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Perrin v Williams[2014] QSC 21

Reported at [2015] 1 Qd R 426

 

SUPREME COURT OF QUEENSLAND

 

PARTIES:

FILE NO/S:

Trial

PROCEEDING:

Determination of separate questions

DELIVERED ON:

28 February 2014

DELIVERED AT:

Brisbane 

HEARING DATE:

24 February 2014

JUDGE:

Jackson J

ORDER:

The order of the court is that:

1.the separate questions set down for determination be answered as follows:

(a)whether the first respondent made any decision to reject for dividend purposes the second respondent’s proof of debt submitted on or about 11 March 2009? - No

(b)whether the first respondent made a decision as to whether the proof of debt dated 7 August 2013 lodged by the second respondent was the basis for the only claim by second respondent against the company? - Yes

(c)whether the applicant was an aggrieved person pursuant to section 1321 of the Corporations Act 2001 (Cth) when the appeal was started? - No

2.The applicant pay the first respondent’s costs of the hearing of the separate questions.

CATCHWORDS:

CORPORATIONS – WINDING UP – CONDUCT AND INCIDENTS OF WINDING UP – PROOF OF DEBTS – PROCEDURE – creditor of a company in liquidation submitted two formal proofs of debt – liquidator accepted the second proof of debt – whether the liquidator failed to adjudicate or decided to reject first proof of debt – whether the liquidator made a decision that the second proof of debt was the basis for the only claim by the creditor against the company

CORPORATIONS – WINDING UP – LIQUIDATORS – APPEAL FROM LIQUIDATOR’S DECISIONS – the appellant had an unrelated claim against the creditor – the appellant sought to challenge the liquidator’s actions in respect of the creditor’s proofs of debt – the creditor assigned its rights to the appellant after the liquidator accepted the second proof of debt – whether the appellant was a person aggrieved under s 1321 of the Corporations Act 2001 (Cth)

COUNSEL:

P D Tucker for the applicant

C Johnstone for the first respondent

No appearance for the second respondent

SOLICITORS:

Tucker & Cowan for the applicant

James Conomos Lawyers for the first respondent

[1] JACKSON J:  The originating application is made by way of appeal under s 1321 of the Corporations Act 2001 (Cth) (“CA”).  Under that section a person aggrieved by an act, omission or decision of a liquidator of a company may appeal to the court. The court may confirm, reserve or modify the act or decision or remedy the omission and make such orders and give such directions as it thinks fit. 

[2] By the application, the applicant, Mr Perrin, contends that the first respondent liquidator, Ms Williams, made decisions:

(a)not to adjudicate on a proof of debt submitted by [Ms Bricknell] in or about March 2009…

(b)to treat the proof of debt submitted by [Ms Bricknell] on or about 7 August 2013…as superseding all earlier proofs of debt and the basis for the only claim made by Ms Bricknell against ACN 084 908 092 (“the Company”); and

(c)to accept the findings of the Lytras & Benjamin report dated 15 April 2013 (and subsequent amendment dated 14 June 2013) rather than the PriceWaterhouseCoopers accounts prepared 4 March 2009 and the findings of the Vincents Chartered Accountant report dated 28 August 2012 in relation to the amount of the loan owing to [Ms Bricknell] by the Company. 

[3] It was ordered that there be a separate determination before the hearing of the application of the following questions:

(a)whether [Ms Williams] made any decision to reject for dividend purposes [Ms Bricknell’s] proof of debt submitted on or about 11 March 2009;

(b)whether [Ms Williams] made a decision as to whether the proof of debt dated 7 August 2013 lodged by [Ms Bricknell] was the basis for the only claim by [Ms Bricknell] against the Company; and

(c)whether [Mr Perrin] is an aggrieved person pursuant to section 1321 of the [CA].

Facts

[4] On 3 March 2009, the company, ACN 084 908 092 Pty Ltd, went into a creditor’s voluntary winding up.[1] 

[5] On 4 March 2009, Ms Williams issued a report to creditors giving notice of a creditors’ meeting and enclosing a blank form for a formal proof of debt in Form 535.  The notice stated that, in accordance with reg 5.6.23 of the Corporations Regulations 2001 (Cth) (‘CR’), only those creditors who had lodged a formal proof of debt would be entitled to vote.

[6] On 11 March 2009, Ms Bricknell submitted a first proof of debt or claim in the sum of $21,870,363.  It was a formal proof of debt.

