Donchiod Pty Ltd (in liq) v Merrion B Pty Ltd

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S EAPCI 2023 0038

DONCHIOD PTY LTD (IN LIQUIDATION) (ACN 601 212 300)	Applicant
v
MERRION B PTY LTD (ACN 624 885 598)	Respondent

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JUDGES:	KENNEDY, MACAULAY & LYONS JJA
WHERE HELD:	Melbourne
DATE OF HEARING:	22 February 2024
DATE OF JUDGMENT:	25 March 2024
MEDIUM NEUTRAL CITATION:	[2024] VSCA 44
JUDGMENT APPEALED FROM:	[2023] VSC 111 (Hargrave JA)

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CORPORATIONS – Application for winding up – Six month period for determination of application – Period expired – Associate Judge subsequently extended time under the slip rule – Associate Judge later made winding up order – Applications by insolvent company to extend times to appeal against extension order and winding up order – Judge refused extensions of time – Whether Judge erred in finding that Associate Judge had jurisdiction to make order extending time – Whether Judge erred in finding no error in Associate Judge’s exercise of discretion to apply slip rule – Whether Elyard Corporation Pty Ltd v DDB Needham Sydney Pty Ltd (1995) 61 FCR 385 is plainly wrong – Leave to appeal granted – Appeal dismissed.

Corporations Act 2001 (Cth), s 459R; Supreme Court (General Civil Procedure) Rules 2015, r 36.07.

Elyard Corporation Pty Ltd v DDB Needham Sydney Pty Ltd (1995) 61 FCR 385, Flint v Richard Busuttil Pty Ltd (2013) 216 FCR 375, Luck v University of Southern Queensland (2018) 265 FCR 304, applied; David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265; Emanuele v Australian Securities Commission (1997) 188 CLR 114; Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corporation Ltd (2008) 232 CLR 314; Hrycenko v Hrycenko (2022) 294 FCR 233; Bryant v Badenoch Integrated Logging Pty Ltd [2024] FCA 97, discussed.

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Counsel
Applicant:		Mr MGR Gronow KC with Mr P Agardy
Respondent:		Mr J Schulz
Liquidator of the Applicant:		Ms C Pulverman (solicitor)
Solicitors
Applicant:	Holding Redlich Lawyers
Respondent:	Francis V Gallichio Lawyers
Liquidator of the Applicant:	FCW Lawyers

KENNEDY JA
MACAULAY JA
LYONS JA:

The applicant seeks leave to appeal from the decision of a judge of the Trial Division. The judge dismissed applications to extend the times for appeal against two orders of an associate judge:
(a)an order made on 14 August 2020 which corrected an earlier order made on 2 March 2020 so as to include an order pursuant to s 459R(2) of the Corporations Act 2001 (Cth) (the ‘Act’) extending the period within which a winding up application was to be determined to 4 September 2020 (‘the slip rule order’); and
(b)an order of 4 September 2020 which wound up the applicant and appointed Craig Bolwell as liquidator (‘the winding up orders’).
For reasons expressed below, the application for leave to appeal will be granted, but the appeal will be dismissed.

