Wood v Links Golf Tasmania Pty Ltd

REASONS FOR JUDGMENT 1 By an interlocutory application, filed on 25 January 2013, the applicants, Peter Andrew Wood and Justin Charles Hetrel, seek an order that the time for Links Golf Tasmania Pty Ltd ("Links Golf") to file any notice of appeal from the judgment of the Court made on 26 June 2012 and the order of the Court made on 16 July 2012 in proceeding VID 204/2010 be extended, pursuant to r 36.05 of the Federal Court Rules 2011 (Cth) ("the Federal Court Rules"), until seven days after the hearing and determination of the substantive application made by them as plaintiffs in this proceeding. 2 The circumstances of the making of the orders and the fixing of the time which the applicants seek to extend require some explanation. Proceeding number VID 204/2010 was brought by Mr Wood and Mr Hetrel in the name of Links Golf, which is named as the first respondent to the interlocutory application. They acted pursuant to leave granted by Finkelstein J, pursuant to s 237 of the Corporations Act 2001 (Cth) ("the Corporations Act"), for them to bring a proceeding on behalf of Links Golf, pursuant to s 236 of the Corporations Act. 3 Mr Wood and Mr Hetrel are former directors of Links Golf. The person named as the second respondent to the interlocutory application, Mr Sattler, is a director of Links Golf. The third respondent named in the interlocutory application, RG Sattler Nominees Pty Ltd, is the majority shareholder of Links Golf. In substance, the matters the subject of the proceeding involved issues of fiduciary duties owed by Mr Sattler to Links Golf and questions whether he was obliged to disgorge in favour of Links Golf gains made by himself, or by companies controlled by him. 4 The trial of the proceeding occupied some 47 sitting days of the Court. Even in a court that does a good deal of serious commercial litigation, it was an extraordinarily long trial. On 26 June 2012, the learned trial judge published reasons for judgment. Those reasons consist of 723 paragraphs, occupying more than 300 pages of typescript. Once again, even in a court that is used to conducting serious litigation, the reasons for judgment are of unusual length. But for one or two particular aspects of the claims made, the proceeding on behalf of Links Golf was unsuccessful. 5 On 16 July 2012, the trial judge pronounced orders in accordance with his Honour's reasons for judgment, including, in paragraph 2, an order that there be judgment for the defendants, subject to orders in favour of Links Golf with respect to the successful aspects of the claims. In paragraph 7 of the orders, his Honour ordered that, subject to any further order of the Court, the time for the plaintiff to file any notice of appeal from the order in paragraph 2 above be extended to 9 November 2012. 6 It was necessary for his Honour to deal with further elements of the proceeding. One was the question of an assessment of damages or equitable compensation in respect of the aspects of the claims on which Links Golf had been successful. The other was the question of costs, having regard to the outcomes. It took some time for those matters to be dealt with. On 24 October 2012, his Honour gave further directions, particularly as to the conduct of what had become a claim for equitable compensation. In the course of those orders, his Honour made an order that the time provided for the filing of a notice of appeal, pursuant to the order in paragraph 7 of the orders made on 16 July 2012, be extended to 14 December 2012. 7 Subsequently, his Honour made further orders. On 30 November 2012, his Honour ordered that the time provided for the filing of a notice of appeal, pursuant to the order in paragraph 7 of the orders made on 16 July 2012 and extended on 24 October 2012, be further extended to 1 February 2013. It is clear, therefore, that the applicants in the present interlocutory application are seeking a further extension of the time fixed by his Honour for Links Golf to file a notice of appeal and extended on two occasions, so as to expire tomorrow. 8 The applicants have recognised that, if Links Golf is to appeal, it will not do so on the decision of those who presently control it. The applicants have filed in the Court, as plaintiffs, a substantive application, by which they seek leave pursuant to s 237 of the Corporations Act to bring an appeal on behalf of Links Golf from the orders made on 16 July 2012 in proceeding number VID 204/2010. 9 It was not until 14 December 2012 that the trial judge made final orders disposing of the entirety of proceeding number VID 204/2010. A week later, on 21 December 2012, the solicitors who act for Mr Wood and Mr Hetrel (and who acted for Links Golf in the proceeding at first instance) sent to Links Golf an email attaching a draft notice of appeal and requesting the consent of the board of Links Golf to Mr Wood and Mr Hetrel bringing an appeal on behalf of Links Golf. This was followed by a letter dated 18 January 2013 in which, not having received a response to the letter of 21 December 2012, the solicitors for Mr Wood and Mr Hetrel threatened to file an application for leave pursuant to s 237 of the Corporations Act. The board of directors of Links Golf, through their solicitors, responded on 22 January 2013, saying that the board did not consent to any appeal being brought by Mr Wood and Mr Hetrel in Links Golf's name, or to any extension of time to file any notice of appeal from the judgment delivered on 16 July 2012. An application of the kind threatened was duly filed on 25 January, although not at that time processed in the registry of the Court. 10 The most obvious aspect of the material that has been filed in support of the interlocutory application is the complete absence from it of any explanation as to why the applicants took no step at all to prepare for or make an application pursuant to s 237 of the Corporations Act for the leave required to bring any appeal on behalf of Links Golf, at any time between the making of orders on 16 July 2012 and 21 December 2012. They did not provide a draft notice of appeal or make any request for consent, such as that made on 21 December 2012. 11 The omission of any such material is made all the more glaring by the fact that solicitors acting on behalf of Links Golf wrote to the solicitors acting on behalf of Mr Wood and Mr Hetrel on 29 October 2012. They referred to the fact that senior counsel for Mr Wood and Mr Hetrel had foreshadowed the possibility of an appeal on 16 July 2012. They requested that Mr Wood and Mr Hetrel provide the board of Links Golf with an outline as to the grounds of appeal. No response to such a request was made until 21 December 2012, when the draft notice of appeal was provided. 