In the matter of O’Keeffe Heneghan Pty Ltd (in liquidation; Aus Life Pty Ltd (in liquidation); Rocky Neill Construction Pty Ltd (in liquidation) trading as KNF Group (a firm) (No 2) [2018] NSWSC 1958

Supreme Court New South Wales

Medium Neutral Citation: In the matter of O'Keeffe Heneghan Pty Ltd (in liquidation; Aus Life Pty Ltd (in liquidation); Rocky Neill Construction Pty Ltd (in liquidation) trading as KNF Group (a firm) (No 2) [2018] NSWSC 1958 Hearing dates: 15 November 2018 Decision date: 14 December 2018 Jurisdiction: Equity - Corporations List Before: Black J Decision: The OzForex Monies are held on trust for the Partnership where the RNC Payments were made in breach of duties owed by the Companies to the Partnership. CBA's security has priority over IFG's security in respect of the OzForex Monies. Catchwords: EQUITY – constructive trust – where payments were made from partnership account to account of corporate partner to partnership immediately prior to it being placed in voluntary administration – whether payments were made by partners to partnership in breach of duty to partnership – whether constructive trust is an appropriate remedy.

PERSONAL PROPERTY – priority of security interests – where bank registered security interest against all property of each company to partnership but not against the partnership – where third party later registered security against all receivables of the partnership – whether bank's security has priority over third party's security in respect of funds wrongly transferred out of partnership account. Legislation Cited: - Banking Act 1959 (Cth) - Conveyancing Act 1919 (NSW) s 37A - Corporations Act 2001 (Cth) s 588FF - Personal Property Securities (Corporations and Other Amendments) Act 2011 (Cth) - Personal Property Securities Act 2009 (Cth) ss 8, 10, 19, 21, 25, 31, 32, 57, 75, 153, 340, 341A Cases Cited: - Agip Africa (Ltd) v Jackson [1990] Ch 265 - Barnes v Addy (1874) LR 9 Ch App 244 - Commonwealth v Byrnes (in their capacity as joint and several recs and mgrs of Amerind Pty Ltd) (recs and mgrs apptd) (in liq) (2018) 354 ALR 789 - Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22 ; (2007) 230 CLR 89 - Fistar v Riverwood Legion and Community Club Ltd [2016] NSWCA 81 - Grimaldi v Chameleon Mining NL (No 2) [2012] FCAFC 6 ; (2012) 87 ACSR 260 - Kalls Enterprises Pty Ltd (in liq) v Baloglow [2007] NSWCA 191; (2007) 63 ACSR 557 - Marcolongo v Chen [2011] HCA 3; (2011) 242 CLR 546 - Metall und Rohstoff AG v Donaldson Lufkin & Jenrette Inc [1990] 1 QB 391 - National Australia Bank Ltd v Garrett (2016) 340 ALR 532 - Patel v Lal [2011] NSWSC 603; (2011) 16 BPR 30,265 - Sandhurst Golf Estates Pty Ltd v Coppersmith Pty Ltd (2014) 285 FLR 267 Texts Cited: DC Turner, in "Debtor-Induced Payments" (2014) 35 Adelaide Law Review 97 Category: Procedural and other rulings Parties: Andrew Spring and Amanda Young (in their capacities as receivers and managers of O'Keeffe Heneghan Pty Ltd (in liquidation), Aus Life Pty Ltd (in liquidation) and Rocky Neill Construction Pty Ltd (in liquidation) trading as KNF Group (a firm) (First and Second Plaintiffs) IFG Network Australia Pty Ltd (Third Plaintiff) Andrew Sallway and James White (in their capacities as joint and several liquidators of O'Keeffe Heneghan Pty Ltd (in liquidation), Aus Life Pty Ltd (in liquidation) and Rocky Neill Construction Pty Ltd (in liquidation) trading as KNF Group (a firm) (First and Second Defendants) O'Keeffe Heneghan Pty Ltd (in liquidation) (Third Defendant) Aus Life Pty Ltd (in liquidation) (Fourth Defendant) Rocky Neill Construction Pty Ltd (in liquidation) (Fifth Defendant) Commonwealth of Australia (Sixth Defendant) Commonwealth Bank of Australia (Seventh Defendant) Representation: Counsel: C R Brown (Plaintiffs) S B Docker (First – Fifth Defendants) P Newton (Seventh Defendant)