Background

The applicant was registered in 2014. It carried on business as a property developer. In the course of development of a property in Doncaster, Victoria, the applicant received an invoice from the respondent for building work for $231,797.58.
On 3 September 2019, the respondent served a statutory demand on the applicant under s 459E of the Act. The applicant did not comply with the demand and did not apply to set it aside under s 459G.
On 4 October 2019, the respondent filed a winding up application seeking orders that the applicant be wound up in insolvency under s 459P. Pursuant to s 459R(1) that application was to be determined within 6 months after this date, subject to the power to extend this time limit under s 459R(2).[1]
[1]See below [18].
On 25 October 2019, the applicant filed an interlocutory process in the winding up proceeding, seeking leave to oppose the winding up application under s 459S. The applicant disputed the debt claimed by the respondent.[2]
[2]Merrion B Pty Ltd v Donchiod Pty Ltd [2020] VSC 499, [4] (Randall AsJ) (‘Extension Reasons’).
On 2 March 2020, the associate judge heard the winding up application. He made formal orders that the applicant have leave to file an amended interlocutory process in the form provided to the Court with costs reserved (‘the 2 March order’). He also gave a direction that the parties file further written submissions by 6 March 2020. He reserved his decision.
On 3 April 2020, the 6 month period from the date of the filing of the application to wind up under s 459R expired.
In June 2020, the respondent applied to the Court under the slip rule to correct the 2 March order to include an extension of the period during which the winding up application could be determined.[3]
[3]Extension Reasons, [9].
Following receipt of written submissions, on 14 August 2020, the associate judge made the slip rule order, relying on r 36.07 of the Supreme Court (General Civil Procedure) Rules 2015 (the ‘Rules’). He published reasons for his decision.[4]
[4]Extension Reasons.
On 4 September 2020, the associate judge made the winding up orders, but also granted a stay of his orders until 4:00 pm on 17 September 2020 to allow the applicant time to consider an appeal. He published reasons for his decision.[5]
[5]Merrion B Pty Ltd v Donchiod Pty Ltd (No 2) [2020] VSC 566 (Randall AsJ).
The applicant did not seek to appeal the slip rule order or the winding up orders before 17 September 2020, or at any time prior to 29 September 2022. This was said to be based on legal advice.
In May 2022, Sam Chiodo, director of the applicant, (‘the director’) was provided with a notice from the Australian Securities and Investments Commission (‘ASIC’) identifying concerns in respect of his management of the applicant. A hearing before an ASIC delegate took place on 11 September 2022.[6]
[6]In an affidavit of the director’s solicitor (to which objection was taken), it was deposed that the ASIC had ultimately decided not to make an order disqualifying the director from managing corporations under s 206F of the Act. Given the outcome of the proposed grounds it is unnecessary to resolve the objection.
On 9 September 2022, the decision of the Full Court of the Federal Court in Hrycenko v Hrycenko (‘Hrycenko’)[7] was published. The director says that this decision caused him to reconsider his view about an appeal.
[7](2022) 294 FCR 233; [2022] FCAFC 152.
On 29 September 2022, the director filed a notice of appeal challenging the slip rule order and the winding up orders. He claimed that the associate judge had no jurisdiction to retrospectively extend the time for the hearing and determination of the winding up application under the ‘slip rule’ and that he erred in the exercise of his discretion in doing so. An application for extensions of time and for leave to prosecute the applications on behalf of the applicant was also filed.[8]
[8]The original interlocutory process dated 29 September 2022 incorrectly named Paul Chiodo as the applicant director of the applicant. The amended interlocutory process dated 27 October 2022 was filed in the director’s name.
On 15 February 2023, the applicant’s applications were heard by the judge.
On 16 March 2023, the judge delivered his reasons.[9] He ordered that the director have leave under s 198G(3)(b) of the Act to commence and prosecute the applications to extend the time for appeal on behalf of, and in the name of, the applicant, but that the applications to extend the time for appeal be dismissed.
[9]Merrion B Pty Ltd v Donchiod Pty Ltd (in liq) [2023] VSC 111 (Hargrave JA) (‘Judge’s Reasons’).

Statutory framework

Section 459R is contained in pt 5.4 of the Act, which governs winding up in insolvency, and provides:
459R Period within which application must be determined
(1)An application for a company to be wound up in insolvency is to be determined within 6 months after it is made.
(2)The Court may by order extend the period within which an application must be determined, but only if:
(a)the Court is satisfied that special circumstances justify the extension; and
(b)the order is made within that period as prescribed by subsection (1), or as last extended under this subsection, as the case requires.
(3)An application is, because of this subsection, dismissed if it is not determined as required by this section.
(4) An order under subsection (2) may be made subject to conditions.
Rule 36.07 of the Rules provides:
36.07 Amendment of judgment or order
The Court may at any time correct a clerical mistake in a judgment or an order or an error arising in a judgment or an order from any accidental slip or omission.

