Case: Australian Competition &amp; Consumer Commission v Black on White Pty Ltd [2004] FCA 363 ; (2008) 138 FCR 314
Outcome: cited
are other decisions which might be understood to impose a higher burden on a party seeking to set aside an order pursuant to O 35, r 7(2). In Australian Competition &amp; Consumer Commission v Black on White Pty Ltd [2004] FCA 363 ; (2008) 138 FCR 314 Spender J said at [14]-[15]: [14] In my opinion, the discretion to set aside an order pursuant to 0 35, r 7(2) of the Federal Court Rules is one that ought to be exercised only in exceptional circumstances, and that generally speaking, the jurisdiction is not to be exercised unless it can be shown that, without fault on the applicant's part, he or she had not been heard on the relevant question. [15] In Wentworth v Rogers (No 9) (1987) 8 NSWLR 388 , Kirby P, in delivering the judgment of the court, accepted there may be unusual circumstances apart from fraud where a court would set aside or vary a perfected order, but that such power, if it existed, could only be used in the most exceptional of cases. The Full Court of the Federal Court in Wati v Minister for Immigration and Multicultural Affairs (1997) 78 FCR 543 said at 552 that the jurisdiction was "truly exceptional" and added: Moreover, generally speaking, the jurisdiction is not to be exercised unless it can be shown that, without fault on the applicant's part, he or she has not been heard on the relevant question. Whether the discretion to set aside an order pursuant to O 35, r 7(2) ought to be exercised in exceptional circumstances only or whether it may be exercised in circumstances that cannot be so described is a question that does not need to be decided in the present case. Either way, I would not be disposed to accede to the Defendant's application to set aside the winding up order. In the present case there is no satisfactory explanation given for the Defendant's non-appearance. The Defendant simply says that its directors left the country to live abroad and, while away, neglected to attend to the company's affairs for a period of almost five years. I think this is a factor that tells against the exercise of any discretion in favour of the Defendant. I note also that there was a significant delay between the making of the winding up order and the filing of the application. The delay was in the vicinity of five months. Mr and Mrs Pagent returned to Australia in late 2005 and I infer that their neglect of the Defendant's affairs continued for several years after their return. Even if the Defendant appeared at the hearing of the winding up application, it is doubtful whether it would have been able to demonstrate any arguable basis to resist the making of a winding up order. The Defendant's insolvency was presumed by its non-compliance with the creditor's statutory demand for payment and it would have been necessary for the Defendant to rebut the presumption of insolvency if it wished to resist the making of the order. The Defendant's only significant assets consist of various artworks which were at the time of the winding up hearing in the possession of a third party pursuant to some arrangement which is not dealt with in the evidence in any way. The evidence does not address whether a sale of artwork constituted a practical means of obtaining cash with which to pay the Plaintiff in a timely manner. In addition, there is no evidence before me that there was, at that time, any obligation, capacity or willingness on the part of Mr and Mrs Pagent or any other person to make additional contributions to the Fund or to provide financial accommodation or assistance of some other kind which might enable the Defendant to pay the Plaintiff. The evidence includes a recent valuation of the artwork undertaken for insurance purposes which values the artwork at about $1.2 million. But there is no evidence which indicates how easy or difficult it would be to turn any of it into cash. The payments made to the Plaintiff by or on behalf of the Defendant did not follow the sale of any of the artwork but were made possible by what were said to be non-deductible contributions recently made to the Fund by Mr Pagent.