Hardie v Hanson [1960] HCA 8

High Court of Australia Dixon C.J. Kitto and Menzies JJ. Hardie v Hanson [1960] HCA 8

ORDER Appeal allowed with costs. Order of the Supreme Court discharged. In lieu thereof application of the liquidator dismissed with costs. The costs of the liquidator in the Supreme Court and in this Court as between solicitor and client and the costs hereby ordered to be paid by the liquidator to be paid out of the assets of the company as part of the costs of winding up.

Cur. adv. vult.

The following written judgments were delivered:—

1960, Feb. 24 Dixon C.J.

The difficulties of this case arise partly from the uncertainty of the facts and partly from the obscurity of the provision upon which the liability of the appellant depends.

The appellant was a director of a company now in voluntary liquidation and the respondent is the liquidator. The company, the name of which is Hardies and Thomsons Pty. Ltd., was incorporated under the Companies Act, 1943-1954 W.A. on 3rd May 1956 for the purpose of amalgamating certain business interests, a purpose which fell through, and it went into liquidation two years later, to be precise on 7th May 1958.

The order from which the appeal is brought was made on the application of the liquidator. It declares that the business of the company was carried on from the month of February 1957 to the date of the commencement of the winding up, namely, 7th May 1958, with intent to defraud the creditors of the company by reason of the fact that the company continued to trade and to obtain goods on credit and to incur other liabilities without any reasonable prospect of being able to pay or provide for the payment thereof. The order further declares that Hardie, the now appellant, is personally responsible without any limitation of liability for all the debts and other liabilities of the company to the extent of £15,000. These declarations are followed by certain specific orders, viz. (1) that Hardie pay to the liquidator the sum of £15,000; (2) that for the purpose of giving effect to the declarations the liability of Hardie thereunder shall be a charge on every debt and obligation due from the company to him. Of the remaining specific directions or orders it is unnecessary to say more than that they deal with costs, liberty to apply, and a stay of execution.