Civil and Administrative Tribunal New South Wales Medium Neutral Citation: B & M Mitchell Pty Ltd (in liquidation) v Mikell Investments Pty Ltd & Divlist Pty Ltd t/as Contemporary Homes [2018] NSWCATAP 168 Hearing dates: On the papers Date of orders: 11 July 2018 Decision date: 11 July 2018 Jurisdiction: Appeal Panel Before: S Westgarth, Deputy President R Hamilton SC, Senior Member Decision: (1) The Registrar is directed to make payment, on a date not before 21 July 2018, to the solicitors for the respondent, Blackwell Short Lawyers of the sum of $6,000.00 currently held by the Tribunal; and (2) Within 14 days of the date of these orders the respondent is directed to provide details of the trust account to which the monies referred to in order 1 above are to be paid Catchwords: Payment of monies held by Tribunal Legislation Cited: Corporations Act 2001 (Commonwealth) Cases Cited: B & M Mitchell Pty Ltd v Mikell Investments Pty Ltd & Divlist Pty Ltd t/as Contemporary Homes [2018] NSWCATAP 35 B & M Mitchell Pty Ltd v Mikell Investments Pty Ltd & Divlist Pty Ltd t/as Contemporary Homes [2018] NSWCATAP 63 McLean Tecnic v Digi-Tech; Kalifair v Digi-Tech [2002] NSWCA 383 Category: Principal judgment Parties: B & M Mitchell Pty Ltd (in liquidation) (Appellant) Mikell Investments Pty Ltd & Divlist Pty Ltd t/as Contemporary Homes (Respondents) Representation: Solicitors: Blackwell Short (Respondents) File Number(s): AP 17/42412 Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: Not applicable Date of Decision: 1 September 2017 Before: K Rickards, General Member File Number(s): HB 16/32023 REASONS FOR DECISION Introduction 1. On 1 September 2017 the Tribunal in its Consumer and Commercial Division made an order requiring the appellant to pay a sum of money in the order of $36,000.00 to the respondent. The appellant filed an appeal and, in addition, made an application to stay the operation of the order made on 1 September 2017. 2. On 18 October 2017 an Appeal Panel of the Tribunal stayed the operation of the order of 1 September 2017 but on the condition that the appellant paid instalments of $6,000.00 per month to the Tribunal pending the outcome of the appeal. 3. On 31 October 2017 the appellant paid $6,000.00 to the Tribunal. That sum is still held by the Tribunal. No other instalments were paid by the appellant. 4. On 1 February 2018 the appeal was dismissed and the stay lifted: see B & M Mitchell Pty Ltd v Mikell Investments Pty Ltd & Divlist Pty Ltd t/as Contemporary Homes [2018] NSWCATAP 35. 5. On 14 March 2018 the Appeal Panel made an order that the appellant was to pay the respondent's costs of the appeal (see B & M Mitchell Pty Ltd v Mikell Investments Pty Ltd & Divlist Pty Ltd t/as Contemporary Homes [2018] NSWCATAP 63). 6. On 5 April 2018 the Appeal Panel made directions for the parties to provide submissions as to which of them should receive the sum of $6,000.00 held by the Tribunal. That issue had not been the subject of submissions in the appeal or orders made by the Appeal Panel. Shortly afterwards, the Tribunal received a letter from Mr A Lucan who advised that he had been appointed liquidator of the appellant on 15 March 2018. 7. The Appeal Panel has made directions for the parties to make submissions as to which of them should receive the sum of $6,000.00 held by the Tribunal. Submissions have been received from the liquidator on behalf of the appellant and also from the solicitors acting for the respondent. Decision 1. The liquidator relies upon s 474 of the Corporations Act 2001 (Commonwealth) (Corporations Act). In summary, that section provides that if a company is being wound up in insolvency, the liquidator must take into his or her custody or under his or her control, all the property to which the company is or appears to be entitled. In our view, that section is only applicable if we find that the money held by the Tribunal is property of the company or property to which the company appears to be entitled. 2. The liquidator also relies upon s 569(3) of the Corporations Act. In summary that section provides that where a creditor of a company receives notice in writing of an application to the Court for the winding up of a company, it is not competent for the creditor to take any action, or any further action, to attach a debt due to the company or to enforce a charge or a charging order against property of the company. 3. In our view, when the sum of $6,000.00 was paid to the Tribunal, it ceased to be the property of the appellant. It was held on trust by the Tribunal for the respondent but on the condition that in the event that the appeal was successful and the order of 1 September 2017 set aside, then the Tribunal would thereafter hold the money as trustee for the appellant. That contingency did not occur because the appeal was not successful. Accordingly, we agree with the respondent's submissions that the sum of $6,000.00 ceased to be the property of the appellant at the time that it was paid into the Tribunal. We agree with the respondent's submission as to the relevance of the judgment in McLean Tecnic v Digi-Tech; Kalifair v Digi-Tech [2002] NSWCA 383 where at [28] it is said: "A successful party is prima facie entitled to the fruits of his judgment. He is entitled to be protected, as far as practicable, from the risk that if the appeal fails assets which earlier were available to satisfy the judgment will no longer be available for that purpose. The Court will endeavour to see that a stay does not cause that kind of prejudice to a judgment creditor. An appellant may be required to provide appropriate security as the price of a stay which may make the judgment creditor a secured creditor. Otherwise a requirement for security is only intended to protect the status quo, that is the existing value of the judgment and not to improve the position of the judgment creditor by increasing that value." 1. It is also our view that section 569(3) of the Corporations Act does not apply because the respondent is not taking "any action, or any further action" to "attach a debt due to the company or to enforce a charge or a charging order against property of the company". From 31 October 2017 that sum was not the property of the company. Rather, the respondent is merely making a submission in response to the Tribunal's desire to pay out the money held by it and the Tribunal's request to receive submissions from the parties as to the appropriate recipient of that money. 2. Accordingly, the Appeal Panel makes the orders set out below. We will defer the time for payment for 14 days to enable the liquidator to consider whether he wishes to appeal this decision. Orders 1. The Appeal Panel makes the following orders: 1. The Registrar is directed to make payment, on a date not before 21 July 2018, to the solicitors for the respondent, Blackwell Short Lawyers of the sum of $6,000.00 currently held by the Tribunal; and 2. Within 14 days of the date of these orders the respondent is directed to provide details of the trust account to which the monies referred to in order 1 above are to be paid. ********** I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Principal Registrar ********** I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar 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 July 2018