[7] On 12 March 2009, the creditors’ meeting was held.  The minutes of the meeting record under the heading “Directors Report as to Affairs” that Ms Williams, as chair of the meeting, had advised creditors that Ms Bricknell’s debt was under a loan account, appeared in the draft financial records of the company and that, until such time as a dividend was declared, there was no need to adjudicate over her proof of debt further.

[8] Subsequently, there was a dispute between Ms Williams as liquidator and Ms Bricknell as respondent to a proceeding claiming the recovery of an alleged unfair preference. 

[9] On 17 June 2013, the unfair preference proceeding was settled at mediation.  The parties entered into a settlement deed.

[10] The settlement deed provided that:

 

“Despite payment of [$4,150,000] hereunder, [Ms] Bricknell may lodge a proof of debt in the liquidation of the Company for such amount as she elects and the proof of debt will be adjudicated upon by the Liquidator of the Company according to law.”

[11] On 18 June 2013, Ms Bricknell paid $4,150,000 to the liquidator pursuant to the terms of the settlement.

[12] On 18 July 2013, Ms Williams issued a further report to creditors.

[13] The further report stated that Ms Williams as liquidator proposed to declare a first interim dividend.  It enclosed a notice to creditors of intention to declare a first interim dividend in Form 547 and a blank form of formal proof of debt or claim in Form 535.  It stated, in part:

 

“…an independent expert engaged on my instructions had determined that despite Ms Bricknell claiming to be a creditor for $21,870,362.00, she was only a creditor for $1,948,464.00.  Ms Bricknell and her lawyers do not accept that determination and may in the future seek to challenge the determination by my expert…

 

Based on my enquiries, I will now accept that Ms Bricknell is a creditor of the company for the sum of $6,098,464…

 

Please note that the Proof of Debt form must be returned to this office on or before 8 August 2013…

 

In the event you have already lodged your claim or have submitted the form previously to my office, and that there is no change in your claim, you are not required to resubmit the form…” (emphasis in original)

[14] On 7 August 2013, Ms Bricknell executed and, on or about that date, lodged a second proof of debt in the amount of $6,098,464.  It was a formal proof of debt.

[15]  On 15 August 2013, Ms Williams wrote to Ms Bricknell stating:

 

“I refer to my previous correspondence dated 18 July 2013 advising of my intention to call a dividend and to your formal Proof of Debt dated 7 August 2013 for the sum of $6,098,464.

 

I am treating the formal Proof of Debt dated 7 August 2013 as a proof of debt superseding all earlier proofs of debt and the basis for the only claim made by you in the Company.

 

On the basis of my investigations into the affairs of the Company … I hereby give notice that I admit your claim in full for the purposes of the respective dividend.”

[16] On 13 September 2013, Mr Perrin filed the originating application by way of appeal under s 1321 CA.[2]

 

Was there a decision to reject the first proof of debt?

[17] There was no uncertainty or equivocation expressed in Ms Williams’ decision making. The first proof of debt had been lodged four years earlier. After that there had been a dispute between Ms Williams as liquidator and Ms Bricknell as creditor about the amount of the debt owing by the company to Ms Bricknell at the relevant date. The terms of settlement did not resolve that dispute. The dispute persisted up to the time of lodgement of the second proof of debt.  The decision Ms Williams made was to accept the second proof of debt on the basis that she treated it as superseding the first proof of debt. 

[18] In the winding up, all debts and claims against the company which occurred before the relevant date are admissible to proof against the company.[3]  A debt or claim must be proved formally if the liquidator, in accordance with regulations, requires it to be proved formally.[4]  However, if the liquidator does not require a formal proof it may be proved either formally or in some other way subject to compliance with the requirements of the regulations relating to informal proof.[5]

[19] Except as otherwise provided, all debts and claims proven in a winding up rank equally and if the property of the company is insufficient to meet them in full they must be paid proportionately.[6]  A liquidator may from time to time fix a day, not less than 14 days after the day on which notice is given, on or before which a creditor may submit particulars of his or her debt or claim.[7]  A proof of debt or claim may be prepared by the creditor personally or by a person authorised by the creditor.[8] A liquidator may from time to time, fix a day not less than 14 days after the day on which notice is given, on or before which creditors the company whose debts or claim have not been admitted are formally to prove their debts or claims.[9]

[20] If the liquidator rejects all or part of a formal proof of debt or claim the liquidator must give notice to the creditor of the grounds and of the creditors right to appeal to the court against the rejection within the time specified in the notice, being not less than 14 days after service of the notice or such further period as the court allows.[10] 

[21] A proof of debt or claim may be withdrawn, reduced or varied by a creditor with the consent of the liquidator.[11] 

[22] An appeal from a rejection of all or part of a formal proof of debt is brought under s 1321 of the CA against the decision of the liquidator by a person aggrieved by that decision.[12]

[23] Mr Perrin contends that Ms Williams’ action in treating the second proof of debt as superseding the first proof of debt was a decision “not to adjudicate” on the first proof of debt.  The parties now join in identifying the relevant question as whether Ms Williams made any decision to “reject for dividend purposes” the first proof of debt.  Mr Perrin’s counsel submits that whilst it might be said that Ms Williams did not adjudicate upon the first proof of debt in accordance with the regulations, her 15 August 2013 letter evidences a decision to consider only the second proof of debt and to disregard the first proof of debt. 

[24] The suggestion seems to be that Ms Williams was required in law to deal with the first proof of debt by accepting or rejecting it for dividend purposes before 15 August 2013.  I do not accept that suggestion.  Although there are a number of events which may oblige a liquidator to accept or reject a proof of debt within a particular period, none were identified that required Ms Williams to accept or reject the first proof of debt and admit the debt before 15 August 2013. 

[25] The first proof of debt was submitted by Ms Bricknell in response to a call for formal proofs of debt.  The request was made by Ms Williams as liquidator.  The context was that Ms Williams was calling the meeting of creditors required under s 497 of the CA.  She was entitled to call for formal proofs for that purpose.[13]

[26] I accept that Ms Williams’ 15 August 2013 letter evidences that she considered only the second proof of debt for the purpose of acceptance or rejection.  It said as much.

[27] The decision made by Ms Williams, in terms of acceptance or rejection of a proof of debt, was the decision to accept the second proof of debt.  That was made on the footing that the first proof of debt was superseded.  The true question raised by paragraphs (a) and (b) of the originating application and paragraph (a) of the questions for separate determination is whether the procedural step followed by Ms Williams of treating the first proof of debt as superseded by the second proof of debt is a decision in respect of which a person aggrieved may appeal under s 1321. 

[28] Mr Perrin’s submissions focus on the breadth of the expression “any act omission or decision” under s 1321. The submission is made that if the conduct of treating the first proof of debt as superseded by the second proof of debt is an act or omission, rather than a decision, then an amendment could be made to the separate question for decision.  However, to follow that course would make the answer to the question whether Ms Williams made any decision to reject the first proof of debt irrelevant. I decline to follow that course, as a matter of discretion.  It would raise for determination whether there are separate appellable acts or omissions, for the purposes of s 1321, involved in the process by which a liquidator considers the materials and thereby makes decision to accept or reject a proof of debt.  That question was not fully argued.  The answer is not so obvious that it goes without saying.

[29] In my view, the substance of the question sought to be raised by separate question (a) is whether for the purposes of s 1321 there was a decision constituting a rejection of the first proof of debt made by Ms Williams. 

[30] Ms Williams submits that the answer to that question should be “no”. She submits that Ms Bricknell “elected to submit a new proof of debt form” and “thereby decided to abandon the First Proof of Debt”. 

[31] Neither of the parties closely analysed the relevant sequence of the procedural rights of a creditor with a right to prove and to rank for payment in a winding up.  There can be no doubt that the status of a creditor of a company in law is significantly affected by the company entering a voluntary creditors’ winding up. For this purpose, I leave aside secured creditors.  An unsecured creditor’s prior rights to proceed at law to judgment and to execute upon the judgment are converted into a right to prove by the process of admission or rejection of a proof of debt and ranking proportionately for the amount admitted to proof in any dividend paid to unsecured creditors.[14]  A liquidator is obliged to deal with the proof of debt in accordance with the regulations and the liquidator’s duties.  When deciding whether to admit or reject a proof of debt a liquidator exercises a quasi-judicial function and must act according to standards no less than a court or a judge.[15]

[32] An assumption which is made in the legislation is that there will be but one formal proof of debt by a creditor in respect of a single debt or claim.  A corollary of that assumption exists in the rules relating to the rejection of double proofs of debt in some circumstances.  But for present purposes, reg 5.6.56 CR expressly recognises the assumption that there will be but one proof in providing that a proof of debt or claim may be withdrawn, reduced or varied by a creditor with the consent of the liquidator.  The requirement of consent would be meaningless if a creditor were able to lodge multiple formal proofs of debt without the consent of the liquidator.

[33] Thus, if as occurred in the present case, a creditor lodges more than one formal proof of debt, how is the liquidator to proceed?  Ms Williams proceeded in a practical and sensible fashion consistent with the terms of settlement which had been reached between her as liquidator and Ms Bricknell in compromising the unfair preference proceeding and as communicated by her further report dated 18 July 2013. 

[34] Ms Williams might have formally responded to lodgement of the second proof of debt by communicating that she consented to reduction or variation of the first proof of debt by the second proof of debt under reg 5.6.56.[16]  It was not suggested that Ms Williams was required to communicate a decision to consent to reduce or vary the first proof of debt and then to give Ms Bricknell further time before accepting or rejecting the second proof of debt.  However, it was submitted that Ms Williams was required to say that she was consenting to Ms Bricknell reducing or varying the first proof of debt when communicating her decision to accept the second proof of debt.

[35] In my view, there is no difference of substance between Ms Williams treating the second proof of debt as superseding the first proof of debt and saying that she consented to the reduction or variation of the first proof of debt comprised by the second proof of debt.  That reasoning exposes a false step in the logic that underlies Mr Perrin’s application about “adjudication” on the first proof of debt or the existence of a “decision to reject” the first proof of debt. 

[36] If it were necessary to proceed further, it might be concluded that by lodging the second proof of debt, Ms Bricknell elected to prove under s 553 CA and the requirement for formal proofs under s 553D CA by requesting and allowing Ms Williams to accept the second proof of debt and admitting that debt as proved so that Ms Bricknell became entitled to rank according to that admitted debt under s 555 CA. 

[37] From that point, so the argument runs, the decision of Ms Williams as liquidator from which a person aggrieved might appeal under s 1321 CA was the decision to accept the second proof of debt. 

[38] An allegation that a party “abandons” a legal right, like an allegation that a party “waives” a legal right, requires more precise analysis to identify the operative legal principles.  If estoppel is put to one side, most of the cases are examples of the doctrine of election.  It appears that Ms Williams’ contentions are based on the doctrine of election.

[39] In this context an election at common law is made between inconsistent rights.[17] The starting point is that the rights must be identified and that after the election both rights cannot be enjoyed.

[40] Ms Bricknell’s right was to prove her debt or claim against the company and to have Ms Williams accept or reject the proof of debt.  The first proof of debt was a formal proof of debt.

[41] On lodgement of the first formal proof of debt, Ms Bricknell’s right to have the liquidator accept or reject a proof of debt in accordance with the CR was a right in relation to that proof of debt unless the liquidator consented that it be withdrawn, reduced or varied under reg 5.6.56 CR. 

[42]  Ms Williams would have been obliged to accept or reject it in accordance with the CA and CR.  Specifically, when Ms Williams gave notice of intention to declare a dividend she became obliged to admit or reject formal proofs of debt or require further evidence within the time allowed under reg 5.6.66 CR.

[43] On lodging the second proof of debt, Ms Bricknell sought, in relation to the same debt or claim as the first proof of debt, to prove the debt or claim by the second proof of debt.  Ms Bricknell did not have a right to have Ms Williams accept or reject both formal proofs of debt. 

[44] In my view, a creditor who lodges a second formal proof of debt does not, by the lodgement alone, elect to prove her debt or claim in accordance with the second proof of debt.[18]  That is because, until the liquidator consents to the reduction or variation of the proof of debt by the creditor, the first formal proof of debt continues to be the proof of debt which engages the creditor’s rights and the liquidator’s obligations to deal with a proof of debt under the CR. 

[45] A loose analogy may be drawn between the circumstances being considered in the present case and the circumstances of a plaintiff who elects between remedies at the time of judgment.[19]   Although the conduct which causes the election may have occurred earlier than the time of entry of judgment, there cannot be any doubt after a judgment that the election has occurred.  However, the election in those situations flows from the inconsistency between the right or rights created under the final judgment and those under the alternative remedy.

[46] The analogy is imperfect.  Not only that, if a proof of debt is wrongly admitted, whether for too much or too little, the liquidator may revoke or amend the decision to admit the proof under reg 5.6.55 CR.  Except to the extent that reg 5.6.55(6) CR provides that the creditor is not entitled to disturb the distribution of any dividends declared before the liquidator revoked or amended the decision, the outcome of a revocation or amendment may alter the rights of the creditor and the other creditors upon proof of their debts under s 555 CA.

