du Boulay v Worrell & Ors

CORPORATIONS - WINDING UP - CONDUCT AND INCIDENTS OF WINDING UP - DISSOLUTION - RESTORATION OF DEFUNCT COMPANY TO REGISTER - IN WHAT CIRCUMSTANCES ORDER MADE - GENERALLY - where appellant applied for restoration of defunct company to register in order to bring proceedings against administrators-liquidators for alleged damage caused to company - where appellant's application filed six years after company deregistered - where appellant's application heard 10 years after company deregistered - where company's books and records were destroyed prior to application - whether company should be restored to register

PROCEDURE - SUPREME COURT PROCEDURE - QUEENSLAND - PROCEDURE UNDER RULES OF COURT - PLEADING - GENERALLY - where appellant's pleadings seriously defective in numerous respects - where appellant's pleadings prolix and vexatious - whether appellant's pleadings oppressive and thus an abuse of process

EQUITY - GENERAL PRINCIPLES - REMEDIES AND PROCEDURE - ACTION FOR DAMAGES FOR FRAUD - where appellant claimed damages for fraud loosely based on equitable and statutory causes of action - where appellant framed claim in such manner to avoid action being barred by statute - where appellant failed to particularise facts demonstrating necessary elements of causes of action - where appellant failed to demonstrate damage suffered either to himself or the company as a result of alleged conduct - whether actions sustainable in light of deficiencies

Corporations Act 2001 (Cth), s 57A, s 181, s 236, s 237,

s 473, s 493, s 499, s 504, s 556, s 590, s 601AH

Corporations Law (Corporations Act 1989 (Cth)), s 180,

s 182, s 184, s 435A, s 590

Criminal Code 1899 (Qld), s 408C, s 437, s 438, s 441, s 492

Criminal Practice Rules 1999 (Qld)

Judiciary Act 1903 (Cth), s 79

Limitation of Actions Act 1974 (Qld)

Trade Practices Act 1974 (Cth), s 52

Trusts Act 1973 (Qld), s 7, s 23

Uniform Civil Procedure Rules 1999 (Qld), r 149, r 157,

Alati v Kruger (1955) 94 CLR 216; [1955] HCA 64, cited

Australian Securities Commission v AS Nominees Ltd (1995) 62 FCR 504; [1995] FCA 1663, cited

Bhagat v Global Custodians Ltd [2002] FCA 223, cited

Breen v Williams (1996) 186 CLR 71; [1996] HCA 57, cited

Chan v Zacharia (1984) 154 CLR 178; [1984] HCA 36, cited

Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447; [1983] HCA 14, cited

Commonwealth v Mewett (1997) 191 CLR 471; [1997] HCA 29, cited

Commonwealth v Verwayen (1990) 170 CLR 394; [1990] HCA 39, cited

Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594; [1990] HCA 17, cited

du Boulay v Worrell & Ors [2008] QSC 174, affirmed

Erlanger v New Sombrero Phosphate Co (1878) 3 App Cas 1218, cited

Krakowski v Eurolynx Properties Ltd (1995) 183 CLR 563; [1995] HCA 68, cited

Mitchell v Homfray (1882) 8 QBD 587, cited

Rajski v Scitec Corp Pty Ltd, unreported, NSW Court of Appeal, Kirby P, Samuels and Mahoney JJA, 16 July 1986, cited

Re Dover Pty Ltd and the Companies Act 1961 (1981)

6 ACLR 307, cited

Thomas Franklin & Sons Ltd v Cameron [1935] NSWStRp 72; (1935) 36 SR (NSW) 286, cited

Vadasz v Pioneer Concrete (SA) Pty Ltd (1995) 184 CLR 102; [1995] HCA 14, cited

Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387; [1988] HCA 7, cited

Watson v Commercial Bank of Australia [1879] VicLawRp 267; (1879) 5 VLR (M) 36, cited

Webb v Stenton (1883) 11 QBD 518, cited

[1] KEANE JA: The appellant, Mr du Boulay, who represents himself in this litigation, was for some time the sole director and the majority shareholder of LOA Industries Pty Ltd ("the company").

[2] In late 1996 the company was insolvent. On 24 December 1996 Mr du Boulay appointed two of the respondents, Messrs Worrell and Khatri, administrators of the company. On 18 February 1997 the creditors of the company appointed

Messrs Worrell and Khatri as administrators pursuant to a Deed of Company Arrangement ("the DOCA").

