Bloc (ACT) Pty Ltd v Crafted Capitol Pty Ltd (No 2) - [2021] ACTSC 85

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:	Bloc (ACT) Pty Ltd v Crafted Capitol Pty Ltd (No 2)
Citation:	[2021] ACTSC 85
Hearing Date:	30 April 2021
DecisionDate:	30 April 2021
Before:	Mossop J
Decision:	See [10]
Catchwords:	CORPORATIONS – WINDING UP – Application for an indefinite stay of winding up order made by the court – application made after orders had been entered – offer made by the defendants to pay outstanding judgment debt in full – winding up order is a final order – no statutory basis to discharge order identified – application dismissed
Legislation Cited:	Corporations Act 2001 (Cth), s 482
Cases Cited:	Davis v Insolvency and Trustee Service Australia (No 2) [2011] FCAFC 9; 190 FCR 437
Parties:	Bloc (ACT) Pty Ltd ( Plaintiff) Crafted Capitol Pty Ltd ( First Defendant) Crafted Central Pty Ltd (Second Defendant)
Representation:	Counsel A Greinke ( Plaintiff) P Walker SC ( Defendants)
Solicitors Mills Oakley ( Plaintiff) Terracon Legal ( Defendants)
File Number:	SC 79 of 2021

MOSSOP J:

I gave my judgment in this manner yesterday morning: see Bloc (ACT) Pty Ltd v Crafted Capitol Pty Ltd [2021] ACTSC 81. At the time that I delivered judgment and made orders counsel for the defendants, Mr Walker SC, sought a stay of those orders until 4:00pm this afternoon. The orders that I made have now been taken out.

By an application in proceeding filed today the defendants seek an extension of the stay until further order of the court. They further seek variation of the freezing order made in relation to Crafted Central Pty Ltd (Crafted) so as to permit the whole of the outstanding judgment sum and interest to be paid to the plaintiff, Bloc (ACT) Pty Ltd (Bloc), and an amount of $200,000 to be paid into court pending quantification of a costs order that I made in favour of Bloc. The purpose of the application is identified as being to then apply to the court for a permanent stay of the winding up or seeking orders for its dismissal.

Counsel for the defendants submitted that the stay of the court’s orders was interlocutory and hence able to be varied. Further, he submitted that the liberty that was granted could be used to vary any of the court’s orders and not merely the freezing order which was made for the benefit of the liquidator.

Even before orders have been entered, there are significant limitations upon the capacity for the court to revisit the orders made: see the summary of the principles in Davis v Insolvency and Trustee Service Australia (No 2) [2011] FCAFC 9; 190 FCR 437 at [4] and [6]. The capacity of the court to vary its orders does not permit a party to relitigate issues which have been determined by the judgment. Nor does it permit a party to reopen its case so as to improve its evidentiary position with the hope of obtaining a different result. The position…

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: [2021] ACTSC 85
Decision Date

CaseChat Overview and Summary

Bloc (ACT) Pty Ltd sought an order for the winding up of Crafted Capitol Pty Ltd, a company that owed Bloc a judgment debt. After the court made orders for the winding up, Crafted Capitol and another company, Crafted Central, sought to stay the winding up orders. They also sought to vary the freezing order made in relation to Crafted Central. They sought to use these orders as a means of applying for a permanent stay or dismissal of the winding up order. The court had to determine whether it was appropriate to grant a further stay of the winding up orders, and whether the defendants had a basis to vary the orders.

The court found that the winding up orders were final orders and could not be varied except by consent or under specific statutory authority. The court held that the offer to pay the outstanding judgment debt did not provide a proper basis to discharge the final orders. The court also held that the proposal to have another entity bring an application under s 482 of the Corporations Act could not provide a basis for extending the stay. The court found that the defendants' approach to the proceedings was inconsistent with the finality of litigation, and that it was appropriate for Bloc to be fully indemnified for costs incurred by the application.

The court dismissed the application for a further stay of the winding up orders, and ordered that Crafted Capitol and Crafted Central pay Bloc's costs of the application on an indemnity basis.

Orders