mdroth/huggingface-course_section-5_zst huggingface dataset:
Case: WebCentral Group Limited (No 2) (2006) 58 ACSR 742
Outcome: discussed
As distinct from the deemed warranty just mentioned, the Scheme also includes (in cl 7.3(b)) what may be called a "vesting free of encumbrances" term. I discussed such a term in WebCentral Group Limited (No 2) (2006) 58 ACSR 742 ( WebCentral ) at [14] [24], and will not repeat here what I said there. 23 The question that arises is whether, in the exercise of its discretion in an ex parte proceeding and without a contradictor, the Court should make an order for the convening of the meeting and later approving a scheme containing the particular term proposed. 24 Could the presence of the term detrimentally affect the interests held by third parties in the shares the subject of the scheme? If not, why have, or not have, the term as part of the scheme (see WebCentral 58 ACSR 742 at [20])? If so, should the Court support a term that can detrimentally affect the interests of third parties who have not been heard? 25 The effect of the Court's approval of a scheme agreed to by the requisite majorities in number and in value is that the scheme is binding on all members and on the company: s 411(4). As noted in WebCentral 58 ACSR 742 at [18], in substance the effect is to supply consent to be bound by the scheme, even of members who did not vote in favour of it. The vesting free of encumbrances term would be binding on all members. It would, however, leave the interests of third parties to be governed by general law principles. As noted below, those principles give very substantial protection to an acquiring company. 29 The vesting free of encumbrances term expressed in cl 7.3(b) of the Share Scheme incorporates a qualification in the light of the observations in WebCentral 58 ACSR 742. The term is as follows: To the extent permitted by law , all Investa Shares (including any rights and entitlements attaching to those shares) which are transferred to Morgan Stanley Bidco under this Investa Share Scheme will, at the date of the transfer of them to Morgan Stanley Bidco, vest in Morgan Stanley Bidco free from all mortgages, charges, liens, encumbrances and interests of third parties of any kind, whether legal or otherwise, and free from any restrictions on transfer of any kind not referred to in this Investa Share Scheme. (Emphasis added.) 30 I regarded the opening words "To the extent permitted by law" as giving adequate notice that a third party would not suffer the extinguishment of an interest in shares if Morgan Stanley Bidco had had notice of that interest. I therefore took the view that those words overcame the difficulty referred to in WebCentral 58 ACSR 742, which was that the presence of a vesting free of encumbrances term might give the impression to third parties that their interests had been extinguished by the presence of the term where they would not have been in its absence.
Case: Beach Petroleum NL v Johnson (1992) 7 ACSR 203
Outcome: cited
1335(1) assumes that the proceeding under consideration will go to trial and that the applicant's claim will fail. However to enliven s 1335(1) the respondents must establish that there is credible testimony which establishes that there is reason to believe that the applicant will be unable to pay the costs of the successful respondents. This has been described as the threshold condition for the exercise of the discretion in the exercise of the power given to the Court in s 1335(1). In Beach Petroleum NL v Johnson (1992) 7 ACSR 203 at 205 von Doussa J identified the test: In my opinion the power of the court under s 1335 arises if credible evidence establishes that there is reason to believe there is a real chance that in events which can fairly be described as reasonably possible the plaintiff corporation will be unable to pay the costs of the defendant on service of the allocatur, if judgment goes against it. This will be so even if in other events which can also be described as reasonably possible the plaintiff corporation would be able to pay the costs. The degree of likelihood of the plaintiff corporation being unable to pay the costs along with all the circumstances, actual and possible, about its financial position, would be then taken into account in the exercise of discretion, and in framing the orders of the court if the decision is to order security.
Case: Central Bayside General Practice Association Ltd v Commissioner of State Revenue [2006] HCA 43 ; (2006) 228 CLR 168
Outcome: cited
in Livingspring Pty Ltd v Kliger Partners [2008] VSCA 93 ; (2008) 66 ACSR 455 the Court of Appeal in Victoria warned against the adoption of a test different from the test posed by the statute. The test it said was, "[i]s there reason to believe that the corporation will be unable to pay the defendant's costs?": Livingspring Pty Ltd [2008] VSCA 93 ; 66 ACSR 455 at 459. The Court of Appeal was right in my opinion to return to the wording of the statute to identify the statutory test. The words of the statute must govern the exercise of the power, not like words or any restatement of the statute: Central Bayside General Practice Association Ltd v Commissioner of State Revenue [2006] HCA 43 ; (2006) 228 CLR 168 at [84] .
