REASONS FOR JUDGMENT
1 These three proceedings were heard together and the plaintiff in each is PrimeSpace Property Investment Limited, a responsible entity of a registered managed investment scheme. The plaintiff applies for orders extending the time within which it must comply with statutory demands issued to it until after the determination by a Full Court of its appeals from orders made by Griffiths J on 9 April 2015. Griffiths J refused its applications to set aside the statutory demands: PrimeSpace Property Investment Ltd v Vienne Pty Ltd [2015] FCA 326. When the plaintiff signalled its intention to appeal it became necessary for it to seek further to extend the time for compliance, since that time cannot be extended after it has expired: Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corporation Ltd (2008) 232 CLR 314 at 327 [27]. Interim machinery orders to permit the bringing of the applications to extend time in an orderly fashion were made on 16 April 2015 by Griffiths J and 20 April 2015 by me, with the effect of extending the time for compliance with the demands to 6.00 pm today.
2 The power of the Court to grant an extension until the hearing of any appeal is not in doubt: s 459F(2)(a)(i) of the Corporations Act 2001 (Cth). I assume in the plaintiff's favour that if the time for compliance is not extended then its appeals will be rendered pointless. There may be some rather nice questions about this; in particular, there may be a question about how the inability to extend time after it has expired (as explained in Aussie Vic Plant Hire) would operate if an appellate court vacated orders refusing to set aside a statutory demand and replaced them instead with an order setting aside the demand. That would require one to determine how the construction point identified in Aussie Vic Plant interacted with the apparently broad grant of appellate jurisdiction in s 24 of the Federal Court of Australia Act 1976 (Cth). Since I assume this in favour of the plaintiff, it is not necessary for me to dwell any further on the matter.
3 I also assume in the plaintiff's favour that it will be prejudiced in a largely irreversible - or certainly very inconvenient - way, if an extension is not granted.
4 The substantive question remaining on the present application is, therefore, whether the plaintiff has established that its proposed appeals have sufficient merit to justify any further extension. This reduces down to an inquiry into whether its proposed appeals are arguable: see Jem Developments Pty Ltd v Hansen Yuncken Pty Ltd (2006) 60 ACSR 393 at 394 [3]; Australian Beverage Distributors Pty Ltd v Cranswick Premium Wines Pty Ltd (2004) 50 ACSR 544.
5 Griffiths J was invited to set aside the demands on the basis that there was a genuine dispute between the plaintiff and the defendant creditors, within the meaning of s 459H of the Corporations Act 2001 (Cth). The plaintiff also argued that the failure to specify a New South Wales address for the service of those creditors constituted 'some other reason why the demand should be set aside', within the meaning of s 459J(1)(b) of the Corporations Act. He determined that there was no such dispute and that the address for service issue was not 'some other reason' to set aside the demands. The address issue has now fallen away. The question on the present application, therefore, is whether it is arguable that his Honour's conclusion about the genuine dispute was incorrect.
6 The dispute was as follows: the plaintiff issued convertible notes to the defendant creditors and is a trustee. Before Griffiths J and myself three arguments, cumulatively, were advanced as to why the plaintiff is not liable to pay the debts in respect of which the statutory demands have been made. These were:
(1) as a trustee the plaintiff has no personal liability at all;
(2) its liability was limited to the assets of the relevant trusts; and
(3) its liability is limited to any surplus which remains on a winding up.
7 Griffiths J rejected argument (1) as untenable. There is no reason to doubt the correctness of his Honour's conclusion in that regard; it is plainly correct: Elders Trustee & Executor Co Ltd v E G Reeves Pty Ltd (1987) 78 ALR 193 at 253.
8 The second and third arguments dependent for their efficacy upon the terms of the subscription agreements under which the convertible notes were issued. Nothing in those terms expressly stated that the creditors' rights to seek repayment of their debts were limited in either of the ways suggested in arguments (2) or (3).
9 It was said, however, that proper consideration of the subscription agreements revealed that they implicitly applied the plaintiff's constitution to the fabric of those agreements. That there might be some connexion between a subscription agreement for convertible notes and the issuer's constitution is hardly surprising when the agreement provides for the conversion of debt interests to equity interests.
10 The relevant provisions of the subscription agreement were as follows:
'BACKGROUND
A. Primespace has requested the Investor to provide funds to Primespace for pre-development expenses and for other purposes.
B. Primespace is the responsible entity of the Fund.
C. The Fund is an unlisted unit trust governed by the Constitution.
D. The Fund is a Registered Scheme as defined in the Constitution.
E. The Investor has agreed to subscribe for the convertible notes of the Fund on the terms and conditions set out in this Agreement.
…
1.2 Interpretation
In this agreement
…
(k) words and phrases used in this Agreement shall have the same meaning ascribed to them in the Constitution;
…
4 CONSTITUTION
The Agreement is supplemental to the Constitution. Should there be any inconsistency between the provisions of this Agreement and the Constitution, this Agreement shall prevail.'
11 These provisions simply do not result in the express application of the constitution to the subscription agreement. Nor can I perceive any reason why a term would be implied that the constitution was to be applied to the subscription agreements. It is not necessary for the efficacy of the agreements that there should be such a term nor is it so obvious that it goes without saying: BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 283.
12 In any event, even if that problem could be surmounted, the argument would still fail. The plaintiff seeks to show that the constitution limits the plaintiff's liability to the trusts' assets (or a surplus on a winding up). There can be no doubt that the subscription agreements do not do this. Hence, even on the plaintiff's argument, the constitution will then prevent what the subscription agreement allows. This would be an inconsistency of the kind referred to in the second sentence of cl 4 and hence the constitution would be outflanked by the subscription agreements.
13 Accordingly, I do not think that the plaintiff has any reasonable prospects of succeeding on its appeals.
14 The application in each proceeding will be dismissed with costs
I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram.