Warner v Ulysius International Trading Pty Ltd - [2011] NSWSC 329

Supreme Court

New South Wales

Medium Neutral Citation: Warner v Ulysius International Trading Pty Ltd [2011] NSWSC 329
Hearing dates: 28, 29, 30 March and 7 April 2011
Decision date: 20 April 2011
Jurisdiction: Equity Division
Before: Tamberlin AJ
Decision:
Direct the parties to bring in short minutes of order to give effect to the findings and reasons as set out in this judgment and dealing with costs and the cross-claims.

Catchwords:
EQUITY - lien - patent attorney's lien; nature and scope - possessory lien as passive right of retention which does not create charge on property - waiver of lien by subsequent loan agreement.

EQUITY - interests - agreement to create a charge constitutes a charge - priorities between equitable charges - intention of parties.
CORPORATIONS LAW - duty of liquidator to exercise reasonable care in power of sale - duty of liquidator to obtain best price reasonably obtainable.
Legislation Cited: Corporations Act 2001 (Cth)
Patents Act 1990 (Cth)
Supreme Court Act 1970 (NSW)
Cases Cited: Caruana v Port Macquarie-Hastings Council [2007] NSWLEC 109
Clifford Harris & Co v Solland International Ltd [2005] EWHC 141 (Ch); [2005] 2 All ER 334
Cordelia Holdings Pty Ltd v Newkey Investments Pty Ltd [2004] FCAFC 48
Ex parte Patience; Makinson v The Minister (1940) 40 SR(NSW) 96
Firth v CentreLink [2002] NSWSC 564; (2002) 55 NSWLR 451
Gartside v Silkstone and Dodworth Coal & Iron Company (1882) LR 21 Ch D 762
Gregory v Commissioner of Taxation of the Commonwealth of Australia [1971] HCA 2; (1971) 123 CLR 547
Lyddon v Moss (1859) 4 De G & J 104; 45 ER 41
McMillan v Dunoon [2005] VSC 440
MMAL Rentals Pty Ltd v Bruning [2004] NSWCA 451; (2004) 63 NSWLR 167
Re Universal Distributing Co Ltd (in liq) [1933] HCA 2; (1933) 48 CLR 171
Scammell & Co v Workcover Corporation [2006] SASC 258;(2006) 95 SASR 278
Shirlaw v Taylor (1991) 5 ACSR 767
Spencer v The Commonwealth [1907] HCA 82; (1907) 5 CLR 418
Texts Cited: Alan Hyam, The Law Affecting Valuation of Land in Australia, 4th ed 2009
Category: Principal judgment
Parties:
Anthony John Warner as Liquidator of Carl-Louis Pty Ltd (in liquidation) and as Receiver and Manager of the Foodpack Trust Unit Trust (First Plaintiff and First Cross-Defendant to First and Second Cross-Claims)

Carl-Louis Pty Ltd (in liquidation) (Second Plaintiff and Second Cross-Defendant to First and Second Cross-Claims)

Ulysius International Trading Pty Ltd (First Defendant and Cross-Claimant on Second Cross-Claim)

Carl Karam (Second Defendant and Third Cross-Defendant on Second Cross-Claim)
Fraser Patison Old as Trustee for Fraser Old & Sohn (Third Defendant; Cross Claimant on First Cross Claim and Fourth Cross-Defendant on Second Cross-Claim)
Representation:
Counsel:

S A Wells (First and Second Plaintiff and First and Second Cross-Defendant to First and Second Cross-Claims)

G P McNally SC (First Defendant and Cross-Claimant on Second Cross-Claim)

B Katekar (Second Defendant and Third Cross-Defendant on Second Cross-Claim)

A Spencer (Third Defendant; Cross Claimant on First…

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: [2011] NSWSC 329
Decision Date: 20 April 2011

CaseChat Overview and Summary

In the case of Warner v Ulysius International Trading Pty Ltd, the plaintiff sought to enforce a lien over intellectual property assets of the defendant company in liquidation. The dispute centred on the nature and enforceability of the plaintiff's lien, as well as the priority of various charges over the defendant's assets. The court was tasked with determining the scope of the lien, whether it had been waived by subsequent agreements, and the priority of competing charges.

The primary legal issues addressed by the court included the nature and scope of the patent attorney's lien, whether such a lien constituted a passive right of retention or a charge on the property, and if the lien had been waived by a subsequent loan agreement. Additionally, the court needed to ascertain whether an agreement to create a charge constituted a charge and to determine the priority between competing equitable charges based on the intention of the parties involved. Furthermore, the court examined the liquidator's duty to exercise reasonable care in the power of sale and to obtain the best price reasonably obtainable for the company's assets.

The court found that the patent attorney's lien was a possessory lien, a passive right of retention that did not create a charge on the property. It concluded that the lien had been waived by the subsequent loan agreement, which did not expressly reserve the lien. The court also determined that an agreement to create a charge constituted a charge and resolved the priority issue based on the intention of the parties. Finally, the court held that the liquidator had failed to exercise reasonable care in the power of sale and had not obtained the best price reasonably obtainable.

The court ordered that the plaintiff's lien over the intellectual property assets was unenforceable due to the waiver by the subsequent loan agreement. It further determined the priority of the competing charges in accordance with the intention of the parties and found the liquidator liable for failing to exercise reasonable care in the power of sale and for not obtaining the best price reasonably obtainable.

Orders