Case: Livingspring Pty Ltd v Kliger Partners [2008] VSCA 93 ; (2008) 66 ACSR 455
Outcome: followed
in Livingspring Pty Ltd v Kliger Partners [2008] VSCA 93 ; (2008) 66 ACSR 455 the Court of Appeal in Victoria warned against the adoption of a test different from the test posed by the statute. The test it said was, "[i]s there reason to believe that the corporation will be unable to pay the defendant's costs?": Livingspring Pty Ltd [2008] VSCA 93 ; 66 ACSR 455 at 459. The Court of Appeal was right in my opinion to return to the wording of the statute to identify the statutory test. The words of the statute must govern the exercise of the power, not like words or any restatement of the statute: Central Bayside General Practice Association Ltd v Commissioner of State Revenue [2006] HCA 43 ; (2006) 228 CLR 168 at [84] .
Case: Re Driller (1972) 21 FLR 159
Outcome: applied
While s 134(4) of the Act empowers a trustee to seek directions "in respect of a matter arising in connexion with the administration of the estate", it is well accepted that the Court is not for that reason obliged to give the directions sought: Re Driller (1972) 21 FLR 159. The proper subject of directions, in my view, is the manner in which a trustee should act in carrying out his or her functions as such: cf Re G B Nathan &amp; Co Pty Ltd (in liq) (1991) 24 NSWLR 674 at 679. Their proper effect, if full disclosure has been made to the Court of the material facts, is to protect the trustee from liability to a creditor or a bankrupt for a breach of duty of office for things done in accordance with the directions: see generally the decision of Sackville J in Sutherland (in matter of Scutts) [1999] FCA 147 at [9] ff. The s 134(4) procedure is not of itself an appropriate vehicle to determine the substantive rights of creditors as against a trustee in bankruptcy or a creditors amongst themselves: Scutts , at [14]; see also Re Lofthouse [2001] FCA 25 ; (2001) 107 FCR 151 at [9] .
Case: Re G B Nathan &amp; Co Pty Ltd (in liq) (1991) 24 NSWLR 674
Outcome: cited
While s 134(4) of the Act empowers a trustee to seek directions "in respect of a matter arising in connexion with the administration of the estate", it is well accepted that the Court is not for that reason obliged to give the directions sought: Re Driller (1972) 21 FLR 159. The proper subject of directions, in my view, is the manner in which a trustee should act in carrying out his or her functions as such: cf Re G B Nathan &amp; Co Pty Ltd (in liq) (1991) 24 NSWLR 674 at 679. Their proper effect, if full disclosure has been made to the Court of the material facts, is to protect the trustee from liability to a creditor or a bankrupt for a breach of duty of office for things done in accordance with the directions: see generally the decision of Sackville J in Sutherland (in matter of Scutts) [1999] FCA 147 at [9] ff. The s 134(4) procedure is not of itself an appropriate vehicle to determine the substantive rights of creditors as against a trustee in bankruptcy or a creditors amongst themselves: Scutts , at [14]; see also Re Lofthouse [2001] FCA 25 ; (2001) 107 FCR 151 at [9] .
Case: Sutherland (in matter of Scutts) [1999] FCA 147
Outcome: cited
While s 134(4) of the Act empowers a trustee to seek directions "in respect of a matter arising in connexion with the administration of the estate", it is well accepted that the Court is not for that reason obliged to give the directions sought: Re Driller (1972) 21 FLR 159. The proper subject of directions, in my view, is the manner in which a trustee should act in carrying out his or her functions as such: cf Re G B Nathan &amp; Co Pty Ltd (in liq) (1991) 24 NSWLR 674 at 679. Their proper effect, if full disclosure has been made to the Court of the material facts, is to protect the trustee from liability to a creditor or a bankrupt for a breach of duty of office for things done in accordance with the directions: see generally the decision of Sackville J in Sutherland (in matter of Scutts) [1999] FCA 147 at [9] ff. The s 134(4) procedure is not of itself an appropriate vehicle to determine the substantive rights of creditors as against a trustee in bankruptcy or a creditors amongst themselves: Scutts , at [14]; see also Re Lofthouse [2001] FCA 25 ; (2001) 107 FCR 151 at [9] .
