Marthas T Market v Reliance [2002] NSWSC 931

New South Wales Supreme Court

CITATION : Marthas T Market v Reliance [2002] NSWSC 931 CURRENT JURISDICTION: Equity Division Corporations List FILE NUMBER(S) : SC 2963/02 HEARING DATE(S) : 30/09/02 JUDGMENT DATE : 9 October 2002

PARTIES : Marthas T Market Pty Ltd - Applicant Reliance Financial Services Pty Ltd - Respondent JUDGMENT OF : Barrett J

COUNSEL : Mr J T Johnson - Applicant Mr P A Fury - Respondent SOLICITORS : English Kearns - Applicant Mark Rumore - Respondent CATCHWORDS : CORPORATIONS - winding up - statutory demand - application to set aside statutory demand dismissed when applicant did not appear - subsequent application for order setting aside order of dismissal - no application to extend time for compliance with demand - time for compliance expires - whether slip rule allows extension of time for compliance LEGISLATION CITED : Corporations Act 2001 (Cth) Burwood Regail Pty Ltd v Deputy Commissioner of Taxation [2002] VSC 349 Currabubula Holdings Pty Ltd v State Bank of New South Wales [2000] NSWSC 232 CASES CITED : Elyard Corporation Pty Ltd v DDB Needham Sydney Pty Ltd (1995) 61 FCR 385 Expile Pty Ltd v Jabb's Excavations Pty Ltd [2002] NSWSC 851 Westpac Banking Corporation v E & W Jury Pty Ltd 1998) 16 ACLC 547 DECISION : Notice of motion dismissed

- 7 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST

BARRETT J

WEDNESDAY, 9 OCTOBER 2002

2963/02 – MARTHAS T MARKET PTY LTD v RELIANCE FINANCIAL SERVICES PTY LTD JUDGMENT 1 By originating process filed on 31 May 2002, Marthas T Market Pty Ltd ("Marthas") sought an order under s.459G of the Corporations Act 2001 (Cth) setting aside a statutory demand served on it by Reliance Financial Services Pty Ltd ("Reliance") in respect of an alleged debt of $750,000. That application afterwards came before the court on several occasions. On 9 August 2002, it was stood over to 10 September 2002. When the matter was called on before Acting Master Berecry on 10 September 2002, there was an appearance for Reliance but no appearance for Marthas. The Acting Master ordered that the application be dismissed with costs. The solicitor for Marthas arrived at court after the order for dismissal had been made, but it is not clear that he then sought to make any application. 2 The next day, 11 September 2002, Marthas filed in the Registry a notice of motion under Part 40 rule 10 seeking an order setting aside the order made on 10 September 2002. Upon being filed, that notice of motion was assigned a return date of 23 September 2002. When the notice of motion came before Acting Master Berecry in the Corporations List on 23 September 2002, it was put to him that, as a result of the order for dismissal made on 10 September 2002 and the absence of any extending order under s.459F(2)(a)(i), the time for compliance with the statutory demand had expired, pursuant to s.459F(2)(a)(ii), seven days after dismissal of Marthas' s.459G application. The Acting Master directed that the notice of motion be listed before the Corporations List Judge and it came before me later on 23 September 2002. By consent, I made orders for the filing of written submissions. These were duly received. I heard supplementary oral submissions on 30 September 2002. 3 It appears to be common ground that the order made by the Acting Master on 10 September 2002 had the effect that the s.459G application was "finally determined or otherwise disposed of" as referred to in s.459F(2)(a)(ii). Explicit submissions to that effect were made by Mr Fury of counsel who appeared for Reliance, while the submissions made by Mr Johnson of counsel on behalf of Marthas seem to me clearly enough to accept that position by contending that the slip rule (part 20 rule 10 of the Supreme Court Rules) is the means by which the situation Marthas considers to be in need of rectification should be rectified. As the slip rule has what is effectively a form of retrospective operation (see Elyard Corporation Pty Ltd v DDB Needham Sydney Pty Ltd (1995) 61 FCR 385), I take reliance on it by Marthas to amount to recognition that retrospectivity of some kind is needed because, with the period fixed by s.459F(2)(a)(ii) having expired, it is no longer open to the court to make an extension order under s.459F(2)(a)(i). 4 The meaning of "finally determined or otherwise disposed of" in this particular statutory context and the non-availability of s.459F(2)(a)(i) once the period for compliance otherwise applicable has expired have been discussed in a number of cases. These have been recently reviewed in some detail by Hansen J in Burwood Retail Pty Ltd v Deputy Commissioner of Taxation [2002] VSC 349 (23 August 2002). Based on his Honour's analysis, the correct course in this case is to proceed on the basis which I understand the parties to have adopted, namely, that Marthas' position can be retrieved only by some retrospective action under the slip rule. That analysis does not seem to me to allow any scope for distinction between a case where a judge or master at first instance dismisses a s.459G application after a hearing on the merits and one where dismissal occurs when the applicant does not appear to prosecute the application 5 When one comes to consider ways in which part 20 rule 10 might be applied here, there is the immediate point that the only order the Acting Master made on 10 September 2002 was an order dismissing the s.459G application with costs and that the question of s.459F(2)(a)(i) extension was not even raised, let alone made the subject of any deliberation by the judicial officer. The fact that a matter is not raised is, of course, not fatal to the application of that aspect of the slip rule that pays attention to what might be termed the underlying and obvious purpose of the order actually made. If that order can only make sense if supplemented in a way that was not mentioned, the court will readily rectify it by adding the necessary supplement. An example of this may be found in the decision of Emmett J in Westpac Banking Corporation v E & W Jury Pty Ltd (1998) 16 ACLC 547. 6 In the present case, the order dismissing the s.459G application made perfect sense without any supplement by way of extension of the period for compliance with the statutory demand. Indeed, it would have been quite at odds with an order dismissing the application (and thereby putting an end to the attempt to have the statutory demand set aside) to contemplate giving the period for compliance some currency beyond that which the statute caused it to have in the ordinary course in consequence of the dismissal. 7 The nature of the slip rule and the cases with which it is, in general, intended to deal are discussed in the judgment of Einstein J in Currabubula Holdings Pty Ltd v State Bank of New South Wales [2000] NSWSC 232. Matters are conveniently summarised in the following passage in his Honour's judgment: "As the power to employ the slip rule is a jurisdiction granted to the Court to prevent injustice, the Court ought to be wary in the extreme of hampering itself by defining in an exhaustive way or laying down as a general proposition, the ambit of which situations will and will not be embraced by the rule. Subject to this caveat, the authorities appear to support the following statements of principle: