SUING FOR DAMAGES TO THE COMPANY
In what circumstances can a shareholder or creditor use the name of a company in liquidation to sue for damages caused to the company …
From time to time the courts are confronted with applications by shareholders or creditors who wish to use the name of a company in liquidation to sue for damages that the company has suffered before it went into liquidation. The case of Aliprandi v Griffith Vintners Pty Ltd (in liq), sets out the principles quite clearly.
Mr Aliprandi was a shareholder in Griffith Vintners Pty Ltd. Without the approval of the liquidator. Mr Aliprandi commenced proceedings against a receiver who had been appointed to his former company. He alleged that the appointment of the receiver was invalid for a number of reasons including:
• there was no proper demand or notice;
• that Partnership Pacific (the company who appointed the receiver) was estopped, by virtue of certain representations, from appointing the receiver;
• that in conducting the company’s business and realising its assets, the receiver committed breaches of its duty to the company; and finally
• that Partnership Pacific was liable to the company for damages under the consumer law at the time for misleading and deceptive conduct.
Mr Aliprandi commenced proceedings to seek the leave of the Court to allow him to continue the proceedings using the company name or alternatively start new proceedings in the name of the company and himself.
The Judge indicated that he must satisfy himself that the proceedings that are foreshadowed have some prospects of success.
His Honour found that the only case that had reasonable prospects of success on the evidence before him at the time was that the receiver had committed breaches of his duty to the company.
His Honour was satisfied that in circumstances where the Court approved this course of action there was no prospect of the liquidator becoming personally liable in respect of the Defendant’s cost in the proceedings conducted in the company’s name by Mr Aliprandi. The Court did however require Mr Aliprandi to deliver to the liquidator a deed duly executed by him indemnifying the company and the liquidator against any costs, charges or expenses, including the liquidator’s remuneration in connection with or arising out of the proceedings.
In summary the Court found that a creditor or contributory of a company in liquidation can be authorised to use the company’s name as a Plaintiff and, that provided a proper indemnity was given to the liquidator and the company and provided the Court was satisfied that there was an arguable case, there is no reason that the leave should not be granted.
IS A QUAD BIKE FARM MACHINERY
Must the financier of a quad bike invite the borrower to participate in a Farm Debt Mediation …
Mrs Roslyn Waller appealed to the Federal Court against an order that she should be made bankrupt. She claimed that the financier of her quad bike, Yamaha Motor Finance Australia Pty Ltd, had not invited her to participate in a mediation under the Farm Debt Mediation Act and because of this they were not entitled to sue her to recover monies and therefore she should not be declared bankrupt.
Yamaha had financed the purchase of a quad bike for Mrs Waller. Mrs Waller claimed that a quad bike could be used for many of the purposes for which a tractor could be used, and therefore it was farm machinery and she was entitled to the protection afforded by the Farm Debt Mediation Act.
His Honour accepted Mrs Waller’s argument that a quad bike could be used for many of the activities that a tractor might be used for. However, he sought to understand the meaning of the expression “quad-bike” and, for that purpose, went to the Oxford English dictionary. A tractor was consistently defined as having large rear wheels.
His Honour concluded that it was too much to ask that a Court conclude that a quad bike was a tractor and he refused to do so.
Mrs Waller’s appeal was dismissed and her bankruptcy was confirmed.
Changes at Jackson & Associates, Solicitors
After a few months in Europe Costin Stan has returned to Australia and Jackson & Associates, Solicitors. Costin is undertaking the Practical Legal Training course at the College of Law which will allow him to be admitted as a solicitor of the Supreme Court of New South Wales in early 2019.
Costin is enthusiastic, has a passion for law and the outcomes that are helpful to clients of the firm.
Should any of our clients wish to contact Costin they can do so at email@example.com