Wily v Rothschild [1999] NSWSC 915

Wily v Rothschild [1999] NSWSC 915

The first transaction failed because the profits from closing out the hedging contracts and the gold bought with those profits were property acquired for the purpose of the venture and were covered by RAL's security. As to the blocked account, the court followed Broad and held that RAL could not hold security over its own indebtedness to AUR, but the second transaction was nevertheless defeated by set off: if it occurred after commencement of winding up, set off operated automatically at commencement; if it occurred before commencement, set off would have been available and the payment did not prefer RAL. There was no evidence that RAL had notice, when receiving the relevant credit, that...

Jurisdiction
Australia
Judgment Date
10 September 1999
Procedural Posture
Corporations Winding Up Application by Liquidator to Set Aside Transactions as Void Against the Liquidator / Judgment After Hearing
Outcome
Plaintiffs' claim dismissed with costs
Legal Topics
['winding Up' 'voidable Preference' 'disposition After Commencement of Winding Up' 'fixed and Floating Charges' 'gold Loan Facility' 'charged Deposits' 'set Off' 'conflicting Precedent']
['corporations' 'insolvency' 'secured Transactions'] ['winding Up' 'voidable Preference' 'disposition After Commencement of Winding Up' 'fixed and Floating Charges' 'gold Loan Facility' 'charged Deposits' 'set Off' 'conflicting Precedent']

Case Brief

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Procedural Posture

Corporations Winding Up Application by Liquidator to Set Aside Transactions as Void Against the Liquidator / Judgment After Hearing

Legal Issues

  1. 1 ['Whether RAL held security over the funds or gold applied to reduce the gold loan facilities.' 'Whether RAL could hold security over the debt represented by the funds in the blocked deposit account.' "Whether a right of set off defeated the liquidator's claims in relation to the second transaction."]

Ratio Decidendi

The first transaction failed because the profits from closing out the hedging contracts and the gold bought with those profits were property acquired for the purpose of the venture and were covered by RAL's security. As to the blocked account, the court followed Broad and held that RAL could not hold security over its own indebtedness to AUR, but the second transaction was nevertheless defeated by set off: if it occurred after commencement of winding up, set off operated automatically at commencement; if it occurred before commencement, set off would have been available and the payment did not prefer RAL. There was no evidence that RAL had notice, when receiving the relevant credit, that...

Court Disposition

Plaintiffs' claim dismissed with costs

Orders

  • ["The plaintiffs' claim is dismissed with costs."]