Mharina Rossi Pty Ltd t/as Mhar's Hair Salon (in liq) v JD and SJ Maconachie Pty Ltd
[2013] QCAT 507
•24 September, 2013
| CITATION: | Mharina Rossi Pty Ltd t/as Mhar’s Hair Salon (in liq) v JD and SJ Maconachie Pty Ltd [2013] QCAT 507 |
| PARTIES: | Mharina Rossi Pty Ltd t/as Mhar’s Hair Salon (in liq) (Applicant) |
| v | |
| JD and SJ Maconachie Pty Ltd (Respondent) |
| APPLICATION NUMBER: | RSL055-12 |
| MATTER TYPE: | Retail shop leases matters |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Ann Fitzpatrick, Member |
| DELIVERED ON: | 24 September, 2013 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. The applications filed by Ross William Lloyd and Mhar Tepace-Lloyd on 25 October, 2012 and 10 December, 2012 to be joined as applicants to the proceedings or to be substituted for the applicant are dismissed; 2. The respondent has leave to be legally represented at any hearing of this matter; 3. The Registrar of the Queensland Civil and Administrative Tribunal is directed to write to Mr Peter Dinoris, Liquidator of the applicant company, care of Vincents Chartered Accountants, Level 34, 32 Turbot Street, Brisbane, Qld. 4000 requiring written advice by 4 pm 11 October, 2013 as to whether he intends to proceed with this matter. 4. In the event that no advice is received or the Liquidator, Mr Dinoris, does not intend to proceed with this matter, the application pursuant to the Notice of Dispute is dismissed, effective 12 October, 2013. |
| CATCHWORDS: | Retail shop leases dispute – applicant company in liquidation – application for joinder or substitution – bankrupt Director – jurisdiction of Tribunal - legal representation. Corporations Act 2001 s 471A, 477(2)(a) |
APPEARANCES and REPRESENTATION (if any):
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act).
REASONS FOR DECISION
Chronology
The applicant filed a Notice of Dispute pursuant to the Retail Shop Leases Act 1994 in this Tribunal on 26 April, 2012 seeking Orders against the respondent for payment of an outstanding invoice in the sum of $48,870.00, reinstatement of a bank guarantee, return of certain intellectual property and payment of an unspecified amount of rent and outgoings up to 30 June, 2015. The claims arise out of a Sub-lease of Shop 6 at Centro Pinelands, Sunnybank, dated 1 July, 2010; a Franchise Agreement, made 7 June, 2010 and an undated License Ageement all entered into between the parties. The respondent terminated the lease and vacated the premises on 6 February, 2012.
A search conducted by the Tribunal reveals that a winding up order with respect to the applicant was made by the Supreme Court of Queensland and a liquidator appointed, effective 16 August, 2012.
The respondent filed a response on 11 September, 2012 seeking an order that the claim be dismissed on the basis that it is not indebted as alleged or at all.
By application filed 25 October, 2012 Ross William Lloyd and Mhar Tepace-Lloyd applied to be added to the matter as applicants.
A search conducted by the Tribunal reveals that Mr Ross Lloyd, Director of the applicant was declared bankrupt on 31 October, 2012 and remains an undischarged bankrupt. A search conducted by the Tribunal reveals that Ms Mhar Tepace-Lloyd, a Director of the applicant is not a bankrupt.
By Directions made on 27 November, 2012 the application filed on 25 October, 2012 was accepted as an application by Mharina Rossi Pty Ltd t/as Mhar’s Hair Salon to amend the notice of dispute.
By further application filed 10 December, 2012 by Ross Lloyd further information and supporting documents were filed in relation to the original application and the application to join himself and Ms Mhar Tepace-Lloyd as applicants. The application states the reasons for the application as compliance with the Directions of 27 November, 2012; to amend the applicant and to provide additional documents. Included was an assertion that the trustee Dean Phillips from Worrells has confirmed they are not required to give consent for Ross Lloyd to act in the matter as “there is not sufficient evidence to show that the proceedings are a divisible asset of the bankrupt estate under the Trustee’s control”
By application filed 29 January, 2013 the respondent sought leave to be legally represented.
At a Directions Hearing on 26 February, 2013 the Tribunal directed that:
1. Mr Lloyd advise what orders are sought by the application to amend the notice of dispute, including whether he seeks to be personally substituted as an applicant either alone or with other persons and if so, whom and by what authority.
2. Mr Lloyd file any consents of the liquidator for Mharina Rossi Pty Ltd t/as Mhar’s Hair Salon and the trustee in bankruptcy for Mr Lloyd of the proceedings.
3. Mharina Rossi Pty Ltd file submissions in response to the application by the respondents application for legal representation.
4. The respondents file any submissions in response to the application to amend the notice of dispute, any application for dismissal and submissions in reply of the application for legal representation.
