Willmott Growers Group Inc v Willmott Forests Limited (Receivers and Managers Appointed) (In Liquidation) [2013] HCA 51

Willmott Growers Group Inc v Willmott Forests Limited (Receivers and Managers Appointed) (In Liquidation) [2013] HCA 51

Section 568(1) of the Corporations Act 2001 (Cth) permits a liquidator to disclaim leases granted by the company as landlord because each lease is a contract within the meaning of s 568(1)(f); upon exercising that power, and subject to statutory requirements, s 568D(1) operates to terminate the company's rights and liabilities under the lease and necessarily the correlative rights and leasehold estate of the tenant, so the tenant's proprietary interest does not survive disclaimer and the tenant may prove for loss as a creditor in the winding up.

Parties
Appellant: Willmott Growers Group Inc; Respondents: Willmott Forests Limited (Receivers and Managers Appointed) (In Liquidation) in its capacity as manager of the unregistered managed investment schemes listed in Schedule 2 & Ors; Fourth Respondent: Willmott Action Group Inc
Jurisdiction
Australia
Judgment Date
04 December 2013
Procedural Posture
Appeal / Decision on Appeal From Supreme Court of Victoria
Outcome
Appeal dismissed with costs.
Legal Topics
Liquidator's Power of Disclaimer, Disclaimer of Leases, Effect of Disclaimer on Tenants' Proprietary Rights, Winding Up of Companies, Leases as Contracts
Corporations Law Insolvency Law Property Law Liquidator's Power of Disclaimer Disclaimer of Leases Effect of Disclaimer on Tenants' Proprietary Rights Winding Up of Companies Leases as Contracts

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Parties

Willmott Growers Group Inc

Appellant

Willmott Forests Limited (Receivers and Managers Appointed) (In Liquidation) in its capacity as manager of the unregistered managed investment schemes listed in Schedule 2 & Ors

Respondents

Willmott Action Group Inc

Fourth Respondent

Procedural Posture

Appeal / Decision on Appeal From Supreme Court of Victoria

Legal Issues

  1. 1 Whether liquidators appointed to a company have power under s 568(1) of the Corporations Act 2001 (Cth) to disclaim leases granted by the company as lessor to scheme participants
  2. 2 Whether such disclaimer by the liquidator terminates the tenants' estates or proprietary interests in the leased land

Ratio Decidendi

Section 568(1) of the Corporations Act 2001 (Cth) permits a liquidator to disclaim leases granted by the company as landlord because each lease is a contract within the meaning of s 568(1)(f); upon exercising that power, and subject to statutory requirements, s 568D(1) operates to terminate the company's rights and liabilities under the lease and necessarily the correlative rights and leasehold estate of the tenant, so the tenant's proprietary interest does not survive disclaimer and the tenant may prove for loss as a creditor in the winding up.

Court Disposition

Appeal dismissed with costs.

Orders

  • The appeal is dismissed with costs.