Deputy Commissioner of Taxation v Fritwell Pty Limited

[1999] NSWSC 263

CITATION:	Deputy Commissioner of Taxation v Fritwell Pty Limited [1999] NSWSC 263
CURRENT JURISDICTION:	Equity Division
FILE NUMBER(S):	2015/95
HEARING DATE(S):	29 March 1999
JUDGMENT DATE:	29 March 1999
PARTIES :	Deputy Commissioner of Taxation (P) Fritwell Pty Limited (D & Cr-cl) Deputy Commissioner of Taxation (Cr-cl) Sean Miller (Cr-D 1) Stuart Miller (Cr-D 2) Christina Brassington (Cr-D 3)
JUDGMENT OF:	Master McLaughlin

COUNSEL :	Mr. M. Murray (P) Mr. J. K. Chippendall (D)
SOLICITORS:	Australian Government Solicitor (P) M.D. Nikolaidis & Co (D)
CATCHWORDS:
DECISION:

SUPREME COURT OF
NEW SOUTH WALES
EQUITY DIVISION

MASTER McLAUGHLIN

Monday, 29 March 1999

2015/95 DEPUTY COMMISSIONER OF TAXATION -v- FRITWELL PTY LIMITED

JUDGMENT

1 MASTER: There is presently before me a Notice of Motion filed by the plaintiff, the Deputy Commission of Taxation, on 17 February 1999. By that Notice of Motion the plaintiff seeks, substantively, an order that the Notice of Motion filed by Hugh Jenner Wily, as liquidator of the defendant, Fritwell Pty Limited, filed on 31 July 1995, be struck out for want of prosecution. 2 That Notice of Motion filed on 31 July 1995 sought, substantively, a declaration that a payment which had been made by the defendant on 16 March 1995, in the sum of $64,942.03 to the Deputy Commissioner of Taxation, was an unfair preference within the meaning of section 588F(a) of the Corporations Law, and consequential orders that the Deputy Commission of Taxation pay that sum to the liquidator and also pay interest upon that sum. 3 It would appear that proceedings for the winding up of the defendant were instituted in February 1995. Those proceedings sought payment by the defendant to the Deputy Commissioner of Taxation of the sum of $64,942.03. Upon payment of that amount by the defendant, the proceedings were dismissed on 16 March 1995. 4 However, subsequently, the defendant was wound up by order of the court in the present proceedings in 2015 of 1995. Mr Hugh Jenner Wily was appointed the liquidator of the defendant. Subsequently he, upon his retirement, has been succeeded in that role by the present liquidator of the defendant, Mr Andrew Hugh Jenner Wily. The liquidator seeks to have repaid to him the amount which in March 1995 was paid by the defendant to the present plaintiff, upon the ground that that payment constitutes a preference which advantages the plaintiff to the detriment of other creditors of the defendant. 5 It is not necessary for me to rehearse the procedural history of the matter since the liquidator filed the Notice of Motion to which I have already referred on 31 July 1995 seeking relief in relation to that payment. Suffice it to say, however, that on 20 June 1996 the proceedings, being in essence the Notice of Motion filed on 31 July 1995, were stood over generally. The liquidator has made no attempt since that time to advance the proceedings which are before the Court. It would appear, however, that the liquidator has conducted certain negotiations directly with the Deputy Commissioner of Taxation, rather than (as would have been more appropriate) through the solicitors for the liquidator and with the Australian Government solicitor, which is acting for the plaintiff in the present proceedings. 6 For instance, as recently as 3 February 1999, the liquidator has seen fit to address to the Australian Taxation Office a demand for repayment of the moneys which are the subject of the present claim, together with interest thereon, and in making that demand, to rely upon a somewhat curious letter which the Moneys Insolvency Unit of the Australian Taxation Office sent to the liquidator on 1 June 1995 (which would give the impression of constituting an admission of the liability of the plaintiff to repay the amount claimed as constituting "a voidable transaction as an unfair preference"). 7 Indeed, even after the present application had been foreshadowed, the liquidator again wrote on 17 February 1999 (the date on which the Notice of Motion presently before the Court was in fact filed), seeking payment of the amount which is the subject of the present proceedings. It is entirely inappropriate in my view that, where there are contentious proceedings on foot between parties, each of whom is represented by legal representatives, one of those parties should claim payment of the moneys which are the subject of the proceedings by what is in effect a demand addressed directly to the other party, without acknowledging the existence of the proceedings and without acknowledging the fact that each of the parties is represented by its or his respective solicitor. 8 The principles relating to the dismissal of proceedings for want of prosecution are well known. It is unnecessary for me here to repeat those principles. There is little merit in the situation in which the defendant finds himself. Mr Chippendall, of Counsel for the defendant, has however submitted that in applying the various principles on which the Court should exercise its discretion in an application to dismiss for want of prosecution, the Court should ultimately exercise its discretion against such dismissal. He has pointed to the fact that the relevant limitation period pursuant to the provisions of section 588SE of the Corporations Law may now have expired. He has pointed to what he has described as the acquiescence by the Deputy Commissioner of Taxation in the progress of the negotiations, and he has queried whether there is any prejudice to the plaintiff which would be greater than the prejudice to the defendant if the proceedings were now to be dismissed. 9    On behalf of the plaintiff it has however been submitted that, consequent upon the delay by the defendant, a delay which it should be emphasised has not been in any way satisfactorily explained, there has been some prejudice to the plaintiff because of the fact that at least one the solicitors who was formerly handling the matter in the office of the Australian Government solicitor is no longer employed by that entity, and the fact that at least one of the officers who had been handling the matter in the office of the plaintiff, being the officer responsible for the matter in June 1995, not only is no longer employed by the plaintiff but as I have been informed, is no longer living in Australia. 10    I appreciate that there is some prejudice to the plaintiff if the proceedings are allowed to remain on foot. It will however be understood that it was always open to the plaintiff at any time after 20 June 1996 to make an application to have the defendant's present claim dismissed for want of prosecution. 11    I have arrived at the conclusion that, on balance, it is not appropriate that I should at this stage dismiss for want of prosecution the present application of the defendant for relief of the nature sought in its Notice of Motion filed on 31 July 1995. It seems to me appropriate however that I should make directions in the matter which will ensure that there is no further delay in having that application brought on for hearing. 12    In addition, it seems to me that the plaintiff was fully justified in making the present application, and I propose to make an order for costs in favour of the plaintiff. 13    I make the following orders:

1. I order that the defendant file and serve any further affidavits upon which it may wish to rely on or before Tuesday 27 April 1999.
2. I stand the matter over to Thursday 29 April 1999 before the Registrar.
3. I order that the defendant pay the costs of the plaintiff of the Notice of Motion filed by the plaintiff on 17 February 1999.
4. I grant leave to the plaintiff to proceed forthwith to assessment of the foregoing costs.

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