[47] However, in my view, when a creditor lodges a second formal proof of debt in respect of the same debt as a first formal proof of debt, and the liquidator treats the second proof of debt as reducing or varying the first proof of debt, the liquidator thereby consents to the reduction or variation. Upon the liquidator admitting the second proof of debt the creditor is taken to have elected as between the two proofs of debt.[20]   Thereafter, the creditor’s rights are to appeal under s 1321,[21] to apply for the liquidator to revoke or amend the decision under reg 5.6.55 CR or to seek leave to begin a proceeding in court against the company under s 471B CA. The admitted proof of debt cannot then simply be varied under reg 5.6.56 CR. 

[48] As a matter of fact, Ms Williams did consider and accept that Ms Bricknell’s debt was in the amount of the second proof of debt.  In notifying Ms Bricknell that she admitted the debt in full for the amount of the second proof of debt, Ms Williams consented to Ms Bricknell reducing or varying the first proof of debt in accordance with the second proof of debt. 

[49] As I have found, under the structure of the CA and CR, by accepting or rejecting a second proof of debt for a single underlying debt or claim, a liquidator will have consented to the reduction or variation of the first proof of debt in accordance with the second proof of debt.  In my view, in those circumstances, it is artificial to describe the liquidator’s decision as one “not to adjudicate” on the first proof of debt.  In substance, the decision was one to consent to the creditor reducing or varying the first proof of debt.  The effect of the consent was to permit the creditor to formally prove a debt or claim in accordance with the second proof of debt.  The creditor’s right was then that the liquidator accept or reject (in whole or in part) the second proof of debt (or require further evidence). 

[50] For those reasons, in my view, Ms Williams did not make a decision to reject the first proof of debt.  Rather, Ms Williams accepted the second proof of debt and admitted it in full in circumstances where Ms Bricknell had, in effect, requested that the first proof of debt be reduced or varied in accordance with the second proof of debt.

[51] It follows that the answer to the first question should be “no”. 

[52] It also follows that the answer to the second question, in a general sense, should be “yes”.  

[53] However, in my view, the liquidator’s decision that the second proof of debt was the basis for admission or rejection of Ms Bricknell’s debt or claim was not itself a “decision” within the meaning of s 1321 CA.  The first relevant “decision” was to consent to the reduction or variation of the first proof of debt under 5.6.56 CR.  After that, the next relevant “decision” made was to accept the second proof of debt and to thereby admit the debt.  If the concept of “decision” in this context is stretched so that the consequence of not accepting or rejecting the first proof of debt were treated as a separate appelable decision, quite apart from the decision to consent to the reduction or variation of the proof of debt or the decision to accept or reject the reduced proof of debt, in my view there would be a risk that the efficient administration of liquidations of this kind will be impaired.[22]

Person aggrieved

[54] Section 1321 CA confers a right of appeal from a decision of a liquidator upon a “person aggrieved”.  For the reasons previously explained, in my view, Ms Williams did not make a decision within the meaning of s 1321 to reject the first proof of debt.  Also, it is not established that Ms Williams made a decision within the meaning of s 1321 that the second proof of debt was the basis of the only claim by Ms Perrin against the company, except as I have explained above.

[55] However if I am wrong in either of those views, the question remains whether Mr Perrin is a person aggrieved by either of the alleged decisions.  Unless he is such a person he does not have a right of appeal under s 1321.

[56] The relevant time to determine whether Mr Perrin was a person aggrieved is when the appeal was started by filing the originating application.[23]  Only a person aggrieved is entitled to appeal under s 1321.  That the appellant is a person aggrieved is a necessary condition of that right of appeal when it is started.

[57] Mr Perrin advances two arguments in support of his contention that he is a person aggrieved.  First, on 13 September 2013 when the appeal was started he was “embroiled in property maintenance proceedings against Ms Bricknell … [and] had a plain financial interest in the asset pool that would fall for division in those proceedings”.

[58] Secondly, he contends that on 11 February 2014 Ms Bricknell assigned to Mr Perrin “the debt owed by the company to Bricknell” in an amount stated to be approximately $21,800,000 together with her rights in relation to the proofs of debt, to withdraw the proofs of debt and to submit a fresh proof of debt.

