Newtronics Pty Ltd (Recs and Mgrs Apptd) (in Liq) v Atco Controls Pty Ltd (in Liq)

[2008] VSC 566

Newtronics Pty Ltd (Recs and Mgrs Apptd) (in Liq)
vAtco Controls Pty Ltd (in Liq)

Court:
Supreme Court of Victoria

Judge: Pagone J

Subject References:
Contract
Contract not to enforce security and provide financial support
Letters of comfort and support
Whether promissory or merely representational
Whether circumstances surrounding the letters were sufficient to create legal obligations
Mortgage Debenture
Variation
Demand for repayment
Whether valid
Receiver
Whether valid
Reasonable belief of valid appointment
Whether receiver relieved from liability on basis that conduct was honest and ought fairly be relieved
ss 419(3) and 1318 Cor-porations Act 2001 (Cth)

Legislative References:
Corporations Act 2001 - s 419(3); s 588H; s 1318

Case References:
-

Hearing date: 26-27 November, 1-4, 9 December 2008
Judgment date: 17 December 2008

Order

Orders accordingly

Counsel for the plaintiffs : Mr C M Scerri, QC with Mr P G Willis

Counsel for the firstnamed defendant : Mr P D Crutchfield with Mr C T Möller

Solicitors for the plaintiffs : Holding Redlich

Solicitors for the firstnamed defendant : Middletons

[1]
[2002] 209 CLR 95 .

[2]
[2002] 209 CLR 95 , [24] (Gaudron, McHugh, Hayne and Callinan JJ), footnotes omitted.

[3]
[1994] 2 VR 106 at 178.

[4]
Ermogenous v Greek Orthodox Community of SA Inc [2002] 209 CLR 95 , [26] (Gaudron, McHugh, Hayne and Callinan JJ) ; Toyota Motor Corporation Australia Ltd v Ken Morgan Motors Pty Ltd [1994] 2 VR 106 at 176 (Tadgell J).

[5]
Commonwealth Bank of Australia v TLI Management Pty Ltd [1990] VR 510 at 516 (Tadgell J).

[6]
Kleinwort Benson Ltd v Malaysia Mining Corporation Berhad [1989] 1 WLR 379 at 391 (Ralph Gibson LJ with Nicholas and Fox LLJ agreeing).

[7]
[2004] NSWSC 149 .

[8]
Ibid [208].

[9]
[Ibid [217]-[218].

[10]
(1989) 21 NSWLR 502 .

[11]
Ibid.

[12]
[1989] 1 WLR 379 .

[13]
[1990] VR 510 .

[14]
(1993) 60 SASR 187 .

[15]
N.C. Seddon and M.P. Ellinghaus Cheshire and Fifoot's Law of Contract (9th Australian ed, 2007) 231.

[16]
The Herald and Weekly Times Ltd v The Federal Commissioner of Taxation (1932) 48 CLR 113 at 120 (Gavan Duffy CJ and Dixon J) , ANZ Bank v FCT (1994) 48 FCR 268 at 278 (Hill J, Northrop and Lockhart JJ agreeing) , RACV Insurance Pty Ltd v Commissioner of Taxation [1975] VR 1 at 8-9 (Menhennitt J).

[17]
Australia & New Zealand Banking Group Ltd v Pan Foods Co Importers and Distributors Pty Ltd [1999] 1 VR 29 at 62 (Buchanan JA) ; Re Goldburg (No 2) [1912] 1 KB 606 at 611 (Phillimore J).

[18]
[1999] 1 VR 29 .

[19]
[1999] 1 VR 29 , [76], see also [9] and [37] (Winneke P).

[20]
Australia & New Zealand Banking Group Ltd v Pan Foods Co Importers and Distributors Pty Ltd [1991] 1 VR 29 , [46] and [55] (Kenny JA) ; Pan Foods Co Importers and Distributors Pty Ltd v Australia & New Zealand Banking Group Ltd (2000) 170 ALR 579 , [8] (Gleeson CJ, McHugh and Hayne JJ), [55], [60] and [62] (Callinan J).

[21]
Similar to the claims by directors for excuse on reasonable grounds for expecting that a company is solvent under s 588H of the Corporations Act 2001 : Morley v State Wide Tobacco Services Ltd [1993] 1 VR 423 .

[22]
Deputy Commissioner of Taxation v Portinex Pty Ltd (No 2) 34 ACSR 422 , [3] (Austin J).

[23]
Finance Facilities Pty Ltd v Federal Commissioner of Taxation (1971) 127 CLR 106 .

[24]
See Metal Manufacturers Pty Ltd v Lewis (1988) 13 NSWLR 315 at 318-9 (Kirby P dissenting but not on this issue) ; Deputy Commissioner of Taxation v Portinex Pty Ltd (No 2) (2000) 34 ACSR 422 , [5]-[8] (Austin J) ; Wilson v Manna Hill Mining Co Pty Ltd (2004) 51 ACSR 404 .

[25]
Wilson v Manor Hill Mining Co Pty Ltd (2004) 51 ACSR 404 , [63] (Lander J) ; George v Rockett (1990) 170 CLR 104 at 112 (Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron, McHugh JJ).

[26]
Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355 , [78]-[80] (McHugh, Gummow, Kirby and Hayne JJ).

[27]
The receivers' task was to take control of the assets of the business. In that task the current books and records were critical whilst the historical accounts, even though recent, were necessarily of secondary relevance and less important.

[28]
Deputy Commissioner of Taxation v Portinex Pty Ltd (No 2) (2000) 34 ACSR 422 esp at [3] and [5] (Austin J).

[29]
See M Piatelli-Palmarin Inevitable Illusions (John Wiley & Sons, 1994) 123-125.

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