In the Matter of DB Mahaffy & Associates Pty Limited [2012] NSWSC 776

Supreme Court New South Wales

Medium Neutral Citation: In the Matter of DB Mahaffy & Associates Pty Limited [2012] NSWSC 776 Hearing dates: 2 July 2012 Decision date: 02 July 2012 Jurisdiction: Equity Division - Corporations List Before: Brereton J Decision: That the plaintiff appoint a solicitor Catchwords: CORPORATIONS - external administration - whether proceedings can be carried on by director of defendant company - director would not have standing to be a plaintiff - UCRP r 7.1(2) requires that a solicitor be appointed to act for defendant company Legislation Cited: (NSW) Uniform Civil Procedure Rules 2005 r 7.1(2) (Cth) Corporations Act 2001, s 459G Category: Procedural and other rulings Parties: DB Mahaffy & Associates Pty Limited (Plaintiff) Australian Taxation Office (Defendant) Representation: David Mahaffy (in person) (Plaintiff) A Kallipolitis (Solicitor) (Defendant) File Number(s): 2011/ 383182

Judgment (ex tempore) 1HIS HONOUR: By originating process filed on 1 December 2011, the plaintiff DB Mahaffy & Associates Pty Limited claims an order setting aside a creditor's statutory demand dated 20 November 2011 and served on it by the defendant the Australian Taxation Office. The originating process was filed by the plaintiff company and specified the plaintiff's address for service as David Mahaffy at an address in Narrabri. Mr Mahaffy is a director of the company. So far as I can ascertain at this stage, the company is an incorporated firm of accountants. Neither the company nor Mr Mahaffy is a solicitor. No solicitor has been engaged to act for the company in the proceedings, and the originating process has not been signed by a solicitor. 2Rule 7.1(2) of the (NSW) Uniform Civil Procedure Rules 2005 provides that a company within the meaning of the (Cth) Corporations Act 2001 may commence and carry on proceedings in any court by a solicitor or by a director of the company. Subrule 3, however, provides that in the case of proceedings in the Supreme Court, that rule authorises a company to commence proceedings by a director only if the director is also a plaintiff in the proceedings. Mr Mahaffy is not a plaintiff in the proceedings, and as the proceedings are an application under s 459G of the (Cth) Corporations Act 2001 to set aside a statutory demand served on the plaintiff company, he would not have standing to be a plaintiff in the proceedings. 3The Rules go on to provide, in r 7.2, certain requirements for an affidavit as to authority to commence and carry on proceedings where they are commenced or carried on by a director. Those rules have not been complied with. In any event, as rule 7.1(2) has the consequence that the intervention of a solicitor is necessary, they are superfluous. 4The proceedings have therefore been irregularly commenced and are liable to be stayed. 5However, Mr Mahaffy has indicated that if that is the situation, he will retain a solicitor. 6The defendant has sought a direction that the plaintiff appoint a solicitor, and that the solicitor file and serve a notice of appearance by 9 July, and has sought further directions in connection with the present notice of motion, which seeks an order setting aside a subpoena issued by the plaintiff. Mr Mahaffy has indicated that longer than the seven days proposed for that purpose will be required, given his geographical location at Narrabri, and I propose to accede to his request in that respect. 7I make the following orders: (1)That unless by 16 July 2012 a notice of solicitor acting has been filed by a legal practitioner retained by the plaintiff, the proceedings be stayed. (2)Direct that the plaintiff file and serve any affidavit evidence upon which it proposes to rely in relation to the defendant's notice of motion filed 21 July 2012 by 16 July 2012. (3)Direct that the defendant file and serve any evidence in reply thereto by 30 July 2012. (4)Adjourn the proceedings to 6 August 2012 in the Corporations Judge Motions List at 9.45 am.