Thomas, in the matter of La La Land Byron Bay Pty Ltd v Poulter
[2020] FCA 1829
•20 November 2020
FEDERAL COURT OF AUSTRALIA
Thomas, in the matter of La La Land Byron Bay Pty Ltd v Poulter [2020] FCA 1829
File number(s): QUD 204 of 2020 Judgment of: GREENWOOD J Date of judgment: 20 November 2020 Catchwords: CORPORATIONS – consideration on an application to strike out a proceeding in which the plaintiff seeks an order that the Court conduct an inquiry into aspects of the administration of La La Land Byron Bay Pty Ltd (In Liquidation) pursuant to clause 90‑10 of Schedule 2 to the Corporations Act 2001 (Cth) Legislation: Corporations Act 2001 (Cth), Schedule 2, clauses 90‑10, 90‑15 Cases cited: UBS AG v Tyne as Trustee of the Argot Trust (2018) 265 CLR 77 Division: General Division Registry: Queensland National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Number of paragraphs: 21 Date of hearing: 20 November 2020 Solicitor for the Plaintiff: The Plaintiff appeared in person Solicitor for the Defendant: Colin Biggers & Paisley Pty Ltd ORDERS
QUD 204 of 2020 IN THE MATTER OF LA LA LAND BYRON BAY PTY LTD (IN LIQUIDATION) ACN 092 061 688
BETWEEN: LUKE THOMAS
Plaintiff
AND: ANDREW POULTER
Defendant
ORDER MADE BY:
GREENWOOD J
DATE OF ORDER:
20 NOVEMBER 2020
THE COURT ORDERS THAT:
1.The proceeding be transferred to the Supreme Court of Queensland.
2.The plaintiff pay the defendant’s costs of and incidental to the interlocutory application filed on 30 October 2020.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
EX TEMPORE REASONS FOR JUDGMENT
GREENWOOD J:
These proceedings are concerned with an interlocutory application filed by the defendant in the principal proceedings, Mr Andrew Poulter, for orders pursuant to rule 16.21 of the Federal Court Rules 2011 (Cth) that the principal proceeding be struck out on the ground that it is said to be an abuse of process.
Alternatively, the second order sought is an order that, pursuant to s 1337H of the Corporations Act2001 (Cth) (the “Act”), the proceeding be transferred to the Supreme Court of Queensland.
The principal proceeding (which is QUD 204 of 2020) was commenced on 2 July 2020. In it, Mr Thomas, as plaintiff, seeks an order that the Court conduct an inquiry into aspects of the administration of a company called La La Land Byron Bay Pty Ltd (in Liquidation) (the “company”).
That power is contained within Schedule 2 to the Act and contemplates that a person with relevant standing can make an application for an inquiry into the external administration of the company: cls 90‑10(1), 90‑10(2).
The powers of the Court in conducting such an inquiry are very broad: cl 90‑15(3).
The power is not invoked often, but it is clearly a broadly‑based power and is well understood to confer a broad reach of power to make such orders as the Court determines appropriate arising out of the conduct of the inquiry: cl 90‑15(1), 90‑15(3).
The principal application is supported by an affidavit of Mr Luke Thomas sworn on 2 July 2020, in which he says that he is a shareholder and creditor of the company and thus he certainly has standing under the provisions to make an application for the conduct of an inquiry. That standing is conferred by cl 90‑10 of Schedule 2 to the Act.
As to the question of an application to strike out the proceeding as an abuse of process, such an application would normally be supported by an affidavit which seeks to set out a narrative or an explanation of the relationship between various earlier proceedings and, in particular, the extent to which there are overlaps between those proceedings so that the Court could conclude on the facts that the most recent proceeding, QUD 204 of 2020 in truth is an abuse of process on the footing, largely, that the new proceeding seeks to agitate matters which are already the subject of earlier proceedings which have either been determined in part or have been the subject of interlocutory orders or are pending.
