Supreme Court New South Wales Medium Neutral Citation: In the matter of Mustang Marine Australia Service Pty Ltd (in liq) [2014] NSWSC 931 Hearing dates: 14 July 2014 Date of orders: 14 July 2014 Decision date: 14 July 2014 Jurisdiction: Equity Division - Corporations List Before: Brereton J Decision: Application for leave to re-open an application for stay dismissed with costs. Catchwords: PROCEDURE – interlocutory applications – application after judgment reserved for leave to adduce further evidence in support of application for stay – where evidence could have been adduced at hearing – where evidence validity to be decisive – refused Category: Procedural and other rulings Parties: Mitchell Ball as official liquidator of Mustang Marine Services Pty Ltd (in liquidation) (first plaintiff) Mustang Marine Australia Services Pty Ltd (in liquidation) (second plaintiff) Standard Bank Asia Ltd (first defendant) Russell Watkins (second defendant) Martin Sheridan Lodge (third defendant) Philip Armstrong (fourth defendant) Christopher Heaton (fifth defendant) Standard Bank PLC (sixth defendant) Representation: Counsel: G Lucarelli (applicant/first and sixth defendants) D L Cook (respondent/plaintiff) Solicitors: Minter Ellison (applicants/first and sixth defendants) Paul Bard Lawyers (respondent/plaintiff) File Number(s): 2012/228731 Judgment (ex tempore) 1. HIS HONOUR: By interlocutory process filed by leave in Court today, the first and sixth defendants Standard Bank Asia Pty Limited and Standard Bank PLC seek leave to re-open the evidence adduced on 6 March 2014 upon the hearing of their application for a stay of the substantive proceedings, which application brought on the ground that the substantive proceedings were in the circumstances an abuse of process, and in respect of which my judgment presently stands reserved. By way of the evidence to be adduced they sought leave to rely on an affidavit of Garry John Hamilton sworn 8 July 2014. The interlocutory process also foreshadowed provision for evidence in reply and supplementary written submissions. 2. Pursuant to interlocutory process filed on 3 December 2013 for a stay of proceedings the applicants contend, in substance, that the substantive proceedings are an abuse of process by reason that, in the circumstances of this particular case, the liquidator not having called for or adjudicated on proofs of debts or otherwise adequately or sufficiently investigated the facts, did not have a sufficient proper basis to institute the proceedings. 3. As I apprehend it, the principal issue on that application is whether, as a matter of law, the professional rule that a legal practitioner must have sufficient or proper grounds for commencing proceedings applies to a liquidator plaintiff as a rule of law so that a breach of it would found a stay of proceedings - as distinct from a rule of ethics or professional practice. 4. The affidavit of Mr Hamilton identifies, I think, accurately, that in his evidence on 6 March the liquidator, who was cross-examined, identified four broad categories of issues that he said he would need to investigate and take advice in respect of, and that they would take "hopefully a limited amount of time". The additional evidence now sought to be adduced is of investigations made by the defendants' solicitor to the effect that he has contacted former directors of the company and a former administrator and ascertained that they have not been contacted or approached by the liquidator. As I understand it, it is sought to use this evidence to say that notwithstanding the liquidator's assertion that there were some matters that required further investigation which would hopefully be undertaken within a short time, nothing further has been done; and then to contend that that would fortify the factual conclusion that the liquidator had an insufficient basis for instituting the proceedings. 5. First, it seems to me that the extent to which the liquidator has made certain investigations or undertaken certain enquiries is unlikely to be decisive in these proceedings. The fundamental question is one of principle rather than one of degree. This proposed evidence might increase the prospects of a factual finding that insufficient steps have been taken by a matter of a few degrees or so, but is unlikely to be determinative of the crucial issue. 6. Secondly, the question whether proceedings have been improperly instituted is one that falls to be determined as at the date of institution of the proceedings and is unlikely to be informed by events that take place not only after the institution of proceedings but after the hearing of the application for a stay. 7. Thirdly, the point could well have been made at the hearing, if it were desired to do so, that none of the persons in question had been approached by the liquidator. The fact that the enquiries were made after the hearing in the light of the liquidator's evidence at the hearing does not detract from the argument that had the applicant defendants wished to deploy in support of their case the fact that the liquidator had not contacted and spoken to relevant persons that could have been done at the hearing, and there would not have been much if any significance in the circumstance that the liquidator did not do so in the three months or so that have passed since then. 8. Fourthly, as a matter of the appropriate case management of these proceedings, this is an interlocutory application in an interlocutory application for a stay of a large insolvent trading claim which will, if permitted, require the provision of time to the respondent plaintiff to adduce evidence in reply, and the facility for further submissions, which will but further delay the delivery of judgment on the stay application and the further management and prosecution of the substantive proceedings, if they are to proceed. 9. While, as it seems to me, there is some force in Mr Lucarelli's submission that there will be little injustice to the plaintiff in permitting this material to be relied on with the provision for evidence in reply and further submissions, there will at least be the prejudice of delay in the prosecution of the proceedings, if they are to proceed. On the other hand, it seems to me that there is little if any injustice to the defendants in declining the application, since evidence of lack of enquiries of the directors and administrator in question would have been available at the March hearing had it been elicited – indeed, my imperfect recollection is that there was some evidence to that effect then – and the likely impact of such material on the critical issues for judgment seems slight. 10. For those reasons, the interlocutory process filed 14 July 2014 is dismissed with costs. ********** 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: 18 February 2015