Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Mayo v W & K Holdings (NSW) Pty Limited [2014] NSWCA 120 Hearing dates: 7 April 2014 Decision date: 07 April 2014 Before: Barrett JA Decision: 1. Pursuant to s 471B of the Corporations Act 2001 (Cth) the appellant have leave to proceed with this appeal against the first respondent. 2. Costs of this motion to be costs in the cause. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Catchwords: APPEAL - respondent in liquidation - leave to proceed required - grant of leave not opposed by liquidator - proof of debt not a realistic possibility in the circumstances - leave granted Legislation Cited: Corporations Act 2001 (Cth) Cases Cited: Distinctive FX 9 Pty Ltd v Statewide Developments Pty Ltd [2012] NSWCA 393 Vagrand Pty Ltd v Fielding (1993) 41 FCR 550 Category: Interlocutory applications Parties: Lauren Margaret Mayo (Appellant) W & K Holdings Pty Limited (First Respondent) William Arthur Leonard (Second Respondent) Representation: Counsel: H W D Stowe (Appellant) Solicitors: File Number(s): 2013/332269 Decision under appeal Citation: [2013] NSWSC 1063 Date of Decision: 2013-08-09 00:00:00 Before: Sackar J File Number(s): 2009/289575 Judgment 1BARRETT JA: The appellant has initiated an appeal in respect of the judgment and orders of Sackar J in proceedings in which his Honour ordered the rectification of certain lease agreements affecting machinery. The effect of the rectification was to alter the basis for the calculation of interest and to include a provision for the transfer of title to the machinery at the end of the lease. 2The appellant maintains that rectification should not have been ordered and that the agreements should have been left to take effect according to their terms in unmodified form. 3Since the making of Sackar J's orders, the first respondent, which is the lessee of the machinery, has become subject to winding up in insolvency, with the result that the appellant is not permitted to proceed with the appeal in the absence of a grant of leave under s 471B of the Corporations Act 2001 (Cth): Distinctive FX 9 Pty Ltd v Statewide Developments Pty Ltd [2012] NSWCA 393 at [13]. 4It is the appellant's application for that leave that is now before me. 5The appellant has put before the Court on the application correspondence with the liquidator of the first respondent which makes it clear that, while the liquidator does not consent to the grant of leave, there is at the same time no opposition. The absence of opposition is a relevant factor in the exercise of the Court's discretion. 6An important issue is as to the prospects of success on appeal, or more precisely, whether there is a serious question for the appellate court. The written submissions that Mr Stowe has handed up contain an analysis of the grounds of appeal in their annexure A. That analysis persuades me that there are matters properly deserving of attention in this Court. 7The other important question is whether it is appropriate to remove the controversy from the decision-making process involved in adjudication of a proof of debt by a liquidator, being a process that is more streamlined than litigation: Vagrand Pty Ltd v Fielding (1993) 41 FCR 550 at 553 - 557. In this case, I am of the opinion that a positive answer must be given to that question, in view of the nature of the relief granted below and the matters in contention on appeal. 8With the court having exercised its power to rectify the lease agreements and the question before the Court of Appeal being whether that rectification should or should not stand, it can scarcely be conceived that the issues should be placed before a liquidator for decision in the context of adjudication of a proof of debt. In order to raise the relevant matter, the appellant would be forced to frame her proof of debt on the basis of the agreements in their unrectified form. Once the liquidator had adjudicated the proof, any appeal in respect of the adjudication would come before a judge of the Equity Division and that judge would be required to consider arguments that have already been addressed by Sackar J and are proposed to be put before this Court in the appeal proceedings. 9That is not at all an efficient or convenient way in which to progress the resolution of the parties' differences. The nature of the relevant equitable jurisdiction and the fact that there has been a decision of the Supreme Court mean that appeal to the Court of Appeal, rather than lodgment of a proof of debt, is the appropriate way forward. In all the circumstances, leave should be granted. 10I make the following orders: 1. Pursuant to s 471B of the Corporations Act 2001 (Cth) the appellant have leave to proceed with this appeal against the first respondent. 2. Costs of this motion to be costs in the cause. ********** Amendments 11 April 2014 - Amended paragraphs: paragraph 9, line 1 "party's" to "parties" 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. Decision last updated: 11 April 2014