Supreme Court New South Wales Medium Neutral Citation: Tanamerah Estates Pty Ltd v Tibra Capital Pty Ltd [2015] NSWSC 1708 Hearing dates: 16 November 2015 Decision date: 16 November 2015 Jurisdiction: Equity - Corporations List Before: Black J Decision: Direct the Plaintiff to file and serve any Notice of Appearance by a legally qualified representative, which it seeks to file, by 4.00pm today and deliver or send a copy of that Notice of Appearance to the Associate to Black J by that time. Catchwords: CORPORATIONS – application to set aside creditor's statutory demand – where company seeks to be represented by director – where orders previously made staying proceedings to allow the company to seek legal representation – where company not represented by legal practitioner – whether proceedings should be dismissed. Legislation Cited: - Civil Procedure Act 2005 (NSW) s 56 - Corporations Act 2001 (Cth) ss 459H, 459J - Legal Profession Uniform Law 2015 (NSW) - Uniform Civil Procedure Rules 2005 (NSW) r 7.1 Cases Cited: - Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685 - Handberg v MIG Property Services Pty Ltd [2012] VSCA 126 - Kalifair Pty Ltd v Digi-Tech (Aust) Ltd [2002] NSWCA 383; (2002) 55 NSWLR 737 - NSW Bar Association v Stevens (No 2) [2003] NSWCA 107 - Re Land Enviro Corp Pty Ltd [2013] NSWSC 731 - Tanamerah Estates Pty Limited v Tibra Capital Pty Ltd [2013] NSWSC 36 - Tanamerah Estates Pty Limited (as the trustee of the Alexander Superannuation Fund) v Tibra Capital [2013] NSWCA 266 Category: Procedural and other rulings Parties: Tanamerah Estates Pty Ltd (Plaintiff) Tibra Capital Pty Ltd (Defendant) Representation: Counsel: M. Klooster (Defendant) Solicitors: Mr J Tydeman (authorised director) Schofield King Lawyers Pty Ltd (Defendant) File Number(s): 2015/176355 Judgment – ex tempore 1. By my judgment delivered on 12 October 2015 ([2015] NSWSC 1519), I ordered that these proceedings be stayed until 4.00pm today, in order for the Plaintiff, Tanamerah Estates Pty Ltd ("Company") to obtain legal representation and for a legal representative to formally enter an appearance on behalf of the Company in the proceedings. I also re-listed the matter in the Corporations (Motions) List today, with a view to determining the status of the proceedings and whether, if no legal representation had been obtained for the Company, they should be dismissed. 2. The intent of my judgment, as the substance of the judgment made clear, was to afford the Company the opportunity to be represented by a legal representative, being a person who held a practising certificate under the Legal Profession Uniform Law 2015 (NSW). Mr Tydeman, who has appeared today for the Company (in circumstances where I have dispensed with the application of Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") r 7.1 for this morning only), submits that there is a legal representative on the record, namely Mr Tydeman, so far as he named himself as representing the Company on the Originating Process. It may be that my previous order could have been more felicitously expressed as permitting an opportunity for a solicitor to file a Notice of Appearance, having regard to the terms of UCPR r 7.1, but it seems to me that the intent of that order was plain to the parties, given the reasoning in the judgment which supported it. 3. Mr Tydeman has made clear that the Company does not propose to retain a solicitor, so as to comply with UCPR r 7.1. Mr Tydeman submits that the Court should nonetheless not dismiss the proceedings, which involve an application to set aside a creditor's statutory demand served by Tibra Capital Pty Ltd ("Tibra") under ss 459H and 459J of the Corporations Act 2001 (Cth), because that would deprive the Company of an opportunity for a hearing of its application on its merits, and would expose the Company to a winding up order, where the creditor's statutory demand was not set aside. 4. It seems to me that there are difficulties with each of those submissions. The first is that the Court, in applying the Uniform Civil Procedure Rules, does not deprive a person who chooses not to comply with them of a hearing. It is no more the case that the Company is deprived of a hearing, where it could retain a legally qualified representative to represent it but chooses not to do so, than a person who could file an originating process, but chooses not to do so, or could file an affidavit, but chooses not to do so, or could comply with other procedural directions, but chooses not to do so, is deprived of a hearing if the Court takes steps to enforce its rules and its procedural requirements so as to promote the interests recognised in s 56 of the Civil Procedure Act 2005 (NSW). 5. Mr Tydeman's submission amounts, in effect, to the proposition that the Court must allow him to represent the Company, although it has previously found that that is not the proper course to take, because otherwise the Company would be deprived of a hearing, if the Company chooses not to obtain qualified legal representation. In the particular circumstances, that course would expose the Company, Tibra and the community (to the extent that it funds the justice system) to the risks identified in my earlier judgment, namely that Mr Tydeman may well be unable to identify the relevant issues or, having regard to his affidavit, conduct the case in a manner proportionate to the summary jurisdiction to set aside a creditor's statutory demand. It is not the case that, in requiring a hearing to take place in accordance with the Uniform Civil Procedure Rules, the Court is depriving the Company of a hearing. What will deprive the Company of a hearing, if that ultimately occurs, is the decision it has itself made not to retain qualified legal representation in that hearing. 