Edwards & Ors v Attorney General & Anor [2004] NSWCA 272

50 ACSR 122 Reported Decision : 60 NSWLR 667 (2004) 22 ACLC 1177

New South Wales Court of Appeal

CITATION : Edwards & Ors v Attorney General & Anor [2004] NSWCA 272 revised - 6/08/2004 HEARING DATE(S) : 23/07/04 JUDGMENT DATE : 6 August 2004

JUDGMENT OF : Spigelman CJ at 1; Mason P at 30; Young CJ in Eq at 35 DECISION : (1) The application under s 63 of the Trustee Act is dismissed; (2) Order that each of the first plaintiffs be relieved in whole from liability for any negligence, default, breach of trust or breach of duty in his capacity as a director of the second plaintiff, Amaca Pty Ltd (ABN 49 000 035 512) and/or Amaba Pty Ltd (ABN 98 000 387 342) arising out of the payment on or after 24 June 2004 up to the date of this order by those companies of their debts, as and when they fall due, including debts arising in respect of claims made for asbestos-related liabilities; (3) No order as to costs; (4) Refer the matter to the Equity Division to deal with any further aspects of the proceedings; (5) Liberty to the plaintiffs to apply on or before 6 December 2004 for similar orders to order (2) in respect of any payments made between the date of this order and 6 December 2004; (6) Like liberty to apply to a Judge to vary the date of 6 December 2004 referred to in the previous order

