- Hans Pet Constructions Pty Ltd v Cassar

Judgment - EX TEMPORE 1By originating process dated 25 September 2012, the plaintiff in proceedings number 299377/2012, MCD Holdings Pty Limited ("MCDH"), seeks orders setting aside a creditors statutory demand dated 5 September 2012 issued by Moylan Investment Group Pty Limited (in liq) ("MIG") under s 459H or alternatively s 459J of the Corporations Act 2001 (Cth). MCDH was previously represented by legal representatives in these proceedings. The matter was listed before a Registrar on 23 October and 12 November 2012 and, on 26 November 2012, the Court made directions in accordance with agreed short minutes of order which provided for the matter to be listed for hearing today. A notice of removal of solicitor has been filed by MCDH on 15 March 2013 in these proceedings. There was no appearance for MCDH today, after the matter was called twice at 10am and again at 10.45am. 2By originating process also dated 25 September 2012, the plaintiff in proceedings 299391/2012, Moylan Business Solutions Pty Limited ("MBS"), also seeks orders setting aside a creditors statutory demand dated 25 September 2012 also issued by MIG. MBS was also represented by legal representatives in these proceedings; they were also listed for hearing today; although no notice of removal of solicitor has yet reached the Court file in these proceedings, there was also no appearance by MBS in these proceedings, after they were also twice called at 10am and 10.45am. 3In order to succeed in setting aside the creditors statutory demands under section 459H or alternatively section 459J of the Corporations Act, it would be necessary for MCDH and MBS respectively to satisfy the Court that there was either a genuine dispute as to the existence or amount of the relevant debt, or an offsetting claim reducing the debt to beneath the statutory minimum, for the purposes of section 459H of the Corporations Act, or some other reason to set aside the demand under section 459J of the Corporations Act. MCDH and MBS had each filed two affidavits of Mr Moylan which sought to establish a basis for the claims to set aside the statutory demands, which have not been read in their absence; MIG has filed substantial evidence, including expert evidence, in response, and that evidence has also not been read where MCDH and MBS have not appeared and there is no case as to which MIG has any need to respond. 4In each proceeding, MIG now seeks an order under rule 29.7(4) of the Uniform Civil Procedure Rules 2005 (NSW), which applies where a trial is called on for hearing and a party is absent and, specifically, permits the Court to dismiss the proceedings if the defendant appears but the plaintiff does not. Such an order was made, for example, in Vogt v Vaughan [2006] NSWSC 1003, in circumstances where Campbell J noted that it was inevitable that a plaintiff's case would be dismissed with costs, in the absence of evidence to support it. A similar position arises in respect of claims to set aside a creditor's statutory demand under section 459H or section 459J of the Corporations Act; such a demand will plainly not be set aside, unless the plaintiff leads evidence to establish either that there is a genuine dispute, that there is an offsetting claim or that there is some other reason to set aside the demand, so as to persuade the Court to make orders under the relevant sections. 5I am conscious, of course, the Court could here take two approaches. The first is further to adjourn the proceedings so as to allow the plaintiffs another opportunity to appear. The second is to dismiss the proceedings under rule 29.7(4) of the Uniform Civil Procedure Rules. In determining whether further to adjourn the proceedings, I should be conscious that, on the one hand, the purpose of rule 29.7 is, as Hallen AsJ (as his Honour then was) noted in NSW Trustee and Guardian as Executor of the Will of Michael Robert Walsh (Deceased) v Gregory [2012] NSWSC 681 at [18], to secure the efficient dispatch of the Court's business but, as his Honour also noted, there is also a fundamental principle that a party affected by a Court order has the right to be heard. The plaintiffs have in fact had the right to be heard on this occasion, although they have not chosen to take advantage of it, and have not communicated any explanation for their non-appearance to the Court or, it appears, to the defendants. It also seems to me that there would be no utility in a further adjournment of the proceedings, in the absence of such an explanation, where there is no reason to think that the plaintiffs would be more likely to appear on the next occasion than on this occasion. 6In determining whether to adjourn the proceedings or exercise the power to dismiss them under rule 29.7 of the Uniform Civil Procedure Rules, I should also have regard to the obligations imposed by sections 56-60 of the Civil Procedure Act. Section 56 of the Civil Procedure Act emphasises that the overriding purpose of the Civil Procedure Act and the rules of Court, in their application to civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in dispute in proceedings. The Court is required to give effect to the overriding purpose when it exercises any power given to it by the Act or by the rules of Court. Section 57 in turn requires the Court to have regard to specified matters, including the just determination of the proceedings, the efficient disposal of the Court's business, the efficient use of available judicial administrative resources, and the timely disposal of the proceedings and all other proceedings in the Court, at a cost affordable by the respective parties. Section 58 requires the Court, in deciding whether to make any order or direction for the management of the proceedings, to act in accordance with the dictates of justice, and the Court must have regard to the provisions of sections 56 and 57, and may have regard to specified matters, in exercising its powers in that regard. In Hans Pet Constructions Pty Ltd v Cassar [2009] NSWCA 230 at [37], Allsop P observed that these provisions bring about "a new statutory balance amongst factors in litigation including Court and party efficiency and the delivery of individual justice". His Honour emphasised that delay and case backlog were not merely matters which effected the public cost in delivery of justice, but also corroded the Court's ability to provide individual justice, and that the reforms introduced by the Civil Procedure Act should be understood as vital for the provision of timely individual justice, notwithstanding that they may on occasion have sharp or detrimental effects on the claims of individual parties. His Honour nonetheless emphasised that the terms and importance of sections 57 and 58 should be borne in mind when exercising these powers. 7In the present case, I have formed the clear view that it is appropriate to make orders dismissing the proceedings in default of the plaintiffs' appearance under rule 29.7 of the Civil Procedure Rules. First, as I have noted, there is no explanation for the non-appearance and no reason to think that an adjournment would secure the plaintiffs' appearance on the next occasion. Second, the non-appearance on this occasion has put the defendants to significant wasted costs and has deprived other members of the community of the opportunity to have their matters heard today, so that the costs which are wasted impact not only upon the defendant in financial terms, but also upon the community and access of members of the community to justice. Third, there is a public interest, reflected in Part 5.4 of the Corporations Act, in the prompt determination of winding up applications. Delay in the determination of winding up proceedings is a matter that is adverse to the community's interest in dealing with circumstances of potential or actual insolvency. 8For all these reasons, I make the following orders in each of proceedings 299377 of 2012 and 299391 of 2012: