Aquaqueen International Pty Ltd v Weber

Judgment 1EMMETT JA: We have before us today an application for leave to appeal from orders made by Garling J on 5 September 2013 together with an application for a stay of those orders. 2On 5 September 2013, Garling J dismissed a notice of motion filed on 11 December 2012 by the present applicant, Aquaqueen International Pty Limited (Aquaqueen). His Honour also dismissed an application filed on 17 December 2012 to set aside a statutory demand made on Aquaqueen by the present respondent, Mr Wolfgang Weber. 3The notice of motion of 11 December 2012 sought the setting aside of a judgment entered in the Supreme Court on 28 November 2012 in consequence of the registration of costs assessments. As a result of that judgment, a statutory demand pursuant to s 459E of the Corporations Act 2001 (Cth) was made by Mr Weber. That prompted the second application for the statutory demand to be set aside, under s 459G of the Corporations Act. 4The present dispute arose out of District Court proceedings commenced by Aquaqueen against Titan National Pty Ltd, Ms Kathryn Wood-Weber and Mr Weber as defendants. The proceedings were heard by Williams DCJ, who dismissed the claim on 6 June 2011. On 24 June 2011, Aquaqueen was ordered to pay the costs of the defendants, including Mr Weber, on an indemnity basis. 5On 17 August 2011, Aquaqueen filed a notice of motion seeking an order that the orders entered against it on 6 June 2011 and 24 June 2011 be stayed. Balla DCJ dismissed that motion on 26 August 2011 and ordered Aquaqueen to pay Mr Weber's costs of that motion on an indemnity basis. 6On 28 November 2012, Mr Weber obtained a single judgment against Aquaqueen in the sum of $38,484.48. That sum represented costs assessed pursuant to the orders made by Williams DCJ and Balla DCJ together with the costs of the assessor in relation to those assessments. On 30 November 2012, Mr Weber served a statutory demand on Aquaqueen under s 459E of the Corporations Act requiring payment of the judgment sum. 7On 11 December 2012, Aquaqueen filed its notice of motion seeking to have the judgment of 28 November 2012 set aside. By proceedings commenced on 17 December 2012, Aquaqueen sought orders under s 459G of the Corporations Act setting aside the statutory demand. 8The bases upon which Aquaqueen sought that the 28 November 2012 judgment be set aside were outlined by Garling J in his reasons. The first basis advanced on behalf of Aquaqueen was that the judgment was obtained by the e-filing process without the deposit at the Registry of the original cost assessment certificates and therefore the judgment was irregularly entered and ought to be set aside. Secondly, it was said that the title on the form used by Mr Weber to obtain the judgment was erroneous and accordingly the judgment was irregular and ought to be set aside. Both of those contentions were dealt with summarily by Garling J. There appears to be no merit whatsoever in them and nothing was said to us to suggest that there was any error on the part of Garling J in disposing of those contentions. 9The third basis advanced to Garling J was that the judgment should be set aside because the total sum for which the judgment was registered included components that represented the costs of the costs assessment process. It was said that those costs could only be recovered by the Manager, Costs Assessment. Garling J dealt with that contention at some length. The matter was of some moment because it involved persuading Garling J that he should not follow an earlier decision of a judge of the Equity division (Kassem & Anor v Koutavas [2012] NSWSC 236). 10In fact, Garling J reached a conclusion inconsistent with that earlier decision. Nevertheless, his Honour then considered whether, as a matter of discretion, if he had reached a different conclusion, he would otherwise set the 28 November 2012 judgment aside. His Honour concluded that, having regard to the circumstances of the case and the manner in which the costs had been incurred, he would not as a matter of discretion, even if he had formed a different view as to whether that decision was wrong, set it aside. 11In order to demonstrate that his Honour's discretion miscarried, some submissions at least would have been required to indicate that his Honour approached that task on the basis of an incorrect principle or that the facts upon which his Honour based his conclusion were mistakenly found by his Honour. 12While it was suggested on behalf of Aquaqueen that there were erroneous findings of fact made by Garling J, no attempt was made to demonstrate how those so-called erroneous findings had any bearing on the exercise of the discretion to decline to set aside the judgment, if it had been open to his Honour to do so. 13Rather, submissions that had not been foreshadowed in the outline of argument were made, along the lines that there were outstanding procedures for review of the costs assessment. However, we were not taken to any specific basis upon which it was said that the costs assessment might ultimately be set aside. 14I am certainly not persuaded that there was any error on the part of Garling J in reaching the conclusion that he did, that no basis had been established for setting aside the judgment entered on 28 November 2012. That conclusion effectively disposes of the proceeding to set aside the statutory demand. Once it is clear that the judgment was properly entered, there was no basis for disputing the statutory demand and, accordingly, there was no basis for setting it aside. 15The substance of the complaint that is made in the outlines of arguments filed on behalf of Aquaqueen flowed from an apparent oversight on the part of the chambers of Garling J in failing to ensure that Aquaqueen was notified of the date on which reasons for Garling J's decision on the motion and the substantive proceedings were to be published. It appears that Aquaqueen was notified by email but, through clerical error, the email address was incorrectly entered. As a consequence, the email was not delivered to Aquaqueen. 16Aquaqueen was not notified of the dismissal of the substantive proceedings for some days after the orders were made on 5 September 2013 and contends that it was more than ten days afterwards before it became aware of the dismissal. The significance of that fact lies in the provisions of ss 459F and 459G of the Corporations Act. Under s 459F(1), if, as at the end of the period for compliance with a statutory demand, the demand is still in effect and the company has not complied with it, the company is taken to fail to comply with the demand at the end of that period. 17Under s 459F(2), the period for compliance with a statutory demand, if the company applies in accordance with s 459G for an order setting aside the demand is seven days after the decision is given dealing with the application to set aside the statutory demand. 18Section 459G sets out the circumstances in which a company may apply to the Court for an order setting aside the statutory demand. It does not appear to have been suggested that s 459G had not been complied with. 19The consequence, however, of Aquaqueen's not being notified of the judgment dismissing its application is that the seven-day period after that application was finally determined or disposed of expired before it was aware of that fact. It complains that it was therefore deprived of the opportunity of complying with the demand. That is a matter of some concern. 20However, in the present circumstances, it does not appear to have caused any ultimate prejudice to Aquaqueen. Since the orders of Garling J were made on 5 September 2013, Mr Weber applied in related proceedings to wind up Aquaqueen, based on its failure to comply with the statutory demand. But during all of that time, Aquaqueen made no effort whatsoever to tender payment of the amount of the demand. Thus, even though there was strictly a deemed insolvency as a consequence of the failure to comply with the statutory demand, by reason of the operation of s 459C(2)(a) of the Corporations Act that consequence is something that it was open to Aquaqueen to overcome by tendering payment. There has been ample time since it became aware of the order dismissing and finally disposing of its application under s 459G to tender the amount of the judgment. It has failed to do so. It still has not indicated that it proposes to make any such payment. 21In those circumstances, it is not appropriate, it seems to me, to grant leave to appeal from either of the orders made by Garling J dismissing the notice of motion of 11 December 2012 and dismissing the application to set aside the statutory demand filed on 17 December 2012. 22The motion before us was a motion for a stay of those orders. In the circumstances there is no utility in granting a stay of the orders and I would therefore dismiss the notice of motion insofar as it seeks such a stay. 23The other prayer for relief in the notice of motion was for leave to be granted to Ms Shirley Penson to represent Aquaqueen. The Court made that order without any opposition from Mr Weber. 24BEAZLEY P: I agree with the reasons of Emmett JA and the orders his Honour proposes. Accordingly, the formal orders of the Court are: (1) The summons seeking leave to appeal is dismissed with costs. (2) Order 2 of the notice of motion filed 17 March 2014 is refused and to that extent that notice of motion is dismissed with costs.