Bellama Pty Ltd v Timms

Supreme Court of South Australia
(Civil)
BELLAMA PTY LTD v TIMMS
[2008] SASC 18
Judgment of The Honourable Justice Debelle (ex tempore)
18 January 2008
APPEAL AND NEW TRIAL - APPEAL - PRACTICE AND PROCEDURE - SOUTH AUSTRALIA - EXTENSION OF TIME FOR APPEAL
Statutory demand – application to set aside statutory demand – Master ordered statutory demand be set aside – appeal again Master’s order – application for extension of time for setting down of appeal – application to wind up a company with close financial ties to plaintiff is being heard and determined by this court – appeal would be futile if winding up order was made against company with close financial ties – extension of time granted.
Corporations Act 2001 (Cth) s 459H, referred to.

BELLAMA PTY LTD v TIMMS
[2008] SASC 18
Civil

DEBELLE J: On 4 January 2007 the applicant, Mr Timms, served on the respondent, Bellama Pty Ltd, a statutory demand for $667,956.92. On 23 January 2007 Bellama Pty Ltd applied for an order pursuant to s 459H of the Corporations Act2001 that there was a genuine dispute about the existence of the debt. On 26 June 2007 a Master of this Court ordered that the statutory demand be set aside.
Mr Timms has appealed against that order. The appeal has not yet been set down for hearing. The appellant has applied for an order extending the time for setting down the appeal. The application is made on the following grounds:
1That Bellama Pty Ltd is a company with close financial ties to a company called Della Plus Pty Ltd.
2That an application to wind up Della Plus Pty Ltd is being heard and determined by this Court.
3That it would be futile and a waste of resources if this appeal were to proceed and an order were to be made winding up Della Plus Pty Ltd.
The gravamen of the application is that it would be pointless for Mr Timms to incur the cost of an appeal if Della Plus Pty Ltd were to be wound up with a consequence that there would be no assets in Bellama Pty Ltd against which he could recover if he were to succeed on his appeal. However, he intends to appeal if Della Plus Pty Ltd is not wound up.
I am satisfied that the financial affairs of Bellama Pty Ltd are sufficiently closely linked to those of Della Plus Pty Ltd to justify an order being made. The companies have common directors and common shareholders.
I am further satisfied it would be futile for Mr Timms to proceed in this appeal if Della Plus Pty Ltd is, in fact, wound up. I am also satisfied that it is proper to extend the time within which to set down the appeal. At the same time Bellama Pty Ltd is entitled to a degree of certainty as to the future and as to the ultimate disposition of this appeal.
I will therefore make an order extending the time within which Mr Timms may set down the appeal. That will be to a time 21 days after the determination of the application to wind up Della Plus Pty Ltd. In case that application is not prosecuted with reasonable expedition or in the event that it is necessary for this appeal to be brought on for hearing, Bellama Pty Ltd should be at liberty to bring this application on for further consideration. It will have liberty to apply to do so.
I am further disposed to make this application because there is no prejudice to Bellama Pty Ltd. It has an order of the court in its favour and it only awaits the outcome of the appeal if that appeal will in the event, proceed.
There will therefore be orders as follows:
1That the time for setting down this appeal be extended until 21 days after the determination at first instance of the application in the action in this Court No 55 of 2007 to wind up Della Plus Pty Ltd.
2The expression ‘At first instance’ in paragraph 1 means the determination of the primary judicial officer.
3Liberty to either party to apply on short notice.
4The costs of and incidental to this application will be costs in the appeal.

Bellama Pty Ltd, a plaintiff, appealed against the decision of a Master to set aside a statutory demand issued against Timms, the defendant. The dispute was heard in the Supreme Court of South Australia, where the primary focus was on the procedural aspects of the appeal, particularly the timeliness of the application for an extension of time for setting down the appeal. The case arose out of a statutory demand issued by Bellama against Timms, which was subsequently set aside by the Master. Bellama sought to appeal this decision and applied for an extension of time to set down the appeal, arguing that the appeal would be futile if a winding up order was made against a company with close financial ties to Timms.

The legal issues before the court were twofold: firstly, whether the Master's decision to set aside the statutory demand was correct, and secondly, whether the appeal was timely and, if not, whether an extension of time should be granted. The court was required to consider the procedural rules governing appeals and the specific circumstances that justified an extension of time. The primary consideration was the potential futility of the appeal if a winding up order was made against a company closely linked to the defendant.

In its reasoning, the court noted that the Master's decision to set aside the statutory demand was a procedural matter that could be reviewed on appeal. However, the court emphasised the importance of procedural timeliness in the context of appeals. Given that another court was simultaneously hearing an application to wind up a company with close financial ties to Timms, the court recognised that the outcome of that application could render the appeal futile. Consequently, the court granted the application for an extension of time, finding that the circumstances justified the delay in setting down the appeal. This decision was based on the potential impact of the pending winding up application on the substantive merits of the appeal.

The court's final orders included granting the extension of time for setting down the appeal and leaving open the substantive merits of the appeal against the Master's decision to set aside the statutory demand. The court recognised the importance of ensuring that appeals are not rendered futile by concurrent proceedings and that procedural fairness is maintained in such complex situations.

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