Boyle v Mealsea Pty Ltd (in liq) [2006] QSC 122

State Reporting Bureau /_) pfcnYO'i Queensland Government Department of Justice and Attorney-General [2006] CSC 17a. Transcript of Proceedings Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Director, State Reporting Bureau. SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION JONES J Plaintiff Defendant CAIRNS . .DATE 28/04/2006 JUDGMENT Plaint No 48 of 2006 DESLEY CAROL BOYLE and MEALSEA PTY LTD (IN LIQUIDATION) ACN 010 907 212 REVISED COPIES ISSUED State Reporting Bureau Date: 16 May, 2006 YARNING: The publication of information or details likely to lead to the identification of persons in some proceedings is a criminal jffence. This is so particularly in relation to the identification of children who are involved in criminal proceedings or proceedings for heir protection under the Child Protection Act 1999, and complainants in criminal sexual offences, but is not limited to those tategories. You may wish to seek legal advice before giving others access to the details of any person named in these proceedings. 1 th Floor, The Law Courts, George Street, Brisbane, Q. 4000 Telephone: (07) 3247 4360 Fax: (07) 3247 5532 -- 1 of 7 -- 1 HIS HONOUR: Before me are two applications, first by the defendant seeking that the application that the proceedings be struck out pursuant to section 471B of the Corporations Act 2001 on the basis that the plaintiff failed to obtain leave of the Court before commencing proceedings against the defendant 10 which is being wound up in insolvency, a fact which the plaintiff was well aware. The second application is by the plaintiff seeking leave nunc pro tunc to begin the proceedings pursuant to that same 20 section. There is also an issue arising as and implicit in these two applications as to what is the proper forum in which the application should be heard. It is clear on the material before me that the defendant, or 30 the liquidator of the defendant is determined to issue proceedings to recover an alleged debt of the plaintiff to the company of $375,930. The plaintiff claims to be a creditor of the company, and has lodged a proof of debt in the sum of $23,443. 40 The plaintiff, if the actions were commenced by the liquidator, would seek to defend any such claim on the basis that the foundation for the claim - a loan arrangement - was unlawful. 50 The action which was commenced by the plaintiff is one seeking declarations to that effect, and the commencement of the action seeking such declaration, Mr Ryall of counsel for the 28042006 D.l Tll/GRB M/T CNS2/2006 (Jones J) 2 JUDGMENT 60 -- 2 of 7 -- 28042006 D.l Tll/GRB M/T CNS2/2006 (Jones J) defendant submits, was in the nature of a pre-emptive strike to prevent the action proceeding under the control of the liquidator in New South Wales. The claim and counterclaim - if I can call it that - between the plaintiff and the defendant relates to a loan transaction which commenced some time ago and was one personally between the plaintiff and her father. It was only on the 2nd of March 1989 that the defendant company was incorporated. There is some conflict between the parties as to what was the true purpose for which the company was incorporated. It appears, essentially, to be a trustee company, but pursuant to other documents - including a loan agreement - the rights and obligations under the initial loan agreement have been transferred to the company. The consequence of those legal steps, which are supported by documents, will be a matter of some argument, it would seem, in the course of the hearing of the proceeding. That leads me to conclude that if witnesses are going to be called on these issues, the body of witnesses will include the accountants who were involved in advising, and who would no doubt give evidence as to the purpose for which the defendant was incorporated, and the solicitors who prepared the subsequent documents relating to the assignment of the rights and obligations under the loan. Both the accountants and the 3 JUDGMENT -- 3 of 7 -- 1 solicitors reside in Cairns, or at.least they did when these events were taking place. 28042006 D.l Tll/GRB M/T CNS2/2006 (Jones J) The only witness who is likely to be located in New South Wales would be the plaintiff's father and perhaps the liquidator who would be the prime mover of either claim or counterclaim on behalf of the company and the creditors of the company. The plaintiff's father is said to be aged and in ill health. He is obviously resident in New South Wales. Details of the nature of his ill health and whether it in any way precluded him from coming to Cairns is not known. There are, of course, alternative means of having his evidence secured by a signed statement or by affidavit, and if necessary, for his giving evidence by telephone. 20 30 So in my assessment, the preponderance of convenience for witnesses certainly favours a hearing in Cairns, which would be a relevant consideration in granting leave nunc pro tunc for the present proceedings already instituted to be the . vehicle by which this dispute is resolved. The company, however, has no money to engage in liquidation. .The principle creditor - the plaintiff's father - also is said 50 to have no money to engage in litigation. The. liquidator, however, has taken advice on these matters, and the creditors are prepared to authorise him to commence proceedings in New South Wales on a speculative basis. 4 JUDGMENT 60 -- 4 of 7 -- Why a liquidator would be prepared to commence proceedings in New South Wales on a speculative basis but not also be prepared to defend a claim in Cairns on a similar basis is not entirely clear. . Obviously there will be increased expense for the liquidator having to appoint town agents and having, at the time of trial, to attend Cairns. But that is not to say that the total cost of litigation in Cairns would be greater than it would be in Sydney. No detail has been placed before me as to the likely costs - professional and Court generated - for conducting such litigation in Sydney as opposed to Cairns. Anecdotal information does indicate that cost of legal services in Sydney might be somewhat higher than in other areas in Australia . But any rate, in the absence of material before me it becomes a matter of whether I impose any additional cost burden on one party or the other. Even if that were to be neutral, I am then left with a situation where the balance of convenience in respect of witnesses certainly favours Cairns. 28042006 D.l Tll/GRB M/T CNS2/2006 (Jones J) 5 JUDGMENT -- 5 of 7 -- The other consideration is the fact that to some extent the plaintiff has incurred expenses by commencing proceedings, in Cairns, engaging lawyers, preparing a claim and preparing a statement of claim. Were I not to grant the application for leave to proceed nun pro tunc those costs would be thrown away. 28042006 T12/RGC M/T CNS2/2006 (Jones J) 1 10 I see no forensic disadvantage to the defendant in coming to Court in Cairns as a counter-claiming defendant as opposed to being a plaintiff in a New South Wales Court. 20 Those being the considerations which appear most relevant to my mind I propose to allow the plaintiff's application and I will grant leave nunc pro tunc to proceed with the action commenced by claim on the 23rd of January 2006. 30 I should mention that although that claim was commenced without prior notice to the liquidator and only after the liquidator had indicated his intention to commence proceedings in New South Wales the claim does raise issues which clearly need to be resolved between the parties. The liquidator had pursued his investigation of those issues even to the point of undertaking public examinations of the plaintiff on the 1st of November 2005. It is a matter which the plaintiff is entitled to have laid to rest at some time and I do not see her commencement of the action as being inappropriate. 40 50 That determination effectively deals with both applications and particularly paragraph 3 of the defendant's application 6 JUDGMENT 60 -- 6 of 7 -- 1 which seeks to have the Supreme Court action in Queensland . transferred to New South Wales, I dismiss that application for the reasons mentioned above. 28042006 T12/RGC M/T CNS2/2006 (Jones J) 10 HIS HONOUR: I order that: (1) Leave be given nunc pro tunc to commence this action; 20 (2) Defendant's application be dismissed; (3) The costs of both applications be costs in the cause . 30 40 50 7 JUDGMENT 60 -- 7 of 7 --