Is the extension application against Sinoace BVI to be re-heard or is it spent?
118 The question then arises whether I can then proceed to re-hear the extension application against Sinoace BVI in VID 410 of 2022, or whether I have no power to do so because the application is spent.
119 The liquidator seeks leave in VID 31 of 2024 to amend his interlocutory process filed on 16 April 2024 by adding a new paragraph 2A in these terms:
In the event that Order 2 made on 9 March 2023 in proceeding VID410 of 2022 is set aside against [Sinoace BVI or Sinoace Hong Kong], or either of them (Affected Respondents), then:
(a) the Court re-hear the Applicants' application in proceeding VID410 of 2022;
(b) the Court give the Affected Respondents a right to be heard in respect to the Applicants' application in proceeding VID410 of 2022;
(c) the Court join the Affected Respondents to proceeding VID410 of 2022 for the purposes of the re-hearing; and
(d) the Court reinstate Order 2 made on 9 March 2023.
120 He seeks the same relief against all the respondents (including Payton Capital Ltd) in VID 33 of 2024.
121 In so far as the application to amend is brought against all respondents in VID 33 other than Payton Capital Ltd, it must be refused, because (i) no application was ever brought against them; (ii) the 9 March 2023 order does not extend to them; and (iii) r 9.05(3) of the Federal Court Rules 2011 (Cth) provides that "[i]f a person is joined as a party under this rule, the start date of the proceeding for the person is the date on which the order is made." As the liquidator accepts, that date in this case would mean that the claims would be time barred.
122 I am not sure why the liquidator's application to amend includes seeking to add Payton Capital Ltd, because it was named in the original application and in the 9 March order, and (unlike Sinoace BVI) was served with the VID 410 of 2022 application.
123 In any event, Sinoace BVI contended that upon the making of an order setting aside the 9 March order, no part of the original application would remain undetermined against it (and is thus spent).
124 It follows, if those submissions are to be accepted, that there can be no re-hearing of the original application.
125 Greig v Stramit Corporation Pty Ltd [2004] 2 Qd R 17 stands for the proposition that once an application under s 588FF(3)(b) for an extension of time has been determined, it cannot be re-heard if an extension order made upon that application is later set aside (Williams JA, Jerrard JA, Fryberg J dissenting). That is the ratio of the case.
126 In that proceeding, on 7 September 2000 Mullins J had made an order on an ex parte application extending the time within which the liquidators might institute proceedings pursuant to s 588FF(1).
127 On 16 May 2002, Chesterman J set the order aside in so far as it applied to Stramit Corporation Pty Ltd (Stramit).
128 On 5 June 2002, the liquidators applied for an order joining Stramit in the proceedings and a consequential order extending the time for bringing proceedings until 30 June 2002.
129 On 1 October 2002, Mullins J on the original application filed on 31 August 2000 made an order adding Stramit as a party and extending the time pursuant to s 588FF(3)(b).
130 Stramit appealed and sought to have the 1 October order set aside.
131 By a majority (Williams and Jerrard JJA, Fryberg J dissenting), the Full Court held that the effect of Chesterman J's order was that Stramit was not a creditor affected by the order made on 7 September 2000, making it necessary for the liquidators to commence a fresh proceeding seeking an extension of time - which, as is the case here, they could not do because the time limit had expired.
132 Because of the nature of the controversy raised before me, it is preferable that I set out in full the relevant parts of the respective judgments in that case dealing with the power to re-hear point.
133 Williams JA held at [71]:
Stramit was not identified as a party to the original application as at 7 September 2000 and … it is necessary to somehow have a proceeding against Stramit before an order binding upon it can be made. There was an application made to the court by the document filed 31 August 2000 and there was a final order of the court, disposing of all issues raised by that application, made on 7 September 2000. The fact that it was subsequently held that that order was not binding on Stramit, who was not a party to that application, does not mean that the proceeding commenced by the application has not been fully and finally determined by the order of 7 September 2000.
134 At [77]-[82], his Honour continued:
[77] Stramit's appeal concentrated on the order for joinder made pursuant to s. 81. But her Honour's conclusion that the application of 31 August 2000 remained "extant and undisposed of in respect of Stramit" was also strenuously attacked.
