Re Na Noulikas Holdings Pty Limited (In Liquidation) Acn C01 094 53p and Alex Stergiou [1992] ACTSC 3 (24 January 1992)

SUPREME COURT OF THE ACT

IN THE MATTER of N.A. NOULIKAS HOLDINGS PTY LIMITED (in liquidation) ACN C01
094 53P and ALEX STERGIOU
S.C. No. 459 of 1991
Practice and Procedure

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Higgins J.(1)

CATCHWORDS

Practice and Procedure - Application for leave pursuant to Corporations law - Claim against Company for injury suffered before winding up - Writ issued after such commencement - Amendment after expiry of limitation period.

Limitation Act 1985, s.36

Corporations Law, s.471(2)

Re A.J. Benjamin Ltd (in liquidation) and the Companies Act (1969) 90 WN (Pt 1) (NSW) 107

HEARING

CANBERRA
24:1:1992

Counsel for the Applicant: Mr R. Lucas

Instructing solicitors: Messrs Colquhoun Murphy

Counsel for the First Defendant: Mr G. Lunney

Instructing solicitors: Messrs Freehill Hollingdale and Page

Counsel for the Third Defendant: Mr G. Stretton

Instructing solicitors: Messrs Julian Oakley and Co

ORDER

The applicant be granted leave pursuant to s.471(2) of the Corporations Law 1991 (Cth) to proceed with action no. SC 403 of 1990 against N.A. Noulikas Holdings Pty Limited (in liquidation).

These proceedings be consolidated with actions nos. SC 791 of 1984 and SC 403 of 1990.

The applicant be granted leave pursuant to s.471(2) of the Corporations Law 1991 (Cth) to proceed with action No. 403 of 1990 against John L. Price Pty Limited (in liquidation).

Pursuant to s.36 of the Limitation Act 1985 the time within which proceedings may be brought against N.A. Noulikas Holdings Pty Limited (in liquidation) and against John L. Price Pty Limited (in liquidation) be extended until 10 July 1990.

The applicant serve a consolidated action Statement of Claim on each defendant within seven days.

Each defendant to the consolidated action seek any further and better particulars of the applicant's claim within a further 21 days or file and serve its defence within that time.

The plaintiff provide the further and better particulars within 21 days of each request.

Each defendant to the consolidated action file and serve its defence within 21 days of having been served with particulars.

Each party be at liberty on three days' notice to apply in respect of the directions the subject of this Order.

The first defendant's costs limited to costs on a consenting basis will be the first defendant's costs in the cause.

The third defendant's costs will be the third defendant's costs in the cause.

The costs otherwise will be costs in the cause.

DECISION

This is an application for leave to proceed against a company in liquidation. The liquidation is close to completion. It is also an application for an extension of time pursuant to the Limitation Act 1975.

2. The facts alleged by the applicant (Mr Alex Stergiou) are as follows. In 1968 he was employed by N.A. Noulikas Holdings Pty Limited. During 1978, that company ("Noulikas Holdings") was employed as a sub-contractor to Leighton Contractors Pty Limited ("Leighton"), the third defendant.

3. On 5 October 1978, some time between 7.30 and 8.00am, a tip-truck arrived at the site. It was believed to be a truck belonging to John L. Price Pty Ltd ("Price"), the second defendant. Rocks were unloaded. They were tipped in such a way that a number of them fell on the applicant, partially burying him.

4. Shortly after the accident, the applicant made out a compensation claim form. That was apparently lost but about a month later a further claim was completed and delivered to Mercantile Mutual Insurance Co Ltd, Noulikas Holdings' insurer.

5. As a result of his injuries, the applicant has been unable to work except for two-three weeks shortly following the delivery of the claim form to the insurer.

6. It would be clear enough even from a brief description of the accident, that a prima facie case of negligence could realistically be inferred. Whether or not the insurer considered that such liability was likely, the true capacity of the applicant for work was a continuing issue.

7. It was not, of course, a continuing issue for Price or Leighton.

8. In early April 1979, the applicant consulted Messrs Crossin and Co, solicitors. He was advised to claim both workmen's compensation and damages. The former claim was conceded by the insurer without the need for contested proceedings. No proceedings for damages for negligence were, however, then commenced.

9. In February 1980 the applicant changed to Messrs Barrads, solicitors. There was considerable correspondence in relation to the workmen's compensation claim and a lump sum settlement. It is not clear to me that Messrs Barrads ever focussed on the difference between a claim for damages at common law and a claim for workmen's compensation. The question of "lump sum compensation" was pursued in correspondence with the insurer. However, whether damages for negligence or a compensation payout was being sought was, at best, ambiguously expressed.

10. In September 1981, the applicant instructed Messrs Livingston Cleary and Co. During October 1982, he attended on Mr Tantala, then a solicitor with that firm. It was not until September 1984 that proceedings were commenced. Those proceedings were within time, but only just.

