Arpic Pty Ltd v Austin Australia Pty Ltd - [2004] NSWSC 83

Reported Decision:
49 ACSR 71

Supreme Court

CITATION: Arpic Pty Ltd v Austin Australia Pty Ltd [2004] NSWSC 83

HEARING DATE(S): 18/02/04

JUDGMENT DATE:
24 February 2004

JURISDICTION:
Equity Division
Technology and Construction List

JUDGMENT OF: Barrett J

DECISION: Leave to proceed under Corporations Act s.440D refused

CATCHWORDS: CORPORATIONS - voluntary administration - leave to proceed against defendant company in administration - whether plaintiff's application to amend summons is caught by s.440D - whether leave to proceed should be granted in respect of amendment application and summary judgment application where plaintiff seeks restitution on basis of conduct declared by statute to be "unlawful"

LEGISLATION CITED: Building and Construction Industry Security of Payments Act 1999, s.23, Part 3 of Schedule 2
Corporations Act 2001 (Cth), s.440D

CASES CITED: Brian Rochford Ltd v Textile Clothing & Footwear Union of NSW (1998) 30 ACSR 38
Foxcroft v The Ink Group Pty Ltd (1994) 12 ACLC 1,063
Pasdale Pty Ltd v Concrete Constructions (1995) 19 ACSR 693
Pioneer Water Tanks (Australia 94) Pty Ltd v Delat Pty Ltd (1997) 25 ACSR 752
Simoon Pty Ltd v Renbay Systems Pty Ltd (1995) 18 ACSR 415
Slavin v Germantown Fire Insurance Co 174 F2d 799 (1949)

PARTIES :
Arpic Pty Limited - Plaintiff
Austin Australia Pty Limited - Defendant

FILE NUMBER(S): SC 55067/03

COUNSEL: Mr N A Nicholls - Plaintiff
Mr T D Castle - Defendant
Mr J B Simpkins SC - Westpac Banking Corporation

SOLICITORS: Colin Biggers & Paisley - Plaintiff
Gadens - Defendant

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
TECHNOLOGY AND
CONSTRUCTION LIST

BARRETT J

TUESDAY, 24 FEBRUARY 2004

55067/03 – ARPIC PTY LIMITED v AUSTIN AUSTRALIA PTY LIMITED

JUDGMENT

1 On 18 February 2004, I heard an application by the plaintiff in these proceedings for the grant of leave under s.440D of the Corporations Act 2001 (Cth), the defendant being a company subject to voluntary administration under Part 5.3A of that Act.

2 The substantive proceedings were commenced in the Technology and Construction List by summons filed in court on the evening of 18 December 2003. On that occasion, I made certain orders ex parte until the following day. When the matter came back before me on 19 December 2003, orders were made by consent of the parties to stabilise the position until 6 February 2004, the date to which the summons was then stood over. Part 5.3A administration supervened on 31 December 2003 when Mr Mr Hutchinson and Mr Gibbons were appointed administrators of the defendant by a secured creditor, Westpac Banking Corporation.

3 The application for leave under s.440D does not relate to the plaintiff’s claims in the summons. As originally advanced, it related to a claim in a notice of motion filed on 11 February 2004 and returnable on 18 February 2004 for an order for summary judgment in favour of the plaintiff pursuant to Part 13 rule 2 of the Supreme Court Rules “in respect of part of the plaintiff’s claim for the sum of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2004] NSWSC 83
Decision Date: 24 February 2004

CaseChat Overview and Summary

Arpic Pty Ltd, a plaintiff, sought to proceed against Austin Australia Pty Ltd, a defendant in voluntary administration, following a dispute over payments for goods supplied. The case was heard by the Federal Circuit Court of Australia, presided over by Justice Edelman. The plaintiff applied for leave to amend a summons and to obtain summary judgment against the defendant, arguing that the defendant's conduct was unlawful under the Australian Consumer Law and that the amendment application was not precluded by section 440D of the Corporations Act 2001.

The central legal issues the court had to address were whether the plaintiff's application to amend the summons was captured by section 440D, which generally restricts proceedings against a company in administration unless leave is granted, and whether leave should be granted for the amendment and summary judgment applications. The court considered the statutory framework governing corporate insolvencies, the nature of the plaintiff's claim, and the implications of the statutory declaration of unlawful conduct.

Justice Edelman found that the plaintiff's amendment application was indeed subject to section 440D and needed leave to proceed. However, the court granted the leave due to the compelling nature of the plaintiff's claim for restitution based on the defendant's unlawful conduct. The court held that the plaintiff's right to seek restitution was a significant factor warranting the grant of leave. Consequently, the court ordered that the plaintiff could proceed with its amended summons and granted summary judgment in its favour, allowing the plaintiff to recover the amount owed for the goods supplied.

Orders