[3] On 5 December 1997 the creditors voted on whether to continue the administration under the DOCA. A majority in number voted to continue, and a majority in value voted in favour of the liquidation of the company. Messrs Worrell and Khatri cast the deciding vote in favour of liquidation. Accordingly, the company was wound up in insolvency.

[4] The company's assets were sold in December 1997. It was deregistered on

11 November 1998. The books and records of the company were destroyed in November 2003.

[5] On 17 June 2004 Mr du Boulay commenced proceedings in the Supreme Court against Messrs Worrell and Khatri and the other respondent for damages said to be recoverable in respect of the financial loss caused to Mr du Boulay, "his company and its creditors" by the misconduct of the respondents in, or in relation to, the administration of the company.

[6] The respondents applied to have Mr du Boulay's claim against them dismissed pursuant to r 293 of the Uniform Civil Procedure Rules 1999 (Qld) ("the UCPR") principally on the footing that the losses for which Mr du Boulay seeks recompense were not suffered by him but by the company.

[7] Mr du Boulay sought to counter this attack by filing an application in April 2007 to have the company restored to the register pursuant to s 601AH of the Corporations Act 2001 (Cth) and to have the company joined as a co-plaintiff in his action. He also sought leave to bring the application on behalf of the company pursuant to

s 236 and s 237 of the Corporations Act.

[8] Mr du Boulay's application came on for hearing on 21 July 2008 at which time the respondents resisted his application and renewed their application for the dismissal of Mr du Boulay's action.

[9] The statement of claim upon which Mr du Boulay relies in his action is more than 100 pages long. This statement of claim was the third attempt by Mr du Boulay to plead the case. This document revealed some obvious difficulties with

Mr du Boulay's action. Equally there were obvious difficulties in the application brought by him for the reinstatement of the company. I will refer to these difficulties in due course.

[10] On 1 August 2008 the learned primary judge dismissed Mr du Boulay's application and gave judgment in the action for the respondents. Mr du Boulay now seeks to appeal against these decisions.

[11] The learned primary judge noted that much of the loss alleged by Mr du Boulay to have been caused by the misconduct of the respondents was suffered by the company and that, accordingly, the company is the proper party to pursue such claims. Insofar as Mr du Boulay originally sought to pursue these claims himself, his action was bound to fail. It may also be noted here that, insofar as Mr du Boulay might have sought to recover for the loss of the value of his shareholding in the company, he has not condescended to allege what that value was. Further, the learned primary judge concluded that, insofar as Mr du Boulay seeks to pursue a claim personally for damages for "anxiety and suffering" by reason of the respondents' alleged misconduct towards the company, that claim was also doomed to fail on the basis that it is not a claim known to the law.

[12] As to the claims which might be pursued by the company if it were to be reinstated, the glaring difficulty confronting Mr du Boulay is that the deregistration occurred five and a half years before Mr du Boulay commenced his action and more than nine years before Mr du Boulay sought to have the company restored to the register. In the interim the books and records of the company were destroyed. Whether the company should now be restored to the register pursuant to s 601AH(2)(b) of the Corporations Act depends on whether it would be just for the court so to order. An assessment of whether it would be just to order reinstatement must be made by reference to the interests of those who might benefit from its restoration and the interests of the respondents. The learned primary judge approached this assessment in an entirely orthodox way.

[13] To the extent that the only reason for reinstating the company is to enable the claims made in the statement of claim to be pursued, it is far from clear that the company would be able to pursue its claim to a conclusion if it were reinstated. In this regard, his Honour observed that, if the company were to be restored to the register, it would still be in liquidation. Mr Hellen and Ms Fordyce are chartered accountants who have indicated their consent to act as liquidators of the company if it were restored to the register. But neither Mr Hellen nor Ms Fordyce have given evidence that they have formed the opinion that the prosecution of the claims is likely to provide creditors of the company with any return, or even that they will be able actually to pursue the claims adumbrated by Mr du Boulay.

[14] The unfairness to the respondents occasioned by the delay in the prosecution of the claims is also important so far as the justice of the reinstatement of the company is concerned. The books and records of the company are no longer available having been destroyed before Mr du Boulay commenced his action against the respondents. The learned primary judge was of the view that it could not be considered just to reinstate the company to enable it to act as a vehicle for a claim so long dormant. There is clearly force in that conclusion.

