FBM Corporation Pty Ltd v Redsilk Enterprises Pty Ltd
[2013] WASC 404
•11 NOVEMBER 2013
FBM CORPORATION PTY LTD -v- REDSILK ENTERPRISES PTY LTD [2013] WASC 404
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2013] WASC 404 | |
| Case No: | COR:226/2013 | 11 NOVEMBER 2013 | |
| Coram: | EDELMAN J | 11/11/13 | |
| 6 | Judgment Part: | 1 of 1 | |
| Result: | Extension of time granted for compliance with statutory demand | ||
| B | |||
| PDF Version |
| Parties: | FBM CORPORATION PTY LTD REDSILK ENTERPRISES PTY LTD |
Catchwords: | Corporations Statutory demand Extension of time to comply with statutory demand Orders sought to preserve the position pending appeal Whether the Court of Appeal is the appropriate forum for resolution of this application Considerations of convenience and comity No argument concerning power of the Court of Appeal |
Legislation: | Corporations Act 2001 (Cth), s 58AA, s 459F, s 459G, s 1322(4)(d) Supreme Court Act 1935 (WA), s 7(1), s 43, s 58(1)(d), s 58(2) |
Case References: | Allmark v Mossensons (a firm) [2006] WASCA 127 Apex Minerals NL v Ashley [2012] WASC 499 Australian Beverage Distributors Pty Ltd v Cranswick Premium Wines Pty Ltd [2004] NSWSC 877; (2004) 50 ACSR 544 Energy Equity Corporation Ltd v Sinedie Pty Ltd [2002] WASCA 3 Hetherington v Tallenford Pty Ltd [2013] WASCA 175 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
REDSILK ENTERPRISES PTY LTD
Defendant
Catchwords:
Corporations - Statutory demand - Extension of time to comply with statutory demand - Orders sought to preserve the position pending appeal - Whether the Court of Appeal is the appropriate forum for resolution of this application - Considerations of convenience and comity - No argument concerning power of the Court of Appeal
Legislation:
Corporations Act 2001 (Cth), s 58AA, s 459F, s 459G, s 1322(4)(d)
Supreme Court Act 1935 (WA), s 7(1), s 43, s 58(1)(d), s 58(2)
Result:
Extension of time granted for compliance with statutory demand
Category: B
Representation:
Counsel:
Plaintiff : Mr J M Healy
Defendant : Mr S J Penrose
Solicitors:
Plaintiff : MKI Legal
Defendant : Tottle Partners
Cases referred to in judgment:
Allmark v Mossensons (a firm) [2006] WASCA 127
Apex Minerals NL v Ashley [2012] WASC 499
Australian Beverage Distributors Pty Ltd v Cranswick Premium Wines Pty Ltd [2004] NSWSC 877; (2004) 50 ACSR 544
Energy Equity Corporation Ltd v Sinedie Pty Ltd [2002] WASCA 3
Hetherington v Tallenford Pty Ltd [2013] WASCA 175
1 EDELMAN J: On 2 August 2013, FBM Corporation filed an application under s 459G of the Corporations Act2001 (Cth) to set aside a statutory demand arising from an alleged debt of $282,720.20. Last Tuesday, 5 November 2013, Master Sanderson delivered reasons for decision dismissing the application by FBM Corporation. It was common ground that the period for compliance with the statutory demand expires tomorrow, 12 November 2013.
2 On Friday 8 November 2013, FBM Corporation brought an application in the Court of Appeal for leave to appeal from that decision.
3 On Friday 8 November 2013, FBM Corporation also filed an originating process in the General Division of the Supreme Court commencing an application to extend time for compliance with the statutory demand until after the appeal is heard. The application was not brought in the appeal. Nor was it brought before Master Sanderson.
4 The 8 November 2013 application to extend time to comply with the statutory demand relied upon s 459F of the Corporations Act 2001 (Cth). That section provides as follows:
When company taken to fail to comply with statutory demand
(1) If, as at the end of the period for compliance with a statutory demand, the demand is still in effect and the company has not complied with it, the company is taken to fail to comply with the demand at the end of that period.
(2) The period for compliance with a statutory demand is:
(a) if the company applies in accordance with section 459G for an order setting aside the demand:
(i) if, on hearing the application under section 459G, or on an application by the company under this paragraph, the Court makes an order that extends the period for compliance with the demand--the period specified in the order, or in the last such order, as the case requires, as the period for such compliance; or
(ii) otherwise--the period beginning on the day when the demand is served and ending 7 days after the application under section 459G is finally determined or otherwise disposed of; or
(b) otherwise--21 days after the demand is served.
6 Unfortunately, conferral between counsel did not occur. Affidavit evidence was filed by FBM Corporation and submissions were filed by both FBM Corporation and Redsilk Enterprises. The evidence and submissions included matters concerning the prospects of success on the appeal.
7 At the commencement of the application before me, counsel for FBM Corporation indicated that he was content to seek an order for a brief extension of time in order to enable him to bring the same application before the Court of Appeal.
