Dennco D H E Pty Ltd, Re [1992] QSC 386

State Reporting Bureau TRANSCRIPT OF PROCEEDINGS (Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Director, State Reporting Bureau.) SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION r' RYAN J ' I \~ No 112 of 1990 IN THE MATTER OF THE COMPANIES (QUEENSLAND) CODE and IN THE MATTER OF THE DENNCO D.H.E. PTY LTD BRISBANE .. DATE 21/10/92 .. JUDGMENT 1 -- 1 of 7 -- ·~.-~~-. -,. -~-. - .. -.. - ---. ~.~----- /'" ,, 211092 HIS HONOUR: I declare the payment of $6,440.60 made by Dennco D.H.E. Pty Ltd in liquidation to H.D.F.I Limited on or about 15 May 1990 is void, and I order the respondent to pay that sum to the applicants. I order the respondent to pay the applicant the costs of and incidental of this application to be taxed, and I publish my reasons. JUDGMENT 2 10 20 0 30 0 40 () 50 60 -- 2 of 7 -- ATTACHMENT C. 2 IN THE SUPREME COURT - ' OF QUEENSLAND APN No. 112 of 1990 Brisbane Before The Hon. Mr. Justice K.W. Ryan [Re: Dennco D.H.E. Pty. Ltd.] IN THE MATTER of the Companies (Queensland) Code - and - IN THE MATTER of the DENNCO D.H.E. PTY. LTD. c c REASONS FOR JUDGMENT - RYAN J. Judgment delivered on 21/10/92 Counsel: Mr. A.M. Daubney for Applicant Mr. J. Logan for Respondent Solicitors: Stubbs Barbeler Grant, Solicitors for Applicant Stephens & Tozer, Solicitors for Respondent Hearing Date: 19/10/92 -- 3 of 7 -- IN THE SUPREME COURT OF QUEENSLAND APN No. 112 of 1990 Brisbane Before The Hon. Mr. Justice K.W. Ryan [Re: Dennco D.H.E. Pty. Ltd.] IN THE MATTER of the Companies (Queensland) Code - and - IN THE MATTER of the DENNCO D.H.E. PTY. LTD. REASONS FOR JUDGMENT - RYAN J. Judgment delivered on 21/10/92 Application has been made by the liquidators of Dennco D.H.E. Pty. Ltd. (In Liquidation) for a declaration that a payment of $6,449.60 made on or about 15 May 1990 to H.D.F.I. Ltd., being a disposition of property of the company made after the commencement of the winding up, is void, and an order that the respondent pay to the applicants that sum. C'' An application for winding up the company was filed on 16 February 1990, and an order for its winding up was made on 20 July 1990. c A cheque dated 15 May 1990 was drawn by the company on its account maintained with the Bank of Queensland payable to the respondent in the sum of $6,449.60. On the same day, a Bank of Queensland bank cheque was made payable to the respondent H.D.F.I. The company had on two previous occasions drawn two cheques on its bank account with Bank of Queensland Ltd. in favour of the respondent, each for the sum of $6,449.60. Upon presentation for -- 4 of 7 -- 2 payment of each cheque on 1 and 10 May 1990 each cheque was dishonoured by the Bank. Section 368 of the Companies (Queensland) Code provides that any disposition of property of the company, other than an exempt disposition, and any transfer of shares or alteration in the status of the members of the company made after the commencement of the winding up by the Court is, unless the Court otherwise orders, void. By s. 365{2) of the Code, the winding up is deemed to have commenced at the time of the filing of the application for the winding up. The answer made by the respondent's solicitor to a claim for repayment of the amount of $6,449.60 was that it had received that payment from the bank drawn against the bank, and that the demand should be made to the bank which had received the company's cheque. It was claimed that it was not a void disposition as the respondent had not received the funds from the company. It is deposed by the Corporate Treasurer of H.D.C. Group Limited of which the respondent is a member that the payment of the sum of $6,449.60 was paid to H.D.F.I. Limited by Dennis & Hughes Enterprises Pty. Ltd. on 15 May 1990. On that day a bank cheque was received from Dennis & Hughes Enterprises Pty. Ltd. It is deposed by a Mr. Weldin, who was at the time Queensland State Manager of H.D.F.I. Ltd., that he recalls that he was told by a representative of Dennis & Hughes Enterprises Pty. Ltd. that a bank cheque for $6,449.60 would be delivered on 15 May. He does not recall being informed that the payment was made by Dennco D.H.E. Pty. Ltd. or on its behalf. (J () 0 -- 5 of 7 -- 3 It is clear from the exhibits to the affidavit of the liquidator that a cheque dated 15 May 1990 was in fact drawn by the company on its account with the Bank payable to the respondent, and that a bank cheque was made on the same day payable to the respondent. The clear inference is that the company's cheque was used to purchase the bank cheque. On the hearing before me it was not contended otherwise. The submission was, as it had been stated earlier by the respondent's solicitor, that there had been no disposition by the company in favour of the respondent. The affidavits filed on behalf of the respondent indicate that in May 1990 Dennis & Hughes Enterprises Pty. Ltd. was indebted to the respondent in the sum of $6,449.60, and that the respondent was unaware that the bank cheque was provided to them from funds of the company rather than the debtor. The question is whether the disposition made by the company was one to the Bank of Queensland or to the respondent. In Re Mal Barnes Electrical Centre Pty. Ltd. (In Liquidation) [ 197 4] 1 NSWLR 254, a demand was made by a liquidator on a bank for an amount which had been paid out of the account of a company by the bank on cheques drawn by the company. The payments out of the account had been made after a petition had been presented for the winding up of the company. It was held by Street C.J. in Eq. that s. 227 of the Companies Act 1961 (NSW), which corresponds to s. 368 of the Companies (Queensland) Code operated to render a disposition void so far as concerned the disponee. It did not operate to affect agencies such as a bank interposing between the company as disponer and the recipient of the property as disponee. -- 6 of 7 -- - ------------·--·-· ----- ' c 4 In the instant case, the issuing of a bank cheque was, in my opinion, simply machinery by which a disposition was made by the company of its property in favour of the respondent. It transferred money it owned to the respondent by using money in its account with the bank to purchase a bank cheque which was payable to the respondent. That amounted to a disposition of property by the company to the respondent, and that disposition was avoided by s. 368 of the Companies Code. I declare that the payment of $6,449.60 made by Dennco C) D.H.E. Pty. Ltd. (In Liquidation) to H.D.F.I. Ltd. on or about 15 May 1990 is void, and I order the respondent to pay that sum to the applicants. 0 I order the respondent to pay the applicants' costs of and incidental to this application to be taxed. 0 () -- 7 of 7 --