Rickhuss v The Cosmetic Institute Pty Ltd (No.2)

[2018] NSWSC 2000

Supreme Court

New South Wales

Medium Neutral Citation:

Rickhuss v The Cosmetic Institute Pty Ltd (No.2) [2018] NSWSC 2000

Hearing dates:

14 December 2018

Date of orders:

14 December 2018

Decision date:

14 December 2018

Jurisdiction:

Common Law

Before:

Garling J

Decision:

(1) In respect of each of the first, third and fourth defendants, namely The Cosmetic Institute Pty Limited (in liq), TCI Bondi Junction Pty Limited (in liq) and TCI Southport Pty Limited (in liq), I order pursuant to s 500(2) of the Corporations Act 2001 (Cth) that the plaintiffs have leave nunc pro tunc to proceed against those companies in these proceedings, namely case number 2017/00279308.

(2) I order that the costs of the Motion be costs in the cause.

Catchwords:

CORPORATIONS – leave to proceed against companies in liquidation pursuant to s 500(2) of the Corporations Act 2001 (Cth) – where leave is being sought to continue representative proceeding – not opposed by liquidators – leave granted

Legislation Cited:

Corporations Act 2001 (Cth)

Category:

Procedural and other rulings

Parties:

Amy Rickhuss (P1)
Kylie Pollock (P2)
Jessica Bruen (P3)
Kirsty-Anne Rowlands (P4)
Lily Knowland (P5)
The Cosmetic Institute Pty Ltd (in liq) (D1)
The Cosmetic Institute Parramatta Pty Ltd (in liq) (D2)
TCI Bondi Junction Pty Ltd (in liq) (D3)
TCI Southport Pty Ltd (in liq) (D4)
Dr Eddy Dona (D5)

Representation:

Counsel:
D Graham SC / S Tzouganatos (P1-P5)
A Flecknoe-Brown (D1-D4)
N Martin (solicitor) (D5)

  Solicitors:
Turner Freeman Lawyers (P)
Barry Nilsson Lawyers (D1-D4)
Meridian Lawyers (D5)

File Number(s):

2017/279308

EX TEMPORE Judgment

1. On 12 December 2018 the plaintiffs filed a Notice of Motion seeking an order in similar terms against the first, third and fourth defendants pursuant to s 500(2) of the Corporations Act 2001 (Cth) granting the plaintiffs leave nunc pro tunc to proceed with their legal proceedings, which were commenced by a Statement of Claim filed on 14 September 2017.

Background

2. The affidavit in support of the plaintiffs’ Motion notes several matters. First, at the time the proceedings were commenced on 14 September 2017, the first, third and fourth defendants were then registered companies carrying on business. Accordingly, they were properly able to be sued.

3. Secondly, that the second named defendant, The Cosmetic Institute Parramatta Pty Limited was at that time in liquidation. Accordingly, prior to the commencement of proceedings, the plaintiffs sought and obtained leave from Brereton J on 28 August 2017 to commence proceedings against the second defendant.

4. Thirdly, that the solicitor for the liquidator of the second defendant raised no opposition to the application for leave to commence proceedings against that party, and I am also informed that it was noted by Brereton J that there was a reasonable prospect of the existence of an insurance policy responding to the claim for damages.

5. Fourthly, that pursuant to a creditors’ voluntary winding-up in respect of the first, third and fourth defendants, liquidators Cor Cordis (“the Liquidators”) were appointed on 10 July 2018. Those companies remain in liquidation.

The Attitude of the Liquidators

6. On 21 August 2018, the solicitors for the plaintiffs contacted the Liquidators and asked the Liquidators' attitude to leave being granted for continuation of the proceedings against the first, third and fourth defendants.

7. On 17 September 2018, the Liquidators responded, indicating that they neither consented nor opposed the continuation of the proceedings against the company. They sought certain acknowledgments.

8. By letter dated 21 September 2018, the solicitors for the plaintiffs confirmed in correspondence with the Liquidators that they would not seek any orders that the Liquidators be personally responsible for costs of the proceedings "unless the liquidators take active steps in the proceedings which are obstructive to the proceedings continuing". That letter also noted, as accurately reflecting the law, that any judgments would rank as unsecured debts unless they are charges against, or otherwise enforceable against, any insurance policies that the respondents claim.

Insurance Policies

9. Attempts have been made to obtain copies of policies of insurance that may respond to the claims being made. To that extent, such inquiries as have been made, although only relatively recently, have not resulted in the production of any insurance policies.

10. When the proceedings were commenced, which was at a time when the second defendant was in liquidation, leave was obtained to commence the proceedings against it and the same solicitor has been instructed to act for the first, second, third and fourth defendants which, by their names and by reference to matters pleaded in the Statement of Claim, are all members of the same corporate group, which are all engaged in the same sort of business.

11. I am informed that, as part of the application seeking leave to commence proceedings against the second defendant, documents were produced on subpoena from three insurance companies, namely Allied World Insurance, Newline Australia Insurance Pty Limited and CGU Insurance Limited. For reasons which were then regarded as appropriate, although those insurance records related to the second defendant, to the extent that they also related to other associated entities, the names of those other entities were redacted.

12. I am satisfied from the fact of there being a reasonable prospect that insurance existed for the second defendant, that the first, third and fourth defendants are generally associated with the second defendant as part of the same corporate group; and from the fact that the same solicitor has represented all four defendants in these proceedings to date and that there has been no correspondence from either the liquidators or the solicitors for the first, third and fourth defendants indicating that there is no insurance coverage in existence, that there is a reasonable prospect that there is insurance coverage in existence which responds to the claims being made by the plaintiff.

Conclusion

13. In all of those circumstances, and in light of the fact that the liquidators do not oppose the relief sought in the Notice of Motion filed 12 December 2018, it is appropriate that the orders set out in that Motion are made.

Orders

14. I make the following orders:

1. In respect of each of the first, third and fourth defendants, namely The Cosmetic Institute Pty Limited (in liq), TCI Bondi Junction Pty Limited (in liq) and TCI Southport Pty Limited (in liq), I order pursuant to s 500(2) of the Corporations Act 2001 (Cth) that the plaintiffs have leave nunc pro tunc to proceed against those companies in these proceedings, namely case number 2017/00279308.

2. I order that the costs of the Motion be costs in the cause.

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Decision last updated: 21 December 2018