July 6, 2014
In Rescom Asia Pacific Pty Ltd v Reapfield Property Consultants Pty Ltd and Foxhat Employment Service Pty Ltd v Deputy Commissioner of Taxation the Victorian Court of Appeal and the Supreme Court considered applications to set aside statutory demands in very different circumstances.
Rescom Asia Pacific Pty Ltd v Reapfield Property Consultants Pty Ltd
The applicant sought leave to appeal a decision of Randall AsJ dismissing an application to set aside a statutory demand. The grounds of appeal included a failure to find there was a genuine dispute or offsetting claim .
The statutory demand relates to a claim for commission on the sale of various apartments in Carlton. The vendor retained Rescom as the underwriter for the sale of the apartments. It was a term of the retainer that in the event that the total sale price of the apartments did not reach a pre-determined level, Rescom would pay the difference to the vendor . If the total proceeds exceeded the predetermined level the vendor would pay the excess amount to Rescom. If the total proceeds exceeded a pre-determined level by a certain amount, then the excess would be shared between Rescom and the vendor .
Rescom engaged Reapfield as its sole marketing agent in Singapore on terms which included a 5% commission on the transacted price of all sales within Singapore. The Agreement referred to a price schedule in an Annexure A of the agreement.
There was, and is, a dispute between the parties as to contents of Annexure A to the agreement with there being two schedules, one referring to lower prices than the other. That said Randall AsJ found he did not need to determine which schedule was incorporated into the agreement for the purpose of determining the application. Focusing on the terms of the marketing agreement and on contemporaneous conduct  he found that the agreement did not impose an obligation on Reapfield other than to use all due care, skill and diligence. There were no consequences for failure by Reapfield to achieve a particular price .
Regarding the contemporaneous conduct the Randall AsJ found :
- the vendor accepted offers made by purchasers procured by Reapfield and booking forms that set out the purchase price and were signed on behalf of Rescom [over the caption] “accepted by underwriter”
- email correspondence to the effect that Rescom “appreciated the good job” and that Rescom was in the “midst of arranging payment as promised”.
- text messages passing between Rescom and Reapfield accepting the invoice for the commissions claimed without complaint and advising that payment would be made when Rescom received draw downs “from equity partners.”
- there were over 20 text messages where Reapfield sought payment and Rescom repeatedly promised to make payment.
- No complaint was made about the invoice that set out the prices obtained for each of the apartments or the liability to pay the commission .
The Court referred to and liberally quoted from the latest Court of Appeal authority on statutory demands, Troutfarms Australia Pty Ltd v Perpetual Nominees Ltd, handed down last year . The key principles can be reduced to the following:
December 2, 2013
The High Court will hand down its decision in Willmott Growers Group Inc v. Willmott Forests Ltd (Receivers and Managers Appointed) (In Liquidation) In its capacity as manager of the unregistered managed investment schemes listed in Schedule 2 and Ors this Wednesday 5 December 2013.
For those, like myself, who practice in the corporations and insolvency area it is a long awaited decision with significant ramifications.
The High Court transcript provides:
MR G.T. BIGMORE, QC: May it please the Court, I appear Read the rest of this entry »
November 24, 2013
The Court of Appeal in Wolfe v Permanent Custodians  VSCA 331 considered issues of duty to co operate in the context of a contractual relationship and unconscionability by a creditor in recovery proceedings against a defaulting mortgagor.
Permanent Custodians Ltd (“Permanent”) holds a first mortgage over a property in Pascoe Vale which secured a loan to Mr Wolfe and his former partner . In 2008 there was default on the loan. In August 2009 Permanent obtained default judgment against Wolfe, a default judgment for the loan and for possession of the Property against his former partner and issued a warrant of possession. Eviction by the Sheriff was scheduled for the week commencing 4 December 2009 . Wolfe entered into an arrangement, on terms set out in a letter from Permanent’s solicitors on 1 December 2009 (the “1 December 2009 arrangement”).
Those terms were, at ,relevantly:
September 26, 2013
Gordon J in Chan v Four C Realty Pty Ltd (in liq), in the matter of Four C Realty Pty Ltd (in liq)  FCA 928 and then in Chan v Four C Realty Pty Ltd (in liq), in the matter of Four C Realty Pty Ltd (in liq) (No 2)  FCA 959 made orders regarding the enforcement of a contract and then approval for the Liquidator to enter into that contract. The facts are common to both hearings
The Applicant, (“Chan”) applied under sections 471B, 477(2B) and 477(6) of the Corporations Act 2001 (Cth) (the Act) for a series of orders including a declaration that, on 13 August 2013, she and the First Respondent (“Four C Realty”) entered into a binding and enforceable contract for her to purchase its business assets of Four C Realty. The Respondents submitted that no binding contract existed on 13 August 2013 and, alternatively, if a binding contract did exist, then Chan was required to provide security for what has been described as “the indemnity” .
Four C Realty carries on business as an estate agent, conducting Read the rest of this entry »
September 25, 2013
In First Equilibrium Pty Limited v Bluestone Property Services Pty Limited (in liq)  FCAFC 108) the Full Federal Court considered an appeal against a winding up order, made by Jacobson J in Bluestone Property Services Pty Ltd (in liq) v First Equilibrium Pty Ltd  FCA 876, under sections 459A and 459P of the Corporations Act 2001 (Cth) (“the Act”) . The court considered in detail the principles associated with winding up on the grounds of insolvency, including the concept of “commercial realities”, and the argument that there was a genuine offsetting claim (which was included as an asset in the financial returns of the appellant on the question of solvency).
