State Bank of NSW & Anor. v Brown & Ors.

(2001) 38 ACSR 715; [2001] NSWCA 223

NSW Court of Appeal

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Interrogate

Catchwords

1. Corporations
2. › Winding up
3. › Recovery of property
4. › Distribution of recovered property
5. › Advantage to funding creditors
6. › Whether 100% of recovered property should go to funding creditors
7. › Assessment of risk assumed
8. › Whether failure to approach other creditors for funding was a relevant consideration
9. › Companies (NSW) Code 1981, s 450
1. Appeal
2. › Standard of appellate review
3. › Appeal from discretionary judgment
4. › Whether error in exercise of discretion
5. › Whether error materially affected decision
6. › House v The King principles
1. Evidence
2. › Jones v Dunkel inference
3. › Limits of inference from failure to call evidence
4. › Whether positive finding can be based solely on Jones v Dunkel inference
5. › Whether inference must be fairly drawn from other evidence

Quick Take

An award of 100% of recovered property to funding creditors under s 450 of the Companies (NSW) Code (now s 564 Corporations Law) should be rare, but is not precluded even where other creditors were not approached for funding, provided the risk assumed and the modest recovery justify it. Whether all creditors were given an opportunity to contribute is a relevant consideration, but its weight depends on whether the non-funding creditors can demonstrate some realistic prospect that they would have contributed. A Jones v Dunkel inference from failure to call evidence cannot alone sustain a positive finding; it can only support an inference otherwise fairly drawn from other evidence.