Demondrille Nominees Pty Ltd v Shirlaw, Kevin R & Anor & Shirlaw, Kevin R v Cornelis Holdings Pty Ltd (in liq) & Anor [1997] FCA 1220

FEDERAL COURT OF AUSTRALIA CONVEYANCING - Relationship of Vendor and Purchaser - Land Titles under the Torrens System - Caveats against Dealings - purchaser-caveator agrees to vendor company's subsequently selling to associated company of purchaser's at reduced price, upon purchaser's being paid amount out of proceeds of second sale upon completion of it - in reliance, vendor company enters into unconditional contract to sell to the associated company of original purchaser - vendor company goes into liquidation - original purchaser lodges caveat which prevents vendor company in liquidation from completing second contract - vendor company in liquidation and its liquidator seek removal of caveat - cooperation between original and later purchasers - original purchaser refraining from seeking specific performance but maintaining caveat - stance taken by original purchaser in encouraging vendor to effect second sale inconsistent with original purchaser's obtaining specific performance - prospect of original purchaser's obtaining specific performance measure of the "equitable estate as purchaser" claimed by it in caveat - trial Judge's order for removal of caveat sustained. CONTRACT - Construction - special condition in contract for the sale of land acknowledging that deposit paid. In fact, to knowledge of both parties, deposit not paid - whether true effect that purchaser subject to ongoing obligation to pay deposit - construction that true effect that purchaser to be treated on completion as having paid amount of deposit. CORPORATIONS - Winding up - voidable transactions - contract for sale of land for $180,000 - that price equal to value of property but special condition that "deposit" of $120,000 paid which had not in fact been paid (associated company of vendor company owed $120,000 to purchaser and lacked means to pay) - subsequently vendor and purchaser execute deed of rescission - context is that purchaser facilitating sale of same property to a company loosely associated with it for only some $135,000 - rescission of original agreement to be effective only upon payment of $120,000 to original purchaser out of proceeds of the sale to second purchaser - contemporaneously with deed of rescission vendor enters into contract to sell to second purchaser - vendor subsequently, but before completing second contract of sale, wound up - vendor solvent at time of original contract but insolvent by time of deed of rescission and second contract of sale, insolvent - whether original contract an "uncommercial transaction" and an "insolvent transaction within ss 588FB and 588FC of Corporations Law - whether deed of rescission made "for purpose of giving effect to" the transaction embodied in original agreement. Corporations Law ss 588FB, 588 FC DEMONDRILLE NOMINEES PTY LIMITED v KEVIN R SHIRLAW AND CORNELIS HOLDINGS PTY LIMITED (IN LIQUIDATION) KEVIN R SHIRLAW v CORNELIS HOLDINGS PTY LIMITED (IN LIQUIDATION) AND DEMONDRILLE NOMINEES PTY LIMITED AG 52 of 1997 FOSTER, LINDGREN AND MADGWICK JJ SYDNEY (HEARD IN CANBERRA) 13 NOVEMBER 1997