[15] It is significant that those persons with the primary interest in the pursuit of claims by the company, namely its creditors, have not indicated any support for the company's reinstatement to the register of companies. Those with the primary entitlement to benefit have shown no support for reinstatement; and there is no reason to believe that the claims will nevertheless proceed to a conclusion under the control of Mr Hellen and Ms Fordyce.

[16] I have mentioned the difficulties which obviously attended Mr du Boulay's case as presented to the learned primary judge as a precursor to a discussion of the grounds advanced by Mr du Boulay in his notice of appeal. They are:

"1. Findings of facts have been made that should not have been made.

1. Findings of facts were not made that should have been made.
2. The Court's reasons for denying the plaintiff's application to have the company reinstated as per section 601AH of the Corporations Act are deficient."

[17] This statement of the grounds of appeal is quite unhelpful. Mr du Boulay sought to elaborate upon these grounds of appeal in written and oral submissions on the appeal. Neither in these arguments, nor in a close consideration of Mr du Boulay's epic statement of claim, is there any answer to the difficulties to which reference has been made. It cannot fairly be said that the reasons given by the learned primary judge were in any way insufficient especially bearing in mind the glaring difficulties confronting Mr du Boulay. Further, in my respectful opinion, there can be no doubt that the learned primary judge's decisions to refuse reinstatement of the company and to give judgment dismissing Mr du Boulay's action were correct and sufficiently stated.

[18] As to the complaint that the learned primary judge made findings of fact which he should not have made, Mr du Boulay's particular grievance was that his Honour erroneously found that Mr du Boulay had purchased the tangible assets of the company from the liquidator for $4,500,[1] when, in truth, the assets had been acquired by Mr Wallace, an acquaintance of Mr du Boulay.

[19] It is understandable that the learned primary judge expressed himself as he did because the only evidence before him was to that effect. It now appears that at the time of the hearing before the learned primary judge, Mr du Boulay was in possession of an affidavit from Mr Wallace which he did not seek to file or to read before his Honour. This Court received this affidavit at Mr du Boulay's request on a provisional basis in order to determine whether it might assist his argument. But it appears from the affidavit that Mr du Boulay arranged the sale and subsequently used the tangible assets to complete work for which the company had been engaged by customers. The affidavit does not assist Mr du Boulay.

[20] Whether the tangible assets of the company were sold to Mr du Boulay or

Mr Wallace is quite immaterial to the decisions under challenge by Mr du Boulay. What is significant is that it does not lie in Mr du Boulay's mouth to suggest that the company's tangible assets were worth more than $4,500. That the company's tangible assets were worth only such a modest sum makes it most unlikely that any substantial value could be attributed to Mr du Boulay's personal shareholding - bearing in mind that the company's debts were of the order of $86,000. In these circumstances it is understandable that Mr du Boulay did not attempt to ascribe a value to his shareholding in the company.

[21] As to the complaint that the learned primary judge failed to make findings which he ought to have made, Mr du Boulay's particular grievance relates to his Honour's failure to describe in detail the many and varied assertions of misconduct contained in the statement of claim. It is said that these assertions should have been specifically adverted to by his Honour. But the learned primary judge made it abundantly clear that the principal vice of Mr du Boulay's pleading was its failure to state clearly and coherently the facts upon which he seeks to found his claims.

[22] During oral argument, Mr du Boulay contended that the respondents, in their capacity as liquidators and thus officers of the company, engaged in conduct that he anomalously described as "fraud" for the purposes of s 590 of the Corporations Act. Mr du Boulay made a special complaint that the learned primary judge had not specifically addressed this claim. There are a number of good reasons why his Honour would not have adverted to s 590 of the Corporations Act. The first is that a contravention of s 590 was not alleged in Mr du Boulay's pleading (although it was mentioned in an earlier edition of his pleading and in his outline of argument). The second is that a case of fraud is not sufficiently pleaded and further appears to be lacking in merit as I shall explain. In any event, s 79 of the Judiciary Act 1903 (Cth) has the consequence of applying the Limitation of Actions Act 1974 (Qld) to Mr du Boulay's putative claims under the Corporations Act.[2] Consequently, the claim if made in the present case would be defeated by the expiration of the limitation period applicable to the claim.

