DEP Comm of Tax v England (as Liq of UB Mins Inc) No. Scciv-00-594
[2001] SASC 76
•23 March 2001
DEPUTY COMMISSIONER OF TAXATION v ENGLAND (As liquidator of UB Minerals Inc (Nevada))
[2001] SASC 76
Miscellaneous Appeal
1................ WICKS J......................... This is an application for an order that an appeal by the defendant against an order of a master made on 1 December 2000 be heard by the Full Court instead of a single judge.
Rejection of proof of debt
The plaintiff lodged a formal proof of debt or claim in relation to the winding up of UB Minerals Inc (Nevada) (Liquidator appointed) ACN 010 506 018 on 2 July 1996 in the sum of $3,341,482.65. The proof of debt was rejected by the defendant liquidator on 31 October 1996. The notice of rejection was duly served on the plaintiff on 1 November 1996.
The notice of rejection provided that if the plaintiff wished to appeal against the rejection of its proof of debt, the plaintiff should do so within 21 days. An informal extension of time of a further 21 days was allowed after the expiration of the first period of time and this expired on 19 December 1996.
Proceedings in the Federal Court
The plaintiff instituted proceedings in the Federal Court of Australia on 23 December 1996 in proceeding number SG 3130 of 1996 for an order that the proof of debt be admitted.
Dismissal by the Federal Court of proceedings for want of jurisdiction
Following the decision of the High Court in Re Wakim ex parte McNally (1999) 198 CLR 511, the Federal Court ordered on 24 January 2000 that the proceeding be dismissed for want of jurisdiction. During the three years or so between the commencement of the action in the Federal Court and the order for dismissal, a substantial amount of work had been done in the preparation of the case.
Proceedings under the Federal Courts (State Jurisdiction) Act
Section 11(2) of the Federal Courts (State Jurisdiction) Act, so far as is material, provides that a person being a party to a proceeding in which a relevant order is made may apply to the Supreme Court for an order that the proceeding be treated as a proceeding in the Supreme Court and the Supreme Court may make such an order. For the purposes of this section a “relevant order” includes an order of the Federal Court dismissing a proceeding relating to a State matter for want of jurisdiction. A “State matter” is defined in s 3 of the Act to mean a matter in which the Supreme Court has jurisdiction other than by reason of a law of the Commonwealth or of another State or Territory.
If the Supreme Court makes an order under s 11(2), the proceeding concerned becomes, and must be recorded by the Supreme Court as, a proceeding in the Supreme Court and for all purposes is taken to have been brought in the Supreme Court on the day when the proceeding was first recorded as a proceeding in the Federal Court: s11(3). Section 11(4) of the same Act authorises the Supreme Court to make ancillary orders considered necessary for the purposes of the proceeding being treated as, becoming and being recorded as, a proceeding in the Supreme Court.
The High Court, in the judgment of the majority in Residual Assco Group Ltd v Spalvins (2000) 172 ALR 366, was of the view that an order under s 11(2) results in a new proceeding to be issued out of the Supreme Court which is separate and distinct from the Federal Court proceedings which were dismissed for want of jurisdiction. The majority of the Court observed on p 374, par 25 as follows:
"The enactment of s 11(3)(b) is only consistent with the Supreme Court proceeding being a proceeding linked to, but operating independently of the Federal Court proceedings."
In par 27, the majority said:
"The purpose of s 11(3)(b) is a strong indicator that the purpose of s 11 is to enable a party to proceedings in a federal court relating to a State matter to bring new proceedings in the Supreme Court whenever the federal court has disposed of its proceedings on the basis that it has no jurisdiction to deal with them."
Under r 123A.05 of the Supreme Court Rules, an application under s 11(2) of the Federal Courts (State Jurisdiction) Act is commenced by summons. All other parties are joined as defendants. Where an order is made under s 11(2), the Supreme Court proceeds as if the proceedings were commenced in the Supreme Court in the first place. Rule 123A.05(2) enables an order for directions to be made and deals generally with interlocutory proceedings taken already and yet to be taken.
