Vynotas P/L v Mystic Crystals Franchises

[2] The winding up application was based upon a statutory demand which was the subject of an application to set aside which was heard and determined by Muir J in Townsville on 11 March 1999. His Honour refused to set aside the statutory demand.

[3] At the hearing of this application Mr Sydney Ronald Dart, a director of the applicant purported to appear on its behalf seemingly unaware of the provisions of s 471A(1) of the Corporations Law which requires that a person obtain the approval of the court to perform or exercise a function or power as an officer of a company the subject of a winding up order, see Rock Bottom Fashion Market Pty Ltd v HR & CE Griffiths Pty Ltd (1997) 25 ACSR 467; [1997] QCA 399.

[4] Mr Dart, once that provision was brought to his attention, sought the approval of the court to appear on the behalf of the applicant. During argument it became clear that the gravamen of the applicant?s complaint was that Muir J had failed to take into account an argument by the applicant that the company which issued the statutory demand (the applicant?s landlord) did so in circumstances where there was no debt owed by the applicant to its landlord on the basis that there had been a variation of the lease between them and that the applicant had henceforth paid its rent in accordance with that varied contract. The decision of Muir J was the subject of an appeal to this court and is currently the subject of an application for special leave to appeal to the High Court of Australia.

[5] At the hearing of this application reference was made to Muir J?s judgment in which there is no discussion of the argument sought to be raised on this occasion. For the sake of completeness the applicant was granted an adjournment for seven days to enable it to put before this court material to show that this argument was ventilated before Muir J on 11 March 1999. In consequence of that the applicant filed an affidavit of Sydney Ronald Dart sworn on 5 September 1999 which respectfully does not deal with the issue. Further the written submissions placed before Muir J likewise do not address any such argument.

[6] In reality, therefore, the applicant seeks to ventilate before this court an argument which could have been and was not ventilated before Muir J. The fact that it was not raised before that Judge is a material consideration in deciding whether to grant approval pursuant to s 471A(1)(d) of the Corporations Law. In our view no reason has been advanced to permit the granting of such approval in this case. We dismiss the application with costs.