12 Further, it seems that, in discussions in relation to directions, as well as adverting to the need for extensions of the time for the filing of a notice of appeal until after all of the issues in the proceeding at first instance had been resolved by orders, the parties also adverted to the possibility of the need for a further application for leave pursuant to s 237 of the Corporations Act, on the basis that the leave granted by Finkelstein J had been exhausted by the completion of that proceeding. 13 The delay between 16 July 2012 and 21 December 2012 is entirely unexplained. This is probably because it is inexplicable that parties who wish to preserve their rights would take no step in all of that time to do what they realised they must do. 14 The gap becomes even more obvious when regard is had to the terms of the draft notice of appeal that was provided. The draft notice of appeal does not engage at all with any orders of the Court that have been made. Although in its terms it is said to be an appeal from paragraph 2 of the orders made on 16 July 2012, it does not in its terms seek the setting aside of that order. What it does is to contain a number of grounds suggesting that particular findings of fact that the trial judge made should not have been made. It advances findings that it is suggested should have been made. It then says that, having regard to findings that were made and to those that should have been made, certain consequences should have flowed. Little, if any, of it is directed to issues of principle. Much, if not all, is directed to seeking to reshape the case as it was determined by the trial judge so as to make it a case in factual terms favouring the arguments that Mr Wood and Mr Hetrel advanced. Because of the need of an appellant to establish error in the making of findings of fact, rather than simply the opportunity to make different findings of fact, the nature of the appeal is somewhat hazardous. 15 Most importantly, though, the notice of appeal is based entirely on the reasons for judgment that were published on 26 June 2012. It does not address itself to any of the issues arising in relation to costs, or to any of the issues arising in relation to those aspects of the claims on which Mr Wood and Mr Hetrel, in the name of Links Golf, were successful. In other words, the notice of appeal could have been composed even earlier than the making of the orders on 16 July 2012, but certainly relatively soon after those orders had been made. 16 There is no explanation as to why this task was not undertaken at an earlier stage. In particular, there is no explanation as to why it was not undertaken following the request on behalf of Links Golf on 29 October 2012. Indeed, there is no evidence as to when the task was actually undertaken, although senior counsel for Mr Wood and Mr Hetrel has indicated that the preparation of the draft notice of appeal was in progress by 14 December 2012, when final orders were made. Why it took a further week after the making of those orders for the draft notice of appeal to be forwarded is perhaps another question. 17 Most importantly, there is no evidence as to why no earlier step was taken to put in train the work necessary to make an application under s 237 of the Corporations Act, which was recognised as a necessary prerequisite to the bringing of any appeal. 18 In my view, both the preparation of the draft notice of appeal and the making of an application for leave pursuant to s 237 of the Corporations Act should have been completed well before the final orders in the proceeding were made, given that Mr Wood and Mr Hetrel only seek to appeal in the name of Links Golf in relation to the substantive order made on 16 July 2012. The view that I take is that the applicants have slept on whatever rights they have. They should therefore not be granted a further indulgence by extension of the time for the filing of a notice of appeal. 19 In addition, it must be said that, if Mr Wood and Mr Hetrel see fit to proceed with their application pursuant to s 237 of the Corporations Act, to bring an appeal in the name of Links Golf, whichever judge is to deal with that application will, if necessary, have available to him or her the power given by r 36.03(b) of the Federal Court Rules to fix a date for the purpose of the filing of a notice of appeal. In other words, if a judge should think it appropriate to grant leave to Mr Wood and Mr Hetrel, the judge will be able to make an order in relation to the time for filing any notice of appeal. 20 I express these conclusions in the conditional way I have because it is by no means certain that the application for leave will be successful. One of the elements that Mr Wood and Mr Hetrel will have to establish, pursuant to s 237(2)(c) of the Corporations Act, is that it is in the best interests of Links Golf that Mr Wood and Mr Hetrel be granted such leave. Some reference was made in argument to the huge financial burden already imposed on Links Golf by the orders in relation to costs made in favour of Mr Wood and Mr Hetrel against Links Golf itself as part of the granting of leave, and to the need for the making of subsequent orders ameliorating the impact on Links Golf of those orders. Given the nature of the grounds of appeal advanced and the need to establish that an appeal would be in the best interests of Links Golf, it is by no means certain that any judge would grant the leave sought. 21 If leave were to be refused, no occasion would arise for any further extension of time to file a notice of appeal. It may also be that the judge dealing with the leave application would reach the view that there was no sufficient likelihood of success in the appeal to warrant the making of an order extending the time. For these reasons, it is better left to the judge dealing with the substance of the application for leave to determine whether any further time for the filing of a notice of appeal should be granted. 22 It follows from my conclusions that, as a matter of the exercise of discretion, I would not grant any further extension of the order made and already extended twice by the trial judge. The interlocutory application for an extension of time will therefore be dismissed. 23 The orders I make are: