Commonwealth Bank Australia v O'Connor & Anor [1999] QSC 440

i / State 'Reporting Bureau 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 No 142 of 1998 COMMONWEALTH BANK AUSTRALIA LIMITED and KEVIN JOSEPH O'CONNOR and PHILLIP GREEN AUSTWIDE CAPITOL LIMITED ACN 057 501 685 AND PAN PACIFIC BANKER'S TRUST CAIRNS .. DATE 13/12/99 .. DAY 1 JUDGMENT Applicant/First Defendant Respondent/Plaintiff Second Defendants {Ii 1°1,1111", Till' I.:IIV Courts, (;('orge Streel, Brishalll.', Q. ·WOO Tdl~(lh/)IIl': (07) J2-t7 -tJIIO F:,x: (07) J2-t7 55J2 -- 1 of 11 -- 131299 D.1 T16/CON M/T CNSll13/99 (Jones J) HIS HONOUR: Yes. Right. Well I propose to allow the adjournment. This is an application, by the respondent/plaintiff in the action, for an adjournment of an application to strike out the claim which he has brought against the Commonwealth Bank. 10 In his claim, which is brought pursuant to Section 52 of the Trade Practices Act, he personally makes a number of allegations of deceptive and misleading conduct. The material before me, including documents raised at the time of that allegation, indicate that the dealings with the Bank were in the name of a company, Trans Australia Hotels Pty Ltd l of which the plaintiff was a controller. The defence raises a number of issues, namely that the 30 ultimate agreement between the Bank and the plaintiff's company was subject to.conditions precedent, which were not fulfilled. They raised questions that the claim is statute l barred. In his submissions, Mr Stewart, on behalf of the Bank, raised concerns about the state of the statement of claim and submitted that it ought to be struck out and the plaintiff given the opportunity to re-plead. That is not part of the application before me, and I decline to make such an order, 50 although I do indicate, for the benefit of the plaintiff's advisers, that there is merit in Mr Stewart's submissions on that point. 60 2 JUDGMENT -- 2 of 11 -- 131299 D.l T16/CON M/T CNSll13/99 (Jones J) Mr Stewart also opposes the application based on what has happened between the plaintiff's advisers and the defendant's advisers since the service of the application and supporting material on 3 December 1999. That reveals that it was only on 10 December 1999, in the afternoon, that solicitors for the plaintiff raised, for the first time, the need to have an adjournment, and it was made on the basis that he himself was not available, and that counsel was not available. Further inquiries have indicated that neither of those grounds have any substance. An explanation for .the plaintiff's solicitor's conduct is given by Mr Jensen on his behalf, namely that he was confused as to which counsel he had briefed, and that his comment about the availability of counsel related to the original counsel briefed, who was indeed not available. That, as I indicated during the course of argument, does not satisfy me that the solicitor has taken due care in responding to this particular application, nor does it indicate that he has been frank with his professional colleague, acting for the Bank. The history of the conduct of this action on behalf of the plaintiff is one which raises matters for concern. There has been a failure to provide copies of documents, particularly documents which are relied upon in the pleadings. There have been requests for particulars of the claim, which have been delayed in their supply,.and when supplied, were inadequate. A repeated request for particulars failed to produce a much better result. 3 JUDGMENT 10 20 30 40 50 60 -- 3 of 11 -- 131299 D.1 T16/CON M/T CNSll13/99 (Jones J) The circumstances then in which this application was made, the circumstances which prevent its being dealt with today, in my view must be visited on the conduct by the respondent's solicitor. I propose to grant the adjournment, because the striking out of a claim is a matter which should only be undertaken after the Court is satisfied that all evidence in support of the claim is reas~nably available, and that the advisers to the party have had ample opportunity to prepare. In this instance I am not satisfied that the plaintiff's case has been properly prepared nor has counsel been sufficiently briefed in order to deal with the defen~ant's application before the Court. I will adjourn that application to· the next available , application day, which is 31 January 2000, and I order that the respondent pay the applicant's costs, thrown away by this adjournment on an indemnity basis, and I further order, pursuant to Rule 708 of the Uniform Civil Procedure Rules, that the respondent's solicitors repay to its client all of the costs ordered to be paid by the client to the respondent. HIS HONOUR: I will give special direction that the materials 10 30 to be relied upon by the respondent at the adjourned hearing 50 of the application be filed and served on the applicant's solicitors on or before 17 January 2000. 4 JUDGMENT 60 -- 4 of 11 -- State Reporting Bureau 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 CHAMBERS WILSON J No 3293 of 1999 REVISED COPfES fSSUED State Reporting Bureau Date I g / <{/ IN THE MATTER OF SEAHAWKS SUPERS PORTS CLUB INCORPORATED and IN THE MATTER OF SECTION 459G OF THE CORPORATIONS LAW BRISBANE .. DATE 04/05/99 JUDGMENT -- 5 of 11 -- 040599 T01/AW16 M/T 4424/99 (Wilson J) HER HONOUR: This is the matter of Seahawks Supersports Club Incorporated. I have before me an application under Part 5.4 Division 3 of The Corporations Law to set aside a statutory demand. The respondent is Sandra Jones who claims $29,409.58 being the amount for which judgment was entered in her favour against the company in the Magistrates Court at Brisbane on 8 February 1999. There are two issues: (a) whether the provisions of Part 5.4 Division 3 apply to the applicant which is incorporated pursuant to the Associations Incorpo~ation Act 1981 (Q~d); and (b) if they do, whether the demand should be set aside because there is a genuine dispute about the debt or for some other reason. The respondent sustained personal injuries in a fall at the defendant's premises in April 1997. She commenced proceedings for damages for negligence in the Magistrates Court at Brisbane. Early in December 1998 she obtained judgment in default of defence. 2 JUDGMENT 10 20 c 30 c 50 -- 6 of 11 -- 040599 T01/AW16 M/T 4424/99 (Wilson J) On 1 February 1999 a Magistrate dismissed an application to set aside the default judgment. A few days later damages were assessed. On 19 February 1999 a Notice of Appeal was wrongly filed in the District Court. The time for appeal expired on 25 February 1999. The statutory demand was served on 22 March 1999. On 26 March 1999 a Notice of Appeal was filed in the Magistrates Court. On the same day the respondent's solicitors offered to withdraw the statutory demand if the monies were paid into the trust account of the applicant's solicitors with an undertaking to pay them to the respondent's solicitors if the applicant failed on appeal. Mr Mark Martin, who appeared for the applicant, submitted that a statutory demand can be served only on a "company" and that the applicant is not a company within the meaning of section 9 of the Corporations Law. He referred to The Peninsular Group Ltd v. Kintsu Co Ltd (1998) 28 ACSR 632 where the New South Wales Court of Appeal held that the provisions of Part 5.4 do not apply to the winding-up in insolvency of a foreign company which is not a "company" but a "Part 5.7 body." 3 JUDGMENT 10 20 30 40 so 60 -- 7 of 11 -- 040599 T01/AW16 M/T 4424/99 (Wilson J) Until 1994 section 45(3) of the Associations Incorporation Act (since renumbered as Section 90(3)) applied Division 6 of Part 12 of the Companies (Queensland) Code to the winding-up of an association incorporated under the Act. That set of provisions broadly covered the same ground as Part 5.7 of the Corporations Law. In their present form sections 90 and 91 of the Associations Incorporation Act apply the provisions of the Corporations Law relating to a company rather than those relating to a Part 5.7 body to an incorporated association. They provide, so far as relevant: "Winding-up by the Supreme Court 90. (1) An incorporated association may be wound-up by the Supreme Court under the following circumstances, that is to say - (c) if the incorporated association is unable to pay its debts. 10 ( 20 c 30 (2) An application to the Supreme Court for the winding- 4C( up of an incorporated association shall be by petition presented either by the incorporated association, or by a member thereof, or by a creditor thereof, or by the chief executive. (3) An incorporated association may be wound-up in the way and under circumstances a company may be wound-up under the Corporations Law. (4) For subsection (3), the Corporations Law applies with all necessary changes and any changes prescribed under the regulations. Application of Corporations Law to winding-up 4 JUDGMENT 50 60 -- 8 of 11 -- 040599 T01/AW16 M/T 4424/99 (Wilson J) 91. (1) The provisions of the Corporations Law dealing with winding-up apply, with all necessary changes and any changes prescribed under the regulations, to the winding- up or dissolution of an incorporated association. (2) In the application of provisions of the Corporations Law to the winding-up of the association, a reference 10 to - (b) a company - is taken to be a reference to the an incorporated association." Accordingly Part 5.4 applies. I mention in passing that even if the provisions relating to Part 5.7 bodies applied, a statutory demand might still be served (under section 585) but there would be no procedure for setting it aside. An argument about the genuineness of the debt would have to take place on the hearing of the winding-up application itself. The next question is whether the demand ought to be set aside. It is based on a judgment debt i.e. a debt which is presently existing and enforceable but subject to the possibility that it may be set aside on appeal. That would require success on an application to extend time for appeal and success on the appeal itself. This possibility does not give rise to a genuine dispute about the existence of the debt within section 459H; see Wilden Pty Ltd v. Greenco Pty Ltd (1995) 13 ACLC 1039, Barclays Australia (Finance) Ltd v. Mike Gaffikin Marine Pty Ltd (1996) 21 ACSR 5 JUDGMENT 20 30 40 50 60 -- 9 of 11 -- 040599 T01/AW16 M/T 4424/99 (Wilson J) 235. The appropriate course may be for the association to apply for a stay. Mr Martin submitted that there was "some other reason" to set 10 aside the statutory demand under section 459J(1) (b) and relied on Eumina Investments Pty Ltd v. Westpac Banking Corporation (1998) 16 ACLC 1440. There Emmett J drew a distinction between the relevance of an appeal to a genuine dispute about the debt and the relevance of an appeal to an offsetting claim. In the latter case no application for a stay could be made and so there would be no mechanism available to the company other than section 459J(1) to prevent the consequences of the presumed insolvency which would follow from non-compliance with the statutory demand. In Eumina Investments the company's (offsetting) claim had been dismissed at first instance. That decision had been upheld on appeal and there was an application for special leave to appeal to the High Court pending. In the circumstances Emmett J set aside the demand under Section 459J on the condition that the company pay the amount of the debt into Court or otherwise secure it. In the present case the appeal which is not yet pending would relate to the debt rather than any offsetting claim. I 6 JUDGMENT c 30 ( 50 60 -- 10 of 11 -- 040599 T01/AW16 M/T 4424/99 (Wilson J) respectfully adopt the reasoning in the cases to which I have referred and conclude: (a) there is no genuine dispute about the existence of 10 the debt; and (b) there is no other reason why the demand should be set aside. This is so however substantial the grounds of appeal. I make no assessment of that in this case beyond noting that the company faces the extra hurdle of obtaining an extension of time within which to appeal. The application is dismissed. I order the applicant to pay the respondent's costs of and incidental to the application to be taxed. 7 JUDGMENT 20 30 40 50 60 -- 11 of 11 --