Young v ICM Agriculture Pty Ltd

REASONS FOR JUDGMENT 1 In each of these proceedings I made the following orders on 4 November 2009: 1. The proceeding be dismissed. 2. (a) Subject to the provisions of the Bankruptcy Act 1966 (Cth) dealing with the application of a bankrupt's property and payment of a bankrupt's creditors, the first applicant pay the respondent's costs of the proceeding, including reserved costs; (b) The second applicant pay the respondent's costs of the proceeding, including reserved costs. 3. Orders 1 and 2 not be entered before 26 November 2009. 4. Any person interested have liberty to apply in this proceeding for an order setting aside orders 1 and 2 by a notice of motion returnable on 25 November 2009 at 9.15 am. 2 The background to the making of those orders can be briefly summarised as follows. 3 The first applicant (Mr Young) was the sole shareholder and the sole director of the second applicant (AAC). On 6October 2009 in proceeding number NSD 530 of 2009 between ICM Agriculture Pty Limited (with Thomson Playford Cutlers as Supporting Creditor) and Daryl William Young, I made an order that the estate of Mr Young be sequestrated: see ICM Agriculture Pty Limited v Young [2009] FCA 1169 (bankruptcy proceeding). The trustees of Mr Young's estate are Jason Lloyd Porter and Ian Charles Francis. Neither they nor AAC appeared on 4 November 2009. Nor have they appeared again today. 4 On 4 November 2009 Mr JT Svehla of counsel, who had appeared for Mr Young in the bankruptcy proceeding, sought leave to appear for Susan Bestow Young, Casey Kevin Alan Young and Cog Lake Pty Limited who claimed to have an interest in the pursuit of these two proceedings in circumstances to be mentioned below. I will refer to Susan Bestow Young by that name although she has at other times during the proceedings been referred to in other, slightly differing forms. I will refer to Casey Kevin Alan (sometimes written as 'Allan') Young simply as Casey Young. 5 By a document numbered 5E2128323, Mr Young had notified the Australian Securities and Investments Commission (ASIC) that he had become the holder of all six issued shares in AAC. According to ASIC's records, this notification was received and processed on 16 June 2009 and effective on 12 June 2009. Apparently, Mr Young notified ASIC that he was the beneficial owner of the shares. He was, at least, recorded as being the beneficial owner of them. 6 Following the making of the sequestration order on 6 October 2009, Mr Young notified ASIC by a document apparently signed on 8 October 2009 and numbered by ASIC 5E2216142 that there had been an error in document 5E2128323 lodged on 16 June 2009 in that the six shares were not held by Mr Young beneficially after all. 7 Apparently what is now to be said is that Mr Young held the six shares as trustee of the Young Family Bloodline Trust (the Trust). 8 What is now said and was, I think, said by Mr Svehla on 4 November, is that on the making of the sequestration order legal title to the six shares vested in the trustees in bankruptcy, Mr Porter and Mr Francis, but as trustees on the terms of the Trust. 9 It is claimed that on 29 October 2009 Cog Lake Pty Ltd was appointed as trustee of the Trust. 10 The reason why I made the orders in the terms that I did on 4 November 2009 was to allow time for those concerned to investigate the question of whether Susan Bestow Young and Casey Kevin Young had become directors of AAC. 11 Late yesterday Michael McHugh of The Law Company at Tamworth provided to the Court two notices of motion, one in each proceeding, and an affidavit in support of one of those motions. In substance he sought an adjournment and an extension of time within which to investigate the position. As well, he sought an order that order number 3 in each proceeding made on 4 November 2009 be extended to a date later than 26 November 2009. 12 In my opinion there has been ample time for the position to be investigated. As long ago as 13 October 2009 Mr Svehla wrote to the solicitors for the respondent, ICM Agriculture Pty Ltd (ICM), to the effect that he had requested the new directors to obtain independent advice to the effect that they had been properly appointed before he, Mr Svehla, would appear for AAC. Mr McHugh's affidavit states that he received instructions to act for Susan Bestow Young and Casey Young on 16 November 2009 and since that time had been busy obtaining information and documents from them. 13 Mr McHugh states that Susan Bestow Young has informed him that she has been busy complying with requirements of the trustees in bankruptcy. According to Mr McHugh's affidavit, Susan Bestow Young and Casey Young reside at Wee Waa, approximately 250 kilometres from Tamworth, and she is a working mother and has young children at home. Casey Young is a farming contractor, and November and December are the peak harvesting period requiring him to work long hours including late into the night and early in the mornings seven days a week. Mr McHugh states that he has not had an opportunity to meet personally with Susan Bestow Young and Casey Young to discuss the matter, and has had to rely on the accountants for AAC to provide him with company records. 14 I told Mr McHugh, who appeared by telephone, that notwithstanding this, I did not think that a case had been made out for an extension. The position of ICM must also be considered. 15 I stood the matter down to 11 am. At that time Mr Faulkner of counsel appeared and asked for, in effect, 21 days in which to investigate the matter. 16 There has been ample opportunity for the matter to be investigated since the making of the sequestration order on 6 October 2009, and the giving of the advice by Mr Svehla on or before 13 October 2009, and again since the making of the orders by me on 4 November 2009. A case for a further delay is not established.