Complete Hire and Sales Pty Ltd v Terra Firma Constructions Pty Ltd
[2018] WASCA 88
•29 MAY 2018
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: COMPLETE HIRE AND SALES PTY LTD (ACN 090 519 823) -v- TERRA FIRMA CONSTRUCTIONS PTY LTD (ACN 605 319 426) [2018] WASCA 88
CORAM: BUSS P
MITCHELL JA
HEARD: 14 MAY 2018
DELIVERED : 14 MAY 2018
PUBLISHED : 29 MAY 2018
FILE NO/S: CACV 48 of 2018
BETWEEN: COMPLETE HIRE AND SALES PTY LTD (ACN 090 519 823)
Appellant
AND
TERRA FIRMA CONSTRUCTIONS PTY LTD (ACN 605 319 426)
Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram: MASTER SANDERSON
Citation: COMPLETE HIRE AND SALES PTY LTD -v- TERRA FIRMA CONSTRUCTIONS PTY LTD [2018] WASC 138
File Number : COR 303 of 2017
Catchwords:
Practice and procedure - Corporations law - Appeal against dismissal of application to set aside statutory demand - Interim application - Whether the Court of Appeal has power to extend the time to comply with statutory demand pending the determination of the appeal
Legislation:
Australian Constitution, s 76(ii)
Corporations Act 2001 (Cth), s 459C(2), s 459F(2)(a), s 459G, s 1337B(3), s 1337B(5)
Judiciary Act 1903 (Cth), s 39(2)
Supreme Court Act 1935 (WA), s 7, s 58(1)(b)
Result:
Time for compliance with statutory demand extended to the hearing of the appeal
Category: A
Representation:
Counsel:
| Appellant | : | Mr D K Skender |
| Respondent | : | Mr J M Healy |
Solicitors:
| Appellant | : | Holborn Lenhoff Massey |
| Respondent | : | Ramsden Lawyers |
Case(s) referred to in decision(s):
Aussie Vic Plant Hire v Esanda Finance [2008] HCA 9; (2008) 232 CLR 314.
Equuscorp Pty Ltd v Perpetual Trustees WA Ltd (1997) 25 ACSR 675.
FBM Corporation Pty Ltd v Redsilk Enterprises Pty Ltd [2013] WASC 404.
Ketrim Pty Ltd v Jaeger Corporation Pty Ltd [2002] NSWSC 871; (2002) 21 ACLC 8.
Macleod v Australian Securities and Investments Commission [2002] HCA 37; (2002) 211 CLR 287.
PrimeSpace Property Investment Ltd v Vienne Pty Ltd (No 2) [2015] FCA 367.
Vista Commercial Construction Pty Ltd v Commissioner of Taxation (1997) 79 FCR 288.
REASONS OF THE COURT:
On 14 May 2018, the court made orders extending the time for the appellant to comply with a statutory demand, and programming the appeal for hearing on 28 May 2018. The court said that it would publish reasons for making those orders at a later date. These are our reasons for making those orders.
On 8 May 2018, Master Sanderson dismissed the appellant's application made under s 459G of the Corporations Act 2001 (Cth) for an order setting aside a statutory demand which had been served upon it by the respondent. The statutory demand was dated 2 December 2017, and demanded payment of debts totalling $376,315.58. Failure to comply with the statutory demand will give rise to a presumption that the appellant is insolvent in an application for winding up of the appellant in insolvency made within 3 months after the failure to comply.[1] Unless extended, the period for compliance with the statutory demand would end 7 days after that final determination of the appellant's application under s 459G of the Act: ie on 15 May 2018.[2] Once the period for compliance with a statutory demand has expired, the Act does not permit the making of an order extending the period for compliance.[3]
[1] Section 459C(2) of the Corporations Act.
[2] Section 459F(2)(a)(ii) of the Corporations Act.
[3] Aussie Vic Plant Hire v Esanda Finance [2008] HCA 9; (2008) 232 CLR 314 [27]. cf PrimeSpace Property Investment Ltd v Vienne Pty Ltd (No 2) [2015] FCA 367 [2] as to whether the position might be different in an appeal from an order refusing to extend time for compliance with a statutory demand (a question which does not arise in this case).
On 10 May 2018, the appellant filed an appeal notice, in which leave was sought to appeal against the master's order dismissing the application to set aside the statutory demand. On the same day, the appellant filed an application in the appeal seeking, relevantly, an order that the time to comply with the statutory demand be extended to 7 days after the determination of the appeal.
A question was raised by the respondent as to whether the Court of Appeal had jurisdiction to extend the time for compliance with the statutory demand pending the determination of the appeal.[4] Counsel for the respondent did not positively contend that the court lacked jurisdiction to make such an order. Nevertheless, it was necessary for us to be satisfied that we had jurisdiction before making an order extending time for compliance with the statutory demand.
[4] Referring to FBM Corporation Pty Ltd v Redsilk Enterprises Pty Ltd [2013] WASC 404 [12] - [14].
In the appeal, this court is exercising federal jurisdiction in a matter arising under the Corporations Act.[5] Jurisdiction 'with respect to civil matters arising under the Corporations legislation' is conferred on the Supreme Court of Western Australia by s 1337B(2)(a) of the Corporations Act. The term 'Corporations legislation' is defined in s 9 to include the Corporations Act. This investment of federal jurisdiction includes appellate jurisdiction within the provisions made for it by this State's judicial system.[6] The relevant aspect of this State's judicial system is the provision for the Court of Appeal division of the Supreme Court to hear and determine appeals from a master, subject to presently immaterial exceptions.[7]
[5] Section 76(ii) of the Commonwealth Constitution.
[6] Macleod v Australian Securities and Investments Commission [2002] HCA 37; (2002) 211 CLR 287 [9].
[7] Section 7 and s 58(1)(b) of the Supreme Court Act 1935 (WA).
Under s 459F(2) of the Corporations Act:
The period for compliance with a statutory demand is:
(a)if the company applies in accordance with section 459G for an order setting aside the demand:
(i)if, on hearing the application under section 459G, or on an application by the company under this paragraph, the Court makes an order that extends the period for compliance with the demand-the period specified in the order, or in the last such order, as the case requires, as the period for such compliance; or
(ii)otherwise-the period beginning on the day when the demand is served and ending 7 days after the application under section 459G is finally determined or otherwise disposed of; or
(b)otherwise - 21 days after the demand is served.
Section 459F(2)(a) operates where a company applies in accordance with s 459G of the Corporations Act for an order setting aside the statutory demand. That application was made in the primary proceedings. Where an application under s 459G is made, the 'Court' is empowered to make an order on an application under s 459F(2)(a)(i) extending the period for compliance with the demand. For this purpose, 'Court' is relevantly defined to include the Supreme Court of Western Australia.[8] An application under s 459F(2)(a)(i) was made by the appellant's application in an appeal dated 10 May 2018. An extension application under s 459F(2)(a)(i) may be made after the determination of an application to set aside a statutory demand but before the expiry of the period for compliance, for purposes which include covering the period when an appeal is determined.[9]
[8] Section 58AA(1) of the Corporations Act.
[9] Vista Commercial Construction Pty Ltd v Commissioner of Taxation (1997) 79 FCR 288, 295 - 297; Equuscorp Pty Ltd v Perpetual Trustees WA Ltd (1997) 25 ACSR 675, 701; Ketrim Pty Ltd v Jaeger Corporation Pty Ltd [2002] NSWSC 871; (2002) 21 ACLC 8 [21].
These provisions of the Corporations Act conferring jurisdiction and power do not distinguish between the General division and the Court of Appeal division of the Supreme Court. Further, under s 1337B(5), the jurisdiction conferred on this court by s 1337B(3) is not limited 'by any limits to which any other jurisdiction of that Supreme Court may be subject'. The limits of the jurisdiction and powers of this court are relevantly defined by the Corporations Act rather than State law.
We are satisfied that, when this court exercises its appellate jurisdiction under s 1337B(3) of the Corporations Act in an appeal against a refusal to set aside a statutory demand, the court has power under s 459F(2)(a)(i) to make an order extending the time for compliance with a statutory demand in order to preserve the subject matter of the appeal and prevent the appeal from being rendered nugatory.
It is unnecessary to consider whether relevant jurisdiction is also conferred by s 39(2) of the Judiciary Act 1903 (Cth).
On the hearing of the application in an appeal, it was common ground between the parties that the appellant had advanced arguable grounds, that the appeal would be rendered nugatory if an extension were not granted and that the balance of convenience favoured the grant of an extension of time for the appellant to comply with the statutory demand. In those circumstances, we were satisfied that it was in the interests of justice to make an order extending the time for the appellant to comply with the statutory demand to 4.00 pm on the day listed for the hearing of the appeal.
There was some debate as to whether the grant of an extension of time should be subject to a condition that the appellant pay the amount specified in the statutory demand into court. However, counsel for the respondent accepted that the respondent's interests would be sufficiently protected if the appeal were listed for an urgent hearing in two weeks' time. The court therefore made an unconditional order extending time for compliance with the statutory demand to 4.00 pm on 28 May 2018, and made programming orders for the appeal to be heard on that day.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
ET
RESEARCH ASSOCIATE/ORDERLY TO THE HONOURABLE JUSTICE MITCHELL29 MAY 2018
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