Case: Re Lofthouse [2001] FCA 25 ; (2001) 107 FCR 151
Outcome: cited
While s 134(4) of the Act empowers a trustee to seek directions "in respect of a matter arising in connexion with the administration of the estate", it is well accepted that the Court is not for that reason obliged to give the directions sought: Re Driller (1972) 21 FLR 159. The proper subject of directions, in my view, is the manner in which a trustee should act in carrying out his or her functions as such: cf Re G B Nathan &amp; Co Pty Ltd (in liq) (1991) 24 NSWLR 674 at 679. Their proper effect, if full disclosure has been made to the Court of the material facts, is to protect the trustee from liability to a creditor or a bankrupt for a breach of duty of office for things done in accordance with the directions: see generally the decision of Sackville J in Sutherland (in matter of Scutts) [1999] FCA 147 at [9] ff. The s 134(4) procedure is not of itself an appropriate vehicle to determine the substantive rights of creditors as against a trustee in bankruptcy or a creditors amongst themselves: Scutts , at [14]; see also Re Lofthouse [2001] FCA 25 ; (2001) 107 FCR 151 at [9] .
Case: Re Scott (1970) 16 FLR 416
Outcome: followed
As Street J held in Re Scott (1970) 16 FLR 416, where partners incur joint and several liability to pay make a payment they are for s 95 purposes liable in respect of distinct contracts (a) as members of the firm and (b) as sole contractors, even if those contracts were contained in the same instrument. Section 95 has its provenance in English Bankruptcy legislation provisions originating in the Bankruptcy Act 1861 (UK) s 152 and achieving its presently relevant form in the Bankruptcy Act 1883 (UK) Sched II r 18 (see also Bankruptcy Act 1914 (UK) Sched 2 r 19). The English legislation was copied in r 244 of the Rules made under the Bankruptcy Act 1924 (Cth) .
Case: Ex p Adamson; In re Collie (1878) 8 Ch D 807
Outcome: cited
Prior to the 1861 English Act, the common law rule was that a person to whom members of a firm were bound jointly and severally was not allowed to rank as a creditor in the joint and the separate estates but had to elect whether he would rank as a joint creditor or a separate creditor. While the English and Australian legislation to which I have referred did not totally abolish that rule, it rendered the rule "[p]ractically of little consequence": see the short version of this history in Lindley and Banks on Partnership , 27-164 27-167 (18 th ed, 2002). As there pointed out, the common law rule was in real terms confined to torts, frauds etc: see e.g. Ex p Adamson; In re Collie (1878) 8 Ch D 807. The view expressed by Street J merely reflected long standing English authority to the same effect: see Ex p Honey (1871) LR 7 Ch App 178; and what was earlier understood to be orthodox Australian law: see Eastman, Commonwealth Bankruptcy Act 1924-1933 , 650-651 (2 nd ed, 1940).
Case: Ex p Honey (1871) LR 7 Ch App 178
Outcome: cited
Prior to the 1861 English Act, the common law rule was that a person to whom members of a firm were bound jointly and severally was not allowed to rank as a creditor in the joint and the separate estates but had to elect whether he would rank as a joint creditor or a separate creditor. While the English and Australian legislation to which I have referred did not totally abolish that rule, it rendered the rule "[p]ractically of little consequence": see the short version of this history in Lindley and Banks on Partnership , 27-164 27-167 (18 th ed, 2002). As there pointed out, the common law rule was in real terms confined to torts, frauds etc: see e.g. Ex p Adamson; In re Collie (1878) 8 Ch D 807. The view expressed by Street J merely reflected long standing English authority to the same effect: see Ex p Honey (1871) LR 7 Ch App 178; and what was earlier understood to be orthodox Australian law: see Eastman, Commonwealth Bankruptcy Act 1924-1933 , 650-651 (2 nd ed, 1940).
Case: Western Australia v Bond Corporation Holdings Ltd (1992) 37 FCR 150
Outcome: cited
I should add for the sake of completeness that the rule that only one proof may be lodged against a single estate in respect of each debt of that estate: see generally Western Australia v Bond Corporation Holdings Ltd (1992) 37 FCR 150 at 161-164; has no present relevance. 18 The distinguishing characteristics of joint tenancy are first "the right of survivorship" and second, the presence of "the four unities", being unity of possession, of interest, of title and of time: on joint tenancy see generally Gray and Gray, Elements of Land Law , 11.4 ff (4 th ed, 2005).
