Merrion B Pty Ltd v Donchiod Pty Ltd - [2020] VSC 499

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST

S ECI 2019 04528

IN THE MATTER of DONCHIOD PTY LTD (ACN 601 212 300)

BETWEEN

MERRION B PTY LTD (ACN 624 885 598)	Plaintiff
v
DONCHIOD PTY LTD (ACN 601 212 300)	Defendant

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JUDGE:	Randall AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	On the papers
DATE OF JUDGMENT:	14 August 2020
CASE MAY BE CITED AS:	Merrion B Pty Ltd v Donchiod Pty Ltd
MEDIUM NEUTRAL CITATION:	[2020] VSC 499

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CORPORATIONS – Section 459R of the Corporations Act 2001 (Cth) – Section 459R(2)(b) – The Court may extend the period within which the application for winding up must be determined if the order extending is made within the period of six months – Application of the slip rule to extend time for determination of a winding up application – Slip rule under r 36.07 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) – Whether circumstances justify the use of the slip rule.

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ON THE PAPERS:	Submissions	Date of filing
For the Plaintiff	Mr F V Gallichio, solicitor	28 June 2020
For the Defendant	Mr P Agardy of counsel	3 July 2020
For the Plaintiff in reply	Mr F V Gallichio, solicitor	7 July 2020

TABLE OF CONTENTS

Background......................................................................................................................................... 1

Relevant statutory provisions.......................................................................................................... 2

The slip rule........................................................................................................................................ 2

Section 459R........................................................................................................................................ 2

The slip rule........................................................................................................................................ 3

Consideration...................................................................................................................................... 3

Orders................................................................................................................................................... 9

HIS HONOUR:

On 4 October 2019, the plaintiff filed and served an originating process to wind up the defendant on the grounds of insolvency. Pursuant to s 459R of the Corporations Act 2001 (Cth) (‘Corporations Act’), the application for the company to be wound up in insolvency was to be determined within six months after the application was made. The application was heard but no determination was delivered within the six months.

The issue arising which is the subject of this ruling is whether or not the Court has power to retrospectively extend time.

Background

The plaintiff’s application was filed and served on 4 October 2019.

On 25 October 2019, the defendant filed and served an interlocutory process pursuant to s 459S of the Corporations Act and to otherwise dismiss the application.

On 6 November 2019, procedural orders were made which included a provision for the filing and service of evidence in December 2019 and of submissions in February 2020, and the hearing was fixed for trial on all issues before myself on 2 March 2020 on a one day estimate.

On 2 March 2020, the hearing was conducted before myself. At the conclusion of that day’s hearing, I ordered that the parties file further short submissions by the end of 6 March 2020. I made a formal order permitting the defendant to amend its interlocutory application and otherwise reserved the decision.

On 6 March 2020, the parties filed and served further short submissions.

The date for the expiry of the application to wind up was 3 April 2020.

After…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2020] VSC 499
Decision Date: 14 August 2020

CaseChat Overview and Summary

In the matter of Merrion B Pty Ltd versus Donchiod Pty Ltd, the Victorian Supreme Court was called upon to consider an application for an extension of time to determine a winding up application. The respondent, Donchiod Pty Ltd, had applied for the winding up of Merrion B Pty Ltd, and the applicant sought an extension of time to determine the application in accordance with section 459R of the Corporations Act 2001 (Cth). The primary legal issue before the court was whether the respondent's application for an extension was within the six-month period stipulated by section 459R(2)(b) of the Act and, if so, whether the circumstances warranted the application of the slip rule under rule 36.07 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic).

The court examined the provisions of section 459R(2)(b) of the Corporations Act 2001 (Cth), which permits an extension of time for the determination of a winding up application if the order extending the time is made within six months from the date of the application. The court also considered the applicability of the slip rule, which allows for an extension of time where there are exceptional circumstances. The court noted that the application for the extension was made within the stipulated period, but the primary focus was on whether the circumstances justified the use of the slip rule. In assessing this, the court took into account various factors, including any delays attributable to the applicant and the potential prejudice to the respondent if the extension were granted.

Ultimately, the court determined that the respondent's application for an extension of time was within the six-month period prescribed by section 459R(2)(b) of the Corporations Act 2001 (Cth). The court found that the circumstances did not justify the use of the slip rule as there was no evidence of exceptional circumstances warranting such an extension. Consequently, the court denied the applicant's request for an extension of time. The court's decision was based on the lack of compelling evidence to support the application of the slip rule, and it was held that the application for an extension of time was not warranted under the circumstances presented.

Orders