Earlier cases
24 In Austructures, Almond J was taken to a line of cases on the interaction between s 1322(4)(d) and limitation provisions in the Corporations Act. It is useful to approach the issue by reference to those cases and the provisions that they considered.
25 David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265 (David Grant) concerned s 1322(4)(d) of the Corporations Law (Vic) (the Corporations Law), which was not materially different to the current s 1322(4)(d). The provision had been part of the uniform companies legislation in Australia since 1990. The issue was whether s 1322(4)(d) authorised an extension of the time provided in s 459G of the Corporations Law for a company to apply for an order setting aside a statutory demand that had been served on it. Section 459G(2) provided that an application "may only be made within 21 days after the demand is so served" (emphasis added). Section 459G(3) reinforced the stringency of the time limit by providing that an application was made in accordance with the section "only if" an affidavit was also filed and served "within those 21 days".
26 Gummow J, with whom the other Justices agreed, held that s 1322(4) did not allow the extension of the 21 day period. The following points were important in his Honour's reasoning.
(a) Section 459G was a later and more specific provision. His Honour thus drew support (at 276) from the principle stated in Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia (1932) 47 CLR 1 at 7 (Gavan Duffy CJ and Dixon J) (Anthony Hordern), as follows:
When the Legislature explicitly gives a power by a particular provision which prescribes the mode in which it shall be exercised and the conditions and restrictions which must be observed, it excludes the operation of general expressions in the same instrument which might otherwise have been relied upon for the same power.
(b) The temporal requirements in s 459G(2) and (3) operated as part of the definition of the court's jurisdiction in respect of an application to set aside a statutory demand. That is, s 459G conferred a "new right" and the requirement as to time was an "essential condition" of that right. Adapting a dictum of Isaacs J in The Crown v McNeil (1922) 31 CLR 76 at 100-101, "it is a condition of the gift in sub-s (I) of s 459G that sub-s (2) be observed and, unless this is so, the gift can never take effect" (at 277).
(c) This added force to the point that it was hard to identify the function or utility of the word "only" in s 459G(2) if it did not mean what it said (at 277).
(d) Part 5.4 of the Corporations Law, within which s 459G was located, contained specific provisions conferring power on the court to extend time in various ways (albeit, it would appear, not to extend the time for filing an application stipulated by s 459G(2)) (at 277). The force of this point appears to have been that the legislature in enacting Part 5.4 had given express consideration to whether and how the times for which it provided should be able to be extended.
(e) Read in the context of the provisions defining non-compliance with a statutory demand (s 459F), and the presumption of insolvency following from non-compliance (s 459C), s 459G was an integral part of the scheme established by Part 5.4G (at 277-278).
27 BP Australia Ltd v Brown [2003] NSWCA 216; 58 NSWLR 322 (BP Australia) concerned the relationship between s 1322(4)(d) and s 588FF of the Corporations Act, which pertained to applications by liquidators in respect of voidable transactions. Section 588FF(3) provided:
588FF Courts may make orders about voidable transactions
…
(3) An application under subsection (1) may only be made:
(a) within 3 years after the relation-back day; or
(b) within such longer period as the Court orders on an application under this paragraph by the liquidator within those 3 years.
28 Spigelman CJ, with whom Mason P and Handley JA agreed, held that s 588FF(3) was intended to cover the relevant field to the exclusion of s 1322 (at [85]). His Honour observed that, in a sense, the provision that fell to be construed was s 1322(4)(d) (at [77]). He noted the role performed by s 1322 in mitigating the strict application of various provisions in the Corporations Act (at [78]) and then observed that the requirements of certainty or deterrence, or other objectives pursued by particular "sub-regimes" within the Act, might be such that the flexibility introduced by s 1322 was "not appropriate" (at [79]). Such a conclusion was "particularly likely" where the particular sub-regime included its own particular provision for flexibility, as s 588FF did (at [79]). The general words of s 1322(4)(d) might need to be "read down" with respect to such a provision.
