Dames & Moore Pty Ltd v Jovista Pty Ltd
[2002] WASC 191
DAMES & MOORE PTY LTD -v- JOVISTA PTY LTD [2002] WASC 191
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2002] WASC 191 | |
| 02/08/2002 | |||
| Case No: | COR:165/2002 | 24 JULY 2002 | |
| Coram: | MASTER SANDERSON | 24/07/02 | |
| 6 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| B | |||
| PDF Version |
| Parties: | DAMES & MOORE PTY LTD (ACN 003 293 696) JOVISTA PTY LTD (ACN 009 171 420) |
Catchwords: | Corporations Act Application for leave by contingent creditor to bring winding-up application Turns on own facts |
Legislation: | Corporations Act, s 459P(2)(a) |
Case References: | Community Development Pty Ltd v Engwirda Construction Co (1969) 43 ALJR 365 Dames & Moore Pty Ltd v Jovista Pty Ltd, unreported; SCt of WA; Library No 980285; 26 May 1998 Re Bond Corporation (1989) 1 WAR 465 Ron Pritchard Pty Ltd v Horowitz Grahame Pty Ltd (1988) 6 ACLC 258 ACP Syme Magazines Pty Ltd v TRI Automotive Components Pty Ltd (1997) 23 ACSR 1997 Alati v We Sheung (2000) 34 ACSR 489 Bingham v Iona Corp Ltd (1995) 13 ACLC 560 Community Developments Pty Ltd v Engwirda Construction Company (1966) 120 CLR 455 Derby Motorplus Pty Ltd v Swan Building Society (1990) 2 ACSR 239 Direct Acceptance v Blackwell (No 2) (1995) 13 ACLC 1251 Ebrahami v Westbourne Galleries Ltd [1973] AC 360 Federal Commissioner of Taxation v Simionato Holdings Pty Ltd (1997) 15 ACLC 477 Helm Maritime Corp v Coplex Resources NL [1999] WASC 21 Mala Pty Ltd v Johnston (1995) 13 ACLC 100 Melbase Corporation Pty Ltd v Segenhoe Ltd (1995) 17 ACSR 187 National Australia Bank Ltd & Anor v Market Holdings Pty Ltd [2000] NSWSC 1009 Re KL Tractors Ltd [1954] VLR 505 Thomas v MacKay Investments Pty Ltd (1997) 22 ASCR 294 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
JOVISTA PTY LTD (ACN 009 171 420)
Defendant
Catchwords:
Corporations Act - Application for leave by contingent creditor to bring winding-up application - Turns on own facts
Legislation:
Corporations Act, s 459P(2)(a)
Result:
Application dismissed
(Page 2)
Category: B
Representation:
Counsel:
Plaintiff : Mr J R Atkinson
Defendant : Mr K L Christensen
Solicitors:
Plaintiff : Minter Ellison
Defendant : Tottle Christensen
Case(s) referred to in judgment(s):
Community Development Pty Ltd v Engwirda Construction Co (1969) 43 ALJR 365
Dames & Moore Pty Ltd v Jovista Pty Ltd, unreported; SCt of WA; Library No 980285; 26 May 1998
Re Bond Corporation (1989) 1 WAR 465
Ron Pritchard Pty Ltd v Horowitz Grahame Pty Ltd (1988) 6 ACLC 258
Case(s) also cited:
ACP Syme Magazines Pty Ltd v TRI Automotive Components Pty Ltd (1997) 23 ACSR 1997
Alati v We Sheung (2000) 34 ACSR 489
Bingham v Iona Corp Ltd (1995) 13 ACLC 560
Community Developments Pty Ltd v Engwirda Construction Company (1966) 120 CLR 455
Derby Motorplus Pty Ltd v Swan Building Society (1990) 2 ACSR 239
Direct Acceptance v Blackwell (No 2) (1995) 13 ACLC 1251
Ebrahami v Westbourne Galleries Ltd [1973] AC 360
Federal Commissioner of Taxation v Simionato Holdings Pty Ltd (1997) 15 ACLC 477
Helm Maritime Corp v Coplex Resources NL [1999] WASC 21
Mala Pty Ltd v Johnston (1995) 13 ACLC 100
(Page 3)
Melbase Corporation Pty Ltd v Segenhoe Ltd (1995) 17 ACSR 187
National Australia Bank Ltd & Anor v Market Holdings Pty Ltd [2000] NSWSC 1009
Re KL Tractors Ltd [1954] VLR 505
Thomas v MacKay Investments Pty Ltd (1997) 22 ASCR 294
(Page 4)
1 MASTER SANDERSON: By originating process issued 31 May 2002 the plaintiff sought an order winding-up the defendant. It is common ground that the plaintiff is a contingent creditor of the defendant and therefore leave of the Court was required to make the application: see s 459P(2)(a) of the Corporations Act. At the commencement of the hearing of the application the plaintiff sought leave to amend in terms of a minute of amended originating process. The amended process sought the grant of leave to make the winding-up application nunc pro tunc. No objection was raised by counsel for the defendant to the application for leave to amend and orders were made accordingly. The question then to be determined was whether or not leave ought be granted to make the winding-up application. The grant of leave was opposed by the defendant. After hearing argument I determined that leave ought be refused and I indicated I would publish my reasons at a later date. These are those reasons.