On 13 March, 2013, submissions were filed on behalf of the applicant by Ross Lloyd objecting to legal representation by the respondent. In those submissions it was said that Ross Lloyd and Mhar Tepace-Lloyd were guarantors under the head lease for the operation of a Mhar’s Hair Salon at Shop 6, Centro Pinelands and “as such it is believed that Ross Lloyd and/or Mhar Tepace-Lloyd can bring action against the respondent.” Further it was said that “Mhar Tepace-Lloyd is the owner of the business name ‘Mhar’s Hair Salon’ under which the Respondents operated and is therefore permitted to bring action under her own name…”
Mr Lloyd did not comply with the Directions requiring him to file details of the Orders sought by the application to amend the notice of dispute and did not file relevant consents of the Liquidator of the applicant or his Trustee in bankruptcy.
The respondents filed submissions on 25 March, 2013 including that:
(a) the respondent has not received any communication from the Liquidator of his intention to pursue the claim against the respondent. It submits that the Tribunal has no power to order the Liquidator to act or prosecute this claim;
(b) the respondent has not received any communication that the Liquidator has consented to any other party including any notice in favour of Mr Lloyd to perform a function or exercise a power as an officer of the applicant. It submits that the Tribunal has no power to order the Liquidator to provide this consent;
(c) the Tribunal has no power to consent to the Officeholders acting on behalf of the applicant;
(d) the Notice of Dispute is between the applicant company and the respondent. The individual officeholders were not a party to the lease under which part of this dispute arises and no privity of contract exists between them and the respondent. The fact that the officeholders were guarantors under a lease to a third party does not entitle them to be a party to these proceedings.
(e) the reason that Mr Lloyd’s Trustee in bankruptcy has made the determination that his consent is not required in this matter is because the proceedings do not involve Mr Lloyd as they involve the applicant company, therefore he personally has no interest in the outcome of the proceedings;
(f) no consent of the Liquidator has been obtained;
(g) the applicant’s claim arising from a Licence Agreement has no reference to the Lease dispute and is outside the jurisdiction of the Tribunal;
(h) the applicant’s claim arising from an alleged failure to return intellectual property is outside the jurisdiction of the Tribunal;
(i) the applicant’s claim arising from an alleged failure of the respondent to comply with unparticularised workplace, health and safety breaches is outside the Tribunal’s jurisdiction.
(j) section 471B of the Corporations Act 2001 prevents the respondent proceeding against the applicant without the leave of the Court. Alternatively, the Liquidator can pursue the claim, however, he has not sought to do so.
Mr Lloyd filed a response to the respondent’s submission on 2 April, 2013. He sets out contentions in relation to breaches of the Lease, termination of the Lease, the Franchise Agreement and Licence agreement between the applicant and the respondent and asserts that both “Ross William Lloyd and Mhar Tepace-Lloyd believe they have a right to pursue the Respondent’s in their own names based on the ownership of certain IP and the working of the lease and the signatories on the lease and as discussed in 2.xvi.”
Mr Lloyd also asserts that because the respondent has alleged unconscionable conduct on the part of the applicant, that it is a personal attack on himself and Ms Tepace-Lloyd which they should be entitled to defend in the Tribunal.
Finally, Mr Lloyd submits that he believes the matter before the Tribunal is “informal” under the Queensland Civil and Administrative Tribunal Act 2009, up to the compulsory conference stage. He asks that the Tribunal allow him and Ms Tepace-Lloyd to participate in the proceedings to that stage. He says that if the winding up order has not been removed and the bankruptcy set aside by then:
·the applicant will then seek the consent of the Liquidator under s471A(1A)(a) of the Corporations Act 2001;
·or the Directors will seek the consent of the President or Judicial Member of the Tribunal exercising delegated powers of the Court under section 471A(1A)(d) of the Corporations Act 2001;
·or the Directors will seek the consent of the Court under section 471A(1A)(d) of the Corporations Act 2001;
·or the Directors will seek the Liquidator’s written consent under section 471A(1A)(c);
·or as a request through the Lord Mayor of Brisbane as an amicus curiae to the Attorney-General to grant a fiat for the Applicants to act in the Attorney-General’s name under the Attorney-General Act 1999.
Mr Lloyd submits that the applicants oppose the application for legal representation.
Statutory Requirements
A Liquidator may bring or defend any proceeding in the Company’s name under section 477 (2)(a) of the Corporations Act 2001 and exercise his other powers.
Section 471A of the Corporations Act 2001 provides:
(1) While a company is being wound up in insolvency or by the Court, a person cannot perform or exercise, and must not purport to perform or exercise, a function or power as an officer of the company.
(1A) Subsection (1) does not apply to the extent that the performance or exercise, or purported performance or exercise, is:
…
(k) with the liquidator’s written approval; or
(l) with the approval of the Court.
Section 58 of the Bankruptcy Act 1966 provides that where a debtor becomes a bankrupt the property of the bankrupt vests forthwith in a registered trustee who is the trustee of the estate of the bankrupt.