[59] The appeal was started on 13 September 2013. There were then proceedings in the Family Court of Australia between Mr Perrin and Ms Bricknell for property or maintenance.  In my view, Mr Perrin did not have a legal interest in the chose in action comprised in any debt or claim which Ms Bricknell had the right to prove against the company as creditor. 

[60] At that time, Mr Perrin was not a creditor of Ms Bricknell because of his rights as a party to the proceedings in the Family Court of Australia.  His rights were to an order of one of the kinds which might be made in such proceedings.  But at that time no order had been made crystallising any right under such an order to the fruits of Ms Bricknell’s right to prove her debt in the winding up of the company.

[61] Mr Perrin relied on cases that show that the proving creditor of the company is a person aggrieved by the decision to reject their proof or that another creditor of the company is a person aggrieved by a decision to accept a proof of debt.[24]  He also relied on a case which shows that a secured creditor of the company’s creditor is a person aggrieved by a liquidator’s decision to accept or reject a debt.[25]  However, those cases do not answer the question whether a person who is financially affected by the decision because they have an unrelated claim against the creditor is a person aggrieved.

[62] Mr Perrin relies on the proposition that “a person who is deprived of something or is adversely affected by the act”[26] is a person aggrieved in relation to an act, omission or decision made by a liquidator.  In my view, such a proposition is not a test in law for whether an appellant is a person aggrieved under s 1321 CA.  It may be accepted that the words “person aggrieved” take their meaning from the context in which they appear in s 1321.[27]  In the context of the CA, there are other sections which refer to a person aggrieved, but not in a way that usefully informs the meaning of those words in s 1321.[28] It should not be forgotten that their present context, as a condition of a right of appeal against a decision of a liquidator, is one which has a long statutory history.[29]

[63] By way of example, Ms Bricknell’s creditors, in general, might be said to be people affected by whether a claim or debt by her is admitted to proof in the amount of $21,000,000 on the one hand or $4,000,000 on the other, depending on the circumstances.  An admission or rejection of a proof of debt with a consequent right to rank equally or proportionately with other debts and claims proved in the winding up may adversely affect whether or not Ms Bricknell’s creditors will be paid or how much they will be paid by her.  But, in my view, that does not make any of them a person aggrieved by the decision to accept or reject her proof of debt. 

[64] When the appeal was started, Mr Perrin was a step removed from the status of creditor.  Thus, he may have had a right to an order in the Family Court of Australia,[30] but he was neither a creditor of Ms Bricknell nor did he have a legal or equitable interest in any debt of the company due to Ms Bricknell as at the relevant date for which Ms Bricknell was entitled to prove in the winding up.

[65] Although a legal interest is not necessarily required in all cases of a person aggrieved, in my view it is important that there not be multiple persons who can assert potentially inconsistent rights on appeal from a decision to accept or reject a proof of debt.[31] There can be no doubt that Ms Bricknell was a person who might have appealed the decision, had she been a person aggrieved by it.  How can Mr Perrin also have had a separate right of appeal?  What would have happened if Ms Bricknell but not Mr Perrin had wished to compromise any appeal started by her where he too had appealed?  Too wide an interpretation of “person aggrieved” in this context might lead to fragmentation and wasted time and expense in a liquidation.  “It should not be overlooked that the wider the class of persons entitled to appeal to the court in respect of an act, omission or decision of a liquidator (or provisional liquidator) the greater the scope for potential disruption of an orderly administration.”[32]

[66] In my view, on 13 September 2013, Mr Perrin was not a person aggrieved. 

[67] For the purposes of analysis, let it be assumed that on 11 February 2014, Ms Bricknell retained a right to prove a debt or claim against the Company for approximately $21,800,000.  Upon Ms Bricknell assigning any admissible debt or claim against the company,[33] Mr Perrin as assignee may have acquired an interest in Ms Bricknell’s rights against the Company.  He might thereby be a person aggrieved by any decision made by the liquidator to accept or reject her proof of debt.[34]

[68] However, there are two potential problems about Mr Perrin’s position in respect of the alleged assignment.  First, an assignment by Ms Bricknell of her rights on 11 February 2014 did not make Mr Perrin a person aggrieved on 13 September 2013.  In other words, Mr Perrin was not a person aggrieved at the time when he started the appeal.  An appeal on 11 February 2014 would have been out of time.[35]  The facts pleaded in the points of claim do not allege that Mr Perrin was a person aggrieved because of the assignment that he now alleges was made on 11 February 2014.  Ms Williams objected successfully to the tender of the deed of assignment as not relevant to the facts alleged on the appeal, as pleaded by the points of claim.