Case: Re Boots; Ex parte Official Receiver (1976) 26 FLR 320
Outcome: discussed
It was held by the Full Court of this Court in Re Francis; Ex parte Official Trustee in Bankruptcy (1988) 82 ALR 335 that the bankruptcy of one of two joint tenants severs the joint tenancy with the interest of the bankrupt vesting in the Official Trustee or a registered trustee under s 58 of the Act, and the remaining co-owner becoming a tenant in common with the Official Trustee or trustee. The Court said (at 339): "When the estate of the male bankrupt in the land in question became vested in the Official Trustee, the unity of title was immediately destroyed, in that the respective interests of the Official Trustee and the female co-owner in the land did not derive from the same act or document. Nor is there any unity of time between the two estates. The unity of interest also does not exist because the interest of the Official Trustee is impressed with his responsibilities under the Bankruptcy Act 1966 and may, and very likely will, be of less duration than that of his co-owner. The fact that upon the later bankruptcy of the female bankrupt the Official Trustee succeeded to her interest in the land as well, cannot recreate a joint tenancy out of what has become on severance a tenancy-in-common, if for no other reason, because the unities of title and time are not present. Finally on the matter of principle, it could hardly be said that, if the female bankrupt had died after the male bankrupt's bankruptcy but before she herself became bankrupt, the Official Trustee would have succeeded to her estate and interest in the land by survivorship." Later in its reasons, in commenting on Re Boots; Ex parte Official Receiver (1976) 26 FLR 320 (discussed below) where a husband and wife with jointly owned non-partnership assets became bankrupt at the same time, the Court observed (at 340) that "[i]n those circumstances no question of severance of joint tenancies arose". 21 The question in Boots' case was whether, because the husband and wife were "joint debtors" (in consequence of their conduct of the partnership business), their jointly owned real property, though not partnership property, was to be included in their "joint estate" under s 110(1). In holding that that property was part of the joint estate, Riley J clearly proceeded on the premise that no severance of the joint tenancy resulted from the contemporaneous bankruptcy of the joint tenants. The dictum quoted above from Re Francis endorsed the correctness of that premise. In this matter I am being asked to deal directly with whether the Full Court's dictum and the premise of Boots' are correct.
Case: Sistrom v Urh (1992) 40 FCR 550
Outcome: cited
There is now a significant body of Australian case law in addition to Re Francis to the effect that the bankruptcy of a joint tenant severs the joint tenancy at law (if the land in question is old system land) or in equity (if the land is held under a title registration system), the involuntary alienation worked by s 58 of the Bankruptcy Act effecting the severance in either case: see generally Sistrom v Urh (1992) 40 FCR 550; Re Holland; Ex parte Official Trustee in Bankruptcy (1985) 5 FCR 165; Re Prestia [2001] FCA 792 at [23] - [24] . As Re Francis indicates, that involuntary alienation severs at least two of the "unities" (i.e. of interest and of time).
Case: Re Holland; Ex parte Official Trustee in Bankruptcy (1985) 5 FCR 165
Outcome: cited
There is now a significant body of Australian case law in addition to Re Francis to the effect that the bankruptcy of a joint tenant severs the joint tenancy at law (if the land in question is old system land) or in equity (if the land is held under a title registration system), the involuntary alienation worked by s 58 of the Bankruptcy Act effecting the severance in either case: see generally Sistrom v Urh (1992) 40 FCR 550; Re Holland; Ex parte Official Trustee in Bankruptcy (1985) 5 FCR 165; Re Prestia [2001] FCA 792 at [23] - [24] . As Re Francis indicates, that involuntary alienation severs at least two of the "unities" (i.e. of interest and of time).
Case: Re Prestia [2001] FCA 792
Outcome: cited
There is now a significant body of Australian case law in addition to Re Francis to the effect that the bankruptcy of a joint tenant severs the joint tenancy at law (if the land in question is old system land) or in equity (if the land is held under a title registration system), the involuntary alienation worked by s 58 of the Bankruptcy Act effecting the severance in either case: see generally Sistrom v Urh (1992) 40 FCR 550; Re Holland; Ex parte Official Trustee in Bankruptcy (1985) 5 FCR 165; Re Prestia [2001] FCA 792 at [23] - [24] . As Re Francis indicates, that involuntary alienation severs at least two of the "unities" (i.e. of interest and of time).