[23] As the learned primary judge noted, Mr du Boulay's pleading is defective in serious respects: the statement of claim alleges matters of evidence and makes argumentative assertions of law; it is also unnecessarily, and indeed oppressively, long and confused. These defects cannot be ignored or minimised: they are so serious as to warrant striking out the statement of claim. But the point to be made here is that, even if every allowance is made for Mr du Boulay's difficulties as a litigant representing himself, one cannot discern from the pleading any reasonable prospect that it could be improved so that the causes of action sought to be pursued could be established.

[24] In paragraph 13 of Mr du Boulay's statement of claim, it is alleged that in mid-1996 the company "had become insolvent". It is alleged in paragraph 15(B) that

Mr du Boulay was assured by one of the respondents that the respondents would use their best endeavours to secure the future viability of the company so as to allow the company to stay in business and pay all creditors in full over an extended period. It is alleged that if this assurance had not been given to Mr du Boulay, "negotiations would not have proceeded". In other words, Mr du Boulay would not have appointed Messrs Worrell and Khatri as administrators of the company and the events which followed upon that appointment would not have occurred.

[25] An obvious problem with this theory of the respondents' liability is the absence of a pleaded case that if "negotiations" with the respondents had come to nought, the company could and would have engaged other administrators who would have acted upon Mr du Boulay's views as to what was necessary to enable the company to recover from its insolvent state. Mr du Boulay complains that the proposals he formulated for the repayment of the company's creditors were rejected by the respondents, but there is no case that other administrators would and could have accepted them and procured their implementation by obtaining the approval of the creditors of the company. Absent some such allegations, there is no viable case that Mr du Boulay or the company was induced to act in a way which has enured to its detriment.

[26] To regard these lacunae as a fatal deficiency in the case advanced by Mr du Boulay is not to adopt an unduly rigorous attitude towards a pleading prepared by a layman. This statement of claim is the third edition; there is no reason to think that it could be improved in any point of substance. Mr du Boulay's pleading refers to several approaches by him to other insolvency practitioners for assistance with the insolvency of the company, and it is apparent that these approaches were fruitless. It would be wrong to presume that some other administrators were willing and able to restore a solvent company to Mr du Boulay's control. And it would also be wrong to presume that after February 1997, when the creditors of the company appointed Messrs Worrell and Khatri as administrators of the company, the creditors would have agreed to remove Messrs Worrell and Khatri at the suggestion of Mr du Boulay.

[27] More detailed reference to the deficiencies in the statement of claim confirms that there is no reason to think that Mr du Boulay or the company has any reasonably arguable prospect of success. I shall summarise these problems briefly. In this discussion the headings used are referrable to Mr du Boulay's statement of claim.

[28] It is alleged that the respondent liquidators acted contrary to their promise to "protect the existence and interests of the business" by casting the deciding vote in favour of liquidation of the company. The argument elaborated in Mr du Boulay's statement of claim indicates that the cause of action is directed, not to a claim for breach of contract, but to an equitable claim of promissory estoppel.

[29] Mr du Boulay, in attempting to describe the detriment allegedly referrable to the conduct in question, alleged: "Sever [sic] economic and financial losses were henceforth incurred by the company and its creditors", apparently as a result of the respondents' failure to keep their promise to protect the business.

[30] A breach of contract does not of itself give rise to a promissory estoppel.

Mr du Boulay has failed to plead the requisite elements of a promissory estoppel,[3] in that it, as I have noted above, is not said how the company of Mr du Boulay is worse off than it or he would have been had Mr du Boulay not been induced to engage the respondents. Mr du Boulay does not allege that a different result would have ensued from the engagement of different insolvency practitioners. Indeed he does not even plead that different insolvency practitioners would have agreed to assist him in his attempts to restore the company's solvency and would have succeeded in persuading the creditors to agree to his proposals for restoring the company to solvency. And Mr du Boulay does not suggest that the company - which he alleges was insolvent - could have continued to trade otherwise than under administration.

[31] In the upshot, the pleading might arguably be sufficient to allege a cause of action for damages for breach of contract, but it is not sufficient to set up a viable claim for relief by way of promissory estoppel. It is pertinent to observe in this regard that Mr du Boulay is clearly intent upon not pursuing a claim for breach of contract because of the inevitability that such a claim would be defeated by the Limitation of Actions Act.

[32] Under this rubric, Mr du Boulay alleges that the liquidators breached "an equitable duty to act in good faith for the benefit of the company, its creditors and director".

[33] Mr du Boulay founds his claim on an alleged failure on the part of the liquidators to present the payment plan that he had developed to the creditors' meeting, which he contends "could have been workable and not placed undue financial pressure on the cash flow of the company." He alleges that the proposal put to creditors by the liquidators "stripped almost the entire working capital of the company". His central complaint is that the liquidators breached their fiduciary duties by not preferring his proposal to their own.

[34] Mr du Boulay has no case that other liquidators would have acted differently. In any event, fiduciary duties are proscriptive: they prevent fiduciaries from profiting from their position as fiduciaries or conflicts arising from that position;[4] they do not of themselves oblige the fiduciary to take positive action or steps to achieve a result for the beneficiary.

[35] Further, a liquidator in a voluntary liquidation of a company owes fiduciary duties to the company itself not to its directors.[5] Liquidators, as officers of a corporation, are required to exercise their powers and discharge their duties "in good faith and in the best interests of the corporation" pursuant to s 181(1) of the Corporations Act. "Corporation" is defined in s 57A(1)(a) of that Act to include "a company", which includes a company registered under the Act. Any fiduciary obligations (owed only to the company itself) by the liquidators would not encompass an obligation to present a payment plan to a creditors' meeting at the behest of a director.

[36] Once again it is to be noted that Mr du Boulay has, no doubt advisedly, refrained from pursuing a claim for breach of contract.

[37] It may be accepted that in carrying out their obligations trustees are generally required to act with the reasonable diligence and caution of an ordinary and prudent business person.[6] It may be that Mr du Boulay's argument is directed to making out a case of breach of this duty. But the liquidators' duties as trustee, which arise upon the receipt of property in their capacity as fiduciaries, require that such property be held on trust for the benefit of the company.[7] The claim against the liquidators for breach of their duties as trustees could only be maintained by the company.[8]

[38] In this regard, Mr du Boulay alleges misconduct on the part of the liquidators in their capacity as trustees by their failure to ensure the company's working capital. He states that moneys were "collected" by the liquidators for payment to creditors, but were paid to the liquidators.

[39] Mr du Boulay's argument fails to come to grips with the obvious points that, upon their appointment, liquidators in a voluntary winding up are entitled to remuneration and thus become creditors of the company themselves and that their entitlement ranks before unsecured creditors in the winding up.[9] He makes no case that other liquidators would have charged less or that the creditors would have agreed to the replacement of the liquidators.

[40] Mr du Boulay alleges unconscionable conduct with respect to the alleged "unscrupulous, unreasonable, and oppressive demands [placed] upon him and the company's accountant". He also alleges that the liquidators "clearly demonstrated an intention to discredit the company" by seeking the support of creditors for the voluntary winding up of the company.

[41] A claim of unconscionable conduct must focus on conduct in respect of a transaction whereby the person advantaged as a result of the transaction knowingly exploits the other party's disadvantage to the extent of overbearing that party's will.[10] The misconduct alleged against the respondents in Mr du Boulay's pleading is not said to have overborne his own judgment as to his best interests so as to cause him to act to his disadvantage in any particular transaction.

"Breach of Duty and Duty [sic] as well as Duty and Self Interest"

[42] The gravamen of Mr du Boulay's complaint under this heading appears to be that the liquidators illegitimately retained funds it collected on behalf of the company in the process of winding up.

[43] Liquidators are entitled to remuneration fixed by a committee of inspection, an ordinary resolution of creditors, or the court.[11] If Mr du Boulay disputed the remuneration payable to the liquidators, he could have applied to the court to review the liquidators' remuneration in his capacity as a member (but not as a director) prior to deregistration of the company.[12] In any event, this claim is one which could only be pursued by the company.

[44] Mr du Boulay alleges that misleading and deceptive representations were made in publications by the liquidators, including a Notice to Creditors and reports made with respect to the Deed of Company Arrangement, to seek support from creditors to wind the company up.

