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[2020] NSWSC 1873

Yakiti Pty Ltd atf the Yakiti Family Trust v Kassem

Application to transfer proceedings to Corporations List refused

Catchwords

CIVIL PROCEDURE – proceedings commenced in Commercial List – whether proceedings should be transferred to the Corporations List – where issues in proceedings relate to other proceedings in the Commercial List – where Commercial List judge has ordered proceedings be managed together

Cases cited

  • Coastline Constructions (Aust) Pty Ltd v Kakavas[2008] NSWSC 388
  • Giorgi v European Asian Bank Aktiengesellschaft NSWSC (Unrep) 3 March 1986

Legislation cited

  • Corporations Act 2001 (Cth)

Judgment

  1. [1]

    In 2017, Macquarie Cosmetic Institute Pty Ltd (MCI) purchased the business and undertaking of:

  2. [2]

    Liquidators were appointed to the TCI Entities on 10 July 2018.

  3. [3]

    On 11 October 2019 MCI commenced proceedings 2019/318531 (“The MCI Proceedings”) against the plaintiffs in these proceedings, Yakiti Pty Ltd and Manito Holdings Pty Ltd, and also against the sole director of Yakiti, Mr Babak Moini, and the sole director of Manito, Mr Alistair Champion.

  4. [4]

    In the MCI Proceedings, MCI claims from each of the defendants equitable compensation, moneys had or received and/or restitution for unjust enrichment and makes claims for insolvent trading under s 588FA and s 588FE of the Corporations Act 2001 (Cth) (“the Act”) and claims of contraventions by Mr Moini and Mr Champion, as directors, of Yakiti and Monito, of ss 588G and 588GAB of the Act.

  5. [5]

    Yakiti and Manito commenced these proceedings on 25 June 2020 against the TCI Entities (the third to sixth defendants), the liquidators for the TCI Entities (the first and second defendants) (together, “the Liquidator Parties”) and MCI (the second defendant).

  6. [6]

    The proceedings are related in that:

    1. (1)

      in the MCI proceedings, MCI asserts and relies on an assignment of rights by the liquidators of the TCI Entities to MCI; whereas

    2. (2)

      in these proceedings, Yakiti and Manito seek to impugn those assignments and to allege related contraventions of cl 100-5(3) of Schedule 2 and of s 477(2A) of the Act amongst other things.

  7. [7]

    Because of the relationship between the proceedings, on 3 July 2020 Hammerschlag J made an order in the MCI Proceedings that they be managed together.

  8. [8]

    By notice of motion filed on 8 September 2020, the Liquidator Parties seek an order that these proceedings be transferred to the Corporations List.

  9. [9]

    Mr Condon SC, for the Liquidator Parties, submitted this should occur because these proceedings:

  10. [10]

    The Liquidator Parties do not seek an order that the MCI Proceedings also be transferred to the Corporations List. Indeed, in his written submissions, Mr Condon did not refer to the MCI Proceedings.

  11. [11]

    In response to my enquiry concerning the apparent relationship between the proceedings, Mr Condon submitted that resolution of the issues in these proceedings will determine the assignment issue in the MCI Proceedings, that there was no risk of issue estoppel or inconsistent judgments provided these proceedings were heard in advance of the MCI Proceedings and that “no one suggests, or can reasonably suggest” that the proceedings be heard together.

  12. [12]

    I do not see that any of these matters, assuming they are correct, compel the conclusion that these proceedings alone should be transferred to the Corporations List. Indeed, Mr Condon’s submission that these proceedings should be heard before the MCI Proceedings suggests strongly that both proceedings should be case managed in the same list.

  13. [13]

    Further, as Mr Muddle SC and Ms Francois for Yakiti and Manito submitted:

  14. [14]

    Mr Muddle and Ms Francois also drew attention to the observations of McLelland J in Giorgi v European Asian Bank Aktiengesellschaft [1] :

  15. [15]

    I am not persuaded that a sufficient case has been made out for a transfer to the Corporations List.

  16. [16]

    Both proceedings were properly commenced in this List.

  17. [17]

    I do not see that the issues that may arise under the Act could not be dealt with by a judge of this List and, as Mr Muddle and Ms Francois have pointed out, there are other issues in the two proceedings which are of an nature customarily dealt with in this List.

  18. [18]

    The first to sixth defendants’ application is dismissed with costs.

Unofficial copy. Source: NSW Caselaw. Refer to the official version for authoritative text.