Warner v Hung, in the matter of Bellpac Pty Ltd (Receivers and Managers Appointed) (In Liquidation) (No 2)

[2013] FCA 1071

FEDERAL COURT OF AUSTRALIA

Warner v Hung, in the matter of Bellpac Pty Ltd (Receivers and Managers Appointed) (In Liquidation) (No 2) [2013] FCA 1071

Citation:

Warner v Hung, in the matter of Bellpac Pty Ltd (Receivers and Managers Appointed) (In Liquidation) (No 2) [2013] FCA 1071

Parties:

ANTHONY JOHN WARNER AND STEVEN KUGEL IN THEIR CAPACITY AS JOINT AND SEVERAL LIQUIDATORS OF BELLPAC PTY LIMITED (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) ACN 101 713 017 and BELLPAC PTY LIMITED (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) ACN 101 713 017 v KEN YUK KEE HUNG, AUSTCORP INTERNATIONAL LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT) ACN 003 132 090, ALFRED WONG, DANNY AU-YEUNG, SHAN PEI INVESTMENT LIMITED, GOOD TEAM INVESTMENTS LIMITED, GREAT INVESTMENTS LIMITED, OSMOND TZE LEUNG KWOK, HONG XU, ZHI HONG, CHIAH CHEANG LEE, GUJARAT NRE COKING COAL LIMITED (FORMERLY KNOWN AS GUJARAT NRE MINERALS LIMITED), ALL SEASONS RESOURCES INC and VIEW PLAN RESOURCES LIMITED

File number:

NSD 1063 of 2012

Judge:

GRIFFITHS J

Date of judgment:

5 November 2013

Catchwords:

COSTS – interlocutory application for security for costs dismissed – whether defendants to interlocutory application should pay the costs of the plaintiffs

PRACTICE AND PROCEDURE – whether oral application for an adjournment should be granted

Legislation cited:

Federal Court Rules 2011 r 19.05

Date of hearing:

5 November 2013

Place:

Sydney

Division:

GENERAL DIVISION

Category:

Catchwords

Number of paragraphs:

8

Solicitor for the First and Second Plaintiffs:

Mr J Breene of Breene & Breene Solicitors

Counsel for the First and Second Defendants:

Ms G McNiven of Tomaras Lawyers

Third Defendant:

The third defendant did not appear

Fourth Defendant:

The fourth defendant did not appear

Fifth Defendant:

The fifth defendant did not appear

Counsel for the Sixth, Eighth, Ninth and Eleventh Defendants:

Mr J Clarke SC

Solicitor for the Sixth, Eighth, Ninth and Eleventh Defendants:

Russells

Solicitor for the Seventh and Tenth Defendants:

Mr T McGrath of Pateman Legal

Solicitor for the Twelfth Defendant:

Mr B Gillard of Gillard Consulting Lawyers

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 1063 of 2012

IN THE MATTER OF BELLPAC PTY LIMITED (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION)  

BETWEEN:

ANTHONY JOHN WARNER AND STEVEN KUGEL IN THEIR CAPACITY AS JOINT AND SEVERAL LIQUIDATORS OF BELLPAC PTY LIMITED (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) ACN 101 713 017
First Plaintiff

BELLPAC PTY LIMITED (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) ACN 101 713 017
Second Plaintiff

AND:

KEN YUK KEE HUNG
First Defendant

AUSTCORP INTERNATIONAL LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT) ACN 003 132 090
Second Defendant

ALFRED WONG
Third Defendant

DANNY AU-YEUNG
Fourth Defendant

SHAN PEI INVESTMENT LIMITED
Fifth Defendant

GOOD TEAM INVESTMENTS LIMITED
Sixth Defendant

GREAT INVESTMENTS LIMITED
Seventh Defendant

OSMOND TZE LEUNG KWOK
Eighth Defendant

HONG XU
Ninth Defendant

ZHI HONG
Tenth Defendant

CHIAH CHEANG LEE
Eleventh Defendant

GUJARAT NRE COKING COAL LIMITED (FORMERLY KNOWN AS GUJARAT NRE MINERALS LIMITED)
Twelfth Defendant

ALL SEASONS RESOURCES INC
Thirteenth Defendant

VIEW PLAN RESOURCES LIMITED
Fourteenth Defendant

JUDGE:	GRIFFITHS J
DATE OF ORDER:	5 NOVEMBER 2013
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The interlocutory application dated 26 September 2013 filed by the 6th, 8th, 9th and 11th defendants be dismissed. 

2.There be no order as to costs.

3.The plaintiffs file and serve all evidence on which they intend to rely in the substantive proceedings on or before 19 December 2013.

4.The matter be listed for directions at 9:30 am on 11 February 2014.

5.Liberty to apply on the giving of 72 hours' notice.

Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 1063 of 2012

IN THE MATTER OF BELLPAC PTY LIMITED (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION)  

BETWEEN:

ANTHONY JOHN WARNER AND STEVEN KUGEL IN THEIR CAPACITY AS JOINT AND SEVERAL LIQUIDATORS OF BELLPAC PTY LIMITED (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) ACN 101 713 017
First Plaintiff

BELLPAC PTY LIMITED (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) ACN 101 713 017
Second Plaintiff

AND:

KEN YUK KEE HUNG
First Defendant

AUSTCORP INTERNATIONAL LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT) ACN 003 132 090
Second Defendant

ALFRED WONG
Third Defendant

DANNY AU-YEUNG
Fourth Defendant

SHAN PEI INVESTMENT LIMITED
Fifth Defendant

GOOD TEAM INVESTMENTS LIMITED
Sixth Defendant

GREAT INVESTMENTS LIMITED
Seventh Defendant

OSMOND TZE LEUNG KWOK
Eighth Defendant

HONG XU
Ninth Defendant

ZHI HONG
Tenth Defendant

CHIAH CHEANG LEE
Eleventh Defendant

GUJARAT NRE COKING COAL LIMITED (FORMERLY KNOWN AS GUJARAT NRE MINERALS LIMITED)
Twelfth Defendant

ALL SEASONS RESOURCES INC
Thirteenth Defendant

VIEW PLAN RESOURCES LIMITED
Fourteenth Defendant

JUDGE:	GRIFFITHS J
DATE:	5 NOVEMBER 2013
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. There are two matters before the Court in the proceedings.  The first relates to an interlocutory application filed 26 September 2013 by the sixth, eighth, ninth and 11^th defendants seeking dismissal of the application pursuant to r 19.01(1)(c) of the Federal Court Rules 2011.  The basis for that application is the failure at the time of the plaintiffs to abide by the Court’s orders relating to security for costs.  I was informed by Mr Breene, acting for the plaintiffs, that the security for costs had since been paid by his clients to the Federal Court Registry on 4 October 2013 and that the Registry had confirmed receipt of that payment on 11 October 2013.  Those matters were not disputed by any of the defendants. 

2. It is recognised that in those circumstances, the interlocutory application should be dismissed. The only issue is what, if any, order as to costs should be made in respect of the interlocutory application.  Mr Clarke SC, who appeared for the sixth, eighth, ninth and 11^th defendants, sought an order in his clients’ favour regarding the dismissal of the interlocutory application.  He says that, while it is true that that interlocutory application now appears to have been made prematurely because of the failure of all relevant parties to recognise that the time for paying the security for costs only arose by reference to the date of the entry of the orders, nevertheless all the parties (including the plaintiffs) had understood, until the matter was brought to their attention by the Court, that the plaintiffs were in default. 

3. Mr Clarke SC also draws attention to the plaintiffs’ conduct in not responding to a series of letters, sent by his clients, which were directed at the subject matter of non-payment of security for costs. 

4. In my view, the matter is finely balanced.  It is true that the plaintiffs should have acted more responsibly in answering the correspondence sent on behalf of Mr Clarke’s clients.  By the same token, however, the interlocutory application which was brought by Mr Clarke SC’s clients was based upon an earlier order drafted by his clients. It is appropriate in those circumstances that there be no order for costs in respect of the interlocutory application.  The interlocutory application, objectively, was brought prematurely.  Accordingly, the Court will order that the interlocutory application dated 26 September 2013 be dismissed and that there be no order as to costs. 

5. At the hearing, this morning, Mr Breene made an application to have the proceedings adjourned for four to six weeks based upon an announcement to the stock exchange by Gujarat NRE Coking Coal Ltd dated 31 October 2013.  In particular, he drew the Court’s attention to a reference in that announcement to the fact that, on 23 October 2013, a creditor of Gujarat had commenced proceedings seeking to have the company and a subsidiary wound up on the grounds that each had failed to comply with statutory demands served upon them. 

6. It is also to be noted, however, that Gujarat claims that the applications have not been validly commenced and it was considering its options regarding a formal challenge to those proceedings.  The Court was advised today by Mr Gillard, who acts for Gujarat, that discussions were taking place between RUS Mining and Gujarat with a view to those proceedings being settled, there apparently being a mutual recognition that they had been invalidly commenced. 

7. In all the circumstances, I consider that the plaintiffs have not established any appropriate basis upon which the proceedings should be adjourned and I reject their oral application. 

8. I make an order that the plaintiffs file and serve all evidence upon which they intend to rely in the substantive proceedings by 19 December 2013. 

I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Griffiths.

Associate:

Dated:       5 November 2013