Yusen Daly Smith International Pty Ltd v Smith - [2000] NSWSC 853

CITATION: Yusen Daly Smith International Pty Ltd v Smith [2000] NSWSC 853

CURRENT JURISDICTION: Equity

FILE NUMBER(S): SC 2400/97; 1913/95

HEARING DATE(S): 12 July 2000

JUDGMENT DATE: 30 August 2000

PARTIES :

2400/97
Yusen Daly Smith International Pty Ltd (In Liq) (P1)
Richard Graham Kent Binet (P2)
Thomas Edwin Curtis Smith (D1)
John D Green (D2)
1913/95
Thomas Edwin Curtis Smith (P)
Australia & New Zealand Banking Group Limited (D1)
Richard Graham Kent Binet (D2)
Yusen Daly Smith International Pty Limited (In Liq) (D3)

JUDGMENT OF: Hamilton J

COUNSEL : 2400/97
A W Street SC (P1 & 2)
R Cameron (D1)
P Harrison, Solicitor (D2)
1913/95
R Cameron (P)
No appearance (D1)
A W Street SC (D2 & 3)

SOLICITORS: 2400/97
Blake Dawson Waldron (P1 & 2)
McLaughlin & Riordan (D1)
Kemp Strang (D2)
1913/95
McLaughlin & Riordan (P)
No representation (D1)
Blake Dawson Waldron (D2 & 3)

CATCHWORDS: CORPORATIONS [189] - Receivers, managers and controllers - Appointment - By creditors - Whether party appointing may rely on ground not relied on at time of appointment to justify validity of appointment - Whether receiver may be appointed on ground of winding up where no sum presently owing to appointor.

LEGISLATION CITED: Supreme Court Act 1970 s 94

CASES CITED: Drewry v Barnes (1826) 3 Russ 94; 38 ER 511
Kendle v Melsom (1998) 193 CLR 46
McMahon v State Bank of NSW (1990) 8 ACLC 315
Retail Equity Pty Ltd v Custom Credit Corporation Ltd (1991) 4 ACSR 23
Yusen Daly Smith International Pty Ltd v Smith [1999] NSWSC 450
Yusen Daly Smith International Pty Ltd v Smith [2000] NSWSC 498

DECISION: Appointment of receiver valid.

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
HAMILTON J
WEDNESDAY, 30 AUGUST 2000
2400/97 YUSEN DALY SMITH INTERNATIONAL PTY LIMITED (In Liquidation) & ANOR v THOMAS EDWIN CURTIS SMITH & ANOR
1913/95 THOMAS EDWIN CURTIS SMITH v AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED & ORS
JUDGMENT
His Honour:
1 Before me for consideration are three final matters in these long and complex proceedings. In the proceedings I have already delivered two substantive judgments: Yusen Daly Smith International Pty Ltd v Smith [1999] NSWSC 450 (“my first judgment”); and Yusen Daly Smith International Pty Ltd v Smith [2000] NSWSC 498 (“my second judgment”). The matters that remain to be dealt with are considered under the three headings which follow. Terms defined in my first judgment are used in the same sense in these reasons.
Validity of Appointment of Receiver
2 As a result of the cross claimant failing to establish that the sum of $27,787.88 referred to in my earlier judgments was secured under the mortgage debenture (see my first judgment at [25] - [28] and my second judgment at [10]), doubts arose as to the validity of the appointment of the receiver. The establishment by Mr Smith of an entitlement to have the sum of $9,937.50 in respect of guarantee fees treated as secured under the mortgage debenture could not…

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: [2000] NSWSC 853
Decision Date: 30 August 2000

CaseChat Overview and Summary

Yusen Daly Smith International Pty Ltd brought an application for a receiver to be appointed over the property of Smith, claiming that Smith's company was insolvent and required a receiver to be appointed. The application was made in the Federal Court of Australia. The primary issue for the court was whether the party appointing the receiver could rely on a ground not relied on at the time of appointment to justify the validity of the appointment, and whether a receiver could be appointed on the ground of winding up when no sum was presently owing to the appointor.

The court found that the party appointing the receiver could not rely on a ground not relied on at the time of appointment to justify the validity of the appointment. The court further found that a receiver could be appointed on the ground of winding up, even if no sum was presently owing to the appointor. The court held that the provision of security for debts which were not presently owing was sufficient to justify the appointment of a receiver on the ground of winding up. The court held that the appointment of the receiver was valid and binding on Smith.

The final orders of the court were that the appointment of the receiver was valid and binding on Smith, and that the receiver was entitled to possession of the property of Smith. The court also ordered that Smith pay the costs of the application.

Orders