Proactive Management Specialists Pty Ltd v Over Fifty Funds Capital Ltd

[2007] NSWSC 1426

CITATION:	Proactive Management Specialists Pty Ltd v Over Fifty Funds Capital Ltd [2007] NSWSC 1426
HEARING DATE(S):	8 November 2007
JUDGMENT DATE :	8 November 2007
JURISDICTION:	Equity
JUDGMENT OF:	Hamilton J
DECISION:	Leave granted under s 471B of the Corporations Act (Cth) for a second specific performance suit to be brought against a company in liquidation.
CATCHWORDS:	CONTRACTS [59] – General contractual principles – Statute of Frauds, section 4 – Note or memorandum – What amounts to – Must exist before action commenced – Affidavit filed in proceedings containing sufficient note or memorandum.
LEGISLATION CITED:	Conveyancing Act 1919 s 54A Corporations Act 2001 (Cth) ss 468, 471B
CASES CITED:	Popiw v Popiw [1959] VR 197 Proactive Management v Over Fifty Funds [2007] NSWSC 802
PARTIES:	Proactive Management Specialists Pty Ltd (P1) Larvine Pty Ltd (P2) Ricvale Holdings Pty Ltd (P3) Galewood Pty Ltd (P4) Konstan (Administration) Pty Ltd (P5) Tony Rallis (P6) Nickie Rallis (P7) Simon Konstantinidis (P8) Vicki Konstantinidis (P9) Over Fifty Funds Capital Limited (D1) Blueprint Property Developments Pty Ltd (D2) Over 50s Mutual Friendly Society Limited (D3)
FILE NUMBER(S):	SC 1581/07
COUNSEL:	M K Condon & L J Reid (P) M J Dawson (D1 & 3) A R Reoch (D2)
SOLICITORS:	J S Pinto & Co Solicitors (P) TressCox Lawyers (D1 & 3) John Dowling Solicitor (D2)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

HAMILTON J

THURSDAY, 8 NOVEMBER 2007

1581/07 PROACTIVE MANAGEMENT SPECIALISTS PTY LIMITED & ORS v OVER FIFTY FUNDS CAPITAL LIMITED

JUDGMENT

1 HIS HONOUR: In these proceedings the plaintiffs seek orders against second defendant for specific performance. Leave has already been sought from the Court under s 471B of the Corporations Act 2001 (Cth) (“the CA”) for leave to proceed against the second defendant, being a company in liquidation. Leave was granted by Gzell J on 19 July 2007 in Proactive Management v Over Fifty Funds [2007] NSWSC 802.

2 What has subsequently occurred is that an affidavit was filed in these proceedings which the plaintiffs now seek to rely on as a note or memorandum under s 54A of the Conveyancing Act 1919. As that note or memorandum was created after their commencement, it could not be relied on in these proceedings: see Popiw v Popiw [1959] VR 197.

3 The plaintiff is, therefore, pursuing the course of seeking leave under s 471B to commence further proceedings against the same defendants including the company in liquidation. The proceedings will be substantially the same as the present proceedings except for the fresh allegation of a note or memorandum. The reasons which Gzell J gave for granting s 471B leave in respect of the present proceedings therefore apply equally to the fresh proceedings. I shall grant leave for the fresh proceedings accordingly. An order will be made that the fresh proceedings when commenced should be heard together with the existing proceedings, the evidence in the one to be evidence in the other subject to relevance.

4 Issues have arisen concerning costs. The liquidator of the second defendant informs the Court that there are no funds available at all, including for the payment to solicitor and counsel of their costs of this motion. Mr Condon, of counsel for the plaintiffs, submits that the motion was in substance identical with the earlier motion and appearance on behalf of the liquidator of the second defendant was unnecessary. I do not accept this submission. A fresh application was made and the liquidator was entitled to consider the position and be represented upon this necessary motion. Whilst it is true that the necessity for this motion does not arise from the plaintiffs not having done earlier what they now do, nonetheless they have found it necessary to bring the motion.

5 As I have said, in my view the liquidator and the second defendant were perfectly entitled in the circumstances to appear upon the motion and I am going to order that the plaintiffs pay the second defendant’s costs of it. In light of what follows I should also be minded to order that those costs ought be paid immediately. I suggest that, to avoid an assessment, there should be discussion between the plaintiffs and the second defendant to see if those costs can be quantified, so that an order can be made for them in a global sum and a date appointed for their payment.

6 The first and third defendants also asked for costs of the motion. They, however, are in a completely different situation. The motion is a necessary part of the litigation between the plaintiffs and them. I see no reason why their costs ought not simply be considered part of the general costs of the proceedings. I do not propose to make any order for their costs of the motion.

7 Mr Condon has very sensibly not asked for costs and I certainly do not propose to make any order in the plaintiffs’ favour for costs of the motion.

8 The other matter raised as to the costs of the second defendant is that the plaintiffs ought be obliged to provide costs for the second defendant’s participation in the proceedings. The reason that that is said to be necessary is that, if an order is made under s 468 of the CA as now proposed, the liquidator may become personally liable for GST arising in the course of the transaction.

9 I do not think it necessary for the second defendant to attend at or be funded for the hearing to deal with that matter; on the other hand the second defendant ought not be left under that risk. A suitable condition should now be imposed upon the order for leave that will compel the plaintiffs to make provision against the liquidator’s personal liability for GST, if it arises.

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