Infact Consulting Pty Ltd v Kyle House Pty Ltd

CATCHWORDS : CORPORATIONS - winding up - statutory demand - appeal from decision of Associate Judge dismissing application for order setting aside demand - PROCEDURE - appeal - from Associate Judge - whether order dismissing application for order setting aside statutory demand is "final order" - whether correct avenue of appeal is to Court of Appeal or court constituted by a judge

Supreme Court Act 1970, ss.101(1)(a), 104 LEGISLATION CITED : Supreme Court Rules 1970, Part 60 rule 17

A-Pak Plastics Pty Ltd v Merhone Pty Ltd (1995) 17 ACSR 176 CASES CITED : Buckland Products Pty Ltd v Deputy Commissioner of Taxation [2003] VSCA 85 Meehan v Glazier Holdings Pty Ltd [2005] NSWCA 24

Infact Consulting Pty Limited - Appellant PARTIES : Kyle House Pty Limited - Respondent

Mr L.J. Karp - Appellant COUNSEL : Mr R.A. Parsons - Respondent

Cross Law - Appellant SOLICITORS : Norbert Lipton & Co

LOWER COURT JURISDICTION : Supreme Court (Master)

LOWER COURT JUDICIAL OFFICER : Associate Justice Macready

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST

2836/05 INFACT CONSULTING PTY LTD v KYLE HOUSE PTY LTD

1 The plaintiff, having been unsuccessful before Macready AsJ upon an application for an order setting aside a statutory demand, has purported to appeal to the court constituted by a judge by filing a document entitled "Notice of Appeal from Associate Judge". 2 Two orders were made by the Associate Judge. The first was an order under s.459L of the Corporations Act 2001 (Cth) dismissing the plaintiff's application for an order under s.459H setting aside the statutory demand. The second was an order under s.459F(2) extending the time for compliance with the statutory demand. 3 These orders were made (and the Associate Judge's reasons delivered) on 16 August 2005, that is, the day next following that on which the Civil Procedure Act 2005 and the Uniform Civil Procedure Rules 2005 commenced and consequential amendments to the Supreme Court Act 1970 and the Supreme Court Rules 1970 came into effect. 4 By virtue of s.118(2)(5) of the Supreme Court Act as now in force (and in force on 16 August 2005), the decisions of the Associate Judge to dismiss the plaintiff's application for an order setting aside the statutory demand and to make an order extending time for compliance were decisions of the Supreme Court constituted by an Associate Judge. The Associate Judge's orders were accordingly orders of the court in a division as referred to in s.101(1)(a) of the Supreme Court Act: "Subject to this and any other Act and subject to the rules, an appeal shall lie to the Court of Appeal from:

(a) any judgment or order of the Court in a Division …" 5 This generally expressed right of appeal to the Court of Appeal from an order of the court in a division is, however, denied where the order in question is an order of an Associate Judge. Such a right exists in respect of an order of that kind only if conferred by the rules of court. This is the effect of s.104 of the Supreme Court Act: "Subject to the rules, an appeal shall not lie to the Court of Appeal from any decision, judgment, order, opinion, direction or determination of the Court in a Division constituted by an associate Judge, registrar or other officer." 6 Where, having regard to s.104 and the provisions of the rules, provision is made for appeal from Associate Judge to the Court of Appeal, such an appeal lies accordingly. It is only where that avenue of appeal does not exist that an appeal lies from an Associate Judge to the court constituted by a judge. Under the provisions as they now stand (and were in force on 16 August 2005), that alternative (and, as it were, default) avenue of appeal derives from Part 45 rule 4 of the Uniform Civil Procedure Rules. 7 The provision of the rules of court relevant to the operation of s.104 in the present case is Part 60 rule 17 of the Supreme Court Rules: " Cases for appeal An appeal shall lie to the Court of Appeal in accordance with section 101 and 103 of the Act, subject however to the leave of the Court of Appeal in any case to which subsections (2) and (4) of section 101 apply, from any decision of the Court in a Division constituted by an associate Judge:

(a) upon a trial pursuant to Schedule D Part 3 paragraphs 1, 2, 3, 3A, 4 (a), 8, 9, 17, 17A, 24, 25, 26, 27 and 28,

(a1) in proceedings referred pursuant to Schedule D Part 3 paragraphs 5, 5A and 5B,

(b) in proceedings under the provisions (except sections 13 to 21 inclusive, which relate to guardianship) of the Testator's Family Maintenance and Guardianship of Infants Act 1916 , (c) in proceedings under section 14 or section 22 of the Married Persons (Property and Torts) Act 1901 , (d) in proceedings under the Family Provision Act 1982 ,

(e) in proceedings under the Property (Relationships) Act 1984 ,

(f) in proceedings on an application for review of taxation of costs,

(g) in proceedings under section 208L or section 208M or section 208N of the Legal Profession Act 1987 ,

(h) in proceedings under section 13 of the Married Persons (Equality of Status) Act 1996 ,

(i) in proceedings determining a question of costs with respect to a matter that has been otherwise finalised,

(j) on an application to extend a period of limitation, fixed by or under an enactment, within which original proceedings must be brought, or

(k) where the decision of the associate Judge is a final decision other than: (i) a decision on an application for a summary judgment, or (ii) a decision on an application for a summary dismissal of proceedings." 8 This provision, clearly enough, describes the cases in which an appeal lies to the Court of Appeal from a decision of the court in a division constituted by an Associate Judge, making it clear that such an appeal is an appeal in accordance with s101 and s103 of the Act. 9 One such case is the case set out in par (k) of Part 60 rule 17. That paragraph has been in its current form since 27 August 2004. It refers to the case where the decision of the Associate Judge is a final decision, other than a decision on an application for a summary judgment, or a decision on an application for a summary dismissal of proceedings. 10 It is submitted on behalf of the defendant that the orders made by the Associate Judge on 16 August 2004 were final orders. The plaintiff says that each order (or, at least, the order extending time for compliance with the statutory demand) was not a final order but, rather, an interlocutory order. 11 I accept the submission made on behalf of the defendant and reject the submission made on behalf of the plaintiff. It is made clear by the decision of the Court of Appeal in A-Pak Plastics Pty Ltd v Merhone Pty Ltd (1995) 17 ACSR 176 that an order setting aside a statutory demand is a final order. Equally, an order dismissing an application for an order setting aside a statutory demand must be a final order. The fact that, at the same time, an order is made extending time for compliance with the statutory demand does not change the quality of the dismissal order, nor can the order extending time be regarded in its own right as an interlocutory order. The simple fact is that, following the making of both such orders on 16 August 2005, the proceedings in which the plaintiff sought to challenge the statutory demand were complete. No further question remained to be agitated between the parties in respect of the subject matter of that proceeding. No further order remained to be sought in the proceeding. No further submissions remained to be made. No further step remained to be taken. No further relief was in contemplation, so far as that proceeding was concerned. It is, of course, impossible to argue that the orders dealing with the statutory demand somehow stood in an interlocutory relationship to any separate and subsequent proceeding seeking a winding up order that the defendant might choose to initiate on the basis of the statutory consequences of failure to comply with the statutory demand, assuming non-compliance with it within the extended period. 12 I might add that the nature of an order of this kind as a final order is borne out by the decision of the Victorian Court of Appeal in Buckland Products Pty Ltd v Deputy Commissioner of Taxation [2003] VSCA 85 and is, I think, also recognised in the more recent decision of the Court of Appeal of this court in Meehan v Glazier Holdings Pty Ltd [2005] NSWCA 24. 13 My conclusion, therefore, is that the present case is within Part 60 rule 17(k) of the Supreme Court Rules so that the correct avenue of appeal is that laid down by Part 60 rule 17, namely, appeal to the Court of Appeal; and that the residual or default power of the court constituted by a judge to hear an appeal from an Associate Judge (preserved, as I have said, by Part 45 rule 5 of the Uniform Civil Procedure Rules 2005) is not exercisable in this case. 14 The purported appeal to the court constituted by a judge is therefore incompetent and will be dismissed accordingly.

[Counsel addressed on costs] 15 The defendant seeks an order for costs, and there is no reason why costs should not follow the event. The defendant says that costs should be ordered on the indemnity basis because the plaintiff had been alerted to the question I have now determined by letter dated 10 October 2005. There is some merit in that suggestion, but I am satisfied that there was room for the plaintiff to make the submissions it did make, with the result that costs will not be ordered on the indemnity basis. 16 The result therefore is that the purported appeal instituted by the plaintiff's "Notice of Appeal from Associate Judge" is dismissed with costs.

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