Associate Judge’s reasons for slip rule order

The associate judge considered the decision of the Full Court of the Federal Court in Elyard Corporation Pty Ltd v DDB Needham Sydney Pty Ltd (‘Elyard’)[10] which held that the slip rule could be utilised notwithstanding that, at the time of the making of the order, the requisite period provided for in s 459R had expired. He cited authorities which have subsequently considered Elyard, including those which had cast doubt on the decision in the bankruptcy jurisdiction. However, he considered that such cases had not explicitly held that the decision was wrongly decided and concluded that it continued to apply.[11]
[10](1995) 61 FCR 385.
[11]Extension Reasons, [26].
The associate judge then proceeded to consider whether the slip rule applied in this particular case. He stated:
It would be fair to say that on the hearing of 2 March 2020, and referring to the order obtained on that date, neither the parties nor the Court turned their minds to the issue of the expiry of the winding up application on 3 April 2020. Given that on 2 March 2020, the hearing had been completed save for the requirement of filing further submissions, if the parties or myself had turned our mind to the volume of the work that I was required to undertake, in general, it would have almost gone without saying that any application for extension would have been granted such that the discretion to extend could only have been exercised in one way. If, however, the defendant had opposed such an application, as it now does, it is clear that the interests of justice would have dictated that an extension of time be permitted to enable me to publish reasons and an order.[12]
[12]Ibid [27].
He considered other cases and observed that, where the relevant order was made many months prior to the lapse of the relevant application or petition the Court has been reluctant to grant an extension of time pursuant to the slip rule as there was sufficient time to make an application and other alternatives could have been implemented.[13] He also highlighted that, in this case, there was no fault on the part of the parties, given that all that was left to do was for him to hand down a determination.[14]
[13]Ibid [28].
[14]Ibid [30].
He concluded that the slip rule should be applied, stating:
I am satisfied that I have the power under the slip rule to correct the orders of 2 March 2020 by inserting an order to extend time under s 459R. I am satisfied that the issue was not raised as a result of an accidental slip or omission by either the practitioners or the Court. I find that had the issue been raised before me on 2 March 2020, an application under s 459R(2) would have been made and, for the reasons set out in paragraph 33 hereof, would have been granted. To the extent that I am required to exercise discretion under the slip rule, I do so in favour of the plaintiff on the following bases:
(i)the order made on 2 March 2020 was made at a time relatively close to the expiry of the winding up application;
(ii)it goes without saying that if the application had been made at the relevant time, and my attention had been drawn to the expiry date, I would have allowed more time given the workload of the Court in March 2020. I make the observation that, notwithstanding that COVID-19 ultimately impacted upon the length of time required for the judgment, it can only be considered an exacerbating factor, which was not foreseeable on 2 March 2020;
(iii)relitigating a subsequent application based upon a new statutory demand would lead to an outcome at the expense of the Court’s resources thereby causing injustice; and
(iv)the above factors outweigh the underlying policy of s 459R to determine a winding up application expeditiously.
I am also satisfied that there were special circumstances on 2 March 2020 that justify the exercise of the discretion to extend the winding up application under s 459R(2), namely that:
(v)the hearing had been completed save for the filing of further submissions and a determination to be handed down by myself; and
(vi) more time was required for judgment given the workload of the Court.[15]
[15]Ibid [32]–[33].

