DJO Enterprises Pty Ltd v Premier Photo Imports International Pty Ltd

[2013] VCC 1180

IN THE COUNTY COURT OF VICTORIA
AT MELBOURNE Revised
(Not) Restricted

COMMERCIAL LIST
EXPEDITED CASES DIVISION

Case No. CI-13-03610

DJO ENTERPRISES PTY LTD	Plaintiff
v.
PREMIER PHOTO IMPORTS INTERNATIONAL PTY LTD & ORS	Defendants

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JUDGE:	His Honour Judge Anderson
WHERE HELD:	Melbourne
DATE OF HEARING:	6 September 2013
DATE OF JUDGMENT:	6 September 2013 (revised 6 September 2013)
CASE MAY BE CITED AS:	DJO Enterprises Pty Ltd v. Premier Photo Imports International Pty Ltd & Ors
MEDIUM NEUTRAL CITATION:	[2013] VCC 1180

REASONS FOR JUDGMENT

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Catchwords:            Practice and procedure – Application by a director to represent a defendant company in the proceeding – Applicant likely to be acting at the direction of her bankrupt husband – Applicant’s husband’s trustee in bankruptcy also a defendant -  Application refused.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr  L E P Magowan	Koornang Legal Services
For the Second Defendant	Mrs L Apakian (Director of the Second Defendant seeking leave)

HIS HONOUR:

1Linda Kay Apakian has sought leave of the Court to represent the second defendant Handley Hall Pty Ltd in the proceeding. Mrs Apakian is the sole director of the second defendant. She has been a director of the company since February 1997. Her husband was a director and a secretary of the company until he resigned on 30 May 2013. Mr Apakian was made bankrupt on 21 June 2013. His trustee in bankruptcy is the fourth defendant in the proceeding.    

2The only defence filed in the proceeding on behalf of the second defendant is a document prepared by Mrs Apakian dated 21 August 2013. In order for that document to be a valid defence, or for the company to take any step in the proceeding, it must be represented by solicitors or leave must be granted for another person to represent the company.

3The basis for the claim against the second defendant is as the guarantor of a debt alleged to be owing by the first defendant to the plaintiff. The second defendant’s obligations are alleged to arise from a deed made 16 December 2009 between the plaintiff, the first defendant, and the second defendant. A document has been provided to the Court which appears to be executed on behalf of the second defendant by Mrs Apakian as a director and apparently by her husband as the sole director and secretary of the first defendant.

4Mrs Apakian submitted that she should be permitted to represent the second defendant in the proceeding for the following reasons:

a.she is the sole director;

b.there is a defence to the proceeding on the basis that no monies were owing from the first defendant to the plaintiff and that the deed, pursuant to which the second defendant was sued as a guarantor, was not a binding agreement;

c.the second defendant, as trustee of a family trust, and both herself and her husband personally have no means to engage solicitors to act on behalf of the second defendant.

5At the commencement of the application, Mrs Appakian asked if her husband could speak on her behalf on the application. She said that the application, including her affidavit, had been prepared by her husband, she had no independent information about the matters in dispute in the proceeding, she had signed documents which were given to her by her husband to sign and she was simply acting on her husband’s advice.

6I refused Mrs Apakian’s request for her husband to speak on her behalf in support of the application. I indicated to her that the making of such a request indicated that the application itself may lack merit because essentially it would be her husband who was making the application and would represent the second defendant in the proceeding as she was not capable of doing so herself.

7Mrs Apakian made the application and supported it by oral submissions. I do not consider however that it is appropriate to grant the application. It is clear, in my view, that effectively it would be Mr Apakian rather than his wife who would be representing the company and taking action on its behalf. It would not be appropriate for a person recently made bankrupt to take such steps for the company in the proceeding. It would also not be appropriate as the fourth defendant is Mr Apakian’s trustee in bankruptcy.

8Mr Magowan of Counsel for the plaintiff, submitted that documents obtained from the Office of Titles in relation to Mr and Mrs Apakian’s home, indicate that in recent months the property has been offered as security for transactions which may have an effect on the enforceability of a caveat lodged by the plaintiff on 21 March 2012. A further caveat was lodged by Madison Lawyers on 17 May 2013, on behalf of Pamela Anne Thomson, relying upon a charge apparently dated in 2004. Ms Thomson is the third defendant in the proceeding. A further caveat was lodged by Madison Lawyers on its own behalf relying upon a charge dated 8 April 2013.

9A mortgage dated 21 June 2013, the day Mr Apakian became bankrupt, was lodged by him at the Office of Titles that day. The mortgage secures an advance of $340,000 by Ms Thomson to the second defendant. The document purports to be executed on behalf of  the second defendant by both Mr and Mrs Apakian as directors, although Mr Apakain ceased to be a director on 30 May 2013. A further caveat was lodged on 27 August 2013 by Mr Apakain. The caveator is Mrs Apakian. She claims an interest as chargee “pursuant to loan agreement dated 11 July 2012 between Pamela Anne Thomson and Linda Kay Apakian”.

10I consider that in the circumstances there is no proper basis for leave being granted to Mrs Apakian to represent the second defendant in the proceeding. Mrs Apakian was granted leave by Her Honour Judge Kennedy on 9 August 2013 to represent the second defendant at a directions hearing. On that day, it was recorded in the order made by her Honour that Mrs Apakain was provided with a copy of the decision of the Court of Appeal in Worldwide Enterprises Pty Ltd  v Silberman & Anor [2009] VSC165  and that she was “informed by the Court that she would not, in the future, be able to act for the second defendant without seeking leave of the Court”.

11I consider that because of the activity associated with the title to Mr and Mrs Apakian’s property that unless the second defendant is represented by solicitors and those solicitors indicate their intention to go on the record and provide appropriate affidavit material indicating that there is a proper basis for a defence to the proceeding, that the plaintiff should be able to exercise its rights pursuant to the Rules and to enter judgment in default of defence.

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Certificate

I certify that these 3 pages are a true copy of the reasons for decision of His Honour Judge Anderson delivered on 6 September 2013 and revised that day.

Dated:      6 September 2013

Philippa Gilkes

Associate to His Honour Judge Anderson