Beattie & Sutherland v Osman (No. 6) [2009] NSWSC 922

New South Wales Supreme Court

CITATION : Beattie & Sutherland v Osman (No. 6) [2009] NSWSC 922

HEARING DATE(S) : 26/08/09

JUDGMENT DATE : 26 August 2009

JURISDICTION : Equity

JUDGMENT OF : White J

EX TEMPORE JUDGMENT DATE : 26 August 2009

DECISION : Refer to paras 6 and 7 of judgment.

CATCHWORDS : PROCEDURE - whether additional order sought by defendants should be made after judgment given

LEGISLATION CITED : Supreme Court Act 1970 (NSW)

CASES CITED : Grahame H Roberts Pty Ltd v Maurbeth Investments Pty Ltd [1974] 1 NSWLR 93

Graeme Robert Beattie and Roderick Mackay Sutherland in their capacity as joint and several administrators of PR Marketing & Media Group Pty Ltd (Administrators Appointed) PARTIES : v Rhonda Osman & 2 Ors (No. 6)

FILE NUMBER(S) : SC 3588/09

COUNSEL : Plaintiff: C D Wood Defendant: B F Katekar

SOLICITORS : Plaintiffs: Matthews Folbigg Defendants: Axis Legal

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

WHITE J

Wednesday, 26 August 2009

3588/09 Graeme Robert Beattie and Roderick Mackay Sutherland in their capacity as joint and several administrators of PR Marketing & Media Group Pty Ltd (Administrators Appointed) v Rhonda Osman & 2 Ors (No. 6) JUDGMENT 1 HIS HONOUR: As noted in my reasons for judgment of 14 August 2009 the defendants seek a declaration to the effect that the plaintiffs were not validly appointed as administrators. Mr Katekar, for the first and second defendants, submits that such a declaration should be made so as to ensure that there is a just, quick and cheap resolution of the real issues between the parties and so that, "so far as possible", all matters in controversy between the parties are completely and finally determined and multiplicity of legal proceedings avoided (Supreme Court Act 1970 (NSW), s 63). 2 There is an initial question of standing. The first and second defendants have entered an appearance. They are the directors of the company which is the named third defendant. No appearance was entered for the third defendant when it was under administration as there was thought to be some doubt as to whether the directors would have standing to cause the company to enter an appearance. As the first and second defendants were named themselves as parties it was, presumably, thought unnecessary to go into that question. Given the urgency with which the proceedings came on that was a sensible position to take. 3 The question about standing arises under s 447C, because whilst the company would have standing to seek a declaration under that section that the appointment of the administrators was not valid, the first and second defendants would not have that standing in their capacity as directors. There is no evidence of their being creditors of the company. However, as Mr Katekar submitted, questions of standing can readily be resolved and now that the administration has come to an end the directors could cause the third defendant to enter an appearance. Moreover, as he submits, the declaration which is sought need not be made under s 447C. Indeed, as I understand it, it is now sought in the court's equitable jurisdiction and pursuant to s 63 of the Supreme Court Act. There is no doubt that the court can, where it is just to do so, resolve an issue which has been litigated between the parties by making declarations contrary to the relief sought by the plaintiff, even in the absence of a cross-claim by the defendant (Grahame H Roberts Pty Ltd v Maurbeth Investments Pty Ltd [1974] 1 NSWLR 93). 4 The difficulty of taking that course in the present case is that questions of onus of proof loomed large in my reasoning. I concluded that the plaintiffs had not discharged the onus which lay on them of showing that a debt was owed by the company to Visiontek. I also concluded that even if such a debt were owed - a matter which I did not attempt to decide - it would not be payable unless a Default Event had occurred. I concluded that no default under clause 2.2 had been established. At para [72], I concluded that I was not satisfied that a Default Event under clause 11.2.20 occurred. I was also not satisfied that a Default Event under clause 11.2.25 had been established (at [75]). 5 In reaching those conclusions, questions of onus of proof played a significant part, particularly in relation to my conclusions in respect of clauses 11.2.20 and 11.2.25. It is true that in delivering my oral reasons I said early in my reasons that I had concluded that no default as defined and as alleged occurred (at [4]) and I said (at [77]) that the consequence of my finding that no Default Event had been shown to have occurred was that the plaintiffs' appointment as administrators was not valid and I ought to bring the administration to an end. It would have been more accurate to have said that the consequence of my findings was that it had not been shown that the plaintiffs' appointment as administrators was valid, as it had not been shown that a Default Event as defined and alleged had occurred. I think that is clear from my reasoning in relation to each of the alleged Default Events. As questions of onus of proof played a significant part in my reasoning, and as the defendants did not themselves seek the relief which they now seek, I do not think it would be just to make the declarations sought by the defendants. 6 For those reasons I decline to make any additional orders save, perhaps, as to costs. 7 I order that the first and second defendants pay the plaintiffs' costs of and incidental to the application by the defendants for declaratory relief.