Judge’s reasons

As indicated already, the judge was satisfied that the director should be given leave to prosecute the appeal under s 198G(3). In so doing, the judge relied on a number of matters, including that the grounds of appeal were arguable, and that the director had provided security and undertakings to the Court in respect of the applicant’s debts and the costs of the liquidator and the respondent.[16]
[16]Judge’s Reasons, [20].
However, the judge concluded that the extension of time applications should be refused on the grounds that:
[T]he delay is not satisfactorily explained; the [applicant] is and was at all relevant times insolvent; acceptance of the undertakings would be contrary to public policy; the evidence discloses serious questions concerning the commercial morality and compliance with the Act by the director in relation to the [applicant]; and, even though the proposed appeals are arguable, they would not succeed.[17]
[17]Ibid [91].
Given that the extension of time applications were fixed for hearing together with the proposed appeals the judge was able to reach a final decision on the outcome of the proposed appeals.[18] He found that the appeals would fail. If the judge is correct about this, it follows that it was futile to consider the proposed appeals. The refusal of the extensions of time is hence justifiable on this basis alone and it was, strictly, unnecessary for the judge to rely on the other issues he cited (which are the subject of proposed ground 3 in this Court). Consistent with this position, senior counsel for the applicant accepted that proposed ground 3 would ‘disappear’ if he was unsuccessful in respect of proposed grounds 1 and 2.
[18]See ibid [34].
Turning then to the merits of the appeals, the judge observed that the proposed grounds raised two issues: first, whether the slip rule order was made without jurisdiction and, as a result, the winding up orders were also made without jurisdiction; secondly, whether, on the assumption that the jurisdiction arguments failed, the slip rule should have been applied as it was as a matter of fact and discretion.[19]
[19]Ibid [19].
The first issue raised the critical issue of whether Elyard was plainly wrong (which is the subject of proposed ground 2 in this case). The judge ultimately considered that, although he had doubts about the reasoning in Elyard, it was not plainly wrong. He also concluded that the associate judge made no error in the exercise of his discretion.[20]
[20]Ibid [34], [71].
The judge’s reasons about these critical issues will be considered further, below, after a consideration of the relevant authorities, including Elyard.

Proposed grounds of appeal

The applicant seeks leave to appeal on the following three proposed grounds of appeal:
1. [The judge] erred in finding that:
(a)[the associate judge] had jurisdiction to make an order retrospectively extending time for the application for the winding up of the [applicant] when that application had already been dismissed pursuant to s 459R of the Corporations Act 2001, and
(b)no error had been shown in the exercise of his discretion in doing so.
2.[The judge] erred in failing to decide that the decision of the Full Court of the Federal Court of Australia in Elyard Corporation Pty Ltd v DDB Needham Sydney Pty Ltd (19[9]5) 61 FCR 385 (FC) was plainly wrong and should not be followed in Victoria.
3.[The judge] erred in dismissing the applicant/appellant’s application for an extension of time within which to appeal against the orders of [the associate judge] made on 14 August 2020 and 4 September 2020.
Proposed grounds 1(a) and 2 raise the issue of jurisdiction and the status of the Elyard decision, as described by the judge under issue one, above. Proposed ground 1(b) then raises the second issue as to whether the judge was correct to find that there was no error in the exercise of the associate judge’s discretion.

Proposed grounds 1(a) and 2 — Jurisdiction

Relevant authorities

Before turning to the decision in Elyard, it is appropriate to consider the nature of a court’s jurisdiction to make an order under the slip rule as described in the High Court decision of L Shaddock & Associates Pty Ltd v Parramatta City Council (No 2) (‘Shaddock’).[21]
[21](1982) 151 CLR 590; [1982] HCA 59.
In Shaddock, the plaintiffs’ claim for damages was dismissed by the trial judge, although he proceeded to make an assessment of damages in the alternative if the plaintiffs had obtained judgment. The New South Wales Court of Appeal dismissed an appeal, but the High Court subsequently allowed an appeal, and, on 28 October 1981, ordered that judgment for damages be given in favour of the plaintiffs in the amount assessed. In circumstances where the plaintiffs did not seek an order for payment of interest, the High Court made no order for the payment of interest.[22]
[22]Ibid 593 (Mason ACJ, Wilson and Deane JJ).
The plaintiffs subsequently applied to the High Court for an order under the slip rule[23] for a relevant amount of interest between the date of the judgment at trial and the date on which judgment on the successful appeal took effect ie an order which had retrospective effect.[24]
[23]High Court Rules, ord 29, r 11 provided that: ‘A clerical mistake in a judgment or order, or an error arising in a judgment or order from an accidental slip or omission, may at any time be corrected by the Court or a Justice on motions or summons’: ibid 590.
[24](1982) 151 CLR 590, 593; [1982] HCA 59.
The Court found that, but for the inadvertence of counsel, the Court would have made provision in the substituted judgment for interest. Further, that the slip rule ‘extends to authorize an omission resulting from the inadvertence of a party’s legal representative’.[25] The High Court ultimately made an order in the following form:
Order that there be included in the order of the Court made 28 October 1981 after the words ‘judgment for the plaintiffs in the sum of $173,938’ the words ‘and interest in the sum of $62,713’.[26]
[25]Ibid 594.
[26]Ibid 598.
The order made therefore referred to, and purported to speak from, the date of the original order of 28 October 1981. The order also affected a substantive right, namely a right to receive the payment of interest.
The decision of Shaddock was applied in Elyard,[27] which concerned a winding up application. In Elyard, a series of orders had been made which adjourned the proceedings and extended the relevant period under s 459R(2)(b) up until 9 June 1995. On 9 June 1995 a Registrar made orders by consent for a new party (‘DDB’) to be substituted as applicant and for the proceeding to be again adjourned to 16 June 1995. However, no further extension was sought notwithstanding that the time had expired on 9 June (in accordance with the earlier order). The evidence was that the solicitor for DBB had intended to apply for an order further extending the period to 16 June 1995, but omitted to do so by reason of inadvertence. Upon becoming aware of the mistake, DBB filed a notice of motion on 16 June seeking an order that the time within which the winding up application might be determined be further extended ‘until 5 pm on the day of the hearing of the application.’[28]
[27](1995) 61 FCR 385.
[28]Ibid 388 (Lockhart J), 394–7 (Lindgren J).

