Mayo v W and K Holdings (NSW) Pty Limited

[2014] NSWCA 120

Court of Appeal

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Mayo v W & K Holdings (NSW) Pty Limited [2014] NSWCA 120

Hearing dates:

7 April 2014

Decision date:

07 April 2014

Before:

Barrett JA

Decision:

1. Pursuant to s 471B of the Corporations Act2001 (Cth) the appellant have leave to proceed with this appeal against the first respondent.

2. Costs of this motion to be costs in the cause.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:

APPEAL - respondent in liquidation - leave to proceed required - grant of leave not opposed by liquidator - proof of debt not a realistic possibility in the circumstances - leave granted

Legislation Cited:

Corporations Act 2001 (Cth)

Cases Cited:

Distinctive FX 9 Pty Ltd v Statewide Developments Pty Ltd [2012] NSWCA 393
Vagrand Pty Ltd v Fielding (1993) 41 FCR 550

Category:

Interlocutory applications

Parties:

Lauren Margaret Mayo (Appellant)
W & K Holdings Pty Limited (First Respondent)
William Arthur Leonard (Second Respondent)

Representation:

Counsel:
H W D Stowe (Appellant)
Solicitors:

File Number(s):

2013/332269

 Decision under appeal 

Citation:

[2013] NSWSC 1063

Date of Decision:

2013-08-09 00:00:00

Before:

Sackar J

File Number(s):

2009/289575

Judgment

1. BARRETT JA: The appellant has initiated an appeal in respect of the judgment and orders of Sackar J in proceedings in which his Honour ordered the rectification of certain lease agreements affecting machinery. The effect of the rectification was to alter the basis for the calculation of interest and to include a provision for the transfer of title to the machinery at the end of the lease.

1. The appellant maintains that rectification should not have been ordered and that the agreements should have been left to take effect according to their terms in unmodified form.

1. Since the making of Sackar J's orders, the first respondent, which is the lessee of the machinery, has become subject to winding up in insolvency, with the result that the appellant is not permitted to proceed with the appeal in the absence of a grant of leave under s 471B of the Corporations Act2001 (Cth): Distinctive FX 9 Pty Ltd v Statewide Developments Pty Ltd [2012] NSWCA 393 at [13].

1. It is the appellant's application for that leave that is now before me.

1. The appellant has put before the Court on the application correspondence with the liquidator of the first respondent which makes it clear that, while the liquidator does not consent to the grant of leave, there is at the same time no opposition. The absence of opposition is a relevant factor in the exercise of the Court's discretion.

1. An important issue is as to the prospects of success on appeal, or more precisely, whether there is a serious question for the appellate court. The written submissions that Mr Stowe has handed up contain an analysis of the grounds of appeal in their annexure A. That analysis persuades me that there are matters properly deserving of attention in this Court.

1. The other important question is whether it is appropriate to remove the controversy from the decision-making process involved in adjudication of a proof of debt by a liquidator, being a process that is more streamlined than litigation: Vagrand Pty Ltd v Fielding (1993) 41 FCR 550 at 553 - 557. In this case, I am of the opinion that a positive answer must be given to that question, in view of the nature of the relief granted below and the matters in contention on appeal.

1. With the court having exercised its power to rectify the lease agreements and the question before the Court of Appeal being whether that rectification should or should not stand, it can scarcely be conceived that the issues should be placed before a liquidator for decision in the context of adjudication of a proof of debt. In order to raise the relevant matter, the appellant would be forced to frame her proof of debt on the basis of the agreements in their unrectified form. Once the liquidator had adjudicated the proof, any appeal in respect of the adjudication would come before a judge of the Equity Division and that judge would be required to consider arguments that have already been addressed by Sackar J and are proposed to be put before this Court in the appeal proceedings.

1. That is not at all an efficient or convenient way in which to progress the resolution of the parties' differences. The nature of the relevant equitable jurisdiction and the fact that there has been a decision of the Supreme Court mean that appeal to the Court of Appeal, rather than lodgment of a proof of debt, is the appropriate way forward. In all the circumstances, leave should be granted.

1. I make the following orders:

1. Pursuant to s 471B of the Corporations Act2001 (Cth) the appellant have leave to proceed with this appeal against the first respondent.

2. Costs of this motion to be costs in the cause.

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Amendments

11 April 2014 - Amended paragraphs: paragraph 9, line 1 "party's" to "parties"

Decision last updated: 11 April 2014