DB Mahaffy & Associates Pty Ltd v Mahaffy - [2011] NSWSC 673

Supreme Court

New South Wales

Medium Neutral Citation: D B Mahaffy & Associates Pty Ltd v Mahaffy [2011] NSWSC 673
Decision date: 29 June 2011
Jurisdiction: Equity Division
Before: White J
Decision:
Refer to paras [24], [31], [35], and [36] of judgment

Catchwords:
CORPORATIONS - statutory demand - application to set aside statutory demand - where plaintiff appeared through a solicitor and sought adjournment - adjournment refused - where a solicitor for plaintiff had no instructions to appear in the proceedings - where no satisfactory explanation for no appearance for plaintiff - originating process dismissed with costs

CORPORATIONS - practice and procedure - notice of motion - where director seeks leave to be joined personally as party to proceedings to set aside statutory demand - director not a proper plaintiff to set aside statutory demand

CORPORATIONS - practice and procedure - where director appeared personally for company - company required to appear by a solicitor or can appear by director if director himself a plaintiff - director not entitled as of right to appear on behalf of plaintiff - Uniform Civil Procedure Rules r 7.1(2) and (3)
COURTS AND JUDGES - bias - disqualification - apprehended bias - where after hearing complaint made of bias - where judge has decided previous applications adversely to complainant or his interests - where no objection taken to judge hearing application at time - where plaintiff's claim dismissed for non-appearance - remaining issue concerning costs - judge refuses to disqualify himself from dealing with remaining issue
Legislation Cited: Corporations Act 2001 (Cth)
Civil Procedure Act 2005
Cases Cited: JSBG Developments Pty Ltd v Kozlowski [2009] NSWSC 1128; (2009) 75 NSWLR 745
DB Mahaffy & Associates Pty Ltd v Mahaffy [2010] NSWSC 881
Mahaffy v Mahaffy [2010] NSWSC 1358
Bienstein v Bienstein [2003] HCA 7; (2003) 195 ALR 225
Re JRL; Ex parte CJL (1986) 161 CLR 342
Category: Interlocutory applications
Parties: D B Mahaffy & Associates Pty Ltd (Plaintiff)
Jeffrey Mahaffy (Defendant)
Representation: R Watson (Solicitor for Plaintiff)
In person (Defendant)

File Number(s): 2010/429076 2011/108012

Judgment

HIS HONOUR: In proceedings 429076 of 2010, Mr Watson, solicitor, seeks an adjournment. He has been instructed by the plaintiff to make that application, but does not have instructions to appear in the matter if the adjournment is refused.

The proceedings are an application to set aside a statutory demand. The originating process says that the demand was received on 13 December 2010, that is, more than six months ago.

On 18 April 2011, Barrett J made orders, including that the matter stand over to the Corporations Judge on 2 May 2011, by which time the plaintiff was to regularise whatever arrangement it intended to rely on to have a natural person represent it in these proceedings. His Honour also stood over to that day an application by the defendant to set aside a subpoena. His Honour also said:

" 5. I would add these observations. The defendant has made it clear that this is the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2011] NSWSC 673
Decision Date: 29 June 2011

CaseChat Overview and Summary

In the matter of DB Mahaffy & Associates Pty Ltd v Mahaffy, the dispute arose from a statutory demand which the plaintiff, DB Mahaffy & Associates Pty Ltd, had issued against the defendant, Mahaffy. The plaintiff sought to enforce the demand, and the defendant applied to set it aside due to procedural irregularities. The case was heard in the Supreme Court of New South Wales. The central legal issues involved whether the plaintiff's non-appearance justified setting aside the statutory demand, whether the director of the plaintiff company could appear on behalf of the company in proceedings to set aside the demand, and whether the judge should disqualify himself from dealing with the remaining issue of costs due to an apprehension of bias.

The court held that the plaintiff's non-appearance without a satisfactory explanation warranted setting aside the statutory demand. Additionally, the court found that a director of the plaintiff company, appearing through a solicitor who did not have instructions to appear in the proceedings, did not have the right to appear on behalf of the company in the statutory demand proceedings. The court referenced the Uniform Civil Procedure Rules, which require that a company appear by a solicitor or by the director if the director is a plaintiff himself. The court dismissed the originating process due to the plaintiff's non-appearance and awarded costs against the plaintiff.

Further, the court addressed the director's application to be joined personally as a party to the proceedings to set aside the statutory demand. The court ruled that the director was not a proper plaintiff to set aside the statutory demand, as the statutory demand was issued against the defendant and not the director personally. Regarding the judge's potential bias, the court considered the complaint made after the hearing and found no grounds for disqualification. The judge had decided previous applications adversely to the complainant, but the complainant had not objected to the judge hearing the application at the time, and the remaining issue concerned only costs. The court refused to disqualify itself from dealing with the remaining issue of costs.

Orders