Cadwallader v Bajco Pty Ltd & Ors [2002] NSWCA 328

New South Wales Court of Appeal

CITATION : Cadwallader v Bajco Pty Ltd & Ors [2002] NSWCA 328 revised - 14/10/2002 FILE NUMBER(S) : CA 40190/02 HEARING DATE(S) : 28, 29 August 2002 JUDGMENT DATE : 26 September 2002

Alan Cadwallader (Appellant) PARTIES : Bajco Pty Ltd (First Respondent) Keith William Skinner and David John Franke Lombe (Second Respondents) David Ewart Cadwallader and Marilyn Alice Wintzloff (Third Respondents) JUDGMENT OF : Heydon JA at 1; Santow JA at 275; Gzell J at 276

LOWER COURT JURISDICTION : Supreme Court LOWER COURT ED 1347/98 FILE NUMBER(S) : LOWER COURT Austin J JUDICIAL OFFICER :

Mr J B Whittle SC/Mr J T Svehla (Appellant) COUNSEL : Mr D J Hammerschlag SC/Mr C R C Newlinds (Second Respondents) Mr J W J Stevenson (Third Respondent) A R Conolly & Company (Appellant) SOLICITORS : Tress Cocks & Maddox (First and Second Respondents) Watson & Watson (Third Respondent) CATCHWORDS : Corporations - directors' duties - breach - company placed in administration - whether directors' purpose in so doing improper - propriety of directors' resolution to pay themselves increased fees - Corporations - administration - meetings - notice - whether valid - Corporations - administrators - whether administrators knew of directors' improper purpose in seeking to place company in administration - accessorial liability - relevance - Remedies - general law and statutory remedies - setting aside of company resolutions - whether appropriate in circumstances - whether company should be taken to have entered voluntary administration - Corporations Law s 447A - Evidence - drawing of inferences - rule in Jones v Dunkel - application - requirements - Equity - waiver - Equity - discretionary defences - unclean hands - D LEGISLATION CITED : Corporations Law Trade Practices Act 1974 (Cth) Abalos v Australian Postal Commission (1990) 171 CLR 167 Barnes v Addy (1874) LR 9 Ch App 444 Barclays Bank plc v Boulter [1997] 2 All ER 1002 Bradshaw v McEwans Pty Ltd (High Court of Australia unreported 1951) Browne v Dunn (1893) 6 R 67 Commonwealth v Verwayen (1990) 170 CLR 394 Cook v Cook (1986) 162 CLR 376 Consul Developments Pty Ltd v DPC Estates Pty Ltd (1975) 132 CLR 373 Coulton v Holcombe (1986) 162 CLR 1 Cousins v International Brick Co Ltd [1931] 2 Ch 90 Devries v Australian National Railways Commission (1993) 177 CLR 472 DPC Estates Pty Ltd v Grey and Consul Developments Pty Ltd [1974] 1 NSWLR 443 Giorgianni v R (1985) 156 CLR 473 Hambro v Burnand [1904] 2 KB 10 Harlowe's Nominees Pty Ltd v Woodside (Lakes Entrance) Oil Co NL (1968) 121 CLR 483 Harrigan v Brown [1967] 1 NSWR 342 Hospitality Group Pty Ltd v Australian Rugby Union Ltd (2001) ATPR 41-831 House v R (1936) 55 CLR 449 Howard Smith Ltd v Ampol Petroleum Ltd [1974] AC 821 CASES CITED: Jenyns v Public Curator (Q) (1953) 90 CLR 113 Jones v Dunkel (1959) 101 CLR 298 Kettles and Gas Appliances Ltd v Anthony Hordern & Sons Ltd (1934) 35 SR (NSW) 108 Luxton v Vines (1952) 85 CLR 352 Mason v Clarke [1954] 1 QB 460 Minister v Immigration, Local Government and Ethnic Affairs v Hamsher (1992) 35 FCR 359 Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1 Payne v Parker [1976] 1 NSWLR 191 Richard Brady Franks Pty Ltd v Price (1937) 58 CLR 112 Rosenberg v Percival (2001) 205 CLR 434 Royal Brunei Airlines Sdn Bhd v Tan [1995] 2 AC 378 Sargent v ASL Developments Ltd (1974) 131 CLR 634 Shum Yip Properties Development Pty Ltd v Chatswood Investment and Development Co Pty Ltd (2002) 40 ACSR 619 Smith v Samuels (1976) 12 SASR 573 State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (In Liq) (1999) 160 ALR 588 Steele v Mirror Newspapers Ltd [1974] 2 NSWLR 348 Tame v New South Wales; Annets v Australian Stations Pty Ltd [2002] HCA 35 Twinsectra Ltd v Yardley [2002] 2 AC 164 Yorke v Lucas (1985) 158 CLR 661 Wentworth v Lloyd (1864) 33 LJ (Eq) NS 688 DECISION : See paragraph 274