Michell, In the matter of Petromech Pty Ltd (in liq) [2021] FCA 1378

Michell, In the matter of Petromech Pty Ltd (in liq) [2021] FCA 1378

The evidence established that since dissolution of the Old Partnership the Company carried on the Business only as manager and agent of the Gawn Partnership, acquired assets and incurred liabilities in that capacity, and was not acting as trustee of an express trust. Applying Re Victoria Station, the Company had a right of indemnity against the partners and a possessory lien over Gawn Partnership assets under its control or at its disposal for debts incurred as manager and agent. It was therefore appropriate under s 90-15 of Schedule 2 to the Corporations Act 2001 (Cth) to direct that the Liquidator was justified in administering the Company on that basis, distributing Available Assets to...

Jurisdiction
Australia
Judgment Date
08 November 2021
Procedural Posture
Corporations Insolvency Application for Directions in Relation to a Company in Liquidation / Orders Made on Originating Application; Originating Application Otherwise Adjourned
Outcome
Directions made substantially in the form sought by the Liquidator; originating application otherwise adjourned; liberty to apply granted.
Legal Topics
['external Administration' "creditor's Voluntary Liquidation" 'partnership Manager' 'agency' 'right of Indemnity' 'possessory Lien' 'distribution of Assets' 'statutory Priorities']
['corporations' 'insolvency'] ['external Administration' "creditor's Voluntary Liquidation" 'partnership Manager' 'agency' 'right of Indemnity' 'possessory Lien' 'distribution of Assets' 'statutory Priorities']

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Procedural Posture

Corporations Insolvency Application for Directions in Relation to a Company in Liquidation / Orders Made on Originating Application; Originating Application Otherwise Adjourned

Legal Issues

  1. 1 ['Whether Petromech Pty Ltd conducted the business in its own capacity or as manager and agent for the Gawn Partnership.' 'Whether the Company had a right of indemnity and a lien over assets under its control or at its disposal in respect of debts incurred as manager and agent for the Gawn Partnership.' "Whether Available Assets should be distributed to the Company's creditors in accordance with the Corporations Act 2001 (Cth), including statutory priorities under s 556." "Whether the Liquidator's remuneration and costs of and incidental to the proceeding should be payable out of funds realised from the Available Assets." 'Whether the remainder of the originating application should be adjourned or dismissed.']

Ratio Decidendi

The evidence established that since dissolution of the Old Partnership the Company carried on the Business only as manager and agent of the Gawn Partnership, acquired assets and incurred liabilities in that capacity, and was not acting as trustee of an express trust. Applying Re Victoria Station, the Company had a right of indemnity against the partners and a possessory lien over Gawn Partnership assets under its control or at its disposal for debts incurred as manager and agent. It was therefore appropriate under s 90-15 of Schedule 2 to the Corporations Act 2001 (Cth) to direct that the Liquidator was justified in administering the Company on that basis, distributing Available Assets to...

Court Disposition

Directions made substantially in the form sought by the Liquidator; originating application otherwise adjourned; liberty to apply granted.

Orders

  • ['Pursuant to s 90-15 of Schedule 2 – Insolvency Practice Schedule (Corporations) to the Corporations Act 2001 (Cth), the first applicant is justified and acting reasonably in proceeding in the external administration of the second applicant on the basis that the Company conducted business as manager and agent for...