Hosking v Extend N Build Pty Ltd

Judgment

1. THE COURT: On 13 July 2018, the Court (Bathurst CJ, Beazley P and Gleeson JA) made the following orders in relation to an appeal brought by the first and second appellants as liquidators of the third appellant, Evolvebuilt Contracting Pty Ltd (Evolvebuilt) against, relevantly, the sixth respondent, Kennico Interiors Pty Ltd (Kennico) (the 2018 appeal judgment): (2) In relation to the sixth respondent: (a) Allow the appeal. (b) Set aside the orders made by the primary judge dismissing the appellants' claim against the sixth respondent. (c) Direct the appellants and the sixth respondent to bring in short minutes of order to give effect to this judgment within 7 days. (d) Order the sixth respondent to pay the appellants' costs of the appeal against it and have a certificate under the Suitors Fund Act 1951 (NSW) if eligible.
2. Those orders reflected the appellants' success on appeal in establishing the liquidators' claim that Kennico was liable pursuant to ss 588FA, 588FC and 588FF of the Corporations Act 2001 (Cth) (Corporations Act) to pay to Evolvebuilt certain unfair preference payments received by Kennico at a time when Evolvebuilt was insolvent.
3. Having regard to what seems to have been an oversight, the parties failed to provide short minutes of order to the Court to give effect to the judgment as directed by order 2(c).
4. On 12 March 2020, the solicitors for the appellants requested the Court to make orders including, that there be judgment for the appellants against Kennico in the amount of $91,978. This was the amount which the appellants had claimed in their statement of claim filed 12 September 2016 (par 102) and again in their notice of appeal (order 3(e)). The appellants did not press a claim for pre-judgment interest on this amount.
5. On 19 March 2020, the Registrar of the Court made directions, relevantly, that Kennico serve on the appellants the orders that it submits the Court should make by 2 April 2020, and for the filing and service of submissions by each party by 16 April 2020 in support of the orders sought by that party. There is evidence that the appellants informed Kennico of these directions, in accordance with the Court's direction. Kennico has not submitted any alternative orders or made submissions in support of any alternative orders.
6. In the circumstances, and subject to the matter next addressed concerning the constitution of the Court, it is appropriate to make the orders sought by the appellants with two modifications.
7. First, it is not necessary to make further orders to the same effect as order 2(a), (b) and (d) made on 13 July 2018.
8. Second, given the terms of s 588FF(1)(a), the judgment should be given in favour of Evolvebuilt, the third appellant, rather than all of the appellants which includes the liquidators. That is not to deny that s 588FF is enlivened only upon the application by the liquidator of the company in question: Gordon v Tolcher (2006) 231 CLR 334 at [34]; [2006] HCA 62. Nor should it be taken to cast doubt on the decision of Santow J in SJP Formwork (Aust) Pty Ltd (in liq) v Deputy Commissioner of Taxation [2000] NSWSC 604; (2000) 34 ACSR 604 (SJP Formwork) at [20]-[21], that an order for recovery of an unfair preference in favour of both the liquidator and the company in liquidation answers the description of an order "under s 588FF". It is unnecessary to express any view on that question for present purposes.
9. Importantly, in SJP Formwork, Santow J acknowledged that the conventional order in relation to a recovered preference contemplated payment to the company. His Honour said that the drafting of the orders in that case referring in the plural to the plaintiffs, being both the liquidator and the company, should be understood as being simply recognition, albeit not drafted with pellucid clarity, that the payment in question was recovered for the company though necessarily paid to the liquidator on behalf of the company: at [20].
10. Examples of the conventional order under s 588FF(1)(a) for repayment of an unfair preference to the company in liquidation, include Woodgate v Fawcett [2008] NSWSC 868; (2008) 67 ACSR 611 at [110]-[111] (Hammerschlag J); and Re BBY Limited (receivers & managers apt) (in liq) [2019] NSWSC 1271 at [34] (Rees J).
11. Consistently with the conventional order for payment to the company, there will be an order pursuant to s 588FF(1)(a) that the sixth respondent pay to the third appellant the amount of $91,978.
12. Turning to the constitution of the Court, the issue which arises is that one of the judges who gave judgment in the 2018 appeal, Beazley P, is no longer a member of the Court. Section 45AA(1) of the Supreme Court Act 1970 (NSW) provides: 45AA Continuation of appeal if one or more Judges unable to continue (1) If an appeal is commenced before 3 or more Judges of Appeal and, before the appeal is determined, one or more of the Judges dies, resigns from office or otherwise becomes unable to continue as a member of the Court of Appeal for the purposes of the appeal, the hearing and determination of the appeal may be completed by the remaining Judges of Appeal so long as at least 2 Judges remain and the parties consent.
13. Although the appellants indicated their consent to the two remaining judges dealing with the matter, no similar consent has been forthcoming from Kennico. In the circumstances, the power under s 45AA(1) is not available. Nonetheless, there is power to reconstitute the Court to include a judge of appeal in substitution for Beazley P: Cotogno v Lamb (1985) 3 NSWLR 221 at 223; Bakarich v Commonwealth Bank of Australia (No 2) [2012] NSWCA 390 at [50], [60].
14. The substantive issues affecting Kennico were decided in the 2018 appeal judgment. Thus, entering judgment for Evolvebuilt against Kennico in the amount sought in the notice of appeal does not involve the present members of the bench doing anything other than authorising a formal step to give effect to the 2018 appeal judgment: Bakarich v Commonwealth Bank of Australia (No 2) at [61]. This Court should complete the appeal by making orders to give effect to the 2018 appeal judgment.
15. The order that the Court makes is: 1. Judgment for the third appellant against the sixth respondent in the amount of $91,978.00.

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