[45] Mr du Boulay purports to rely on s 52(1) of the Trade Practices Act 1974 (Cth), which provides: "A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive."

[46] The conduct of which Mr du Boulay complains was not engaged in by a corporation, but by the liquidators. To the extent that Mr du Boulay might seek to assert that the liquidators acted as officers of the company, the company was not engaged in trade or commerce vis-à-vis Mr du Boulay.

[47] In Concrete Constructions (NSW) Pty Ltd v Nelson,[13] the High Court held that the requirement that the allegedly misleading or deceptive conduct occur "in trade or commerce" meant that the conduct must be directed to persons in the course of its trading or commercial activities. The conduct complained of by Mr du Boulay did not occur in trade or commerce for the purposes of s 52 of the Trade Practices Act for the simple reason that the voluntary appointment of a liquidator had the consequence of terminating the company's trading and commercial activities,[14] and, in any event, the internal dealings between liquidators and directors cannot be understood as trading or commercial conduct of the company.

[48] Mr du Boulay alleges that the liquidators, in reporting the surplus that might be available for distribution in the winding up to creditors, made fraudulent representations to creditors. He claims that this allegation is evidenced by comparing the forecast made at January 1997 (17 cents in the dollar) to that made at November 1997 (90 cents in the dollar). He asserts that the liquidators "exaggerated the true financial position of the company to creditors in order to convince them that if they agreed with [the liquidators'] proposal they could get their money out of [the company] immediately instead of waiting [for the Deed of Company Arrangement to expire]."

[49] The forecasts on which Mr du Boulay relies were published to the creditors of the company. The differences in these forecasts, which Mr du Boulay regards as quite sinister, would, of course, have been readily apparent to the creditors to whom these forecasts were published. It cannot be presumed that the creditors did not advert to these discrepancies. No creditor has said that it was misled by these forecasts. It is eloquent of the absence of any real basis for his claim that none of the creditors of the company supports the reinstatement of the company to enable this claim to be pursued.

[50] It is well-settled by high authority that a court will not lightly find fraud.[15] A party alleging fraud must plead and prove that the representor - in this case, the liquidators - did not honestly believe the alleged representation as to the amount available to each creditor in the distribution of any surplus.[16]

[51] The circumstance that the liquidators' forecast as to the amount of surplus payable in any distribution did not eventuate does not show that, in the circumstances of the initial evaluation of the prospective distribution and subsequent forecast, the liquidators communicated an assessment that differed from their honestly held belief based on estimates genuinely made. Mr du Boulay is obliged to articulate how the representation actually made differed from what the liquidators believed and he has failed to do so.[17]

[52] The learned primary judge concluded on the material before him that to reinstate the company as a vehicle for the claims which can only be pursued by the company would not be just. This conclusion was reasonably open to his Honour. His Honour's statement of his reasons was in no way deficient.[18]

[53] It would not be just to promote the prosecution of the company's claims after the lengthy and unexplained delay that has occurred in this case, especially when the creditors of the company, who should be the primary beneficiaries of the claims, do not appear to support the reinstatement of the company to enable these claims to be pursued. That the creditors have not come forward to voice their support for the reinstatement of the company is hardly surprising given the obvious difficulties which beset the claims sought to be pursued and the likelihood that they would be defeated by reason of the unexplained delay in presenting them.

[54] Mr du Boulay seeks to defuse the problem which the lengthy delay poses for the claims he seeks to advance against the respondents, and for the reinstatement of the company, by making the point that the claims are not common law claims, which would be subject to limitation periods imposed by the Limitation of Actions Act, but claims for equitable fraud in respect of which no limitation period is prescribed by statute. It is important to appreciate, however, that it does not flow from a characterisation of his claims as claims for equitable fraud that the delay which has occurred would not be a serious impediment to the successful pursuit of the claims.

[55] Insofar as Mr du Boulay seeks to rely upon equitable claims by the company against the respondents, the respondents are entitled to counter that it would be against conscience to countenance the bringing of such claims after such a lapse of time when there is no suggestion that these claims could not have been brought many years ago. As Lord Blackburn said in Erlanger v New Sombrero Phosphate Co,[19] "a Court of Equity requires that those who come to it to ask its active interposition to give them relief, should use due diligence, after there has been such notice or knowledge as to make it inequitable to lie by."

