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Silbermann v One.Tel Ltd (In liq)

Silbermann v One.Tel Ltd (In liq)

Case [2002] NSWSC 295 15 April 2002

Winding Up & Liquidation

Unjust Enrichment

Set-off

Corporate Law & Governance

Insolvency Law

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Reported Decision:
(2002) 20 ACLC 846

New South Wales

Supreme Court

CITATION: Silbermann v One.Tel Ltd [2002] NSWSC 295

FILE NUMBER(S): SC 4258/01

HEARING DATE(S): 08/02/02, 11/04/02,11/04/02

JUDGMENT DATE: 15 April 2002

PARTIES :

Mark Silbermann and Others - Plaintiff
One.Tel Ltd (in liquidation) - Defendant

JUDGMENT OF: Gzell J

LOWER COURT
JURISDICTION : Supreme Court (Master)

LOWER COURT
FILE NUMBER(S) : 4258/01

LOWER COURT
JUDICIAL OFFICER : Master Macready

COUNSEL : J L Trew QC with I D Faulkner for the plaintiffs
H K Insall SC for the defendant

SOLICITORS: Piper Alderman Lawyers for the plaintiffs
Freehills Lawyers for the defendant

CATCHWORDS: Corporations - leave to proceed against company in liquidation - appeal from Master - proceedings to vary contracts as unfair before Industrial Relations Commission - indemnity sought for directors' liability to credit card companies for company expenses - not provable in the winding up - meaning of future "claims" - set-offs of credit card company obligations to company in liquidation.

LEGISLATION CITED: Corporations Act 2001 (Cth)
Supreme Court Act 1970 (NSW)
Industrial Relations Act 1996 (NSW)
Bankruptcy Act 1966 (Cth)
Corporate Law Reform Act 1992 (Cth)

CASES CITED: Do Carmo v Ford Excavations Pty Ltd [1981] 1 NSWLR 409
Morrison v Judd (NSWCA), 10 October 1995,Unreported
House v The King (1936) 55 CLR 499 at 505
Madden v Fisher [2001] NSWSC 535
Fisher v Madden [2002 NSWCA 28
Something Better Pty Ltd v Pyramid Building Society (in liquidation) [1996] 2 VR 352 at 353-355, 367-368, 370-371
Pyramid Building Society (in liquidation) v Terry (1996-1997) 189 CLR at 189, 193-194
Majik Markets Pty Ltd v Brake and Service Centre Drummoyne Pty Ltd (1992) 28 NSWLR 443 at 461
Visalli v Southwell (1988) 12 NSWLR 502

DECISION: See par 22.

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

Gzell J

MONDAY 15 APRIL 2002

4258/01 MARK SILBERMANN & ORS v ONE.TEL LTD (IN LIQUIDATION)

1 The appellants sought leave nunc pro tunc under the Corporations Act 2001 (Cth), s 500(2) to proceed against the respondent in the Industrial Relations Commission of New South Wales. Master Macready refused leave. An appeal lies to the Court constituted by a judge under the Supreme Court Rules, Pt 60 r 10. The Supreme Court Act 1970, s 75A(5) provides that the appeal is by way of rehearing. It has been held, however, that where the Master’s decision involves an exercise of discretion, the same principles apply to the appeal as apply to an appeal from a single judge to the Court of Appeal (Do Carmo v Ford Excavations Pty Ltd [1981] 1 NSWLR 409, Morrison v Judd (NSWCA), 10 October 1995, unreported). The appellants must show that the Master acted on a wrong principle such as failing to take into account a material consideration (House v The King (1936) 55 CLR 499 at 505).

2 The first appellant is a director of the respondent. He provided services to the respondent through his service company, the second appellant.…

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 Silbermann v One.Tel Ltd (In liq)

Details

AGLC: Silbermann v One.Tel Ltd (In liq) [2002] NSWSC 295
Case: [2002] NSWSC 295
Decision Date: 15 April 2002

CaseChat Overview and Summary

Silbermann sought leave to sue One.Tel, a company in liquidation, in the Federal Court. The dispute centered around seeking an indemnity for credit card expenses incurred by One.Tel's directors, which were intended for the company's benefit. These expenses were not considered provable debts in the company's winding-up proceedings. Additionally, Silbermann requested to offset future claims by credit card companies against One.Tel with the company's own obligations to those credit card companies.

The primary legal issues revolved around the interpretation of "future claims" in the context of the winding-up provisions and whether the credit card expenses could be treated as provable debts or if they could be offset against the company's own liabilities to the credit card companies. The court had to determine whether Silbermann's claims could proceed against One.Tel and if the proposed set-offs were permissible.

The court found that the credit card expenses were not provable debts in the winding-up as they did not meet the criteria for preferential debts. The court also clarified that "future claims" referred to debts that were due or payable at the commencement of the winding-up. Regarding the proposed set-offs, the court held that these could not be recognised as they would alter the balance of creditor interests. Consequently, Silbermann was denied leave to proceed against One.Tel in liquidation and the application for set-offs was dismissed.

Orders