FEDERAL COURT OF AUSTRALIA
Bird v McComb (No 3) [2011] FCA 697
Citation: Bird v McComb (No 3) [2011] FCA 697 Parties: SUZANNE CHRISTINE BIRD v JOHN EDMUND MCCOMB, BRIMIN GEM PTY LTD (ACN 056 330 333), SCB HOLDINGS PTY LTD (ACN 085 917 371), CARRIAGES PTY LTD (ACN 063 116 852), NEWTOUN PTY LTD (ACN 006 858 788) and AUSTRAL PACIFIC QUEENSLAND PTY LTD AS TRUSTEE OF THE BM FAMILY TRUST File number: QUD 10 of 2011 Judge: COLLIER J Date of judgment: 20 June 2011 Catchwords: PRACTICE AND PROCEDURE – principles relevant to discharge of Mareva orders – consideration of an application to vary interlocutory restraints made by previous docket Judge so as to enable the defendant companies to borrow monies – interlocutory restraints maintaining status quo pending trial of the action – properties owned by second defendant held subject to terms of deed of trust – failure of plaintiff to enter appearance at previous directions hearing – delay of plaintiff in filing points of claim as previously ordered – whether plaintiff prosecuting litigation with diligence – whether facts materially different from those before previous Judge – defendants subject to call up notices on properties due to orders preventing borrowing monies to fund interest payable on mortgages – orders previously made varying interlocutory restraints – Court’s discretion to discharge previous orders to be exercised with great caution having regard to the importance of the public interest in the finality of litigation Legislation: Corporations Act 2001 (Cth)
Federal Court Rules O 35 r 7Cases cited: Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 cited
Bird v McComb [2011] FCA 129 related
Bird v McComb (No. 2) [2011] FCA 507 related
Charlie Carter Pty Ltd v The Shop, Distributive and Allied Employees’ Association of Western Australia [1987] FCA 10 cited
Greek City Co Ltd v Demetriou (1983) 2 All ER 321 cited
Paras v Public Service Body Head of the Department of Infrastructure (No 2) [2006] FCA 652 cited
Shen v An Ying Group Ltd [2006] NZHC 999 citedDate of hearing: 9 June 2011 Place: Brisbane Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 42 Counsel for the Plaintiff: Mr J Griffin and Mr A Johnson Solicitor for the Plaintiff: Mylne Lawyers Solicitor for the First, Second, Third, Fourth, Fifth and Sixth Defendants: Mr DRW Tucker of Tucker & Cowen
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
QUD 10 of 2011
BETWEEN: SUZANNE CHRISTINE BIRD
PlaintiffAND: JOHN EDMUND MCCOMB
First DefendantBRIMIN GEM PTY LTD (ACN 056 330 333)
Second DefendantSCB HOLDINGS PTY LTD (ACN 085 917 371)
Third DefendantCARRIAGES PTY LTD (ACN 063 116 852)
Fourth DefendantNEWTOUN PTY LTD (ACN 006 858 788)
Fifth DefendantAUSTRAL PACIFIC QUEENSLAND PTY LTD AS TRUSTEE OF THE BM FAMILY TRUST
Sixth Defendant
JUDGE:
COLLIER J
DATE OF ORDER:
20 JUNE 2011
WHERE MADE:
BRISBANE
THE COURT ORDERS THAT:
The notice of motion filed 3 June…
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Details
- AGLC
- Bird v McComb (No 3) [2011] FCA 697
- Case
- [2011] FCA 697
- Decision Date
CaseChat Overview and Summary
The case of Bird v McComb (No 3) involved a dispute between Ms Bird and various defendant companies, primarily concerning the ownership and management of properties and businesses held by these entities. The dispute originated from a de facto relationship that ended in 2005, with subsequent litigation over the management and control of companies that held real property and conducted business activities. Ms Bird sought various orders, including injunctive relief and declarations, to prevent the defendants from dealing with company assets and to rectify the company registers. The defendants, in turn, sought to have the interlocutory orders discharged, arguing that they were preventing the companies from refinancing mortgages and thus suffering financial hardship.
The legal issues before the court included whether the defendants were subject to call-up notices on their properties due to the orders preventing them from borrowing money to fund interest on mortgages, and whether the status quo had changed in favour of the plaintiff. Additionally, the court had to consider whether the facts had materially changed since the previous orders were made, and whether the plaintiff was prosecuting the litigation with due diligence. The defendants argued that the current orders imposed an unjust burden on them, while Ms Bird opposed the discharge of the orders.
The court found that the previous orders made by Greenwood J provided sufficient scope for the defendants to seek variation of the orders in relation to refinancing if necessary. The court did not find that the current circumstances warranted a discharge of the orders, as the defendants had not demonstrated that the balance of convenience had shifted in their favour. The court also noted the importance of the public interest in the finality of litigation, exercising its discretion to discharge previous orders with great caution.
The court dismissed the notice of motion filed by the defendants, maintaining the interlocutory restraints and ordering the parties to seek submissions regarding costs. This decision underscored the importance of considering the broader implications of interlocutory orders and the need for careful consideration of applications to discharge or vary such orders, particularly in cases involving complex business and property interests.
The legal issues before the court included whether the defendants were subject to call-up notices on their properties due to the orders preventing them from borrowing money to fund interest on mortgages, and whether the status quo had changed in favour of the plaintiff. Additionally, the court had to consider whether the facts had materially changed since the previous orders were made, and whether the plaintiff was prosecuting the litigation with due diligence. The defendants argued that the current orders imposed an unjust burden on them, while Ms Bird opposed the discharge of the orders.
The court found that the previous orders made by Greenwood J provided sufficient scope for the defendants to seek variation of the orders in relation to refinancing if necessary. The court did not find that the current circumstances warranted a discharge of the orders, as the defendants had not demonstrated that the balance of convenience had shifted in their favour. The court also noted the importance of the public interest in the finality of litigation, exercising its discretion to discharge previous orders with great caution.
The court dismissed the notice of motion filed by the defendants, maintaining the interlocutory restraints and ordering the parties to seek submissions regarding costs. This decision underscored the importance of considering the broader implications of interlocutory orders and the need for careful consideration of applications to discharge or vary such orders, particularly in cases involving complex business and property interests.
Orders
Orders of the court
The notice of motion filed 3 June 2011 be dismissed.
Note:
Background
Background to the litigation
I am not prepared to discharge the orders of Greenwood J as sought by the defendants, and consider that the appropriate order is to dismiss the notice of motion. My reasons are set out below.Background The background facts to the notice of motion are summarised by Greenwood J in Bird v McComb [2011] FCA 129 and Bird v McComb (No. 2) [2011] FCA 507. Ms Bird and Mr McComb lived in Victoria and Queensland in a de facto relationship for a period of 31 years between 1974 and 2005. During that time Ms Bird and Mr McComb held interests in and conducted particular business activities through a number of proprietary companies limited by shares. It appears that when the de facto relationship ended in 2005, all of the real property in which Ms Bird and Mr McComb held an interest was owned by the various companies in which they held shares, namely the second, third, fourth and fifth defendants. It also appears that each of the defendant companies carried on the business of buying and selling property. Ms Bird continued to receive an income from the second defendant after 2005 in an amount of $1,200 per week, however those payments ceased on 16 March 2009.Orders 1, 2 and 3 made 18 February 2011 By an application filed 19 January 2011 the plaintiff, Ms Bird, sought a variety of orders against the defendants under the Corporations Act 2001 (Cth) including rectification of the registers of the second, third and fourth defendants, declarations as to directorships of the second, third, fourth and fifth defendants, delivery up of books, records and accounts, and, in the alternative, orders for winding up of the second, third, fourth and fifth defendants. Ms Bird also sought interlocutory relief in the nature of:·orders injuncting the defendants from in any manner dealing in the assets, shareholding or change in officers of the second, third, fourth and fifth defendants;·a declaration that, until the hearing of this matter the former shareholdings of the plaintiff are held on trust by the first and second defendants; and·an order that the first defendant disclose to the solicitors for the plaintiff the assets and liabilities of each of the second, third, fourth and fifth defendants. The trial of substantive issues is currently set down for four days commencing 19 July 2011. The hearing in respect of the interlocutory relief sought by Ms Bird was conducted by his Honour on 17 February 2011, with judgment in respect of that interlocutory relief delivered by his Honour on 18 February 2011 (Bird v McComb [2011] FCA 129). In that judgment his Honour noted that the defendants urged upon the Court the proposition that no interlocutory order ought be made which had the effect of preventing the companies from going about the orthodoxy of their business arrangements and in particular the buying and selling of properties owned by each company and the completion of arrangements to refinance several mortgages over properties which had expired. Although the defendants conceded that the affidavit material relied upon by Ms Bird before his Honour made out a prima facie case, as his Honour observed:The real question agitated by the respondents is the prejudice the respondents will suffer if restrained in the manner sought by the applicant plaintiff. (at [38])
Evidence
Evidence Before The Court
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Decision
Reasons for decision
Fifth, the defendants now submit that they are subject to call up notices on the properties due to orders preventing them from borrowing monies to fund the interest payable on the mortgages and that therefore the Mareva orders have changed the status quo in favour of the plaintiff. As I have already noted, his Honour’s orders in February anticipated that the defendants might need to refinance the existing securities, and left open to the defendants the possibility of returning to Court to vary the orders. Indeed, in April his Honour made orders to permitting limited refinancing. I am not satisfied that the current circumstances warrant a discharge of the orders of Greenwood J. Rather, I am satisfied that his Honour’s orders provide scope to the defendants to seek variation of the orders in relation to refinancing, should they so require. Before me they have not done so. They have sought only discharge of his Honour’s orders.Conclusion After the hearing, the defendants forwarded to my chambers formal wording of undertakings they proposed at the hearing should I be prepared to discharge his Honour’s orders. The plaintiff, through Counsel, opposed an order discharging his Honour’s orders notwithstanding the terms of undertakings proposed by the defendants. The plaintiff and the defendants have submitted that they are under significant financial pressures. Mr McComb has submitted that the current orders are forcing him to engage in strategies in respect of the properties which he would prefer to avoid. In the circumstances however I am unable to identify how the current orders impose an unjust burden on the defendants, or that the balance of convenience has shifted such that an order discharging his Honour’s orders of 18 February 2011 and 18 April 2011 is warranted. I will seek submissions from the parties as to costs.
Ratio Decidendi
Legal Principle Established
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