2 The plaintiff and the defendant have been engaged in long-running litigation in this Court (the civil claim). The dispute concerns a construction contract. The plaintiff claims it is owed money by the defendant and the defendant claims it is owed money by the plaintiff. The civil claim was the subject of a summary judgment application by the plaintiff on part of the claim. I dismissed the plaintiff's application and published reasons for doing so: see Dames & Moore Pty Ltd v Jovista Pty Ltd, unreported; SCt of WA; Library No 980285; 26 May 1998. Given the conclusion I reached on the summary judgment application, it is fair to say that the defendant has an arguable case against the plaintiff's claim. Put another way, there is a serious question to be tried. That is the inevitable conclusion that must be drawn from dismissal of a summary judgment application. The plaintiff on this application did not seek to argue otherwise.
3 It was the plaintiff's position on this application that despite the fact there was a genuine dispute as to the defendant's indebtedness, leave should nonetheless be granted to the plaintiff to apply to wind up the defendant. Essentially the plaintiff relied on a letter from the defendant's solicitors to the plaintiff's solicitors of 8 March 2002. A copy of this letter appears as part of annexure "DJM10" to the affidavit of David John May sworn 4 June 2002 and filed in support of the application (page 253). Relevantly that letter reads as follows:
"Our client has advised us that Jovista Pty Ltd ceased trading in August 2001 and has no assets. We have also been advised that
(Page 5)
- Jovista Pty Ltd has secured debts in excess of $700,000 and has no means of satisfying those debts.
Our client has received funding from related entities to pursue its counterclaim against your client and to defend your client's claim to the present point. The proceedings have become protracted and very costly and our client instructs us that the related entities are no longer prepared to continue incurring further expenses in funding this action to trial.
If our client's counterclaim is dismissed and your client succeeds in its claim and judgment is entered against Jovista Pty Ltd it will have no means of satisfying any judgment entered in favour of your client."
4 The letter went on to propose a resolution of the dispute between the parties on certain terms and conditions. Based upon this letter it was said by the plaintiff that the defendant was clearly insolvent and that it was proper it be wound up. On that basis it was said that leave to bring the application ought be granted.
5 As a general rule, when a debt is disputed on substantial grounds leave should be refused to allow a contingent or prospective creditor to proceed with the winding-up. This principle emerges from a number of cases, particularly Ron Pritchard Pty Ltd v Horowitz Grahame Pty Ltd (1988) 6 ACLC 258 and Re Bond Corporation (1989) 1 WAR 465. The Court does retain a discretion in an appropriate case to grant leave to a contingent creditor to bring a winding-up application: see Community Development Pty Ltd v Engwirda Construction Co (1969) 43 ALJR 365. But in cases where leave has been granted, the common thread seems to be that there is no doubt as to the indebtedness of the company to the contingent creditor. What may be in doubt is the quantum of the claim. That was certainly the case in the Engwirda decision. Here it is the claim itself which is in dispute.
6 Furthermore, it is by no means clear from the evidence available that the defendant is insolvent. A careful reading of the letter from the defendant's solicitors to the plaintiff's solicitors does not establish that insolvency is conceded. While it is clear that the position of the defendant is precarious, it does nothing more than that. The position may be different where a company is hopelessly insolvent and admission is made to that effect. But that is not this case.
(Page 6)
7 In all the circumstances I was not satisfied that leave ought be granted. Accordingly I dismiss the plaintiff's application with costs.
0
13
0