Plaintiff v Defendant

1. On 23 October 2024 the plaintiff, Bullet Masonry Pty Ltd, by an originating process, applied to wind up the defendant, Elite Project Management & Associates Pty Ltd, pursuant to ss 459A and 459P of the Corporations Act 2001 (Cth) ('the Act').
2. On 26 February 2025, a judicial registrar ordered that this proceeding be listed for hearing before an associate judge on 28 May 2025.
3. Section 459R of the Act provides:

Period within which application must be determined

(1) An application for a company to be wound up in insolvency is to be determined within 6 months after it is made.

(2) The Court may by order extend the period within which an application must be determined, but only if:

(a) the Court is satisfied that special circumstances justify the extension; and

(b) the order is made within that period as prescribed by subsection (1), or as last extended under this subsection, as the case requires.

(3) An application is, because of this subsection, dismissed if it is not determined as required by this section.

(4) An order under subsection (2) may be made subject to conditions.

1. The hearing was listed more than six months after the application was made. No order was made by the judicial registrar to extend time pursuant to s 459R of the Act and, this proceeding was dismissed by s 459R(3) on 23 April 2025.
2. The plaintiff, Bullet Masonry Pty Ltd, applies pursuant to r 36.07 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) to correct the order of the judicial registrar under the 'slip rule'.
3. Rule 36.07 provides:

Amendment of judgment or order

The Court may at any time correct a clerical mistake in a judgment or an order or an error arising in a judgment or an order from any accidental slip or omission.

1. The defendant opposes an order being made under the 'slip rule' submits that the application stands dismissed pursuant to s 459R of the Act.
2. The defendant relies on Flint v Richard Busuttil and Co Pty Ltd ('Flint').[1] In that case, an order had not been made extending a creditor's petition before the expiration of 12 months. By virtue of s 52(5) of the Bankruptcy Act 1966 (Cth), the petition had lapsed.
3. A federal magistrate applied the 'slip rule' and extended the creditor's petition after it had lapsed on the basis that that the running of time had not been addressed or raised at a directions hearing three months prior to the expiration date.
4. On appeal, the Full Court of the Federal Court held the 'slip rule' was not properly invoked because no error could be established as at the date of the directions hearing, and it was unclear whether an extension would have been ordered as at that date, had the matter been addressed.
5. Allsop CJ, Katzmann and Perry JJ said:

On 29 August 2012 there was a directions hearing before the federal magistrate. If an application had been made on that day for an extension of the creditor's petition under s 52 of the Bankruptcy Act, his Honour would have been required to consider whether it was just and equitable to extend the petition and, if so, in what terms the order should be made. We respectfully disagree with the conclusion of the primary judge that there is no doubt that the order would have been made. The review of the registrar's decision was not without its complexity, but almost three months remained before the petition would lapse. Instead of extending the period of the creditor's petition, the federal magistrate may have shortened the time for Ms Flint to file her submissions. He may have listed the creditor's petition for hearing on a date in early November, conditionally, depending upon the outcome of the application before him. These steps would have reflected the expedition required and the public policy that inheres in the prompt dispatch of a creditor's petition under s 52. The interests of creditors generally can be adversely affected by delays in the disposition of bankruptcy matters. Thus, if there was an error on the part of either the representative of the creditor in not making the application for an extension on (or before) 29 August or in the federal magistrate not adverting to the question, it is not clear what course would probably have been taken and, a fortiori, not clear that an order would have been made at that time extending the life of the creditor's petition.[2]

1. The defendant submits that s 52(4) of the Bankruptcy Act 1996 (Cth) is a mirror provision to s 459R of the Act. The defendant also submits that there is a very similar factual situation in Flint to the one here.
2. I note that the petition expired approximately three months after an order was made by a federal magistrate for submissions to be filed. Here the originating process was filed on 23 October 2024, the order was made on 26 February 2025, and the application was listed for hearing on 28 May 2025. There was also approximately two months between the time of the order and the expiration date pursuant s 459R for the application to be determined.
3. The Full Court in Flint raised doubt as to whether the order would have been made as the federal magistrate would have had to consider if it was just and equitable for the petition to be extended.
4. Pursuant to s 459R, the Court must be satisfied that there are special circumstances to justify the extension.
5. The defendant also relies on Hrycenko v Hrycenko (by his legal representative Hycenko) ('Hrycenko'),[3] which is another case in the Bankruptcy jurisdiction. In that case, on 29 July 2020, a petition was presented and on 14 May 2021, the primary judge made orders setting the matter for hearing on a date after 28 July 2021, which was a date after the petition lapsed. No order was made extending the life of the petition, and on 29 September 2021, the petition was heard. On 14 January 2022 the primary judge made an order under the 'slip rule' that the orders made on 14 May 2021 be amended nunc pro tunc by the addition of an order that the life of the petition be extended.
6. On appeal, the Full Court of the Federal Court held that the 'slip rule' was unavailable to make an order to extend the time of the petition.
7. Moshinsky J stated:

In Endresz v Commonwealth [2019] FCAFC 197; (2019) 273 FCR 286 (Endresz), Rares and Markovic JJ stated at [81]:

The Full Court in Flint recognised the considerable constraints that apply where there is resort to the slip rule in circumstances where the exercise of an independent discretion is required. Whether the slip rule can be invoked where, through an accidental slip or omission an order was not made extending the life of a petition pursuant to s 52(5) of the Act before the expiration of 12 months from the date of presentation of a petition, will depend upon the circumstances. In particular, as s 52(5) of the Act requires the exercise of an independent discretion, the question of how the discretion would have been exercised had the order been made at the earlier time becomes a relevant factor. As the Full Court recognised in Flint, if the discretion could only be exercised one way it is difficult to see how the slip rule could not apply. But, if there is any room for debate as to the outcome of an exercise of the discretion under s 52(5) it is difficult to see how the slip rule could be engaged.

(Emphasis added.)

Application of principles to facts of this case

In my view, in the circumstances of this case, it was not open to the primary judge to apply the slip rule to amend the orders made on 14 May 2021 to include an order extending time pursuant to s 52(5) of the Bankruptcy Act. This is because it is not clear what order would have been made had the creditor made an application, on 14 May 2021, for an order under s 52(5) that the period at the expiration of which the petition would lapse be extended.[4]

In the circumstances, by parity of reasoning with Flint, it is not clear what course would probably have been taken, and therefore what order would have been made, if an application for an order under s 52(5) had been made on 14 May 2021. As in Flint, there was still a substantial period of time before the creditor's petition was due to lapse. In these circumstances, to adopt the language of Endresz, there is "room for debate" as to how the discretion in s 52(5) would have been exercised.[5]

1. In Donchiod Pty Ltd (in liq) v Merrion B Pty Ltd ('Donchiod'),[6] on 4 October 2019 the respondent filed a winding up application under s 459P of the Act. The application was heard by an associate judge on 2 March 2020, who made orders directing the parties to file further written submissions and reserved his decision. On 3 April 2020, the six-month period in which the application was to be determined expired. In June 2020, the respondent applied under the slip rule to extend the time under s 459R. On 14 August 2020, the associate judge applied the 'slip rule' and wound up the company.
2. On 9 September 2022, the decision in Hrycenko was published, which caused the director of the company that had been wound up to file a notice of appeal challenging the 'slip rule' order. This was dismissed by a judge and an appeal was made to the Court of Appeal.
3. The associate judge, in coming to his decision, relied on Elyard Corporation Pty Ltd v DDB Needham Sydney Pty Ltd ('Elyard')[7] a decision of the Full Court of the Federal Court_._
4. In that case, the Full Court of the Federal Court held that where a later order under the 'slip rule' corrects an error in an earlier order, the later order speaks from the date of the earlier corrected order, so the earlier order is deemed to be treated as having always operated as corrected. It held that the 'slip rule' could be utilised, even though at the time of the making of the order, the requisite period under s 459R had expired.
5. The Court of Appeal accepted that Elyard was correctly determined. It also noted that notwithstanding reservations, Elyard has been applied in a number of decisions of single judges.
6. The Court of Appeal referred to Hrycenko made two preliminary observations. First, the decision in Hrycenko does not resolve the critical issues which concerns the interaction between s 459R and the 'slip rule' power because none of the three judges expressly stated that the reasoning in Elyard was wrong or plainly wrong. Second, the 'slip rule' in Donchiod was made prior to the date that the winding order was made. The Court of Appeal also said that 'case was concerned with different legislation in circumstances where the ultimate question must turn on an examination of the relationship between the particular statutory provision and the slip rule power'.[8]
7. The Court of Appeal, in coming to its decision, said:

In this case, the objective circumstances largely speak for themselves. The parties had spent time and money on making both written submissions and oral submissions over the course of the day on 2 March on a matter of some complexity. The associate judge had also allocated a day in hearing the case such that all that remained was for him to make a determination. The Court clearly thereby intended that the application would remain on foot until the delivery of a judgment so that such time and effort was not an exercise in futility. That was the only rational explanation for ordering further submissions and reserving judgment.