The Court has before it submissions which set out aspects of that matter, but as to a factual foundation which explains in narrative form the extent of the overlaps and the particular relationship between various proceedings, it would not be appropriate to make an order that the proceedings be struck out.
As to the question of what constitutes an abuse of process, it is sufficient to simply say that the guiding principles as to whether a particular proceeding engages an abuse of process are to be found in the judgment of the plurality Kiefel CJ, Bell and Keane JJ in UBS AG v Tyne as Trustee of the Argot Trust (2018) 265 CLR 77 taken together with, of course, the judgment of Gageler J.
Accordingly, it is not appropriate on the current state of the material to strike out the matter as an abuse of process because the Court is simply not in a position to make foundation findings about aspects of that application.
However, the second limb to the application involves an application for an order that the matter be transferred to the Supreme Court of Queensland.
It is not necessary to go into the sequence of proceedings in any particular detail. However, it is relevant to note that proceedings were commenced in the Federal Court (being QUD 407/2019 and QUD 438/2019), which were then consolidated as a result of the case management conference and other procedural matters in a proceeding called QUD 41/2019.
An order was made on 23 December 2019 giving effect to the consolidation of those proceedings and the transfer of the consolidated proceeding to the Supreme Court of Queensland in light of the proceedings commenced in that Court which, at the time of the transfer order, satisfied this Court that there was a relevant relationship between the factual foundation for the relief sought in those Federal Court proceedings and the matters in controversy in the Supreme Court proceedings.
There seemed, at that time, to be a degree of overlap between those proceedings which would warrant, firstly, the consolidation, and secondly the transfer of the consolidated proceeding to the Supreme Court simply because there was some symmetrical utility in having all of those foundation matters resolved in the one place at the one time between the relevant parties.
The legacy of those orders is that the transferred proceeding became QUD 206/2020 in the Supreme Court, and that proceeding was ultimately consolidated with the proceedings described as 8834/2018 and 13700/2017 in the Supreme Court of Queensland. Orders were ultimately made that Mr Thomas put on a consolidated claim and a consolidated, presumably amended, statement of claim, identifying particularly the various factual matters put in controversy.
The issues that have been raised in the earlier proceedings, and the issues raised in this proceeding going to an inquiry into the affairs of the company, engage with a number of factual matters which appear to be common to the various proceedings. Some of them involve, of course, the treatment by Mr Poulter of various issues in controversy concerning dealings in the cash of the company at the relevant periods of time; questions in relation to the lease and whether or not lease payments were, in fact due; whether or not the termination of the lease was valid; whether steps were taken by Mr Poulter to preserve the leasehold interest of the company, and other matters.
These factual questions concerned a number of documents which have emerged in the course of oral examinations, and they need to be contextually understood in the total chronology of the events and the various responses by Mr Poulter to issues confronting the company. It may, or may not be, appropriate to engage with all aspects of the present proceeding in the context of resolving the matters in the consolidated Federal Court proceedings transferred to the Supreme Court in the context of the issues alive in the Supreme Court proceedings.
However, there is a sufficient degree of commonality about some foundation matters which makes it more than sensible that the one court deal with the collection of factual questions which need to be dealt with, and that the one court deal with the question of procedural administration of regularising the proceeding so that there is a consolidated claim, a properly articulated factual foundation, and a proper basis for relief identified. In the scope of exercising its jurisdiction in the Supreme Court, that court can no doubt determine the extent to which it ought to engage in the forms of relief sought by the plaintiff in this proceeding.
Accordingly, for all of those reasons, I propose to make an order that the present proceeding, QUD 204/2020, be transferred to the Supreme Court of Queensland, and I so order.
I am going to make an order that the respondent pay the applicant’s costs of and incidental to the interlocutory application for transfer, and I will confine the costs to the present application for transfer. Ultimately, the Supreme Court, when it determines the transfer proceeding, can decide what ought to happen to the costs of the proceeding.
I certify that the preceding twenty‑one (21) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Greenwood. Associate:
Dated: 20 November 2020
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