Capitol Invest Pty Ltd v Mobbs 88 Pty Ltd, in the matter of Mobbs 88 Pty Ltd
[2023] FCA 1585
•7 December 2023
FEDERAL COURT OF AUSTRALIA
Capitol Invest Pty Ltd v Mobbs 88 Pty Ltd, in the matter of Mobbs 88 Pty Ltd [2023] FCA 1585
File number: NSD 737 of 2023 Judgment of: YATES J Date of judgment: 7 December 2023 Publication of reasons: 13 December 2023 Catchwords: PRACTICE AND PROCEDURE – application by defendant for hearing date to be vacated and for leave to file further evidence – application refused Division: General Division Registry: New South Wales National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Number of paragraphs: 14 Date of hearing: 7 December 2023 Counsel for the Plaintiff: Mr N Mirzai and Dr A Lim Solicitor for the Plaintiff: Blackstone Waterhouse Lawyers Counsel for the Defendant: Mr J Pope (solicitor) Solicitor for the Defendant: Pope & Spinks Solicitors Counsel for the Supporting Creditor: Mr D Olthof (solicitor) Solicitor for the Supporting Creditor: Craddock Murray Neumann ORDERS
NSD 737 of 2023 IN THE MATTER OF MOBBS 88 PTY LTD ACN 604 254 319
BETWEEN: CAPITOL INVEST PTY LTD ACN 159 744 902
Plaintiff
AND: MOBBS 88 PTY LTD ACN 604 254 319
Defendant
DEPUTY COMMISSIONER OF TAXATION
Supporting Creditor
ORDER MADE BY:
YATES J
DATE OF ORDER:
7 DECEMBER 2023
THE COURT NOTES THE FOLLOWING UNDERTAKING GIVEN TO THE COURT BY THE DEFENDANT:
1.The defendant will give to the solicitors for the plaintiff and the supporting creditor by sending by email to [email protected] and [email protected] 14 days’ notice of the defendant’s intention to take any steps to sell any real property assets owned by it, together with providing:
(a)any draft contract for sale;
(b)the title reference and address of the property proposed to be sold; and
(c)the details of any real estate agent who has been appointed to conduct the sale of the property.
2.The defendant (including by its officers, servants and agents) will not take any steps to sell any real property asset prior to the expiry of the 14-day period of notice to be given pursuant to 1 above.
3.Within 3 days of the any contract for sale being executed in respect of a real property asset, the defendant will give to the solicitors for the plaintiff and the supporting creditor by sending by email to [email protected] and [email protected] a copy of the executed contract for sale.
4.The defendant (including by its officers, servants and agents) will not complete the sale of any real property asset for which a contract for sale has been executed prior to 7 days after the executed contract for sale has been provided as required by 3 above.
5.No later than 3 days prior to the settlement of the sale of any real property asset, the defendant will give to the solicitors for the plaintiff and the supporting creditor by sending by email to [email protected] and [email protected] a copy of the draft settlement sheet.
6.The proceeds of sale (less the amount required to discharge any registered mortgage, the reasonable costs of the sale and unusual conveyancing adjustments) in respect of any sale by the defendant of real property assets owned by it will be paid into the trust account for the solicitors for the defendant and will not be disbursed until final orders have been made in the proceedings or otherwise with the consent of the plaintiff and the supporting creditor.
THE COURT ORDERS THAT:
7.The defendant’s application to vacate the hearing date of 12 December 2023 and to file further evidence (the defendant’s application) be refused.
8.The defendant pay the plaintiff’s and supporting creditor’s costs of the defendant’s application.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
(Delivered ex tempore, revised from transcript)
YATES J:
The defendant applies to vacate the hearing date of the plaintiff’s winding-up application currently listed for 12 December 2023, and to seek leave to file further evidence. The application is opposed by the plaintiff and the supporting creditor.
The application to vacate the hearing is based on the defendant’s solicitor’s personal circumstances involving the need to attend to his wife, who is to be admitted to hospital on 11 December 2023 for surgery. She is expected to be in hospital from 11 December to at least 13 December 2023. As I have noted, the hearing is listed for 12 December 2023.
