SKELLERUP ROTOCURE LIMITED v CHADWICK INDUSTRIES PTY LTD [1990] NSWCA 166

SKELLERUP ROTOCURE LIMITED vy CHADWICK INDUSTRIES PTY LTD

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

GLEESON CJ, KIRBY P and MAHONEY JA 2-3 October 1990, 4 October 1990 [1990] NSWCA 166

DEED — Charge to secure indebtedness of company — whether charge attaches only to debts in existence at the date of the charge — Held: (Mahoney JA; Gleeson CJ and Kirby P concurring) (1) A fixed charge may be created over choses in action not now in existence; (2) To give effect to the purpose of the parties in the grant of the charge and the language of the charge in question here, the charge given by the deed applied to debts resulting from obligations which, at the date of the execution of the deed had not yet crystallised into liquidated damages.

WORDS AND PHRASES — "debt": Bank of Australasia v Hall (1907) 4 CLR 1514; Ex parte Kemp: In re Fastnedge (1874) LR 9 Ch App 383 referred to.

Gleeson CJ In this matter I have had the benefit of reading in draft form the judgment of Mahoney JA. I agree with his Honour's judgment.

Kirby P I agree with the orders proposed by Mahoney JA and with his reasons.

Mahoney JA Chadwick Industries Pty Ltd ("Chadwick") had contracted to do work in relation to the Darling Harbour development. It claimed that it should have been paid, or should be paid, moneys because of what it had done. It claimed this against the Darling Harbour Authority and those who had worked with or for it. By April 1989 these moneys had not been paid. In April 1989 Chadwick owed Skellerup Rotocure Limited ("Skellerup") $NZ.411,324.32. Skellerup pressed Chadwick for the money owed to it. Ultimately it was agreed that Chadwick should give to Skellerup a charge to secure Chadwick's indebtedness to Skellerup. On 11 April 1989 a deed of charge was executed.

Chadwick pressed its claims against Darling Harbour Authority. At the end of 1989, as the result of the efforts of a mediator, an agreement was made between Chadwick and the Darling Harbour Authority whereby $1.1 million was agreed to be paid to Chadwick. In due course that amount ("the contract sum") was paid to Chadwick.