Silberman v Worldwide Enterprises Pty Ltd

[2010] VSC 664

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION
COMMERCIAL COURT
CORPORATIONS LIST - E

S CI 2010 04731

IN THE MATTER of WORLDWIDE ENTERPRISES PTY LTD (ACN 083 154 741)

DOV SILBERMAN	Plaintiff
v
WORLDWIDE ENTERPRISES PTY LTD	Defendant

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JUDGE:	GARDINER AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	22 September 2010
DATE OF JUDGMENT:	22 September 2010 (Ex tempore, revised 23 September 2010 and 15 October 2010)
CASE MAY BE CITED AS:	Silberman v Worldwide Enterprises Pty Ltd
MEDIUM NEUTRAL CITATION:	[2010] VSC 664

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EXTERNAL ADMINISTRATION – Application for winding up in insolvency – Application by director of the defendant for leave to appear on behalf of defendant pursuant to r 1.17(1) of the Supreme Court (General Civil Procedure) Rules 2005 – Application refused – Winding up order made.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr S. Hay	Herbert Geer
For the Defendant	Mr M. Goodman sought leave to appear on behalf of the defendant but such leave was refused.

HIS HONOUR:

1. The plaintiff seeks an order that the defendant (“Worldwide”) be wound up in insolvency under the provisions of the Corporations Act2001 by an originating process filed 30 August 2010.  The plaintiff relies on the failure by Worldwide to comply with a statutory demand served on Worldwide at its registered office at 5 St Kilda Road Victoria 3182 by post on 15 July 2010.  The plaintiff says that there was no compliance with that demand, nor was a timely application made to set aside the demand within the 21 days after service of the demand. 

1. The statutory demand upon which the plaintiff relies is based on a judgment of Wood AsJ made 22 June 2010.  That order was the result of a taxation of costs pursuant to the order of Master Daly, as she then was, made on 22 August 2008.  Wood AsJ ordered that the plaintiff’s costs be taxed and allowed in the sum of $36,713.01 and be paid by Worldwide.  The order is a final order under 63.56 of the Supreme Court (General Civil Procedure) Rules 2005.

1. When the matter was called on for hearing today, the director of Worldwide, Morris Goodman, sought leave to appear on behalf of Worldwide and much of the hearing time was devoted to an application by him for leave to appear on behalf of Worldwide pursuant to r 1.17(1) of the Supreme Court (General Civil Procedure) Rules 2005.  Mr Goodman filed a Notice of Appearance dated 21 September 2010 and an affidavit in support affirmed by him on the same date. 

1. Mr Hay, counsel for the plaintiff, opposed leave being granted to Mr Goodman pursuant to r 1.17(1). He referred me to decisions of J. Forrest J of 1 May 2009 in Worldwide Enterprises Pty Ltd v Silberman & anor[1] and of the Court of Appeal of 23 February 2010 (Weinberg and Bongiorno JJA) in Worldwide Enterprises v Silberman & anor.[2] .

   [1][2009] VSC 165

   [2][2010]VSCA 17

1. In the hearings before J. Forrest J and the Court of Appeal, Mr Goodman had appeared with leave[3] to represent Worldwide in an appeal from the decision of Daly AsJ who refused to grant leave to appeal to Worldwide from orders made by VCAT in proceeding No. 5129 of 2009. J. Forrest J had to consider an application by the defendants, Messrs Silberman (the plaintiff in this application) and Mr Sam Chizik, that Worldwide’s appeal from the orders of Master Daly be stayed until Worldwide was represented by a solicitor as required by r 1.17(1) of the Rules. In addition, J. Forrest J had to consider an application by the second defendant for security for costs.

   [3]The appearance section of the judgment of the Court of Appeal noted that Mr Newman was granted limited leave to appear

1. Although the proceeding before J. Forrest J and the subsequent appeal to Weinberg and Bongiorno JJA are in a sense one step removed from the present proceeding, they are relevant for consideration on the question of whether Mr Goodman should be granted leave to appear on behalf of Worldwide in this application. Those decisions consider and analyse the relevant authorities dealing with the grant of leave under r.1.17(1) and are particularly pertinent as they consider the very question of Mr Goodman’s entitlement to represent Worldwide in court proceedings. I shall return to those decisions after considering the background to the matter before me today.

1. In his Notice of Appearance which he purports to have filed on behalf of Worldwide, Mr Goodman identifies several grounds of opposition to the winding‑up application.  Although I have determined not to give Mr Goodman leave to appear on behalf of Worldwide, my reasons for doing so are based in large part on the contents of the Notice of Appearance and affidavit in support as they outline what he would have sought to submit on behalf of Worldwide had he been given the opportunity to do so. 

1. The first three paragraphs of the Notice of Appearance concern the order of Wood AsJ which is the judgment debt the subject of the statutory demand.  Mr Goodman asserts that Worldwide has filed a Notice of Review of the orders of Wood AsJ made on 22 June 2010. The terms of r 63.57 require that any such review be filed and served on each party interested within 14 days after the making of the orders of the Cost Court.  The plaintiff denies that he has been given notice of such review and no evidence has been filed by Worldwide that such a review is on foot.  In an affidavit of Bruce Charles Crosthwaite sworn 22 September 2010, he deposes that his enquiries reveal that no such notice of review has been filed with the Court.  