After the proceeding was dismissed by the Federal Court for want of jurisdiction, the plaintiff on 29 June 2000 issued a summons out of this Court under s 11(2) of the Federal Courts (State Jurisdiction) Act for the following relief:
An order that the proceeding formerly known as Federal Court of Australia proceeding No SG 3130 of 1996, and commenced in the Federal Court of Australia South Australian District Registry on 19 December 1996 and dismissed by the Federal Court on 24 January 2000 for want of jurisdiction be treated as a proceeding in the Supreme Court.
Such ancillary or other orders as the Court deems fit.
The summons came before a master in this Court on a status conference on 13 September 2000. The application for orders sought in the summons was listed for argument on 20 October 2000.
By application dated 16 October 2000, the plaintiff sought an order under s 11 of the Federal Courts (State Jurisdiction) Act be heard by a judge rather than a master. This application was dismissed.
On 1 December 2000 a master made the following order in the proceeding commenced in the Supreme Court on 29 June 2000:
"(1).... That the proceedings formerly known as Federal Court of Australia proceeding No SG 3130 of 1996 and commenced in the Federal Court of Australia (South Australian District Registry) on 19 December 1996 and dismissed by the Federal Court on 24 January 2000 for want of jurisdiction be treated as a proceeding in the Supreme Court of South Australia.
(2)... I reserve the question of costs.
(3)... I certify it fit for counsel.
(4)... I direct that the Registrar of this Court requests from the Registrar of the Federal Court (South Australian District Registry) that the file in Action No SG 3130 of 1996 be forwarded to this Court.
(5)... I adjourn this matter to a case evaluation conference on Thursday 15 February 2001 at 10.45 am."
On the hearing of the application it was acknowledged and accepted by the parties that the order of the Federal Court in respect of which the formal order was made on 24 January 2000 is a “relevant order” within the meaning of s 11 of the Federal Courts (State Jurisdiction) Act. It was also agreed that the Court had a discretion as to whether an order is made under s 11. The dispute in this proceeding appears to relate to the nature and extent of that discretion.
Counsel for the plaintiff maintained that the discretion was a very narrow one and was limited to ensuring that the action came within the terms of s 11. On the other hand, counsel for the defendant liquidator argued that the discretion is unfettered but nevertheless must be exercised judicially. The learned Master exercised his discretion in favour of the plaintiff.
Appeal from Master’s order
The defendant appealed from the Master’s order by notice of appeal filed 11 December 2000.
Application to have appeal heard by Full Court
On 2 January 2001 the defendant made application to the Supreme Court to have his appeal against the order of a master made on 1 December 2000 to be heard by the Full Court instead of a single judge.
The first question which arises is whether an appeal in these circumstances lies to the Full Court or to a single judge.
Section 50(2) of the Supreme Court Act 1935 provides:
"(2).... Subject to the rules of court, an appeal shall lie to a judge against a judgment, order, direction or decision of a master."
As can be seen, the right of appeal to a single judge is made subject to the Rules of Court. Rule 106.05 is as follows:
"106.05(1) Subject to subrule (2) below an appeal from ... any ... final finding, decision, direction ... or judgment, arrived at, made, given, directed or entered on the trial or hearing of any proceedings or of any question or issues by a Master lies to the Full Court and is to be governed by Rule 95.
(2) Any appeal from a master:
(a) ...
(b).... from an order, decision or judgment to which subrule (1) does not apply;
(c) ...
is to be to a single Judge and is to be governed by r 97.
(3)... An appeal under subrule (2) is to be instituted within seven days of the order, decision or judgment appealed from."
The notice of appeal in this matter was filed on 11 December 2000 and the order appealed from was made on 1 December 2000. Under the Rules, the notice of appeal would appear to be within time irrespective of whether the appeal is to the Full Court or a single judge.
