Federal Court of Australia|1991-10-11

The applicant have leave to commence proceedings against the second respondent in respect of the causes of action described in the affidavits read in support of this motion.

Such leave does not extend to the taking of any step to enforce any judgment obtained in such proceedings against the property of the second respondent without the prior leave of this Court or the Supreme Court of Queensland.

The applicant shall not, without such prior leave, prove in respect of the whole or any part of any such judgment in the winding up of the second respondent.

Until Wednesday, 17 July next or further order, the second respondent by itself, its servants and agents, be restrained from parting with possession, dealing with, disposing of or encumbering any of the goods set out in schedule A to the application.

The application, the motion head today, a sealed copy of this order and all affidavits in support be served upon the respondents by a facsimile transmission or otherwise by 4.00 pm tomorrow, 12 July 1991.

The matter be remitted to a Judge of this Court for further hearing.

The proceedings be returnable for further hearing and directions by telephone directions to be given at 4.30 pm on Wednesday, 17 July next, before a Judge of this Court.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

I agree with the reasons given by Lockhart J. why this court has jurisdiction to give leave pursuant to s471(2) of the Corporations Law to commence or to continue a proceeding against a company in liquidation, notwithstanding that the order for winding up was made by another court, in this case the Supreme Court of Queensland, having jurisdiction under the Corporations Law.

2. Once the national character of the legislation that comprises the Corporations Law is recognised there is no reason to suppose that the word "Court" in s471(2) was intended to have a meaning narrower than that given to it by what is termed the dictionary section of the Corporations Law, s9 ,unless considerations of convenience or appropriateness provide such a reason.

3. But considerations of appropriateness are specifically addressed by s44 of the Corporations Acts of each State and of the Northern Territory ("the Corporations Acts") and by the equivalent section in the Commonwealth Act, s53 of the Corporations Act, 1989.

4. Section 44 of the Corporations Acts gives to a court having jurisdiction under s42 the power to transfer a civil matter to another court: "Where it appears to the court that, having regard to the interests of justice, it is more appropriate for the proceeding, or an application in the proceeding, to be determined by another court having jurisdiction in the matters for determination in the proceeding or application ....": s42(2). Section 44(3) provides:

"In deciding whether to transfer a proceeding or application

under subsection (2), the court must have regard to:

(a) the principal place of business of any body corporate

concerned in the proceeding or application; and

(b) the place or places where the events the subject to the

proceeding or application took place."

5. The court may transfer the proceeding or application on the application of a party made at any stage or it may do so of its own motion: s44(4).

6. Section 44(2) will allow a wide range of considerations to be taken into account in deciding whether it is more appropriate for a proceeding to be determined in another court. The expression "the interests of justice" is a broad one. Section 44(3) requires a court to have regard to the matters it specifies but it does not thereby limit the range of matters that fall for consideration under s44(2). Rather, s44(3) recognises that, Australia being a large country with widely dispersed main centres of population, it is necessary to have regard to practical connections between a proceeding, or an application in a proceeding, and a particular part or parts of Australia to see where the interests of justice lie when deciding whether another court is a more appropriate court to determine the matter. Section 44 certainly does not deny the relevance of existing proceedings in other courts in the same or a related matter. These may, depending upon the circumstances, be of great importance in determining whether or not to transfer, but the section does not single out such considerations for special treatment.

7. Considerations of appropriateness being addressed by the legislation in this broad way - notions of convenience being comprehended too by the width of s44 - there is no warrant for reading any limitation into the defined word "Court" where it appears in s471(2) of the Corporations Law. As defined by s9, "Court" includes this court when exercising the jurisdiction conferred upon it, as here, by s42 of the relevant Corporations Act.

8. Whether the court that made the winding up order is in fact the more appropriate court to determine an application for leave to proceed is a matter that can be determined when the application is made under s471(2) of the Corporations Law, bearing in mind that a court may act of its own motion to transfer the application to the court that made the winding up order, and bearing in mind also that the court may transfer any related proceeding before it in which it has jurisdiction under the Corporations Law.

9. In the particular circumstances of the present case, for the reasons given by Davies J., I do not consider that, having regard to the interests of justice, it is more appropriate that the application for leave to proceed, or the appeal under s1321 of the Corporations Law, be determined by the Supreme Court of Queensland or by any other court having jurisdiction. As to the specific matters to which s44(3) requires a court to have regard, the fact that the principal place of business of the second respondent is or was in Queensland is but one factor to be taken into account; the applicant, for example, carries on business in New South Wales. Although most, but not all, of the main events took place in Queensland it is more important that all the principal witnesses could more readily give evidence in Sydney than in Brisbane and that Sydney is the more convenient venue for the trial.

10. I agree with Davies J., for the reasons that he gives, that this is an appropriate case to exercise the jurisdiction conferred on the Court by s42 of the Corporations (Queensland) Act 1990 and to grant leave to proceed, on conditions, pursuant to s471(2) of the Corporations Law. Those conditions are of course of importance.

I have had an opportunity to read the reasons for judgment prepared by my brother Lockhart J. I agree with the views which his Honour has expressed and would merely add a few words of my own.

2. The object of the legislative scheme is to ensure that the Corporations Law of the Commonwealth and of each State and Territory operates, so far as possible, as if that law "constituted a single national Corporations Law applying of its own force throughout Australia." See, e.g., s.8(1) of the Corporations Law and s.13(1) of each State Corporations Act 1990. See also s.26(a) of each State Corporations Act which specifies it to be an object of the legislation that the Corporations Laws be "administered and enforced on a national basis, in the same way as if those Laws constituted a single law". In furtherance of this object, the Corporations Law in s.9 defines "Court" as meaning "the Federal Court or the Supreme Court of this or any other jurisdiction, when exercising the jurisdiction of this jurisdiction". It follows that when the words "the Court" are used throughout the Corporations Law, as frequently occurs, the reference is to whichever of the Federal Court or of the Supreme Courts of the States and Territories is called upon to exercise the jurisdiction under the Corporations Law. This provision is given force by s.42 of each State Corporations Act which provides that jurisdiction is conferred on the Federal Court and, subject to s.9 of the Administrative Decisions (Judicial Review) Act 1977 (Cth), on the Supreme Court of each State and Territory with respect to civil matters arising under the Corporations Law.

3. With respect to such matters, no court has primacy, e.g. because of the place of incorporation. Section 44(2) of each State Corporations Act confers, however, upon the court exercising the jurisdiction so vested, a power to transfer a proceeding or application to another court when, "having regard to the interests of justice, it is more appropriate for the proceeding, or an application in the proceeding, to be determined by another court having jurisdiction in the matters for determination in the proceeding or application". Moreover, courts having jurisdiction in civil matters arising under the Corporations Law, the Judges and the officers of those courts are enjoined by s.46 to "act in aid of, and be auxiliary to, each other in all such matters."

4. Thus, the Federal Court and the Supreme Courts of the States and Territories all have jurisdiction in civil matters arising under the "single national Corporations Law". Matters arising under the Corporations Law may be initiated in any such court and will be determined by that court unless, in the interests of justice, it is more appropriate for the proceeding or an application in the proceeding to be determined by another court.

5. The term "interests of justice" is a broad term which enables all relevant factors to be taken into account. Those factors include matters relating to the efficiency, including the economy and expedition, of litigation and matters of convenience having regard to the location of witnesses and records. The term would also encompass matters of policy relating to the administration of justice by the Federal Court and the State and Territory Supreme Courts.

6. I see no reason for reading the words "the Court" in sub-s.471(2) of the Corporations Law as having, in the context, a more limited meaning and as denoting either the Supreme Court of the State in which the corporation was incorporated or the particular court, whether it be the Federal Court or the Supreme Court of a State or Territory, which made a winding up order or appointed a provisional liquidator. In sub-s.471(2) and in the analogous sub-ss.444(1) and 500(2), the words "the Court" mean such court being the Federal Court or a Supreme Court of a State or Territory as is called upon to exercise the jurisdiction under the Corporations Law. The making of a winding up order by a court does not, of itself constitute that court as "the Court" exercising the jurisdiction in relation to matters thereafter arising with respect to the corporation in liquidation or its liquidator.

7. In the present proceeding, two matters arise under the Corporations Law. The first is an application for leave to proceed, an application made under sub-s.471(2), and the second is an appeal from an act or decision of the liquidators of Alcam Foods Pty Limited, the appeal being brought under s.1321 of the Corporations Law. In respect of these matters, which, being inter-related may be looked upon as one matter, the Federal Court has jurisdiction, the jurisdiction being conferred in this instance by the Corporations (Queensland) Act 1990 (Qld) with the consent of the Commonwealth. As application has been made to this Court, the Court has a duty to exercise the jurisdiction so conferred, subject to its discretion to transfer.

8. On the question of discretion as to whether this Court should transfer the application for leave or the appeal under s.1321 to the Supreme Court of Queensland, the question arises whether it would be in the interests of justice to do so. The applicant carries on business in New South Wales. The goods, the subject of the dispute between the parties, were ordered by the first respondent, Mr Laurie Campbell, whilst he was resident in the Northern Territory. Mr Campbell subsequently moved to Brisbane and requested that delivery be there made, as it was. It is alleged to be a term of the agreement for sale that property in the goods would not pass until payment in full had been made. Mr Campbell established Alcam Foods Pty Limited to conduct his business in Brisbane. That business was unsuccessful and, on 3 June 1991, the Supreme Court of Queensland ordered that Alcam Foods Pty Limited be wound up. The third respondents, who were appointed the liquidators, now claim title to the goods.

9. The applicant's witnesses are resident in New South Wales. Mr Campbell, the first respondent, is now also resident in New South Wales. Accordingly, all the principal witnesses could more readily give evidence in Sydney than in Brisbane. The evidence of the liquidators, if any, is likely to be in documentary form. Thus, Sydney is the convenient venue for the trial. Interlocutory matters can readily be dealt with by the Federal Court for, being a national court, it has registries both in Sydney and in Brisbane, the Court is familiar with dealing with interlocutory matters by telephone if necessary and the Court sits throughout the Commonwealth. In these circumstances, it would not be in the interests of justice to transfer the application for leave or the appeal under s.1321 to the Supreme Court of Queensland, thereby requiring additional costs to be incurred.

10. In In Re Phoenix Oil and Transport Co. Ltd. (No. 2) (1958) Ch 565 at 570, Wynn-Parry J. referred to a relevant element of policy when his Lordship contrasted a winding up by the court with a creditors' liquidation and said:-

"In the case of a winding up by the court, however,

different considerations arise. In this case the court is

conducting an administration, and so, as in the case of an

ordinary administration action in the Chancery Division, it

retains, under the express provisions of the statute, a much

greater degree of control."

11. This aspect, while important, is in the circumstances of this case adequately cared for by the Court's order that the applicant not take any step to enforce any judgment obtained in the proceedings against the property of Alcam Foods Pty Limited without the prior leave of this Court or the Supreme Court of Queensland and that the applicant shall not, without such prior leave, prove in respect of the whole or any part of such judgment in the winding up.

12. This was therefore an appropriate case to exercise the jurisdiction conferred on the Court by s.42 of the Corporations (Queensland) Act and to grant leave to proceed pursuant to sub-s.471(2) of the Corporations Law.

