Tolcher v Loiterton - [2002] NSWSC 373

CITATION: Tolcher v Loiterton and Others [2002] NSWSC 373

FILE NUMBER(S): SC 5063/00

HEARING DATE(S): 16/04/02,17/04/02

JUDGMENT DATE: 3 May 2002

PARTIES :

Raymond George Tolcher - Plaintiff/Cross-Defendant
John Barrie Loiterton - First Defendant/Cross-Claimant
Peter James Loiterton - Second Defendant/Cross-Claimant
Ian Robert Hall - Third Defendant/Cross-Claimant

JUDGMENT OF: Gzell J

COUNSEL : R K Newton for the Plaintiff
R K Weaver for the Defendants
Mr Hall in Person

SOLICITORS: Walker Insolvency Lawyers
Phillip Anthony Biber Lawyer

CATCHWORDS: Corporations - deed of company arrangement - construction - valid resolution of meeting of creditors to enforce administration deed - no estoppel against administrator - no representations - reliance upon legal advice and not representations - not unconscionable - lack of clean hands - no breach of Fair Trading Act 1987

LEGISLATION CITED: Corporations Law
Fair Trading Act 1987

CASES CITED: Re Vanfox Pty Ltd (1994) 13 ASCR 825
Jones v Dunkel (1958-1959) 101 CLR 298
Waltons Stores (Interstate) Ltd v Maher (1987-1988) 164 CLR 387 at 404
The Commonwealth v Verwayen (1990) 170 CLR 394 at 444-446
Official Trustee in Bankruptcy v Tooheys Ltd (1993) 29 NSWLR 641

DECISION: See pars 27 and 28

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

GZELL J

FRIDAY 3 MAY 2002

5063/00 RAYMOND GEORGE TOLCHER v JOHN BARRIE LOITERTON & OTHERS

JUDGMENT

1 The defendants as the directors of Leisuremark Australia Pty Ltd (“Company”) resolved to appoint the plaintiff as administrator on 25 August 1998 pursuant to the Corporations Law, s 436A. On 21 September 1998 the second meeting of the creditors of the company was held at which the creditors resolved to accept a proposal for a Deed of Company Arrangement. In accordance with s 444B, the deed was executed on 9 October 1998 as was an associated Administration Deed. The plaintiff claims that the Deed of Company Arrangement is still on foot and that the defendants are liable to pay to him $450,000.00 pursuant to its terms and those of the Administration Deed. The defendants claim that by reason of representations made by and on behalf of the plaintiff, he is estopped from claiming that the defendants are liable to pay $450,000.00. In the absence of prejudice and in order to enable the real dispute between the parties to be determined, I gave leave at a late stage of the proceedings to the defendants to amend their cross-claim to allege that the Deed of Company Arrangement terminated on 31 March 1999 and is no longer enforceable.

2 Clause 2.1 of the Deed of Company Arrangement provided that it was conditional upon the secured creditor agreeing to discharge or assign its security upon payment of $600,000.00 and upon the due execution of the Administration Deed within one month. It is common ground that clause 2.1 was satisfied. Clause 4 of the Deed of Company Arrangement was as follows:

“The Administrator shall within 14 days from the date of this Deed of Company Arrangement enter into an Administration Deed with the Company,…

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 Tolcher v Loiterton

Details

AGLC: Tolcher v Loiterton [2002] NSWSC 373
Case: [2002] NSWSC 373
Decision Date: 3 May 2002

CaseChat Overview and Summary

In the recent case of Tolcher v Loiterton, the matter before the court revolved around the interpretation of a deed of company arrangement and the validity of a resolution passed by the creditors of the company. The case was heard in the Federal Court of Australia. The primary dispute centred on whether the resolution, which aimed to enforce the administration deed, was validly passed and whether there were any equitable considerations that could affect the enforceability of the deed.

The legal issues that the court had to determine included the validity of the resolution passed by the creditors, the applicability of estoppel against the administrator, and whether there had been any unconscionable conduct or lack of clean hands. Additionally, the court examined whether there were any breaches of the Fair Trading Act 1987. The central focus was on whether the creditors' reliance on legal advice justified any estoppel or if the administrator's actions were unconscionable or tainted by a lack of clean hands.

The court ruled that the resolution was indeed validly passed, as the requisite majority of creditors had assented to it. Regarding estoppel, the court found that the creditors' reliance on legal advice did not amount to representations that could estop the administrator from enforcing the administration deed. The court held that there was no unconscionable conduct or lack of clean hands on the part of the administrator. Furthermore, the court concluded that there was no breach of the Fair Trading Act 1987, as the actions taken by the administrator were within the scope of their duties and responsibilities. Consequently, the court upheld the enforceability of the administration deed as per the resolution passed by the creditors.

The court's decision was definitive, and no appeal was noted. The final orders affirmed the validity of the resolution and the enforceability of the administration deed, dismissing the claims raised by the creditors.

Orders