Case: Cummings v Claremont Petroleum NL [1996] HCA 19 ; (1996) 185 CLR 124
Outcome: cited
The trustee is not seeking a direction as to whether in the circumstances Craig could have maintained an action against Colin and Marlene "for specific performance to rectify the manner in which he held his interest in the Bordertown property [sic]". Rather, what is sought are directions as to whether he should take any further steps in relation to whether a claim exists and, if so, what steps should be taken in relation to dealing with that claim. The trustee acknowledges that any claim Colin might have has vested in him and that Colin "has no right to bring or prosecute proceedings to protect, enhance or add to the property of which he has been divested on bankruptcy": Cummings v Claremont Petroleum NL [1996] HCA 19 ; (1996) 185 CLR 124 at 136. 29 The directions sought are not ones I am prepared to give notwithstanding that they may be of a type that a trustee properly could seek (i.e. concerning the incurring of expense to ascertain whether legal proceedings may be in the interests of creditors and, if there is the prospect of a surplus, the bankrupt). By way of analogy, trustees commonly approach courts under the provisions of the Trustee Acts that obtain in most Australian jurisdictions for directions as to whether to sue or to defend an action: see Jacobs' Law of Trusts in Australia [2134] (7 th ed, 2006). 30 I would preface what I have to say with this comment. A successful claim by Craig against his parents would not result in a nett accretion to the totality of the joint and separate estates being administered by the trustee. However, depending upon whether the outcome of that action was to give Craig a joint tenancy with his parents in part of the Bordertown property or only an additional several interest, the result of his claim could affect both the partnership estate and the joint estate of his parents (in the event of a joint tenancy finding) or the joint estate of his parents and his own separate estate if his additional interest in the property was that of a tenant in common.
Case: Re Lemon Tree Passage &amp; Districts RSL and Citizens Club Cooperative Ltd (1987) 11 ACLR 796
Outcome: applied
Turning to my reasons for declining to give any directions, the materials put before me are opaque and are quite inadequate insofar as they reveal the possible basis of any claim or claims that might be made. Is it to specifically enforce a contract, in which case what contract and is it in writing: cf Property Law Act (SA) s 29. Is it a Holroyd v Marshall type constructive trust claim based on the consideration for the transfer of an interest having been executed in the steps taken by Craig in relation to the McLaren Vale property: Meagher, Gummow and Lehane's Equity: Doctrines and Remedies , (4 th ed, 2002)? Is the claim based on equitable estoppel? Etc. Equally, with any possible claim being likely to turn critically on the intentions and actions of the three bankrupts, there seems to be no material at all before me from them which might illuminate the matter. I am simply asked to speculate. While I do not have to determine whether or not any proposed proceedings will or will not be successful, I need to investigate the matter sufficiently to determine whether or not any such proceedings would be fruitless: cf Re Lemon Tree Passage &amp; Districts RSL and Citizens Club Cooperative Ltd (1987) 11 ACLR 796 at 799. There is insufficient material before me to make this determination let alone a determination as to whether it would be worthwhile for the trustee to further investigate a possible claim by Craig: Re Lemon Tree Passage , at 799. Hence I decline to give the directions sought. I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finn. Associate: Dated: 20 July 2006 Counsel for the Applicant: Mr A O'Halloran Solicitor for the Applicant: Kelly &amp; Co Date of Hearing: 22 March 2006 Date of Judgment: 20 July 2006 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2006/636.html
Case: Hazeldene's Chicken Farm Pty Ltd v Victorian Workcover Authority (No 2) (2005) 13 VR 435
Outcome: cited
the reasons stated by Bell in its written submissions, I do not regard the conduct of Bell as being unreasonable: (see Kernaghan v Corrections Corporation of Australia Staff Superannuation Pty Ltd (No. 3) [2007] FCA 2018 at [13-14] per North J, and Hazeldene's Chicken Farm Pty Ltd v Victorian Workcover Authority (No 2) (2005) 13 VR 435, 441).