Bell v Neil Raymond Cribb as Liquidator of Costanoza Pty Ltd (in Liq) [No 2]
[2013] WASC 104
•27 MARCH 2013
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: BELL -v- NEIL RAYMOND CRIBB AS LIQUIDATOR OF COSTANOZA PTY LTD (IN LIQ) [No 2] [2013] WASC 104
CORAM: BEECH J
HEARD: 15 & 17 JANUARY 2013, 21 & 26 MARCH 2013
DELIVERED : 26 MARCH 2013
PUBLISHED : 27 MARCH 2013
FILE NO/S: CIV 1697 of 2012
BETWEEN: CARL WILLIAM BELL
First Plaintiff
ALLCERT HOLDINGS PTY LTD AS TRUSTEE FOR THE W J TRUST TRADING AS TWIN STAR RESOURCES
Second PlaintiffAND
NEIL RAYMOND CRIBB AS LIQUIDATOR OF COSTANOZA PTY LTD (IN LIQ)
First DefendantWATER CORPORATION
Second DefendantCOSTANOZA PTY LTD (IN LIQ)
Third DefendantMAURICE JAMES CUTTS
Fourth Defendant(BY ORIGINAL ACTION)
NEIL RAYMOND CRIBB AS LIQUIDATOR OF COSTANOZA PTY LTD (IN LIQ)
First Plaintiff (by counterclaim)COSTANOZA PTY LTD (IN LIQ)
Second Plaintiff (by counterclaim)AND
CARL WILLIAM BELL
First Defendant (by counterclaim)ALLCERT HOLDINGS PTY LTD AS TRUSTEE FOR THE W J TRUST TRADING AS TWIN STAR RESOURCES
Second Defendant (by counterclaim)ACCEPT ENTERPRISES PTY LTD
Third Defendant (by counterclaim)(BY COUNTERCLAIM)
Catchwords:
Practice and procedure - Summary judgment - Application for summary judgment on counterclaim - Effect of bankruptcy of a party - Whether any arguable defence to counterclaims - Turns on own facts
Legislation:
Bankruptcy Act 1966 (Cth), s 60(2), s 60(3)
Corporations Act 2001 (Cth), s 588FB, s 588FG
Result:
Summary judgment and default judgment entered
Category: B
Representation:
Original Action
Counsel:
First Plaintiff : In person
Second Plaintiff : No appearance
First Defendant : Mr K L Christensen
Second Defendant : No appearance
Third Defendant : Mr K L Christensen
Fourth Defendant : No appearance
Solicitors:
First Plaintiff : In person
Second Plaintiff : No appearance
First Defendant : Gadens Lawyers
Second Defendant : No appearance
Third Defendant : Gadens Lawyers
Fourth Defendant : No appearance
Counterclaim
Counsel:
First Plaintiff (by counterclaim) : Mr K L Christensen
Second Plaintiff (by counterclaim) : Mr K L Christensen
First Defendant (by counterclaim) : In person
Second Defendant (by counterclaim) : No appearance
Third Defendant (by counterclaim) : No appearance
Solicitors:
First Plaintiff (by counterclaim) : Gadens Lawyers
Second Plaintiff (by counterclaim) : Gadens Lawyers
First Defendant (by counterclaim) : In person
Second Defendant (by counterclaim) : No appearance
Third Defendant (by counterclaim) : No appearance
Case(s) referred to in judgment(s):
Bell v Cribb [2013] WASC 32
BEECH J:
Introduction
These are my reasons for making orders on 26 March 2013.
These reasons should be read with my earlier reasons in Bell v Cribb [2013] WASC 32. I will use the terminology explained in those reasons. In that case, I outlined the applications that had been made by the Liquidator. I also explained that a sequestration order, making Mr Bell bankrupt, had been made on 15 January 2013. Consequently, on 17 January 2013 I ordered that the Liquidator's application for summary judgment in relation to the Allcert Vehicles and his application for a default judgment in relation to the Accept Vehicles be adjourned. On 8 February 2013 I also ordered that the action be stayed under s 60(2) of the Bankruptcy Act 1966 (Cth) until the trustee in Mr Bell's bankruptcy made an election to prosecute or discontinue the action pursuant to s 60(3) of the Bankruptcy Act.
Since then, Mr Bell's trustee in bankruptcy, the Official Trustee, elected under s 60(3) to discontinue the action (see attachment FX17 of Fei Fei Xue's affidavit of 18 March 2013). Consequently, on 26 March 2013 I made orders discontinuing the action by Mr Bell as first plaintiff.
