Gloria Marshall Australia Pty Ltd (In liq) v Bell Press Pty Ltd & Ors [2002] NSWSC 1191

New South Wales Supreme Court

CITATION : Gloria Marshall Australia Pty Ltd (In liq) v Bell Press Pty Ltd & Ors [2002] NSWSC 1191 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 5421/02 HEARING DATE(S) : 6/12/02 JUDGMENT DATE : 6 December 2002

Gloria Marshall Australia Pty Limited (In liq) (P1) Gregory Winfield Hall (P2) Bell Press Pty Limited (D1) Dergoss Pty Limited (D2) PARTIES : Evamont Pty Limited (D3) Jandream Pty Limited (D4) Murdoch Magazines Pty Limited (D5) Northwood Investments Pty Limited (D6) Chief Commissioner of State Revenue (D7) JUDGMENT OF : Young CJ in Eq

A Spencer (P) COUNSEL : M Hirst (S) (D2 & 4) J Buchanan (S) (D6) The Argyle Partnership (P) SOLICITORS : Gadens Lawyers (D2 & 4) McCabe Terrill Lawyers (D6)

CATCHWORDS : CORPORATIONS [253]- Winding up- Preference claims- Procedure for trying- Choice of forum and venue. LEGISLATION CITED : Corporations Act 2001, ss 588FA, 588FE, 588FF and 1337H(2) CASES CITED : Dean-Willcocks v Air Transit International Pty Ltd (2002) 42 ACSR 328 DECISION : Orders made.

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

YOUNG CJ in EQ

Friday 6 December 2002

5421/02 – GLORIA MARSHALL AUSTRALIA PTY LTD (IN LIQ) v BELL PRESS PTY LTD & ORS JUDGMENT 1 HIS HONOUR: The present proceedings involve an application by the liquidator of the first plaintiff to recover certain alleged preferences under ss 588FA, 588FE and 588FF of the Corporations Act 2001. The amounts involved are relatively small, mainly being in the area of $40,000 to $80,000 per defendant. That means the case raises problems for both the liquidator and the defendants. 2 The liquidator is under costs pressure not to litigate the issue of solvency in a number of different fora. 3 On the other hand, the defendants, who are only involved in a relatively small way, in a case which would normally be dealt with in the local court, do not wish to become involved in complex litigation in the Supreme Court with a host of other parties. 4 Because of the multitude of matters this is a problem that has been with us for many years, but there have been a number of cases where this Court has corralled a series of proceedings in various courts and case managed them. This has been occurring regularly since at least the collapse of the Spedley group of companies. However, since Dean-Willcocks v Air Transit International Pty Limited (2002) 42 ACSR 328, the procedure has been slightly modified in having the one action in which all alleged recipients of preferential payments are joined where the determination binds all parties. 5 There are two interlocutory processes before the Court this morning, one brought by the liquidator to include the various defendants in the one action, and the second by one of the defendants, who is only involved with a debt of $41,000, to have its matter referred to the Magistrate's Court at Southport Queensland. 6 In my view, the best way of dealing with the matter is by common sense. The cross-vesting legislation does not apply to this sort of action. It is one that has to be determined in due course under s 1337H(2) of the Corporations Act. That sub-section gives the alternative of transferring an application, rather than the whole proceedings, to another court so that by judicious and separate questions one can send part of the proceedings involving local witnesses to a local court anywhere in the Commonwealth. 7 However, at this stage, it is not at all clear what the issues are. They are probably: (a) solvency; (b) the facts of the claim; (c) the circumstances of payment; and (d) issues on which the defendants have the onus under the relevant section. That last matter, if it becomes the crucial point in the case, would very strongly suggest that matter be dealt with locally rather than in Sydney. However, the position is not at all clear with respect to (b) and (c), and, almost certainly, (a) is a matter that should not be determined locally at all; indeed (a) probably needs to be the first question determined. 8 Accordingly, in my view, it is appropriate that the liquidator's order be granted, so long as the defendants are protected against undue expense by that happening. The way to do that is to make the following formal orders: