ONE year on from the fall of Carpenter International Pty Ltd (CIPL) over a $20 million failed export deal, the Supreme Court of Victoria has ruled in favour of CIPL on a contentious contract battle which has grinded the company's liquidation to a halt.
Following nine months of deliberation, Justice Joanne Cameron delivered her judgment on a trial between CIPL administrators and three major creditors over the ownership of the cattle.
Administrators, and now CIPL’s liquidators, Grant Thornton Australia (GTA), challenged livestock agents Charles Stewart (CS), Charles Stewart Nash McVilly (CSNM) and Dairy Livestock Services (DLS) over ownership of the cattle, during a three-day court dispute in August 2015.
CIPL went into voluntary administration in March 2015, leaving 11,000 cattle bound for China stranded on agistment in southern NSW, eastern South Australia, Victoria and Tasmania, and at GG Feedlot in Western Victoria.
While the final sale of livestock was completed last week, one year since the company went into administration, the court dispute concerned entitlement to the sale proceeds. The administrator’s August update stated 3,222, of the 10,486, were subject to ownership claims.
The livestock sales of 7,264 head, conducted by facilitating agent DLS, resulted in the realisations of more than $4 million. It is estimated cattle sold from $550 to $1000.
The trial raised concerns about the transaction of livestock, including competing contracts labelled “battle of forms”, the effectiveness of the Personal Property Securities (PPS) registrations and vesting of security interest in personal property.
During the August trial, Barrister Hamish Austin appeared on behalf of the plaintiffs, GTA, and said there were two “duelling” contracts governing the same transaction.
He said there was not a “neat precedent” within the industry that would result in one contract superseding.
Barristers on behalf of the agents disputed ownership of the cattle due to due to del credere (on trust) contracts, and claimed they held a security interest in the cattle.