Stanton (WA) Pty Limited (In Liquidation) v Vasquez Investments Pty Limited [2017] NSWSC 256

Supreme Court New South Wales

Medium Neutral Citation: Stanton (WA) Pty Limited (In Liquidation) v Vasquez Investments Pty Limited [2017] NSWSC 256 Hearing dates: 15/03/2017 Date of orders: 15 March 2017 Decision date: 15 March 2017 Jurisdiction: Equity - Commercial List Before: McDougall J Decision: Grant leave to continue with proceedings against company in liquidation. Catchwords: CORPORATIONS – administrators appointed to two defendants on eve of hearing – whether to grant leave to continue – no question of principle. Legislation Cited: Corporations Act 2001 (Cth) Category: Consequential orders (other than Costs) Parties: Stanton (WA) Pty Limited (In Liquidation) (Plaintiff) Vasquez Investments Pty Limited (First Defendant) Bryve Resources Pty Ltd (Second Defendant) Robert Paul Stanton (Third Defendant) Lachlan Townend (Fourth Defendant) Vasquez (WA) Pty Ltd (Fifth Defendant) Shareholder Services Pty Ltd (Sixth Defendant) Representation: Counsel: P T Russell (Plaintiff)

Solicitors: Ashurst Australia (Plaintiff) File Number(s): 2016/247919

Judgment – (ex tempore – revised 16 march 2017) 1. HIS HONOUR: The plaintiff seems to have incurred liabilities in its capacity as trustee of a trust. The first defendant was appointed as trustee of that trust, in place of the plaintiff, after judgment had been given against the plaintiff in this Court and when it was apparent that the plaintiff was about to be placed into liquidation. The judgment quantified and gave effect to the liabilities that the plaintiff said it incurred in its capacity as trustee. 2. The plaintiff seeks declaratory and other relief relating to its right to indemnity out of the assets of the trust, and relief in respect of transactions that it says were carried out either as a disposition in fraud of creditors, or otherwise in abuse of the powers of the first defendant, which had the effect of reducing, so the plaintiff says, the value of the trust assets. 3. In November last year, the matter was fixed for hearing, for two days commencing today. At all material times, up until then, the first and second defendants were legally represented. The third to sixth defendants have filed submitting appearances. 4. There were various interlocutory skirmishes which need not be considered. The first and second defendants were represented in those skirmishes. However, on 1 March 2017, the solicitor for those defendants notified the plaintiff's solicitor that he was seeking leave to file notice of ceasing to act. Hammerschlag J dealt with that on 3 March 2017, granting the leave sought. 5. The plaintiff's preparation for hearing continued. The Court has been provided with Court Books containing the relevant evidence, and with an outline of submissions. 6. The first and second defendants were called outside court at 10 o'clock. There was no appearance. 7. Mr Russell of Counsel, who appears for the plaintiff, has tendered an email from a Mr Timothy Cook, a registered liquidator, to the plaintiff's solicitors. That email was apparently sent at 9.32am this morning. By it, Mr Cook noted that he had been appointed as administrator of the first and second defendants the previous day, 14 March 2017. He provided a copy of his Form 505 notifications to the Australian Securities and Investments Commission. The date stamps on those forms suggest that they were lodged at 9.22 or 9.23 this morning, that is to say, about ten minutes before Mr Cook sent the email to which I have referred. 8. In all the circumstances, there is a very clear inference available that this is an attempt by the first and second defendants to delay the hearing of the plaintiff's claim. The appropriate course, so it seems to me, is to allow the hearing to proceed, but on the basis that Mr Cook may seek leave to intervene should he be advised to do so, and on the basis of the usual order as to enforcement of any declaration or judgment that may be given in the plaintiff's favour. 9. For those reasons, I consider it appropriate to grant the plaintiff leave to continue against the first and second defendants pursuant to s 440D of the Corporations Act 2001 (Cth). 10. I make the following orders. 1. Grant the plaintiff leave to continue these proceedings against the first and second defendants. 2. Order as a condition of that leave that the plaintiff not enforce any judgment or other order in its favour without the prior leave of the Court. 3. Direct that Mr Timothy Cook be notified forthwith of the making of these orders. 4. Reserve leave to Mr Cook to apply within 14 days of today's date to have the orders set aside or varied.