CATCHWORDS : CORPORATIONS- Directors- Intending to act in a way where personal liability might attach- Directors unable to obtain insurance- Whether Court can give protection for past and future "breaches" under s 1318 of the Corporations Act- Whether provisions of s 197 of that Act relevant. CORPORATIONS- Difference between (a) potential unliquidated claim and (b) prospective or contingent debt. CORPORATIONS- Construction of Corporations Act- Preferable approach. TRUSTS- Partly charitable trust- Trustees also directors of trading companies- Problems with possible solvency of companies- Whether Court should give judicial advice. Acts Interpretation Act 1901 (Cth), s 15AA Charitable Trusts Act 1993 (NSW), s 23 Conveyancing Act 1919 (NSW), s 37D Companies Act 1948 (Imp) s 448 LEGISLATION CITED : Companies Act 1985 (Imp) s 727 Companies Code 1981 (Cth) Corporations Act 2001 (Cth), ss 5C, 9, 197, 411, 419A(7), 510, 1318 Judicial Trustees Act 1896 (Imp), s 3 Limited Liability Act 1855 (Imp) Trustee Act 1925 (NSW) ss 63, 85 Agar v Hyde (2000) 201 CLR 552 Amaca Pty Ltd v State of New South Wales [2004] NSWCA 124 Bovis Lend Lease Pty Ltd v Wily (2003) 45 ACSR 612 Boyded Industries Pty Ltd v Canuto [2004] NSWCA 256 Brown v Burdett (1882) 21 Ch D 667 Circle Petroleum (Qld) P/L v Greenslade (1998) 16 ACLC 1577 Cole v South Tweed Heads Rugby League Football Club Ltd [2004] HCA 29 Commissioner of Taxation v Simionato Holdings Pty Ltd (1997) 15 ACLC 477 Commonwealth Bank of Australia v Friedrich (1991) 5 ACSR 115 Community Development Pty Ltd v Engwirda Construction Co (1969) 120 CLR 455 Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1 Customs & Excise Commissioners v Hedon Alpha Ltd [1981] QB 818 Daniels v Anderson (1995) 37 NSWLR 438 Darvall v North Sydney Brick & Tile Co Ltd (1989) 15 ACLR 230 Dean-Willcocks v Soluble Solution Hydroponics Pty Ltd (1997) 15 ACLC 833 Derek v Cheung (2001) 181 ALR 310 Downing v Commissioner of Taxation (1971) 125 CLR 185 FAI Insurances Ltd v Winnecke (1982) 151 CLR 342 Ferrier & Knight v Civil Aviation Authority (1994) 55 FCR 28 Ghantous v Hawkesbury City Council (2001) 206 CLR 512 Graham Barclay Oysters Pty Ltd v Ryan (2003) 211 CLR 540 Hallett v Dowdall (1852) 21 LJQB 98 Hanel v O'Neill (2003) 48 ACSR 378 In re European Life Assurance Society (1869) LR 9 Eq 122 Insurance Commissioner v Associated Dominions Assurance Society Pty Ltd (1953) 89 CLR 78 Intagro v ANZ Banking Group [2004] NSWSC 618 Kenna & Brown Pty Ltd v Kenna (1999) 32 ACSR 430 Kinsela v Russell Kinsela Pty Ltd (1986) 4 NSWLR 722 Lawson v Mitchell [1975] VR 579 Leslie v Howship Holdings Pty Ltd (1997) 15 ACLC 459 Liftronic Pty Ltd v Unver (2001) 179 ALR 321 Modbury Triangle Shopping Centre Pty Ltd v Anzil (2000) 205 CLR 254 Nardell v Hunter Valey Coal Processing (2003) 178 FLR 400 National Australia Bank Ltd v Market Holdings Pty Ltd (2000) 50 NSWLR 465 New South Wales v Lepore (2003) 212 CLR 511 New South Wales v Paige (2003) Aust Torts Rep 81-676 Newcastle City Council v Shortland Management Services (2003) 57 NSWLR 173 CASES CITED : Orica Ltd v CGU Insurance Ltd [2003] NSWCA 331; 13 ANZ Insurances Cases 61-596 Oshlack v Richmond River Council (1998) 193 CLR 72 People of New York; By Bohlinger, Superintendent of Insurance v The International Workers Order Inc 106 NYS (2d) 953 (1951) Re Allsop [1914] 1 Ch 1 Re Bond Corporation Holdings Ltd (1990) 8 ACLC 153 Re Botar-Tatham Pty Ltd (2001) 52 NSWLR 680 Re Capital Annuities Ltd [1979] 1 WLR 170 Re Denley's Trust Deed [1969] 1 Ch 373 Re Home Treat Ltd [1991] BCLC 705 Re Homemaker Retail Management Ltd (2001) 187 ALR 520 Re Inkerman Grazing Pty Ltd (1972) 1 ACLR 102 Re International Harvester Australia (1983) 1 ACLC 700 Re International Vending Machines Pty Ltd [1962] NSWR 1408 Re Mirvac Ltd (1999) 32 ACSR 107 Re Perpetual Trustee Company Ltd [2003] NSWSC 1185 Re Rosenthal [1972] 1 WLR 1273 Re Schulz [1961] SASR 377 Re Simpson [1961] QWN 50 Re Tollemache [1903] 1 Ch 457 Re United Medical Protection Ltd (2002) 41 ACSR 623 Re Vouris (2003) 47 ACSR 155 Reynolds v Katomba RSL All Services Club Ltd (2001) 53 NSWLR 43 Richmond Valley Council v Standing (2002) Aust Torts Rep 81-879 Roman Catholic Archbishop of Melbourne v Lawlor (1934) 51 CLR 1 Rosenberg v Percival (2001) 205 CLR 434 State of New South Wales v Godfrey & Godfrey (2004) NSWCA 113 Steen v Law, Liquidator of International Vending Machines Pty Ltd (1963) 37 ALJR 229 Stonegate Securites Ltd v Gregory [1980] Ch 576 Sullivan v Moody (2001) 207 CLR 562 Tame v New South Wales (2002) 211 CLR 317 Taylor v Taylor (1910) 10 CLR 218 The Millstream Pty Ltd v Schultz [1980] 1 NSWLR 547 Union Trustee Co of Austalia Ltd v Church of England Property Trust (1946) 46 SR (NSW) 298 University of Wollongong v Mitchell [2003] Aust Torts Rep 81-708 Van Der Sluice v Display Craft Pty Ltd [2002] NSWCA 204 Woods v Multi Sport Holdings Pty Ltd (2002) 208 CLR 460 Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 78 ALJR 628 Wyong Shire Council v Vairy [2004] NSWCA 247 Young v Murphy (1994) 13 ACSR 722 Sir Llewellyn Edwards, Peter Jollie, Ian Hutchinson and Dennis Cooper (P1) PARTIES : Medical Research and Compensation Foundation (P2) The Attorney General in and for the State of New South Wales (D1) The Australian Securities and Investment Commission (D2) FILE NUMBER(S) : CA 40631/04 J T Gleeson SC, L McCallum and J A C Potts (P) COUNSEL : S Gibb SC (D1) I M Jackman SC (D2) Clayton Utz (P) SOLICITORS : Crown Solicitor (D1) Kim Turner (D2)