This is an important case under the Corporations Law. It raises the general question whether jurisdiction with respect to matters arising under the Corporations Law concerning a company in liquidation is confined to the court which made the winding up order against it or extends to any court in Australia having jurisdiction under the Corporations Law. It also raises the specific question whether leave to commence or continue a proceeding against a company in liquidation pursuant to s. 471(2) of the Corporations Law may be given only by the court which made the winding up order against the company or by any court having jurisdiction with respect to the Corporations Law in Australia.

2. The applicant, Acton Engineering Pty Limited, a supplier of bakery and food processing equipment, asserts that it entered into an agreement with the first respondent, Laurie Campbell, for the sale by the applicant to him of certain bakery equipment and that the property in the equipment was not to pass until he paid the applicant in full for it. The second respondent, Alcam Foods Pty Limited (in liquidation), was incorporated on 15 February 1991 and was controlled by the first respondent until the appointment on 2 May 1991 by the Supreme Court of Queensland of the third respondents as provisional liquidators. On 3 June 1991 the Supreme Court of Queensland made an order winding up the second respondent and appointing the third respondents as its liquidators.

3. The bakery equipment came into the possession and under the control of the third respondents. The applicant demanded its return on the ground that the first respondent had not paid for it. The third respondents asserted that the second respondent, not the first respondent, was the owner of the equipment and denied that the applicant had title to it. They told the applicant that they intended to sell the equipment at auction.

4. On 11 July 1991 the applicant commenced this proceeding. The substantive relief sought is a declaration that the applicant is the owner of the equipment and an order against the second respondent for delivery up of the equipment to the applicant. The applicant also claims interest and damages. The applicant sought leave to proceed against the second respondent; leave being required because of s. 471(2) of the Corporations Law which provides that:

"Where an order has been made for the winding up of a company, or a

provisional liquidator has been appointed in respect of a company, no

action or other civil proceeding may be commenced or proceeded with

against the company except:

(a) by leave of the Court; and

(b) in accordance with such terms as the Court imposes".

5. The applicant also seeks to appeal to this Court from the decision of the third respondents, as liquidators of the second respondent, made on 5 July 1991, to immediately sell the equipment at auction and not to return the goods to the applicant; the appeal being brought pursuant to s. 1321 of the Corporations Law.

6. The applicant sought an interlocutory injunction against the second respondent to restrain it from parting with possession, dealing with, disposing of or encumbering any of the equipment.

7. The proceeding came in the first instance before a Judge of the Court who raised with counsel appearing for the applicant (the proceeding was ex parte) the question whether this Court has jurisdiction to grant leave to the applicant to proceed against the second respondent pursuant to s. 471(2) of the Corporations Law or whether the Supreme Court of Queensland is the only court which has such jurisdiction, it having made the order for winding up of the second respondent. A Judge of this Court (von Doussa J.) held earlier in State Bank of South Australia v Clockwork Motors Pty Limited (Receiver and Manager Appointed) (In Liquidation), unreported, 17 April 1991, that the only court which has jurisdiction to grant leave to sue pursuant to s. 471(2) of the Corporations Law is the court which made the winding up order in respect of the relevant company. See also the judgment of French J. in State of Western Australia v Vetter Trittler Pty Limited (In Liquidation) (Receiver and Manager Appointed), (1991) ATPR (Digest) 1146-075.

8. The matter was urgent because of the evidence that the sale of the equipment by the third respondents was imminent. The Chief Justice ordered on 11 July 1991 that the matter was of sufficient importance to justify the giving by him of a direction that the jurisdiction of the Court in the matter shall be exercised by a Full Court. Accordingly the Chief Justice gave that direction under s. 20(1A) of the Federal Court of Australia Act 1976. This Full Court then sat in the afternoon of 11 July 1991 and heard the application for leave to commence the proceeding against the second respondent and for an interlocutory injunction restraining the second respondent from parting with possession, dealing with, disposing of or encumbering any of the equipment.

9. The matter proceeded ex parte before the Full Court and at the conclusion of argument, upon noting that the usual undertaking as to damages was given on behalf of the applicant by its counsel, the Court gave leave to the applicant to commence this proceeding against the second respondent and made an order restraining the second respondent for a limited time from parting with possession, dealing with, disposing of or encumbering any of the equipment. The Court also made orders for the service of its order and other documents upon the respondents and remitted the matter for further hearing to a Judge of the Court. The Full Court stated that the reasons for its decision would be given in due course. These are my reasons which led me to agree in that decision.

10. Prior to 1 January 1991 (when the Corporations Law commenced to operate throughout Australia) each State and Territory of Australia had its own Companies Code which was part of the "co-operate scheme laws" established under the previous co-operative companies legislation. Each Code contained a provision equivalent to s. 471(2) of the Corporations Law. Section 371(2) of the Companies (Western Australia) Code was the counterpart of s. 471(2) in that State and it was discussed by French J. in State of Western Australia v Vetter Trittler Pty Limited (supra) in conjunction with the cross-vesting legislation. His Honour found that the cross-vesting legislation had the effect that the jurisdiction conferred by s. 371(2) to grant leave to proceed against the company in liquidation may be exercised, not only by the Supreme Court of Western Australia, but by the Federal Court as well; but his Honour then found that only the court which made the winding up order should grant leave under s. 371(2) and he relied for this conclusion upon the judgment of von Doussa J. in State Bank of South Australia v Clockwork Motors Pty Limited (supra) with respect to s. 471(2) of the Corporations Law.

11. I turn now to the Corporations Law. Central to the Corporations Law is the Corporations Act 1989 (Cth) (No. 109 of 1989) as amended by the Corporations Legislation Amendment Act 1990 (Cth) (No. 110 of 1990) (to which I shall refer together as the Federal Act). These were Acts of the Commonwealth Parliament central to the new legislative scheme that was to apply throughout Australia. Section 3(1) of the Federal Act provides:

"The object of this Act (other than Part 8) is to make a law for the

government of the Australian Capital Territory in relation to

corporations, securities, the futures industry and some other matters."

12. Section 5 provides that the Corporations Law as set out in s. 82 applies as a law for the government of the Australian Capital Territory. The Corporations Law is then set out in s. 82 and it is the law which was to be enacted, not only by the Commonwealth Parliament, but also by the Parliaments of all States and of the Northern Territory, so as to achieve uniformity throughout Australia of laws concerning corporations, securities, the futures industry and other matters. In the result, the Commonwealth Parliament and the Parliament of each State and of the Northern Territory passed its respective Corporations Act, each applying the Corporations Law in its own jurisdiction, so that the one law prevailed throughout Australia from 1 January 1991: see Corporations (New South Wales) Act 1990, NSW, No. 83 of 1990; Corporations (Victoria) Act 1990, Vic., No. 80 of 1990; Corporations (Queensland) Act 1990, Qld., No. 98 of 1990; Corporations (South Australia) Act 1990, S.A., No. 66 of 1990; Corporations (Northern Territory) Act 1990, N.T., No. 56 of 1990; Corporations (Tasmania) Act 1990, Tas., No. 41 of 1990; Corporations (Western Australia) Act 1990, W.A., No. 105 of 1990.

13. The explanatory memorandum to the Corporations Legislation Amendment Act 1990 (Cth) states in paragraph 6 that one of the features of the Act is:

"the cross-vesting of civil jurisdiction on the Supreme Courts of each

State and Territory and the Federal Court with respect to matters

arising under the Commonwealth and State and Territory laws. The

purpose of these provisions is to permit relatively simple

administration and enforcement of the Corporation Laws".

Paragraphs 56 and 57 of the explanatory memorandum state that the essence of the cross-vesting scheme under the Federal Act and the corresponding State and Northern Territory legislation (which together constitute the Corporations Law) is that the Federal Court and the Supreme Courts of the States, the Northern Territory and the Australian Capital Territory are each vested with civil jurisdiction under the Corporations Law of the Commonwealth, the States, the Australian Capital Territory and the Northern Territory; while each court is empowered to transfer proceedings to another court having jurisdiction where it is in the interests of justice to do so. Paragraph 182 of the explanatory memorandum states that the cross-vesting scheme "is intended to operate as a complementary Commonwealth and State exercise and requires for its operation both Commonwealth and State legislation".

14. The Federal Act confers jurisdiction on the Federal Court and the State and Territory Supreme Courts in relation to civil matters arising under the Corporation Laws of the Australian Capital Territory. The relevant Acts passed by the States and the Northern Territory Parliaments have a similar operation in relation to matters arising under the Corporations Law of those jurisdictions. The winding-up in this case was ordered by the Supreme Court of Queensland under the Corporations (Queensland) Act 1990 (No. 98 of 1990), to which I shall refer as the Queensland Act.

15. It is necessary to state the relevant provisions of the Federal and Queensland Acts and the Corporations Law itself. It should be remembered that the Federal Act and the Queensland Act, like all the other Corporations Acts of the States and the Northern Territory, mirror each other.

16. Division 1 of Part 9 of the Federal Act relates to vesting and cross-vesting of civil jurisdiction. Section 49(1) provides that Division 1 of Part 9 confers jurisdiction over civil matters arising under the Corporations Law of the Australian Capital Territory to the exclusion of the Jurisdiction of Courts (Cross-Vesting) Act 1987 and s. 39B of the Judiciary Act 1903. Section 49(2) provides that nothing in Division 1 of Part 9 affects any other jurisdiction of any court. The comparable provision to s. 49 in the Queensland Act is s. 40.

17. Section 51(1) of the Federal Act confers jurisdiction on the Federal Court with respect to civil matters arising under the Corporations Law of the Australian Capital Territory. Section 51(2) provides that, subject to s. 9 of the Administrative Decisions (Judicial Review) Act 1977, jurisdiction is conferred on the Supreme Court of each State and the Australian Capital Territory with respect to civil matters arising under the Corporations Law of the Australian Capital Territory. Section 51(3) provides that the jurisdiction conferred on a Supreme Court by subsection (2) is not limited by any limits to which any other jurisdiction of that Supreme Court may be subject. Section 42 of the Queensland Act is the equivalent provision.

18. Section 52(1) of the Federal Act provides that an appeal may not be instituted from a decision of a Judge of the Federal Court to a Full Court of the Supreme Court of a State or Territory. Subsections (2) and (3) of s. 52 provide that an appeal may not be instituted from a decision of a Judge of the Supreme Court of a State or the Australian Capital Territory to the Full Court of a Supreme Court of another jurisdiction or to the Full Court of the Federal Court. Section 43 of the Queensland Act contains basically the same provision. In the result, an appeal from a decision of a Judge of a Court, whether the Federal Court or the Supreme Court of a State or Territory, may be brought only to the Full Court of that Court. Paragraph 171 of the explanatory memorandum to the Corporations Legislation Amendment Act states that the purpose of s. 52 is to "ensure that, notwithstanding the cross-vesting of jurisdiction, the normal hierarchy of appeals will apply".

