Sacco v Golden Glory Pty Ltd (in liq)
[2011] FCA 1346
•24 November 2011
FEDERAL COURT OF AUSTRALIA
Sacco v Golden Glory Pty Ltd (in liq) [2011] FCA 1346
Citation: Sacco v Golden Glory Pty Ltd (in liq) [2011] FCA 1346 Parties: DEANNE LOUISE SACCO v GOLDEN GLORY PTY LTD (IN LIQUIDATION) File number: VID 1295 of 2011 Judge: GORDON J Date of judgment: 24 November 2011 Date of hearing: 24 November 2011 Date of last submissions: 24 November 2011 Place: Melbourne Division: GENERAL DIVISION Category: No catchwords Number of paragraphs: 11 Solicitor for the Applicant: Mr RD Silverstein of Ronald David Silverstein, Solicitor Counsel for the Respondent: The Respondent did not appear
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
VID 1295 of 2011
BETWEEN: DEANNE LOUISE SACCO
ApplicantAND: GOLDEN GLORY PTY LTD (IN LIQUIDATION)
Respondent
JUDGE:
GORDON J
DATE OF ORDER:
24 NOVEMBER 2011
WHERE MADE:
MELBOURNE
THE COURT ORDERS THAT:
1.Subject to paragraph 2, pursuant to s 500(2) of the Corporations Act 2001 (Cth), the applicant have leave to proceed with the civil proceeding against the respondent in the Supreme Court of Victoria, SCI 2009 10269 (the Proceeding).
2.The applicant not seek to enforce any further judgment that she may obtain against the respondent in the Proceeding without the further leave of a Court.
3.Liberty to apply.
Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
VID 1295 of 2011
BETWEEN: DEANNE LOUISE SACCO
ApplicantAND: GOLDEN GLORY PTY LTD (IN LIQUIDATION)
Respondent
JUDGE:
GORDON J
DATE:
24 NOVEMBER 2011
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
The respondent, Golden Glory Pty Ltd (the Company), is in liquidation following a resolution for its voluntary winding up. The applicant, Deanne Louise Sacco (Ms Sacco), has applied for an order under s 500(2) of the Corporations Act 2001 (Cth) (the Corporations Act) for leave to proceed with the prosecution of a proceeding against the Company. The proceeding was filed against the Company in the Supreme Court of Victoria SCI 2009 10269 (the Proceeding) in November 2009 seeking an order for accounts that arose from the sale by the Company, as mortgagee, of a property in Aspendale of which Ms Sacco was the registered proprietor (the Property).
Settlement of the sale of the Property occurred on 26 November 2009. On the same day, in the Proceeding, the Supreme Court ordered that a sum of $53,477.01 from the sale proceeds (the Sum) be paid into one of the Supreme Court’s Common Funds. The Sum was paid into that Common Fund on about 4 December 2009. Pleadings were filed in the Proceeding. In general terms, Ms Sacco contended that the Company had defalcated in relation to trust monies that the Company should have held for Ms Sacco.
On 22 September 2011, an Order in favour of Ms Sacco of the payment of $9,000 in costs was made against the Company by the Supreme Court. The costs were payable forthwith and were ordered because the trial was adjourned due to the non-appearance of the Company at the hearing. The costs have not been paid.
The trial was relisted for hearing on 13 October 2011 and heard by Associate Justice Daly. The Company did not attend that trial. On that day, Associate Justice Daly granted declarations and made Orders (13 October Orders) as follows:
THE COURT DECLARES THAT:
1.[Ms Sacco] paid the [Company] in partial repayment of a mortgage:
a.$20,000 on 9 October 2008;
b.$1,000 on 18 September 2009;
c.$600 on 25 September 2009.
2.The [Company] has failed to provide [Ms Sacco] with any bill of costs in taxable form in relation to the orders of this Court dated 4 February 2009 and 14 September 2009.
THE COURT ORDERS THAT:
3.$33,477.01 be paid to [Ms] Sacco from the Court’s Common Fund No 1 and debited … forthwith.
4.Within 30 days of service of this order on the [Company], the [Company] file and serve any bills of costs in taxable form in relation to the orders of this Court dated 4 February 2009 and 14 September 2009.
5.If the [Company] fails to comply with paragraph 4 of these orders, $20,000 together with interest be paid to [Ms] Sacco from the Court’s Common Fund No 1 and debited … .
6.[Ms Sacco] may seek a taking of accounts by an Associate Justice based on the declarations of this Court.
7.The hearing of any taking of accounts in this proceeding be fixed for a date not before 21 November 2011.
8.The [Company] pay [Ms Sacco’s] costs of this proceeding to date, including all reserved costs on:
a.a party-party basis up to 23 December 2009; and
b.a solicitor-client basis from and including 23 December 2009 and up to and including the date of this order.
9.There be liberty to apply.
Ms Sacco received $33,477.01 pursuant to the 13 October Orders. The hearing of the taking of accounts is listed for tomorrow, 25 November 2011.
On 27 October 2011, Ms Sacco’s solicitor swore an affidavit setting out his calculation of what the Company, as mortgagee of the Property, was entitled to recover and his calculation of the liability of the Company, as trustee, to account to Ms Sacco. The amount allegedly owed by the Company to Ms Sacco was $90,682.46. It is apparent from other material provided by Ms Sacco’s solicitor to the Company, that Ms Sacco seeks to recover in excess of $90,000 in costs.
On 16 November 2011, the Company was placed in liquidation.
Section 500(2) of the Corporations Act provides that, after the passing of a resolution for voluntary winding up, no action or other civil proceeding is to be proceeded with or commenced against a company except by leave of the Court and subject to such terms as the Court imposes. The purpose of that stay of proceedings is to ensure that a company in liquidation does not face a multiplicity of legal proceedings that are expensive, time-consuming and potentially unnecessary. It is for the Court to determine whether or not to grant leave under s 500(2).
In undertaking that exercise, it is material for the Court to have regard to such matters as the degree and complexity of the legal and factual issues involved, whether the claim has some arguable merit, the amount and seriousness of the claim, and whether the contemplated proceeding would prejudice the creditors generally.
The material before the Court indicates that the Proceeding is well advanced. Indeed, the Court has finally determined some of the substantive issues between the Company and Ms Sacco. Thus, it cannot be said that the Proceeding does not have some prospect of success. Given the stage that the Proceeding has reached, a question which arises is why the Proceeding should be allowed to proceed. As will be apparent, the claims made by Ms Sacco are not as an unsecured creditor but as a beneficiary of a trust where the trustee (the Company) has allegedly misapplied funds belonging to Ms Sacco. And, the issues left for determination are the taking of accounts, the determination of the question of costs and, if so, the basis on which costs are to be assessed.
In addition to those matters concerning the Proceeding, Ms Sacco also relied upon other facts and matters in support of her application concerning steps allegedly taken by the Company (or by those in actual or de facto control of the Company on behalf of the Company) which are said to have “effectively stripped [Ms Sacco] of her entitlement to trust monies”. For the purposes of this application, it is unnecessary to resolve those issues as a matter of fact. It is sufficient to record that the allegations have been made and that, on their face, they would appear to add to the seriousness of the claim.
In all of the circumstances, I consider that it is appropriate to grant leave under s 500(2) of the Corporations Act. The grant of leave will be subject to the condition that Ms Sacco not seek to enforce any judgment that she may obtain against the Company in the Proceeding without the further leave of a Court.
I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gordon. Associate:
Dated: 24 November 2011
0
0
0