GSA Industries (Aust) Pty Ltd, in the matter of Third Julex Pty Ltd v Third Julex Pty Ltd

REASONS FOR JUDGMENT 1 Once again it is necessary to deal with the aftermath of the decision by the High Court in Re Wakim; Ex parte McNally (1999) 163 ALR 270. Whatever the outcome, the parties will have incurred costs that they could not have foreseen when this proceeding commenced. 2 The respondent, Third Julex Pty Ltd (in liquidation), was a hopelessly insolvent company. On application by the applicant, an unsecured creditor, the company was wound up and Mr Kelly was appointed its liquidator. The orders were made by a Registrar of the Federal Court at a time when the authorities were to the effect that this Court had jurisdiction to entertain claims under the Corporations Law. The winding up application was not opposed. At the hearing it was not suggested that the Court did not have jurisdiction to make the orders sought. 3 After his appointment, Mr Kelly conducted an investigation into the affairs of the company as was his duty. It appeared to Mr Kelly that the company had a good claim against Bitzer Australia Pty Ltd to recover unfair preferences. Mr Kelly and the company commenced an action against Bitzer Australia in the Magistrates' Court at Melbourne claiming $20,000. Presently that action is stalled. 4 Bitzer Australia brings an application to set aside the Registrar's order. I take this to be an application to review, purportedly pursuant to s 35A(5) of the Federal Court of Australia Act 1976 (Cth). It also asks for a declaration that Mr Kelly was not lawfully appointed as the liquidator of the company. The basis for each claim is the decision in Re Wakim. There the High Court held that the Federal Court cannot exercise jurisdiction under the Corporations Law. Accordingly, so it is said, the orders made by the Registrar have no effect (being void) and should be set aside on the review or alternatively it should be declared that the company is not in liquidation and has no liquidator. If any of those orders are made Bitzer Australia will apply to have the proceeding in the Magistrates' Court dismissed. 5 I can dispose of the request for a declaration in short shrift. The claim is based upon a false premise. Bitzer Australia asserts that in view of the holding in Re Wakim the orders made by the Registrar are a nullity. However it is clear enough, and supported by authority, that an order of a superior court such as the Federal Court, made in excess of jurisdiction is voidable and remains valid and enforceable until set aside: see eg Cameron v Cole (1944) 68 CLR 571; Re Zagoridis; ex parte Q'Plas Group Pty Ltd (1990) 27 FCR 108; R v Sagacio; Ex parte Katelaris (1990) 99 FLR 439; Autistic Association of New South Wales v Dodson [1999] FCA 715; Australia and New Zealand Banking Group Ltd v Merribee Pastoral Industries Pty Ltd (1998) 84 FCR 367; Robins v Incentive Dynamics Pty Ltd [1999] FCA 1651; Westpac Banking Corporation v Paterson (1999) 167 ALR 377. It follows that the requested declaration cannot be granted. 6 On the question whether the orders of the Registrar should be set aside because they were made in excess of jurisdiction, it is necessary to have regard to the Federal Courts (State Jurisdiction) Act 1999 (Vic) which came into force on 15 December 1999. By that Act an "ineffective judgment" is preserved as if that judgment had been a valid judgment of the trial division of the Supreme Court of Victoria: see s 6 of the State Jurisdiction Act. An "ineffective judgment" is a judgment of a Federal Court in a State matter given or recorded before 15 December 1999 in the purported exercise of jurisdiction purporting to have been conferred on the Federal Court by a relevant State Act: see s 4(1). The Corporations (Victoria) Act 1990 (Vic) is a relevant State Act. It is the enactment that purported to confer on the Federal Court jurisdiction under the Corporations Law. Therefore the winding up order and the order appointing a liquidator are ineffective judgments. 7 The effect of the State Jurisdiction Act is that the future course of the winding up proceeding should be dealt with by the Supreme Court of Victoria. It may be doubtful whether this court now has jurisdiction to deal with the matter at all (see Edensor Nominees Pty Ltd v Australian Securities & Investments Commission [2000] FCA 231) although I am of the opinion that an order could be made setting aside the decision of the Registrar for want of jurisdiction had the State Jurisdiction Act not become law. 8 I should mention that even if this Court were able to consider the validity of the decision of the Registrar, I would not undertake that task. Under the rules in force when the Registrar's decision was made an appeal against his decision was required to be lodged within twenty-one days (see the former O 71, r 7) unless an extension was allowed. 9 I would not be disposed to grant an extension. My reasons are as follows: (1) Bitzer Australia did not oppose the making of the winding up order. On the current state of the authorities it had standing to do so (see Re Gasbourne Pty Ltd [1984] VR 801), but it seems that it was either indifferent to the possibility of a winding up or made a conscious decision not to intervene. (2) The company is hopelessly insolvent and the interests of creditors would not be advanced if the winding up order is revoked. Indeed, all that would occur if the order were to be set aside is that the company would be wound up by the Supreme Court of Victoria. (3) It is likely that many people including the liquidator have acted on the faith of the winding up order and their transactions should not be disturbed. 10 In the result I will refuse the relief sought by Bitzer Australia, dismiss its application and order that it pay the costs of the company. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein.