Brookside Management Pty Ltd v Richardson
[2002] WASC 9
BROOKSIDE MANAGEMENT PTY LTD -v- RICHARDSON & ANOR [2002] WASC 9
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2002] WASC 9 | |
| Case No: | COR:419/2001 | 4 JANUARY 2002 | |
| Coram: | PULLIN J | 4/01/02 | |
| 9 | Judgment Part: | 1 of 1 | |
| Result: | Application for stay dismissed | ||
| B | |||
| PDF Version |
| Parties: | BROOKSIDE MANAGEMENT PTY LTD (ACN 092 706 057) MICHAEL BRYAN RICHARDSON DIANE ELIZABETH RICHARDSON |
Catchwords: | Procedure Application for a stay of Master's order Turns on own facts |
Legislation: | Corporations Act 2001, s 459G Corporations Law, s 459H1(a), s459H1(b) Property Law Act, s 9 Supreme Court Rules, O 47 r 13, O 63 r 15 |
Case References: | Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685 Croney v Nand (1999) 2 Qd R 342 Edge Technology Pty Ltd v Lite-On Technology Corporation (2000) 18 ACLC 576 Federal Commissioner of Taxation v Myer Emporium Ltd [No 1] (1986) 160 CLR 220 Hoyt's Proprietary Ltd v Spencer (1919) 27 CLR 133 Hume v Maher, unreported; SCt of WA (Murray J); Library No 980643; 29 October 1998 Nil |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
and
BROOKSIDE MANAGEMENT PTY LTD
(ACN 092 706 057)
BETWEEN : BROOKSIDE MANAGEMENT PTY LTD (ACN 092 706 057)
- Applicant
AND
MICHAEL BRYAN RICHARDSON
DIANE ELIZABETH RICHARDSON
Respondents
Catchwords:
Procedure - Application for a stay of Master's order - Turns on own facts
(Page 2)
Legislation:
Corporations Act 2001, s 459G
Corporations Law, s 459H1(a), s459H1(b)
Property Law Act, s 9
Supreme Court Rules, O 47 r 13, O 63 r 15
Result:
Application for stay dismissed
Category: B
Representation:
Counsel:
Applicant : Mr D P Nolan
Respondents : Mr A J Aristei
Solicitors:
Applicant : Wojtowicz Kelly
Respondents : Ian K Campbell
Case(s) referred to in judgment(s):
Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685
Croney v Nand (1999) 2 Qd R 342
Edge Technology Pty Ltd v Lite-On Technology Corporation (2000) 18 ACLC 576
Federal Commissioner of Taxation v Myer Emporium Ltd [No 1] (1986) 160 CLR 220
Hoyt's Proprietary Ltd v Spencer (1919) 27 CLR 133
Hume v Maher, unreported; SCt of WA (Murray J); Library No 980643; 29 October 1998
Case(s) also cited:
Nil
(Page 3)
1 PULLIN J: This is an application to stay the effect of the decision of Master Sanderson, who declined to set aside a statutory demand served on the applicant in these proceedings. The application to the Master was made under s 459G of the Corporations Act 2001.
2 The applicant contended that a genuine dispute or offsetting claim existed which afforded grounds for the Master setting aside the statutory demand. If an offsetting claim existed or there was a genuine dispute, then it had to be shown before the Master that the claim or dispute was one which the applicant raised in good faith and was not fictitious or merely colourable. See Edge Technology Pty Ltd v Lite-On Technology Corporation (2000) 18 ACLC 576. The demand by the respondent in this case was based on a deed dated 1 May 2001, which provided in covenant 2(a) as follows:
"In consideration of the Creditor agreeing to advance the Debt on the Commencement Date, the Debtor as beneficial owner and as trustee of any trust:
(i) acknowledges that the Debtor is indebted to the Creditor in the sum of the Debt; …"
3 Covenant 3 provided as follows:
"The debtor covenants and agrees that:
…
(b) the Debtor shall pay to the Creditor the whole of the Money Secured without any right of deduction or set-off on or before the Repayment Date or the sale of the Charged Property, whichever is the earlier in time;"
4 The "Debt" was defined to mean the sum of $100,000; the "Money Secured" was defined to mean the aggregate of the Debt and Interest and other items; the "Repayment Date" was defined to mean a date six months in time from the Commencement Date unless varied by mutual agreement by the parties; and the "Commencement Date" was defined to mean the date of settlement of the Charged Property as purchased jointly by the Debtor and the Creditor.
5 The Charged Property is a property at 149 Bussell Highway, Busselton. In an affidavit sworn by John Rodney Murfitt, the deponent said:
(Page 4)
- "In or about December 2000, the Company was presented with a proposal concerning the Property by Mr Michael Brian Richardson ('Mr Richardson'). Mr Richardson was associated with the selling agent for the Property and is a licensed real estate agent."
6 Paragraph 8 of the affidavit said:
"The initial discussions concerning the Property were between Mr Richard Trainer and myself on behalf of the Company, and Mr Richardson. Mr Trainer was a former director of the Company and was subsequently engaged as a consultant concerning the Property."
7 Paragraph 9 reads:
"Mr Richardson advised myself and Mr Trainer in a meeting in Margaret River in December 2000 that the Property was undervalued and that he had a tenant ready to take over part of the property at a higher rent."
8 It is said that these things induced the company to purchase the property jointly with Mr Richardson and his wife. The allegations about the representations, about the value, and about the existence of a tenant, are not said to be false representations giving rise to any claim for damages. It was explained by counsel for the applicant that these facts were merely background material.
9 Paragraph 16 of Mr Murfitt's affidavit says:
"As it was not intended that the Company would contribute any of its own funds to the purchase, but would have the purchase entirely financed, the Company did not wish to proceed with the purchase."
10 That is not satisfactory evidence because it does not say who held the intention. If it is supposed to be a reference to the intention of the company, then the fact that the company did not wish to proceed with the purchase would have been of no relevance. In any event, this aspect does not seem to be the foundation for the complaint made by the applicant in these proceedings.
11 The affidavit continues in par 17:
(Page 5)
- "Mr and Mrs Richardson wished to proceed with the purchase and presented proposals to the Company to enable settlement to proceed by either purchasing all of the shares in the Company, or by providing funds to the Company to enable settlement to proceed."
12 Paragraph 18 reads:
"The Company and Mr and Mrs Richardson were ultimately unable to reach any agreement on the proposal that they purchase the shares in the Company."
13 And par 19 reads:
"Mr Richardson subsequently advised Mr Trainer and myself that they would contribute $200,000.00 towards the purchase price and obtain finance for $400,000.00 to enable settlement to occur. Mr Richardson also informed Mr Trainer that upon settlement occurring, they would immediately refinance the Property to reflect the original intention of the Property being 100% financed and it would also commence application for the Property to be strata-titled. The Company agreed to settle on this basis."
14 Paragraph 20 reads:
"Accordingly on 1 May 2001, settlement of the sale of the Property occurred. Finance in the sum of $400,000.00 was obtained from BankWest in the joint names of the Company and Mr and Mrs Richardson to assist in the purchase of the Property."
15 And it is said in par 21:
"Subsequent to the settlement of the purchase of the Property, Mr Richardson has failed to attempt to refinance the Property, and has made no application for strata title. Upon Mr Richardson's failure to attend to these matters, Mr Richard Trainer on behalf of the Company requested that the Property be put to the market and sold. Despite numerous requests, Mr Richardson has refused to do so."
16 The affidavit, in par 22, then deposes to the fact that the company executed the deed, which I have referred to earlier and which is dated
(Page 6)
- 1 May 2001. It is to be noted that the solicitors for the company prepared this document and proffered it to Mr and Mrs Richardson to sign. Paragraph 22 of the Murfitt affidavit reads:
" … This document has never been delivered to the Richardsons as Mr Richardson did not perform his obligations as described in the preceding paragraph."
18 Paragraph 23 reads:
"The Acknowledgment of Debt does not describe the terms of repayment of the debt. This is because it was not intended that the moneys would be repayable until either the Property was refinanced or the Property was ultimately sold. It was never intended that the moneys would be repayable whilst we continued to be joint tenants of the Property."
19 There is again a real difficulty with this paragraph, which states that somebody had an intention. It does not disclose that it was the intention of both parties, or of one or the other. In submissions, counsel for the applicant said that it was inserted to reflect the effect of what was set out in par 19 and which I have quoted above. In my view, par 19 does not contain an agreement of the kind which is said to be found in par 23.
20 Similar facts were deposed to in an affidavit of Mr Trainer, which was also filed in the proceedings before the Master.
21 The Master dismissed the application under s 459G. No reasons for decision are on the file, and neither of the parties have produced a note of the reasons, but I have been informed by counsel appearing before me today that the Master's reasons for dismissing the application were because of the existence of the acknowledgment of the debt and the provisions that I have quoted from it above and the fact that there was no genuine dispute. There was no genuine dispute because the alleged oral agreement which is said to contradict the terms of the deed would not stand against the written agreement so as to raise any genuine dispute.
22 During submissions, I asked counsel for the applicant to identify exactly what the oral agreement was which would have altered the obligation to make payment under the deed. Counsel said that there was a condition that the Richardsons would apply for the property to be
(Page 7)
- refinanced and to be strata-titled, and that the moneys would not be repayable until the property was refinanced or the property was ultimately sold. It was said by counsel for the applicant that this is based on par 23 of Mr Murfitt's affidavit.
23 As I have explained, par 23 of Mr Murfitt's affidavit is in the form of a submission and contains no admissible evidence. Paragraph 19 of Mr Murfitt's affidavit, which is said to contain the evidence to support the submissions in par 23, does not, in my opinion, contain any condition of the sort which counsel submitted existed.
24 I am informed also that the Master said that the collateral agreement which was said to have been set up would, in any event, not be enforceable because of Hoyt's Proprietary Ltd v Spencer (1919) 27 CLR 133. I agree that the condition contended for would contradict the plain terms of the deed, which I have already referred to.
25 The grounds of appeal which the applicant wishes to advance are that the learned Master erred, first, in not taking into account, or giving sufficient weight to, the evidence set out in pars 19, 20, 21, 22, 23 and 24 of the affidavit of Mr Murfitt, sworn 27 November 2001, which evidence raised a dispute and/or offsetting claim of the types contemplated in s 459H1(a) and/or (b) of the CorporationsLaw. There is a second ground, which says that the Master erred in not taking account of, or giving sufficient weight to, the evidence set out in pars 19, 20, 21, 22, 23 and 24 of the affidavit of Mr Trainer, sworn 27 November 2001, which evidence raised a dispute and/or offsetting claim of the types contemplated in section 459H1(a) and/or (b) of the Corporations Law. The third ground is that the Master erred in his interpretation of the written agreement dated 1 May 2001 entered into between the applicant and the respondents, when such interpretation was not consistent with the evidence raised by the applicant in regard to the terms of the agreement.
26 In considering whether or not a stay should be granted, it is first necessary to identify the jurisdiction of the court to order a stay. There are three sources of jurisdiction: First O 47 r 13; secondly, O 63 r 15; and thirdly, the court has an inherent jurisdiction to stay proceedings or orders in appropriate circumstances.
27 Counsel for the applicant submitted that I only had to consider the relative advantages and disadvantages to the parties in granting or not granting the stay, in deciding whether to grant the stay - in other words, whether or not the balance of convenience favoured the applicant - and it
(Page 8)
- was said that the circumstances favour the applicant because if an order is not made staying the effect of the Master's order, then the result will be that a winding-up order will be made based upon the non-compliance with the statutory demand.
28 It was suggested in submissions by counsel for the applicant that I need not consider the grounds of appeal and their strength.
29 The tests which apply in relation to a stay application have been debated from time to time. On the one hand, it is suggested that a stay of proceedings is only to be ordered where "special circumstances" exist. See, for example, Federal Commissioner of Taxation v Myer Emporium Ltd [No 1] (1986) 160 CLR 220 at 222-223, and see also Hume v Maher, unreported; SCt of WA (Murray J); Library No 980643; 29 October 1998.
30 I also refer to the case of Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685, and particularly at p 693 to p 695 where the principles governing stays are discussed. The New South Wales Court of Appeal in that case considered whether or not special or exceptional circumstances were necessary to justify a stay, and concluded that it is not necessary for the grant of a stay that special or exceptional circumstances should be made out.
31 As far as the Court was concerned there, it is sufficient that the applicant for the stay demonstrates a reason or an appropriate case to warrant the exercise of discretion in the applicant's favour.
32 I will proceed on the basis that the test is as stated in Alexander v Cambridge Credit Corporation (supra). At p 695 of the Cambridge Credit case the Court said:
"Two further principles can be mentioned. The first is that where there is a risk that the appeal will prove abortive if the appellant succeeds and a stay is not granted, courts will normally exercise their discretion in favour of granting a stay … Secondly, although courts approaching applications for a stay will not generally speculate about the appellant's prospects of success, given that argument concerning the substance of the appeal is typically and necessarily attenuated, this does not prevent them considering the specific terms of a stay that will be appropriate fairly to adjust the interest of the parties, from making some preliminary assessment about whether the appellant has an arguable case. This consideration is protective of the position of a judgment creditor where it may be plain that
(Page 9)
- an appeal, which does not require leave, has been lodged without any real prospect of success and simply in the hope of gaining a respite against immediate execution upon judgment."
33 In Croney v Nand (1999) 2 Qd R 342, the Queensland Court of Appeal said at 349:
"The prospects of success of the appeal is not a matter about which the Court considering a full stay application should generally speculate about. Making an assessment of whether the appellant has an arguable case is undertaken to ensure that the appeal has not been lodged simply to delay execution."
34 In this case, the parties executed the acknowledgment of debt. It is very clear in its terms. In my view, the contention by the applicant that there is some basis for denying the obligations imposed on it under the acknowledgment of debt, has no substance at all. In my opinion, the affidavits of Mr Murfitt and Mr Trainer afford no grounds for likely success in the appeal
35 So, in my opinion, there is no arguable case which can be advanced by the applicant based on the affidavits which have been filed in these proceedings. It is not that there is an attempt to put up an oral condition contradicting the terms of the deed; it is that there is no evidence at all of any oral agreement of the kind which is contended for by counsel for the applicant.
36 For those reasons, I dismiss the application for a stay.
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