JUDITH MARI GASE v IAN CEDRIC HARDY

JUDGMENT:

• 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

Application under s106 of the Industrial Relations Act 1996.

1 HIS HONOUR: This is a motion by the applicant in s.106 proceedings for orders for expedition and secondly and more importantly for present purposes, an interlocutory order restraining the respondent until further order from interfering with the auction of plant, equipment and stock, which are assets of the partnership business to which the proceedings relate, on 13 May 2000.

2 The motion has proceeded ex parte today, there having been no appearance made on behalf of the respondent, although the evidence establishes that the solicitor acting for the respondent in other related proceedings in the Supreme Court Equity Division is aware of the proceedings today and indeed informed the respondent last week at least of that fact.

3 The substantive proceedings concern a partnership business in which the applicant provided her home and rural property at Menangle Park for the purpose of an Alpaca stud business conducted by the applicant and the respondent. The property, which prior to the engagement of the parties in the partnership was unencumbered by borrowings, was made available to the National Australia Bank as security for partnership borrowings in the sum of $300,000. It appears that the partnership remains indebted to the Bank in a sum slightly greater than that.

4 It also appears that the Bank has demanded payment of the partnership debt, there having been, it seems, a practical failure of the partnership business.

5 The evidence tendered on the motion suggests that the sale of the plant, equipment and stock is likely to produce a sum in the order of $200,000 which should be available to meet the partnership debt.

6 It also appears from the material that the respondent disputes (a) that the auction should proceed and (b) that the proceeds of the auction should be used for the purpose of meeting the partnership's indebtedness to the Bank. It follows, indeed the evidence suggests, that the respondent would seek that the Bank should recover the debt by utilising the mortgage it holds over the applicant's property. No doubt other complications have arisen or will arise in this context.

7 In any event, the applicant relies upon what she contends is an essential unfairness in the partnership arrangement which had her provide her home as sole security for the Bank financing of the partnership business and had her work for little or no income over a number of years in the conduct of the Alpaca stud which required daily efforts on her part and would for her provide in effect the sole security for the business debt.

8 That unfairness, it is said, is exacerbated by the conduct of the respondent during the operation of the business and subsequently in not assisting to pay the Bank debt, in opposing the sale of plant, equipment and stock and by seemingly accepting that the applicant should bear, at least initially, the substantial burden for the failure of the business.

9 The applicant's position in respect of the property is clear. It is one which she purchased in about 1992 and renovated and it was not until 1995, and then until 1998, that the parties conducted the business and also a personal relationship.

10 It seems to me that the facts which have been established support the proposition that the Commission in Court Session ought make an order to the effect that the respondent be restrained from interfering with the auction if the Court has jurisdiction to do so.

11 Ms Clifford for the applicant has sought to establish by reference to the authorities, the proposition that the Court does have power to grant interlocutory relief and that this is a suitable case. It is now beyond question that there is jurisdiction available for that purpose which has been defined over the last 15 or so years to be confined to ensuring that due process of the Court would not be frustrated or be at naught.

12 That such a question provides difficulty is clear from the cases. The difficulty in the present case seems to me to concern the nature of the relief in the substantive grounds for relief. The orders, which I do not repeat, would to an extent seek to ensure that the allegedly unfair arrangement is made fair by a series of orders altering the relationship.

13 One such order is to the effect that if the partnership business has insufficient cash to pay the partnership business debt, the partners or either one of them are authorised to sell such of the stock, plant and equipment of the partnership business that would pay or part pay the debt. In one sense the interlocutory relief now sought matches fairly precisely the final relief in that particular respect. On the other hand, the proposition that the partnership business debt should be met by assets of the partnership business would seem, despite arrangements which were put in place at the outset, to be reasonably commendable in the context of proceedings under s.106.

14 In the absence of persuasion to some other course, it is clear in the present case the applicant would suffer, perhaps solely at least in the interim, a very substantial personal blow if the failure to sell assets of the partnership business were to visit upon her the loss of her home. That such a consequence would be in theory perhaps capable of remedy by order for payment of money, in substance and in practice it seems to me it could not be so compensated.

15 The case is not without difficulty but I am satisfied in the circumstances of the proceedings today that the applicant has made out a case for interlocutory relief at least on an interim basis and I would propose to order that the respondent be restrained from interfering with the auction of plant, equipment and stock as defined in the summons for relief initiating these proceedings, that auction to be held on the scheduled date, 13 May 2000.

16 I propose to stand over the order for further consideration at 10.15am, Thursday, 23 March at which time the respondent will be afforded an opportunity to deal with the matter further.

17 In relation to the question of service, an application has been made for an order for substituted service pursuant to R.110 which permits the making of such an order where service cannot conveniently be effected by the ordinary processes provided by the Rules. Rule 104, "Service Upon Individuals", provides five different means by which that can be done.

18 Attempts last week by Wise McGrath process service acting on behalf of the applicant failed to achieve personal service upon the applicant and as I read R.104, where no address for service has been provided, as is the present case, the only means by which service may be effected is by posting the documents to the respondent at the usual place of business of that person. That is inappropriate in this case.

19 I direct, pursuant to R.110 that service of the respondent in these proceedings should be effected by service upon Nash O'Neill Tomko, solicitors of 55 Hunter Street, Sydney.

20 Ms Clifford referred helpfully to a decision of Hunt J in Amos Removals & Storage Pty Ltd and ors. v. Small and Others (1981 2 NSWLR 525). In that matter at p.528 his Honour considered the question of service upon a solicitor; whether that would "with reasonable probability, be effective to bring notice of proceedings to those defendants" and his Honour expressed the firm opinion that a solicitor in circumstances in which he detailed would be under an obligation to bring notice of the process to those whom he had a relationship. In the present matter it is clear Mr Nash of Nash O'Neill Tomko is acting for the respondent in other related proceedings and has in a sense complied with the obligation of the kind which Hunt J found in the Amos Removals case by informing the respondent of the proceedings today.

21 I would direct that the solicitors for the applicant advise Nash O'Neill Tomko of the nature of the order made today and the fact the matter is returnable before the Court at 10.15am on Thursday, 23 March 2000.

23 CLIFFORD: Insofar as service upon the solicitor of the notice of motion that has already taken place on 15 March, does your Honour contemplate my instructing solicitor serving a further copy of the notice of motion.

24 HIS HONOUR: No, to the extent your earlier action has complied with the order which I have now effected, I will waive compliance with the Rule. Costs reserved. Order accordingly.

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