Cribb v Kingsbury
[2020] FCA 551
•24 April 2020
FEDERAL COURT OF AUSTRALIA
Cribb v Kingsbury [2020] FCA 551
File number: WAD 87 of 2019 Judge: MCKERRACHER J Date of judgment: 24 April 2020 Legislation: Corporations Act 2001 (Cth) ss 588FE(4), 588FE(6A), 588G Cases cited: Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 Date of hearing: Determined on the papers Date of last submissions: 23 April 2020 Registry: Western Australia Division: General Division National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Category: No Catchwords Number of paragraphs: 16 Counsel for the Plaintiffs: Mr CA Davis Solicitor for the Plaintiffs: Stacks Law Firm Counsel for the Defendants: Mr H Paiker Solicitor for the Defendants: Paiker & Overmeire ORDERS
WAD 87 of 2019 BETWEEN: NEIL RAYMOND CRIBB, AS LIQUIDATOR OF PILBARA BAKERIES PTY LTD (IN LIQUIDATION) ACN 149 201 230
First Plaintiff
PILBARA BAKERIES PTY LTD (IN LIQUIDATION) ACN 149 201 230
Second Plaintiff
AND: JAMES RICHARD KINGSBURY
First Defendant
MALAGA PROPERTIES PTY LTD ACN 072 232 869
Second Defendant
JUDGE:
MCKERRACHER J
DATE OF ORDER:
24 APRIL 2020
THE COURT ORDERS THAT:
1.The Defendants serve an affidavit of Adrian Charles Steven Catlin on or before 7 May 2020.
2.The Plaintiffs serve a list of documents and affidavits to be included in a draft Index on or before 14 May 2020.
3.The Defendants serve a list of documents and affidavits to be included in a draft index to a Court Book by 21 May 2020.
4.The Plaintiffs and Defendants provide their objections to documents and affidavits to be included in the draft index by 28 May 2020.
5.The Plaintiffs prepare, file and serve an index that identifies which documents and affidavits tendered by consent and which documents are objected to and identifying the party making the objection on or before 14 June 2020.
6.The Plaintiffs prepare serve and file a Court Book including the affidavits and documents tendered by consent and those objected to by a party.
7.The Plaintiffs are to file and serve an outline of submissions, chronology and list of authorities on or before 18 June 2020.
8.The Defendants are to file and serve an outline of submissions, chronology and list of authorities on or before 28 June 2020.
9.Objections to documents and affidavits to be ruled on at the trial of the action.
10.The parties have liberty to restore the matter to the list on three days' notice.
11.Costs be in the cause.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
MCKERRACHER J:
These reasons relate only to interlocutory management of this matter. The first plaintiff, Mr Neil Cribb, is the liquidator of the second plaintiff, Pilbara Bakeries Pty Ltd (in liquidation). The first defendant, Mr James Kingsbury, is a former director of Pilbara Bakeries. The second defendant, Malaga Properties Pty Ltd, was one of two shareholders in Pilbara Bakeries. Mr Kingsbury is the sole director and shareholder in Malaga Properties.
The liquidator claims that Pilbara Bakeries made payments to Malaga Properties pursuant to agreements entered into between Pilbara Bakeries and Malaga Properties, including for a commercial property lease, use of vehicles, equipment, premises fit out, and business loans. The liquidator contends that Pilbara Bakeries was insolvent from June 2012 and that a number of the payments made pursuant to the agreement are voidable as unfair preferences and as unreasonable director-related transactions within the meaning of s 588FE(4) and s 588FE(6A) of the Corporations Act 2001 (Cth).
The liquidator further claims that Mr Kingsbury failed to prevent Pilbara Bakeries from incurring debts whilst it was insolvent in contravention of s 588G of the Corporations Act. Declarations and compensation are sought.
Attempts to mediate the dispute ensued throughout much of 2019. A case management hearing occurred on 4 March 2020 to determine the timeline for the filing of further materials by the defendants. I ordered that the defendants have until 31 March 2020 to file their further evidence. By orders made by consent, this was extended to 16 April 2020, with orders that further case management orders be determined on the papers from 24 April 2020 onwards if not agreed.
The parties have been unable to agree on the proposed orders.
The matter is set down for a three day trial, from 14-16 July 2020.
The plaintiffs are concerned about delay on the part of the defendants with filing further evidence in relation to the proceeding, having regard to extensions of time which have been granted. Since being served with the plaintiffs’ evidence, the defendants have had some five months to serve any evidence on which they intend to rely on in the proceeding. Having regard to the fact that the trial dates are fixed for the reasonably near future, the plaintiffs contend that the delay is unacceptable.
The defendants now seek to file further evidence, but at this stage have provided only a limited explanation as to the delay. I accept the plaintiffs’ submissions that in cases where an indulgence is sought particularly in or close to the trial, where there is an obvious potential for serious disruption to the litigation, there should be a proper explanation for the application showing that it is brought in good faith and bring to the Court’s attention in a candid way the circumstances giving rise to the application: Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 (at [103], [107]-[109]).
The plaintiffs also oppose the defendants’ proposed order requiring the plaintiffs to file and serve a court book prior to dealing with any objections to documents and affidavits as:
(a)the defendants have served the plaintiffs with the affidavit of Mr Kingsbury, sworn on 27 March 2020, which exhibits 1751 pages of documents; and
(b)Mr Kingsbury’s affidavit provides no explanation as to the relevance of the exhibited documents, nor is there relevance apparent on the face of the documents.
The plaintiffs contend the following orders should be made:
1.The parties are to each serve a list of documents and affidavits to be included in the draft index to the Court Book on or before 7 May 2020.
2.The parties are to exchange objections to affidavits or documents on or before 14 May 2020.
3.The Plaintiffs are to prepare, file and serve an index that clearly indicates which documents are tendered by consent and which documents are objected to and identifying the party making the objection on or before 21 May 2020.
4.The Plaintiffs are to file and serve an outline of submissions, chronology and list of authorities on or before 4 June 2020.
5.The Defendants are to file and serve an outline of submissions, chronology and list of authorities on or before 4 June 2020.
6.The parties are to file an agreed list of the outstanding objections divided into classes to be ruled on by 11 June 2020.
7.The parties have liberty to restore the matter to the list on three days’ notice.
The defendants propose these orders:
1.The Defendants serve an affidavit of Adrian Charles Steven Catlin on or before 7 May 2020.
2.The Plaintiffs serve a list of documents and affidavits to be included in a draft Index on or before 14 May 2020.
3.The Defendants serve a list of documents and affidavits to be included in a draft index to a Court Book by 21 May 2020.
4.The Plaintiffs and Defendants provide their objections to documents and affidavits to be included in the draft index by 28 May 2020.
5.The Plaintiffs prepare, file and serve an index that identifies which documents and affidavits tendered by consent and which documents are objected to and identifying the party making the objection on or before 14 June 2020.
6.The Plaintiffs prepare serve and file a Court Book including the affidavits and documents tendered by consent and those objected to by a party.
7.The Plaintiffs are to file and serve an outline of submissions, chronology and list of authorities on or before 18 June 2020.
8.The Defendants are to file and serve an outline of submissions, chronology and list of authorities on or before 28 June 2020.
9.Objections to documents and affidavits to be ruled on at the trial of the action.
10.The parties have liberty to restore the matter to the list on three days' notice.
In support of these orders, the defendants assert that the plaintiffs have, at all times, been aware that Mr Adrian Catlin is critical to their defence and have been aware of the nature of Mr Catlin’s evidence since the examination which they held on 23 June 2018. The defendants argue that the nature and content of Mr Catlin’s evidence is further clear from the expert report of Ms Jennifer Low and the amended defence filed by the defendants.
The defendants make the point that they responded to the plaintiffs’ evidence, which was filed on 30 October 2019, which comprised identification by the plaintiffs of some 2,356 documents in a report by the liquidator listing documents in his possession considered relevant to the proceedings by providing an expert report of Ms Low.
The defendants explain that they did not understand the order for filing evidence in response to the plaintiffs’ affidavit of 30 October 2019 to require filing then of Mr Catlin’s affidavit. But they stress that the plaintiffs are not in any way caught by surprise or prejudiced in any way in proceeding and preparing for trial should the order allowing the filing of Mr Catlin’s affidavit be made.
To the extent there is an explanation, if any, for the delay, it appears to be an explanation based on a misunderstanding of the terms of orders. Whilst not a particularly satisfactory explanation, I am not persuaded, nor have the plaintiffs indicated specific prejudice that they would suffer by reason of the late filing. There are, of course, difficulties under which everyone is operating during the COVID-19 crisis.
In all the circumstances, I consider the appropriate orders are those proposed by the defendants and those orders will be made, with costs in the cause.
I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher. Associate:
Dated: 24 April 2020
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