Williams v Bearing Traders Pty Ltd [2008] NSWSC 896

New South Wales Supreme Court

CITATION : Williams v Bearing Traders Pty Ltd [2008] NSWSC 896

HEARING DATE(S) : 29 August 2008

JUDGMENT DATE : 4 September 2008

JUDGMENT OF : Malpass AsJ

DECISION : Application for summary dismissal refused; costs of the Amended Notice of Motion reserved.

CATCHWORDS : COMMON LAW - summary dismissal of appeal from Local Court

LEGISLATION CITED : Corporations Act 2001

CATEGORY : Principal judgment

PARTIES : Gary Alexander Williams (Plaintiff) Bearing Traders Pty Ltd (Defendant)

FILE NUMBER(S) : SC 12456/08

COUNSEL : K Morrissey (Plaintiff) D Allen (Defendant)

SOLICITORS : Aitken Lawyers (Plaintiff) Catalyst Legal (Defendant)

LOWER COURT JURISDICTION : Local Court

LOWER COURT FILE NUMBER(S) : 6056/07

LOWER COURT JUDICIAL OFFICER : Freund LCM

LOWER COURT DATE OF DECISION : 6 May 2008

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

Associate Justice Malpass

Thursday 4 September 2008

12456/08 Gary Alexander Williams v Bearing Traders Pty Ltd

JUDGMENT 1 HIS HONOUR: The defendant was a creditor of two companies (Minfox Pty Ltd and Fox McLanahan Pty Ltd). The two companies went into liquidation. The defendant sought to recover the indebtedness from the plaintiff. 2 Proceedings were first commenced in this Court. They were later transferred to the Local Court. The claim relied on the provisions of ss 588G and 588M of the Corporations Act 2001 ("the Act'). The provisions enable the recovery of moneys, in the circumstances set forth therein, from a person who falls within the definition of a director (see s 9 of the Act). 3 A hearing took place before Freund LCM. The Magistrate found in favour of the defendant. 4 One of the issues to be determined by the Magistrate was whether or not the plaintiff was a director for the period 31 October 2002 to 15 January 2003 (the relevant period) within the meaning of s 9. The Court has been informed that the defendant relied only on (b)(i) of that provision ("they act in the position of a director"). In her judgment, the Magistrate expressed that she was satisfied on the balance of probabilities that the plaintiff was a director within the meaning of the section (paragraph 32 of the judgment). 5 The plaintiff has brought proceedings in this Court by way of appeal. He now relies on an Amended Summons. The appeal relates to the finding just mentioned (that he was a "director"). The defendant has sought summary dismissal of the proceedings. It proceeds on an Amended Notice of Motion. 6 The Amended Notice of Motion was given a special fixture by the Registrar and it was listed for hearing on 29 August 2008. On that day, the parties were represented by counsel. Although counsel for the plaintiff was content for the appeal itself to be heard, counsel for the defendant was not. He informed the Court that he was only in a position to argue the matter of summary disposition. Accordingly, only that matter was heard. 7 The taking of that position saw the defendant acquiring the onus and having to satisfy a higher test than that which faces the plaintiff in the appeal. It has been expressed in terms of clear demonstration of entitlement to relief. In the context of an appeal, it seems to me that in substance the defendant is required to clearly demonstrate that all of the grounds of appeal are unarguable. Counsel seemed to adopt this approach as the appropriate one. Furthermore, the remedy is a discretionary one. 8 The grounds of appeal are set forth in paragraphs 11 – 14 of the Amended Summons. Paragraphs 11 – 13 relate to what are said to be errors in point of law. Paragraph 14 relates to what are said to be errors concerning questions of mixed law and fact. Leave is required to enable an appeal on these matters to be maintained. 9 Paragraph 11 alleges that the finding was made without any evidence and that this was an error in point of law. 10 Paragraph 12 attacks the reasoning process expressed by the Magistrate in the judgment. It is said that paragraphs 27 – 31 thereof either express no reasons or inadequate reasons only. 11 Paragraph 13 relates to a finding that the plaintiff executed a credit agreement. The finding appears in two passages in the judgment (paragraphs 11 and 31). 12 Paragraph 14 alleges that other findings were made without any evidence (these concerned, inter alia, the signing of documents). 13 It is perhaps convenient to first deal with the ground raised in paragraph 13. The finding made in paragraph 32 was expressed to have been reached because of all the reasons set out in paragraphs 27 – 31. Paragraphs 27 – 30 may be regarded largely as a recitation of certain of the evidence and of submissions made. Largely, the reasoning process is to be gleaned from paragraph 31. In substance, the Magistrate observed that she did not accept the evidence of the plaintiff and that there was clear documentary evidence as to his involvement in the companies, inter alia, between April 2001 and February 2002. Paragraph 31 also provides a list of documents which included the credit agreement. 14 It was common ground that the plaintiff had not executed the credit agreement. Despite this being made known to the Magistrate, she erroneously proceeded to make the finding that it had been executed by the plaintiff. This finding infects the expression of reasoning process and the weight given to it is an unknown. 15 There was an avenue that enabled the bringing of the matter back before the Magistrate so that she could deal with this matter. However, so far, it has not been taken and it may now be out of time. 16 The submissions made on behalf of the defendant suggest that its counsel accepts that there cannot be a summary dismissal in respect of the ground alleged in paragraph 13. In my view that is the correct approach.