8 Counsel for Redsilk Enterprises said that he opposed the extension of time for compliance with the statutory demand. But counsel for Redsilk Enterprises said that he had no submissions to make concerning why it would not be appropriate to grant a brief extension of time to permit an application to be brought in the Court of Appeal.
9 I made the following orders in Court this afternoon, indicating to parties that I would publish short reasons for taking this course:
1. The time for service of this application be abridged.
2. Pursuant to s 459F(2)(a)(i) and s 1322(4)(d) of the Corporations Act 2001 (Cth), the time for compliance with the defendant's statutory demand for payment of debt dated 11 July 2013 and served 18 July 2013 be extended from 12 November 2013 to 14 November 2013.
3. The costs of this application be in the costs of the foreshadowed application in the Court of Appeal to extend the time for compliance with the statutory demand.
10 There were no submissions made in opposition to order 3 concerning costs.
11 My reasons for making order 2 are fourfold.
12 First, no arguments concerning jurisdiction or power of the General Division or the Court of Appeal were raised before me. There have been orders made extending time for compliance with a statutory demand by single judges of this Court pending an appeal to the Court of Appeal,1 by single judges of the Full Court of this Court pending an application for special leave to appeal to the High Court,2 and by single judges in the New South Wales Supreme Court pending appeal to the Court of Appeal of New South Wales.3 But in the very brief time I had to research this point I was unable to find any published decision of a Court of Appeal which has exercised power to extend time for compliance with a statutory demand.
13 Although counsel were given notice of the point, it was not submitted that the Court of Appeal lacked power to make an order extending time for compliance with a statutory demand pending the determination of an appeal to the Court of Appeal.4 Indeed, counsel for Redsilk Enterprises submitted that the course that should have been taken, as is now sought by FBM Corporation, was for this application to have been brought in the appeal.
14 If concerns arise about a lack of power for the Court of Appeal to hear an application, the extension of time for compliance which I have granted would still leave open the possibility for FBM Corporation to seek a further order from the General Division of this Court that the issue be referred from the General Division to the Court of Appeal for determination.5 My orders have not been perfected and, subject to argument on the point, my tentative view is that I would grant liberty to apply to seek any orders in relation to that issue, if necessary. An application can be made to me at short notice.
15 Secondly,it was common ground that a decision to extend time in this application requires an assessment of:
(i) the prospects of success in the appeal and whether an arguable case has been shown;
(ii) whether the appeal will be rendered nugatory unless the extension is granted; and
(iii) the prejudice the respective parties will suffer in the alternative eventualities.6
16 At the very least, there is substantial overlap between these issues and the general approach taken to the question of leave to appeal which is currently before the Court of Appeal. That general approach involves asking whether the decision below is attended with sufficient doubt to justify the granting of leave, and, in addition, whether substantial injustice would be done by leaving the decision unreversed.7
17 Thirdly, one of the arguments put by Redsilk Enterprises in order to resist the application for an extension of time is that to extend time in circumstances in which FBM Corporation is insolvent 'would be prejudicial to the interests of the plaintiff's creditors pending the determination of the appeal, a process which will presumably take months'.8 One possible answer to this submission is that the application could be granted on the condition that FBM Corporation seek expedition of its appeal.9 But whether expedition would be granted, and the time when such an appeal would be heard, are obviously matters for the Court of Appeal.
18 Fourthly,there may be a real question of the utility of any order which I make. For instance, if I were to make an order refusing to extend the time for compliance then, in circumstances in which an appeal is already on foot, FBM Corporation might seek leave to appeal from my decision extending time for compliance. This would bring the near-identical issue to the Court of Appeal on an expedited basis prior to the expiry of the period for compliance tomorrow.
19 It was for these reasons that I made the orders set out at [9] above.
1Apex Minerals NL v Ashley [2012] WASC 499.
2Energy Equity Corporation Ltd v Sinedie Pty Ltd [2002] WASCA 3.
3Australian Beverage Distributors Pty Ltd v Cranswick Premium Wines Pty Ltd [2004] NSWSC 877; (2004) 50 ACSR 544.
4 See Corporations Act 2001 (Cth) s 1322(4)(d), s 58AA ('Court'). Cf Supreme Court Act 1935 (WA) s 7(1).
5Supreme Court Act 1935 (WA) s 43, s 58(1)(d), s 58(2).
6Australian Beverage Distributors Pty Ltd v Cranswick Premium Wines Pty Ltd [2004] NSWSC 877; (2004) 50 ACSR 544; Energy Equity Corporation Ltd v Sinedie Pty Ltd [2002] WASCA 3.
7Allmark v Mossensons (a firm) [2006] WASCA 127 [26] (Pullin JA, Buss JA agreeing); Hetherington v Tallenford Pty Ltd [2013] WASCA 175 [49] (the Court).
8 Submissions of Redsilk Enterprises, 11 November 2013 [2.2].
9Australian Beverage Distributors Pty Ltd v Cranswick Premium Wines Pty Ltd [2004] NSWSC 877; (2004) 50 ACSR 544.
1
5
2