1. Mr Goodman contends that Wood AsJ did not have jurisdiction to hear the summons for the taxation of costs and that the plaintiff obtained the order on 22 June 2010 by “deception”. Wood AsJ is an Associate Judge who has been allocated to the Costs Court by the Chief Justice pursuant to section 17C of the Supreme Court Act 1986 and has jurisdiction to make the order which the plaintiff relies upon.  The allegation of deception is asserted but is not supported by evidence.

1. Paragraphs 4, 5 and 6 of the Notice of Appearance concern an application by Worldwide in the Federal Court of Australia in proceeding VID 719/2010 to set aside the statutory demands served by the plaintiff and Mr Chizik.  On 13 September 2010, that application was dismissed by Registrar Burns and Worldwide was ordered to pay the respondent’s costs.  The affidavit of service of the statutory demand filed in the  application before me, of Cameron Richard Roberts sworn 23 August 2010, states that the statutory demand was served on Worldwide by sending it to its registered office at 5 St Kilda Road, St Kilda Victoria 3182 on 15 July 2010.  Mr Goodman contends that Worldwide was served with the statutory demand on 30 July 2010.  At the hearing of this matter, he read to the Court an affidavit (apparently filed in the Federal Court application) of a partner of the firm Lowe Lippmann, accountants, which firm’s premises serve as the registered office of Worldwide. The deponent to that affidavit stated that Mr Goodman collected the demand on 30 July 2010. No evidence was led as to the actual date of its arrival at the registered office. The presumption of service in the ordinary course of post is not disturbed by such assertion by Mr Goodman, even if it was in the form of admissible evidence in this proceeding, which it was not.

1. An application of the service provisions of the Corporations Act and the Acts Interpretation Act results in a conclusion that the application to set aside the demand in the Federal Court, which was filed on 18 August 2010, was well out of time.  Further, Mr Goodman states that that application was served on the plaintiff by mail on 23 August 2010, some five days after it was filed and well and truly beyond the 21 day time limit prescribed by the Corporations Act for “making” a valid application to set aside the demand under section 459G.  For that reason, I consider that any appeal or review from the decision of Registrar Burns of the order of 13 September 2010 has no prospect of success at all.[4]

   [4]David Grant Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265 at 269.

1. The remainder of the Notice of Appearance, which is really a notice of opposition, makes unsupported generic complaints and assertions such as the proceeding has been commenced “by deception”, that it is “frivolous, vexatious or otherwise lacks of substance”, “has  tendency to cause prejudice, embarrassment”, is “an abuse of process and is irregular”, and will result in an “inconsistency of possible decisions” (this last contention being presumably based on a contention that the appeal from the order of Registrar Burns will be successful). 

1. The Notice culminates in a statement that the plaintiff, Mr Chizik and their solicitor “are accused persons in the Magistrates’ Court of Victoria Criminal Division proceedings for acts of perjury, obtaining financial advantage by deception, obtaining property by deception, falsification of documents, theft.”  I asked Mr Goodman what these matters were a reference to and he stated that he has commenced private criminal prosecutions against those persons which are returnable in October 2010.  In response to my question as to whether they involved the same subject-matter as that which was agitated and rejected in VCAT, he stated that they did. 

1. Mr Goodman’s affidavit in support of the Notice of Opposition is in much the same vein as the Notice of Appearance and purports to give evidentiary support to it.  It contains numerous accusations of improper behaviour by the plaintiff and those advising him which are not supported by any evidentiary foundation. 

1. I have determined to deny leave to Mr Goodman to appear on behalf of Worldwide. The submissions he made orally and the contents of his Notice of Appearance and the affidavit he affirmed purportedly in support of it suffer from the same vices for which the Court of Appeal and before it, J. Forrest J denied him leave.  In particular, I refer to paragraphs 35 to 56 of the decision of Weinberg JA and paragraph 75 of the judgment of Bongiorno JA and paragraphs 15 to 28 of the decision of J. Forrest J. 

1. The current proceeding is an application for the winding‑up of Worldwide which is deemed to be insolvent by reason of non‑compliance with a statutory demand which relies on judgment debt.  I asked Mr Goodman why it was a solicitor could not be obtained to represent Worldwide and he indicated to the Court that Worldwide had no funds and had not traded for some years.  I am satisfied that Worldwide has suffered no prejudice by the denial of leave to Mr Goodman as the matters he sought to agitate have no prospect of succeeding. His submissions and the documents he filed revealed that his participation would only have protracted proceedings for no good purpose and added to the costs of the plaintiff, which will be irrecoverable in the event that Worldwide has no assets. 

1. I am satisfied pursuant to r 5.9 of the Supreme Court (Corporations) Rules that the plaintiff has complied with the requirements of the Corporations Act and the Supreme Court (Corporations) Rules 2003. I order as follows:

1.The time for lodgement with the Commission of notice of the filing of the proceeding is extended to 31 August 2010 at 4pm.

2.Worldwide Enterprises Pty Ltd (ACN 083 154 741) be wound‑up in insolvency under the provisions of the Corporations Act 2001.

3.Phillip Newman is appointed liquidator in the winding‑up.

4.The plaintiff’s costs are costs in the winding‑up.