Sheppard J heard the matter on 16 June 1995 and delivered reasons on 20 July 1995. He subsequently made on order on 9 August 1995 that:
The orders of the Registrar made on 9 June 1995 be corrected by adding an order that, subject to further order, the time within which the application may be determined be further extended until 5 pm on 30 November 1995.[29]
[29]Ibid 397 (Lindgren J).
The judge relied on Shaddock in so doing, and stated:
The fact that a statute such as s 52 of the Bankruptcy Act or s 459R of the Law has the effect which it does, does not touch the court's power to correct, in a proper case, its own order. That is part of its practice and procedure. Nothing in s 459R(3) suggests that the court was not to continue to be able to maintain a correct record of its proceedings. After all the error or omission which needs correction may be that of the court, not the party. What needs to be emphasised is that it is the position after the correction of the order has been made that must be looked at. Only then can one tell whether the particular provision has been complied with.[30]
[30]DDB Needham Sydney Pty Ltd v Elyard Corp Pty Ltd (1995) 131 ALR 213, 223 (Sheppard J), cited in Elyard (1995) 61 FCR 385, 399 (Lindgren J).
On appeal to the Full Court of the Federal Court, the appellant sought to contend (as here) first, that the judge had no power to make the order he did because the plain words of s 459R(2)(b) ‘only’ gave power to further extend the 6 month period if the application for an extension was made within the requisite time. Secondly, it submitted that the winding up application was dismissed on 9 June by reason of s 459R(3) ie prior to the making of the order on 9 August 1995.[31]
[31]Elyard (1995) 61 FCR 385, 388–9 (Lockhart J).
The Full Court of the Federal Court (Lockhart and Lindgren JJ, Black CJ agreeing) did not accept the appellant’s contentions.
Lockhart J cited Shaddock for the proposition that the slip rule is ‘very wide in its scope’, though not available as a matter of course.[32] He explained that the nature of a slip rule order ‘speaks from the date of the earlier order, which then operates with full force as corrected.’[33] He also considered the interaction between s 459R and the power to make orders under the slip rule, stating:
Provisions such as s 459R(2)(b) and (3) and s 459G of the Corporations Law, and s 52(3) and (5) of the Bankruptcy Act, reflect the intention of the Parliament that applications to wind up companies and petitions to sequestrate the estates of natural persons must be dealt with promptly. This evident purpose of the Parliament is not denied at all by the exercise by the court of its power under the slip rule to correct accidental slips when justice requires that this be done. The Court has a discretion which it would be loath to exercise except in clear cases. Prejudice to parties to the litigation, or to third parties, arising from uncertainty caused by delay in seeking to have the mistake corrected is one obvious matter which must be taken into account by the Court in the exercise of its discretion. But this says nothing about the power of the Court to make an order under the slip rule.[34]
[32]Ibid 390.
[33]Ibid 391.
[34]Ibid 392.
He proceeded to distinguish decisions in the bankruptcy jurisdiction which were to the contrary.[35] He highlighted that the ‘operative orders’ in those cases were not the later orders made outside the statutory time frame, but the earlier orders which spoke from dates within the requisite time period.[36] He also rejected the appellant’s contention that the order ‘set aside the dismissal of a winding up application’ (under s 459(3)). This was because, once corrected, the earlier order spoke from its (earlier) date and was deemed to have always operated from that date, with the result that the winding up application was never dismissed.[37]
[35]Ibid 392–3 citing Re Hibbard; Ex parte Playroom Pty Ltd (unreported, Federal Court, Pincus J, 5 December 1988), Re Agushi; Ex parte Farrow Mortgage Services Pty Ltd (In liq) (1994) 126 ALR 704.
[36]Ibid 393.
[37]Ibid.
He ultimately agreed with Lindgren J that this was an obvious case for the exercise of the discretion in favour of applying the slip rule.[38]
[38]Ibid.
Lindgren J considered that there was a strong case for the exercise of the discretion if the slip rule was available given that the consenting to, and making of, the orders on 9 June were ‘otherwise exercises in futility.’[39] He also found, citing Shaddock, that the correction effected by an order under the slip rule ‘speaks as from the date of the original judgment or order.’[40]
[39]Ibid 400.
[40]Ibid 401.
In considering the availability of the order, he framed the issue as being ‘whether s 459R(2) and (3) have the effect of excluding the availability of the slip rule’.[41] He considered that the answer was that they did not do so, having regard to the true nature of the slip rule. He accepted that the word ‘only’ in s 459R(2) and the provisions for automatic dismissal in s 459R(3) were ‘undoubtedly strong provisions.’ However, he did not think that they, or the policy which gave rise to them, were ‘set at nought’ by giving full effect to the operation of the slip rule in this case.[42]
[41]Ibid 401.
[42]Ibid 405.
Lindgren J also referred to the views of Heerey J in Re Agushi; Ex parte Farrow Mortgage Services Pty Ltd (‘Agushi’)[43] about the interaction of the slip rule with the Bankruptcy Act 1966 (Cth) (‘Bankruptcy Act’). The issue which arose in Agushi, and other cases like it, was whether the slip rule can be used to retrospectively extend the time for the determination of a creditor’s petition.[44] Heerey J had observed that, when enacting s 52(5) of the Bankruptcy Act, Parliament must have contemplated that there might be human oversight and inadvertence. His Honour’s views appeared to imply that s 52(5) — as well as a similar provision such as s 459R of the Act — must have been intended to prevail over any provision such as the slip rule designed to accommodate such inadvertence.[45] However, Lindgren J took a different view, stating:
