FEDERAL COURT OF AUSTRALIA Qin Fan v Modena Prestige Cars Pty Limited [2010] FCA 951 Citation: Qin Fan v Modena Prestige Cars Pty Limited [2010] FCA 951 Parties: QIN FAN and XIAO PING YIN ATF YIN FAN FAMILY TRUST v MODENA PRESTIGE CARS PTY LIMITED (IN LIQUIDATION) File number(s): NSD 207 of 2010 Judge: EMMETT J Date of judgment: 6 August 2010 Legislation: Corporations Act 2001 (Cth) s 500 Date of hearing: 6 August 2010 Place: Sydney Division: GENERAL DIVISION Category: No catchwords Number of paragraphs: 5 Counsel for the Applicants: G. Craddock SC Solicitor for the Applicants Surry Partners Lawyers Counsel for the Defendant: A.J. Rollins Solicitor for the Defendant: Sage Solicitors IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 207 of 2010 BETWEEN: QIN FAN First Plaintiff XIAO PING YIN ATF YIN FAN FAMILY TRUST Second Plaintiff AND: MODENA PRESTIGE CARS PTY LIMITED (IN LIQUIDATION) Defendant JUDGE: EMMETT J DATE OF ORDER: 6 August 2010 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Pursuant to s 500(2) of the Corporations Act 2001 (Cth), leave be granted to the plaintiff to proceed with proceeding SYG 1506 of 2009 in the Federal Magistrates Court against the defendant. 2. The leave granted in order 1 above be granted on terms that any judgment obtained in the Federal Magistrates Court against the defendant not be enforced against the defendant without the leave of the Court. 3. The proceeding be listed for further directions on 12 November 2010 at 9:30 am. Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 207 of 2010 BETWEEN: QIN FAN First Plaintiff XIAO PING YIN ATF YIN FAN FAMILY TRUST Second Plaintiff Second Plaintiff AND: MODENA PRESTIGE CARS PTY LIMITED (IN LIQUIDATION) Defendant JUDGE: EMMETT J DATE: 6 August 2010 PLACE: SYDNEY REASONS FOR JUDGMENT 1 The plaintiffs have commenced a proceeding in the Federal Magistrates Court seeking damages against the defendant, Modena Prestige Cars Pty Limited (the Company). The Company was subject to administration but is now in the course of being wound up. Accordingly, under s 500(2) of the Corporations Act 2001 (Cth) (the Corporations Act), no action or other civil proceeding is to be commenced or continued against the Company except by leave of the Court and subject to such terms as the Court imposes. 2 In the proceeding in the Federal Magistrates Court the plaintiffs claim that the company engaged in conduct that was misleading or deceptive in contravention of s 52 of the Trade Practices Act 1974 (Cth). The conduct alleged related to the sale of a parcel of land at Herbert Street, Artarmon. The thrust of the complaint is that a form of contract for sale was provided to the plaintiffs which did not disclose notice of a proposal by Willoughby City Council to issue a fire safety order. The plaintiffs complain that there was, in fact, such a proposal which detrimentally affected the value of the property. 3 The plaintiffs were successful at an auction and entered into a contract for sale and purchase of the property. They say that, had they been informed of the proposal, they would not have bid the price at which the property was sold to them. In this proceeding the plaintiffs seek an order granting leave pursuant to s 500(2) of the Corporations Act. They also seek a declaration that certain monies held in a trust account in respect of the sale of the property is not property belonging to the Company and would be available to satisfy any judgment that they might obtain in the Federal Magistrates Court. The plaintiffs no longer press the latter prayer for relief in this proceeding. 4 The only relief presently sought by the plaintiffs is an order granting leave under s 500(2). That is not opposed by the Company, which appears through counsel instructed on behalf of its liquidator. In all of the circumstances I consider that it is appropriate to grant leave pursuant to s 500(2) on terms that the plaintiffs will not seek to enforce any judgment that they may obtain in the Federal Magistrates Court against the Company without the further leave of the Court. 5 At this stage there is no evidence before the Court as to the financial position of the Company to indicate, for example, whether payment of any judgment in favour of the plaintiffs would have the effect of giving them a preference over other unsecured creditors. The plaintiffs ask for their costs of this proceeding in circumstances where the Company does not oppose the grant of leave and the declaration is no longer sought. I do not consider it is appropriate to make any order as to costs. The question of the costs of this application may be a matter for the Federal Magistrates Court. I certify that the preceding five (5) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett. Associate: Dated: 31 August 2010