Loading...
Queensland Judgments

beta

Authorised Reports & Unreported Judgments
Exit Distraction Free Reading Mode
  • Unreported Judgment
  • {solid} Appeal Determined (QCA)

Hontan Pty Ltd (in liq) v Terry & Maree Gilltrap Collector Car Consultants P/L

 

[1993] QCA 3

 

IN THE COURT OF APPEAL 

 

SUPREME COURT OF QUEENSLAND

 

Appeal No. 141 of 1992

 

The President

Mr Justice Pincus

Mr Justice Derrington

 

HONTAN PTY. LTD. (In Liquidation)

 

Respondent

 

- and

 

TERRY AND MAREE GILLTRAP COLLECTOR

CAR CONSULTANTS PTY. LTD.,

MAREE ROSE GILLTRAP AND TERENCE JOHN

GILLTRAP

 

Appellants

 

REASONS FOR JUDGMENT OF THE COURT

 

Delivered the 3rd day of February, 1993

 

This is an appeal from a judgment delivered in the Trial Division on 19 June 1992.  The appellants are Terence John Gilltrap, Maree Rose Gilltrap and Terry and Maree Gilltrap Collector Car Consultants Pty. Ltd. ("TMG"). The disputes the subject of this litigation relate to issues which have arisen in the winding up of Hontan Pty. Ltd. (In Liquidation).

 

The declarations and orders made by the primary judge are as follows:

 

"1.IT IS DECLARED that dispositions of the property of Hontan Pty. Ltd. (In Liquidation) made by cheques particulars of which are given below are void;

 

Particulars

(i)Cheque No.938201 dated 3rd July, 1990 drawn on the Australia and New Zealand Banking Group Limited at Southport in favour of Terry and Maree Gilltrap Collector Car Consultants Pty. Ltd. in the sum of Five thousand dollars ($5,000.00);

(ii)Cheque No.938202 dated 10th July, 1990 drawn on the Australian and New Zealand Banking Group Limited at Southport in favour of Terry and Maree Gilltrap Collector Car Consultants Pty. Ltd. in the sum of Nine thousand dollars ($9,000.00);

 

2.IT IS ORDERED that the Respondents repay to Hontan Pty. Ltd. (In Liquidation) Fourteen thousand dollars ($14,000.00) together with interest thereon at the rate of 12% per annum from the 3rd day of September 1990 until today.

3.IT IS FURTHER ORDERED that the Respondents deliver to Desmond William Knight as Liquidator of Hontan Pty. Ltd. property of Hontan Pty. Ltd.  (In Liquidation) which is in their hands namely

(i)a Buchanan motor vehicle specified in Exhibit "S" to the Affidavit of Kazuo Hasegawa;

(ii)a lawn mower specified in Exhibit "H" to the Affidavit of Maree Rose Gilltrap;

(iii)office table being a folding table 2400 millimetres x 900 millimetres with chrome legs specified in Exhibit "I" to the Affidavit of Maree Rose Gilltrap and chairs specified in Invoices Numbered 657210 and 656397 issued by "Super A Mart" to M. Gilltrap which documents form part  of Exhibit "AA" to the Affidavit of Kazuo Hasegawa;

(iv)a wheelbarrow specified in Exhibit "AA" to the Affidavit of Kazuo Hasegawa;

(v)garden tools in Exhibit "AA" to the Affidavit of Kazuo Hasegawa.

 

4.IT IS FURTHER DECLARED that the property referred to in Order 3 above together with a Ranger Ride-on Mower specified in Exhibit "J" to the Affidavit of Maree Rose Gilltrap and a Whippersnipper specified in Exhibit "H" to the Affidavit of Maree Rose Gilltrap is the property of Hontan Pty. Ltd. (In Liquidation).

5.IT IS FURTHER ORDERED that the Respondents pay one-half of the Applicant's taxed costs of and incidental to this Application, including reserved costs.

6.IT IS FURTHER ORDERED that the Application be otherwise dismissed.

7.IT IS FURTHER ORDERED that in the event no appeal from these orders is brought by the Respondents within 21 days of the date of the Judgment any money paid into the Court in this Application together with accretions if any and presently remaining in Court be paid out to the Solicitors for the Applicant."

 

The grounds of appeal stated in the notice of appeal are as follows:

 

"1.The learned trial judge erred in law and in fact in finding that the sum of $15,000.00 paid into the account of the company on 28th June, 1990 was the property of the company.

2.The learned trial judge erred in law in holding that the payments of $5,000.00 and $9,000.00 on 3rd July, 1990 and 10th July, 1990 respectively were void pursuant to section 368(1) of the Companies (Qld) Code.

3.The learned trial judge erred in law and in fact in finding that the Buchanan motor vehicle, a ride-one mower, a whippersnipper, a lawnmower, an office table and chairs, a wheelbarrow and garden tools were not transferred from the company to the Respondent soon after 14th February, 1991.

