Appeal and new trial - Appeal - Practice and procedure - Tasmania - When appeal lies - "Person aggrieved" - Leave to appeal - Extension of time to appeal - Single judge has no power to grant an extension of time for leave to appeal by a "person aggrieved" but not a party to the appeal. Supreme Court Civil Procedure Act, s42 (1)(b). Rules of Court, O76, r3. In re Padstow Total Loss and Collision Assurance Association (1881-1882) 20 Ch D 137 at 142; In re Clayton Mills Manufacturing Company (1888) 37 Ch D 28; Ex parte Tucker; In re Tucker (1879-1880) 12 Ch D 308; Sellar v Charles Bright and Co Limited (No 2) (1904) 91 LT 9, referred to.

Appeal and new trial - Appeal - Practice and procedure - Tasmania - When appeal lies - No appeal against order made by consent - Meaning of order made by consent. Supreme Court Civil Procedure Act, s43(a). Rogers v Curnow (1979) 22 SASR 204; Chandless-Chandless v Nicholson (1942) 2 KB 321; Siebe Gorman and Co Ltd v Pneupac Ltd (1982) WLR 185, referred to.

Appeal and new trial - Appeal - Practice and procedure - Tasmania - Time for appeal - Extension of time - In what cases - Extending the time for appeal against an order extending the time for registration of a charge under the Corporations Law. Rules of Court, O76, r3(5).

Solicitors for respondent: Dobson, Mitchell and Allport

UNDERWOOD J The applicants are Sky-Ridge Pty Ltd (In liq) and Andrew Richard Crawford. The latter is the liquidator of the former and, for convenience, I shall refer to the applicants as Sky-Ridge and the liquidator respectively. The issue on this motion is whether an order should be made pursuant to the Rules of Court, O76, r3(5) extending the time within which the applicants may appeal to the Full Court.

2. The Facts: In August 1994, Mr and Mrs Dean agreed to sell to Sky-Ridge a business called "Sky-Ridge Homes". Part of the sale transaction was a loan to Sky-Ridge from the respondent, Burlington Pty Ltd ("Burlington") of $190,000. Instructions were given to a solicitor to prepare a debenture charge by Sky-Ridge in favour of Burlington to secure repayment of the loan. The solicitor acted in accordance with his instructions and the debenture was executed on 18 August 1994. The solicitor had it duly stamped in accordance with the provisions of the Stamp Duties Act. This was completed on 29 September 1994. (The solicitor's affidavit deposes this date as "29th August 1994" but from all the other evidence, it appears that the month was September). On 4 November 1994 the solicitor sent notice of the charge to the Australian Securities Commission. It was entered on the Register on 14 November 1994, after payment of late fees.

3. Relevantly, the Corporations Law, s266(1) made the debenture "void as a security on that property as against the liquidator, the administrator of the company ... unless notice was lodged under section 263(1) ...". Section 263(1) provides that the notice shall be lodged forty-five days after the creation of the charge, in this case on or before 3 October 1994. Lodgement was effected thirty-two days late. The reason for lateness was the solicitor's ignorance of the forty-five day time limit imposed by s263(1). The solicitor became aware of the time limit on 20 November 1994, and on 1 December 1994 made application to this Court on behalf of Burlington for an order that the time for lodgement of the notice be extended. The Corporations Law, s266(4) provides:

"The Court, if it is satisfied that the failure to lodge a

notice in respect of a charge, or in respect of a variation

in the terms of a charge, as required by any provision of

this division;

(a) was accidental or due to inadvertence or some other

sufficient cause; or

(b) is not of a nature to prejudice the position of creditors

or shareholders;

or that on any other grounds it is just and equitable to

grant relief, may, on the application of the company or any

person interested and on such terms and conditions as seem to

the Court just and expedient, by order, extend the period for

such further period as is specified in the order."

4. The application and supporting affidavits were served on Sky-Ridge. One of the affidavits was sworn by Mr Allan Brady, a director of Sky-Ridge. Financial information relating to the business of Sky-Ridge was annexed to that affidavit. The thrust of the whole affidavit was that Sky-Ridge was solvent. By par9, Mr Brady deposed:

"Sky-Ridge Pty Ltd consents to the making of the order which

is sought in this application and a letter to that effect,

with the seal of the company affixed is annexed hereto and

marked with the letter 'D'."