[78] The formal order of Chesterman J. of 16 May 2002 relevantly states: "That the order of 7 September 2000 that time be extended for the Respondent to make applications under s 588FF(1) of the Corporations Act be set aside in so far as it applies to Stramit Corporation Ltd." The order itself does not contain his Honour's remarks which I have called a "footnote" and quoted in para. [52] hereof; those remarks are clearly obiter. I have already pointed out that neither Chesterman J. nor Austin J. in Brown No. 2 cited any authority for the proposition that the original application would remain extant so far as the creditor held to be excluded from the operation of the order originally made was concerned. Mullins J. repeated those remarks. As I have already pointed out the original ex parte order was not set aside; it still stands so far as every creditor of the company, other than Stramit, is concerned. The order of 7 September 2000 is a final order of the court disposing of all the issues raised by the application filed 31 August 2000.
[79] In those circumstances counsel for Stramit submits that the matter is covered by s. 10(1)(d) of the Corporations (Ancillary Provisions) Act 2001. That section relevantly provides that a proceeding commenced under the Law may be continued as provided for by that Act provided that the proceeding "had not been concluded or terminated" before the enactment of the Corporations Act 2001 (Cth). The submission is that if the order of 7 September 2000 finally disposed of the application of 31 August 2000 then s. 10 did not apply to it.
[80] In my view there is merit in that submission. The effect of the order of Chesterman J. is a declaration that Stramit is not a creditor affected by the order of 7 September 2000. That order of 7 September still remains as a final order co-extensive with the relief sought in the application of 31 August 2000. In those circumstances one cannot say that by some process the application has been reopened so that the applicant liquidators can seek further orders on it.
[81] The consequence is that strictly the liquidators should have commenced a fresh proceeding after the order of Chesterman J seeking a relevant order pursuant to s 588FF with respect to Stramit. It is obvious that any such application was doomed to fail because on any view it was made outside the time periods prescribed therein, and as Mullins J has correctly held there was no provision in the Act (which would have been the legislation applicable at the time such fresh application was made) permitting an extension of a time period prescribed in that section. If the court was to regard the application filed 5 June 2002 … as a fresh application seeking relief pursuant to s 588FF(3)(b) against Stramit it would be bound to fail for the reason just given.
135 At [113]-[118] Jerrard JA reached the same conclusion, reasoning as follows:
[113] The critical point upon which those learned judges disagree is whether, as Chesterman J. stated and Mullins J. accepted, the order made by Chesterman J. resulted in the liquidator's application to extend time filed 31 August 2000 remaining extant and undisposed of in respect of Stramit. Williams J.A. holds that there were no such extant proceedings, and Fryberg J. that there were. I respectfully agree with the reasons and conclusions of Williams J.A., and respectfully disagree with those of Fryberg J., and likewise respectfully disagree with those of Chesterman J., Mullins J., and Austin J. as expressed by the latter in Brown (No. 3) (2001) 188 A.L.R. 469 at [29] - [30]. My reasons are as follows.
[114] Fryberg J. describes the order made 16 May 2002 by Chesterman J. as resulting in the liquidators being no longer entitled to all of the relief for which they applied on 31 August 2000. His Honour holds that the question whether that application had been finally disposed of can be resolved only by examining what occurred at the hearing. He also holds that what occurred was not that Chesterman J. set aside the order as against Stramit with the intent of ensuring that the original application failed against that company, but rather that Chesterman J. did so to enable a hearing to take place, should the liquidator wish its application re-argued.
[115] With due respect to that view, the application filed 31 August 2000 did not apply for any order for relief against Stramit. It asked only for an order that the time within which "an application" might be brought pursuant to s. 588FF(1) of the Corporations Law be extended to end on 11 September 2001. No potential respondents were identified. The order made by Mullins J. on 7 September 2000 was in similar general terms (extending the time for bringing "applications") and made no reference to Stramit or any respondent. That order enabled the liquidators to bring by 11 September 2001 pt 5.7B proceedings against any respondents they chose, on any s. 588FE ground.
[116] Had Mullins J. in her order made 7 September 2000 specifically excluded from the grant of leave both Stramit, and the other entity described in the evidence supporting the application before her Honour as a likely respondent to later s. 588FF proceedings, on the ground that neither entity had been served with the application and should have been, the liquidators would have had various choices of action. They could have immediately commenced proceedings within time, at least against Stramit, as the liquidators now depose they were in a position to do. They could have appealed the order by Mullins J. excluding Stramit. They could have brought an urgent s. 588FF(3) application on notice against Stramit, with the latter as a respondent. If the liquidators took none of those three steps, then whether or not they abandoned their original intention of possibly proceeding pursuant to s. 588FF(1) against Stramit, no further step would remain to be taken by the liquidators, and no further listing or order by the court would be required, to dispose of the application filed 31 August 2000. The order made 7 September 2000 excluding Stramit and that other entity would stand as the final order of the court. With respect to Fryberg J., that position is different from that prevailing in Re McLellan [1979] Qd.R. 392, cited by his Honour, in which an originating summons was not dealt with on the return day by the Chamber Judge, nor adjourned for a hearing to a later day. As held by Andrews J., as he then was, that summons had enlivened the jurisdiction of the Court and there had been a lapse in formal procedure. There had not been any order made on that summons, let alone a final order.
[117] The situation when the ex parte order actually made by Mullins J. was set aside on 16 May 2002 "in so far as it applies to Stramit Corporation Ltd" was the same, in my judgment, as the position that would have existed had the order made by Mullins J. on 7 September 2000 specifically excluded Stramit. That position is that subject to appeal, the proceeding on the ex parte application inasmuch as it was an application to which Stramit should have been a respondent, was concluded by the order of Chesterman J. but adversely to the liquidators. There was no extant but incomplete proceeding on that application in which some further step still remained to be taken, and no further order was required to dispose of that application, either against Stramit or as to the application made in general terms against all possible respondents.
[118] This has particular significance because of the nature of the application filed 31 August 2000, which needed to be made on or before 11 September 2000. Once that date had passed without any proper application by the liquidator against Stramit, no relevant application or order could be made. This distinguishes the position from that in, for example, the Family Court of Australia in the circumstances considered in Taylor v. Taylor, and those the then Court of Bankruptcy dealt with in Cameron v. Cole (1944) 68 C.L.R. 571.
136 Justice Fryberg dissented, reasoning at [146]-[150] as follows:
[146] Was the original application then finally disposed of? There is no doubt that even after 16 May 2002 so much of the order of 7 September 2000 as remained was a final order of the court. However that does not answer the question. Nor is it answered by the fact that the liquidators were no longer entitled to all of the relief for which they had applied. Both of these matters are relevant to the question, but they do not conclude it.
[147] When on an application a court makes a final order granting the applicant less relief than was sought in the application, the question whether the application has been finally disposed of can be resolved only by examining what occurred at the hearing. It may be that the court considered whether relief to the extent sought should be granted and decided that it should not. In that case the application has been disposed of, subject to an appeal by either (or any) party. On the other hand it may be that the court intended to deal with the application only in part and to leave part of it to be resolved at some future time. Often this will be reflected in an order adjourning the further hearing of the application to a date to be fixed, but an adjournment order is not essential. The same result follows when an appeal court sets aside an order in part and remits the matter to the court below. Where a court does not decide part of an application on the merits the application has not been fully disposed of.
[148] In the present case Chesterman J. did not set aside the order as against Stramit with the intent or for the purpose of ensuring that the original application fail against that company; in other words, on the merits. He did so to enable a hearing to take place. If there were any doubt about this his Honour expressly dispelled it in the penultimate paragraph of his reasons for judgment:
"[37] Accordingly, I order that the order in so far as it applies to Stramit be set aside. The purpose of this order is to leave extant the liquidators' application to extend time but to remove from the order actually made the extension of time to commence proceedings against Stramit. The liquidators, if they so wish, must re-argue the application."
This was no mere footnote to his Honour's reasons. It was their culmination. It embodied the essence of his decision.
[149] It follows that when it came before Mullins J. on 13 June 2002 the liquidators' application had not been fully disposed of. Her Honour so held. She was correct.
[150] That finding led her Honour to find that the case was covered by s. 1383(3) of the Corporations Act 2001. From that she concluded that by reason of ss 7 and 8(2) of the Corporations (Ancillary Provisions) Act 2001, the liquidators' application which came before her on that date was to be treated as an application brought under s. 588FF of the Corporations Act, not the Corporations Law. As I understood it, that conclusion was not challenged on appeal.
(footnotes omitted)
137 It is necessary now to go to some subsequent cases that have considered Greig.
138 In BP Australia Ltd v Brown at 359-360 [205]-[208], Spigelman CJ (with whom Mason P and Handley JA agreed) said that he "saw considerable force in the dissenting opinion of Fryberg J" in Greig and for the view that a re-hearing of a s 588FF(3)(b) application could be ordered. But as the Chief Justice said expressly at 360 [209], it was unnecessary for him to decide the issue of whether the majority in Greig or the dissenting judgment was correct, because counsel for the unsuccessful appellant did not submit that a consequence of the character identified by the majority in Greig would flow, so that was not part of the case before the Court. It follows that his Honour's observations about Greig, which I now set out, are obiter dicta:
[205] By majority, Williams JA and Jerrard JA, Fryberg J dissenting, the court [in Greig] allowed the appeal from Mullins J. Her Honour had made an order under s 81 of the Supreme Court of Queensland Act 1991 (Qld) which permits amendment of an application even though the amendment will add a new party or a relevant period of limitation has ended. Insofar as the decision turned on the terms of that section it is not directly applicable in New South Wales. (See further, Pt 20, r 4 of the Supreme Court Rules.)
[206] The majority in Greig rejected the basis on which Chesterman J and Mullins J proceeded, adopting that of Austin J, that the original proceedings remained in existence after the ex parte orders had been set aside against the creditors. (See at [56], [71]-[72], [79]-[82], per Williams JA and [114]-[118], per Jerrard JA; contra at [146]-[150], per Fryberg J.) The majority concluded that the ex parte orders had finally disposed of the proceedings on the original application and the subsequent order to set aside the order as against a particular creditor did not alter that position.
[207] I see considerable force in the dissenting opinion of Fryberg J that the effect of the subsequent order, which is in identical terms to that of Austin J in the present proceedings, had the consequence that the original proceedings were not finally disposed of. The events in Greig differ in that the original order extending time did not, as the orders made by Austin J did, reserve liberty to persons to apply to set aside or vary the order extending time. However, this express reservation only made clear what would in any event be the legal position: a person affected by an ex parte order may always apply to have the order set aside. (See Owners of the SS Kalibia v Wilson (1910) 11 CLR 689 at 694, per Griffith CJ.)
[208] Furthermore, the test of finality is the determination of the rights of the parties in a "principal cause", not the determination of the application before the court. (See Hall v Nominal Defendant (1966) 117 CLR 423 at 443, per Windeyer J. See generally Southern Cross Exploration NL v Fire and All Risks Insurance Co Ltd (No 2) (1990) 21 NSWLR 200.) There may be cases where ancillary proceedings are appropriately characterised as the lis before the court. However, an application for an extension of time is not, in my opinion, able to be so characterised. The "principal cause" is the application under s 588FF(1).
[209] It is, however, unnecessary to decide this issue. Although, in the course of oral submissions, Mr Coles QC did suggest that the original order was final, he did not submit that a consequence of the character identified by the majority in Greig would flow. That was not part of the case before this Court.
139 I was also taken to what Doyle CJ said in Ansell Ltd v Davies (2008) 219 FLR 329 at 337-338 [54], but his Honour's observations about Greig were limited to endorsing the view that an application under s 588FF(3) is a valid application even though an order was sought against creditors who were not identified and who were not then parties to the proceedings, nor were they served with the proceedings. It was that aspect of BP Australia Ltd v Brown that his Honour agreed with, noting that, in any event, he was "not persuaded that the decision … in Greig …is to the contrary".
140 In Re Octaviar Ltd (2012) 271 FLR 413 at 432-433 [61] Black J recorded a formal submission made by the defendant (a company called Fortress) that "the Court has no power, on discharging the orders previously made, to re-exercise that discretion …" and that the "view expressed by Williams JA in Greig v Stramit, that, on the discharge of orders obtained ex parte or irregularly, the proceeding is at that point concluded so that a fresh proceeding must be commenced by the Liquidators, which would be outside the period prescribed by s 588FF(3)(b) of the Corporations Act is correct and should be preferred".
141 Justice Black said of that submission (at [61]): "A contrary view was taken by Fryberg J in Greig v Stramit. In BP v Brown, by which I am bound, Spigelman CJ (with whom Mason P and Handley JA agreed) referred to that contrary view …" and quoted what the Chief Justice said at [207]-[208] of his reasons (quoted above).
142 His Honour also said in Re Octaviar at 418-419 [17]-[19] that he was bound by BP Australia Ltd v Brown in so far as it stood for the proposition that an application under s 588FF(3)(b) seeking a general order for an extension of time to make an application under s 588FF(1) against any creditor is a valid application and an order in those terms is valid, which is the effect of the conclusion reached by Spigelman CJ at [168]. And he was, with great respect, correct to regard himself as bound by that proposition, as the High Court noted in Fortress Credit Corporation at 499 [9] (French CJ, Hayne, Kiefel, Gageler and Keane JJ). But it is not clear to me why his Honour also regarded himself as bound by Spigelman CJ's separate observations in BP Australia Ltd v Brown about Greig at [207]-[208], because they were, in my respectful view, obiter observations, for the reasons that I have endeavoured to explain.
143 In Re Harris Scarfe Ltd (in liq) (No 3) (2008) 216 FLR 242 Debelle J at 250 [28] said that he preferred the reasoning of Spigelman CJ in BP Australia Ltd v Brown, as follows:
[28] The reasoning of the majority in Greig depends on the proposition that the effect of an order setting aside an ex parte order against a creditor is that the application has been determined and is no longer extant so that it is necessary for the liquidator to institute a fresh application under s 588FF(3) against that creditor: see Williams JA (with whom Jerrard JA agreed) at [81] and [82]. Such an application will be doomed to failure because it is a fresh application made outside the 3-year period prescribed by s 588FF(3). The conclusion that the effect of an order setting aside an ex parte order has the consequence that the application has been determined and is no longer extant is, in my view, wrong for the reasons already expressed. For that reason, I prefer the reasoning of Spigelman CJ in BP Australia Ltd.
144 In Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485 at 492 Mason CJ, Brennan, Dawson, Toohey and Gaudron JJ reiterated the long-standing principle that "an intermediate appellate court - and all the more so a single judge - should not depart from an interpretation placed on [corporations] legislation by another Australian intermediate appellate court unless convinced that that interpretation is plainly wrong". See too Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ in Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 at 151-152 [135] ("Intermediate appellate courts and trial judges in Australia should not depart from decisions in intermediate appellate courts in another jurisdiction on the interpretation of Commonwealth legislation or uniform national legislation unless they are convinced that the interpretation is plainly wrong"); and Rogers J in Hamilton Island Enterprises Pty Ltd v Commissioner of Taxation [1982] 1 NSWLR 113 at 119 ("In my view it is of cardinal importance in the proper administration of justice that single judges of State Supreme Courts exercising federal jurisdiction should strive for uniformity in the interpretation of Commonwealth legislation. Unless I were of the view that the decision of another judge of co-ordinate authority was clearly wrong I would follow his decision").
145 In my respectful view, and notwithstanding the views expressed in Re Octaviar and in Harris Scarfe, I regard myself as being bound to follow the majority finding in Greig that once an application under s 588FF(3)(b) of the Act for an extension of time has been determined, it cannot be re-heard if an extension order made upon that application is later set aside
146 I do not regard that decision as plainly wrong.
147 On the contrary, in my respectful view, the conclusion reached by Williams JA and Jerrard JA was correct for the reasons their Honours gave.
148 For those reasons, in my view, it is not open to me to re-hear the original application, and I decline to do so.
149 But in any event, for reasons I will turn to shortly, in any event I would not allow the liquidator's nunc pro tunc application with respect to Sinoace BVI.
150 Before turning to the liquidator's nunc pro tunc applications, I need first to deal with an additional issue that concerns Sinoace HK.