Re M & M Outdoor Centre P/L

This case involves an application by Grainco Limited to the Supreme Court of Queensland for leave to proceed with a District Court action against M & M Outdoor Centre Pty Ltd, a company in liquidation. Grainco seeks to recover damages for defective grain covers fabricated by M & M, which were supplied by Grainco. The original Federal Court proceedings were transferred to the District Court of Queensland with an order for Grainco to pay $18,546 to M & M's solicitors, pending the outcome of the proceedings. M & M has since claimed title to this money and denied liability for Grainco's claim. The liquidator of M & M opposes Grainco's application for leave to proceed.

The central legal issues in this case are whether the application for leave to proceed under s.471B of the Corporations Law constitutes a "fresh proceeding" requiring leave under District Court Rule 377(2), and whether leave to proceed should be granted under s.471B. The court must also determine if Rule 377(1) requires one month's notice to the other party.

The court concluded that the application for leave to proceed is not a "fresh proceeding" within the meaning of District Court Rule 377(2). The incapacity to proceed against a company in liquidation is imposed by a source external to the Rules, and the granting of leave to proceed merely restores the applicant's capacity to take further steps in the action. The court also found that Rule 377(1) does not apply as the application was brought on notice. The court granted Grainco leave to proceed with the District Court action.

The court ordered that Grainco Limited be granted leave to proceed with the District Court Action, and that the costs of and incidental to this Application be reserved unto the District Court of Queensland held at Brisbane.