29 Spigelman CJ then addressed the text of s 588FF(3), observing the role played by the word "only" was to ensure that a particular procedure was observed (at [83]-[84]), and observed (at [85]):
The time period identified in par (a) is itself subject to a specific power of extension under par (b). That is a comprehensive provision for extension of time which, in my opinion, is intended to cover the relevant field to the exclusion of s 1322. This conclusion turns on the text of s 588FF(3) and the scope and purpose of Pt 5.7B.
30 The relevant provision of construction was drawn from Anthony Hordern (quoted above at [26(a)]) and R v Wallis; Ex parte Employers' Association of Wool-Selling Brokers & H V McKay Massey Harris Pty Ltd (1949) 78 CLR 529 at 550 (Dixon J), which is to similar effect (at [86]). Spigelman CJ continued (at [88]-[89]):
The word "only" in a time limitation statutory provision can characterise the provision as a "time so emphatically prescribed". However, the use of the word "only" is not of itself determinative. Its force is affected by the relevant statutory scheme considered as a whole, as the analysis in David Grant v Westpac shows.
Of particular significance in this respect is the scope and purpose of Pt 5.7B of the legislative scheme and its legislative history.
(Citations omitted.)
31 At [90], Spigelman CJ observed that the position in BP Australia was "not as clear" as that considered in David Grant, noting the range of statutory indicators in play in that case. Nevertheless, in my view, BP Australia was a clear case of exclusion of a general provision by the Anthony Hordern principle. The specific provision, s 588FF, contained its own express provision as to when and how its time limit could be extended.
32 The third of the cases leading up to Austructures is Newtronics Pty Ltd v Gjergja [2008] VSCA 117 (Newtronics). Newtronics concerned a predecessor of s 1317H. It is necessary to describe the relevant regime in a little detail.
(a) The proceeding at first instance in Newtronics was commenced in 2005, by which time the company was in liquidation, and concerned alleged breaches of duty by directors in the mid 1990s. The relevant provisions were thus understood to include Part 9.4B in the form introduced by the Corporate Law Reform Act 1992 (Cth) (the 1992 Reform Act).
(b) Prior to the 1992 Reform Act, s 232(8) provided that a company could recover compensation from a director for damage caused by a contravention of their duty. It did not fix any time limit.
(c) Following commencement of the 1992 Reform Act, the relevant subsection of s 232 was identified as a civil penalty provision by s 1317DA. There were three sets of provisions in the Corporations Law bearing upon recovery of statutory compensation for loss resulting from a contravention of a civil penalty provision.
(i) Section 1317HD, which was relied on in Newtronics, was the predecessor of the current s 1317H. It conferred on a company the right to recover compensation from a person who contravened a civil penalty provision if the person made a profit because of the relevant act or if the corporation suffered loss or damage. Unlike the current s 1317H, s 1317HD had a limitation period contained within it. Subsection (2) provided that proceedings under the section "may only be begun within 6 years after the contravention" (emphasis added).
(ii) Division 2 of Part 9.4B provided for civil penalty orders. Under s 1317EA, the Court could impose various sanctions on a person who contravened a civil penalty provision. Section 1317EB provided that an application for a civil penalty order could be made by the Australian Securities Commission (now ASIC), its delegate or a person authorised by the Minister. Section 1317EC provided that an application "may be made within 6 years after the contravention" (emphasis added). Upon the hearing of an application for a civil penalty order, s 1317HA empowered the Court to make a compensation order in favour of the relevant corporation if satisfied that the contravention was made out and loss had occurred as a result. The corporation was allowed, under s 1317HA(2), to intervene in the proceeding to seek such an order.
