CINEMA PLUS LTD (ADMINISTRATORS APPOINTED) & ANOR v ANZ BANKING GROUP LIMITED [2000] NSWCA 195

(2000) 35 ACSR 1 Reported Decision : (2000) 49 NSWLR 513 (2000) 157 FLR 204

New South Wales Court of Appeal

CITATION : CINEMA PLUS LTD (ADMINISTRATORS APPOINTED) & ANOR v ANZ BANKING GROUP LIMITED [2000] NSWCA 195 revised - 1/08/2000 FILE NUMBER(S) : CA 40530/00 HEARING DATE(S) : 21 July 2000 JUDGMENT DATE : 28 July 2000

Cinema Plus Limited (Adminstrators Appointed) - First Appellant PARTIES : Steven John Sherman and Ian Doublas Ferrier - Second Appellants Australia and New Zealand Banking Group Limited - Respondent JUDGMENT OF : Spigelman CJ at 1; Sheller JA at 71; Giles JA at 140

LOWER COURT JURISDICTION : Supreme Court - Equity Division LOWER COURT 3002/2000 FILE NUMBER(S) : LOWER COURT Windeyer J JUDICIAL OFFICER :

COUNSEL : P M Wood - Appellants J C Sheahan SC/J E Thomson/H N Newton - Respondent SOLICITORS : Henry Davis York - Appellants Blake Dawson Waldron - Respondent CATCHWORDS : BANKING AND FINANCIAL INSTITUTIONS - Banker and customer - Debtor and creditor - Banker's rights to combine accounts - Whether banker entitled to consolidate current account and loan account - Where contract provided for consolidtion - Whether charge created, s440B Corporations Law - Priority of administrator's lien, s443E Corporations Law - CONTRACTS - Sale and lease back agreement - Whether clause void for uncertainty - Whether clause penal in nature - CORPORATIONS - Corporations Law - Where administrators appointed - Meaning of 'charge' under s440B - Whether, in consolidating accounts, banker acted 'on behalf of' customer pursuant to s437D - Meaning of 'recover' under s440C - Administrator's indemnity and lien pursuant to ss443E, 443F - Priority - EQUITY - Equitable charges and liens - Creation of charge over debt where chargee owes debt to chargor - D LEGISLATION CITED : Corporations Law 1991 Associated Alloys Pty Ltd v ACN 001 452 106 Pty Ltd (2000) 74 ALJR 862 Bradford Old Bank Limited v Sutcliffe [1918] 2 KB 833 Broad v Commissioner of Stamp Duties (NSW) [1980] 2 NSWLR 40 Capital and Counties Bank Ltd v Rhodes [1903] 1 Ch 631 Cooper v Federal Commissioner of Taxation (1954-57) 97 CLR 397 EMCL Pty Ltd v Esanda Finance Corporation Limited (2000) FCA 612 and (1999) FCA 978 Esanda Finance Corporation Ltd v Jackson (1992) 59 SASR 416 Esanda Finance Corporation Ltd v Plessnig (1989) 166 CLR 131 Estate Planning Associates (Australia) Pty Ltd v Commissioner of Stamp Duties (1985) 2 NSWLR 495 Evans v Rival Granite Quarry Ltd [1910] 2 KB 979 Griffiths v Commonwealth Bank of Australia (1994) 123 ALR 120 Halesowen Presswork & Assemblies Ltd v Westminster Bank Ltd [1971] 1QB 1 CASES CITED: In re Bank of Credit and Commerce International SA (No 8) [1998] AC 214 In re Bourne [1906] 1 Ch 697 In re Charge Card Services Ltd [1987] Ch 150 In re Ross; ex parte Attorney General for the Northern Territory of Australia (1979) 54 ALJR 145 Lewis v Keene (1936) 36 SR(NSW) 493 Matthews v Geraghty (1986) 4 ACLC 727 National Provincial and Union Bank of England v Charnley [1924] 1 KB 431 National Westminster Bank Ltd v Halesowen Presswork & Assemblies Ltd [1972] AC 785 Osborne Computer Corporation Pty Ltd v Airroad Distribution Pty Ltd (1995) 37 NSWLR 382 The Council of the Upper Hunter County District v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429 The King v Portus; ex parte Federated Clerks Union of Australia (1949) 79 CLR 428 Timbertown Community Enterprises Ltd v Holiday Coast Credit Union Ltd (1997) 15 ACLC 1679 Wily v Rothschild Australia Ltd (1999) 47 NSWLR 555 DECISION : 1. Appeal allowed; 2. Notice of contention dismissed; 3. Set aside the orders made by Windeyer J on 10 July 2000; 4. The parties to bring in short minutes of order; 5. The respondent to pay one-half of the appellants' costs of the appeal.