6. The second proposition put by Mr Tydeman also seems to me to be incorrect, so far as a dismissal of the application to set aside the creditor's statutory demand will not necessitate a winding up order, at least during the period in which the appeal which Mr Tydeman indicates he, or the Company, has brought against my judgment is pending. The Court has a well-established jurisdiction to adjourn a winding up application, even where a creditor's statutory demand has not been set aside, where an appeal in respect of the subject matter of the winding up application is pending: Handberg v MIG Property Services Pty Ltd [2012] VSCA 126; Re Land Enviro Corp Pty Ltd [2013] NSWSC 731 at [15]. 7. It seems to me the preferable course, consistent with my earlier judgment, will be to allow the Company until 4.00pm today for any change of mind, and make a direction that any Notice of Appearance of a legally qualified representative which it files by that time should also be copied to my Associate. If a Notice of Appearance by such a person is not filed by that time, I propose to make an order dismissing the proceedings in Chambers, consistent with the conclusion which I reached in my earlier judgment. There seems to me to be no reason not to take that course, in circumstances where it appears the Company will not take the opportunity to retain a legally qualified representative which had been afforded to it. 8. It seems to me, however, that it would be consistent with s 56 of the Civil Procedure Act and established principle to stay the order that I propose to make dismissing the proceedings, if the Company has not filed a Notice of Appearance of a legally qualified representative, for a relatively short period of 21 days, to allow the Company to pursue its appeal against my earlier judgment with expedition. Mr Klooster, who appears for Tibra, has pointed out that an appeal in respect of another issue between the Company and Tibra is already listed in the Court of Appeal in early December 2015, although it will be a matter for the Court of Appeal whether it is prepared to deal with the two issues on that date, where the second of those issues, arising from my judgment, may be in relatively narrow scope. In any event, even if the Court of Appeal were not prepared to deal with both issues on the same date, a stay of the proposed order dismissing the proceedings for a 21 day period would allow the Company an opportunity to pursue its application for leave to appeal, or an appeal so far as my judgment is final in character, on an expedited basis. The Court of Appeal would then have the opportunity to consider whether to extend the stay which I would order, for a further period, depending upon its assessment of the prospect of the appeal. 9. The matters relevant to whether a stay should be granted are, of course, well established, and the Court must ask what the interests of justice require, and whether there is a reason or appropriate case to warrant the exercise of discretion in favour of a stay: NSW Bar Association v Stevens (No 2) [2003] NSWCA 107 at [3]; Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685 at 694. Relevant matters include, on the one hand, an assessment whether the appellant has an arguable case, and there is a serious question to be determined, and whether the appeal would be rendered nugatory if a stay was not granted: Alexander above at 695; Kalifair Pty Ltd v Digi-Tech (Aust) Ltd [2002] NSWCA 383; (2002) 55 NSWLR 737 at [18]. 10. I should indicate that, for my part, it seems to me that the Company at best has a weak case, so far as the substance of any appeal is concerned, where my earlier judgment is consistent with the judgment which Hallen J had previously reached (Tanamerah Estates Pty Limited v Tibra Capital Pty Ltd [2013] NSWSC 36), and which it appears two judges of the Court of Appeal had reached (Tanamerah Estates Pty Limited (as the trustee of the Alexander Superannuation Fund) v Tibra Capital [2013] NSWCA 266) in respect of similar issues concerning Mr Tydeman's wish to represent the Company in litigation in this Court. Having said that, I recognise that the Court of Appeal may take a different view from that which I have taken in my judgment, and that there would be at least some potential prejudice to the Company, if a stay were not granted for a short period, since it could then be exposed to the commencement of a winding up application, notwithstanding that winding up application might well be adjourned pending the determination of its application for leave to appeal, or its appeal from, my judgment. There is little disadvantage to Tibra from a stay for a short period, particularly where the parties will already be before the Court of Appeal on another matter, and Mr Klooster, fairly, did not oppose a stay for 21 days on that basis. 11. In those circumstances, it seems to me that the proper course will be to order a stay for a short period, of an order made dismissing the proceedings if no Notice of Appearance is filed by 4pm today particularly in circumstances where the respective parties are before the Court of Appeal within that relatively short period in any event. 12. Accordingly, I make the following order and note the following matter: 1. Direct the Plaintiff to file and serve any Notice of Appearance by a legally qualified representative, which it seeks to file, by 4.00pm today and deliver or send a copy of that Notice of Appearance to the Associate to Black J by that time. 2. Note that, if no such Notice of Appearance is delivered to or received by the Associate to Black J by that time, Black J will make an order in Chambers dismissing the proceedings with costs, and staying that order for 21 days, to allow the Plaintiff to bring such application for leave to appeal or such appeal as it may be advised. ******** 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: 16 November 2015