The OWNERS - STRATA PLAN NO. 57748 v Tavendale

[2015] FCCA 2610

FEDERAL CIRCUIT COURT OF AUSTRALIA

THE OWNERS - STRATA PLAN NO. 57748 v TAVENDALE [2015] FCCA 2610

Catchwords:
PRACTICE AND PROCEDURE – Application for interlocutory injunction to restrain the sale of property – whether, assuming applicant has arguable case for final relief, the granting of the injunction would be in aid of such relief –application dismissed.

Applicant: THE OWNERS - STRATA PLAN NO. 57748

Respondent: AILSA PAIGE TAVENDALE

File Number: SYG 919 of 2015

Judgment of: Judge Manousaridis

Hearing date: 14 September 2015

Delivered at: Sydney

Delivered on: 14 September 2015

REPRESENTATION

Solicitors for the Applicant: Mr R. Black of R D Black & Associates

ORDERS

1. The application for interlocutory relief made before Judge Manousaridis today is dismissed.

FEDERAL CIRCUIT COURT OF AUSTRALIA

AT SYDNEY

SYG 919 of 2015

THE OWNERS - STRATA PLAN NO. 57748

Applicant

And

AILSA PAIGE TAVENDALE

Respondent

REASONS FOR JUDGMENT

(revised from transcript)

1. There came before me as duty judge this afternoon an interim application filed by or on behalf of Ms Ailsa Paige Tavendale.  In that interim application Ms Tavendale seeks, among other things, an order restraining the sale by the respondent of a property at 132 Wentworth Street, Oak Flats, New South Wales, that is due to take place on Tuesday, 15 September 2015. 

2. The respondent is, in fact, the trustee in bankruptcy of Ms Tavendale.  He was appointed trustee on 14 May 2015, being the day on which a registrar of this Court made a sequestration order against the estate of Ms Tavendale. 

3. In support of the application, Ms Tavendale relies on an affidavit, the effect of which I will now summarise.  She deposes that she was a director of Stepping Stones Child Care Centre Proprietary Limited.  That company owned and operated a child care centre at 132 Wentworth Street, Oak Flats, New South Wales, being the property in respect of which an injunction is being sought.  She asserts that the business was solvent, paying its debts at the time of Ms Tavendale’s bankruptcy, but it has now closed. 

4. Ms Tavendale says that in October and December 2014 she suffered from a number of illnesses, which it is not necessary to set out in any detail in these reasons for judgment.  She says, however, that because of those illnesses she was unable to work and she got behind financially.  In October 2014 she refinanced Stepping Stones Child Care Centre and the property at 132 Wentworth Street, Oak Flats, to tide her over and to pay her bills.  In the loan that she secured she believed she obtained an amount sufficient to pay the petitioning creditor in these proceedings; but for reasons which she says are not clear to her, that amount was not received.  In any event, Ms Tavendale had an operation on 14 April 2015 and she had her first follow-up appointment on 14 May 2015, being the day on which the sequestration order was obtained.  On the date of the hearing she tried to contact the Court by email to advise that she would be absent and that she would attempt to negotiate the repayment of the debt.  She says she sent numerous emails to the Court registry but they bounced.  As I said before, a sequestration order was made. 

5. Ms Tavendale also deposes that Stepping Stones Child Care Centre Proprietary Limited owns the property at 132 Wentworth Street and is now insolvent.  She says that the trustee has closed the Stepping Stones Child Care Centre so there is no income.  She also deposes that the trustee has listed for sale 132 Wentworth Street and has called for expressions of interest.  She says that the auction is listed for 15 September 2015, although no time is specified.  Her solicitor, Mr Black, has informed the Court that the auction is due to take place at 5 pm.  Ms Tavendale says that if 132 Wentworth Street, Oak Flats, is sold there is no way Ms Tavendale will be able to reconstitute her child care business and that the damage she will suffer will be irremediable. 

6. In applications for interlocutory relief a court usually enquires into at least two matters.  The first is to determine whether the applicant has an arguable case for the final relief the applicant claims and in aid of which the interlocutory relief is sought; and the second matter the court looks at is where the balance of convenience lies, assuming there is an arguable case. Perhaps not conventionally, I will proceed on the assumption that Ms Tavendale has an arguable case for the final relief she seeks; and the final relief that she seeks is the annulment of the sequestration order. 

7. As I understand or as I understood her solicitor, the ground on which that annulment would be sought would be, first, that Ms Tavendale is in fact solvent and, secondly, the circumstances in which a sequestration order was made in her absence.  And here I am referring to Ms Tavendale’s inability to attend on that day and her inability to communicate that fact to the Court before the sequestration order was made. 

8. If I assume that there is an arguable case, the grant of the order that Ms Tavendale seeks today will not aid such application for final relief.  The reason is that the property that is being sold – that is to say, 132 Wentworth Street, Oak Flats – is a property which she herself says is owned by Stepping Stones Child Care Centre Proprietary Limited.  A company, of course, is a separate legal entity from the persons who are its shareholders and who otherwise manage it.  The property that is being sold, therefore, does not form part and cannot form part and it is not alleged it forms part of Ms Tavendale’s estate. 

9. As I have noted above, Ms Tavendale has asserted that the property is being sold by the company but through the actions of the trustee.  Precisely or indeed even generally how it is said that that is occurring is not apparent on the evidence.  And, in any event, even if there was some impropriety or some unauthorised action by the trustee in the manner in which the property of Stepping Stones Child Care Centre Proprietary Limited’s property is being dealt with, that is not a matter that can be the subject of a right of action by Ms Tavendale. The proper plaintiff to complain about that conduct is the company itself. 

10. My conclusion so far, therefore, is that even if Ms Tavendale has an arguable case for the final relief she seeks, the granting of the injunction which she seeks this afternoon on an urgent basis cannot assist her in that application.  I then turn to the question of whether there is an arguable case for the relief she seeks.  In considering that question, I do take into account the urgency with which this application has been brought.  Nevertheless, there are some matters that I need to point out.  First, to the extent that solvency is relied on, there is no evidence which can reasonably suggest, on the material before me at any rate, that Ms Tavendale is solvent.  Reference has been made to the fact that she has equity in a unit.  That may or may not be so but the critical thing in assessing solvency is whether the debtor has the ability to pay the debts as and when they fall due.  But it may well be that if the case for annulment is pursued and greater time is available, Ms Tavendale may be able to establish she is solvent.  

11. The second ground on which the application for annulment appears to be based on is the circumstances in which the sequestration order was made.  Accepting that there was a mishap in Ms Tavendale’s not being at the hearing in which a sequestration order was made, there is no evidence – or at least no evidence that is acceptable – to explain why she did not apply to the Court, as she was entitled to, for a review of the registrar’s decision.  Such application had to be made within 21 days. 

12. I do note that in her affidavit reference is made to the fact that Ms Tavendale had sought to make enquiries as to where around $15,000 of the money that she borrowed back in October 2014 could be found or how it could be accounted for.  But even if one accepts that, that does not, in my opinion, arguably give rise to a reasonable explanation for her not applying for a review of the registrar’s decision. 

13. There is also another matter which bears on my decision not to grant any interlocutory relief. And that is that, although an undertaking as to damages has been proffered, there is no evidence to suggest that Ms Tavendale has the financial wherewithal to honour such undertaking if the necessity for calling upon it arises. 

14. For those reasons, therefore, the application for interlocutory relief made ex parte before me is refused. 

I certify that the preceding fourteen (14) paragraphs are a true copy of the reasons for judgment of Judge Manousaridis

Associate: 

Date: 25 September 2015