A1 Chemicals Pty Ltd v Loremo Pty Ltd

[2015] NSWCA 309

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:	A1 Chemicals Pty Ltd v Loremo Pty Ltd [2015] NSWCA 309
Hearing dates:	2 September 2015
Date of orders:	02 September 2015
Decision date:	02 September 2015
Before:	Ward JA
Decision:	1.   On the undertaking of the Appellant’s solicitor to pay the requisite filing fees, give leave for the filing in Court of its Motion dated 2 September 2015. 2.   Grant leave for the filing in Court of the Affidavit of Hamish McLeod dated 1 September 2015. 3.   Grant leave for the filing in Court of the Affidavit of Atanaan Ilango dated 2 September 2015. 4.   Dismiss the Appellant’s Notice of Motion, with costs.
Category:	Procedural and other rulings
Parties:	A1 Chemicals Pty Ltd (Appellant) Loremo Pty Ltd (First Respondent) Hampic Pty Ltd (Second Respondent)
Representation:	Counsel: Mr G Miller QC (Appellant) Mr J Zmood (First and Second Respondents)   Solicitors: Mercantile Legal Services (Appellant)
File Number(s):	2015/00206147
Publication restriction:	Nil
Decision under appeal	Court or tribunal: District Court of New South Wales Jurisdiction: Civil Citation: [2015] NSWDC 159 Date of Decision: 19 June 2015 Before: Balla DCJ File Number(s): 2013/310377

Judgment

1. WARD JA: This is an application that is brought before me by notice of motion filed in court, by my leave, today by A1 Chemicals Pty Limited (the appellant). In effect what the appellant seeks is a variation of orders that I made when the matter proceeded on a similarly urgent basis on 12 August 2015 in order to allow the appellant a further week to provide an unconditional bank guarantee in terms suitable to the respondents in lieu of payment into court.

2. I will not go into the background of the application. That is set out in my ex-tempore reasons of 12 August 2015. What I ordered on that day was that, subject to compliance within a set period of time with a condition for the payment into court of the amount the subject of the statutory demand, execution of the District Court judgment on which the respondents’ statutory demand was based be stayed pending the determination of the appeal that had been filed on 12 August 2015 in relation to that District Court judgment. The stay was to become effective immediately on compliance with the condition for payment into court pursuant to O 2 of the orders that I made on that occasion.

3. The position, as the appellant would have no doubt been aware, from 12 August 2015 to date has therefore been that there is no stay of the judgment at this stage because there has been no compliance with the condition upon which an order was made for the operation of the stay.

4. I gave liberty to the appellant to apply on two business days’ notice to vary the terms of O 1 to provide for the provision of an unconditional bank guarantee (which was, I emphasise, to be in terms satisfactory to the respondents) in lieu of payment into court as provided for in O 1.

5. What has since happened is, at least in part, set out in an affidavit of Mr McLeod, the solicitor for the appellant. That affidavit, sworn 1 September 2015, was filed in court by my leave. It would appear that in the period from the making of the orders on 12 August 2015 and today there have been negotiations by a director of the appellant with the ANZ Bank in relation to the request for provision of an unconditional bank guarantee and Mr McLeod has become directly involved from towards the end of August 2015 in negotiations with the bank and/or solicitors for a third party in an attempt to procure such a bank guarantee.

6. Mr McLeod gave some brief oral evidence today in which he referred to various “indications” that had been given by the bank and/or by a caveator of one of the properties sought to be put forward to the bank as security for the provision of the bank guarantee, but the position remains that as at nearly 1pm on 2 September 2015 there has been no payment into court and there is no certainty, or commitment on the part of the bank (as far as I can see, on the material that has been put forward) to provide an unconditional bank guarantee. There has also been no attempt to ascertain whether the terms of any such guarantee would be acceptable to the respondents.

7. The respondents have filed in court today, in anticipation of the appellant’s application (that having been foreshadowed in an email that may or may not have been correctly described by counsel for the respondents as delphic) an affidavit that raises matters which it is submitted have put the respondents on notice that there may be an issue as to the solvency of the appellant.

8. I am not in a position to make any comment in relation to that and the appellant, for obvious reasons, has not been in a position to respond to the affidavit, although I note that the appellant appears to have chosen not to respond to requests for provision of documentation that would establish its solvency which were made as early as around 13 August 2015 by the respondents.

9. It is not suggested that the existence of a stay is a matter that will be conclusive or determinative one way or the other of the application by the appellant in the Corporations List to set aside the respondents’ statutory demand, which application is, I understand before the Court tomorrow and may or may not be dealt with tomorrow.

10. It is submitted by the respondents that the Court should not exercise discretion to vary the orders in circumstances where there is no certainty in relation to the position of the solvency of the company and where there has been, it is submitted, no candour in the description of solvency of the appellant in the correspondence between the parties.

11. On the last occasion there were detailed submissions put forward by the respondents as to why it was in the exercise of the Court’s discretion that no stay should be granted. Those included submissions as to there being no real prospects of success. I did not on the last occasion address those in any detail and I do not propose to do so now.

12. Nevertheless, in circumstances where the appellant has had three weeks in effect to get its house in order in relation to the provision of security for the judgment debt, either by way of payment into court of that amount or by an unconditional bank guarantee (subject to obtaining an order varying the order that I made on the last occasion), and where there is still no objective certainty as to whether and when, if at all, an unconditional bank guarantee in terms satisfactory to the respondents will be provided, and where I am not persuaded that this will be a matter that will necessarily be determinative against the appellant of its application to set aside the statutory demand, I am not persuaded to exercise the discretion to vary the orders that were made on the last occasion.

13. The appellant’s notice of motion is dismissed with costs.

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Decision last updated: 30 September 2015