The High Court held that Hilary Fanning’s claim concerning disputed Dana Petroleum shares and their sale proceeds was statute-barred. The ruling resolved a preliminary issue in the liquidation of Money Markets International Stockbrokers Ltd; it did not determine whether Fanning or Consulting and Investment Services Inc. (CIS) owned the shares or proceeds.
The liquidator had asked for directions on whether the proceeds represented client money or client financial instruments. On 5 March 2012, Finlay Geoghegan J. directed that the preliminary question be whether Fanning’s claim was time-barred under the Statute of Limitations 1957. Three other named claimants later ceased their involvement, leaving Fanning as the remaining claimant on that issue.
The judgment records that the disputed sale was said to have been made on 7 September 1998, with the company acting as broker for CIS, the vendor. The company was ordered wound up on 15 March 1999. The liquidator and CIS argued that any claim to the shares was against CIS, outside the liquidation, and that the ordinary six-year limitation period applied. Fanning’s counsel accepted that a claim against CIS would be time-barred, but relied on authorities holding that limitation time does not continue to run for claims against assets within a liquidation once winding up begins.
Fanning also argued that the liquidator’s handling of proceeds from an earlier tranche of Dana shares supported an estoppel over the disputed tranche. The judge found that the evidence did not establish any representation by the liquidator about the second tranche that could create an estoppel. The judgment also noted that the earlier shares had been sold by a client other than CIS, creating a difficulty for an estoppel claim against CIS.
The court concluded that any claim Fanning had to the disputed shares derived from the alleged contract with CIS, not a claim to prove as a creditor in the company’s liquidation. The judgment records evidence that neither the company nor CIS had received payment for the shares and that the purported contract had not been completed. The judge said the cause of action, if any, arose on 7 September 1998, and held the claim statute-barred under the 1957 Act, as amended and extended.
The ruling was confined to that preliminary limitation issue. The judgment expressly stated that it was not deciding the issues raised in the liquidator’s application for directions.