FEDERAL COURT OF AUSTRALIA E Banc Trade Pty Limited (ACN 091 483 493) v Semlow Pty Limited (ACN 058 489 688), in the matter of E Banc Trade Pty Limited [2005] FCA 767 CORPORATIONS – application by company to set aside a statutory demand – application dismissed. Corporations Act 2001 (Cth), s 459G, s 459J IN THE MATTER OF E BANC TRADE PTY LIMITED (ACN 091 483 493) E BANC TRADE PTY LIMITED (ACN 091 483 493) v SEMLOW PTY LIMITED (ACN 058 489 688) NSD 675 OF 2005 GYLES J 3 JUNE 2005 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 675 OF 2005 IN THE MATTER OF E BANC TRADE PTY LIMITED ACN 091 483 493 BETWEEN: E BANC TRADE PTY LIMITED ACN 091 483 493 PLAINTIFF AND: SEMLOW PTY LIMITED ACN 058 489 688 DEFENDANT JUDGE: GYLES J DATE OF ORDER: 3 JUNE 2005 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The application be dismissed. 2. The plaintiff pay the costs of the defendant. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 675 OF 2005 IN THE MATTER OF E BANC TRADE PTY LIMITED (ACN 091 483 493) BETWEEN: E BANC TRADE PTY LIMITED (ACN 091 483 493) PLAINTIFF AND: SEMLOW PTY LIMITED (ACN 058 489 688) DEFENDANT JUDGE: GYLES J DATE: 3 JUNE 2005 PLACE: SYDNEY REASONS FOR JUDGMENT 1 This is an application by E Banc Trade Pty Limited (the company) to set aside a statutory demand pursuant to s 459G and s 459J of the Corporations Act 2001 (Cth). The demand in question was served on or about 13 April last, it being dated 11 April. It was alleged that an amount of $50,296.95 was outstanding and the description of the debt was 'judgment entered in the District Court at Parramatta on 25 February 2005 in proceeding 58 of 2003, $49,745' plus certain interest. 2 This proceeding was commenced on 3 May 2005 on which occasion the company did not appear either before the Registrar in person or by a solicitor as required by the rules in the case of a corporation. It appeared by telephone, represented by parties who are not lawyers. That was done, no doubt, as a matter of convenience. Counsel has sought and been granted leave to appear for the company on a direct access basis over the opposition of the defendant. The basis for the application is that the company wishes to appeal to the New South Wales Court of Appeal against the judgment of Delaney DCJ of the District Court entered, as has been alleged, on 25 February this year which is the basis for the statutory demand. 3 It is said that the company wishes to appeal on the basis of a denial of natural justice due to the refusal of an adjournment, brief details of which I will mention in a moment. It is also submitted that I should accept that the transcript of the reasons for judgment of Delaney DCJ have only become available in the last day or so and that it is desired to consider whether there are other grounds for appeal on the merits against the decision which was made. It is submitted that the demand ought be set aside to enable the appeal process to take place. Alternatively that there ought to be an adjournment for a sufficient period to see whether the company is serious in its intention to appeal. 4 The short circumstances of the application for adjournment are principally taken from the transcript of the reasons of the District Court Judge but are consistent with the other evidence in the case. The proceedings against the company in the District Court were commenced in February 2003 claiming alleged rental and related expenses up to 30 June 2002. I will not go through the early history of the matter but on 13 September 2004 it was listed for hearing on 2 December 2004. On 2 December the trial commenced with counsel appearing for the company. In the course of the day, counsel for the company sought and was granted an adjournment, returned to the Court and made an application for leave to withdraw. He was granted that leave. It is said from the bar table that this was on the basis that counsel's instructions had been withdrawn. That is, in any event, the conclusion I would draw. Counsel would not be allowed to withdraw on any other basis in the middle of a day's hearing. However, I cannot speculate upon the reason for the withdrawal of those instructions. There were difficulties in relation to the solicitor in any event because a Queensland solicitor was instructing at the trial, apparently the local agent's retainer having been terminated. 5 The matter was adjourned until the following day when counsel appeared for the company seeking an adjournment. The matter was adjourned to 14 December 2004 that being an agreed date. It was anticipated that the matter would then proceed. However, on 13 December 2004 an urgent notice of motion was brought on by the company to adjourn the case for hearing to a date not before 31 January 2005, the grounds being that the company had been unable to obtain legal representation. The application was based upon the affidavit of a person who described himself as a director. There was no legal representative for the company present on that day. The party who made the application on behalf of the company was not legally qualified. When it was sought to cross-examine the deponent, it was said that he was in Queensland, and could not attend. It was submitted that the matter should be adjourned in any event. Delaney DCJ adjourned the notice of motion to the following day with a direction that the deponent was to attend. On that day there was no appearance for the company. Counsel for the other party and the Judge were required to wait to see if anyone representing the company would appear. There was no appearance. The motion was then dismissed, the hearing proceeded with and judgment reserved. Judgment was ultimately delivered on 25 February 2005. 6 It is submitted for the company that on the evidence it did not receive any notification of what took place on 14 December and in particular received no notification of the proposed delivery of the reserved judgment or the delivery of that judgment. In those circumstances it submits that it should be allowed further time to pursue its rights. 7 In my opinion, there has been ample time since service of the notice of demand in this matter for the company to have retained lawyers and to have properly investigated all that took place before the District Court and, in particular, I am satisfied that there was no barrier to obtaining a transcript of the reasons for the judgment at any time after the service of the statutory demand. There is no evidence which satisfactorily explains any delay in that regard. The refusal of this application, of course, would not inhibit the company in any way from exercising its right to appeal and indeed from seeking from the Court of Appeal a stay of proceedings. 8 I cannot predict what might happen if this proceeding is dismissed and the statutory demand is not set aside. It may mean that there is a basis for bringing winding-up proceedings. If that is done then the existence of a stay by the New South Wales Court of Appeal would be a matter to be taken into account at that stage, as would the solvency of the company. So, notwithstanding the valiant efforts of Mr Jones, who has had a very difficult task having only been recently instructed, in my opinion there is no proper basis for setting aside the notice of demand under s 459G or s 459J. The application is therefore dismissed and I order that the plaintiff pay the costs of the defendant. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles. Associate: Dated: 22 June 2005 Counsel for the Plaintiff: G Jones Counsel for the Defendant: W Terracini SC, G Newton Solicitor for the Defendant: Williams Boxsell Georgas Date of Hearing: 3 June 2005 Date of Judgment: 3 June 2005