Koch (Liquidator), in the matter of JC Nominees Pty Ltd (in liquidation) v Trim
[2020] FCA 1637
•7 September 2020
FEDERAL COURT OF AUSTRALIA
Koch (Liquidator), in the matter of JC Nominees Pty Ltd (in liquidation) v Trim [2020] FCA 1637
File number: SAD 35 of 2017 Judgment of: CHARLESWORTH J Date of judgment: 7 September 2020 Date of Publication of Reasons: 11 November 2020 Legislation: Corporations Act 2001 (Cth) Division: General Division Registry: South Australia National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Number of paragraphs: 21 Date of hearing: 7 September 2020 Counsel for the Applicants: Mr E Belperio Solicitor for the Applicants: O’Toole Lawyers Counsel for the First Respondent: Mr G Griffin Solicitor for the First Respondent: Griffins Lawyers Counsel for the Second and Third Respondents: Mr R Trim appeared on behalf of the Second and Third Respondents ORDERS
SAD 35 of 2017 IN THE MATTER OF JC NOMINEES PTY LTD (IN LIQUIDATION)
BETWEEN: TARQUIN KOCH AS LIQUIDATOR OF JC NOMINEES PTY LTD (IN LIQUIDATION) ACN 007 789 488
First Applicant
JC NOMINEES PTY LTD (IN LIQUIDATION) ACN 007 789 488
Second Applicant
AND: MATTHEW DARREN TRIM
First Respondent
ELIZABETH MARGARET TRIM
Second Respondent
TRIMS PROPERTIES PTY LTD ACN 007 740 561
Third Respondent
ORDER MADE BY:
CHARLESWORTH J
DATE OF ORDER:
7 SEPTEMBER 2020
THE COURT ORDERS THAT:
1.The applicants be permitted to make an oral application for summary judgment against the second and third respondents in the sum of $47,350.00.
2.The applicants are excused from filing an amended statement of claim deposing to the facts relied upon in support of their application for summary judgment.
3.The application for summary judgment is allowed.
4.The first and second respondents are to pay to $47,350.00 to the applicants, being the sum owing pursuant to the Deed of Settlement entered into on 28 June 2018, forming annexure SMO-1 to the affidavit of Susan Mary O’Toole sworn on 5 May 2020.
5.The respondents are to pay the applicants’ costs of the application for summary judgment.
6.The originating application dated 3 February 2017 is otherwise dismissed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
CHARLESWORTH J
The first applicant, Mr Tarquin Koch is the liquidator of the second applicant, JC Nominees Pty Ltd (in liquidation) ACN 007 789 488 (the Company). The first and second respondents (Mr Matthew Trim and Ms Elizabeth Trim) are directors of the Company.
By their second statement of claim the applicants alleged that the directors had contravened provisions of the Corporations Act 2001 (Cth) and fiduciary duties owed to the Company. Among other things, they alleged that the third respondent was a knowing recipient of benefits flowing from the directors’ contraventions. The applicants have compromised those claims in the circumstances described below.
On 7 September 2020 I made orders in this action in the following terms:
1.The applicants be permitted to make an oral application for summary judgment against the second and third respondents in the sum of $47,350.00.
2.The applicants are excused from filing an amended statement of claim deposing to the facts relied upon in support of their application for summary judgment.
3.The application for summary judgment is allowed.
4.The first and second respondents are to pay to $47,350.00 to the applicants, being the sum owing pursuant to the Deed of Settlement entered into on 28 June 2018, forming annexure SMO-1 to the affidavit of Susan Mary O’Toole sworn on 5 May 2020.
5.The respondents are to pay the applicants’ costs of the application for summary judgment.
6.The originating application dated 3 February 2017 is otherwise dismissed.
Oral reasons for making the orders were delivered at the time that the orders were made.
I now provide a written record of those reasons, expressed in substantially the same terms as those given orally.
