Chisholm v The Official Trustee in Bankruptcy

THE COURT: 1 This is an application for leave to appeal against an order of Finn J of 12 May 2000 dismissing an application by Mr Philip Chisholm ("the appellant"). Leave to appeal was refused on 29 August 2000. The following are our reasons for refusing leave. The application before Finn J was an unusual one. The appellant had been a director of Nedlands Pty Limited. That company was placed in liquidation by order of a Registrar of this Court though the company is now suing the appellant in the Supreme Court of South Australia. The application by the appellant determined by Finn J was made, by notice of motion, in the proceedings in which the order was made by the Registrar. In various ways the orders sought in the notice of motion (as varied) flowed from a contention that the winding up order of the Registrar was void. Finn J concluded that the winding up order was voidable and not void. 2 No issue is raised in this application for leave about the jurisdiction of Finn J to hear and determine the application though that may, itself, raise an issue of some complexity. It is accepted by counsel for the appellant that a relevant consideration as to whether leave should be granted is the strength of the case sought to be put in the appeal. It is also accepted that, in these proceedings, we would be constrained by existing authority to conclude that any winding up order made by a Judge of this Court is voidable and not void: see Robins v Incentive Dynamics Pty Ltd (in liquidation) (1999) 91 FCR 423. That is not to say, however, that this issue is settled given that the issue appears to have been squarely raised in the High Court in Re Macks; Ex parte Saint (A6 of 2000) which was argued on 13 and 14 June 2000. Judgment of the Court is presently reserved in that matter. 3 We agree with the conclusion of Finn J, and with his reasons, that if an order of a Judge of the type under consideration is voidable notwithstanding that it was made in exercise of a power founded on a constitutionally impermissible conferral of power by a state, then such an order made by a Registrar would have the same legal character and is to be treated as an order of the Court. The exercise of the power by the Registrar was consistent with the language of s 35A of the Federal Court of Australia Act 1976 (Cth). 4 One aspect of the submissions made by the appellant in this application for leave warrants particular comment. A submission was made that the authority conferred on the Court by s 35A to delegate powers of the Court to a Registrar is a power to delegate only powers conferred on the Court. It was submitted that if the Court did not have power to order that a company be wound up then any purported delegation of that power was ineffective and any exercise of the power by the delegate would not attract the operation of what was described by the appellant's counsel as the superior court of record principle: see Robins at par 25. However, no legal principle or authority was pointed to that supports this contention. Section 35A confers authority to delegate a power and, if delegated, the content of the power and the consequences of its exercise are as if exercised by a Judge. As Gibbs CJ (Stephen and Aickin JJ agreeing) said in Commonwealth v Hospital Contribution Fund of Australia (1982) 150 CLR 49 at 59: "[t]he jurisdiction and powers of the court do not cease to be its jurisdiction and powers because they are exercised by an officer of the court, under the rules of the court." 5 Where there is no relevant power to exercise, the order made may be void or voidable. Anticipating a conclusion that an order made by a Registrar without statutory foundation has the same consequences attending it as an order of the Court, the appellant sought to attack the delegation itself as ineffective. It could not however be suggested that there is any relevant constitutional impediment to the delegation which provided the basis for holding the Registrar's order invalid in R v Davison (1954) 90 CLR 353; see also Harris v Caladine (1991) 172 CLR 84 (Brennan and Toohey JJ). Finn J distinguished those cases from the present, correctly in our respectful view. 6 We are not satisfied that any error has been shown in his Honour's reasoning. 7 The ultimate legal issue of practical relevance is whether the orders winding up Nedlands Pty Limited and appointing the liquidator have any continuing legal effect. That question is not answered by a decision as to whether any order of the Registrar is void or voidable. Rather it is answered by determining the effect of the Federal Courts (State Jurisdiction) Act 1999 (SA) on the purported exercise of power by a Registrar under the Corporations Law. That issue is also raised in Re Macks; Ex parte Saint and is likely to be determined by the High Court in that matter. No real purpose is served by answering, as we are being invited to, only part of the relevant question. Moreover that part may, on final analysis, be a false issue in any event, as the remedial state legislation may operate on the historical fact that an order was made and the Act's operation may not depend on the legal effect of the order. 8 For these reasons we concluded leave to appeal should be refused. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Moore, Kiefel and Mansfield.