Flexirent Capital Pty Ltd v Pro-Active Business Corporation Pty Ltd

[2007] FCA 856

FEDERAL COURT OF AUSTRALIA

Flexirent Capital Pty Ltd v Pro-Active Business Corporation Pty Ltd [2007] FCA 856

FLEXIRENT CAPITAL PTY LTD (ACN 064 046 046) v PRO-ACTIVE BUSINESS CORPORATION PTY LTD (ACN 105 109 564), JARROD FRANCIS MCKENZIE, MICHAEL JAMES MAUNDER, DIRECT.2.U PTY LTD (ACN 105 571 551), GLYN BETHUNE, BRIAN DAVID MCLEOD, RICHARD SEDAWIE AND PAUL BRAUER
VID 630 OF 2004

GRAY J
14 MAY 2007
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 630 OF 2004

BETWEEN:

FLEXIRENT CAPITAL PTY LTD (ACN 064 046 046)
Applicant

AND:

PRO-ACTIVE BUSINESS CORPORATION PTY LTD
(ACN 105 109 564)
First Respondent

JARROD FRANCIS MCKENZIE
Second Respondent

MICHAEL JAMES MAUNDER
Third Respondent

DIRECT.2.U PTY LTD (ACN 105 571 551)
Fourth Respondent

GLYN BETHUNE
Fifth Respondent

BRIAN DAVID MCLEOD
Sixth Respondent

RICHARD SEDAWIE
Seventh Respondent

PAUL BRAUER
Eighth Respondent

JUDGE:	GRAY J
DATE OF ORDER:	14 MAY 2007
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1.The applicant have leave to discontinue the proceeding against the first and second respondents.

2.There be no order as to costs as between the applicant and the first and second respondents.

3.        Liberty to apply is reserved to the first and second respondents.

Note:   Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 630 OF 2004

BETWEEN:

FLEXIRENT CAPITAL PTY LTD (ACN 064 046 046)
Applicant

AND:

PRO-ACTIVE BUSINESS CORPORATION PTY LTD
(ACN 105 109 564)
First Respondent

JARROD FRANCIS MCKENZIE
Second Respondent

MICHAEL JAMES MAUNDER
Third Respondent

DIRECT.2.U PTY LTD (ACN 105 571 551)
Fourth Respondent

GLYN BETHUNE
Fifth Respondent

BRIAN DAVID MCLEOD
Sixth Respondent

RICHARD SEDAWIE
Seventh Respondent

PAUL BRAUER
Eighth Respondent

JUDGE:	GRAY J
DATE:	14 MAY 2007
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

1. This proceeding was commenced originally against eight respondents.  Only the first and second of those respondents now remain effectively active respondents.  The proceeding has already been discontinued pursuant to orders of the Court against the sixth and eighth respondents.  The fourth, fifth and seventh respondents were never served with the originating process, and the third respondent is an undischarged bankrupt, against whom the proceeding is consequently stayed.

2. The first respondent is a corporation and the second respondent is a director of it.  To some extent, they have participated in the proceeding.  A solicitor, apparently retained by them, has filed documents bearing the solicitor’s name and what appears to be the solicitor’s office address.  One thing that the solicitor has failed to file is a notice of appearance.  Accordingly, officially, the solicitor is not on the record.  Unfortunately, this escaped the notice of the Court as well as of the solicitor acting for the applicant.

3. Previous orders of the Court were made, in effect, for a trial on the issue of damages only against the first and second respondents.  On pursuing that, however, the applicant decided to see if it could resolve the matter with the first and second respondents without such a trial.  A proposal was put by the solicitor for the applicant to the solicitor who appeared to be acting for the first and second respondents.  That solicitor replied that he was unable to make any contact with the first and second respondents.  The solicitor has also informed the Court that he is unable to communicate at all with those whom he regards as his clients.

4. In these circumstances, the applicant has now applied, by notice of motion filed on 8 May 2007, for leave to discontinue the proceeding, without there being any order as to costs as between the applicant and the first and second respondents.  The notice of motion and the supporting affidavit have been served on the solicitor who was supposed to be acting for the first and second respondents.  That service was effected in ample time to enable the notice of motion to be dealt with today.  Unfortunately, because the solicitor is not formally on the record for the first and second respondents, the service is ineffective to provide the required notice to those parties.  The applicant has not attempted to serve the notice of motion on the registered office of the first respondent, or personally on the second respondent.

5. Instead, the solicitor for the applicant has submitted to me today that the applicant ought to be allowed to obtain the orders sought in the notice of motion.  I can see considerable force in the argument that the first and second respondents ought to be given notice properly when an order of this kind is sought against them.  On the other hand, there seems to be little in the way of utility to be served by adjourning the notice of motion and requiring service of it in the manner I have described.  That sort of order would only increase the costs of the proceeding, in a situation in which the first and second respondents have already indicated that they have no funds and, for that reason, have no desire to participate further in the conduct of the proceeding.

6. In the circumstances, it seems to me that, if I were to make the orders sought by the applicant today, and I were to reserve liberty to apply, that would leave it open to the first and second respondents, if they should see fit to do so, to seek to set aside the order and to contest the issue of discontinuance, or the issue of costs, or both of those issues.  It seems to me that utility will be best served by the making of such an order.

7. Accordingly, the orders that I make are as follows:

   1.The applicant have leave to discontinue the proceeding against the first and second respondents.

   2.There be no order as to costs as between the applicant and the first and second respondents.

   3.        Liberty to apply is reserved to the first and second respondents.

I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gray.

Associate:

Dated:       4 June 2007

Counsel for the Applicant:	P Matthews
Solicitor for the Applicant:	Mallesons Stephen Jaques
Counsel for the First and Second respondents:	The first and second respondents did not appear and were not represented
Date of Hearing:	14 May 2007
Date of Judgment:	14 May 2007