In so far as it is suggested that other options were available, as at 2 March there was only around 1 month until the application would expire, absent an extension. In these circumstances, the associate judge found that 'it goes without saying' that he would have allowed more time given his workload in March 2020. There is no basis for the suggestion that he was in a position to reprioritise his workload. Rather, we agree with the judge that there is no reason to doubt the associate judge's assessment of his own workload. We also agree with the judge that, given the solvency of the company was the key issue in the judgment and a matter of some complexity, it was not reasonably open to deliver a decision earlier and separate from the reasons.

We therefore consider that it was well open for the associate judge to find that he would have only exercised his discretion 'one way', namely, in favour of an extension.[9]

1. The defendant submits that Donchiod is to be distinguished because it considered the position of a retrospective granting of an extension order under the slip rule. In my view that is not a proper basis to distinguish Donchiod.
2. The defendant also submits that unlike Elyard, no application was made pursuant to s 459R(2) so as to attract the slip rule. Also, unlike Donchiod, the consideration for an extension of time was never put before a judicial officer for determination, so there is no order to correct by way of the slip rule. The defendant also refers to Flint where the Full Court considered that for the slip rule to apply, there must be an order in need for a correction.
3. Here, the order that needs correction is that of the judicial registrar which omitted reference to an extension of time pursuant to s 459R.
4. The Court of Appeal has made it clear that the case of Hrycenko is not of great assistance where the slip rule is made prior to the date of the winding up order. Here, a winding up order has not been made and therefore applying the reasoning of the Court of Appeal, it would be appropriate to apply the slip rule extending time under s 459R.
5. In its reasoning, the Court of Appeal noted that in the circumstances of that case, the Court clearly intended that the application remain on foot until delivery of the judgment, so that the time and effort expended in the case was not an exercise in futility.
6. In the case of Re Care A2 Plus Pty Ltd ('Care A2'),[10] Black J, where an order had already been made pursuant to s 459R(2), extended the time pursuant to s 459R(2) using the slip rule and said:

Second, it is inconceivable that his Honour would not have extended the time for a hearing, under s 459R of the Act, had the matter been drawn to his attention. The contrary view would require me to accept the extraordinary proposition that his Honour would, on the one hand, make orders to extend the time for Care A2's evidence and set the matter down for hearing today, but would do nothing to preserve the Court's ability to make effective orders today. That proposition need only to be stated to be rejected. I am satisfied that the time to determine the winding up should be extended, nunc pro tunc, under s 459R of the Act.[11]

1. In In the matter of CII Group Pty Ltd[12] where no order had been made under s 459R, unlike Care A2, Black J made orders that time be extended nunc pro tunc. His Honour said:

It is plain that the Court has power to extend the time to determine a winding up order under s 459R of the Act, nunc pro tunc. I should add to my oral judgment that, in Amorin Constructions Pty Ltd v Kamtech Electrical Services Pty Ltd (2008) 73 NSWLR 627; [2008] NSWSC 285, Hammerschlag J (as his Honour then was) on-served that the use of the slip rule, in respect of s 459R of the Act, should not be permitted to undermine the policy of Pt 5.4 of the Act which requires winding-up applications to be dealt with expeditiously. I accept that proposition and I proceed on that basis. Having said that, the Full Court of the Federal Court has observed in Flint v Richard Busuttil & Co Pty Ltd [2013] FCAFC 131; [2013] 216 FCR 375 at [46]; [2013] FCAFC 131 that it is difficult to see why the slip rule should not apply:

"[i]f the surrounding circumstances are such ... that it can be concluded that proper attendance for the matter (had the error not occurred) could only have resulted in the discretion being exercised in one way."[13]

1. The reasoning of the Court of Appeal applies to this application. I will make an order extending the time under s 459R of the Act. I am of the view that the judicial registrar would have extended time had s 459R been addressed at the hearing on 26 February 2025.

ELITE PROJECT MANAGEMENT & ASSOCIATES PTY LTD (ACN 132 752 071)

BROADWAY & FRAME PREMIX CONCRETE PTY LTD (ACN 106 469 363)

[1] [2013] FCAFC 131; 216 FCR 375.

[3] [2022] FCAFC 152; [2022] 294 FCR 233.

[6] [2024] VSCA 44; 74 VR 430.

[7] [1995] FCA 943; 61 FCR 385.

[9] Donchiod, per Kennedy, Macaulay and Lyons JJA, [111]-[113].

[10] [2024] NSWSC 1677.

[12] [2025] NSWSC 318.