Tanamerah Estates Pty Ltd v Tibra Capital Pty Ltd [2016] NSWCA 78 | Case summary

Tanamerah Estates Pty Ltd v Tibra Capital Pty Ltd [2016] NSWCA 78 | Case summary | Zoe

ex tempore Judgment

HIS HONOUR: Mr Tydeman appears with leave for Tanamerah Estates Pty Ltd, the applicant on a notice of motion filed on 5 April 2016 seeking two substantive orders: 1. an order extending the time for compliance with a statutory demand issued by the respondent, Tibra Capital Pty Ltd, dated 22 May 2015 until such time as an application filed in the High Court of Australia by Tanamerah Estates on 24 March 2016 has been disposed of, and 2. an order staying pending proceedings in this Court to wind up Tanamerah Estates.
The history in an abbreviated form of this litigation is as follows. The statutory demand, the subject of order 1, and which founds the pending winding up proceedings, the subject of order 2, was received on 25 May 2015 and is in the amount of $118,545.73. Tanamerah Estates filed an application to set aside the statutory demand in accordance with s 459G of the Corporations Act 2001 (Cth) on 15 June 2015. That was met by a motion filed by Tibra that Tanamerah Estates had no standing to bring those proceedings, it being a company that had not retained a solicitor to appear for it, contrary to UCPR r 7.1.
The matter came before Black J in the Equity Division on 12 October 2015. His Honour indicated that the proceedings brought by Tanamerah Estates would be dismissed in the event that a solicitor had not been retained by 16 November 2015. An application seeking leave to appeal from that decision was filed on 9 November 2015. However, later in November Black J made orders dismissing the proceedings brought by Tanamerah Estates under s 459G but stayed that order until 6pm on 9 December 2015. The pending application for leave to appeal was thereupon amended and expanded to challenge the second set of orders made by Black J.
It is accepted that at 6pm on 9 December 2015 the order dismissing the proceedings made on 18 November 2015 but until then stayed came into effect. The consequence was that the time for compliance with the statutory demand expired at 6pm on 16 December 2015: Corporations Act, s 459F(2)(a)(ii).
The application for leave to appeal from Black J's orders came before two Judges of Appeal on 26 February 2016. By reserved decision delivered on 1 March 2016 Tanamerah's summons was dismissed with costs: Tanamerah Estates Pty Ltd v Tibra Capital Pty Ltd [2016] NSWCA 23.
It is from that decision that Tanamerah Estates seeks special leave to appeal to the High Court of Australia. It has done so by application filed on 24 March 2016. Mr Tydeman has indicated that so far all that has been filed is the application for special leave to appeal and that the further documents, notably the submissions in support of the application for special leave to appeal, are yet to be filed. That said, the application for special leave to appeal occupies seven pages (excluding formal parts) within which paras 3-23, which occupy six pages, identify 21 proposed grounds of appeal.
Tanamerah Estates accepts that a precondition to success on its motion is that exceptional circumstances be established. That is no different from any other interlocutory motion filed in this Court in circumstances where this Court has finally determined the matter. The position was resolved authoritatively and recently by the Court comprising Bathurst CJ, Beazley P and McColl JA in Rinehart v Welker [2012] NSWCA 1; 83 NSWLR 347 at [10]-[11] and [48], where this Court stated that the approach adopted by Brennan J in Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (No 1) (1986) 161 CLR 681 was to be applied. Brennan J had there said at 684 that: "A stay to preserve the subject-matter of litigation pending an application for special leave to appeal is an extraordinary jurisdiction and exceptional circumstances must be shown before its exercise is warranted. If an order for a stay is made, the respondent is kept out of the benefit of the order of the court in which the matter is pending until the hearing of the application for special leave to appeal."
The very large majority of applications for special leave to appeal are refused each year. An even larger majority of applications seeking special leave to appeal are refused when the applicant is unassisted by legal representation. In the present case I have the benefit of the reasons of the Court of Appeal from which Tanamerah Estates seeks special leave to appeal and the 21 grounds identified in the application for special leave to appeal. It is not necessary to summarise each of those 21 grounds. I start with the first, which on its face, goes to the "nub" of the matter. It is in the following terms: "Judgment is wrong because it is materially incorrect, untrue, unjust and dishonest. The nub of what is wrong with judgment relates to the court below having misconstrued the lawful right to representation as is provided for by Acts of Parliament. The judgment failed to recognise only the board of directors, as a tutor, may make legally binding decisions in the name of the company, as a person under legal incapacity. That exercisable power, under the Corporations Act 2001 (Cth) such as s 198A, includes the right to join to the proceedings as a 'plaintiff' (as defined by s 3 in Civil Procedure Act 2005 (NSW) ('CPA')) without the need for the body of directors to make a claim for relief which is separate from the company's claim for relief. The requirement in the Uniform Civil Procedure Rules 2005 (NSW) ('UCPR') is that if the board of [directors] exercises its power, and does not wish to be represented by a solicitor, then the board of directors must assign its powers to a single director for the purpose of conducting legal proceedings on behalf of the board of directors and in the name of the company. The then empowered single director, on behalf of the board of directors, may join as a 'plaintiff' (as defined by the CPA s 3) by signing and filing the originating process in the capacity as a non-party and in the name of the company. However, by doing so that director must then stand legally responsible for the conduct of legal proceedings in the name of the company. Judgment failed to recognise all these types of nuances and the powers of the board of directors thus demonstrating a miscarriage of justice has occurred and that Acts of Parliament have been contravened by the Court below."
Not all of the proposed grounds of appeal in the High Court make allegations of untruth, injustice or dishonesty. Some are more measured. However, I am left with the firm conviction that this is an application for special leave to appeal which enjoys no realistic prospects of success whatsoever.
In opposition to the motion filed by Tanamerah Estates, Tibra pointed to a lack of power in respect of the first order sought to extend time for compliance with the statutory demand. It relied upon what had been held in Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corporation Ltd [2008] HCA 9; 232 CLR 314 to the effect that a court has no power to extend the time for compliance with the statutory demand after that time had expired. Against this, Mr Tydeman submitted that Aussie Vic Plant Hire was distinguishable in the facts of this case.
Having regard to the view that I have formed in relation to the prospects of success of the application for special leave to appeal, it is unnecessary for me either to summarise Mr Tydeman's submissions distinguishing Aussie Vic Plant Hire or to rely upon it in the exercise of my discretion. It is also not necessary for me to address the practical matter that arises out of litigation between these two parties. The practical reality, as I presently see it, is that the application for special leave to appeal is likely to be determined before the finalisation of the application to wind up. That application was only recently commenced, on 11 March 2016, and served on 23 March 2016, and is listed for its first return date before a Registrar later this week on 14 April 2016.
In the event that special leave is granted by the High Court of Australia, then nothing in the judgment I am giving today would stand in the way of Tanamerah Estates making a further application, on the basis of materially changed circumstances, for the relief that it seeks. However, the fact of the matter is that today it is necessary for Tanamerah Estates to demonstrate exceptional circumstances why, it having sought to appeal by way of special leave, not as of right, Tibra Capital should be denied the benefit of the judgment to which it is entitled, having succeeded at first instance and on appeal. Tanamerah Estates has failed to establish those exceptional circumstances. It follows that a precondition to the exercise of power sought by both paragraphs of the notice of motion is not made out and the notice of motion therefore must be dismissed. [Discussion concerning costs.]
Mr Tydeman opposes an order for costs. There is no basis, Tanamerah Estates having failed to establish exceptional circumstances, for costs to be ordered other than following the event. The order of the Court is that the notice of motion filed on 5 April 2016 be dismissed with costs.

Tanamerah Estates Pty Ltd v Tibra Capital Pty Ltd

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