Buzzle Operations Pty Ltd (in liq) v Apple Computer Australia Pty Ltd [2011] NSWCA 109

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Buzzle Operations Pty Ltd (in liq) v Apple Computer Australia Pty Ltd [2011] NSWCA 109 Hearing dates: 21, 22, 23 March 2011 Decision date: 09 May 2011 Before: Hodgson JA at [1]; Young JA at [11]; Whealy JA at [286] Decision: Appeal dismissed with costs. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Catchwords: CORPORATIONS- uncommercial transactions- Corporations Law s 588FB- new company taking over business of "Resellers"- Resellers owe debt to Apple- new company not obliged to pay Resellers' debt to Apple, but does so- whether transaction uncommercial- significance of whether or not transaction is for full consideration and detriment suffered by payer- full consideration does not necessarily, by itself, render a transaction commercial but goes a long way to avoiding it being termed uncommercial- balance of detriment was such that payments were uncommercial transaction- defence of good faith- Corporations Law s 588FB(2)- for the defence to apply, there must be good faith, no reasonable grounds to suspect insolvency and valuable consideration- where a creditor receives payment for a genuine debt, prima facie it acts in good faith- satisfaction and release of an antecedent debt is valuable consideration- defence under s 588FB(2) applies to payments.

CORPORATIONS- who is a shadow director?- a person in accordance with whose instructions or wishes the directors of a company are accustomed to act- "in accordance with" requires a causal connection- "the directors" are the governing majority or real decision makers regardless of whether there has been an informal delegation of board authority- "accustomed" is habitual compliance over a period of time- the instructions or wishes must be with regards to board decisions and not managerial activities- whether certain activities are board or managerial activities is a question of fact- subject must be approached with an eye to the ultimate question- not every person whose advice is in fact heeded as a general rule by the board is a shadow director- neither Apple nor its representative was a shadow director. Legislation Cited: Corporations Act 2001 (Cth), s 267 Corporations Law, ss 9, 95A, 267, 553C, 588FB, 588FE, 588FF, 588FG, 588G, 588H, 588M, 588V, 588W, 1317S, 1318 Corporations Law Economic Reform Program Act 1999 (Cth) English Companies Act 1985 (UK) English Companies Act 2006 (UK) Cases Cited: Abalos v Australian Postal Commission [1990] HCA 47; 171 CLR 167 ASC v AS Nominees Ltd (1995) 133 ALR 1 ASIC v Murdaca [2008] FCA 1399; 68 ACSR 66 ASIC v Vines [2005] NSWSC 1349; 65 NSWLR 281 Cashflow Finance Pty Ltd v Westpac Banking Corporation [1999] NSWSC 671 Commissioner for Corporate Affairs (Vic) v Bracht [1989] VR 821 (1988) 14 ACLR 728 Commonwealth Bank of Australia v Friedrich (1991) 5 ACSR 115 Cussen v Sultan [2009] NSWSC 1114; 74 ACSR 496 Deputy Commissioner of Taxation v Austin (1998) 28 ACSR 565 Emanuel Management Pty Ltd (in liq) v Foster's Brewing Group Ltd [2003] QSC 205; 178 FLR 1 Ex parte James (1874) 9 Ch App 609 Ford v Beech (1846) 11 QB 842; 116 ER 689 Hall v Ledge Finance Ltd [2005] NSWSC 645 Hall v Poolman [2007] NSWSC 1330; 215 FLR 243; 65 ACSR 123 Harris v S (1976) 2 ACLR 51 Head v Kelk [1963] SR (NSW) 340 Ho v Akai Pty Ltd (in liq) [2006] FCAFC 159; 24 ACLC 1,526 Kazar, re Frontier Architects Pty Ltd (in liq) [2010] FCA 1381; 81 ACSR 158 Lewis v Doran Constructions Pty Ltd [2005] NSWCA 243; 54 ACSR 410 Mangles v Grand Collier Dock Co (1840) 10 Sim 519; 59 ER 716 Perpetual Trustee Co Ltd v Commissioner of Stamp Duties (1970) 72 SR (NSW) 453 Presbyterian Church (NSW) Property Trust v Scots Church Development Ltd [2007] NSWSC 676; 64 ACSR 31 Re Hydrodam (Corby) Ltd [1994] 2 BCLC 180 Re Kaytech International plc [1999] 2 BCLC 351 Re Lo-Line Electric Motors Ltd [1988] Ch 477 Re Parker (1996) 80 FCR 1; 150 ALR 92; 25 ACSR 560 Revenue and Customs Commissioners v Holland; In re Paycheck Services 3 Ltd [2010] 1 WLR 2793; [2011] 1 All ER 430 Salomon v A Salomon & Co Ltd [1897] AC 22 Secretary of State for Trade and Industry v Deverell [2001] Ch 340 Secretary of State for Trade and Industry v Tjolle [1988] 1 BCLC 333 The King v Corporation of Bedford Level (1805) 6 East 356; 107 ER 1323 Ultraframe (UK) Ltd v Field & Ors [2005] EWHC 1638 (Ch); All ER (D) 397 (Jul) Vaccari v Maxwell 3 Blatchf 368 (28 Fed Cas 862(SD NY 1855) Willers v R (1995) 81 A Crim R 219 Category: Principal judgment Parties: Buzzle Operations Pty Ltd (in liq) (First Appellant) Andrew Hugh Jenner Wily (Second Appellant) Apple Computer Australia Pty Ltd (First Respondent) James Likidis (Second Respondent) Colin McIntosh Nicol (Third Respondent) Scott Bradley Kershaw (Fourth Respondent) Representation: Counsel: D F Jackson QC, L V Gyles SC and J Shepard (Appellants) B A Coles QC, C R C Newlinds SC and R C A Higgins (Respondents) Solicitors: Piper Alderman (Appellants) Clayton Utz (Respondents) File Number(s): 2004/181828 Decision under appeal Citation: Buzzle Operations Pty Ltd (In liq) v Apple Computer Australia Pty Ltd [2010] NSWSC 233 Date of Decision: 2010-03-30 00:00:00 Before: White J File Number(s): SC 6768/04