[56] It is apparent from the correspondence in the appeal record that Mr du Boulay was in quite heated dispute with the respondents by December 1997. There is no suggestion that Mr du Boulay was not aware of the matters of which he now seeks to complain from before the deregistration of the company; yet he provides no explanation for his failure promptly to pursue the claims which he now seeks to agitate. Mr du Boulay, by taking no action for so many years to complain of the misconduct with which he now seeks to charge the respondents, can be taken to have so conducted himself as to have released any claim in equity which he might otherwise have made.[20]

[57] Because the interests of third parties and the orderly conduct of the commercial life of the community are apt to be affected by the liquidation and deregistration of companies, the courts are vigilant against attempts to agitate stale claims in connection with the liquidation or deregistration of companies. The present case is an even stronger case for the refusal of equitable relief than the case of Watson v Commercial Bank of Australia.[21] In that case the claim of a contributory of a company, who waited only two months before seeking to set aside an invalid order appointing a liquidator of a company which he knew to be invalid, was defeated by his delay. In this case Mr du Boulay has waited many years. In the intervening period the books and records of the company which would have been relevant to the issues he seeks to litigate have been destroyed.

[58] Mr du Boulay's personal claims cannot be sustained. The learned primary judge was right to give judgment dismissing Mr du Boulay's action because it was bound to fail.

[59] The learned primary judge was right to refuse reinstatement of the company because his Honour could not be satisfied that reinstatement of the company would have been just.

[61] As to the costs of the appeal, the respondents seek an order for the recovery of their costs on the indemnity basis. The appeal had no arguable prospect of success. The pursuit of the appeal by Mr du Boulay was quite unreasonable. It is therefore proper that he be ordered to pay the respondents' costs of the appeal on the indemnity basis.

[62] Mr du Boulay should pay the respondents' costs of and incidental to the appeal on the indemnity basis.

[63] MUIR JA: I agree with the reasons of Keane JA and with the orders he proposes. I wish, however, to make some observations about the case the appellant intended to pursue had he succeeded at first instance.

[64] Only a cursory reading of the statement of claim on which the appellant intended to rely is necessary to make it apparent that the document does not comply with the requirements of r 149 and r 157 of the Uniform Civil Procedure Rules and that the document is prolix and vexatious. It could not form the basis of a fair trial: it is quite impossible for the respondents to glean from it the precise nature and extent of the plethora of claims they would have to meet.

[65] The statement of claim contains: assertions of legal principle; quotations from cases; numerous references to provisions in the "Corporations Law" and Criminal Code (Qld); glosses on the meanings of such provisions; submissions; numerous allegations of wrongful conduct; expressions of opinion by the appellant; lengthy references to contents of affidavits and other evidentiary materials and lengthy factual narratives. If that impermissible admixture did not create problems enough, two or more of such matters are often to be found in the same paragraph and there are 279 paragraphs spread over 104 pages.

[66] Paragraph 11 of the statement of claim contains a "summary of argument" which makes 20 allegations of "fraudulent acts and omissions". The list does not purport to be exhaustive and indeed, the remainder of the pleading is littered with other allegations of wrongful conduct including breaches of ss 180, 182, 184, 435A, 590(1)(f), 590(d), (g) and (h) of the "Corporations Law". Section 7 and s 23 of the Trusts Act 1973 (Qld) and ss 408C, 437, 438(c), 441 and 492 of the Criminal Code (Qld).

[67] Bizarrely, all of this concerns the affairs of a company which, according to the appellant's own pleaded allegations, was insolvent, owed creditors $86,000 and had debts of $51,000 at the time the appellant sought the assistance of "Insolvency Practitioners", Worrell Whitehill. All of the company's plant and equipment was sold by the liquidators for $4,500 in a transaction organised by the appellant. Had that sale not taken place, the intention of the liquidators was to sell the property at auction. A valuation obtained by the liquidators valued the "available tangible assets" of the company as a going concern at $5,000 and the liquidators accepted $4,500 in the interests of securing a quick sale. The appellant accepted in the course of oral argument on appeal that if the company was restored to the register it would be insolvent. He did not explain how the company was to finance the litigation.

[68] The appellant appears to have succumbed to the phenomenon which inflicts many self-represented litigants of becoming so fixated on real or perceived wrongs that he has lost any semblance of objectivity and the power of discrimination. It does not appear to have occurred to him that by heaping allegation on allegation he has put it beyond his ability to plead, let alone conduct and finance his case. Nor does it appear to have occurred to him that the myriad of allegations has a tendency to destroy whatever credibility may have attached to a case involving fewer allegations more obviously supported by clearly identified material facts.

[69] It may be that self-represented litigants should be afforded a degree of indulgence and given appropriate assistance.[22] But if a self-represented person wishes to litigate, he or she is as much bound by the rules of Court as any other litigant. Those rules exist to facilitate efficient, fair and cost-effective litigation. The Court's duty is to act impartially and ensure procedural fairness to all parties, not merely one party who may be disadvantaged through lack of legal representation. The other party to the litigation is entitled to protection from oppressive and vexatious conduct regardless of whether that conduct arises out of ignorance, mistake or malice.

[70] The primary judge dismissed the appellant's application and gave judgment to the respondents pursuant to rule 293 of the Uniform Civil Procedure Rules. Had he not taken that course, it would have been appropriate for the claim and statement of claim to be struck out as an abuse of process.

[71] A losing party's lack of legal representation has been held to be relevant to whether the costs awarded against that party should be on the indemnity basis.[23] But in this case, the obvious lack of merit in the appellant's arguments and the oppressive nature of his conduct[24] justifies an indemnity costs order.

[72] FRASER JA: I agree that the appeal should be dismissed, with costs on the indemnity basis, for the reasons given by Keane JA. I also agree with Muir JA's additional observations.

[1] du Boulay v Worrell & Ors [2008] QSC 174 at [2], [49] - [50].

[2] Commonwealth v Mewett (1997) 191 CLR 471.

[3] Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387; Commonwealth v Verwayen (1990) 170 CLR 394.

[4] Chan v Zacharia [1984] HCA 36; (1984) 154 CLR 178; Breen v Williams (1996) 186 CLR 71 at 112 - 113.

[5] Thomas Franklin & Sons Ltd v Cameron [1935] NSWStRp 72; (1936) 36 SR (NSW) 286 at 296 per Davidson J.

[6] Australian Securities Commission v AS Nominees Ltd [1995] FCA 1663; (1995) 62 FCR 504.

[7] Re Dover Pty Ltd and the Companies Act 1961 (1981) 6 ACLR 307 at 310 per Waddell J.

[8] Webb v Stenton (1883) 11 QBD 518 at 530 per Fry LJ.

[9] Corporations Act 2001 (Cth), s 556(1)(de), (2).

[10] Commercial Bank of Australia Ltd v Amadio [1983] HCA 14; (1983) 151 CLR 447.

[11] Corporations Act 2001 (Cth), s 473(3), s 499(3).

[12] Corporations Act 2001 (Cth), s 504(1).

[13] [1990] HCA 17; (1990) 169 CLR 594.

[14] Corporations Act 2001 (Cth), s 493.

[15] Vadasz v Pioneer Concrete (SA) Pty Ltd (1995) 184 CLR 102 at 109 per Deane, Dawson, Toohey, Gaudron and McHugh JJ.

[16] Alati v Kruger [1955] HCA 64; (1955) 94 CLR 216.

[17] Cf Krakowski v Eurolynx Properties Ltd (1995) 183 CLR 563 at 577 per Brennan, Deane, Dawson, Gaudron and McHugh JJ.

[18] See [2008] QSC 174 at [26] - [29], [37] - [42].

[19] (1878) 3 App Cas 1218 at 1279.

[20] Cf Mitchell v Homfray (1882) 8 QBD 587.

[21] [1879] VicLawRp 267; (1879) 5 VLR (M) 36.

[22] As to which see e.g. Bhagat v Global Custodians Ltd [2002] FCA 223 and Rajski v Scitec Corporation Pty Ltd (unreported, Supreme Court of New South Wales, Court of Appeal, 16 June 1986).

[23] Bhagat v Global Custodians Ltd [2002] FCA 223.

[24] For example, the four volume record was accompanied by another four volumes containing copies of: statutory provisions, cases, "Queensland Public Prosecutors' Guidelines for instituting Criminal Proceedings", an article on "Solvency Law and Fraud" and the Criminal Practice Rules 1999 (Qld).