Benson v Carroll

REASONS FOR JUDGMENT 1 On 23 April 2008 I made the following orders in this proceeding: 1. The proceeding be dismissed. 2. Order 1 not be entered without leave of the Court. 3. The respondents have liberty to apply at any time by motion on notice supported by affidavit for an order that order 1 be entered. 4. The applicants have leave to apply at any time by motion on notice supported by affidavit for orders setting aside orders 1 and 3. 2 Before the Court today is a motion brought by the applicants by notice of motion filed on 22 May 2008 supported by an affidavit of Peter Michael Benson made on 21 May 2008 seeking, pursuant to order 4 of 23 April 2008, an order setting aside orders 1 and 3 of that date. 3 The respondents have never applied pursuant to order 3 of 23 April 2008 for an order that order number 1 of that date be entered. 4 The proceeding was commenced on 3 July 2007, the application filed on that date being supported by a statement of claim. The statement of claim suggests on its face that a degree of detailed attention was given to the cause of action relied on by the applicants. I do not mean to imply anything one way or the other as to the viability of the claims asserted. 5 The proceeding progressed little if at all following its commencement. 6 On 1 August 2007, a direction was made fixing a time for the respondents to request particulars in relation to a cross vesting issue and the proceeding was stood over to 15 August 2007. 7 On 15 August 2007 the proceeding was stood over to 26 September 2007. On that date it was stood over to 24 October 2007. On 24 October 2007 it was stood over to 7 November 2007. On 7 November 2007 it was stood over to 12 December 2007. On 12 December 2007 it was stood over to 6 February 2008. On 6 February 2008 it was stood over to 23 April 2008, the date on which the orders previously mentioned were made. 8 Apparently, late on 22 April 2008 the solicitors for the respondents supplied to the then solicitors for the applicants, Barclays Legal, a copy of a proposed notice of motion and affidavit of Matthew Thomas Kelly in support. The proposed notice of motion was to seek a permanent stay pursuant to O 20 r 5 of the Federal Court Rules (Cth). 9 When the proceeding was before the Court on 23 April 2008 Mr Benson appeared unrepresented. His affidavit in support of the present motion states that at the time he was recovering from major heart surgery which had left him incapacitated since 6 February 2008. He states that shortly prior to the hearing on 23 April 2008, his counsel withdrew from the case and that he (Mr Benson) became involved in a dispute with Barclays Legal. Mr Benson states that on the evening prior to the hearing, Mr Carbone of Barclays Legal informed him that he would not be attending Court on the following morning to appear for the applicants to resist the respondents' proposed motion. 10 Mr Baird of counsel represented the respondents on 23 April 2008. Mr Benson consented to the orders set out at [1] on behalf of the applicants without the benefit of legal advice. It appears that in the circumstances the respondents' notice of motion and supporting affidavit was not actually filed. I note that I did not make an order for costs, and this tends to confirm that those documents were not filed. Probably the fact of Mr Benson's consent was treated by the respondents as rendering the filing unnecessary. 11 According to Mr Benson's affidavit in support of his motion today, he instructed his present solicitors, McKells Solicitors, on 15 May 2008. 12 In the final paragraph of his affidavit, Mr Benson states that the applicants wish to proceed with the action and will seek directions as soon as possible. 13 The totality of the circumstances surrounding the present motion cannot be understood without reference to two other proceedings. 14 In the Supreme Court of New South Wales, there has been a proceeding number 4111 of 2008 in which there has been an application for the taking of partnership accounts. This has resulted in a judgment being given on 24 September 2008 for $446,314.14 has been given for Andrew Carroll as trustee for the Hobbs & Carroll Property Trust against Benson Communications Pty Limited as trustee for the Grantham Project (Trust). It will be noted that the latter is the present second applicant. The former Trust is referred to in the name of the present second respondent, but the trustee named is different. 15 Two points are to be noted in relation to the Supreme Court proceeding. First, apparently there is or is to be an appeal by Benson Communications Pty Ltd. Second, a question has been raised whether the judgment should probably have been given in favour of Hobbs & Carroll Partnership Pty Limited as trustee rather than Andrew Carroll as trustee. I do not understand the point to be that an error was made by the Supreme Court but it may be that the evidence overlooked the fact that the judgment should be in favour of the entity that was trustee at the time. I need say no more on that matter. 16 The other proceeding to which I referred is a proceeding NSD 1674 of 2008 in this Court commenced on 24 October 2008. That proceeding is brought by the present second applicant, Benson Communications Pty Limited, as trustee for the Grantham Project (Trust) against Andrew Carroll as trustee for the Hobbs & Carroll Property Trust. In that proceeding, the applicant seeks to set aside a creditor's statutory demand dated 7 October 2008 that was served on it. Apparently the applicant in that proceeding will rely upon the claim that it asserts as second applicant in the present proceeding (NSD 1249 of 2007). 17 The present respondents resist the motion to set aside orders numbered 1 and 3 made on 23 April 2008 but I have emphasised that in setting aside those orders, no implication is to be drawn as to the merit of the claim made in this proceeding. 18 The applicant in proceeding NSD 1674 of 2008 should be able to rely on the claim it makes as second applicant in this proceeding. The applicants have explained the circumstances of the giving of consent on 23 April 2008 to the making of the order of dismissal. 19 Orders 1 and 3 made on 23 April 2008 should be set aside and both of the proceedings in this Court will be stood over for a fortnight. The applicants should pay the respondents' costs of the applicant's motion. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren.