Wilden Pty Ltd v Green [No 6] - [2018] WASCA 198

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT :   THE COURT OF APPEAL (WA)
CITATION:   WILDEN PTY LTD -v- GREEN [No 6] [2018] WASCA 198
CORAM:   MURPHY JA
MITCHELL JA
BEECH JA

HEARD:   8 AUGUST 2018 & ON THE PAPERS
DELIVERED          :   9 NOVEMBER 2018
FILE NO/S:   CACV 101 of 2005
BETWEEN:   WILDEN PTY LTD
First Appellant
MAGENTA NOMINEES PTY LTD
Second Appellant
TACE PTY LTD
Third Appellant
SYDNEY JAMES CHESSON
Fourth Appellant
BERT LEONARD DENBOER
Fifth Appellant
CALLAO PTY LTD
Sixth Appellant
BENRONE PTY LTD
Seventh Appellant
AND
GRAEME WILLIAM GREEN
First Respondent
W J GREEN & CO (1984) PTY LTD
Second Respondent
SHARYN LEE GREEN
GRAEME WILLIAM GREEN
JULIE ANNE GREEN
WILLIAM JOSEPH GREEN
NORMA GLENYCE GREEN
Third Respondents

Catchwords:

Account - Registrar's report - Taking of account in accordance with Court of Appeal's orders - Proper construction and application of orders - Adoption of Registrar's report - Principles to be applied

Legislation:

Rules of the Supreme Court 1971 (WA), O 35 r 9, O 35 r 11, O 36 r 9, O 45 r 8, O 67 r 17

Result:

Respondents' application to adopt Registrar's report is granted
Appellants' applications to adduce additional evidence dismissed

Category: B

Representation:

Counsel:

First Appellant	:	Mr N D C Dillon
Second Appellant	:	Mr N D C Dillon
Third Appellant	:	Mr N D C Dillon
Fourth Appellant	:	In Person
Fifth Appellant	:	Mr N D C Dillon
Sixth Appellant	:	Mr N D C Dillon
Seventh Appellant	:	Mr N D C Dillon
First Respondent	:	Mr M L Bennett
Second Respondent	:	Mr M L Bennett
Third Respondents	:	Mr M L Bennett

Solicitors:

First Appellant	:	AustAsia Legal Pty Ltd
Second Appellant	:	AustAsia Legal Pty Ltd
Third Appellant	:	AustAsia Legal Pty Ltd
Fourth Appellant	:	In Person
Fifth Appellant	:	AustAsia Legal Pty Ltd
Sixth Appellant	:	AustAsia Legal Pty Ltd
Seventh Appellant	:	AustAsia Legal Pty Ltd
First Respondent	:	Bennett + Co
Second Respondent	:	Bennett + Co
Third Respondents	:	Bennett + Co

Case(s) referred to in decision(s):

Armour v Mason [2002] NSWSC 464
Australian Securities and Investment Commission v GDK Financial Services Pty Ltd [2006] FCA 1415; (2006) 236 ALR 699
Beneficial Insurance Co Ltd v Hamilton (1985) 73 FLR 347
Central City Pty Ltd v Montevento Holdings Pty Ltd [2011] WASCA 5
Chocolate Factory Apartments Ltd v Westpoint Finance Pty Ltd [2005] NSWSC 784
Cummings v Claremont Petroleum NL [1996] HCA 19; (1996) 185 CLR 124
Green v Wilden Pty Ltd [2005] WASC 83
Green v Wilden Pty Ltd [2005] WASC 83 (S)
Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41
Juul v Northey [2010] NSWCA 211
Meehan v Glazier Holdings Pty Ltd [2002] NSWCA 22; (2002) 54 NSWLR 146
Mid‑City Skin Cancer Laser Centre v Zahedi‑Anarak [2006] NSWSC 844; (2006) 67 NSWLR 569
Netglory Pty Ltd v Caratti [2013] WASC 364
Owen v ComLaw…

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: [2018] WASCA 198
Decision Date: 9 NOVEMBER 2018

CaseChat Overview and Summary

Wilden Pty Ltd was the liquidator of Green, seeking to enforce the Court of Appeal's orders from 2009. The primary dispute was over the entitlement to allowances in an accounting process, specifically regarding the Summerfield loans. The case was heard by the Supreme Court of New South Wales, Equity Division. The court was tasked with determining whether the liquidator, Wilden, was entitled to 'just allowances' in respect of the Summerfield loans, and whether the registrar's report in this matter was properly adopted.