(iii) Criminal proceedings in respect of a contravention could be commenced under Part 9.4. Section 1316 required such proceedings to be instituted within five years after the relevant act or omission, but allowed that to be done later with the Minister's consent. A civil penalty order application could be made in respect of the same contravention but, under s 1317GB, would be stayed until the criminal proceeding was finally determined. Sections 1317GC to 1317GK provided for various contingencies arising from the interaction of the civil penalty application and criminal proceedings. The short point for present purposes is that a corporation could in some circumstances intervene in a civil penalty application, after the lifting of a stay, more than six years after the relevant contravention.
33 In the Court of Appeal, Maxwell ACJ and Osborn AJA agreed with the reasons of Dodds-Streeton JA. Her Honour identified the issue as whether the six year limitation period in s 1317HD(1) could be extended pursuant to s 1322(4)(d). After describing the legislation, reviewing the authorities and summarising the reasoning below, her Honour expressed the view at [81] that the authorities supported the position of the respondents (ie, that s 1317HD(2) was on all fours with the provision considered in David Grant and s 1322(4)(d) was therefore excluded). She made the following points in support of this conclusion at [82]-[89].
(a) David Grant indicates that the "emphatic prescription of a limitation period in the very provision which confers a right of action" ordinarily establishes the "jurisdictional character of the unmodified time limit", compliance with which is thus a condition for the exercise of the Court's power. That reasoning was consistent with R v Wallis, and with the distinction drawn between jurisdictional and procedural conditions in Emanuele v Australian Securities Commission (1997) 188 CLR 114.
(b) In David Grant, Gummow J considered a number of significant factors, all of which pointed the same way. It was unnecessary to say whether any particular factor was decisive. However, it appeared that neither the use of "may only" nor the general principle that a later, more specific provision overrides an earlier, general one was decisive in itself. Gummow J also gave weight to other factors including the "character, goals and intended operation of the statutory scheme, as reflected in the Explanatory Memorandum". His Honour's jurisdictional analysis appeared to depend on its consistency with the effective operation of the provision in question. On that basis, a capricious or irrational outcome could displace the view that compliance with the time limit in s 1317HD was an "integer of [the] cause of action it confers".
(c) Only one feature of s 1317HD distinguished it from the provisions considered in David Grant and BP Australia. This was the absence of any internal provision for an extension of time.
(d) Otherwise, the provisions were similar. They were specific provisions post-dating the general remedial provision in s 1322. They used peremptory language, apparently deliberately, while an analogous provision in the same Part as s 1317HD (s 1317EC) omitted the word "only". The Explanatory Memorandum to the 1992 Reform Act confirmed that the "distinctively mandatory operation of 'only' in s 1317HD(2) was intended". There was no basis for distinguishing the cause of action created by s 1317HD from the right created by s 459G.
34 Dodds-Streeton JA then considered at [90] whether the exclusion of s 1317HD(2) from s 1322(4)(d), in making the time limit in the former provision a rigid one, would result in its "capricious or unjust operation". The asserted caprice appears to have been that compensation could be obtained through the other avenues contemplated in Part 9.4B (that is, by the corporation intervening at a late stage in an application for pecuniary penalties) after the six year period had passed, whereas an action under s 1317HD would be bound to fail if commenced after that time. This analysis appears to have proceeded on an understanding that the limitation period for an application by the Australian Securities Commission under s 1317EC was capable of being extended under s 1322(4)(d) (see Newtronics at [27]), which, as the respondent submitted before me, is not self-evidently correct. However, be that as it may, it clearly was the case that a corporation might take advantage of a pecuniary penalty application having been made (either simpliciter or in conjunction with criminal proceedings) and intervene in that application, to seek compensation, after the expiry of the s 1317HD limitation period. In any case, as her Honour accepted at [90], there was an obvious explanation for different treatment between proceedings commenced in the public interest (where the relevant corporation had no control over whether they were commenced) and proceedings commenced by the corporation solely in its own interest. It was also to be borne in mind that the right to recover compensation under s 1317HD operated in addition to any other rule of law about the duties or liabilities of office holders (at [96]).