If the order appealed from is a “final finding, decision, direction ... or judgment” the appeal may proceed as of right to the Full Court subject to amending the notice of appeal to refer it to the Full Court rather than to a single judge. Orders in this regard can be made by a single judge acting under r 95.12. Where r 106.05(1) is applicable, the appeal to the Full Court is as of right and requires no leave.
Alternatively, where a “final finding, decision, direction ... or judgment” is not involved, r 106.05(2)(b) will apply. The appeal lies to a single judge as of right. No leave is required.
The question in issue then is whether or not the order appealed against is a final finding, decision, direction or judgment, or alternatively whether it is merely interlocutory in character.
The starting point is Hall v Nominal Defendant (1966) 117 CLR 423. In that case, there was an application to extend time within which to sue the Nominal Defendant. A question arose as to the status of a purported appeal where it was necessary for the High Court to determine whether the order appealed from was a final judgment or merely interlocutory. At p 440 of the report Taylor J said:
"So an order made in the course of an action or suit which does not conclude the rights of the parties inter se, although it may, of course, conclude the fate of the particular application in which it is made is interlocutory only."
Later in his judgment at p 440 Taylor J said:
"Brett LJ, referring to the jurisdiction given to the Court by s 25(8) of the Judicature Act, said:
‘The power there given is of the largest kind, unless it is circumscribed in point of time by the words “interlocutory order”’
But it is said that interlocutory must mean something between action begun and final judgment. I cannot agree. In my opinion, ‘interlocutory order’ there means an order other than a final judgment or decree in an action: (1880) 6 QBD at p 78.
The order in the present case was made in proceedings preliminary to the bringing of an action and although it deprived the appellant of the benefit of the order of the learned judge of first instance, it did not operate to prevent him from making a further application for an extension of time. No doubt its practical effect was that any further application would have been fruitless unless supported by additional relevant facts but the order made by the Full Court did not of its own force conclude his right to bring an action."
The High Court again considered the matter in Licul v Corney (1976) 180 CLR 213. At p 219, Barwick CJ said:
"The first question arising from the objection to the competency of the appeal to this Court is whether the order of the Supreme Court was a final order within the meaning and operation of s 35(1)(a) of the Judiciary Act (1903) (Cth) (as amended). To be final for this purpose, the order, in my opinion, must of its own force put an end to the action or proceeding between the parties. It is not enough, in my opinion that by reason of circumstances unconnected with and uncontrolled by the order itself, it may be or become impossible or impracticable to proceed with this action."
At p 225, Gibbs J said:
"One view ... is that the test depends on the nature of the application made to the Court. The other view which, since Hall v Nominal Defendant ..., should, I think be regarded as established in Australia, depends on the nature of the order made; the test is: Does the judgment or order, as made, finally dispose of the rights of the parties?"
In Carr v Finance Corporation of Australia Limited (1980-1981) 147 CLR 246, the High Court considered an appeal from an order declining to set aside a judgment by default. Gibbs J said at p 248:
"The question whether a judgment is final or interlocutory for the purpose of the rules relating to appeals is one productive of much difficulty. The test now applied in this Court for determining whether a judgment is final or not is whether the judgment or order appealed from, as made, finally determines the rights of the parties: Licul v Corney ... An order refusing to set aside a default judgment does not as a matter of law finally dispose of the rights of the parties, for it is open to the disappointed defendant to apply again to have the judgment set aside: Hall v Nominal Defendant ...
In my opinion the test in Licul v Corney requires the Court to have regard to the legal rather than the practical effect of the judgment. If this were not so, the question of whether a judgment is final or interlocutory would be even more uncertain than it is at present."
In Malouf v Malouf (1999) 167 ALR 383, the Full Federal Court were concerned with an application for pre-trial discovery. The application was dismissed by a single judge on the ground that it did not meet certain criteria. The applicant sought to appeal to the Full Court against this decision and a question arose as to whether an appeal lay as a right or whether leave to appeal was required. At p 39, the Full Court said:
. "For present purposes, we need only consider Hall. That decision has been followed consistently in Australia and appears to be materially indistinguishable from the present case in that it involved an application in advance of the commencement of substantive proceedings. It establishes that for the purposes of determining whether there is an appeal as of right, itself depended upon whether the decision in question was final or interlocutory, the test is whether or not the order in question precludes a further application. There is nothing in the rule currently under consideration which would preclude an applicant from making more than one application thereunder. No doubt, an application based on the same grounds as a previous application would be unsuccessful but for the reasons advanced by the High Court, that is not relevant. The order is interlocutory."
