Sheraz Pty Ltd v Rumsley

[2019] FCA 1522

FEDERAL COURT OF AUSTRALIA

Sheraz Pty Ltd v Rumsley [2019] FCA 1522

File number:

WAD 285 of 2019

Judge:

JACKSON J

Date of judgment:

16 September 2019

Catchwords:

COSTS - application for injunction - any injunction rendered unnecessary by passage of time - application to be discontinued - no order as to costs

Legislation:

Corporations Act 2001 (Cth) ss 459C, 459E, 459G

Cases cited:

Hamersley Iron Pty Limited v The National Competition Council [2008] FCA 598; (2008) 247 ALR 385

Leadenhall Australia Pty Ltd v Australian Securities and Investments Commission [2018] FCA 1792

Oswal v Burrup Holdings Ltd(No 2) [2012] FCA 1187; (2012) 208 FCR 425

Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622

Sheraz Pty Ltd v Rumsley [2019] FCA 493

Sheraz Pty Ltd v Vegas Enterprises Pty Ltd [2015] WASCA 4; (2015) 48 WAR 93

Date of hearing:

Determined on the papers

Date of last submissions:

29 July 2019 (plaintiff)
22 July 2019 (defendant)

Registry:

Western Australia

Division:

General Division

National Practice Area:

Commercial and Corporations

Sub-area:

Corporations and Corporate Insolvency

Category:

Catchwords

Number of paragraphs:

29

Counsel for the Plaintiff:

Mr P Clifford

Solicitor for the Plaintiff:

Clifford Chambers

Counsel for the Defendant:

The defendant appeared in person

ORDERS

WAD 285 of 2019

BETWEEN:

SHERAZ PTY LTD (ACN 009 134 016)

Plaintiff

AND:

ALAN PHILLIP RUMSLEY

Defendant

JUDGE:	JACKSON J
DATE OF ORDER:	16 SEPTEMBER 2019

THE COURT ORDERS THAT:

1.The plaintiff must file and serve any notice of discontinuance within 14 days of the date of these orders.

2.For the purposes of r 26.12(7) of the Federal Court Rules 2011 (Cth), the plaintiff is not liable to pay the defendant's costs of the proceedings.

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

JACKSON J:

1. These proceedings involve a statutory demand under s 459E of the Corporations Act 2001 (Cth), which the defendant, Mr Rumsley, served on the plaintiff, Sheraz Pty Ltd, on 24 January 2019. Sheraz applied for an injunction to prevent Mr Rumsley from relying on the demand in any application for the winding up of Sheraz. Before the injunction application was heard, however, the three month period after Sheraz's alleged failure to comply with the demand expired. That meant that Mr Rumsley could no longer use that failure to found a presumption of insolvency: see s 459C(2)(a) of the Act. So these proceedings are now pointless.

2. Sheraz has indicated that it will discontinue the proceedings.  I will make an order requiring it to do so within 14 days.  But Sheraz seeks the costs of commencing the proceedings, because it claims that unreasonable conduct by Mr Rumsley made the application necessary.  Mr Rumsley opposes any order for costs against him.  These reasons concern that costs dispute.

   Background

3. The statutory demand was the subject of Banks‑Smith J's judgment in Sheraz Pty Ltd v Rumsley [2019] FCA 493. Her Honour sets out the…