These reasons were given orally at the end of the hearing. Minor amendments have been made for clarity.
[2]
By an application in the appeal, dated 25 September 2019, the appellant seeks orders pursuant to s 471B of the Corporations Act 2001 (Cth) and s 40(1)(e) of the Criminal Appeals Act 2004 (WA) that he have leave to commence appeal proceedings against the first respondent nunc pro tunc, on conditions that a costs order not be made against the first respondent, and any other monetary order not be enforced against the first respondent without further leave.
On 29 October 2019, Hill J programmed this application through to a hearing. The appellant relies on the affidavit of Edward Clarence Indran Ferris, affirmed on 25 September 2019.
On 1 March 2018, the appellant brought various charges against the first respondent, Perth Demolition Company Pty Ltd, by prosecution notices alleging offences against the (WA), said to have been committed on 11 May 2016.
The charges were heard on 2 May 2019, and on 5 August 2019 the first respondent was acquitted.
On 20 August 2019, on the application of the Deputy Commissioner of Taxation, the Federal Court of Australia ordered that the first respondent be wound up in insolvency.
On 2 September 2019, unaware that the first respondent was in external administration, the appellant filed an appeal notice commencing this appeal.
Section 40(1) of the Criminal Appeals Act provides that, for the purposes of dealing with an appeal an appeal court may exercise the powers set out in (a) to (n), including exercise any power that the Supreme Court may exercise in a civil case. One of the powers that the Supreme Court may exercise in a civil case is under s 471B of the Corporations Act.
While a company is being wound up in insolvency a person cannot begin or proceed with a proceeding in a court against the company, or in relation to the property of the company, except with leave of the court and in accordance with such terms, if any, as the court imposes. The reference to the court in s 471B includes the Supreme Court of Western Australia.
The fact that the appeal was commenced without leave, if leave is required, would be an irregularity, but would not make the appeal notice or the proceedings a nullity.
I am satisfied that I have the power to grant leave, if it is required, and that the power may be exercised so as to grant leave for the initiation of an appeal: Re Coastal Constructions Pty Ltd (in liq) (1994) 13 ACSR 329; Sihota v Pacific Sands Motel [2003] NSWSC 119; (2003) 56 NSWLR 721.
The appellant filed detailed submissions discussing inconsistent authorities as to whether leave is required in the present circumstances.
In Tate v Aarjets Pty Ltd atf the Jurgholme Trust [2010] QCA 243, the Queensland Court of Appeal, heard an appeal from the District Court in relation to charges brought against the respondent under the Liquor Act 1992 (Qld). McMurdo P said at [4]:
[3]
The first respondent's insolvency is no bar to this application. Section 471B of the Corporations Act 2001 (Cth), which prohibits certain proceedings in respect of companies in liquidation without leave of the court has no application to criminal proceeding of this kind.
[4]
The appellant points to later single judge decisions, in particular Worksafe Western Australia Commissioner v Australian Countertop Pty Ltd (in liq) [2014] WASC 413, a decision of Master Sanderson, and Burwood Council v Pan Pac Investments Pty Ltd [No 2] [2019] NSWLEC 29, which have held that leave is required. Despite the cogency of the reasoning in the single judge authorities, there is a decision of a Court of Appeal which is not only influential but binding.
In the circumstances, the best course is to proceed on the basis that, if leave is required, I should determine whether the appellant should have leave.
On the assumption that leave is required, the appellant submitted that the following factors favour the court granting leave:
[5]
On the grounds stated in the appeal notice it is arguable that the magistrate erred in law in acquitting the First Respondent, and that a substantial miscarriage of justice arose as a result. That is, the appeal proceedings have a solid foundation and give rise to a serious dispute.
2. There is a public interest in the correct application of the law in summary criminal prosecutions, particularly in prosecutions under the Environmental Protection Act 1986 (WA).
[6]
The appeal proceedings would not unduly prejudice the creditors of the First Respondent. This is because, as a condition of leave, the Appellant seeks that no costs order be made against the First Respondent, and that any other monetary order not be enforced against the First Respondent without further leave. Further, the liquidator of the First Respondent does not intend to participate in the proceedings. [Relevant of course to that consideration is that any penalty or fine imposed by a court on the First Respondent would not be provable in the first respondent's insolvency by reason of s 553B of the Corporations Act.]
[7]
The proof of debt procedure is not applicable to the appeal proceedings.
2. The liquidator of the First Respondent neither consents nor objects to the appeal proceedings. As noted the liquidator does not intend to participate in the proceedings, so they will not be affected the orderly winding up of the First Respondent, particularly if the appeal can be programmed on a relatively urgent basis.
I accept the submissions of the appellant. The court has a wide discretion in determining whether to grant leave. The discretion is guided by the need to ensure that a company in liquidation is not subjected to a multiplicity of actions which would be expensive and time consuming, as well as, in some cases, unnecessary.
I have had regard to the attitude of the liquidator, who does not intend to participate. While that would have the result that the appeal would not interfere with the orderly winding up of the first respondent, the appeal would not be contested. The conditions to be imposed on the grant of leave, together with s 553B of the Corporations Act, should ensure that it does not prejudice the rights of creditors or the position of the company, even if the appeal should proceed undefended by the company.
The appeal concerns the correct application of the law relating to the liability of a company for the acts of an employee. There is a public interest in the correct application of the law in summary prosecutions. In accepting this point, however, it should not be taken that I have formed any view about the merits of the appeal other than that the issue of the liability of a corporation for the acts of its servants is important and that the grounds of appeal are arguable.
For those reasons, I would grant leave, should it be needed, subject to the conditions set out in the minute of proposed orders, and make orders in terms of that minute.
[8]
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.