W G and B P/L and Anor. v Kizbeau P/L and Ors. Kizbeau P/L v W G and B P/L

[1993] FCA 303

0 1qq3

JUDGI\lEiilT No. ........ ........ .. .,,,.,,,,,,,

IN THE FEDERAL COURT OF AUSTRALIA	)
) -
VICTORIA DISTRICT REGISTRY	) No. 503 of 1992
GENERAL DIVISION

.*

W G h B PTY LTD iACN 005 558 9761

and WALLACE GEORGE McLEAN

Appellants

and

KIZBEAU PTP LTD [ACN 006 983 071)

GARRY FRANCIS SHEILS and ANNA M I A ELIZABETH SHIELS

Respondents

IN THE FEDERAL COURT OF AUSTRALIA	)
VICTORIA DISTRICT REGISTRY	) No. 3049 of 1992
GENERAL DIVISION

KIZBEAU PTY LTD

(ACN) 006 983 0711

Applicant

and

Respondent

Judse :	Heerey J
Place:	Melbourne
Date:	29 April 1993
the hearing of the appellant's appeal to the Full Court which	is listed for hearing in the week commencing 8 June. There is
a theoretical alternative that the Full Court appeal might be brought forward to an earlier date, but I think for obvious reasons I need not consider that possibility.
In my opinion, the appellant's application should succeed. There are a number of factors which lead me to that conclusion. I stress of course, as I said in Ataxt in P t y
Limited v Gordon P a c i f i c Developments ( 1991) 29 FCR 564, this
is a discretionary decision which ultimately turns on the consideration of the circumstances of each case. I will point out, there are some factors particular to this case which carry considerable weight.
First, the hearing of the appeal has been fixed for a date very soon after the proposed date for the winding up petition.
Secondly, from what was said by counsel for the appellant, it does seem that there is a reasonable case for the appellant to argue on the appeal. It would obviously be presumptuous of me
to canvass the merits of the appeal any further, and counsel for the respondent quite properly did not attempt to do so.
Suffice it to say that there seem to be arguable points as to whether the conduct complained of by the respondent could in the circumstances amount to misleading or deceptive conduct, and also issues as to whether, even if it did, the assessment of damages by the learned judge was correct.
Thirdly, there is the point that the respondent is in a unique position in that it is in possession of the appellant's motel under a lease, the present term of which expires on 15 December 1993, but which contains a succession of options which total, I was told, some 22 years from the date of commencement in 1988. Thus, the respondent can work off its debt against rent accrued under the lease. No rent has been paid since 16 December 1992. Even on the assumption that the estimate of the appellant's liabilities tendered by the respondent is correct, the respondent would work off any indebtedness of the appellant in a period of about seven months.
Fourthly, the evidence does not disclose any other creditors; certainly any unsecured creditors. There is a secured creditor, the Bank of Melbourne. The evidence seems to indicate that it has not called up its facilities granted to the appellant and is prepared to hold its hand, at least until the resolution of the appeal proceedings.
Fifthly, there is a balance sheet of the appellant as to 31
March 1993 which shows a surplus of assets over liabilities of $303,000. There was point made of the fact that the appellant had not paid an amount of $8289 which were costs ordered to be paid in respect of an unsuccessful appeal to the Full Court against an interlocutory order in this matter, those costs being outstanding since the end of last year. No doubt if that amount is owing it should be paid promptly, but it does not seem to me that this factor outweighs the overwhelming common sense of having a Full Court adjudicate the substantial issue between these parties, namely whether the debt they primarily rely on, being a debt for some $265,000, depending on the judgment of the Judge of this Court, is owing at all.
I will order that the hearing of the winding-up application
number VG 3049 of 1993 be adjourned to a date to be fixed after the hearing and determination of the appeal to the Full Court of the respondent W.G. & B. Pty Limited. I reserve
liberty to apply.  I order that in the appeal which is VG 503
of 1992, the respondent's notice of motion dated 27 April 1993 be dismissed.
I will order that the respondent pay the appellant's costs of the application and of the motion.
I will order that the appellant's notice of motion dated 23
April be dismissed.

The essential question here is whether I should order the adjournment of the winding up petition against the appellant, which has been fixed for hearing on 26 May 1993, until after

I certify that this and tk preceding three (4) fou pages are a true copy o the Reasons for Judgment o his Honour Mr

Heerey / I

Counsel for the applicant:	Dr P Buchanan QC and Mr ti
Colbran
Solicitor for the applicant:	Wisewoulds
Counsel for the respondents:	Mr D M B Derham
Solicitor for the respondents:	Molomby & Molomby
Date of hearing:	29 April 1993