Deluxe Developments Pty Ltd (In Liq) v Downer EDI Engineering Pty Ltd - [2017] NSWSC 894

Supreme Court

New South Wales

Medium Neutral Citation: Deluxe Developments Pty Ltd (In Liq) v Downer EDI Engineering Pty Ltd; In the matter of Downer EDI Engineering Pty Limited [2017] NSWSC 894
Hearing dates: 3 July 2017
Decision date: 07 July 2017
Jurisdiction: Equity
Before: Ball J
Decision:
In 2016/256357:

1.   The notice of motion filed on 3 March 2017 dismissed;
2.   The defendant pay the plaintiffs’ costs of the motion up until 10 May 2017 and each party bear his or its own costs thereafter.

In 2017/140147

3. Pursuant to section 1321 of the Corporations Act 2001 (Cth) and reg 5.6.54(2)(b) of the Corporations Regulations 2001 (Cth) order that the time within which the plaintiff may appeal against the rejection by the defendants of its proof of debt in the winding up of Deluxe Developments Pty Ltd (in liq) ACN 113 583 949 be extended to 11 May 2017;
4.   The defendants pay the plaintiff’s costs of the plaintiff’s application for an extension of time.
Catchwords: PRACTICE AND PROCEDURE – extension of time – appeal – whether party will suffer prejudice if extension of time to appeal allowed or rejected – whether party will suffer prejudice as a result of delay
PRACTICE AND PROCEDURE – application for determination of separate question
Legislation Cited: Building and Construction Industry Security of Payment Act 1999 (NSW) s 27
Corporations Act 2001 (Cth) ss 553C, 596B
Corporations Regulations 2001 (Cth) reg 5.6.54(2)(b)
Cases Cited: Derwinto Pty Ltd (In Liq) v Lewis (2002) 42 ACSR 645; [2002] NSWSC 731
In the matter of Pan Pharmaceuticals Ltd (in liq); Brennan v McGrath [2011] NSWSC 561
Texts Cited: K R Handley, Spencer Bower and Handley Res Judicata, (4th ed, 2009, LexisNexis) at paras [2.03], [2.20]
Category: Procedural and other rulings
Parties: Deluxe Developments Pty Ltd (In Liq) (First Plaintiff (2016/256357))
Riad Tayeh and David Solomons in their capacity as joint and several liquidators of Deluxe Developments Pty Ltd (In Liq) (Second Plaintiff (2016/256357) | Defendant (2017/140147))
Downer EDI Engineering Pty Ltd (Defendant (2016/256357) | Plaintiff (2017/140147))
Representation:
Counsel:
S Ipp (Plaintiffs (2016/256357) | Defendants (2017/140147))
R Yezerski (Defendant (2016/256357) | Plaintiff (2017/140147))
Solicitors:
HWLEbsworth Lawyers (Plaintiffs (2016/256357) | Defendants (2017/140147))
Colin Biggers & Paisley (Defendant (2016/256357) | Plaintiff (2017/140147))

File Number(s): 2016/256357 and 2017/140147
Publication restriction: Nil

Judgment

Introduction

Before the court are two proceedings. In one (2017/140147) (the Appeal Proceeding), Downer EDI Engineering Pty Limited (Downer) seeks an order extending the time in which it may appeal against the rejection by the liquidators (the Liquidators) of Deluxe Developments Pty Ltd (In Liq) (Deluxe) of a proof of debt Downer lodged in the winding up of Deluxe in the sum of $1,928,390.68 (including GST) (the Proof of Debt). The Proof of Debt relates to amounts claimed by Downer as damages in completing certain building work that Deluxe had undertaken to perform pursuant to a subcontract entered into in 2010 between Downer as head contractor and Deluxe…

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: [2017] NSWSC 894
Decision Date: 07 July 2017

CaseChat Overview and Summary

The matter before the court involved a liquidator, Deluxe Developments Pty Ltd, who sought to appeal a decision made in the Federal Circuit Court. The appeal was directed against Downer EDI Engineering Pty Ltd, a party involved in the original proceedings. The central dispute centred around the liquidator's request to extend the time limit for lodging an appeal against the Federal Circuit Court's decision. This request was made outside the statutory timeframe, necessitating an extension of time.

The court was required to determine two primary legal issues: first, whether granting the extension would prejudice Downer EDI Engineering Pty Ltd; and second, whether the liquidator would suffer prejudice if the extension was denied. The court also needed to consider whether there were exceptional circumstances justifying the late filing of the notice of appeal. Furthermore, the liquidator sought a determination of a separate question under section 86 of the Federal Court of Australia Act, which pertains to the circumstances in which the court may determine a separate question.

In its reasoning, the court emphasised the importance of ensuring that the right to appeal is not unreasonably curtailed while also balancing the need to maintain the integrity of court processes. The court examined the specific circumstances of the case, including the reasons for the delay and the potential impact of the extension on both parties. Ultimately, the court found that allowing the extension would not prejudice Downer EDI Engineering Pty Ltd and that exceptional circumstances did exist to warrant the late filing. Consequently, the court granted the extension and determined the separate question in favour of the liquidator. The final orders included permission for the liquidator to lodge the appeal within the extended timeframe and a determination that the separate question could be addressed in the appeal proceedings.

Orders