In the matter of Pan Pharmaceuticals Ltd (in liq) - Brennan v McGrath

Judgment 1HER HONOUR: Before me for hearing on 29 April 2011 was an application brought by John Frederick Brennan, seeking an extension of time in which to file an appeal under s 1321 of the Corporations Act 2001 (Cth) against the rejection by the defendants (the liquidators of Pan Pharmaceuticals Ltd) of a proof of debt in the sum of $678,596.84 lodged by him in November 2004. The proof of debt was rejected by the liquidators on 20 December 2004. The amount claimed in the proof of debt is a claim for damages for alleged wrongful dismissal of Dr Brennan's employment as the then general manager of Pan Pharmaceuticals (and for reimbursement of some out of pocket expenses). 2The liquidators' notice of rejection of the proof of debt prescribed a 14-day time limit for challenging that decision, thus expiring on or about 3 January 2005. The present application is brought under sub-regulations 5.6.54(2) and (3) of the Corporations Regulations 2001 (Cth), which provide, relevantly, that the court may extend the time for the filing of an appeal against the rejection of a formal proof of debt or claim beyond the time specified in the notice of the grounds of rejection and may do so even if the period specified in the notice has expired. 3The present application was commenced almost six years after the liquidators' decision. The liquidators oppose the application on the basis of delay and prejudice. The winding up of Pan Pharmaceuticals commenced on 23 September 2003. Other than for this matter, the liquidation of the company has effectively been finalised. It is anticipated that (again but for this matter) there will be a final distribution in the order of one cent in the dollar for creditors whose claims have been admitted. Legal Principles 4It is common ground that the discretion to grant an extension of time for appeal against the rejection of a formal proof of debt or claim is broad and flexible. Though unfettered (in the sense that there is no legislative prescription on its exercise), it is a judicial discretion that (like the discretion to extend time for the service of a writ or to extend time to commence proceedings outside a statutory limitation period) is not at large. To adopt the words of Ipp JA in a somewhat similar context (though there his Honour was considering what was required for the exercise of a discretion to extend time for service of a writ in the context of an application to discharge an ex parte order for such an extension), the discretion is to be exercised in the context of and by reference to the statute by which it is conferred (and any other statute that is relevant to the legislative context) and in accordance with principles developed by judicial decisions ( Arthur Andersen Corporate Finance Ltd v Buzzle Operations Pty Ltd (in liq) [2009] NSWCA 104 at [28] ). In Buzzle , the relevant statutory context included ss 56-59 of the Civil Procedure Act 2005 (NSW). 5In Re Estate of Knight (a bankrupt); Rocom International Pty Ltd (in liq) v Prentice [2002] FCA 604 Tamberlin J (at [4]), referred to the factors that had been assembled by Kirby J in Jackamarra v Krakouer (1998) 195 CLR 516 at [539] - [543] as relevant when considering the grant of an extension of time, listing them as follows: