Hawthorne & Anor v Harris, P.W & Ors [1995] FCA 181

Hawthorne & Anor v Harris, P.W & Ors [1995] FCA 181

The term in the parties' agreement that the loan would be repaid 'when funds available' is void for uncertainty; consequently, at law the second applicant was entitled to demand repayment at any time. The debt became due and owing on the demand of 1 July, 1994. The second respondent's inability to pay justified its winding up under s. 459P of the Corporations Law.

Parties
First Applicant: Sydney Hawthorne; Second Applicant: Plastec Australia Pty. Ltd.; First Respondent: Patrick William Harris; First Respondent: Maureen Anne Harris; Second Respondent: Combined Security Systems & Designs Pty. Ltd.
Jurisdiction
Australia
Judgment Date
28 February 1995
Procedural Posture
Application for Winding Up and Related Relief / Judgment After Hearing on Preliminary Issue
Outcome
Second applicant's application for winding up of the second respondent granted; first applicant's oppression-based application dismissed; costs awarded as set out.
Legal Topics
Loan Agreements, Uncertainty in Contract Terms, Repayment of Loans, Winding Up of Companies for Insolvency, Oppression Remedies Under Corporations Law
Contract Law Corporations Law Equity Loan Agreements Uncertainty in Contract Terms Repayment of Loans Winding Up of Companies for Insolvency Oppression Remedies Under Corporations Law

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Parties

Sydney Hawthorne

First Applicant

Plastec Australia Pty. Ltd.

Second Applicant

Patrick William Harris

First Respondent

Maureen Anne Harris

First Respondent

Combined Security Systems & Designs Pty. Ltd.

Second Respondent

Procedural Posture

Application for Winding Up and Related Relief / Judgment After Hearing on Preliminary Issue

Legal Issues

  1. 1 Whether the agreement that loan moneys would be repaid 'when funds available' is void for uncertainty
  2. 2 Whether the loan was repayable on demand or only from profits or available funds
  3. 3 Whether the second respondent is insolvent and should be wound up

Ratio Decidendi

The term in the parties' agreement that the loan would be repaid 'when funds available' is void for uncertainty; consequently, at law the second applicant was entitled to demand repayment at any time. The debt became due and owing on the demand of 1 July, 1994. The second respondent's inability to pay justified its winding up under s. 459P of the Corporations Law.

Court Disposition

Second applicant's application for winding up of the second respondent granted; first applicant's oppression-based application dismissed; costs awarded as set out.

Orders

  • Declaration that since the second applicant's demand of 1 July, 1994, a debt has been due and owing by the second respondent to the second applicant.
  • Order that the second respondent be wound up pursuant to s. 459P of the Corporations Law.