The order made under s 11(2) of the Federal Courts (State Jurisdiction) Act at first sight would appear to be a final order in that the order under that section was the only order sought in the proceeding except for “such ancillary or other orders as the Court deems fit”.
However, that statement must be read along with s 11(4) of the Act. From this, it is clear that the order made under s 11(2) following an order for dismissal for want of jurisdiction is merely a procedural step. It is an important provision in that it enables fresh proceedings to be commenced in the Supreme Court. On the making of the order, under s 11(2), the Master adjourned the matter to a case evaluation conference to be held on 15 February 2001. That date has since been vacated and the date 26 April 2001 substituted. No doubt on that occasion, a master will review the state of the pleadings and give directions as to other interlocutory proceedings designed to prepare the case for trial. In the light of the current procedure in this Court, it is impossible to see how the s 11(2) order can be regarded as a final judgment; it is merely a procedural step on the way. It follows that as the order is not final but rather interlocutory, there is an appeal to a single judge as of right. In my opinion, the appeal arising from the notice of appeal filed 11 December 2000 was regularly made. It would appear to have been instituted within the applicable seven day period.
Reference to the Full Court
The next question is whether the appeal can be referred to the Full Court for hearing rather than by a single judge. I understand that where it is appropriate for an appeal to be heard by the Full Court under these circumstances, s 49(1) of the Supreme Court Act 1935 is sometimes pressed into service where the matter in question would meet the criteria applicable to a Full Court appeal. So far as is material s 49(1) is as follows:
"49(1) Any judge of the Court sitting in the exercise of any jurisdiction may ... direct any case or point in a case to be argued before the Full Court and the Full Court may hear and determine any such case or point ... so directed to be argued."
The words “may ... direct any case or point in a case to be argued before the Full Court and the Full Court may hear and determine any such case or point ... so directed to be argued” appear to me to extend the scope of s 49(1) beyond the reservation of a case stated to enable a case of importance to be referred immediately for argument before the Full Court.
I conclude that I have the power to refer this appeal to the Full Court. The question is whether, in the exercise of my discretion I should exercise such power.
The notice of appeal dated 11 December 2000 in the first instance raises the question of an extension of time in relation to proceedings by way of appeal from the rejection by the defendant of the plaintiff’s proof of debt. In my opinion, on this issue the Court is given a wide discretion under Companies Regulation 5.6.54(3). The determination of whether there should be an extension of time may involve the calling of evidence. I do not think that proceedings under s 11(2) of the Federal Courts (State Jurisdiction) Act are an appropriate means of resolving this question. The time point should be dealt with directly on a summary judgment application or by way of defence and reply at the trial. In view of the time that has now elapsed it may not be possible to entertain a summary judgment application. In the circumstances, I consider that an application under s 11(2) of the Federal Courts (State Jurisdiction) Act to be inappropriate for the resolution of the issue under par 1 of the notice of appeal.
Paragraphs 2, 3 and 4 of the grounds of appeal speak in generality without particulars of the relevant facts. I would not attempt to express any view on these grounds without further and better particulars.
Paragraph 5 should be a direct application based on specific facts. As the matter stands, it seeks no more than an advisory opinion and this is something the court should not be asked to give.
It seems to me that none of the grounds of appeal is appropriate as the Notice of Appeal stands, to warrant the attention of the Full Court.
For these reasons, I am of the opinion that the application dated 2 January 2001 of the plaintiff seeking an order that the appeal against the order of Judge Bowen Pain made on 1 December 2000 be heard by the Full Court instead of a single judge of this court, be dismissed. I will hear the parties as to costs.
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5
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