Ocean Marine v Erkag [1999] NSWSC 599 (7 June 1999)

Last Updated: 23 June 1999

NEW SOUTH WALES SUPREME COURT

CITATION: Ocean Marine v Erkag [1999] NSWSC 599

CURRENT JURISDICTION: Equity

FILE NUMBER(S): 2587/99

HEARING DATE{S): 7 June 1999

JUDGMENT DATE: 07/06/1999

PARTIES:

Ocean Marine Mutual Insurance Association Limited (In provisional liquidation) (P)

v

Erkag Pty Limited (Liquidator appointed) (D)

JUDGMENT OF: Austin J

LOWER COURT JURISDICTION: Not Applicable

LOWER COURT FILE NUMBER(S): Not Applicable

LOWER COURT JUDICIAL OFFICER: Not Applicable

COUNSEL:

N Hutley SC (P)

M Quinlan (D)

SOLICITORS:

Withnell Hetherington (P)

CATCHWORDS:

Corporation - company - voluntary winding up - stay of civil proceedings - no stay of proceedings in a foreign court.

ACTS CITED:

Corporations Law ss 471B, 500(2)

DECISION:

Declaration made as sought.

JUDGMENT:

THE SUPREME COURT

OF NEW SOUTH WALES

EQUITY DIVISION

AUSTIN J

MONDAY 7 JUNE 1999

2587/99 - OCEAN MARINE MUTUAL INSURANCE ASSOCIATION LIMITED (IN PROVISIONAL LIQUIDATION) V ERKAG PTY LIMITED (LIQUIDATOR APPOINTED)

JUDGMENT (EX TEMPORE)

1 HIS HONOUR: Section 500(2) of the Corporations Law says that `after the passing of a resolution for voluntary winding up, no action or other civil proceeding shall be proceeded with or commenced against the company except by leave of the Court and subject to such terms as the Court imposes.' The plaintiff has sought, amongst other things, a declaration that the provisions of s 500(2) of the Corporations Law have no application to proceedings in the United Kingdom. The summons in the matter was filed on 3 June 1999 and made returnable before Young J on 4 June 1999 who stood it over to the Company List where it comes before me today.

2 Today, the parties consent to the Court making a declaration that the provisions of s 500(2) have no application to proceedings in the United Kingdom. The Court would not necessarily make a declaration on a point of law expressed in those relatively wide terms simply on the basis that the declaration was made by consent. However, in the present case it appears to me clear that the law is to the effect of the declaration which is sought.

3 In United States Surgical Corporation v Ballabil Holdings Pty Limited (1986) 4 ACLC 639, McLelland J held, relying on English authority, that s 371(2) of the Companies (New South Wales) Code had no application to proceedings in Connecticut on the ground that the words `action or other civil proceeding' in that subsection were confined to actions or proceedings in New South Wales and did not extend to actions or proceedings in a foreign court.

4 The successor to s 371(2) is s 471B of the Corporations Law. The wording of the new provision puts the outcome beyond doubt. Relevantly, the new provision states that where a company is being wound up in insolvency or by the Court or a provisional liquidator of a company is acting, the person cannot begin or proceed with `a proceeding in a court against the company'. The word `court' is defined in s 58AA(1) to mean any court when exercising the jurisdiction of this jurisdiction. I had occasion to explore the meaning of that definition in Brian Rochford Ltd v Textile Clothing & Footwear Union of NSW (1998) 30 ACSR 38. For the reasons there given, my opinion is that a proceeding in the United Kingdom is not, for the purposes of s 471B, a proceeding in a court as defined in s 58AA.

5 In the present case the liquidation is a voluntary liquidation and the relevant provision is s 500(2) rather than s 471B. However, it appears to me that the outcome is the same. While the amended wording of s 471B referring to a `court' is not found in s 500(2), the wording of the latter provision is indistinguishable from the wording of s 371(2) of the Companies Code which was dealt with by McLelland J in the USSC case. In my opinion nothing turns on the fact that the wording of s 500(2) has not been amended to bring it into line with s 471B because the same result flows from McLelland J's decision.

6 It is, therefore, appropriate for me to make the declaration sought by consent.

7 On the question of costs, the defendant submits that an order should be made for the plaintiff to pay its costs. However, it seems to me that the matter was one appropriate to be the subject of proceedings in this Court. The defendant says that if more time had been given it could have conducted legal research sufficiently early to consent to the declaration without any necessity for an appearance. However, in a case such as the present one where the consent of the parties is not determinative of the outcome, it appears to me sufficiently helpful to have appearances in person by both sides that such a course would have been of assistance in any event. In those circumstances it seems to me that there should be no order as to costs.

8 The parties have, by consent, handed me a document entitled Short Minutes of Order which I initial date for the purposes of identification. I make the declaration in paragraph 1 of that document. I add a new paragraph 2, noting that there is no order as to costs. I also note that although the short minutes refer to the applicant and respondent, I take it that these orders dispose of the summons as well as the Notice of Motion in the proceedings.

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LAST UPDATED: 22/06/1999