[69] Although UCPR r 375(2) provides that “[t]he court may give leave to make an amendment even if the effect of the amendment would be to include a cause of action arising after the proceeding was started”, Mr Perrin neither applied to amend the points of claim nor did he submit that r 375(2) would authorise an amendment to allege that on 11 February 2014 Mr Perrin became a person aggrieved by the alleged decisions.  In any event, in exercising the discretionary power to grant or to refuse any opposed application Mr Perrin to make such an amendment, it would be necessary to take into account that Rule 14.1(3) of the Corporations Proceedings Rules requires that an appeal be started within 21 days after the decision appealed against.

[70] Secondly, Mr Perrin’s rights as assignee may depend on Ms Bricknell’s rights.  Put simply, if Ms Bricknell was not a “person aggrieved”, Mr Perrin as assignee of her rights will not be a person aggrieved.  The potential difficulty is that in substance the appeal which Mr Perrin wishes to propound is not from any rejection of Ms Bricknell’s proof of debt.  It is from the acceptance of the proof of debt.  It is not an ordinary use of language to describe a person who lodges a proof of debt which is accepted and the debt admitted so that the person ranks proportionately for dividend purposes in the amount of the proof as an “aggrieved person” by reason of the decision to accept the proof of debt.

[71] However, it is inappropriate to further examine these questions further.  They are not live for decision on the hearing of the separate questions which have been set down for hearing.

[72] In my view, at the time of filing the appeal Mr Perrin was not an aggrieved person within the meaning of s 1321.  It follows from that conclusion that the third question should be amended to ask whether Mr Perrin was an aggrieved person at the time when the appeal was started.[36]

[73] As amended, the answer to that question should be “no”. 

[74] That form of question makes it clear that there is no determination of the question whether, on 11 February 2014, by reason of the deed of assignment, Mr Perrin became a person aggrieved in relation to the liquidator’s decisions on 15 August 2013 to consent to the reduction of the first proof of debt by the second proof of debt and to accept the second proof of debt.

Costs

[75] Following the event, the applicant should pay the first respondent’s costs of the hearing of the separate questions.

Footnotes

[1] CA, Pt 5.5.

[2] Rule 14.1(3) of the Corporations Proceedings Rules requires that an appeal be started within 21 days after the decision appealed against: see Schedule 1A of the Uniform Civil Procedure Rules 1999 (Qld). No order extending the time for Mr Perrin’s appeal has been made.

[3] CA, s 553(1). “Relevant date” is defined in CA, s 9.

[4] CA, s 553D(1).

[5] CA, s 553D(2).

[6] CA, s 555.

[7] Corporations Regulations 2001 (Cth) (“CR”) r 5.6.39(1).

[8] CR, r 5.6.40(1).

[9] CR, r 5.6.48(1).

[10] CR, r 5.6.54.

[11] CR, r 5.6.56.

[12] Re Jay-O-Bees Pty Ltd (in liquidation) (2004) 50 ACSR 565, 575.

[13] CR, 5.6.23(1)(b)(ii).

[14] The creditor may only proceed in court on the original debt with leave: s 471B CA.

[15] Tanning Research Laboratories Inc v O'Brien (1990) 169 CLR 332, 338-339.

[16] As to the operation of CR 5.5.56 see Ray Brooks Pty Ltd v New South Wales Grains Board (2002) 171 FLR 350, 364-5 [73].

[17] Agricultural and Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570, 588-589 [56]-[59].

[18] Provident Capital Ltd v Kelso Builders Supplies Pty Ltd (in liq) (rec and mngrs apptd) (2008) 66 ACSR 643, 647 [26].

[19] United Australia Ltd v Barclays Bank Ltd [1941] AC 1, 30.

[20] Compare Surfers Paradise Investments Pty Ltd (in liq) v Davoren Nominees Pty Ltd [2004] 1 Qd R 567.

[21] Re Magic Australia Pty ltd (in liq) (1992) 7 ACSR 742, 745; Derwinto Pty Ltd v Lewis & anor (2002) 42 ACSR 645, 657 [67].

[22] Compare Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321, 336.

[23] Queensland Newsagents Federation Ltd v Trade Practices Commission; ex parte Newsagency Council of Victoria Ltd (1993) 46 FCR 38, 46.

[24] Westpac Banking Corporation v Totterdell (1998) 20 WAR 150, 154.

