Botany Bay v Permtree Botany Bay v BAS Botany Bay v Jazabas [2009] NSWSC 896

New South Wales Supreme Court

CITATION : Botany Bay v Permtree Botany Bay v BAS Botany Bay v Jazabas [2009] NSWSC 896

HEARING DATE(S) : 09/06/09; 12/06/06 Judgment reserved 27/07/09

JUDGMENT DATE : 31 August 2009

JURISDICTION : Equity Division

JUDGMENT OF : Macready AsJ at 1

CATCHWORDS : CORPORATIONS - winding up - winding up in insolvency - oppression or abuse of process. - PROCEDURE - costs –security for costs order subject of statutory demand – defendants entered costs order as a judgment debt and successfully applied to registrar to pay debt by instalments – clerical error meant first instalments were not paid - whether winding up proceedings could continue – whether present procedure is a way of avoiding statutory stay – proceedings dismissed.

Botany Bay City Council v Parmtree Pty Ltd PARTIES : Botany Bay City Council v BAS Developments Pty Ltd Botany Bay City Council v Jazabas Pty Ltd

FILE NUMBER(S) : SC 4553/08; 4552/08; 4549/08

COUNSEL : Mr G McNally SC for plaintiff Mr PE King for defendants

SOLICITORS : Houston Dearn O'Connor for plaintiff Cropper Parkhill for defendants

- 1 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

ASSOCIATE JUSTICE MACREADY

Monday 31 August 2009

4553/08 Botany Bay City Council v Parmtree Pty Ltd 4552/08 Botany Bay City Council v BAS Developments Pty Ltd 4549/08 Botany Bay City Council v Jazabas Pty Ltd JUDGMENT 1 His Honour: In this matter the plaintiff has sought an order to wind up the three defendants in insolvency under s 459E of the Corporations Act 2001 (Cth). The applications are made based upon service of a contentious statutory demand dated 4 July 2008 in the sum of $46,251.82. The matters have been heard together with the evidence in one being the evidence in others. Reference to the defendants is a reference to all three defendants in each action. 2 A further amended notice of appearance was filed by the defendants in relation to matter number 4549 (Jazabas) which opposes the plaintiffs application for winding up for the reasons that the judgment debt is not due and payable, the defendant is solvent, the application to wind up was brought for a collateral purpose and are an abuse of process, and further, that the plaintiff has failed to comply with the requirements of the Corporations Act and Regulations, particularly Corporations Regulations 5.4 and 5.6 and sections 465A and 470(1) of the Act. 3 There is also a notice of motion filed by the defendant in each proceeding on 7 November 2008 seeking to have the proceedings dismissed as an abuse of process. 4 The parties have provided detailed submissions which I have incorporated with amendments. Background 5 The plaintiff is a local government authority that administers an area in south eastern Sydney. 6 The defendants are each corporations. Jazabas and Permtree have been engaged in residential property development and BAS Developments Pty Ltd builds the Jazabas and Permtree developments. The three corporations have as their managing director Mr Stephen Haigh. The defendants contend that Permtree is no longer active, its only asset being an unresolved chose in action against the plaintiff. 7 In 1994 Jazabas purchased land in Hillsdale. They sold the land in 1997, after the plaintiff disclosed the existence of toxicity risks to nearby land. 8 It appears that in 1983 the Council conducted a Risk Assessment Study and in an unpublished report identified a "risk reduction zone" which identified the Hillsdale land as being within that zone. A later report published in 1985 did not include the Hillsdale land within the zone (see Jazabas Pty Ltd & 2 Ors v Haddad & 2 Ors [2006] NSWSC 880 per Simpson J at [7]). 9 In 1998, Jazabas brought proceedings against the Council for negligent misrepresentation on the ground that the Council stated in a section 149 certificates that there was no Council policy with respect to such hazards. 10 Rolfe J, in Jazabas v Botany Council [2000] NSWSC 58 held that Council was negligent in failing to advise the Jazabas of its policy in relation to the Risk Assessment Study and the Risk Reduction Zone. 11 The decision was reversed by the Court of Appeal in City of Botany Bay Council v Jazabas Pty Ltd [2001] NSWCA 94 and the High Court refused special leave to appeal.