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Woods & White v Hopkins

Woods & White v Hopkins

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Case Copied 22 January 2016 53 min read

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JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: WOODS & WHITE -v- HOPKINS [2016] WASC 16

CORAM: ACTING MASTER GETHING

HEARD: 15 OCTOBER 2015

DELIVERED : 22 JANUARY 2016

FILE NO/S: COR 161 of 2015

BETWEEN: MATTHEW DAVID WOODS & HAYDEN LEIGH WHITE as Joint and Several Liquidators of LITTLE TIGER PTY LTD (IN LIQ) as Trustee for the BPH TRUST
First Plaintiff
MATTHEW DAVID WOODS & HAYDEN LEIGH WHITE as Joint and Several Liquidators of GWYNGALCHU PTY LTD (IN LIQ) as Trustee for the BPS TRUST
Second Plaintiff
MATTHEW DAVID WOODS & HAYDEN LEIGH WHITE as Joint and Several Liquidators of NEREUS PTY LTD (IN LIQ) as Trustees for the BPM TRUST
Third Plaintiff
AND
RICK GAVIN HOPKINS
First Defendant
BRYNLEY THOMAS SCOTT
Second Defendant
JUSTIN STEPHEN MANOLIKOS
Third Defendant
CHARLIE SAM NAPOLI
SILVERLINE ASSET PTY
Fourth Defendants
GRAHAM ARTHUR ADDISON
JABRUM PTY LTD
GRAHAM ADDISON & ASSOCIATES PTY LTD
Fifth Defendants
COMMONWEALTH BANK OF AUSTRALIA LTD
Sixth Defendant

Catchwords:

Corporations law - Winding up - Application by liquidators for directions - Whether indemnity secured by equitable charge can be exercised by liquidators against partnership assets - Priority of distribution of partnership assets where all parties are companies

Legislation:

Bankruptcy Act 1966 (Cth), s 110
Corporations Act 2001 (Cth), s 479, s 553E, s 556
Partnership Act 1895 (WA), s 50, s 57

Result:

Directions given

Category: A

Representation:

Counsel:

First Plaintiff                :     Mr J C Vaughan SC
Second Plaintiff            :     Mr J C Vaughan SC
Third Plaintiff               :     Mr J C Vaughan SC
First Defendant             :     No appearance
Second Defendant         :     No apperance
Third Defendant           :     No appearance
Fourth Defendants        :     Mr M L Bennett
Fifth Defendants           :     Mr S J Lemonis
Sixth Defendant            :     No appearance
Interested Party             :     Mr G D Cobby

Solicitors:

First Plaintiff                :     Clayton Utz
Second Plaintiff            :     Clayton Utz
Third Plaintiff               :     Clayton Utz
First Defendant             :     Tottle Partners
Second Defendant         :     Tottle Partners
Third Defendant           :     Tottle Partners
Fourth Defendants        :     Bennett & Co, Barristers & Solicitors
Fifth Defendants           :     Lemonis & Tantiprasut Lawyers
Sixth Defendant            :     No appearance
Interested Party             :     For Ms J Low in her capacity as Liquidator of BYBAPL (in liq)

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

Amni Pty Ltd v Williams [1981] 2 NSWLR 138
Atwell & Atwell v Roberts[No 3] [2009] WASC 96
Australian Securities and Investments Commission v GDK Financial Solutions Pty Ltd (in liq) (No 3) (2008) 246 ALR 580
Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485
Canny Gabriel Castle Jackson Advertising Pty Ltd v Volume Sales (Finance) Pty Ltd [1974] HCA 22; (1974) 131 CLR 321
Coad v Wellness Pursuit Pty Ltd (in liq) [2009] WASCA 68; (2009) 40 WAR 53
Coats v Southern Cross Airlines Holdings Ltd (in liq) [2000] 1 Qd R 84
Commissioner of State Taxation for the State of South Australia v Cyril Henschke Pty Ltd [2010] HCA 43; (2010) 242 CLR 508
Davies v Littlejohn [1923] HCA 64

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: [2016] WASC 16
Decision Date: 22 JANUARY 2016

CaseChat Overview and Summary

Woods & White was the liquidator of two companies in liquidation. One company had entered into a partnership agreement with another company. The liquidators applied for directions in relation to the partnership assets. The liquidators sought to exercise an indemnity secured by an equitable charge over partnership assets, arguing that they should have priority over the other creditors of the company in liquidation. The respondents were the partners, who contested the liquidators' application. The court was asked to determine whether the liquidators could exercise the indemnity secured by the equitable charge, and if so, whether the liquidators should have priority over the other creditors of the company in liquidation in the distribution of partnership assets.

The court considered the nature of the equitable charge and whether it could be exercised by the liquidators. The court also considered the priority of distribution of partnership assets, and whether the liquidators should have priority over the other creditors of the company in liquidation. The court examined the relevant provisions of the Partnership Act and the Corporations Act, as well as relevant case law. The court held that the liquidators could exercise the indemnity secured by the equitable charge, as it was a proprietary interest in the partnership assets. The court also held that the liquidators should have priority over the other creditors of the company in liquidation in the distribution of partnership assets, as the equitable charge was a security interest in the partnership assets.

The court found in favour of the liquidators and granted their application for directions. The liquidators were allowed to exercise the indemnity secured by the equitable charge, and they were also given priority over the other creditors of the company in liquidation in the distribution of partnership assets. The court held that the equitable charge was a security interest in the partnership assets, and therefore the liquidators had a proprietary interest in the partnership assets. The court held that the liquidators should be paid first from the partnership assets, ahead of the other creditors of the company in liquidation. The court did not make any orders in relation to the other respondents, as they did not contest the liquidators' application.

In summary, the court held that the liquidators could exercise an indemnity secured by an equitable charge over partnership assets, and that the liquidators should have priority over the other creditors of the company in liquidation in the distribution of partnership assets. The court granted the liquidators' application for directions, and made orders in favour of the liquidators. The court did not make any orders in relation to the other respondents, as they did not contest the liquidators' application.

Orders