Equilibrium has a sole director and shareholder, Mr Justin Brown (“Brown”). Bluestone has a sole director and a shareholder, Mr Lance Hodgkinson (“Hodgkinson”) . Brown & Hodgkinson were property developers involved in a number of substantial property developments  - . In late 2005 Brown wanted to sell out of a development  and at a meeting convened to discuss this with Hodgkinson he wrote on a single sheet of paper what arrangements would effect this outcome. Both then signed the document. Brown claimed the document was an enforceable agreement. Some of the payments contemplated by the document (totalling $600,000) Read the rest of this entry »
September 23, 2013
The court of appeal, per Hansen and Tate JJA, considered the operation of default notices, service and the doctrine of fair notice in Wilde & Anor v Morgan & Ors  VSCA 250. It was an appeal from a decision of AsJ Derhham in Re: Art Pacific Pty Ltd; Wilde v Morgan & Ors  VSC 330 (27 June 2013).
The applicants sought orders, set out at , that:
(1) the appointment of the first and second respondents as agents for the third respondent by Deed of Appointment of Agents for Mortgagee in Possession dated 23 October 2012 (the Deed) under a mortgage of land between the second applicant and the third respondent was invalid;
(2) further or alternatively, the first and second respondents entry into possession or assumption of control of the land of the second applicant pursuant to the Deed was invalid.
The issue at the core of the hearing at first instance and on appeal was Read the rest of this entry »
September 2, 2013
Associate Justice Gardiner undertook a detailed examination of a liquidator’s powers under part 5.9 of the Corporations Act, in particular section 596D(2), in Banksia Securities Limited (Receivers and Managers Appointed)  VSC 416 .
On 25 June Gardiner AsJ ordered a summons for the examination of Michael Hall (“Hall”) under section 596B of the Corporations Act (The “Act”) by the plaintiff, the joint and several receivers of Banksia Securities Limited (“Banksia”) . Hall applied for orders to set aside the summons in so far as it related to the production of documents .
Hall is a member of the the firm MB+M. The plaintiffs are investigating an unqualified audit report for the 2008 financial year which he signed, on behalf of MB+M and whether the provisioning for some of the loans was materially inadequate. At the time of the application no proceedings had been issued against MB+M or Hall .
Hall objected on the following bases:
- while he accepted that an examinable affair of a company includes the property and that the existence of insurance in respect of a chose in action against a third party is capable of being an examinable affair however stated that the Court can not be Read the rest of this entry »
September 1, 2013
The consequences of an examinee not claiming privilege against self incrimination during a public examination by a liquidator are dealt with in Ferguson J’s decision in Le Roi Homestyle Cookies Pty Ltd (in liquidation) v Gemmell  VSC 452.
The Liquidators of Le Roi Homestyle Pty Ltd allege that the Defendants have contravened the insolvent trading provisions of the Corporations Act 2001 (“The Act”). Before issuing proceedings the Liquidators conducted public examinations of each of the Defendants pursuant to section 597. In large part, the insolvent trading claim against the Defendants is based on information elicited in the course of the public examinations.
Neither defendant claimed either privilege during his examination.The Associate Judge before whom the public examination read out the provisions of section 597(1) of the Act and explained its meaning and operation  – .
The Defendants applied Read the rest of this entry »
December 19, 2012
Griffiths J in Platinum Communications Pty Ltd v Computer Networks Pty Limited  FCA 1260 considered an amendment to application to set aside a statutory demand.
The plaintiff, a retailer, and the defendant, a software provider, entered into an agreement whereby the plaintiff would use the defendant’s software under licence and receive related services for payment . When the software was switched on the plaintiff suffered difficulties in many of its stores . The plaintiff claimed Read the rest of this entry »
November 2, 2012
Re Willmott Forests Limited  VSCA 202 is a very important decision in insolvency jurisprudence. The Victorian Court of Appeal upheld an appeal from a finding of a trial judge that the disclaimer of a lease agreement by the liquidator did not have the effect of extinguishing the leasehold interests in land . In doing so the court undertook a detailed analysis of section 568 of the Corporations Act.
The majority defined the question as, at :
whether a leasehold interest in land is extinguished by the disclaimer of the lease agreement by the liquidator of the lessor, pursuant to s 568(1) of the Corporations Act 2001 (Cth) (‘the Act’)
Willmott Forests Ltd (“WFL”) owned leases from third parties freehold properties. It entered into 25 year leases. The liquidators of WFL sought to sell the interest in the properties unencumbered by the leases and seek to disclaim the lease agreement. They applied to the court for approval of such disclaimers . Sale contracts for the sale of the land contained conditions precedent to their completion of the liquidators obtaining orders and directions from a court authorising the liquidators, at :
a) to exercise the powers to terminate, relinquish or surrender the project documents of the registered MIS and Professional Investor MIS; and
(b) to disclaim the project documents of the contractual and partnership MIS as onerous pursuant to s 568(1) of the Act.
The liquidators made application under section 511 of the Act and 477 (2B) for approval of their entry into contracts.
Warren CJ and Sifris AJA
Regarding the operation of section 568 their honours stated:
- liquidators have the power to disclaim property of a company in liquidation or contracts entered into by the company 
- it is to enable a liquidator to Read the rest of this entry »