Property is defined in that Act to include personal property of any description. A cause of action is caught by the definition.
Section 60 of the Bankruptcy Act 1966 provides, relevantly:
(2) An action commenced by a person who subsequently becomes a bankrupt is, upon his or her becoming a bankrupt, stayed until the trustee makes election, in writing, to prosecute or discontinue the action.
(3) If the trustee does not make such an election within 28 days after notice of the action is served upon him or her by a defendant or other party to the action, he or she shall be deemed to have abandoned the action.
Analysis
Mr Ross William Lloyd and Ms Mhar Tepace-Lloyd applied on 25 October, 2012 for orders that they be added to the proceeding as applicants. The application filed 10 December, 2012 suggests that they wish to be substituted as applicants for the current applicant company. They have not set out with any clarity the Orders they seek in these two applications. However, it is possible to glean that they wish to pursue the applicant company’s claims and to pursue personal claims against the respondent.
Neither Mr Lloyd nor Ms Tepace-Lloyd have obtained the written approval of the Liquidator of the applicant to act as an officer of the company in the conduct of these proceedings on behalf of the company.
The Liquidator has taken no steps to conduct the proceeding as part of the winding up of the company.
To the extent that Mr Lloyd seeks some personal relief, apart from the question of the jurisdiction of this Tribunal, his Trustee in bankruptcy has not agreed to prosecute any action.
Mr Lloyd and Ms Terpace-Lloyd have made no submissions with respect to section 42 of the Queensland Civil and Administrative Tribunal Act 2009. They have made no submissions as to why the Tribunal should exercise its discretion to join them as parties to the application, even if that were possible given the insolvency of both the applicant and Mr Lloyd.
It is not the case as asserted by Mr Lloyd that the proceedings in this Tribunal are “informal” up to the point of any compulsory conference so that fresh parties may participate in the proceedings and add causes of action relevant to them as appears to be Mr Lloyd’s intention.
It is not the case that Mr Lloyd may wait until after a compulsory conference to seek relevant consents. Mr Lloyd has been directed to do so. He has not. To the extent that it is possible to discern what is meant by the quote attributed to Mr Lloyd’s Trustee in bankruptcy with respect to the proceedings, I accept the submission of the respondent that the Trustee would not appear to consider Mr Lloyd’s claim to be a cause of action personal to him, but rather the claim relates to the company, Mharina Rossi Pty Ltd (in liq), hence the Trustee has not involved himself further.
To the extent that Mr Lloyd and Ms Terpace-Lloyd seek to be joined as parties to respond to allegations of unconscionable conduct in their capacity as officers of the applicant I consider that they require the written consent of the Liquidator to do so. They have not provided that consent to the Tribunal.
To the extent that either Ms Terpace-Lloyd or Mr Lloyd seek to prosecute personal rights arising out of the Franchise Agreement and the Licence Agreement between the applicant and the respondent or as guarantors under the head lease, I do not consider these matters fall within the jurisdiction of the Tribunal. The Franchise Agreement, Licence Agreement and guarantee under the Head Lease are not a retail shop lease as defined in the Retail Shop Leases Act 1994 and the dispute arising out of the documents is not a retail tenancy dispute as defined in that Act. The Tribunal only has jurisdiction with respect to a retail tenancy dispute as set out in section 103 of the Retail Shop Leases Act 1994.
To the extent that the applicant company seeks to prosecute rights arising out of the Franchise Agreement and the Licence Agreement, not only is there the problem that the Liquidator has not pressed the action, I also consider that any such claim does not fall within the jurisdiction of the Tribunal as a retail tenancy dispute.
Findings and Orders
I consider the application by Mr Lloyd and Ms Terpace-Lloyd to be joined as parties to this proceeding as applicants or to be substituted for the applicant company, to be misconceived on the basis that they have no standing to bring the applications as officers of the applicant without the consent of the Liquidator or the Supreme or Federal Court. Further, this Tribunal has no jurisdiction to deal with the personal claims they seem to assert which are not retail tenancy disputes. The applications are dismissed.
In relation to the application by the respondent to be legally represented I accept the submissions that the liquidation of the applicant makes the matter more complex together with issues of jurisdiction. I am prepared to give the respondent leave to be represented at the hearing of this matter, should it proceed.
It is undesirable from the point of view of the respondent and the Tribunal for this matter not to be finally dealt with. I direct the Registrar of the Tribunal to write to the Liquidator, Mr Peter Dinoris of Vincents Chartered Accountants, Level 34, 32 Turbot Street, Brisbane requiring him to notify the Tribunal in writing no later than 4pm, 11 October, 2013 as to whether he intends to proceed with this matter. In the event that no response is received or the Liquidator does not intend to proceed with the matter, the application will be dismissed with effect on 12 October, 2013.
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