In the Matter of Auzhair Supplies Pty Ltd (in Liq) [2013] NSWSC 1

Supreme Court New South Wales

Medium Neutral Citation: In the Matter of Auzhair Supplies Pty Ltd (in Liq) [2013] NSWSC 1 Hearing dates: 14 August & 16 October 2012 Decision date: 25 January 2013 Jurisdiction: Equity Division - Corporations List Before: Brereton J Decision: Auzhair 1 holds its assets and undertaking upon trust for Auzhair Supplies, and is liable to account to Auzhair Supplies for such assets and undertaking. Auzhair Supplies' claim against the second, third and fourth defendants is not barred by statute - directly or by analogy - or by laches. The directors are liable in equity to compensate Auzhair Supplies for the loss it has suffered by reason of their breach of duty, being the amount that Auzhair Supplies is unable to recover from Auzhair 1. Catchwords: LIMITATION OF ACTIONS - Equitable claims - breach of trust - whether claim in respect of a fraudulent breach of trust - whether claim for breach of directors' duties is a claim in respect of a breach of trust - application in equity of statutory limitation period by analogy - whether claim for equitable compensation including profits for breach of general law directors' duties sufficiently analogous to claim for statutory compensation under Corporations Act, s 1317H that limitation period in s 1317K should apply - whether inequitable in particular circumstances of case to apply limitation period by analogy

CORPORATIONS - Limitation of actions - whether running of limitation period against deregistered corporation can be suspended upon reinstatement under Corporations Act, s 601AH(3) - whether claim for equitable compensation including profits for breach of general law directors' duties sufficiently analogous to claim for statutory compensation under Corporations Act, s 1317H that limitation period in s 1317K should apply - whether inequitable in particular circumstances of case to apply limitation period by analogy Legislation Cited: (Cth) Companies Act 1981, s 229 (Cth) Corporations Act 2001, s 180, s 181, s 182, s 183, s 185, s 601AH, s 1317H, s 1317K (NSW) Companies Act 1961, s 124(1) (NSW) Limitation Act 1969, s 14(1)(d), s 23, s 47(1)(a), s 48, s 55(1)(b) (UK) Limitation Act 1939, s 26 (UK) Limitation Act 1980, s 21(1)(a) (VIC) Companies Act 1958, s 107 (VIC) Trusts Act 1896, s 29(1) Cases Cited: A-G for Hong Kong v Reid [1949] 1 All ER 1; 1 AC 234 Armitage v Nurse [1998] Ch 241; [1997] 2 All ER 705 Auzhair Supplies Pty Ltd (a deregistered company) and Auzhair 1 Pty Ltd, Re; Greenaway v Auzhair 1 Pty Ltd (2010) 80 ACSR 538; [2010] NSWSC 1339 Barker v Duke Group [2005] SASC 81; (2005) 91 SASR 167 Beaman v A.R.T.S. Limited [1949] 1 All ER 465 Belan v Casey [2003] NSWSC 159; (2003) 57 NSWLR 670 Brightwell & Ors v RFB Holdings Pty Limited (in Liquidation) [2003] NSWSC 7; (2003) 44 ACSR 186 Burdick v Garrick (1870) LR 5 Ch App 233 Cassis v Kalfus [2003] NSWSC 649 Chittick v Maxwell (1993) 118 ALR 728 Cia de Seguros Imperio v Heath (REBX) Ltd [2001] 1 WLR 112 Cohen v Cohen [1929] HCA 15; (1929) 42 CLR 91 Coulthard v Disco Mix Club Ltd [2000] 1 WLR 707; [1999] 2 All ER 457 Crawley v Short [2009] NSWCA 410 Del Borrello v Australian Securities & Investments Commission [2008] WASC 48 Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89 Hicks v Trustees Executors and Agency Company Limited (1901) 27 VLR 389 Hovenden v Lord Annesley (1806) 2 Sch & Lef 607 In re City Equitable Fire Insurance Company Limited [1925] Ch 407 In re Sharpe; Masonic and General Life Assurance Company v Sharpe [1892] 1 Ch 154 In the matter of Liverpool Hotels Pty Ltd (in liq) [2010] NSWSC 72 KM v HM (1993) 96 DLR (4th) 289 Knox v Gye (1872) LR 5 HL 656; 42 LJ Ch 234 Maxwell v Chittick [1994] NSWCA 196 Norton v Lord Ashburton [1914] AC 932 O'Halloran v RT Thomas & Family Pty Ltd (1998) 45 NSWLR 262, 274; 29 ACSR 148; 12 ACLC 1705 P&O Nedlloyd BV v Arab Metals Co & Ors [2007] 1 WLR 2288 Permanent Building Society (in liq) v Wheeler (1994) 11 WAR 187; 14 ACSR 109; 12 ACLC 674 R v McNeil [1922] HCA 33; (1922) 31 CLR 76 Savage v Lunn [1998] NSWCA 203 Seymour v Seymour (1996) 40 NSWLR 358 Smith v Clay (1767) 3 Bro CC 646; 29 ER 743 The Charitable Corporation v Sutton & ors (1742) 2 Atk 400; 26 ER 642 The Duke Group Ltd (in liq) v Alamain Investments Ltd [2003] SASC 415 The Metropolitan Bank v Heiron (1880) 5 Ex D 319 Westpac Banking Corporation v Bell Group Ltd (in liq) (No 3) (2012) 89 ACSR 1; [2012] WASCA 157 Williams v Minister, Aboriginal Land Rights Act 1983 and Another (1994) 35 NSWLR 497 Texts Cited: ICF Spry (1997) Equitable Remedies, 5th Edition, LBC Information Services Meagher, Heydon & Leeming (2002) Meagher, Gummow & Lehane's Equity - Doctrines & Remedies, 4th Edition, LexisNexis Butterworths Paterson, Ednie & Ford (1982-1990) Australian Company Law, 3rd Edition, Vol 2, Butterworths Young, Croft & Smith (2009) On Equity, Lawbook Co Category: Principal judgment Parties: Auzhair Supplies Pty Ltd (in liq) (plaintiff) Auzhair 1 Pty Ltd (first defendant) Roy Gerace (second defendant) Ilario Gerace (third defendant) Domenico Gerace (fourth defendant) Representation: Counsel: Mr JT Johnson (plaintiff) Mr DPM Ash (defendants) Solicitors: Carroll & O'Dea (plaintiff) Sachs Gerace Lawyers (defendants) File Number(s): 2012/ 80701