Cornerstone Properties Pty Ltd v Crisp-Air Pty Ltd (in liquidation)

[2014] QDC 193

DISTRICT COURT OF QUEENSLAND

CITATION:

Cornerstone Properties Pty Ltd v Crisp-Air Pty Ltd (in liquidation) [2014] QDC 193

PARTIES:

CORNERSTONE PROPERTIES PTY LTD
(Plaintiff/Respondent)

V

CRISP-AIR LTD
(Defendant/Applicant)

FILE NO/S:

DC No 4455 of 2011

DIVISION:

Civil

PROCEEDING:

Application

ORIGINATING COURT:

District Court at Brisbane

DELIVERED ON:

10 September 2014

DELIVERED AT:

Brisbane

HEARING DATE:

4 September 2014

JUDGE:

Devereaux SC DCJ

ORDER:

1.   The application is dismissed;

2.   The Parties have leave to file submissions as to costs within 7 days.

CATCHWORDS:

PROCEDURE – COURTS AND JUDGES GENERALLY – COURTS - Where plaintiff granted leave to file further submissions after trial – where plaintiff applied to re-open its case and time for filing submissions extended pending the application – where defendant in voluntary creditors’ winding up before application to re-open decided – where application to re-open dismissed – where plaintiff has not sought leave of Supreme Court to proceed – where liquidator seeks orders designed to progress proceeding to judgment – whether orders can be made

Corporations Act 2001 s. 500(2)

Arpic Pty Ltd v Austin Australia Pty Ltd [2004] NSWSC 83 Dealquip Australia Pty Ltd v 33 Electra Pty Ltd (No.2) [2013] NSWSC 1382

COUNSEL:

GW Dietz for the Applicant

RJ Anderson for the Respondent  

SOLICITORS:

Dowd & Company for the Applicant

Broadley Rees Hogan for the Respondent  

1. The liquidator of the defendant has brought this application for orders designed to progress the proceeding to judgment.

1. At the end of the trial of this claim, on 30 November 2012, I granted the plaintiff leave to file further submissions on three defined matters by 10 December 2012. Soon after the trial and before filing submissions the plaintiff notified the court it would seek leave to re-open its case. The time for filing further submissions was, in effect, put in abeyance pending a ruling on the application to re-open.

1. The application was filed in February 2013 and heard on 20 March 2013.

1. On 7 May 2013, liquidators were appointed to the defendant.

1. On 10 July 2013, I dismissed the application. I ordered the plaintiff’s legal representatives, on or before 10 October 2013, to file and serve an affidavit deposing to the progress of the claim with the liquidators and proposing what further steps ought to be taken in the proceeding.

1. The plaintiff’s solicitor filed an affidavit, sworn on 10 October 2013, which attached a copy of an ASIC search on the defendant and the minutes of a meeting.  The affidavit included no proposal for the resolution of the proceeding.

1. The liquidator has now applied for orders that the leave to file further submissions given to the plaintiff at the end of the trial be, in effect, revoked; alternatively, that the plaintiff be directed to apply to the Supreme Court under s. 500(2) of the Corporations Act 2001 for leave to proceed against the defendant and then file submissions by a certain date, and, in default, that the leave to file them be ‘withdrawn without further order’ of the court.

1. The winding up of the defendant was a creditors’ voluntary winding up. Counsel for the liquidator, Mr Dietz, refers to Arpic Pty Ltd v Austin Australia Pty Ltd [2004] NSWSC 83 and Dealquip Australia Pty Ltd v 33 Electra Pty Ltd (No.2) [2013] NSWSC 1382 and submits the prohibition in s. 500(2) does not prevent the defendant by its liquidator from bringing the application. I am not persuaded either case supports this application.

1. In Arpic, the defendant was placed into administration after the proceeding was commenced (by summons). The plaintiff sought to amend the summons and also applied for summary judgment. The proposed amendment would have had the effect of expanding the claims against the defendant company in administration. Barrett J decided that the application for leave to amend therefore required leave under s. 440D of the Corporations Act 2001.

1. The applicants in Dealquip were (relevantly) defendants to a cross-claim by 33 Electra, a company then in liquidation. They sought summary dismissal of the cross-claim for want of prosecution. White J decided that the cross-claim was not a proceeding referred to in s. 471B of the Corporations Act. It followed that the application for summary dismissal was also not such a proceeding. So, leave was not required to bring the application.

1. In Dealquip, the substantive proceeding was brought by, not against, a company now in liquidation. That was an essential fact in the reasoning of White J to the conclusion that the application for summary dismissal was not a proceeding under s. 471B.

1. In the present case, it is clear and common ground that s. 500(2) applies to the substantive proceeding. Mr Anderson, for the plaintiff, argues that the liquidator cannot therefore (even) bring the application because to bring an application seeking orders which would advance the proceeding is itself a step advancing the proceeding towards a conclusion. This might be correct but I prefer to approach the matter by considering whether the court can make the orders sought.

1. In my opinion, the plaintiff cannot file submissions without leave of the Supreme Court any more than the court could convene to hear oral argument. So much does not seem to be in contest, given the nature of the orders sought by the liquidator. It follows that I have no power to order the plaintiff to file the submissions. Also, I consider I do not have power to compel the plaintiff to apply to the Supreme Court.  Therefore, I cannot make the alternative orders sought in the application.

1. The remaining question is whether making the first order sought, in effect the revocation of leave to file further submissions, would itself be to ‘proceed’ the proceeding. The present position is that a party was granted leave to file further submissions; ultimately no time limit was set for the filing; a long period has passed and nothing has been filed. The reasons for failing to file submissions would be relevant to whether an order should be made but the immediate question is whether an order revoking leave may be made.

1. I am not satisfied it is open to the court to make the order sought any more than the court could decide not to convene on a day set for further argument but proceed straight to judgment because of the passing of a resolution for winding up. While a party has leave to file further submissions, the trial is incomplete. The trial may not proceed without leave of the Supreme Court.

1. Even if it were open, I would not make the order. The substantial materials filed in the application show the plaintiff has decided not to apply to the Supreme Court because it is reasonably certain it will not recover anything from the liquidation. There is a substantial secured creditor and a preferred creditor. This belief has been confirmed by the liquidator, who deposes to the likelihood that, were there to be judgment in favour of the defendant with costs, proceeds would likely be distributed to the Australian Government Department of Education, Employment and Workplace Relations as a consequence of payments made to employees of the defendant. The plaintiff’s reason for not seeking leave of the Supreme Court does not provide a ground for revoking leave to file submissions.

1. The liquidator also deposes that if judgment is not delivered on the plaintiff’s claim he would not be able to accept or reject the plaintiff’s proof of debt. No satisfactory reason for this professed inability was presented. In any case, I would not have considered this relevant to the making of the order sought if I had concluded that I could make it.

1. The application is to be dismissed. I am minded to order that the costs of the application be reserved, as were the costs of the plaintiff’s unsuccessful application to re-open, but I will give the parties leave to file submissions on costs of the application within seven days of the date of this judgment.