[25] Fortress Credit Corporation (Aust) II Pty Ltd v Fletcher (No 2) [2013] NSWSC 1625 [101], [147].

[26] Brereton v ASIC [2007] FCA 651 [2]; cf re Formcrete Services Pty Ltd (1976) 2 ACLR 46, 48.

[27] World Health Ltd v Shin-Sun Aust Pty Ltd (2010) 240 CLR 590, 597.

[28] For example, CA, ss 175, 440J, 554A, 1101B and 1323 (The list is not comprehensive).

[29] Companies Act of 1931 (Qld) s 202(5); Companies Act 1961 (Qld) s 279; Companies (Qld) Code, s 538; Corporations Law, s 1321.

[30] On 14 February 2014, orders of that kind were made by the Family Court of Australia.

[31] See, for example, Australian Securities Investments Commission v Forestview Nominees Pty Ltd (2006) 236 ALR 652, 661.

[32] Northbourne Developments Pty Ltd v Reiby Chambers Pty Ltd and ors (1989) 19 NSWLR 434, 438; see also Australian Securities Investments Commission v Forestview Nominees Pty Ltd (2006) 236 ALR 652, 661-2 [39]-[40].

[33] I put to one side whether any assignment is a legal assignment under s 199 of the Property Law Act 1974 (Qld) or an equitable assignment.

[34] Compare Pitman v Pantzer (2001) 115 FCR 361.

[35] Rule 14.1(3) of the Corporations Proceedings Rules.

[36] See, for example, Perpetual Trustees Australia Ltd v Heperu Pty Ltd and ors (No 2) (2009) 78 NSWLR 190, 194 [20].

Close

Editorial Notes

  • Published Case Name:

    Perrin v Williams & Anor

  • Shortened Case Name:

    Perrin v Williams

  • Reported Citation:

    [2015] 1 Qd R 426

  • MNC:

    [2014] QSC 21

  • Court:

    QSC

  • Judge(s):

    Jackson J

  • Date:

    28 Feb 2014

  • White Star Case:

    Yes

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Agricultural & Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570
1 citation
Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321
1 citation
Australian Securities Investments Commission v Forestview Nominees Pty Ltd (2006) 236 ALR 652
2 citations
Brereton v ASIC [2007] FCA 651
1 citation
Derwinto Pty Ltd (in liq) v Lewis (2002) 42 ACSR 645
1 citation
Fortress Credit Corporation (Aust) II Pty Ltd v Fletcher (No 2) [2013] NSWSC 1625
1 citation
Northbourne Developments Pty Ltd v Reiby Chambers Pty Ltd and ors (1989) 19 NSWLR 434
1 citation
Perpetual Trustees Australia Ltd v Heperu Pty Ltd and ors (No 2) (2009) 78 NSWLR 190
1 citation
Pitman v Pantzer (2001) 115 FCR 361
1 citation
Provident Capital Ltd v Kelso Builders Supplies Pty Ltd (in liq) (rec and mngrs apptd) (2008) 66 ACSR 643
1 citation
Queensland Newsagents Federation Ltd v Trade Practices Commission; Ex parte Newsagency Council of Victoria Ltd (1993) 46 FCR 38
1 citation
Ray Brooks Pty Ltd v New South Wales Grains Board (2002) 171 FLR 350
1 citation
Re Formcrete Services Pty Ltd (1976) 2 ACLR 46
1 citation
Re Jay-O-Bees Pty Ltd (in liquidation) (2004) 50 ACSR 565
1 citation
Re Magic Australia Pty ltd (in liq) (1992) 7 ACSR 742
1 citation
Surfers Paradise Investments Pty Ltd (in liq) v Davoren Nominees Pty Ltd[2004] 1 Qd R 567; [2003] QCA 458
1 citation
Tanning Research Laboratories Inc v O'Brien (1990) 169 CLR 332
1 citation
United Australia Ltd v Barclays Bank Ltd (1941) A.C., 1
1 citation
Westpac Banking Corporation v Totterdell (1998) 20 WAR 150
1 citation
World Health Ltd v Shin-Sun Aust Pty Ltd (2010) 240 CLR 590
1 citation

Cases Citing

Case NameFull CitationFrequency
Colefax v National Australia Bank Ltd[2019] 2 Qd R 449; [2018] QCA 2441 citation
Re ACN 084 908 092 Pty Ltd (in liq) [2018] QSC 167 1 citation
1

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