11. The first defendant was incorrectly named as "N.A. Noulikas Constructions Pty Ltd". On 13 September 1984 Mr Tantala noted on his file that he had been contacted by an officer of "N.A. Noulikas Concrete Reinforcement Pty Ltd" who advised that Noulikas Holdings was the correct defendant as at the date of the applicant's accident.

12. In May 1985 Mr Tantala, apparently, spoke to the Registrar concerning an application to alter the names of the defendants. The names of the second and third defendants were also wrong. The third defendant has, however, appeared. It did not object to the correction of its name.

13. In December 1985, Messrs Meyer Boettcher and Clapham, solicitors, took over the matter. They attempted to sort the matter out but the applicant was not satisfied with their efforts. In March 1987 he instructed Messrs Macphillamy Cummins and Gibson to take over the matter. However, the relevant litigation solicitor was away and could not promptly attend to the matter. In July 1989, he complained to his local member and left the file with her for some time. The matter was then referred to the applicant's present solicitors.

14. During the course of this odyssey around the legal profession, the writ became stale as against the first and second defendants. Those defendants have also gone into liquidation.

15. On 15 January 1991 proceedings were commenced in the Supreme Court of Victoria for leave to continue proceedings against the first defendant pursuant to s.471(2) of the Corporations Law. That matter has been transferred to this Court pursuant to cross-vesting legislation.

16. It should be noted that the second defendant has declined to appear. The third defendant, having had its name corrected, seeks contribution from the first and second defendants and has no objection to the applicant's present motions being granted.

17. The first defendant, however, claims to be prejudiced if the orders sought against it are granted. It says that its insurance cover is not unlimited. The liquidation is nearly complete. The delay was quite considerable - between 1984-89. However, I do not consider that the delay since the various parties were notified of the applicant's intention to proceed during 1990 has added to any such prejudice.

18. It may well be the case, as was submitted, that the delay has been caused or contributed to by the negligence of some of the applicant's previous solicitors. The evidence does not clearly establish that to be so. If there is such negligence, it does not mean that prejudicial consequences to the defendants will be ignored. That a third party may or may not be an alternative source of liability may be relevant but it will rarely be significant. It is also relevant that the insurer of the employer for the purpose of these proceedings is the same insurer which has been dealing with the applicant's claim since 1985.

19. There is real prejudice to the liquidator and the creditors of the first defendant unless the claim is limited to the insurance cover. That prejudice, is however, readily able to be removed (see A.J. Benjamin (1969) 90 WN (NSW) 107).

20. I propose to grant the orders sought by the applicant in his amended Notice of Motion. There has been delay. It has not all been his fault. There has been continuing contact with the first defendant's insurer. There is a substantial claim which appears to have merit. It would be unjust to shut the applicant out unless there is substantial injustice to the respondent. It may be that the lack of full insurance cover will prejudice the applicant. If so, that is one of the consequences of the delay which the applicant or his advisers have permitted to occur. It would be unjust to visit the consequences of that lack of full insurance cover on creditors of Noulikas Holdings after such delay. However, the applicant should, at least, have the benefit of that insurance cover, which is not insubstantial even if it does not cover his full entitlement against Noulikas Holdings.

21. As to costs, these proceedings were protracted by the lack of full information from the applicant. However, they were also protracted by the first defendant not proposing the limitation in the A.J. Benjamin case which would adequately have protected its interests.

22. It seems to me that the costs of the application should be awarded as follows:-
1. The first defendant's costs limited to costs

on a consenting basis will be the first defendant's costs in
the cause.
2. The third defendant's costs will be the third
defendant's costs in the cause.
3. The costs otherwise will be costs in the cause.

23. I make the following orders:-

1. the applicant be granted leave pursuant to
s.471(2) of the Corporations Law 1991 (Cth) to proceed with
action no. SC 403 of 1990 against N.A. Noulikas Holdings Pty
Limited (in liquidation).
2. These proceedings be consolidated with actions
nos. SC 791 of 1984 and SC 403 of 1990.
3. The applicant be granted leave pursuant to
s.471(2) of the Corporations Law 1991 (Cth) to proceed with
action No. 403 of 1990 against John L. Price Pty Limited (in
liquidation).
4. Pursuant to s.36 of the Limitation Act 1985
the time within which proceedings may be brought against
N.A. Noulikas Holdings Pty Limited (in liquidation) and
against John L. Price Pty Limited (in liquidation) be extended
until 10 July 1990.
5. The applicant serve a consolidated action
Statement of Claim on each defendant within seven days.
6. Each defendant to the consolidated action seek
any further and better particulars of the applicant's claim
within a further 21 days or file and serve its defence within
that time.
7. The plaintiff provide the further and better
particulars within 21 days of each request.
8. Each defendant to the consolidated action file
and serve its defence within 21 days of having been served
with particulars.
9. Each party be at liberty on three days' notice
to apply in respect of the directions the subject of this order.
10. The costs of this application be costs in the
consolidated proceedings and dealt with as previously indicated.