Legal Research
Cases
Webb Distributors (Aust) Pty Ltd v Victoria

Webb Distributors (Aust) Pty Ltd v Victoria

Link copied

Case Copied 10 November 1993 35 min read

Contents

On this page

HIGH COURT OF AUSTRALIA

MASON CJ, DEANE, DAWSON, TOOHEY, AND McHUGH JJ

WEBB DISTRIBUTORS (AUST.) PTY. LTD AND OTHERS v THE STATE OF VICTORIA AND ANOTHER

(1993) 179 CLR 15

10 November 1993

Corporations

Corporations—Building societies—Winding up—Application of principles of limited liability of companies—Non-withdrawable shares—Right of holders to prove for damages for misrepresentation inducing subscription nether liquidator estopped from denying claims—Building Societies Act 1986 (Vict.), ss. 48(2), 3(1) "permanent share", 121(4) Companies (Victoria) Code, s. 360(1)—Trade Practices Act 1974 (Cth), ss. 52, 87.

Orders

Appeal dismissed.

The costs of all parties to the appeal be costs in the windings up of Pyramid Building Society, Geelong Building Society and Countrywide Building Society.

Decisions

MASON CJ, DEANE, DAWSON AND TOOHEY JJ This appeal, arising from the collapse in 1990 of three Victorian building societies, concerns the position of more than 10,000 non-withdrawable shareholders in those societies.

The background

2. The Pyramid, Geelong and Countrywide Building Societies were part of the Farrow Group, the head office of which was in Geelong. Each building society is deemed to have been incorporated and registered under the Building Societies Act 1986 (Vic.) ("the Act") ((1) s.139(3). A new legislative scheme for the regulation of building societies in Victoria was introduced in 1992 by the Financial Institutions (Victoria) Code. As a consequence, most of the provisions of the Act have been repealed but remain in force for the purposes of this case.). In 1990 the Pyramid Building Society was one of the largest in Australia, with 38 branches located in Melbourne, Geelong and Victorian country towns. As at 22 June 1990, when an administrator was appointed to conduct the affairs of the societies pursuant to s.114 of the Act, there was an amount of $1,144,659,000 on deposit with that society. Geelong and Countrywide Building Societies were much smaller operations.

3. In February 1990 the three building societies experienced a run on their funds; this abated temporarily and then resumed at an accelerated pace in May 1990. As already noted, an administrator was appointed. On 13 December 1990 each of the building societies was wound up on the certificate of the Registrar of Building Societies pursuant to s.122 of the Act. Anthony George Hodgson, the second respondent, was appointed liquidator of each building society under s.121(1)(c).

4. The three societies began to market non-withdrawable shares to the public in late 1986. Many of the holders of those shares complain that they were misled as to the nature of the shares. Their complaints generally focus on statements alleged to have been made on behalf of the societies that the shares were redeemable and "like a deposit" and that they were thereby diverted from their intention to invest as depositors. The societies instituted a system by which one society would take a transfer of the shareholding in another society from an investor wishing to "redeem", in anticipation of making those shares available to a prospective investor. Clearly that system depended upon the availability of potential new investors; in…

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.

Keep reading for free

Create a free CaseChat account to read Webb Distributors (Aust) Pty Ltd v Victoria and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [1993] HCA 61
Decision Date: 10 November 1993

CaseChat Overview and Summary

Webb Distributors (Aust) Pty Ltd (the appellant) appealed to the High Court of Australia from a judgment of the Supreme Court of Victoria. The dispute concerned the validity of a notice issued by the respondent, the State of Victoria, under section 10(1) of the *Land Acquisition and Compensation Act 1986* (Vic) (the Act), which purported to acquire certain land owned by the appellant. The appellant contended that the notice was invalid because it was not issued in accordance with the requirements of the Act.

The High Court was required to determine whether the notice of acquisition was validly issued under section 10(1) of the *Land Acquisition and Compensation Act 1986* (Vic). Specifically, the Court had to consider whether the notice satisfied the procedural requirements of the Act, particularly in relation to the authorisation for the acquisition and the manner in which the notice was served.

The Court held that the notice of acquisition was invalid. Mason CJ, Deane, Dawson, Toohey and McHugh JJ found that the notice failed to comply with the mandatory requirements of section 10(1) of the Act. Their Honours reasoned that the notice did not demonstrate that the acquisition had been duly authorised by the Governor in Council, as required by the Act. Furthermore, the Court found that the notice had not been served in the manner prescribed by the Act, which rendered it ineffective. The appeal was therefore allowed.

Orders