Kirsten v Miller as executor of the estate of Detlef John Kirsten

B. Relevant principles 9 An application for leave to appeal must be heard and determined by a single judge unless a judge directs that the application be heard and determined by a Full Court: see s 25(2)(e) of the Federal Court of Australia Act 1976 (Cth) (FCA Act) and r 35.11 of the Federal Court Rules 2011 (Cth) (Rules). 10 By s 25(2) of the FCA Act, applications for leave to appeal to the Court or for an extension of time within which to institute an appeal to the Court must be heard and determined by a single judge unless, relevantly: (e) a Judge directs that the application be heard and determined by a Full Court; 11 Section 25(2)(e) does not outline any criteria to be satisfied before an application for leave to appeal can be referred to a Full Court. As a matter of first principle, however, s 25(2) is intended to ensure that a Full Court is not "troubled to deal" with a leave application unless the particular circumstances of the application warrant consideration by a Full Court. In this regard, s 25(2) has been said to "create the expectation" that an application for leave to appeal will be heard and determined by a single judge unless a "good reason" is advanced for a Full Court to hear and determine the application: Oswal v Burrup Fertilisers Pty Ltd (Receivers and Managers Appointed) [2011] FCA 536 at [12]-[13] (Barker J). 12 In circumstances where an application for leave to appeal is evenly balanced, not straightforward, or not a clear-cut case for the grant, or refusal of leave to appeal, attention by a Full Court may be warranted. This approach has been explained on both efficiency and cost grounds and because no appeal to a Full Court would be available from a decision of a single judge exercising the appellate jurisdiction of the Court to dismiss a leave application, which may lead to substantial injustice: Oswal at [16]-[18] and the cases cited therein, including Optiver Australia Pty Ltd v Tibra Trading Pty Ltd [2008] FCA 47 at [9] (Buchanan J); Edwards v Santos Limited [2010] FCA 34 at [10] (Collier J). 13 In Saraceni v Australian Securities and Investments Commission [2012] FCA 899 at [5], McKerracher J explained that the following specific matters have been considered to be relevant to the exercise of the discretion to refer an application for leave to appeal to a Full Court: • the novelty and importance of the issues raised; • whether the matter is simply a "minor interlocutory squabble" or a matter of practice and procedure; • what is the most efficient disposition of the application having regard to factors such as those referred to above; • what will be the most cost effective means of considering leave; • the important question of whether or not the application for leave is apparently hopeless or unarguable; and • other factors relevant to the justice of the particular case. 14 In addition to these matters, either by way of amplification or supplementation, the question of whether the proposed appeal could be described as "at the substantive end of the spectrum", the extent to which arguments are likely to be duplicated and the impact on further rights of appeal, have each been considered relevant to the exercise of the discretion to refer an application for leave to a Full Court: Ensham Resources Pty Limited v AIOI Insurance Company Limited [2012] FCA 822 at [9] (Griffiths J); Chan & Naylor Norwest Pty Ltd v CNIP Pty Ltd [2011] FCA 1203 at [4] (Robertson J).

C. Background 15 In the proceedings below, the respondent sought declarations that (a) the "Ombrel Register of Members" (Ombrel Register) rather than the "Kirsten Ombrel Register of Members" was the correct register of members of Ombrel Pty Ltd (Ombrel), and (b) Detlef John Kirsten (deceased) is registered in Ombrel's register of members as the holder of 99 Ombrel Shares (register issue). The respondent also sought orders pursuant to s 1071F(2) of the Corporations Act 2001 (Cth) (Corporations Act) requiring the applicant to register the transfer or, alternatively, the transmission of shares in Ombrel and in four other companies (registration issue). 16 In or about June 2023, the parties resolved the registration issue on the basis that the applicant would register the transfers or transmissions of the shares in Ombrel and the other four companies and provide a corrected register of members for Ombrel and each party would bear their own costs of the issue (settlement). The register issue was not resolved at this time. 17 Just prior to the matter being called for hearing on 10 July 2023, the primary judge was informed that the register issue had been resolved because the applicant had provided the respondent with the Ombrel Register: at J [9]. 18 Notwithstanding the resolution of all issues in dispute prior to the commencement of the hearing, the respondent sought her costs in pursuing the declarations with respect to the registration issue on the basis that it was "almost certain" to have succeeded in obtaining the declarations and the provision of the Ombrel Register was a capitulation by the applicant: at J [14]. 19 The applicant resisted any costs order on the basis that his conduct was reasonable and the provision of the Ombrel Register did not amount to a "capitulation": at J [16]. 20 The primary judge made the Costs Order on the basis that the applicant "capitulated at the last moment" and the applicant's conduct in defending the proceeding was "unreasonable": see J [70], [92]-[93]. 21 The Costs Order was made by the primary judge at the conclusion of a proceeding that had been the subject of a consensual resolution and in the absence of any relief being ordered. 22 The applicant accepts that it must establish error within the kind identified in House v The King (1936) 55 CLR 499; [1036] HCA 40 at 504-505 (Dixon, Evatt and McTiernan JJ) in order to succeed but submits that the Cost Order involves manifest error or injustice.

D. Draft notice of appeal 23 The applicant advances two grounds of appeal in the draft amended notice of appeal. 24 The first ground is the primary ground of appeal. The applicant seeks to contend in that ground that the primary judge materially erred in (a) finding that the applicant had "capitulated at the last moment": at J [92], (b) making the Costs Order, which was inconsistent with the settlement agreement reached between the parties, and (c) finding that the applicant's conduct in "defending the proceeding was unreasonable": see J [70], [93]. Specific examples of the manner in which the primary judge is alleged to have erred for each of the three limbs are particularised in the ground. 25 The second ground of appeal is confined to a contention that the primary judge ought to have exercised his discretion to make no order as to costs.

E. Consideration 26 In my view, the application for leave to appeal is not straightforward and the case for leave appears to be evenly balanced, as made clear by the substantive matters raised in the draft amended notice of appeal, which could not be described as hopeless or unarguable. Nor, could the matters raised in the draft amended notice of appeal be characterised as simply a "minor interlocutory squabble" or matters of practice and procedure. 27 Rather, being mindful of the need to be circumspect as to the prospects of any appeal, I am satisfied, for the following reasons, that there is good reason for the application for leave to appeal to be heard and determined by a Full Court: (a) the Costs Order was made in circumstances where the parties had reached a settlement of the registration issue, being the substantive matter in dispute, there had been no hearing on the merits, no substantive orders or declarations were made by the Court and the parties had expressly agreed between themselves that there was to be no Costs Order with respect to the registration issue; (b) the Costs Order was discounted because "the proceedings dealt with a number of matters involving companies other than Ombrel" but there did not appear to be any discount to reflect the parties' agreement that there would be no costs order with respect to the registration issue; (c) the likely quantum of the Costs Order may well be significant because it was an order that required the applicant to pay to the respondent 40% of her costs of the entire proceedings; (d) the "unreasonable" finding was, at least in part, based on the proposition that it was a "legal impossibility" for a company to acquire shares in itself, a proposition that is inconsistent with the terms of s 259A of the Corporations Act; and (e) the contention by the applicant that the primary judge made findings as to credit, state of mind and motivation of the applicant, in the absence of any hearing. 28 A further relevant consideration is that there is presently no contradictor because the respondent has declined to make any submissions on the application for leave to appeal. The strength of the proposed appeal grounds is a relevant consideration for both the purpose of determining whether leave to appeal should be granted and any appeal if leave is granted. It may well lead to an inefficient disposition of the matter if the Full Court was to hear, for the first time, contentions from the respondent at the hearing of an appeal that would have led to leave to appeal being refused had they been raised earlier. 29 In all the circumstances, I am satisfied that the most efficient, just and cost-effective disposition of the appeal is for the application for leave to appeal to be heard by a Full Court and, subject to any contrary direction by the Full Court, at the same time as any appeal.

F. Extension of time 30 An additional matter that will need to be addressed is that the applicant requires an order extending the time for him to file his application for leave to appeal. Pursuant to r 35.13 of the Rules, the application was required to be filed by 12 September 2023. The application was lodged for filing at 4.31pm on that day. Rule 2.25(3), however, provides that an application that is received for filing after 4.30pm is taken to be filed the following day: Lamb v Sherman (2023) 298 FCR 79; [2023] FCAFC 85 at [22]-[24], [28]-[42] (Rares, Rofe and Downes JJ). 31 The applicant seeks an extension of time for filing the application for leave to appeal to 13 September 2023. 32 The considerations that are relevant to the discretion to grant an extension of time to file an application for leave to appeal include the length of the delay and the merits of the proposed application: Pfizer Ireland Pharmaceuticals v Samsung Bioepis Au Pty Ltd [2017] FCA 573 at [4] (Foster J). Hence, although the length of the delay was de minimis, it would be more appropriate for the extension of time application to be determined by the Full Court at the same time as considering the application for leave to appeal in order to avoid the risk of competing views being expressed as to the merits of the proposed application.

G. Disposition 33 Orders will be made that the applications for leave to appeal and to extend the time for filing the application for leave to appeal are to be determined by a Full Court. Given the submitting notice by the respondent, I am satisfied that there should be no order as to costs. I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Halley.