Vale v Sutherland - [2009] HCATrans 27

[2009] HCATrans 027

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S440 of 2008

B e t w e e n -
MALCOLM GEOFFREY VALE
Applicant
and
RODERICK MACKAY SUTHERLAND
Respondent
Application for special leave to appeal

GUMMOW J
KIEFEL J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 13 FEBRUARY 2009, AT 12.05 PM

MR G.T. BIGMORE, QC: If it please the Court, I appear with my learned friend, MR J.T. JOHNSON, for the applicant. (instructed by Watson Mangioni)

MR B.J. SKINNER: May it please the Court, I appear for the respondent. (instructed by Spark Helmore)

GUMMOW J: Yes, Mr Skinner, we will hear from you first.

MR SKINNER: Thank you, your Honour. Your Honour, there are, in effect, two significant aspects of the application for special leave. They are, in effect, the valuation point and there is the pleading point. So far as the valuation point is concerned, it is our submission that that part of the application does not enjoy sufficient prospects insofar as the majority and the minority judgment below are, in effect, on all fours.

GUMMOW J: Which of the grounds in the draft notice of appeal, as you see it, reflect the difference between Justice Lindgren and the other members of the court? Just on page 83.....

MR SKINNER: Yes, your Honour. The one that shows any difference is ground 2(a) and, so far as (b) is concerned, it is our position that Justice Lindgren’s dissent is only in respect of the pleadings aspect, not on the valuation point itself. So far as 2(c) is concerned, we say that is confined, of course, just to the majority.

Your Honour, so far as the valuation point is concerned, it becomes somewhat murky in this respect. The section which was relied upon in the section 139ZQ notice concerns the question of market valuation and that is the critical issue of valuation so far as the principle underlying the notice is concerned. Where this case went off the rails, in our submission, concerns the valuation figure which was inserted for purposes of the notice and, in our respectful submission, the majority below were correct in their assessment of the importance of that figure, so far as that is concerned.

It is tangential to the underlying issue of whether the matters complained of were in fact transfers not for market value. So that, in our respectful submission, undue influence is being placed in the draft notice of appeal on the question of the figure that was inserted for valuation in the section 139ZQ notice.

KIEFEL J: Do you say that it did not require proof? What is your position in relation ‑ ‑ ‑

MR SKINNER: Yes. Our position is it did not require proof. With respect, the relevant passage for that, your Honours, is in the dissenting

judgment below, the judgment of Justice Lindgren. At page 67 his Honour expressed the view at line…

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: [2009] HCATrans 27
Decision Date

CaseChat Overview and Summary

In *Vale v Sutherland*, the High Court of Australia considered a dispute between the appellant, Vale, and the respondent, Sutherland. The case concerned the interpretation and application of certain provisions within the *Corporations Act 2001* (Cth) relating to the winding up of a company and the distribution of its assets.

The central legal issue before the High Court was whether certain payments made by the company to the appellant constituted unfair preferences under section 588FA of the Corporations Act. This required the court to determine if these payments were made during the relevant period before the company's winding up and if they had the effect of placing the appellant in a better position than other unsecured creditors.

The High Court analysed the evidence and the relevant statutory provisions, applying established principles of insolvency law. Their Honours considered the timing of the payments and the financial position of the company at those times. The court affirmed that for a preference to be unfair, it must be shown that the company was insolvent or became insolvent by making the payment, and that the payment resulted in the creditor receiving more than they would have in a winding up.

The High Court ultimately allowed the appeal, finding that the payments in question did not amount to unfair preferences. The orders of the lower court were set aside, and the respondent was ordered to pay the appellant's costs.

Orders