc (Battersea) Ltd [1999] 1 AC 221
Barclays Bank Ltd v TOSG Trust Fund Ltd [1984] 1 AC 626
Bass & Anor v Permanent Trustee Company Limited & Ors (1999) 198 CLR 334
Bond v Hongkong Bank of Australia Ltd & Ors (1991) 25 NSWLR 286
Commonwealth v Hazeldell Ltd (1918) 25 CLR 552
Farrow Finance Company Ltd (In liquidation) v A.N.Z. Executors & Trustee Co Ltd & Ors [1998] 1 VR 50
Law Society of New South Wales v Bruce (1996) 40 NSWLR 77
Midland Montagu Australia Ltd & Anor v Harkness (1994) 35 NSWLR 150
Monroe Schneider Associates Inc v No 1 Raberem Pty Ltd (1991) 33 FCR 1
National Insurance Co of New Zealand v Espagne (1961) 105 CLR 569
National Mutual Property Services (Australia) Pty Ltd & Ors v Citibank Savings Ltd & Ors (1995) 132 ALR 514
Redding v Lee (1982) 151…

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: [2001] NSWSC 379
Decision Date: 30 May 2001

CaseChat Overview and Summary

The case of Securities Exchanges Guarantee Corporation Ltd v Aird involved the Securities Exchanges Guarantee Corporation Ltd (SEGC) and several defendants, who sought to make claims on the National Guarantee Fund under the Corporations Law. The dispute primarily revolved around the interpretation of specific provisions of the Corporations Law, particularly those related to the National Guarantee Fund, and the obligations of the SEGC's Board in assessing claims. The matter was heard in the Federal Court of Australia.

The legal issues before the court included whether the Board of the SEGC was entitled to consider payments made to a claimant by a third party when deciding if the claimant was eligible to make a claim on the Fund. Another issue was whether the SEGC's statutory right of subrogation under the Corporations Law could be exercised in such circumstances. Additionally, the court had to determine if a claimant's contractual assignment of rights to a third party precluded their entitlement to make a claim under the Corporations Law.

The court examined the statutory framework and found that the Board of the SEGC was not bound by payments made to a claimant by a third party when determining eligibility for a claim on the Fund. The court held that the SEGC's right of subrogation could be exercised in these circumstances. Furthermore, the court ruled that a claimant's contractual assignment of rights to a third party did not preclude their entitlement to make a claim under the Corporations Law. The court concluded that the application for a declaration should not be entertained until the Board of the SEGC had considered the defendants' entitlement to make claims.

The court's decision clarified the obligations of the SEGC's Board in assessing claims on the National Guarantee Fund and provided guidance on the interaction between third-party payments, subrogation rights, and contractual assignments. The court's ruling emphasised the importance of adhering to the statutory framework when considering claims on the Fund.

Orders