In support of the application, the defendant says that the hearing, which was originally listed on the basis that it would take one-half to one day, will now exceed two days. This change in estimate appears to be because the sole director and secretary of the plaintiff, Said Sakr, has filed an affidavit in reply which, with annexures, is 63 pages. Having looked at the affidavit, which is only 35 paragraphs, there appears to be nothing in it that would warrant extensive cross-examination. I am unable to see why the hearing will exceed two days. I do not see why the original estimate of the hearing should not stand.
I have sympathy for the defendant’s solicitor’s circumstances, but I am not persuaded that they justify an adjournment of the hearing which will take place on the day after his wife is admitted to hospital. From that time, she will be under the care of the hospital and her surgeon. The evidence does not reveal any unusual circumstances of the operation to be performed. Although I understand the natural concern of the solicitor for his wife’s wellbeing, this alone is not a reason to adjourn the hearing.
I had understood from previous case management hearings that counsel would be briefed to appear for the defendant at the hearing. The present position appears to be that counsel, who was formerly briefed, will no longer be appearing. However, the opportunity to brief counsel remains, and that opportunity should be taken if the defendant’s solicitor is not available on 12 December 2023. I note that the defendant’s solicitor has an employed solicitor who will be available to attend court on 12 December 2023 to provide instructions to counsel. The defendant’s solicitor has informed me that the employed solicitor is relatively junior, but, even accounting for that, I am persuaded that she would be able to perform the task of receiving and providing instructions.
I am not persuaded that leave should be granted, in blanket terms, to the defendant to file and rely on further evidence. On 6 October 2023, this matter was referred to me for trial. I appointed a case management hearing on 16 October 2023 to determine its readiness. At that time, the plaintiff pressed for a hearing date. The defendant required extra time to file evidence in answer. I allowed the defendant that opportunity. At a further case management hearing on 3 November 2023, I was told that the defendant had filed its evidence in answer and that the hearing should take one-half to one day. This was on the basis that the plaintiff and the supporting creditor would have the opportunity to file evidence in reply. This opportunity was taken and Mr Sakr’s affidavit, to which I have referred, was filed.
In the course of oral submissions this morning, I was taken to aspects of that affidavit involving conversations between Mr Sakr and Sam Fayad, a former director of the defendant and the father of the current director of the defendant. It seems that the evidence that the defendant wishes to be put on seeks to address those conversations.
Having looked at those parts of Mr Sakr’s affidavit, I have reservations about their admissibility. If those parts of the affidavit were to be read, and if objection were to be taken to them, it is certainly likely that those parts of the affidavit would be rejected, in which event the need for evidence from Mr Sam Fayad would fall away.
Having made those observations, the appropriate course for the defendant is to prepare an affidavit, should it so desire, and have that available at the hearing. At that time, an application to rely on further evidence could be renewed, if need be. In those circumstances, there is no reason why I should allow the application to file further evidence at the present time.
An affidavit has been made by Mr Olthof, the solicitor for the supporting creditor, which contains evidence that, certainly at some stage, the defendant proposed to dispose of certain real property. The identity of that real property is not revealed, but it appears that a contract providing for the sale of that property has, according to the defendant, been rescinded. This has nevertheless caused some concern that the defendant has endeavoured to, or might, dispose of its assets in the face of the winding up application.
Without delving into that matter further, it is sufficient for me to note that, this morning, an undertaking has been provided to the Court by the defendant in terms which are, at least, satisfactory to the supporting creditor. That undertaking has been marked MFI-1. It is an undertaking which the Court accepts.
In the circumstances, the hearing will proceed on 12 December 2023 on the evidence that has now been filed, but subject to the observations I have made earlier in these reasons.
The defendant’s application is refused.
[After hearing submissions on costs] I am not prepared to defer the question of costs. Certainly part of the interlocutory application is understandable (I refer in particular to Mr Pope’s personal circumstances). In my view, costs should follow the event. I order the defendant to pay the plaintiff’s and supporting creditor’s costs of the application.
I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Yates. Associate:
Dated: 13 December 2023
0
0
0