Peter A Clarke

Yesterday’s Federal Court decision in Grant Thornton Services (NSW) Pty Limited v St. George Wholesale Distributors Pty Ltd (No 2) throws up both a curious factual situation but the relatively little considered section 459(S) of the Corporations Act 2001. It is also a salient and sombre lesson in how to run an application.

Facts

Grant Thornton Services (NSW) Pty Ltd (“Grant Thornton”) provides accounting services.  It provided those services to the “Paul’s Warehouse” group of companies.  St George Wholesale Distributors Pty Ltd (St George) is part of that group but unlike other companies in that group it had net asssets.  Grant Thornton issued invoices on St George totalling $91,305.50. When the invoices were not paid Grant Thornton issued a statutory demand.  St George neither paid the sum nor applied to set aside the demand.  When St George found itself the subject of winding up application it roused itself to apply for leave to oppose the application on the basis that there was a genuine dispute. Leave is required because, per section 459 (S), St George could have earlier applied to set aside the statutory demand because there was a genuine dispute.

The issues

Section 459(s) (pars [7]  – [10])

To get leave section 459(s) requires that a court is satisfied that the ground is material to proving that a company is solvent.

In my experience there is a growing tendency of legal representatives copying letters to their opposing numbers to the court when there is a judge allocated to a proceeding.  The Internet makes that feasible and an easy operation.  There is also a tendency to correspond with a judge’s associate, copying the other side.  Both practices are fraught.  Courts try to be flexible and the assistance by some associates in facilitating consent orders is a terrific example of marrying technology with being responsive to parties needs.  The cost and time savings in not having to attend to get an adjournment or the worry in whether a fax has got to the court in time to adjourn a date off is significant.

But there is a limit and there is propriety………….and Singh v Secretary, Department of Employment and Workplace Relations is a salutory lesson in overstepping the line.  

The Full Court’s commentary Read the rest of this entry »

The one critisism that should never be levelled at the Australian and that is consistency of purpose.  Through Albrechtson and Merrit it bangs on and on and on about the evil of a bill of rights or its less effective cousin, a Charter of Rights. Every so often it brings the tedium by “reporting” in breathless terms on another fault or twenty by one of the anti chartists.  Today’s Legal Affairs section has such a report, this time from the heart of intellectual analyis, the Police Federation of Australia.  Rights charter opens police to ‘legal risks’  is another run at the same theme.  This time the boys in blue are afeared of new risks…… Oh c’mon!  Police forces in the US have to deal with a Bill of Rights and somehow manage to work their way through that hell.  Same as in England.  And in Victoria and the ACT for that matter.      

The constant sub theme is that this pandora’s box is owned and operated by unelected judges who will become de facto legislators.  And it shows its face in this screed with:

It argued that an enunciation of individual rights could clash with provisions in existing laws, leaving courts, rather than parliaments, with the job of determining whose rights should hold sway. “For example, coercive powers in national security laws requiring alleged suspects to answer police questions may be found to be incompatible with the right to silence or privacy,” the federation said.

The courts consider the balancing exercise every week of the year.  Sometimes the bench makes rulings which enhance rights, sometimes it restricts.  It is called the common law.  Somehow the courts have been able to steer a path through these difficult situations for almost a millenium.  

I am not a supporter of either cause thus far.  I can see the benefits in a Bill of Rights, especially in political system which is relatively inflexible and given to rule by executive fiat.  With less party discipline I would have more faith in Parliament to debate issues going to our rights and responsibilities.  But a Charter or Bill of Rights is what the framers make of it.  It is not evil per se. 

Time for a more sensible and nuanced debate.  And something a bit less predictable from the OZ.       

The Federal Court decision in  Lodge Partners Pty Ltd v Pegum is a salutory lesson that while the threshold for determining whether there is a genuine dispute is low where the facts are essentially agreed and the main dispute  is the construction of a contract a court can and does make that call. In this proceeding that construction was against the applicant and the statutory demand was not set aside. On his way to that conclusion Lingren J provided a very useful analysis.

Issues

The focus here was on what constitutes a genuine dispute.  Lingren dealt with that in a two stage process. At [17] he quickly reviewed the authorities and distilled the principle that no “genuine dispute” exists where  the contentions by the applicant is devoid of substance such that “no further investigation is warranted.”  He said: Read the rest of this entry »

The bane of a litigators life is an unrepresented litigant.  Another burr under the saddle is a corporation represented by an officer.   Unrepresented litigants, with a few notable exceptions, often put arguments that are exciting to make but not relevant.  That is not to say lawyers are free of running ridiculous points.  A few appearances before an overworked judge usually cures an advocate of running silly points.

In Worldwide Enterprises Pty Ltd v Silberman & Anor Forrest  J  heard an appeal by defendants seeking to stay the pleading under Rule 1.7 of hte Supreme  Court Rules until the plaintiff engaged solicitors.  The Defendant also sought security for costs.

Representation Read the rest of this entry »