Pilmer & Ors v Hih Casualty & General Insurance Limited & Ors (No 2)

(2004) 90 SASR 465; [2004] SASC 389

Supreme Court of South Australia

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Catchwords

1. Corporations
2. › Winding up
3. › Disposition of property after commencement of winding up
4. › Money paid into court by company before winding up order
5. › Whether money in court is 'property of the company'
6. › Whether payment out constitutes void disposition
7. › Corporations Act 2001 (Cth), s 468(1), s 468(4)
1. Corporations
2. › Winding up
3. › Disposition of property after commencement of winding up
4. › Discretion to validate void disposition
5. › Relevant considerations
6. › Whether court should validate disposition in circumstances where company wrongly denied liability and asserted solvency
7. › Corporations Act 2001 (Cth), s 468(1)
1. Practice and Procedure
2. › Money paid into court
3. › Nature of interest in money paid into court
4. › Whether party paying money into court retains legal or equitable interest
5. › Position of other party as secured creditor
6. › Supreme Court Act 1935 (SA), s 119

Quick Take

Money paid into court by a company before the commencement of winding up is not 'property of the company' for the purposes of s 468 of the Corporations Act 2001 (Cth), and payment out to the party for whose benefit it was paid in does not constitute a void disposition. The party for whose benefit money is paid into court is in the nature of a secured creditor. Even if the money were property of the company, the court has a wide discretion to validate the disposition, and relevant factors include the company's prior assertions of solvency, wrongful denial of liability, the purpose of the payment in as security, and the good faith of the parties.