Jarbin Pty Limited v Clutha Limited (in liq) [2004] NSWSC 28

Reported Decision : (2004) 22 ACLC 550

New South Wales Supreme Court

CITATION : Jarbin Pty Limited v Clutha Limited (in liq) [2004] NSWSC 28 HEARING DATE(S) : 15 December 2003 JUDGMENT DATE : 25 February 2004 JURISDICTION: Equity JUDGMENT OF : Campbell J DECISION : No significance in vendors of debt and notes receiving higher percentage return on their debt than the dividend declared in the liquidation. Financier's costs of acquiring debt not treated as an expense for purposes of section 564. Net proceeds divided between financier and other creditors 50/50.

CATCHWORDS : CORPORATIONS - winding up - litigation funder purchases debts and notes of company in liquidation, finances litigation by that company - litigation settles and funder seeks preferential distribution of the proceeds under section 564 Corporations Law - whether any significance in vendors of debts and notes to financier receiving a higher proportion of the face value of those debts and notes than the dividend declared in the winding up - how financier's costs of becoming a creditor ought be treated - consideration of factors relevant to manner of distribution of settlement sum Bankruptcy Acts Amendment Act 1896 (NSW) Bankruptcy Act 1898 (NSW) Bankruptcy Act 1924 (Cth) Bankruptcy Act 1966 (Cth) Bankruptcy Amendment Act 1980 (Cth) LEGISLATION CITED : Bankruptcy Amendment Act 1985 (Cth) Companies Act 1899 Companies Act 1936 Companies Act 1961 Companies Act 1981 Corporations Law Re A and M Myerson (1908) 25 WN (NSW) 136 In the matter of A Shadler, Ltd (1905) 5 SR (NSW) 33 Re ACN 076 673 875 Ltd (rec and mgr apptd) (in liq) (Bendeich as liq, Greatorex and others intervening by leave) (2002) 42 ACSR 296; [2002] NSWSC 578 Re Addstone Pty Ltd (in liq) (1998) 83 FCR 583; (1998) 16 ACLC 1320 Re Allied Glass Manufacturers Ltd (1936) 36 SR (NSW) 409 Allquip (WA) Pty Ltd (in liq) v Allan (1997) 25 ACSR 765 Re Bailey (30 May 1946, unreported) Re Bavistock (1946) 14 ABC 30 Re Brierley; ex parte The Official Assignee (1898) 19 NSWLR 25 Brookfield & Anor v Davey Products Pty Ltd & Ors (1996) 14 ACLC 303 Buiscex Ltd v Panfida Foods Ltd (in liq) (1998) 28 ACSR 357 Re Cartco Pty Ltd (1994) 14 ACSR 357 Re Clarke; ex parte Deputy Commissioner of Taxation (1981) 51 FLR 220 Deputy Commissioner of Taxation v Currockbilly Pty Ltd (2002) 172 FLR 99 Elfic Ltd v Macks [2001] QCA 219; [2003] 2 Qd R 125; (2001) 181 ALR 1; (2001) 162 FLR 41; (2001) 19 ACLC 1324 Re Farrow [1957] St R Qd 452 Re French Caledonia Travel [2003] NSWSC 1008 Re Glenisia Investments Pty Ltd (in liq) (1995) 19 ACSR 84 Household Financial Services Pty Ltd v Chase Medical Centre Pty Ltd (1995) 18 ACSR 294 Hypec Electronics Pty Ltd (in liq) v Mead [2003] NSWSC 934; (2003) 202 ALR 688 Re Ivermee; ex parte Official Receiver (1974) 36 FLR 187 CASES CITED : Re Jacka Nominees Ltd (in liq) (1996) 14 ACLC 633 Re Ken Godfrey Pty Ltd (in liq) (1994) 14 ACSR 610 Re Kyra Nominees Pty Ltd (in liq) (1987) 11 ACLR 767 Re Lance; ex parte The Official Assignee (1900) 21 LR (NSW) B&P 29 Manettas v Dylcu Pty Ltd (1995) 13 ACLC 1567 Re Manson; ex parte The Official Assignee (1897) 18 LR (NSW) B&P 45 Re Maywald; ex parte The Official Receiver; Slatters Ltd, (Respondent) (1934) 8 ABC 13 Re Moage Ltd (in liq) (1997) 25 ACSR 53 Re Movitor Pty Ltd (in liquidation) (1996) 64 FCR 380; (1996) 14 ACLC 587 Re Passmore; ex parte Official Receiver in Bankruptcy (1984) 56 ALR 181 Peake (as liquidator of Australian Housewares Pty Ltd (in liq)) [2003] FCA 170 Re Pinnacle Construction Pty Ltd (in liq); re Star [2001] NSWSC 1210; [2002] ACLR 120 NSW 51 Re M L Ried (1946) 13 ABC 287 Re Rosewarne; ex parte The Official Receiver of the Court of Bankruptcy (1932) 4 ABC 192 Re Russell (in his capacity as official liquidator of Parkston Ltd (in liq)) (2000) 35 ACSR 114 Re Sigvart; ex parte Gordon & Gotch (Australasia) Ltd (1932) 4 ABC 240 State Bank of New South Wales v Brown (2001) 38 ACSR 715; [2001] NSWCA 223 Re Tosich Construction Pty Ltd (1997) 73 FCR 219 UTSA Pty Ltd (in liquidation) v Ultra Tune Australia Pty Ltd and others [1997] 1 VR 667; (1996) 132 FLR 363; (1996) 21 ACSR 251; (1996) 14 ACLC 1262 UTSA Pty Ltd (in liq) and others v Ultra Tune Australia Pty Ltd and others (1996) 21 ACSR 457, (1996) 14 ACLC 1610 Re Webb; ex parte Taylor (1987) 75 ALR 139 Re William Felton Co Pty Ltd (1998) 145 FLR 211; (1998) 28 ACSR 228; 16 ACLC 1294 PARTIES : Jarbin Pty Limited - Plaintiff Clutha Limited (in liquidation) - Defendant FILE NUMBER(S) : SC 5716/03 COUNSEL : S G Finch SC; J M Hennessy - Plaintiff V F Kerr - Defendant SOLICITORS : Moloney Lawyers - Plaintiff Piper Alderman Lawyers - Defendant