Mitako Constructions Pty Ltd v ISA Constructions Pty Ltd

[1992] FCA 1075

IN THE FEDERAL COURT OF AUSTRALIA	) )
NEW SOUTH WALES DISTRICT REGISTRY	) No. NG 3071 of 1992

)

GENERAL DIVISION )

BETWEEN:MITAKO CONSTRUCTIONS PTY LIMITED

Applicant

AND:ISA CONSTRUCTIONS

Respondent

28 April 1992

REASONS FOR JUDGMENT

LOCKHART J.

In July, 1991, the applicant, Mitako Constructions Pty Limited, contracted to carry out certain building work at 64 Penshurst Street, Willoughby. The respondent, ISA Constructions Pty Limited, became a sub-contractor to the applicant for the carrying out of portion of that work, essentially concreting. Certain payments were made by the applicant to the respondent but it is plain from the material before the Court that a

dispute arose between them as to the amount, if any, of any

balance that would be payable by the applicant to the

respondent. The amount in dispute appears to be approximately
$25,000 to $30,000.

On 22 April 1992 the applicant commenced this proceeding (3071 of 1992) in this Court pursuant to leave to serve short

notice granted by this Court. The applicant sought an order to restrain the respondent from instituting proceedings in any Court to wind up the applicant. The matter was adjourned by me on 22 April to 24 April, that is last Friday, and was then adjourned again until 1 May. On 24 April 1992 the respondent commenced proceedings in the Supreme Court of New South Wales to wind up the applicant and yesterday the Supreme Court ordered that the matter before it, that is the winding up proceeding, be transferred to this Court because the earlier proceeding had been instituted in this Court by the applicant. Consequently,

this Court is now seized of both matters. It seems plain enough to me that there is a dispute between the parties as to this debt. Whether there is a bona fide dispute within the meaning

of the authorities is not a matter which I propose to consider
this morning; it will be considered in due course.

The interests of justice are served by the Court giving the earliest date it can to hear the winding up application, but in the meantime to freeze the winding up proceeding.

The Court orders that:

1.Both matters, 3071 of 1992 in this Court, and the matter that was until yesterday in the Supreme Court, namely, matter 7631 of 1992, be consolidated.

2.Upon the applicant Mitako Constructions by its counsel giving to the Court the usual undertaking as to damages, the respondent, ISA Constructions Pty Limited, be restrained until further order from advertising or otherwise proceeding further with its application for winding up of the applicant, filed in the Supreme Court on 24 April 1992 and transferred to this Court by order of the Supreme Court on 27 April 1992.

3.The applicant to file and serve any remaining affidavits in

chief by 1 May 1992.

4The respondent to file and serve any remaining affidavits by 8

May 1992.

5.The applicant to file and serve any affidavits in reply by 15

May 1992.

6.The matters are adjourned for hearing on 19 May.

7.Liberty is reserved to either party to apply on two days

notice.

8.Subpoenas may be issued by any party returnable before the

Registrar on Friday, 15 May 1992.

The question arises as to what should happen to the costs of the motion of the applicant today. When the proceedings were commenced by the applicant on 22 April the affidavit in support of the application was that of Anthony Michael Mulkearns sworn on 22 April and it, amongst other things, laid the ground for the argument of the applicant that there is a bona fide dispute between the parties in relation to the debt which underlies the

subsequent winding-up application filed in the Supreme Court by the respondent. On the morning of 24 April the respondent filed in this Court, pursuant to leave of the Court, two affidavits,

each by Arthur Stellatos, one sworn 23 and the other 24 April 1992 which in essence sought to rebut the argument to be advanced by the applicant that there was a bona fide dispute about the debt.

It is apparent from what I have said earlier that although I shall not today determine whether there is a bona fide dispute as to the existence of the debt, it is apparent that the parties are in dispute as to whether the debt exists or not and that was a fact which existed prior to the filing by the respondent of the winding-up application in the Supreme Court. The applicant has succeeded in its motion today and in my view the proper

order for costs is that the costs of the motion should be the applicant's costs in the proceeding as consolidated and accordingly the court makes that order. I should add there was no legal barrier to the respondent filing the application in the Supreme Court, but it is regrettable that it did so.

I certify that this and the preceding three (3) pages are a true copy of the reasons for judgment herein of the Honourable Mr. Justice Lockhart.

AssociateDated: 28 April 1992

Counsel for the Applicant :  V.R.W. Gray

Solicitors for the Applicant : Landerer & Co. Counsel for the Respondent : T.D. Blackburn

Solicitors for the Respondent:  A.G. Robinson Creais

Date of Hearing : 28 April 1992
Date of Judgment : 28 April 1992