1 In each of these proceedings, the plaintiff made application under
s 459G of the Corporations Act 2001 (Cth) for an order setting aside a statutory demand served on it by the defendant.
2 On 4 June 2008, I ordered, in each case, giving reasons, that the application be dismissed with costs: see Clawson Holdings Pty Ltd v Citigroup Global Markets Australia Pty Ltd [2008] NSWSC 537; PJM Financial Services Pty Ltd v Citigroup Global Markets Australia Pty Ltd; PJKLM Holdings Pty Ltd v Citigroup Global Markets Australia Pty Ltd [2008] NSWSC 547.
3 On 11 June 2008, each plaintiff sought and was granted leave to file in court an interlocutory process (styled notice of motion), together with a supporting affidavit, by which it sought a stay of execution of the order of dismissal. The form of order sought has since been refined. It is now in these terms:
"Order that execution upon the orders made herein on 4 June 2008 be stayed until the determination of the plaintiff's summons for leave to appeal filed in the Court of Appeal on 11 June 2008 and in the event that leave to appeal is granted to the plaintiff until the determination of its appeal."
4 Each supporting affidavit, or more precisely exhibits to it, outline grounds on which the particular plaintiff intends to seek to appeal against the decision that its s 459G application be dismissed.
5 Counsel for the defendant appeared on 11 June 2008 and indicated that his client required time to consider the stay application that had been filed in court by the several plaintiffs. The defendant by its counsel gave to the court, in each proceeding, an undertaking that it would not take steps to initiate winding up proceedings against the particular plaintiff until the stay application had been heard and determined. Upon that undertaking and with the consent of the plaintiff in each case, the stay application was then adjourned for seven days and a direction was made regarding the service of evidence to be adduced by the defendant on that application (in the event, the defendant does not seek to adduce evidence).
6 The three stay applications have come before me again this morning. Each plaintiff has pressed its application. The defendant in each case submits, however, that a stay of execution of the orders of 4 June 2008 would be of no utility and should for that reason be refused.
7 Apart from the very real question of the meaning, if any, of an order staying execution of an order of dismissal, it is the contention of the defendants that utility of any such order is denied by the legislative scheme concerning statutory demands in Division 2 of Part 5.4 of the Corporations Act.
8 I accept the defendant's submissions. I shall explain my reasons.
9 When, on 4 June 2008, the court ordered that each s 459G application be dismissed, that application was, as mentioned in s 459F(2)(a)(ii) "finally determined"; and this was so even though rights of appeal may have then been available. This is made clear by the decisions of the Court of Appeal of Victoria and the Court of Appeal of this court in, respectively, Buckland Products Pty Ltd v Deputy Commissioner of Taxation [2003] VSCA 85 at [8] and [9] and Meehan v Glazier Holdings Pty Ltd [2005] NSWCA 24; (2005) 53 ACSR 229 at [64].
10 Because each s 459G application was "finally determined" on 4 June 2008 and there was no order under s 459F(2)(a)(i) extending the time for compliance with the statutory demand (nor, indeed, any application by any plaintiff for such an order), the period for compliance was that stated in s 459F(2)(a)(ii). That period ended at the expiration of seven days after the making of the order of 4 June 2008.
11 In addition, and as the High Court recently held in Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corporation Ltd [2008] 8 HCA 9; (2008) 82 ALJR 564, it is not open to the court, in a case of an unsuccessful s 459G application such as this, to grant an extension of time by order under s 459F(2)(a)(i) once s 459F(1) has operated to produce a situation of non-compliance by reason of the circumstance that the demand is still in effect but uncomplied with as at the end of the compliance period as fixed by s 459F(2)(a)(ii). In other words, an order extending time under 459F(2)(a)(i) can only be made before the compliance deadline for the time being applicable has passed.
12 The circumstances at issue in the Aussie Vic Plant Hire case were analogous with those of this case. On 20 June 2006, a Master of the Supreme Court of Victoria dismissed the s 459G application and at the same time made an order under s 459F(2)(a)(i) extending the compliance period to 4 July 2006. The unsuccessful applicant company gave notice of appeal to a single judge of the Supreme Court. Before the appeal came on for hearing but after 4 July 2006, the company applied for a further extension of the compliance period. The further extension application and the appeal itself came before Whelan J together. Both were dismissed, his Honour taking the view that because the compliance period had expired without compliance having occurred, so that non-compliance in terms of s 459F(1) was established and complete, no order he made could change that. That is the position that was ultimately endorsed by the High Court.
13 Two principles emerging from the legislative regime were applied. The first is the principle established and recognised in the Buckland Products case and in Meehan v Glazier Holdings Pty Ltd, namely, that, without an extant extension of time for compliance, there is no point in prosecuting an appeal against the dismissal of a s 459G application. The second is the principle that was accepted by the High Court in Aussie Vic Plant Hire that, once s 459F(1) has caused non-compliance to occur, an order of the court extending time cannot undo that and accordingly will not be made.
14 In the circumstances of each of the cases now before me, an appeal to the Court of Appeal will be pointless because non-compliance with the statutory demand became established and complete at the end of 11 June 2008 and cannot now be undone. A stay of execution of each order of dismissal made on 4 June 2008 pending determination of an appeal, if otherwise in some way meaningful or efficacious according to its terms, is therefore equally pointless.
15 The plaintiffs seek to rely on a decision of Master McLaughlin in Geoform Design Pty Ltd v Strauss (1996) 14 ACLC 675. That case is not of assistance because it did not consider the effects of the legislative scheme that are central to the matter before me and were clearly brought out in the later appellate decisions to which I have referred.
16 In each of the three proceedings, therefore, the plaintiff's interlocutory process (styled notice of motion) filed on 11 June 2008 is dismissed.
17 With respect to the matter of costs, it is clear that costs of each application should follow the event. The defendant has pointed out the indemnity provision in the financing agreements. Clause 20 and the definition of "costs" in Part H makes it clear, in each case, that, as a matter of contract, the defendant is entitled to be reimbursed in full for expenses it incurs in or about the facility. The costs of this application are within that provision and I see no reason why the costs order on the present applications should not be framed accordingly.
18 It is therefore ordered in each case that the plaintiff pay the defendant's costs of the interlocutory process or notice of motion, such costs being assessed on the indemnity basis.
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