4.The learned trial Judge erred in law and in fact in holding that the transfer of the Buchanan motor vehicle to the Respondents (if such transfer took place) soon after 14th February, 1991 constituted a preference within the meaning of section 451 of the Companies (Qld) Code.

 

Hontan was a shelf company which, in May 1989, was acquired for the purpose of a joint venture between the appellants and Cosmo Development Corporation ("Cosmo"), a company associated with a Japanese investor, Mr Kazuo Hasegawa.  Mrs Gilltrap and Mr Hasegawa became the directors of Hontan, although Mr Gilltrap also seems to have acted as though he were a director.

 

The project involved the establishment of a collector car museum/recreational facility on Hope Island, near the Gold Coast.  Substantial sums of money were provided by Cosmo as the project proceeded, land was acquired, town planning consents were obtained, and some building work was performed.  Approximately one million dollars had been remitted from Japan by about September 1989.  These funds did not pass through a bank account in the name of Hontan but were transmitted to and disbursed by solicitors.

 

The total cost of establishing the project had originally been estimated by the appellants at about 1.5 million dollars but, by October 1989, Mr Hasegawa was informed that the total cost was estimated to be about 1.9 million dollars.  From that point on, there were differences of opinion between the joint venturers. However, those disputes do not arise in the present proceedings.

 

A. Declarations and Order 1 and 2

 

By 14 February, 1990, Hontan was insolvent as the directors acknowledged in the minutes. On 19 March, an application for the winding up of Hontan was filed.  For the first time, a bank account in the name of Hontan was opened on 28 June, 1990, when $15,000.00 was paid into the account by TMG. Then, on 3rd and 10th July, 1990, payments of $5,000.00 and $9,000.00 respectively were made out of the bank account to TMG. Less than a week later, on 16 July, 1990, an order was made for the winding-up of Hontan. At that time, Hontan's bank account still contained $1,000.00.

 

In answer to the claim of the liquidator of Hontan to recover the $14,000.00 paid out of Hontan's bank account to TMG, the appellants contend that the money paid into the bank account had been lent to Hontan for a specific purpose which had not been fulfilled so that Hontan held the money on trust for the lender, TMG: Barclays Bank Ltd. v. Quistclose Investments Pty. Ltd. (1970) AC 567, 581-582.  That case has been the subject of considerable discussion, including a detailed analysis of a number of the authorities by Gummow J. in Re Australian Elizabethan Theatre Trust; Lord v. Commonwealth Bank of Australia (1991) 30 FCR 491. However, the present matter needs no elaborate discussion of principle, for the appellants fail hopelessly on the facts.

 

It seems clear enough that the deposit  of $15,000.00 to Hontan's bank account was a loan.   Mr Gilltrap said as much in a contemporaneous document.  Exhibit 2, the cheque butt for the cheque for $9,000.00 withdrawn from Hontan's account and paid to TMG, records that that cheque was for "repayment of part of loan for fees, etc." However, the appellants failed to establish any specific purpose as the basis for the trust which they asserted.

 

The trial judge said:

 

"It is difficult to know precisely why Mr and Mrs Gilltrap caused that money to be paid into the account at that particular time. Their intention was described in different ways, but perhaps the clearest is Mr Gilltrap's statement that "we were negotiating to buy Mr Hasegawa's share in Hontan Pty. Ltd. ... . We deposited some money because we were negotiating to buy a share and there was a chance we would need some money to send him as evidence of good faith".  The suggestion is that in the expectation that he would succeed in buying out the Japanese interests, he wanted the company to start off with enough money to pay stamp duty and other outgoings "for a deposit on Hasegawa's share". 

 

According to Mrs Gilltrap in an affidavit which she filed in the proceedings:

 

"The money was deposited to cover anticipated legal costs for the transfer of Mr Hasegawa's shareholding in the company to my husband."

 

There are broad similarities but also significant differences between these two versions. Importantly, they were not communicated between Mr and Mrs Gilltrap, at least in any discussion which was established by evidence, and certainly  Mr Hasegawa was not informed.  There were no meetings of either of the parties to the supposed transaction, TMG and Hontan, and no documentary evidence  whatever which supported, directly or by inference, the existence of a trust. Finally, there was no explanation why, if the alleged purpose of the loan by TMG to Hontan had failed by 3 July, part only of the money was withdrawn on that day, another sum was withdrawn a week later, and a substantial balance was left in Hontan's bank account when it was placed in liquidation a week later still.

 

In these circumstances, the trial judge was plainly correct in the first two declarations and orders which he made and the appeal against this part of his judgment must be dismissed.

 

B. Order and Declaration 3 and 4

 

The other dispute for resolution on this appeal concerns the primary judge's declaration that a Buchanan motor vehicle and various other items are the property of Hontan and his order that the appellants return the property to the liquidator.