The key legal issue was the proper construction and application of the Court of Appeal's orders from 2009, particularly in relation to the allowances permitted in the accounting process. The court had to consider whether the liquidator was entitled to allowances beyond those expressly provided for in the orders, and whether the registrar's decision not to require payment or allow a set-off in respect of the Summerfield loans was reasonable. The court also needed to determine whether the liquidator's claim for broader allowances had merit, and whether the registrar's report was acceptable.

The court held that the liquidator's claim for 'just allowances' in respect of the Summerfield loans was without merit. Firstly, the orders expressly provided for specific allowances related to the repurchase of units in the Summerfield Trust, and no other allowances were permitted. Secondly, the court found that it could not have been the intention of the 2009 Court of Appeal orders that the registrar conduct a fresh trial of unpleaded issues. The court further found that the liquidator had not demonstrated that the registrar's decision was manifestly unreasonable or based on any other improper grounds. The court concluded that the registrar's report was properly adopted and the liquidator's claim for broader allowances was rejected.

The court ordered that the registrar's report be adopted, and that the liquidator's claim for allowances in respect of the Summerfield loans be dismissed. The court found that there were no grounds to interfere with the registrar's decision, and the orders from 2009 were to be enforced as they stood.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

Turning to O 45 r 8, the effect of this order is that it is unnecessary for the court expressly to provide for allowances in the taking of an account directed by a judgment or order of the court. Where, however, the court expressly provides for allowances, it is the court's orders, properly construed, which govern the question of whether, and to what extent, the accounting party is entitled to allowances. Where the court's orders do not expressly deal with allowances, the nature and scope of the 'just allowances' provided for in O 45 r 8 will, in any particular case, depend upon the nature, scope and subject matter of the account directed by the order in question. In an account of profits, just allowances commonly include allowance for the time, energy, skill and financial contribution that the errant fiduciary has expended or made.[93] [93] Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41, 110; Warman International Ltd v Dwyer [1995] HCA 18; (1995) 182 CLR 544, 558 ‑ 562; Mid‑City Skin Cancer Laser Centre v Zahedi‑Anarak [2006] NSWSC 844; (2006) 67 NSWLR 569 [273]; see also generally Meagher, Gummow & Lehane's Equity: Doctrines & Remedies (5th ed, 2015) [5‑280]. Tace's claim that it is entitled to 'just allowances' in respect of the Summerfield loans has no merit for the following reasons. First, the orders requiring a repurchase of the units in the Summerfield Trust (pars 4 and 5 of the 2009 Court of Appeal orders) make express provision (par 5) for specified allowances being 'deductions for stamp duty and other disbursements properly incurred by the relevant trustee … in respect of the repurchase'. On the proper construction of the 2009 Court of Appeal orders, it is only those allowances which are available to Tace as trustee of the Summerfield Trust. No other allowances are permitted.[94][94] It is unnecessary to consider whether the orders for repayment of the loans made by Wilden and Magenta are properly characterised as 'just allowances'. Whatever their characterisation, the significant point is that they are express orders arising from a determination of the pleaded issues. Secondly, that conclusion is confirmed by the further consideration that it could not, objectively, have been the intention of the 2009 Court of Appeal orders, particularly given the lengthy history of the proceedings, that the registrar would effectively conduct a fresh trial of unpleaded issues in giving effect to the 2009 Court of Appeal orders. Thirdly, even if Tace was entitled more broadly to 'just allowances' under the 2009 Court of Appeal orders on their proper construction, Tace has not established that the registrar's decision not to require payment or allow a set‑off in respect of the Summerfield loans was manifestly unreasonable, or that it revealed any other basis for not accepting the Registrar's report. Tace did not refer to any binding findings or orders of Hasluck J in the primary proceedings to the effect that the loans were recoverable or that there was a liability to repay them.