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. 17 I now turn to the ground of appeal alleged in paragraph 11. The Court was taken to documents referred to in paragraph 31 of the judgment and there was a presentation of an analysis concerning that material. 18 It was submitted that the documents were either executed outside the relevant period or by the plaintiff as a director of other companies. This appears to be the case. In reply, the defendant submitted that inferences could be drawn from other material (including documentation executed outside the relevant period). 19 It seems to me that the determination of this ground involves a full analysis of the material and full argument on the question. In my view, the determination of this ground of appeal should be deferred to a full hearing of an appeal. 20 I move on to the ground alleged in paragraph 14. It seems to me, save as to one consideration, that the approach to this ground should be the same as that taken in respect of the ground alleged in paragraph 11. 21 The one consideration concerns the question of whether or not an extension of time is required to enable the ground to be litigated. The defendant contends that the application for leave has been made out of time and that for this reason alone it should be summarily dismissed. It was said from the bar table that consent was not given to an Amended Summons that included such a ground. There is dispute between the parties concerning that matter. There is no evidence from the defendant to support his contention. The plaintiff looks to consent orders filed with the Court on 26 June 2008 which contains the following order: "1. The Plaintiff to file any amended Summons by 10 July 2008." 22 In the circumstances, I consider that the Court should not grant summary dismissal in relation to this ground on the basis that it has been brought out of time. 23 There remains the ground alleged in paragraph 12. On this question, the plaintiff relies on the analysis presented in respect of the ground alleged in paragraph 11. The argument is put that the reasons expressed by the Magistrate were erroneous and gave rise to error of law. 24 It seems to me that the reasons advanced by the Magistrate sufficiently disclose the path that led her to the finding and that the expression of reasoning process has not disadvantaged the plaintiff in the presentation of his appeal. In my view, the fact that the reasoning process may be erroneous does not assist the plaintiff. Accordingly, I consider that this ground of appeal is doomed to failure. 25 I dismiss that ground of the appeal that is alleged in paragraph 12 of the Amended Summons. Save as to that relief, the application for summary dismissal is refused. As requested by the parties, the costs of the Amended Notice of Motion are reserved. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.