 

The appellants contended that they purchased the motor vehicle for $23,000.00 after the meeting on 14 February 1990 at which it was acknowledged that Hontan was insolvent, and that they paid for the motor vehicle and the other smaller items of property the subject of the orders under appeal by payments totally $34,500.00 to creditors of Hontan between February and the end of June 1990.

 

The primary judge accepted that the appellants had made those payments but said:

 

"There is no evidence of any arms length negotiation, or indeed of any negotiation at all in relation to the resale of his car. The [appellants'] case is at best a  notional transaction stemming from the conclusion of Mr and Mrs Gilltrap that in view of the poor liquidity of the  company, it would be better served if that asset was converted to money, thereby enabling various creditors to be paid.  There was no negotiated price, but the Gilltraps seem to have assumed that the previous price of $23,000.00 was appropriate. There is no specific payment or payments to which they can point as representing the repurchase of his particular asset.

 

... .

 

 .... There has been I think a degree of rationalisation in the conclusion that this represents the purchase monies for the transaction that is now said to have taken place. At best it seems to have been a transaction that took place in the minds of Mr and Mrs Gilltrap but I cannot accept that there was any decision made on behalf of Hontan to that effect, or that there is any identifiable transaction for the sale of the car.

  

Perhaps Mr and Mrs Gilltrap were influenced in paying greater sums on behalf of Hontan between February and June 1990 in the belief that they had taken the car back, then they otherwise would have done, but I do not believe any valid re-transfer of the vehicle was affected by the transaction between the company and the [appellants]...."

 

His Honour then dealt with the other items in broadly similar terms.

 

The appellant's primary assertion is that, in the absence of evidence to the contrary from the respondent, the trial judge was obliged to accept their evidence. That assertion is somewhat over-stated, especially as there was evidence inconsistent with their present claims from the appellants themselves. Once again, there is no evidence of the transactions save what was in the respective minds of Mr and Mrs Gilltrap, no communications with Mr Hasegawa, and no documentary support.

 

Without doubt, on the whole of the evidence, it was open to the trial judge to reject the appellants' claims, as he did.  The appellants fail on these aspects also.

 

Accordingly, the appeal is dismissed with costs.

 

IN THE COURT OF APPEAL

 

SUPREME COURT OF QUEENSLAND

 

Appeal No. 141 of 1992

 

HONTAN PTY. LTD. (In Liquidation)

Respondent

 

- and

 

TERRY AND MAREE GILLTRAP COLLECTOR

CAR CONSULTANTS PTY. LTD.,

MAREE ROSE GILLTRAP AND TERENCE JOHN

GILLTRAP

Appellants

 

The President

Mr Justice Pincus

Mr Justice Derrington

Judgment of the Court delivered the

3rd day of February, 1993

APPEAL DISMISSED WITH COSTS

 

IN THE COURT OF APPEAL

 

SUPREME COURT OF QUEENSLAND

 

Appeal No. 141 of 1992

 

The President

Mr Justice Pincus

Mr Justice Derrington

 

HONTAN PTY. LTD. (In Liquidation)

Respondent

 

- and

 

TERRY AND MAREE GILLTRAP COLLECTOR

CAR CONSULTANTS PTY. LTD.,

MAREE ROSE GILLTRAP AND TERENCE JOHN

GILLTRAP

Appellants

 

REASONS FOR JUDGMENT OF THE COURT

 

Delivered the 3rd day of February, 1993

 

MINUTE OF ORDER: Appeal dismissed with costs.
CATCHWORDS:  
Counsel:

Mr M. Martin for the appellants

Mr R.L. Morton for the respondent

Solicitors:

Messrs. Worcester and Co. for the appellants

Messrs. Gall Standfield and Tiley for the respondent

Hearing Date: 17th November, 1992
Close

Editorial Notes

  • Published Case Name:

    Hontan Pty Ltd (in liq) v Terry & Maree Gilltrap Collector Car Consultants P/L & Ors

  • Shortened Case Name:

    Hontan Pty Ltd (in liq) v Terry & Maree Gilltrap Collector Car Consultants P/L

  • MNC:

    [1993] QCA 3

  • Court:

    QCA

  • Judge(s):

    Fitzgerald P, Pincus JA, Derrington J

  • Date:

    03 Feb 1993

Litigation History

Event Citation or File Date Notes
Primary Judgment SC 90/173 (no citation) 19 Jun 1992 Declaration that certain dispositions of property made by the company are void; order that the respondents repay money and return property to the company: Thomas J
Appeal Determined (QCA) [1993] QCA 3 03 Feb 1993 Appeal dismissed: Fitzgerald P, Pincus JA, Derrington J

Appeal Status

{solid} Appeal Determined (QCA)