19. Section 53 of the Federal Act is a key provision; it relates to the transfer of proceedings. Section 53(1) provides that s. 53 applies to a proceeding with respect to a civil matter arising under the Corporations Law of the Australian Capital Territory in a court having jurisdiction under s. 51. Section 53(2) empowers a court to transfer a proceeding or application to another court where the firstmentioned court, having regard to the interests of justice, is of the view that it is more appropriate for the proceeding or an application in the proceeding to be determined by the other court having jurisdiction in the matter for determination in the proceeding or application. Section 53(3) states that, in deciding whether to transfer a proceeding or application under subsection (2), the court must have regard to: (a) the principal place of business of any body corporate concerned in the proceeding or application; and (b) the place or places where the events the subject of the proceeding or application took place. Section 53(4) provides that the court may transfer a proceeding or application on the application of a party or of the court's own motion. Section 53(5) states that, where under subsection (2) a court transfers a proceeding or application in a proceeding to another court, the Registrar or other proper officer of the firstmentioned court must transmit to the Registrar or other proper officer of the other court all documents filed in the firstmentioned court in respect of the proceeding or application; and the other court must proceed as if the proceeding had been originally instituted in the other court and the same proceedings had been taken in the other court as were taken in the firstmentioned court, and in a case where an application is transfered, the application had been made in the other court. Section 44 of the Queensland Act mirrors s. 53 of the Federal Act.

20. Section 55 of the Federal Act is a significant provision. It provides that all courts having jurisdiction in civil matters arising under the Corporations Law of the Australian Capital Territory, the Judges of those courts and the officers of, or under the control of, those courts must severally act in aid of, and be auxiliary to each other in all such matters. This provision has its counterpart in s. 46 of the Queensland Act.

21. Section 56(2) of the Federal Act empowers the Federal Court or the Supreme Court of the Australian Capital Territory to exercise jurisdiction, whether original or appellate, conferred on that court by a law of a State corresponding to Division 1 of Part 9 with respect to matters arising under the Corporations Law of a State and to hear and determine a proceeding transfered to that court under such a provision. The equivalent provision in the Queensland Act is s. 47.

22. Section 57 confers upon a person who is entitled to practice as a barrister or solicitor or both in a court, the same entitlement to practice in relation to a proceeding that has been transfered to another court and other proceedings out of which the transfered proceedings arise or to which the transfered proceeding is related, as he had in the court which transfered the proceeding to another court. The equivalent section in the Queensland Act is s. 48.

23. Section 59 of the Federal Act relates to the enforcement of judgments. Section 59(1) provides that a judgment of the Federal Court or of the Supreme Court of the Australian Capital Territory given in the exercise of jurisdiction conferred by Division 1 of Part 9 or by a law of a State that corresponds to that division, is enforceable in the Australian Capital Territory as if the judgment had been given by that court entirely in the exercise of that court's jurisdiction apart from Division 1 or any such law. That provision is mirrored by s. 50 of the Queensland Act.

24. Section 14(1) of the Federal Act, the counterpart of which is s. 13(1) of the Queensland Act, is a critical provision. It provides:

"The object of this section is to help ensure that the Corporations Law

of the Capital Territory operates, so far as possible, as if that Law,

together with the Corporations Law of each jurisdiction other than the

Capital Territory, constituted a single national Corporations Law

applying of its own force throughout Australia."

25. Turning to the Corporations Law itself, s. 9 is the definition section or as it describes itself the "Dictionary". It defines "court" as meaning "any court when exercising the jurisdiction of this jurisdiction". The word "Court" is defined as meaning "the Federal Court, or the Supreme Court of this or any other jurisdiction, when exercising the jurisdiction of this jurisdiction". The word "jurisdiction" is itself defined by s. 9 as meaning "a State or the Capital Territory and, in the case of a State, includes the coastal sea of the State". Plainly, in the definition of both "court" and "Court" the reference to the word "jurisdiction" is to jurisdiction in the defined sense, except where first appearing in the definition of "court" and where secondly appearing in the definition of "Court" where it is obviously a reference to jurisdiction in the sense with which the word is normally understood, namely, the jurisdiction exercised by a court.

26. Section 581 of the Corporations Law mirrors s. 55 of the Federal Act and s. 46 of the Queensland Act in relation to all external administration matters.

27. I turn to s. 471(2) of the Corporations Law, the terms of which are set out earlier. Section 471(2) of the Corporations Law and its statutory predecessors serve the purpose of ensuring that a company in liquidation is not subjected to a multiplicity of actions which would waste its assets and the time of its liquidator. The corresponding sections in the Bankruptcy Act 1966 (ss. 58(3), (4), (5) and (60)) and their statutory predecessors serve a similar purpose. Although the restraint upon suit is not confined to actions brought by creditors of the company or to claims that would be provable in the winding up, generally the company in liquidation will be insolvent, so the restraint enables the limited assets of the company to be preserved and distributed efficiently among the creditors who have rightful claims upon them. A clear statement of the purpose of sections such as s. 471(2) is to be found in the judgment of James L.J. in Re David Lloyd and Co. (1877) VI ChD 339 at 344:

"These sections in the Companies Act, and the corresponding legislation

with regard to bankrupts, enabling the Court to interfere with actions,

were intended, not for the purpose of harassing, or impeding, or

injuring third persons, but for the purpose of preserving the limited

assets of the company or bankrupt in the best way for distribution among

all the persons who have claims upon them. There being only a small

fund or a limited fund to be divided among a great number of persons, it

would be monstrous that one or more of them should be harassing the

company with actions and incurring costs which would increase the claims

against the company and diminish the assets which ought to be divided

among all the creditors."

28. These principles are inherent in the condition that is commonly imposed by courts, upon granting leave to sue the company, that the applicant for leave shall not enforce any judgment which he may obtain against the company without the prior leave of the court. Useful discussion of the rationale which underlies the sections in company and bankruptcy legislation equivalent to s. 471(2) of the Corporations Law is to be found in McPherson The Law of Company Liquidation 3rd ed pp 180-187; Ford Principles of Company Law 5th Ed., pp 770-1; Pennington's Company Law 5th Ed., pp 871-872; and Lindley on Companies 6th Ed. pp 904-911. The reported cases which consider sections such as s. 471(2) are too numerous to mention, but useful discussion can be found in In Re David Lloyd and Co (supra); In Re International Pulp and Paper Co. (1876) III Ch D 594 per Jessel M.R. at 598; Thomson v The Mulgoa Irrigation Company Limited (1894) 4 BC (NSW) 33; Re Sydney Formworks Pty Limited (1965) NSWR 646 per McLelland C.J. in Eq. at 649-650; Re A.J. Benjamin Limited (In Liquidation) and The Companies Act (1969) 90 WN Pt 1 (NSW) 107 per Street J. at 109-110; Haviland v Joslow (No. 4) Pty Limited (1979) 4 ACLR 373 per Needham J. at 374-5; Storey v Lane [1981] HCA 47; (1981) 147 CLR 549 per Gibbs C.J. at 556-7; Maher v Taylor (1984) 8 ACLR per 931 David Hunt J. at 933-935; and Tarea Management (North Shore) Pty Limited (In Liquidation) v Glass, Full Federal Court, unreported, 8 March 1991 per Hill J.

29. Sections in company and bankruptcy legislation equivalent to s. 471(2) of the Corporations Law gave the power to grant the requisite leave to sue a company in liquidation or a bankrupt, as the case may be, to the court having jurisdiction to wind up the company or make a sequestration order against the person.

30. The permission to commence or continue proceedings against a company in liquidation is conferred by s. 471(2): "(a) by leave of the Court; and (b) in accordance with such terms as the Court imposes". As mentioned earlier the word "Court" is defined by s. 9 of the Corporations Law as meaning the Federal Court or the Supreme Court of the State or the Northern Territory whose legislation has enacted the Corporations Law or any other jurisdiction, when exercising the jurisdiction of that State or Territory. Although that definition is subject to the introductory words of s. 9 ("Unless the contrary intention appears"), I see no contrary intention with respect to the use of the word "Court" in s. 471(2). In other words the court which may give the leave to sue or to proceed under s. 471(2) may be the Federal Court or the Supreme Court of any State or Territory. For myself I see no warrant for treating the word "Court" where it appears in the section as being confined to the particular court which made the winding up order against the company concerned. I therefore respectfully differ from the views of my brother von Doussa J. on this question expressed by him in State Bank of South Australia v Clockwork Motors Pty Limited.

31. It is true, as von Doussa J. observed, that under former companies legislation a compulsory winding up was recognised as an administration conducted by the court which made the winding up order. An official liquidator appointed to conduct that administration was an officer of the court which made the appointment. It is also true that, speaking generally and so far as practicable, the winding up of a company should be conducted by the court which made the winding up order, but this is because in practice it is convenient that applications in the course of the winding up of a company are generally best made to that court as it will have the winding up file under its control or the control of its Masters, Registrars or officers and may be familiar with the winding up generally or at least with earlier applications that may have been made in it by liquidators creditors or others. That is a matter of convenience, not jurisdiction, under the national Corporations legislation now in force in Australia. But in the case of applications under s. 471(2) for leave to sue a company in liquidation, there will be circumstances where it is obviously convenient that the court to consider the application to grant the leave is the same court as the court in which it is proposed to bring the substantive proceeding against the company. The present case is an example of this.

32. The Commonwealth Parliament and the Parliaments of each State and of the Northern Territory have conferred jurisdiction (original and appellate) on the Federal Court and the Supreme Courts of each State and Territory with respect to civil matters arising under the Corporations Law (s. 51 of the Federal Act and s. 42 of the Queensland Act).

33. "Civil matters" are matters other than criminal matters (s. 49(1) of the Federal Act and s. 40(1) of the Queensland Act).

34. The word "matter" is of wide import. In my opinion a matter arising under the Corporations Law is "a justiciable controversy, identifiable independently of the proceedings which are brought for its determination and encompassing all claims made within the scope of the controversy": see Fencott v Muller (1983) 152 CLR 570 per Mason, Murphy, Brennan and Deane JJ. at 603. See also Philip Morris Inc. v Adam P. Brown Male Fashions Pty Limited (1981) 148 CLR 457; Crouch v Commissioner for Railways (Qld) [1985] HCA 69; (1985) 159 CLR 22 per Mason, Wilson, Brennan, Deane and Dawson JJ. at 37-38; and Quick and Garran in The Annotated Constitution of the Australian Commonwealth (p 765).

35. The Federal Act and the State and Northern Territory Acts "confer" jurisdiction on courts in respect of matters arising under the Corporations Law. As to the distinction between "conferring" jurisdiction upon courts and courts being "invested" with federal jurisdiction by a law of the Parliament pursuant to s. 77(iii) of the Constitution see Australian Trade Commission v Film Funding and Management Pty Limited [1989] FCA 188; (1989) 24 FCR 595 per Gummow J. at 598-600.

36. I would add that I see no warrant for construing the phrase "civil matters arising under the Corporations Law" appearing in s. 51 of the Federal Act and s. 42 of the Queensland Act, as referring to a winding up matter as a whole in the sense that, once the Federal Court or Supreme Court has made a winding up order, it is then seized of the winding up matter so that it, and only it, may thereafter deal with proceedings by way of application or motion in that matter.

37. Although this case is concerned with a compulsory winding up, the Corporations Law provides, as did its legislative predecessors, for creditors' and members' voluntary windings up. Section 500(2) of the Corporations Law provides that, after the commencement of a creditors' voluntary winding up of a company, no action or other civil proceedings shall be proceeded with or commenced against the company except by leave of the Court and subject to such terms as the Court imposes. There is no comparable provision in the case of members' voluntary windings up, doubtless because they are presumed to be in respect of solvent companies and the winding up is under the control of its members and the liquidator whom they appoint. The question arises with respect to a creditors' voluntary winding up, as to which "Court" is intended to be the recipient of the power to grant leave to sue. It is plain that the definition of "Court" in s. 9 is perfectly apposite and that no contrary intention can be gleaned in such a case. In other words, the Federal Court or the Supreme Court of any State or Territory would have the power conferred by s. 500(2). Why should there be a different result in the case of compulsory windings up? I can see no good reason for reaching any different conclusion.

38. Section 468 of the Corporations Law deals with the avoidance of dispositions of property made after the commencement of the winding up by the Court. Such dispositions are void unless "the Court" otherwise orders (s. 468(1)). Again I see no warrant for reading the word "Court" other than in the sense attributed to it by the definition in s. 9.

39. Section 480 should be mentioned. It provides that when the liquidator has in essence completed the liquidation of a company he may apply to the Court for an order that he be released and that the company be dissolved. Although it is difficult to imagine a case where the liquidator would not make this application to the Court which wound up the company and appointed him liquidator, there is in my view no bar to his making the application to any court having jurisdiction in respect of matters arising under the Corporations Law. If this was done the court before which such application came could transfer it to the court which ordered that the company be wound up and appointed the liquidator. Similarly with respect to s. 482 which empowers the "Court" to stay the winding up of a company. See also s. 488.

40. An interesting case in this area of discourse is Fabric Sales Limited v Eratex Limited (1984) 1 WLR 863 where the English Court of Appeal (Eveleigh and Kerr L.JJ.) rejected a submission that definition of the word "court" in s. 455(1) of the Companies Act 1948 (U.K.) as "the court having jurisdiction to wind up the company" meant the Companies Court and not the High Court of Justice in the sense of each and every Judge of the High Court. Eveleigh L.J., after referring to s. 218(1), which provided: "The High Court shall have jurisdiction to wind up any company registered in England", said at 865:

"... I cannot find any reason to put any limitation upon the words of a

definition when they appear clearly set out in the statutes, and when

one reads section 455 the words seem to me clear. They do not say, 'the

court presently seised of the liquidation proceedings': they say 'the

court having jurisdiction,' and that, by section 218, means the High

Court.

It is clear by a number of sections of the Supreme Court Act 1981 that

the position today is that each Judge of the High Court has concurrent

jurisdiction. ...

In so far as it has been argued that the Companies Court is to be

treated as a court in its own right, as it were, in relation to section

231 (the equivalent of s. 471(2) of the Corporations Law) I would,

mutatis mutandis, adopt the words of Brightman J. In re Shilena Hosiery

Co Limited (1980) Ch 219, 224, where he says:

'The Companies Court is not a court separate and distinct from the High

Court, with its own peculiar jurisdiction. The jurisdiction to wind up

a company is conferred on the High Court, not the Companies Court (see

section 218(1) of the Companies Act 1948), nor is the companies judge

invested with a special jurisdiction not possessed by a High Court judge

sitting elsewhere. The Companies Court is a way of describing the High

Court when dealing with matters originating in the chambers of the

Bankruptcy Registrar dealing with company matters, and the companies

judge is a way of describing a High Court judge when trying such matters

... Once it is accepted that the Companies Court is merely a

description of the High Court when operating through the chambers of the

Bankruptcy Registrar dealing with company matters, the question of

jurisdiction is greatly narrowed because every judge of the High Court

has jurisdiction to grant relief under section 172 of the Law of

Property Act, whether he is or is not sitting as the companies judge.

All that remains is a procedural question, namely whether relief under

section 172 is capable of being granted in proceedings begun by a

summons issued in the Companies Court as distinct from some other form

of procedure.'"

41. Kerr L.J. agreed with the judgment of Eveleigh L.J. on this point.

42. Fabric Sales is an interesting case for present purposes because it rejected the argument that judges who customarily deal with company matters are the only judges empowered to lift the statutory stay against actions or proceedings against a company in liquidation. Power could be exercised by any Judge of the High Court, though for reasons of convenience the Court of Appeal sent the matter for further hearing to the Manchester District Registry so that it would be heard by a Judge exercising chancery jurisdiction in the North of England.

43. Similarly under the Corporations Law it may generally be convenient and practicable for the court that made the winding up order to exercise jurisdiction under the Corporations Law with respect to civil matters arising in the winding up, and in some courts this jurisdiction will be exercised by Judges who customarily sit in equity matters because the courts of Chancery traditionally have dealt with insolvent administrations.

44. To a lawyer like myself who from early days at the Bar spent a deal of time practising in the Equity Division of the Supreme Court of New South Wales (including matters relating to the winding up of companies), it is on first impression a strange notion that a court, other than the court which made an order that a company be wound up, may have jurisdiction with respect to the winding up of that company. But all of this thinking has been swept away by the Corporations Legislation of the Federal and State legislatures and the legislature of the Northern Territory that together constitute the present Corporations Law. The evident intent of all legislatures within Australia is that each of the Federal Court and the Supreme Courts may exercise jurisdiction in respect of civil matters arising under the Corporations Law. Hence an order for the winding up of a company may, for example, be made by the Supreme Court of Queensland and subsequent applications or motions in the winding up be made to that Court or to any other State or Territory Supreme Court or the Federal Court.

45. It is interesting to note whilst on this point that under the Corporations Law any company, irrespective of the State or Territory of Australia in which it was incorporated, may be wound up by any court having jurisdiction with respect to the Corporations Law in Australia. So a company may, for example, be incorporated in Tasmania and wound up by order of the Supreme Court of the Northern Territory. There is no dramatic step subsequently involved in the notion that an application in that winding up may thereafter be made to the Supreme Court of another State or the Federal Court. The scheme that has been put in place by the Corporations Law recognises these possibilities and has given it legislative endorsement throughout Australia. As each of the courts having jurisdiction in civil matters arising under the Corporations Law, the Judges of those Courts and the officers of or under the control of those courts must act in aid of each other and be auxiliary to each other in all such matters, it follows that court files, documents and process must be transmitted from one court to the other as the occasion demands.

46. So far I have dealt with the powers that may be exercised by courts in the course of the winding up of a company. The provisions mentioned earlier relating to the transfer of proceedings are crucial to the operation of the Corporations Law. I have mentioned s. 53 of the Federal Act and its counterpart in the State and Northern Territory legislation, namely, s. 44. Those sections give wide powers to courts to transfer a proceeding or an application in the proceeding to another court which has jurisdiction with respect to the Corporations Law having regard to the interests of justice (including the principal place of business of the company and the places where the events the subject of the proceeding or application took place). This is a power which may be exercised on the application of a party or of a court's own motion. Section 53(5) gives full force and effect to such an order by requiring the Registrar or other proper officer of the transfering court to transmit to the Registrar or other proper officer of the court to which the proceeding or application has been transfered all the relevant documents, and requires the court to which the proceeding was transfered to proceed as if the proceeding had been originally constituted in it and as if the same proceeding had been taken before it as was taken in the transfering court. This wide power of transfer ensures that administration of matters arising out of the Corporations Law is conducted sensibly and that applications or proceedings are not brought in courts with which they have no real connection or which are otherwise inappropriate as the forum for the particular proceeding or application. In practice, of course, the good sense of parties and their advisers should ensure in the vast majority of cases that proceedings are commenced or continued in the appropriate court.

47. The Federal Court itself provides a useful analogy to the concept embodied in the administration of the Corporations Law in Australia by the Federal Court and all Supreme Courts. The Federal Court is one court having jurisdiction throughout Australia. It has registries, Registrars and officers in the capital cities of all six States, the Capital Territory and the Northern Territory. It has resident Judges in all States and Territories except for the time being Tasmania and the Northern Territory. Any person has the right to commence a proceeding by filing the initiating process in any registry of the Court. The Court or a Judge is empowered at any stage of a proceeding to direct that the proceeding or part of it be conducted or continued at a place specified in the order. Order 10 rule 1(2)(f) provides that the Court may direct that a proceeding be transfered to a place, at which there is a registry, other than the place at which the proceeding was commenced or, where there has been a transfer, a place other than the place to which it has been transfered (see Order 1 rule 4 meaning of "proper place"). The Court is also empowered to direct that the trial of a proceeding be fixed at a place other than the "proper place" (Order 30 rule 6): see National Mutual Holdings Pty Limited v The Sentry Corporation (1988) 19 FCR 155 where these questions were discussed by a Full Court of this Court. Although a matter may be commenced by any person in any registry of the Court, the Court may transfer it from that registry to any other registry of the Court throughout Australia; and, even without making a formal order for transfer, may at any stage of the proceeding direct that the trial or part of the trial take place in some city other than the city in which the proceeding was commenced or to which it has been transfered.

48. The evident intention of the Corporations Law is substantially to the same effect, although there is not one court but a number of courts, the Federal Court and all Supreme Courts. But the practical working out of matters arising under the Corporations Law is closely analogous in my view to the way in which matters may be heard, transfered or tried by the Federal Court itself throughout Australia, so the administration of the Corporations Law does not present Australian courts or litigants with undue difficulties. Quite the contrary, it recognises that Australia is one nation with a federal system of government in which each of the Federal Court and the State and Territory Supreme Courts may exercise the jurisdiction possessed by each other under the Corporations Law in a sensible and orderly fashion.

Court of Australia Act 1976

Legislation Amendment Act 1990

(Queensland) Act 1990

State Corporations Act 1990

Decisions (Judicial Review) Act 1977

(New South Wales) Act 1990

(South Australia) Act 1990

Corporations (Northern Territory) Act 1990

(Western Australia) Act 1990

Courts (Cross-Vesting) Act 1987

Supreme Court Act 1981

Court of Australia Act 1976

Legislation Amendment Act 1990

(Queensland) Act 1990

State Corporations Act 1990

Decisions (Judicial Review) Act 1977

(New South Wales) Act 1990

(South Australia) Act 1990

Corporations (Northern Territory) Act 1990

(Western Australia) Act 1990

Courts (Cross-Vesting) Act 1987

Supreme Court Act 1981

Re Acton Engineering Pty Limited v Laurie Campbell; Alcam Foods Pty Limited (In Liquidation); Peter Ivan Felix Geroff and Robert John Fred Burns [1991] FCA 469; 9 ACLC 1466/6 ACSR 149/103 ALR 437; (1991) 31 FCR 1 (11 October 1991)

Re Acton Engineering Pty Limited v Laurie Campbell; Alcam Foods Pty Limited

At a glance

Court

Decision date

Source

Judgment (87 paragraphs)

Parties

Legislation Cited (28)

Cases Cited (8)

Re Acton Engineering Pty Limited v Laurie Campbell; Alcam Foods Pty Limited (In Liquidation); Peter Ivan Felix Geroff and Robert John Fred Burns [1991] FCA 469; 9 ACLC 1466/6 ACSR 149/103 ALR 437; (1991) 31 FCR 1 (11 October 1991)