Nommack (No.100) v FAI Insurances (In Liq) [2002] NSWSC 354

New South Wales Supreme Court

CITATION : Nommack (No.100) v FAI Insurances (In Liq) [2002] NSWSC 354 CURRENT JURISDICTION: Common Law Division FILE NUMBER(S) : SC 13048 of 1991 HEARING DATE(S) : 18 April 2002 JUDGMENT DATE : 26 April 2002

Nommack (No. 100) Pty Limited (Plaintiff) PARTIES : v FAI Insurances Limited (In Liquidation) (Defendant)

JUDGMENT OF : Master Malpass

Mr C Stevens QC (Plaintiff) COUNSEL : N/A (Defendant) Mr B Coles QC (Liquidators) Beazley Singleton (Plaintiff) SOLICITORS : N/A (Defendant) Blake Dawson Waldron (Liquidators) CATCHWORDS : Leave to proceed interests of justice - a question to be determined having regard to the relevant circumstances of the particular case before the Court - onus of proof. LEGISLATION CITED : Corporations Act 2001. Corporations Law, s 471B. CASES CITED : Bowlers Club of NSW v Jones Lang LaSalle & Ors, Griffiths v Berkeley Challenge & Ors [2001] NSWSC 609. DECISION : See paragraph 38.

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

Master Malpass

FRIDAY 26 APRIL 2002

13048 of 1991 Nommack (No. 100) Pty Limited v FAI Insurances Limited (In Liquidation)

JUDGMENT 1 Master Malpass: The proceedings were commenced on 31 May 1991. An exposition of the nature of the claim and the earlier history of the proceedings may be found in relevantly recent judgments of this Court (the judgments of Master Harrison and McClellan J). Whilst I have had regard to that material, I do not propose to reproduce all of it in this judgment. 2 During 1991, the plaintiff had agreed to provide security for costs in the sum of $20,000. The security was not provided until 20 April 2000. During that period the proceedings had been stayed. The company had been deregistered in 1995 (there had been a failure to lodge returns for about four years) and it was not reinstated until 15 June 1999. 3 Also, in about 1999, action was started to resurrect the proceedings. It appears that about this time a property developer (Mr Wong) came on the scene and provided finance. He has provided moneys which enabled the reinstatement and provided the security. In addition, it appears that the plaintiff's present legal advisers have been paid costs in the order of about $20,000. 4 It seems that Mr Wong may be a director but not a shareholder. The court has been told that a Mr Arnold is a shareholder. It is unclear when Mr Arnold came on the scene. The plaintiff had been a company in which the late Mr Theeman had been involved. It appears that he died in the late 1980's. Hitherto, he had been the only source of funds. 5 In early 2000, the plaintiff sought directions. Also, it filed and served a Differential Case Management document. 6 The more recent history of the proceedings follows the filing of a Notice of Motion by the defendant on 15 June 2000. The defendant then sought dismissal of the proceedings for want of prosecution. On 1 September 2000, Master Harrison dismissed the Notice of Motion. On 23 August 2001, McClellan J dismissed an appeal from that decision. On the same day, the plaintiff filed a Notice of Motion seeking inter alia leave to proceed against the defendant pursuant to s 471B of the Corporations Law. 7 The hearing of this application took place on 18 April 2002. The application was opposed. The plaintiff relies on two affidavits sworn by its solicitor (Mr Beazley). He was cross-examined. The defendant relies on an affidavit sworn by Mr McGrath (one of the liquidators of the defendant). It exhibited two further affidavits. Oral evidence was given by Mr Scarcella (a solicitor).