Meehan, W J v Stockmans Australian Cafe (Holdings) Pty Ltd (Subject to Deed of Company Arrangement)

[1996] FCA 996

NOT FOR DISTRIBUTION

IN THE FEDERAL COURT OF AUSTRALIA  )
NEW SOUTH WALES DISTRICT REGISTRY  )
GENERAL DIVISION  )           No. NG 592 of 1994

BETWEEN:WILLIAM JOSEPH MEEHAN and

NANCY THERESE MEEHAN

Applicants

AND:STOCKMANS AUSTRALIAN CAFE (HOLDINGS) PTY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT)

First Respondent

PAUL McVERRY

Second Respondent

CORAM:Lehane J

PLACE:Sydney

DATE:24 October 1996

MINUTE OF ORDERS

THE COURT ORDERS:

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

NOT FOR DISTRIBUTION

IN THE FEDERAL COURT OF AUSTRALIA  )
NEW SOUTH WALES DISTRICT REGISTRY  )
GENERAL DIVISION  )           No. NG 592 of 1994

BETWEEN:WILLIAM JOSEPH MEEHAN and

NANCY THERESE MEEHAN

Applicants

AND:STOCKMANS AUSTRALIAN CAFE (HOLDINGS) PTY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT)

First Respondent

PAUL McVERRY

Second Respondent

CORAM:Lehane J

PLACE:Sydney

DATE:24 October 1996

EXTEMPORE REASONS FOR JUDGMENT

LEHANE J:  This is a motion seeking the vacation of the dates set down for the trial of this matter next week.  It comes before the court, unfortunately, very much at the last moment.

The motion must however be dealt with in the circumstances as they now appear.  The evidence before me is that the second respondent, (Mr McVerry) who is represented this morning for the limited purpose of this motion, does not have legal representation for the trial.  He was represented previously by those representing the first respondent and to the extent that costs were incurred by the respondents they had been paid by the first respondent.  There is evidence, of a rather limited character, that Mr McVerry's means are not large and that he would be unable to pay from his own resources the cost of legal representation during a trial which might extend over five days.  There is evidence also, to which I think it is appropriate not to give a great deal of weight, that the attendance of Mr McVerry at a trial next week is likely to disrupt the operation of the deed of company arrangement in relation to the first respondent as is the attendance of other persons who might be required to give evidence.

It has been put to me, and I accept, that vacation of the trial dates and an adjournment of the proceedings against Mr McVerry would result in prejudice, and probably considerable prejudice, to the applicants.  I must accept that prejudice would be caused by an adjournment.  It has also been put to me that in the circumstances an order for the payment of costs thrown away may not by any means entirely mitigate the prejudice; and certainly the view now usually taken by the court is that an order for the payment of costs thrown away is by no means a universal panacea in circumstances such as these.

It has been put to me also, that as a result of Mr McVerry's knowledge from early July of the administration and proposed deed of company arrangement, he has been aware, since that time, of the possibility that proceedings against the first respondent might be stayed and therefore that they might continue against him alone.

Additionally it has been put to me, and I think correctly, that on the evidence Mr McVerry seems to have done very little, if anything, to protect himself against this
possibility.  One must also consider the public interest involved in the management of court time and the effective use of the public resources of the court.  It is an undesirable course, in the absence of compelling reasons, to vacate a week's trial two working days before it is due to commence.

Despite all that, I have with reluctance come to the conclusion that the dates next week ought to be vacated and the proceedings against Mr McVerry ought to be adjourned.  There is room for argument, and the argument was put to me, that the applicants themselves were slow, even when prompted, to make the necessary adjustments, take the necessary advice, and make the necessary decisions in the changed circumstances presented to them as a result of the first respondent's appointment of an administrator.  I have been handed a chronology which refers to a circular to debtors dated 2 September 1996 received by the applicants from the administrator.  In my view, however, it is a reasonable inference that, as claimants, the applicants are likely to have known what was afoot somewhat earlier than the 2 September.  In any case, a considerable time elapsed after the applicants had unquestionably become aware of what was going on, before finally, following substantial prompting, they filed the notice of motion which was before me earlier this week.

While this is a consideration, I believe the overwhelming consideration is simply that it would be unreasonable to permit these complex proceedings to proceed to trial next week where, for whatever reason, the second respondent is not presently represented for the purposes of the trial and where, on the evidence, it seems highly probable that amounts
available for application towards satisfaction of claims against either respondent are likely to be relatively small.

The applicants undoubtedly have the right to proceed in this matter against Mr McVerry.  They may, in the end, decide that it is in their interests to do so.  In my view, however, it would not be a correct exercise of the court's discretion to allow that matter to proceed to a full-scale trial next week.

The only matter left to be addressed is the order for costs sought in the motion.  It is not pressed and Mr Meagher SC, for the second respondent, has indicated that he does not press any opposition to what I believe would be the usual order in a case such as this, that the second respondent pay the costs thrown away as a result of the orders which I propose to make.

For those reasons the orders which I make are, first, that the dates allocated for the trial of the action, being 28 October 1996 to 1 November 1996, be vacated; secondly, that the second respondent pay the costs of the applicants thrown away in consequence of that order; and thirdly, that the second respondent pay the applicants' costs of this motion.  Fourthly, I order that the applicants pay the first respondent's costs of the applicants' motion of 17 October 1996 and the first respondent's motion of 16 October 1996.

The final order I make is that the proceedings be adjourned for further mention before me at 9.30 am on Thursday 7 November 1996.

I certify that this and the preceding 4 pages are a true copy of the Reasons for Judgment of the Honourable Justice Lehane.

Associate:

Dated:  24 October 1996

Heard:  24 October 1996

Place:  Sydney

Decision:  24 October 1996

Appearances:  Mr C F Hodgson of counsel instructed by Ferry's Law Firm, Solicitors appeared for the applicant.

Mr A J Meagher SC instructed by Russell and Company appeared for the respondent.