The position of the trustee in bankruptcy
The trustee in bankruptcy did not appear on 26 March 2013.
Mr Bell submitted on 26 March 2013 that the proceedings should be adjourned because the Official Trustee had failed to appear in court, and to enable Mr Bell to speak with the Official Trustee. For reasons I gave orally, I rejected that application.
Contrary to Mr Bell's submission, the court did not order that the Liquidator arrange for the trustee in bankruptcy to appear in court.
The purpose of the adjournment of the Liquidator's applications in January 2013 was to allow Mr Bell's trustee in bankruptcy an opportunity to be heard in relation to the Allcert Vehicles and the Accept Vehicles. That was because, although those vehicles were in the names of those companies, it may be that pursuant to the Repayment Arrangement or otherwise, the trustee in bankruptcy claims some entitlement in relation to those vehicles: Bell v Cribb [56].
It is evident from the correspondence attached to the affidavit of Fei Fei Xue of 18 March 2013 that the Official Trustee has been asked, more than once, whether he intends to participate in the proceedings.
The Official Trustee has been given ample opportunity to participate, including by the adjournment from 21 March 2013 to 26 March 2013. By letter of 25 March 2013, the Official Trustee advised that he neither consented nor objected to the orders sought by the Liquidator, and did not seek an adjournment (see attachment NS2 to Nerida Smith's affidavit of 25 March 2013).
Further, Mr Bell has had ample opportunity to speak to the trustee in bankruptcy in the past weeks, should he have wished to do so.
Accordingly, on 26 March 2013, it was appropriate to resolve the Liquidator's applications that were adjourned after argument had been completed in January 2013.
The bankruptcy
Mr Bell asserts that his bankruptcy is under appeal and that he is not a bankrupt. I reject that assertion. The sequestration order remains in force, rendering Mr Bell a bankrupt, unless and until an order is made discharging or staying it. The lodging of an appeal does not affect the operation of the sequestration order.
The unrepresented companies
The companies which are the defendants to the Liquidator's counterclaims, Allcert Holdings Pty Ltd and Accept Enterprises Pty Ltd, are not represented by solicitors and have not filed any documents through solicitors. See, in this regard, Bell v Cribb [73] ‑ [74].
Summary judgment: principles
I refer to the principles outlined in Bell v Cribb [49].
Allcert Vehicles
The Liquidator seeks summary judgment on his counterclaim for the Allcert Vehicles.
The Liquidator accepts, rightly in my opinion, that his application for summary judgment must proceed on the basis of the facts put forward by Mr Bell. In other words, that application proceeds on the assumption that the Repayment Arrangement (as described in Bell v Cribb [8]) occurred.
There is undisputed evidence that:
(a)the Allcert Vehicles, which are some of the vehicles the subject of the Repayment Arrangement, were transferred from Costanoza to Allcert (see Neil Cribb's affidavit of 28 September 2012, pages 709 ‑ 724 and the evidence identified in the Liquidator's table of evidence of 15 January 2013);
(b)Costanoza did not owe any debts to Mr Bell, or to his related entities including Allcert and Accept (Neil Cribb's affidavit of 28 September 2012 [86]);
(c)neither Mr Bell nor Allcert ever paid any money or other consideration to Costanoza in respect of the transfer (Michael Edmondson's affidavit of 19 December 2012 [8]).
In my view, the conclusion is overwhelming that the transfer of these vehicles from Costanoza to Allcert was an uncommercial transaction under s 588FB of the Corporations Act 2001 (Cth). Costanoza suffered the detriment of losing the ownership of the vehicles for no consideration. It received no benefit from the transfer. The loan the subject of the Repayment Arrangement was a loan between Mr Bell and Mr Cutts. There is no evidence that the discharge of that loan provided any benefit to Costanoza.
As I concluded in Bell v Cribb [69], in my view the evidence establishes that by no later than September 2011, Costanoza was insolvent.
There is no evidence to give rise to any arguable defence on the part of Allcert under s 588FG of the Corporations Act.
For these reasons, I granted summary judgment on the Liquidator's counterclaim in relation to the Allcert Vehicles.
Accept Vehicles
The Liquidator seeks default judgment against Accept in relation to his counterclaim. No appearance or defence has been filed by Accept as a defendant to this counterclaim.
Consequently, it is not necessary for the Liquidator to prove that there is no triable issue in relation to his counterclaim. In any event, for reasons that correspond with those just given in relation to the Allcert Vehicles, I discern no triable issue in relation to this claim.
For these reasons, I entered default judgment in relation to the Accept Vehicles.
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