5. Annexure "D" is dated 6 December 1994 and addressed to the Registrar of the Supreme Court, Launceston. It reads:

"Sky-Ridge Pty Ltd has been served with an application made

by Burlington Pty Ltd dated 1st December, 1994. The

application seeks an extension of time for lodgement of

notice to the Australian Securities Commission of the

debenture charged to Burlington Pty Ltd dated 18th August

1994. The company has also been served with a copy of an

affidavit of Robert William Pearce sworn 1st December 1994 in

support of the application. The company consents to the

making of the order sought in the application."

6. The application came before Wright J on 8 December 1994. Sky-Ridge did not appear on the application. His Honour noted the consent and heard counsel for Burlington outline the factual material contained in the affidavits. One of the deponents gave some oral evidence to correct a minor error in his affidavit. Counsel primarily relied on inadvertence as the basis for making the order, although submissions were put on the alternative basis as enacted in s266(4)(b). This is what his Honour said:

"Yes, thank you, Mr Jones. Well I'm satisfied that it is an

appropriate case for the exercise of the discretion sought.

I think that plainly this was the failure to register which

could properly be characterised as due to inadvertence on the

part of Mr Pearce. I am satisfied on the material provided

that there's no real prospect of prejudice to shareholders or

creditors. I think it appropriate that the order sought

should be made."

7. An order was taken out. It is dated 8 December 1994. The operative part reads:

"That the period for lodgement of the notice of charge

required by s263(1) of the Corporations Law in respect of a

debenture charge over the assets of the respondent in favour

of the applicant be extended until and including the 14th

November 1994."

8. On 30 January 1995 the liquidator was appointed administrator of Sky-Ridge. In his report made pursuant to the Corporations Law, s439A, the liquidator advised that Sky-Ridge should be wound up as it was insolvent. The advice was accepted and Sky-Ridge was put into liquidation. On 27 February 1995 the liquidator became liquidator of Sky-Ridge. He contends that at the time Wright J made his order, Sky-Ridge was already insolvent and that if the proper material had been put before the learned judge, he would not have made the order extending the time for lodging notice of the charge. The only avenue open to the liquidator to attack this order is to appeal against it to the Full Court but there is an initial hurdle in the way of that.

9. The period of twenty-one days for appealing, allowed by the Rules of Court, O76, r3(1), ended on 29 December 1994. It may have been that due to court holidays (O79, r3) the time for appealing did not expire until a few days later, but nothing turns upon that for it had well and truly expired by the time of the liquidator's appointment.

10. The liquidator conducted investigations into the affairs of the company and took advice. In result, on 30 March 1995 Sky-Ridge and the liquidator filed a notice of appeal against the order of Wright J and filed this motion for an order that, "the time limited for the institution and service of the appeal in this matter be extended, pursuant to the provisions of O76, r3(5), to the dates of actual filing and service respectively." The "notice of appeal" was served on 5 April 1995.

11. Mr Abbott, counsel for Burlington, made two preliminary submissions which, if successful, would result in this application being dismissed. They are:

1 The liquidator was not a party to the proceedings that

culminated in the order of Wright J and even though he is a

person aggrieved or whose interests are affected by the order

within the meaning of the Supreme Court Civil Procedure Act,

s42(1)(b), his right to appeal is subject to the Full Court

giving him leave in accordance with that paragraph.

2 Sky-Ridge has no right of appeal because the order was

"given or made by the consent of the parties" within the

meaning of the Supreme Court Civil Procedure Act, s43.

12. Person Aggrieved - Leave to Appeal: The Supreme Court Civil Procedure Act, s42(1) provides:

"Subject to the provisions of this Act, an appeal from any

such judgment, order, or other determination as is mentioned

in section 40 or section 41 may be instituted

(a) ...

(b) with the leave of a Full Court, by any person who is not

entitled to appeal under paragraph (a), but who is aggrieved

or whose interests are affected by the judgment, order, or

determination."

