Toveill Pty Ltd v Australian Quality Plus Pty Ltd; Joe's Citrus pty Ltd v Australian Quality Plus Pty Ltd [2010] NSWSC 1003

Toveill Pty Ltd v Australian Quality Plus Pty Ltd; Joe's Citrus pty Ltd v Australian Quality Plus Pty Ltd [2010] NSWSC 1003

Leave under s 500(2) was refused because the proposed proprietary claim to on-sale proceeds did not have a solid foundation amounting to a serious question to be tried. The sale agreement contained a retention of title clause but said nothing about proceeds of on-sale, and the alleged trust term was neither so obvious that it went without saying nor necessary for business efficacy. The course of dealings showed that AQP was expected to on-sell under pre-existing contracts as principal, not as agent or bailee of Toveill, so no fiduciary or Quistclose trust basis was established. The alternative claim for particular oranges would not attract specific restitution for a readily available...

Jurisdiction
Australia
Judgment Date
07 September 2010
Procedural Posture
Applications for Leave Under S 500(2) of the Corporations Act 2001 (cth) to Proceed Against a Company in Creditors Voluntary Winding Up / Interlocutory Process Filed on 6 July 2010
Outcome
The applications for leave under s 500(2) were dismissed in both proceedings, with costs payable by the applicants.
Legal Topics
['winding Up' 'leave to Proceed Against Company in Liquidation' 'retention of Title Clause' 'passing of Property' 'implied Terms' 'quistclose Trust' 'proprietary Claims' 'restitution and Detinue']
['corporations' 'sale of Goods' 'contracts' 'equity'] ['winding Up' 'leave to Proceed Against Company in Liquidation' 'retention of Title Clause' 'passing of Property' 'implied Terms' 'quistclose Trust' 'proprietary Claims' 'restitution and Detinue']

Case Brief

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Procedural Posture

Applications for Leave Under S 500(2) of the Corporations Act 2001 (cth) to Proceed Against a Company in Creditors Voluntary Winding Up / Interlocutory Process Filed on 6 July 2010

Legal Issues

  1. 1 ['Whether leave under s 500(2) of the Corporations Act 2001 (Cth) should be granted to proceed against AQP in liquidation.' 'Whether the proposed proprietary claim to proceeds of on-sales had a solid foundation amounting to a serious question to be tried.' 'Whether a term should be implied into the sale agreements requiring AQP to hold on-sale proceeds in a separate account and on trust for the seller.' 'Whether AQP on-sold the oranges as agent of Toveill or as principal under pre-existing contracts with overseas buyers.' 'Whether the alternative claim for return or account of oranges justified leave or was merely a damages claim suitable for proof in the winding up.']

Ratio Decidendi

Leave under s 500(2) was refused because the proposed proprietary claim to on-sale proceeds did not have a solid foundation amounting to a serious question to be tried. The sale agreement contained a retention of title clause but said nothing about proceeds of on-sale, and the alleged trust term was neither so obvious that it went without saying nor necessary for business efficacy. The course of dealings showed that AQP was expected to on-sell under pre-existing contracts as principal, not as agent or bailee of Toveill, so no fiduciary or Quistclose trust basis was established. The alternative claim for particular oranges would not attract specific restitution for a readily available...

Court Disposition

The applications for leave under s 500(2) were dismissed in both proceedings, with costs payable by the applicants.

Orders

  • ['In each of 2010/143247 and 2010/143245, order that the interlocutory process filed on 6 July 2010 be dismissed.' "In each of 2010/143247 and 2010/143245, order that the applicant under the interlocutory process pay the respondent's costs of the interlocutory process."]