Reasons
The Court has before it an application for summary judgment in relation to amounts said to be owing under a Deed entered into between the applicants, the respondents, and a non-party to the proceedings.
The Deed was entered into following a mediation conducted by a Registrar of this Court. By that Deed, the applicants agreed that they would accept, in settlement of the dispute, payment of the total sum of $60,000 to be jointly and severally paid by the three other parties to the Deed.
Clause 2 of the Deed is titled “The Settlement”. It provides at cl 2.1 that Mr Matthew Trim, Ms Elizabeth Trim and Mr Russell Trim (the non-party) will pay to the liquidator (the first applicant) in his own right, and for and on behalf of the company, the sum of $60,000.
Clause 2.2 provided that the liability to pay that sum was to be joint and several.
Clause 2.3 set out the dates by which instalments were to be paid and the amounts of those instalments.
Clause 2.5 provided that the proceedings would remain on foot until the whole sum of $60,000 had been paid, after which the proceedings were to be discontinued.
Clause 2.6 provided as follows:
In default of any one payment, the whole of the balance of the $60,000 due shall become immediately due and payable. The Liquidator and the Company shall have the option to enter summary judgment against Matthew Trim, Elizabeth Trim or Russell Trim for the balance owing. The liquidator shall retain the alternate right to prosecute the Proceedings but shall not be entitled to exercise both option[s].
As at 30 January 2020, the applicants had not received all of the sums that were payable pursuant to cl 2.3 of the Deed. In particular, the payment required in subcl 2.3.2 (that is $10,000 by the end of December 2018) had not been paid, although smaller amounts had been advanced.
I am satisfied that there was a discussion between Mr Russell Trim and the solicitor for the applicants on 30 January 2020. The parties are in dispute as to the effect of that conversation. It is the applicants’ evidence that the solicitor for the applicants, Ms O’Toole, granted an extension of six months in which to pay the instalments that were then owing. For the respondents it was alleged that the effect of the conversation was that no further payments were due to be made within the six months. However, Ms Trim accepts that the whole of the outstanding amounts were to have been paid by 31 July 2020. On any view of the facts, the instalments owing under the Deed were to have been paid in full by that date.
That was not done.
The proper evaluation of the facts is that there has been forbearance on the part of the liquidator not to exercise his entitlement under cl 2.6 of the Deed for a period of six months commencing on 30 January 2020.
The application for summary judgment was filed on 5 May 2020. The respondents submit that the application was premature because of the six months grace that was extended by the applicants through their solicitor had not yet expired.
The applicants have today made an application orally to the Court seeking relief in the same terms as that sought on the interlocutory application filed on 5 May 2020 as later amended on 20 July 2020.
The effect of cl 2.6 of the Deed is that the applicants may elect either to seek summary judgment against Mr Matthew Trim, Ms Trim or Mr Russell Trim for the balance owing under the Deed, or the liquidator shall retain the alternate right to prosecute the proceedings (but shall not be entitled to exercise both options). Counsel for the applicants has confirmed that, by this proceeding, the applicants make the election to seek summary judgment for the balance presently owing. As at 7 September 2020, that amount is $47,350. Summary judgment is sought against only two counter parties to the Deed, namely Mr Matthew Trim and Ms Trim. No relief is sought against Mr Russell Trim, nor is any relief sought against the third corporate respondent in the proceeding.
I will grant leave to the applicants to bring this application for summary judgment within the same proceeding in which the originating application was filed, and I will dispense with any rules that might otherwise have required that the statement of claim be amended to record other facts deposed to in Ms O’Toole’s affidavits. I will proceed on the basis that an oral application has been made, supported by the affidavits of Ms O’Toole, and I will allow the application for the reasons I have given.
Additional order
As has been foreshadowed to the parties, the Court will extend the period in which to appeal from the orders, so as to expire on a date being 21 days from the publication of these reasons.
I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Charlesworth. Associate:
Dated: 11 November 2020
0
0
1