Raine & Horne Commercial P/L (ACN 003622919) v Capital Concepts & Development P/L

JUDGMENT No. ........ ........ .. ........ ,,,. 93

1 IN THE FEDERAL COURT OF AUSTRALIA

) )

NEW SOUTH WALES DISTRICT REGISTRY ) NO NG 3157 of 1993
GENERAL DIVISION

BETWEEN: RAINE & HORNE COMMERCIAL PTY
LIMITED (ACN 0036229191
Applicant

AND : CAPITAL CONCEPTS AND DEVELOPMENT
PTY LIMITED
Respondent

HILL J SYDNEY 20 AUGUST 1993 FEDERAL COURT OF
AUSTRAUA PRINCIPAL REOISTRY

EX TEMPORE REASONS FOR JUDGMENT

Before the Court is a winding up petition brought by Raine & Horne Commercial Pty Limited, the applicant, against Capital Concepts & Developments Pty Limited, the respondent. The respondent seeks a stay on the ground that a previous petition presented by the applicant against the respondent in the Supreme Court of New South Wales for the winding up of the respondent, based upon a different notice under s.460 of the Corporations Law albeit in relation to the same underlying indebtedness, had been dismissed in the Supreme Court and the applicant is bringlng in that Court a motlon for costs.

notify the respondent of adjourned dates in the Supreme Court and ultimately failed to appear itself, as a result of which
an order was made dismissing the petition but without any order for costs being made. By a motion returnable on 7 September 1993, the respondent has asked the Supreme Court for an order for costs to be taxed on an indemnity basis.
For the respondent it is submitted that the present is a case at least analogous to that to which 0.22 r.8 of the Federal Court Rules relates, and that the principle underlying that rule should be applied in the present case. It is clear that that rule could have itself no direct application because, even if the proceedings referred to in that rule could be construed as a proceedings in the Supreme Court, the rule concerns only a case where a party has discontinued and the present is not such a case.
The situation in the Supreme Court is broadly the
same as that applicable in this Court, namely, that a party
will not be permitted to commence proceedings a second time

where the previous proceedings have been discontinued while costs remain outstanding. The underlying rationale of that
principle is to avoid an abuse of process of the Court. However, there is presently no order for costs although it is possible that the respondent will succeed in obtaining an order on its motion in due course.
I do not think that the underlying rationale for granting a stay is present in this case. There has been no abuse of process on the part of the applicant by commencing proceedings afresh in respect of a different S. 460 demand notice, notwithstanding that the previous proceedings in the Supreme Court were dismissed.
I would be concerned if proceedings were commenced in this Court so as to avoid a stay being granted by the Supreme Court in a case where that Court might regard the matter as an abuse of its process. However, it does not seem to me that that can be the reason why proceedings were commenced in this Court in the present case. Indeed, I was told from the bar table that the real rationale for proceedings belng commenced in this Court was that the filing fees payable in the Federal Court are somewhat lower than those presently prevailing in the Supreme Court.
No attempt has been made on the part of the
respondent to suggest in the application for a stay that it is

not indebted to the applicant or that there is a substantial case for saying that the winding up order ought not be made.
These are matters that have not been raised before me in support of the stay. In these circumstances it seems to me that I should not, as a matter of discretion, grant a stay but that I should proceed, subject to hearing an application for adlournment on another ground, to hear the petition.
I certify that this and the
preceding two (2) pages
are a true copy of the Reasons
for Judgment herein of his Honour
Mr Justice Hill.
Associate: T.'&&~AW;'

Date : 19- S ~ ~ E M ~ ~ C T h 4 3

Counsel and Solicitors SR Donaldson instructed by
for Applicant: Phillips Fox
Counsel and Solicitors MM Macrossan instructed by
for Respondent: DW Alexander & CO
Date of Hearing: 20 August 1993
Date Judgment Delivered: 20 August 1993

The circumstances in which the Supreme Court
proceedings came to be dismissed are not completely clear.
What appears from the evidence is that the applicant failed to

The Federal Court of Australia, in this case, heard a winding-up petition brought by Raine & Horne Commercial P/L against Capital Concepts & Development P/L. The respondent sought a stay of the proceedings on the basis that a previous winding-up petition brought by the same applicant against the respondent in the Supreme Court of New South Wales had been dismissed, and the applicant was seeking costs in the Supreme Court. The core issue before the Court was whether the applicant should be permitted to commence new proceedings in the Federal Court, given the dismissed Supreme Court petition and the absence of any costs order at the time of the stay application.

The court considered the principles underlying the Federal Court Rules, particularly rule 0.22 r.8, which pertains to cases where a party discontinues proceedings and seeks a stay in subsequent proceedings. However, the Court noted that the rule could not be directly applied as the previous Supreme Court proceedings were dismissed, not discontinued, and there was no outstanding costs order at the time of the stay application. The rationale behind preventing an abuse of process by allowing a party to recommence proceedings was acknowledged, but the Court found no evidence of an abuse in this case. Furthermore, the applicant's decision to commence proceedings in the Federal Court was attributed to the lower filing fees rather than an attempt to circumvent a potential stay in the Supreme Court.

The Court determined that the applicant had not suggested that it was not owed the debt or that there was a substantial case against the winding-up order. Given these circumstances, the Court decided not to grant a stay, opting instead to proceed with hearing the petition, subject to an application for adjournment on another ground. The decision highlights the Court's discretion in granting a stay and its consideration of the principles of avoiding abuse of process and the specific circumstances of each case.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established

1 IN THE FEDERAL COURT OF AUSTRALIA	) )
NEW SOUTH WALES DISTRICT REGISTRY )	NO NG 3157 of 1993
GENERAL DIVISION

BETWEEN:	RAINE & HORNE COMMERCIAL PTY LIMITED (ACN 0036229191
Applicant