13. This statutory provision reflects the old Chancery practice in England that leave could be given to a person who, although not a party to the proceedings, is someone who might properly have been a party. See Cuthbertson v City of Hobart [1921] HCA 51; (1921) 30 CLR 16 at 25; Peter v Shipway [1908] HCA 52; (1908) 7 CLR 232 at 259. The English practice was governed by the test, "is, could or could not the applicant by possibility be made a party to the action by service". See Crawcour v Salter (1882) 30 WR 329; In Re Youngs; Doggett v Revett (1885) 30 Ch D 421. This test has been modified by the Supreme Court Civil Procedure Act, s42(2) which provides:

"A Full Court may grant leave to any person to appeal under

paragraph (b) of subsection (1) notwithstanding that such

person could not have been made a party to the cause or

matter in which the judgment, order, or other determination

to be appealed from was given or made."

14. Mr Abbott submitted that with respect to the liquidator's application for an extension of time to appeal, it is not competent for a single judge to grant the order sought. Although the Rules of Court, O76 make detailed provision with respect to the filing and service of a notice of appeal, there is no rule of court dealing with an application for leave to appeal. Order 76, r3(1) relevantly provides that an appeal shall be served within twenty-one days from the date of the judgment and by r3(5):

"The court or a judge may extend the time for appealing,

notwithstanding that the said period of twenty-one days or

ten days, as the case may be, has expired."

15. The post Judicature Acts practice in the United Kingdom was that, "a person not a party to the record must first apply ex parte to the Court of Appeal for permission to appeal." See Daniell's Chancery Practice 8 ed 1111; In re Securities Insurance Company (1894) 2 Ch 410; In re Markham, Markham v Markham (1880-1881) 16 Ch D 1. There is no statutory enactment or rule of court that confers upon a single judge the power to grant the leave that the applicant needs before he can appeal to the Full Court. Cf, the case of an appeal from an order for costs, in which case the Supreme Court Civil Procedure Act, s44(1)(a) provides that leave may be given by the Full Court or the judge who made the order. Only the Full Court can grant the liquidator leave to appeal. The time elapsed between the date of the judgment from which leave to appeal is sought and the date of the application for leave is a relevant factor in the proper exercise of the discretion upon an application to grant leave. See for example, In re Padstow Total Loss and Collision Assurance Association (1881-1882) 20 Ch D 137 at 142; In re Clayton Mills Manufacturing Company (1888) 37 Ch D 28; Ex parte Tucker; In re Tucker (1879-1880) 12 Ch D 308. In each of those cases the question of whether or not leave to appeal would be granted was dealt with by the Full Court either as a preliminary point or as part and parcel of a hearing of the merits of the appeal itself. The authors of Daniell's Chancery Practice 8 ed at 1128 write:

"An application for leave to appeal after the expiration of

the prescribed period should not be made ex parte. Leave can

only be granted by the Court of Appeal, and not by a judge of

first instance."

16. The authority cited for the last sentence is Sellar v Charles Bright and Co Limited (No 2) (1904) 91 LT 9. In that case the relevant rule of court provided that there could be no appeal from certain orders after the expiration of specified time "except by special leave of the Court of Appeal." The applicable rules of court further provided a general power for a court or a judge to enlarge or abridge the time appointed for doing any act or taking any proceedings, but with respect to that Collins MR said at 10:

"I cannot assent to the proposition that the learned judge

could impose upon the Court of Appeal the obligation to hear

an appeal which was out of time."

17. Counsel referred to In re a charge given by Hewitt Nominees Pty Ltd to Blackwood Hodge Hire (Australia) Pty Ltd (1978-1990) 4 ACLR 348. There is a similarity between that case and the present application in that it too was an application by a liquidator to a single judge for an extension of time within which to appeal against the same kind of order as that made by Wright J. The preliminary submission put to me by Mr Abbott was put to Sheahan J in that case. The submission was based on the proposition that the Chancery practice required leave to be granted if the intending appellant was a person aggrieved but not a party to the proceedings. The submission failed in that case because in Queensland there was no statutory requirement that such a person required leave to appeal, and the Chancery practice relied upon had not been adopted in Queensland. The case is of no assistance on this application because unlike the position in Queensland, in Tasmania, the Chancery practice has been adopted by the enactment of the Supreme Court Civil Procedure Act, s42(1)(b) which provides that a person aggrieved but not a party may only appeal "with the leave of a Full Court."

18. Leave is required before there can be a valid notice of appeal. See Cumbes v Robinson (1951) 1 All ER 661 (the authorised report, (1951) 2 KB 83 does not refer to this aspect of the appeal). The Supreme Court Practice 1988 (UK) under O59, r14/7 notes after a reference to that case, that "(i)t follows therefore, that an intending appellant cannot stop time for serving a notice of appeal running (where leave to appeal is required) by serving a notice of appeal in advance of obtaining leave."

19. The liquidator cannot give a valid notice of appeal until leave to appeal has been granted. Neither the Rules of Court nor the Act prescribe any time within which leave must be sought. The Act confers the power to grant such leave on the Full Court. This accords with the former Chancery practice. It follows that a single judge has no power to grant the liquidator's application and it must be dismissed.

20. No Appeal Against an Order Given or Made by Consent: The Supreme Court Civil Procedure Act, s43 provides:

"No appeal shall lie to a Full Court from any judgment,

order, or other determination of a judge, whether sitting in

court or in chambers

(a) given or made by the consent of the parties;

..."

21. No doubt, the provenance of this section is the Supreme Court Judicature Act 1925 (UK), s31(1)(h). The side note to the Tasmanian section indicates this. However, it may be noted that the 1925 UK enactment provided that no appeal lay "without the leave of the court or a judge making the order, from an order of the High Court or any judge thereof made with the consent of the parties ..." but the Tasmanian statute is a complete bar to an appeal from orders and judgments made or given by the consent of the parties. So far as I have been able to ascertain, the 1925 English provision persists today, now enacted with the same words in the Supreme Court Act 1981 (UK), s18(1)(f).

22. The statutory bar enacted in the Supreme Court Judicature Act 1925 (UK), s31(1)(h) owes its origins to the Judicature Act 1873 (36 and 37 Vic c 66) (UK), s49, which in turn has its provenance in the Chancery practice before the enactment of the Judicature Acts. It would appear that the Chancery practice was to refuse to entertain appeals from orders made by consent viz, the present practice in Tasmania by virtue of the Supreme Court Civil Procedure Act. As long ago as 1752 in Harrison v Rumsay [1752] EngR 147; 2 Ves (Sen) 488: 28 ER 312 the Lord Chancellor said:

"He would by no means set aside a decree obtained by consent

of counsel on both sides; for it would be most dangerous. It

was an established rule not to do it; nor would he make the

precedent. There was a good while ago an appeal of that kind

in the House of Lords, who desired the party bring an action

against the counsel. If they could prove collusion on the

counsel, it would be a different thing."

23. In Wood v Griffith [1815] EngR 1125; 1 Mer 35: 35 ER 590 the old rule was confirmed but held not to apply in the case where the consent had been only to the form of the minutes of the order following a determination by the Master. In Davis v Chanter 2 PH 545: 41 ER 1054 it was unsuccessfully argued that the making of an amendment after an order of an adjournment with liberty to amend, was an implied consent and thus a bar to an appeal. See also Stewart v Forbes 1 Mac and G 137: [1849] EngR 440; 41 ER 1215; Cole v Scott 1 Mac and G 518: 41 ER 1366. Hadida v Fordham and Sons (Limited) (1893-1894) 10 TLR 139 was a case involving deceit in relation to the passing off of the brand name of a polishing paste. At the trial, the defendants' counsel gave an undertaking not to use the brand name but refused to pay costs. Romer J tried the action on the question of costs only and found against the defendants. They appealed. The report states that the Court of Appeal accepted the following submission made on behalf of the respondents:

"Mr Neville, QC, and Mr Waggett for the respondents, took the

preliminary objection that there could be no appeal merely

for costs, and that the order of Mr Justice Romer, except so

far as costs were concerned, amounted to a consent order, and

there could be no appeal from a consent order."

24. In other States, eg, Supreme Court Act (Vic), s17A(4)(b); Supreme Court Act (WA) s60(1)(e); Supreme Court Act (SA) s50(1)(2)(a); Supreme Court Act 1970 (NSW), s101(2)(c), the common form of legislation accords with the UK post Judicature Act position viz, that there may be an appeal against a consent order but only with the leave of the judge or the Full Court. However, in Tasmania the bar against such appeals is absolute. What then is an order "given or made by the consent of the parties?"

25. A judgment or order is given by consent if it is the result of a bargain or real agreement between the parties and is not merely an acceptance by one party of a proposed order of the court. This proposition was accepted by Zelling J in Rogers v Curnow (1979) 22 SASR 204 at 207. In that case, the Master proposed a certain order to the appellant and he accepted it. Zelling J held this was not an order by consent because the order "did not arise from any pre-existing bargain with the defendant" (207). In Chandless-Chandless v Nicholson (1942) 2 KB 321 Lord Greene MR said at 324, "there is a great deal of difference between a consent order in the technical sense and an order that embodies provisions to which neither party objects." It is to be noted that the Tasmanian statutory provision refers to orders made by consent and not to orders made with consent. Thus it appears that where the consent does not result in the making of the order but is only one of the factors that caused the order to be made, the order is not one that is made by consent. In Chandless-Chandless v Nicholson (supra) it was held that an order is made by consent when it is the nature of a contract between the parties. In Siebe Gorman and Co Ltd v Pneupac Ltd (1982) WLR 185 Lord Denning MR referred to the distinction at 189 in this way: "In every case it is necessary to discover which meaning is used. Does the order evidence a real contract between the parties? Or does it only evidence an order made without objection." His Lordship immediately went on to discuss this proposition by reference to earlier cases in the following terms:

"We were referred to several cases. In Huddersfield Banking

Co Ltd v Henry Lister and Son Ltd (1895) 2 Ch 273 there was a

consent order dealing with a large amount of machinery and

plant. Everyone had agreed that it should be sold on certain

terms. That was clearly a contract between the parties with

which the court would not interfere except on the same

grounds as any other contract. In Purcell v F C Trigell Ltd

(1971) 1 QB 358 the correspondence (which is set out in the

facts of the case) showed that there was a real contract

agreed between the parties that, unless a particular order

for interrogatories was complied with, the matter should be

struck out. In that case I said (p 364) that the court had a

discretion to vary or alter the terms of interlocutory orders

- even though made by consent. There is a case mentioned in

The Supreme Court Practice (1982), Vol 2, p 603, para 2011,

Australasian Automatic Weighing Machine Co v Walter (1891) WN

170. That concerned an order by consent to transfer shares.

Again it was a case in which there was a real contract

between the parties. Equally, in Intervale Group of

Companies Ltd v Knighton (unreported), June 30, 1976, Court

of Appeal (Civil Division) Transcript No 302 of 1976, Bridge

LJ, after analysing all the facts, came to the conclusion, at

p 14: 'that there was here an unconditional binding contract

in law between the parties that the order of February 10

should be made, as it was.' Scarman LJ added that, in the

circumstances of the case, 'from Bridge LJ's analysis of the

facts, there was here a contract.' The most recent case was

in the same category: see Chanel Ltd v F W Woolworth and Co

Ltd (1981) 1 WLR 485. It seems to me that all those cases

can be - and should be - explained on the basis that there

was a real contract between the parties evidenced by the

order which was drawn up."

26. The statutory provision pursuant to which Wright J made the order in respect of which Sky-Ridge wishes to appeal is the Corporations Law, s266(4). I have set it out earlier in these reasons. It confers a discretion. It is well established in Australia that upon an application for an extension of time to give notice of a charge, the applicant is obliged to provide satisfactory evidence of the company's solvency or provide some procedure to protect the interests of unsecured creditors. See Re Guardian Securities Ltd (1984) 8 ACLR 822. The importance of the position of unsecured creditors on an application such as this was emphasised in Commercial Banking Co of Sydney Ltd v George Hudson Pty Ltd (In liq) [1973] HCA 50; (1973) 131 CLR 605. Menzies J said at 613:

"It is a deeply rooted principle of company law that, when

liquidation has commenced, one creditor should not be

assisted by the court to improve its positions vis a vis

other creditors."

That decision marked a departure from the then UK position that an extension of time merely put the mortgagee in the position in which he or she or it would have been, had there been no inadvertence and thus the position of unsecured creditors took a back seat.

27. It seems to me that the order made by Wright J was the product of an exercise of a judicial discretion. Sky-Ridge's consent was a factor in the exercise of that discretion but not the only factor. The parties did not and could not make a binding contract to extend the time for registering notice of the charge; a contract only requiring perfection by an order of the court. The effect of Sky-Ridge's consent was no more than support for an exercise of the judicial discretion in favour of Burlington's application. In my view the resultant order was not one that was made by the consent of Sky-Ridge within the meaning of the Supreme Court Civil Procedure Act, s43(a). It was an order made in the exercise of a statutory discretion in respect of which Sky-Ridge agreed to offer no opposition. Other factors were taken into account including, as his Honour said, "no real prospect of prejudice to shareholders or creditors." Had that not appeared to his Honour, it is unlikely that he would have made the order he did notwithstanding Sky-Ridge's consent. Although it might be argued that the order was made with the consent of Sky-Ridge, it was not made by its consent. The preliminary point taken against Sky-Ridge on this application fails.

28. The Merits of the Application: The motion to extend time was filed on 30 March 1995 so in round terms, the period of delay was in the order of three months. Mr Abbott submitted that the period was so great that it should result in this application being refused. However, in the proper exercise of the discretion I do not think that the period of delay is of great significance. Approximately a month after the time for appealing expired, the affairs of Sky-Ridge passed into the control of the liquidator and by his affidavit, the liquidator explains that during the following two months he was very busy managing and inquiring into the affairs of the company, as well as taking legal advice. Significantly, Mr Abbott did not submit that the period of delay occasioned any specific prejudice although of course, general prejudice always arises out of delay. Mr McElwaine counsel for both applicants, submitted that the applicants (now confined to the applicant Sky-Ridge) had demonstrated that there was a strong prima facie case for the appeal to succeed. He based this submission principally on the propositions that error occurred in the making of the order extending time for lodging notice of the charge when there was insufficient material with respect to the position of unsecured creditors and further, if the Full Court granted leave to adduce fresh evidence, that at the time the order was made Sky-Ridge was insolvent. It is not necessary for me to examine in great detail the affidavit material filed on this application relevant to the solvency issue. It is sufficient to say for present purposes, that the affidavit material filed on behalf of Sky-Ridge presents a strong prima facie case that at all relevant times Sky-Ridge was insolvent.

29. The only material relevant to the question of insolvency that was before the learned judge on the application to extend time to give notice of the charge, was the affidavit of Mr Brady. Although that affidavit annexed a balance sheet of the company, it related only to the date Sky-Ridge commenced operations. The affidavit recited the liability to Burlington of $190,000 and an overdraft facility with the bank then standing at $50,000. The only reference to creditors appears in the following two paragraphs of Mr Brady's affidavit:

"The company has unsecured trading creditors. The trade

creditors of the company to the 31st October 1994 are now

partly paid. I anticipate that all of the October accounts

will be paid by 9 December 1994. There are trading debts of

the company incurred since 1st November 1994 which remain

outstanding under normal trading terms.

Although the company has traded at an overall loss since it

commenced operating the business, it is anticipated that the

position of the company will improve. There are a number of

contracts in progress at the moment and sufficient work to

continue operations until the 30th June 1995."

30. Prima facie that material indicates that the company could not then pay its debts as they fell due notwithstanding the assertion that in the future "the position of the company will improve."

31. Pursuant to the Corporations Law, s477(2), the liquidator is empowered to make this application and to bring an appeal in the name of Sky-Ridge if time is extended so to do. I am satisfied that Sky-Ridge has a good arguable case on appeal in that:

1 If leave is given to adduce fresh evidence (in the

circumstances of this case there is a good argument that such

leave will be given) insolvency at the relevant time may well

be made out and in result, the Full Court may be persuaded

that error occurred in the exercise of the discretion.

2 If such leave to adduce fresh evidence is refused, there

is still an arguable case, albeit not as strong as it will be

if fresh evidence is adduced, that on the material before

Wright J error occurred in the exercise of the discretion.

32. There is, of course, an obvious explanation for the delay up until the liquidator's appointment and a reasonable explanation for the delay thereafter. No specific prejudice arises from either period of delay and in all the circumstances, an appropriate exercise of the discretion on this application is that Sky-Ridge should be granted the extension sought.

33. The orders are then, that the application of the liquidator is dismissed. The application by Sky-Ridge is granted. The time for Sky-Ridge to appeal from the order of Wright J is extended until 5 April 1995.