DB Mahaffy and Associates Pty Ltd v Jeffrey Mahaffy

[2011] NSWSC 901

Supreme Court

New South Wales

Medium Neutral Citation:	DB Mahaffy & Associates Pty Ltd v Jeffrey Mahaffy [2011] NSWSC 901
Hearing dates:	1 August 2011
Decision date:	01 August 2011
Before:	White J
Decision:	Refer to paras [ 14 ] and [17] of judgment.
Catchwords:	CORPORATIONS - statutory demand - application to set aside statutory demand - where presumption of insolvency has already arisen - where no utility in the present proceedings - proceedings stayed until further order
Legislation Cited:	Civil Procedure Act 2005
Category:	Procedural and other rulings
Parties:	D B Mahaffy & Associates Pty Ltd (Plaintiff) Jeffrey Mahaffy (Defendant)
Representation:	Defendant in person
File Number(s):	2011/108012; 2010/429076

Judgment

1. HIS HONOUR: Mr David Mahaffy objects to my dealing with this matter this morning. He has written to the Registrar on 29 July 2011 stating amongst other things that he would not the allow me to appear before him again (sic). He alleged bias and corruption.

1. There is no appearance for the plaintiff this morning. I decline to recuse myself from dealing with the matter today.

1. The basis for the application that I disqualify myself, so far as I can understand it, is that I have decided three other matters adversely to Mr David Mahaffy or the plaintiff. I do not think that anything that I have decided previously could give rise to a reasonable apprehension of bias in relation to the matter which is before me today.

[Mr Jeffrey Mahaffey addressed.]

1. The originating process in this matter was filed on 4 April 2011. It seeks an order setting aside a statutory demand dated 15 March 2011. The statutory demand seeks the payment of $392,162.11 said to be payable under a judgment of the District Court of 24 February 2011 with interest under s 101 of the Civil Procedure Act 2005.

1. On 29 June 2011 I dealt with another application between the same parties in proceedings 429076 of 2010. In that proceeding the same plaintiff sought to set aside an earlier statutory demand dated 9 December 2010 which claimed a debt of $172,137.14 said to be payable under two other judgments of the District Court of 4 September 2009, 16 April 2010, and under two costs orders of this Court.

1. On 29 June 2011 I dismissed the originating process in proceeding 429076 of 2010 seeking to set aside that statutory demand. Time for compliance with that statutory demand expired on 6 July 2011. I am told that the statutory demand was not complied with by that date, and I am told that no order was made by the Court of Appeal extending the time for compliance. Accordingly the presumption of insolvency has arisen.

1. Prima facie , the present proceeding serves no useful purpose unless an appeal is brought against my orders of 29 June 2011 in proceedings 2010/429076, it is found on appeal that the orders should be set aside, and it is also found that the defendant should be restrained from bringing or prosecuting winding-up proceedings in reliance on the presumption of insolvency arising from non-compliance with the earlier statutory demand.

1. The present proceedings might also serve some useful purpose if the defendant does not institute winding-up proceedings against the plaintiff relying on the existing presumption of insolvency, within three months of 6 July 2011.

1. It may theoretically be possible for these proceedings to have some utility depending upon what steps might be taken in any winding-up proceedings commenced on the basis of the presumption of insolvency arising from non-compliance with the earlier statutory demand.

1. However, as matters presently stand, I can see no utility in the present proceedings.

1. I am not minded to dismiss these proceedings for want of appearance. That is so for two reasons. First, as I have indicated, an order dismissing these proceedings would not affect the presumption of insolvency that has already arisen. Secondly, such an order might spawn further litigation by way of an application to set aside the order made in default of appearance by the plaintiff.

1. In the circumstances, I propose to stay the proceedings until further order. I have discussed with the defendant my intention to stand the proceedings over for some months until 2012 with liberty to either party to restore the matter to the list on 14 days' notice. On reflection, I think that the better course is simply to stay the proceedings until further order. If either party can demonstrate a good reason as to why the proceedings should be reactivated, then the matter can be restored to the list on 14 days' notice to the opposite party and on application in writing to the Corporations List Judge.

1. In the meantime, whilst the proceedings are stayed, neither party will be incurring any costs in relation to these proceedings, and no steps can be taken in them.

1. For these reasons I make the following orders:

1. The proceedings be stayed until further order.

2. The proceedings may be restored to the list for the purposes of lifting the stay by application to be made in writing to the Associate to the Corporations List Judge on notice to the opposite party, such application to identify the reason or reasons the party seeking to restore the matter wishes the stay to be lifted.

1. In proceedings number 429076 of 2010 neither the defendant nor Mr David Mahaffy provided submissions in accordance with my order of 29 June 2011 that within 14 days the parties provide submissions on the defendant's application that Mr David Mahaffy pay his costs of those proceedings.

1. Mr Jeffrey Mahaffy, the defendant to those proceedings, says that he was too busy to be able to comply with that order. I do not know why Mr David Mahaffy has not complied with it.

1. I will extend the time for both David Mahaffy and Jeffrey Mahaffy to provide submissions in relation to the defendant's application in paragraph 7 of his notice of motion of 25 May 2011. That is to say, I extend the time for both of them to exchange and provide to my Associate written submissions in relation to that matter, up to and including 15 August 2011. If no submissions are provided by that time, I will dismiss that application.

1. As previously indicated, if either the defendant or Mr David Mahaffy seeks an oral hearing in relation to that application, they should advise my Associate within 14 days and I will arrange for the matter to be listed at an appropriate time for that to be dealt with.

Decision last updated: 17 August 2011