Rock Bottom Fashion Market P/L v HR & CE Griffiths P/L [1997] QCA 399

(a) as a liquidator appointed for the purposes of the winding-up; or

(b) as an administrator appointed for the purposes of an administration of the company beginning after the winding up order was made; or

On the face of it the section is perfectly general and is wide enough to deprive Mr Innes of any power he might otherwise have had to file a notice of appeal against the winding-up order, since he has neither the written approval of the liquidator, nor the approval of the Court. Mr Innes has made a number of submissions on the subject of his right to appeal in the company's name, which may be summarised by saying that s. 471A, properly construed, was not intended to change the pre-existing law in any relevant respect and that the appeal is valid because it was treated as valid until the Court itself drew the parties' attention to the apparent effect of s. 471A.

Of these contentions, the second plainly has no substance. As to the first, it is desirable to go back to In re Diamond Fuel Company (1879) 13 Ch.D. 400, in which it was held that the directors of a company then had, despite s. 95 of the Companies Act 1862 (U.K.), power to institute and pursue an appeal against a winding-up order. Reference to s. 95 discloses that it empowered the liquidator to bring proceedings in the company's name, but did not say to what extent if at all the directors might do so. The principle of In re Diamond Fuel Company has been consistently applied, under various schemes of company legislation; see for example Robert H Barber & Co. Ltd v. Simon [1914] HCA 69; (1914) 19 C.L.R. 24 at 28, and Re Rick Wilson Pty Ltd and the Companies Act (1982) 7 A.C.L.R. 354 at 355, 356. An appeal against a winding-up order has been treated as a special exception; the general rule was that a company in liquidation is not entitled to act by its directors: Gosling v. Gaskell [1897] A.C. 575 at 587, 588. Kennedy J, in Anfrank Nominees Pty Ltd v. Connell (1989) 1 A.C.S.R. 365 at 383, described the directors' right to appeal in the company's name against the winding-up order as follows:

"That clearly is an exceptional right and, it might be thought, it derives from necessity, otherwise the company would be unable to challenge such an order."

There is no necessity for the Diamond Fuel rule now, since the Court is given power under s. 471A to approve the performance or exercise of a function or power as an officer of the company; Mr Innes did not apply for such approval.

We should add that Mr Innes has relied on a comment in Aetna Properties Pty Ltd v. G A Listing & Maintenance Pty Ltd (1994) 12 A.C.L.C. 404 to establish that a director's residual power to appeal against a winding-up order remains, despite the enactment of s. 471A. Although this decision was given after s. 471A was inserted by s. 68 of Act No. 210 of 1992 and became effective on 23 June 1993, the judge relied on Arafura Finance Corporation Pty Ltd v. Kooba Pty Ltd (No. 2) [1987] NTSC 64; (1988) 6 A.C.L.C. 200, a case decided before the enactment of s. 471A, to conclude that the director's power existed. The reasons make no mention of s. 471A. In light of the express words of s. 471A, we do not accept that Aetna establishes that directors have a residual power to appeal against a winding-up order and that no consent of the liquidator or the court is required.

The only question is whether, assuming this Court has power to do so, it should imply, by way of construction of s. 471A(1), an additional exception, "(e) An appeal against a winding-up order". No ground on which such a judicial amendment of the terms of the section might be made has been suggested and s. 471A(1) must be given its plain effect.

It follows that the purported institution of the appeal was a breach of s. 471A(1) and the appeal must be struck out; Mr Innes must pay the costs of H R & C E Griffiths Pty Ltd in respect of the purported appeal, other than the costs relating to the application for security.