Muroa Pty Ltd v O'Meara

15 ACLC 1427

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(Judgment by: Young J)

Muroa Pty Ltd
v.O'Meara

Court:

Judge:
Young J

Legislative References:
English Act - 190
Companies Act 1936 - 299

Case References:
Graham v Edge - (1888) 20 QBD 683
Russian & English Bank v Baring Bros & Co - [1935] 1 Ch 120

Hearing date:
Judgment date: 26 August 1997

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Judgment by:
Young J

There are four notices of motion filed in proceedings 2691/97 and 4306/96, and I believe I can deal with them all in the one set of reasons. The first motion in 2691/97 is an application by a company in liquidation and its liquidator for summary judgment. That motion is not proceeded with, and it may be dismissed.

The second is a motion in 4306/96 filed by Mr Kenneth Ian O'Meara on 28 July 1997. Mr O'Meara says that he is a contributory of the company in liquidation. However, after discussion, that motion is not proceeded with and is struck out.

The third motion, also in 4306/96, was filed by Mr O'Meara on 11 August 1997. The gravamen of the complaint is that one of the petitioning creditors, Margaret Rose Lightbody, did not exist but was an alias for an ex- employee of the company, Wendy Burt, and that Wendy Burt or Margaret Rose Lightbody did not live in New South Wales but rather in the Australian Capital Territory. The second point does not seem to have any relevance, particularly when it is remembered that the Australian Capital Territory is not another State.

As to the first point, the matter came about because there was a dispute between the company and at least Mr Lightbody, a very bitter dispute with allegations on both sides. A judgment was obtained by the Lightbodys in the District Court of Newcastle against the company and that was the basis of the statutory demand. Mr O'Meara says that the Newcastle District Court proceedings were very badly handled by the solicitor retained by him. I just do not know anything about that, but the process that ensued first the judgment and then the statutory demand and then the winding up order would seem to me to be such that even if the facts put forward by Mr O'Meara, in his address, were true, that would not be a reason for declaring the winding up proceedings before the Registrar void and of no effect. So, I dismiss that motion of 11 August 1997 in 4306/96.

Finally, there is a motion in 2691/97. That is a strange suit. I have not had to delve deeply into the ramifications of it. The plaintiffs are the company and the liquidator, and they seek in their summons a declaration that the withdrawal of a certain caveat by Lorraine O'Meara was void and of no effect. It would appear that the company had real property. The liquidator put a caveat on the property in his own name and the liquidator complains, which the O'Mearas denied, that the caveat was removed in an unauthorised fashion.

Mr O'Meara says that unless a vesting order is made under s. 474(2) of the Corporations Law, the liquidator is not able to lodge a caveat in his own name. This is absolutely correct. See Re Application by the Liquidator of Haupiri Courts Ltd [1969] NZLR 348.

Counsel for the liquidator says that a declaration to this effect should not be made on motion. I am not sure why, because the argument put by counsel for the liquidator does not show any reason why the New Zealand case does not apply.

However, the orders sought by Mr O'Meara are, so far as are relevant:

(1) An order that the second plaintiff be restrained from bringing or defending any legal proceedings including this matter, under the provisions of s. 474(2) of the Corporations Law;

(9) An order restraining the plaintiffs from placing any further caveat on the property; and

(11) An order that the second plaintiff liquidator be joined in his own right and not in his capacity as a liquidator.

As to (1), although the liquidator cannot maintain a caveat in his own name, s. 477(2)(a) gives him the requisite power to commence proceedings and defend proceedings and some proceedings may be brought in the name of the liquidator and some in the name of the company. So I do not make order (1). So far as order (9) is concerned, there is no current threat to place any caveat on the title of the property. So it is unnecessary to make that order. So far as order (11) is concerned, as I understand the law, when a liquidator is joined in proceedings in his own name he may be described in his official capacity (see for instance, Graham v Edge (1888) 20 QBD 683). Accordingly, I do not make that order.

There has been some discussion as to the real effect of s. 474(2) of the Corporations Law. That section has, in one form or other, been part of the company law in England since, at least, 1929 when it appeared as s. 190 of the English Act and s. 299 of the Companies Act 1936. Prior to then, the corresponding section (s. 203 of the 1862 English Act; cf s. 185 of the NSW Companies Act, 1899) only applied to unregistered companies. Such a provision is easily explicable.

I have not looked at the Law Reform Commission's Report as to why the legislation changed in the English 1929 Act. It is hard to see exactly why the expanded version of the section is needed except, as is suggested in cases such as Russian & English Bank v Baring Bros & Co [1935] 1 Ch 120 at 133-5, where a company has been dissolved or where for some reason or other, as Wallace and Young suggest in their Australian Company Law and Practice (LBC Sydney 1965) p 671, it is necessary for the liquidator to lodge a caveat in his own name.

However, in the present case, to lodge a caveat the liquidator needed to have obtained such an order, which he did not obtain. So he cannot maintain the caveat. No order, however, need be made as the caveat regularly, or irregularly, has already been removed. However, it has been replaced with a new caveat, again in the liquidator's personal name, Caveat No. 3111929. That caveat cannot stand and the liquidator should remove it.

To a degree, that is a technicality because if there is any interest in the company, the company can file a caveat or, indeed, the interlocutory orders made in the proceedings may already cover the situation and could be lodged with the Registrar General as a court order.

Accordingly, it does not seem to me necessary to make any orders, and I think that the battle today was a draw. So each party pays their own costs but the liquidator's costs can come out of the assets.

In 2691/97:

(a)

Notice of motion by the fifth defendant, no order made, on the understanding that the liquidator will remove his invalid caveat.

(b)

Notice of motion by the liquidator of 14 August 1997 dismissed.

(c)

Directions given as per short minutes of order.

(d)

Stand over to the Registrar's list on 13 October 1997 at 9.30 am.

In 4306/96, the notice of motion of 28 July 1997 by Mr Kenneth O'Meara is struck out. The notice of motion of 11 August 1997 is dismissed. No order as to costs in either matter.