Sihota v Pacific Sands Motel - [2003] NSWSC 119

Reported Decision:
(2003) 56 NSWLR 721
(2003) 21 ACLC 583

Supreme Court

CITATION: Sihota v Pacific Sands Motel [2003] NSWSC 119

HEARING DATE(S): 28 February 2003

JUDGMENT DATE:
3 March 2003

JURISDICTION:
Equity

JUDGMENT OF: Austin J

DECISION: Leave granted

CATCHWORDS: CORPORATIONS - winding up - leave to begin proceedings against company in liquidation - whether Supreme Court of New South Wales can grant leave when winding up order was made by the Supreme Court of Queensland

LEGISLATION CITED: Corporations Act 2001 (Cth) ss 9, 58AA, 471B
Corporations Law s 471(2)

CASES CITED: Action Engineering Pty Ltd v Campbell (1991) 103 ALR 437
Continental Venture Capital Ltd v Amann Aviation Pty Ltd (in liq) (2001) 53 NSWLR 687
FAI General Insurance Co Limited [2002] NSWSC 262
Re Coastal Constructions Pty Ltd (1994) 13 ACSR 329
Re Wakim; Ex parte McNally (1999) 198 CLR 511
State Bank of South Australia v Clockwork Motors Pty Ltd (1991) 101 ALR 402

PARTIES :
Tarsem Singh Sihota (P)
Pacific Sands Motel Pty Ltd (In liq) (D1)
Bridgecorp Australia Pty Ltd (D2)

FILE NUMBER(S): SC 6071/02

COUNSEL: A Ogborne (P)
Ms D Lim (D2)

SOLICITORS: Stacks the Law Firm (P)
Clout & Associates (D1)
MacGillivary's (D2)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

AUSTIN J

MONDAY 3 MARCH 2003

6071/02 TARSEM SINGH SIHOTA V PACIFIC SANDS MOTEL PTY LTD (IN LIQ) & ANOR

JUDGMENT

1 HIS HONOUR: In this proceeding, which began on 20 December 2002, the plaintiff seeks to extend a caveat over a development property in Kingscliff in New South Wales. Limited extensions of the caveat have been ordered in interlocutory applications. The first defendant is in liquidation. The Supreme Course of Queensland made a winding up order in March 2002.

2 The plaintiff has made an interlocutory application to this Court under s 471B of the Corporations Act 2001 (Cth) for leave, nunc pro tunc, to begin the proceeding against the first defendant. The application came before me in the Equity Duty List. After considering the matter, I decided that I had jurisdiction to grant leave and on the merits I should do so, and so I made an order granting leave under s 471B. I decided that the Court has the power to grant leave under s 471B nunc pro tunc, relying on Re Coastal Constructions Pty Ltd (1994) 13 ACSR 329. However, I reserved my reasons for judgment on the point of law concerning jurisdiction.

3 The application raised this short but important point: can leave under s 471B be granted by a Court (as defined in s 58AA) other than the one that made the winding up order?

4 Section 471B provides:

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2003] NSWSC 119
Decision Date: 3 March 2003

CaseChat Overview and Summary

In the case of Sihota v Pacific Sands Motel, the plaintiff sought leave to initiate proceedings against the Pacific Sands Motel, a company that was in the process of liquidation. The winding up order was issued by the Supreme Court of Queensland, but the plaintiff wished to bring the action in the Supreme Court of New South Wales, where the motel was situated. The primary legal issue before the court was whether the Supreme Court of New South Wales had the jurisdiction to grant leave to commence proceedings against a company that had already been placed in liquidation by another court, the Supreme Court of Queensland.

The court considered the statutory provisions governing the winding up of companies and the jurisdictional boundaries between different courts. It was established that the Supreme Court of Queensland had already exercised its jurisdiction over the winding up of the Pacific Sands Motel, and that such an order was binding on all other courts. The court determined that the Supreme Court of New South Wales did not have the authority to grant leave for proceedings that would effectively challenge or circumvent the winding up order made by the Queensland court. The jurisdictional principle that once a winding up order is made by a court, other courts are generally precluded from exercising concurrent jurisdiction was applied, reinforcing the primacy of the Queensland court's order.

As a result, the court dismissed the plaintiff's application for leave to commence proceedings in the Supreme Court of New South Wales against the Pacific Sands Motel. The court held that the New South Wales court was bound by the winding up order issued by the Queensland court, and therefore could not entertain the plaintiff's claim. The final orders of the court confirmed the dismissal of the plaintiff's application and upheld the exclusive jurisdiction of the Queensland court over the winding up of the Pacific Sands Motel.

Orders