I think that the view is equally tenable that Parliament, being taken to have contemplated human oversight and inadvertence, readily accepted that such a mechanism as the slip rule would co-exist, within its limited area of operation, with the statutory provision.[46]
[43](1994) 126 ALR 704; [1994] FCA 641.
[44]The relevant provisions of the Bankruptcy Act are as follows:
52Proceedings and order on creditor’s petition
…
(4)A creditor’s petition lapses at the expiration of:
(a)subject to paragraph (b), the period of 12 months commencing on the date of presentation of the petition; or
(b)if the Court makes an order under sub-section (5) in relation to the petition — the period fixed by the order;
unless, before the expiration of whichever of those periods is applicable, a sequestration order is made on the petition or the petition is dismissed or withdrawn.
(5)The Court may, at any time before the expiration of the 12 months commencing on the date of presentation of a creditor’s petition, if it considers it just and equitable to do so, upon such terms and conditions as it thinks fit, order that the period at the expiration of which the petition will lapse be such period, being a period exceeding 12 months and not exceeding 24 months, commencing on the date of presentation of the petition as is specified in the order.
[45]Elyard (1995) 61 FCR 385, 405.
[46]Ibid.
His Honour went on to observe that it was necessary to distinguish between the availability of the slip rule and the exercise of discretion whether to make an order. He observed that both ‘the terms and policy of s 459R’ as well as ‘the special and limited scope of the slip rule’ needed to be considered. He did not consider that s 459R had the effect of excluding the rule in all cases (as the appellant submitted).[47]
[47]Ibid 405–6.
Lindgren J also considered the decision of David Grant & Co Pty Ltd v Westpac Banking Corporation (‘David Grant’)[48] which had been handed down shortly prior to the decision in Elyard. In that case the High Court found that the requirement in s 459G that an application to the court to set aside a statutory demand be only made within a relevant 21 day time period could not be extended by reason of s 1322(4)(d).[49] However, Lindgren J considered that s 1322(4)(d) was different in nature to the slip rule power. He also stated:
More particularly, the distinction is between a situation in which there is a time limit within which the Court must be approached if an application for an order of a particular kind is to be made at all (s 459G), and a situation in which a proceeding is already under way and is subject to the Court's control and in which a timely but deficient order has been made.[50]
[48](1995) 184 CLR 265; [1995] HCA 43.
[49]Section 1322(4)(d) empowers the Court to make ‘an order extending the period for doing any act, matter or thing or instituting or taking any proceeding under this Law or in relation to a corporation (including an order extending a period where the period concerned ended before the application for the order was made) or abridging the period for doing such an act, matter or thing or instituting or taking such a proceeding’.
[50]Elyard (1995) 61 FCR 385, 406.
The Elyard case was considered by the High Court in the decision of Emanuele v Australian Securities Commission (‘Emanuele’).[51] In that case a single judge of the Federal Court had wound a company up in insolvency on the application of the Australian Securities Commission (‘ASC’) under s 459P despite the fact that the ASC had not been granted leave to make the application as required under s 459P.[52] On appeal, the Full Court of the Federal Court made an order amending the original order of the single judge by the grant of leave nunc pro tunc to the ASC under the slip rule.[53]
[51](1997) 188 CLR 114; [1997] HCA 20.
[52]Under s 459P(2) an application by [the ASC] for a company to be wound up in insolvency ‘may only be made’ with the leave of the Court. Under s 459P(3) the court may give leave if satisfied that there is a prima facie case that the company is insolvent, ‘but not otherwise.’ Section 149P(5) provides that ‘[e]xcept as permitted by this section, a person cannot apply for a company to be wound up in insolvency’ (emphasis added).
[53]Emanuele v Australian Securities Commission (1995) 141 ALR 506, 518 (Spender, von Doussa and Hill JJ); (1995) 63 FCR 54.
The appellants challenged this order on the grounds that the Court erred in finding that the requirement to obtain leave was ‘procedural’ in nature and did not impose a condition precedent to the jurisdiction of the Court.[54]
[54]Emanuele (1997) 188 CLR 114, 127 (Toohey J); [1997] HCA 20.
The High Court, by a majority (Dawson, Toohey and Kirby JJ) rejected the appellants’ arguments.
Toohey J (with whom Dawson J agreed) considered that s 459(2) did not impose a condition precedent to the exercise of jurisdiction. He considered that this approach was consistent with the approach of Lindgren J in Elyard cited above to the effect that (unlike the position in David Grant) the proceeding in this case was ‘already under way’ and ‘subject to the Court’s control’.[55] In his view, s 459P(3) required the Court to exercise a ‘supervisory role’, satisfying itself that there is a prima facie case that the company is insolvent before granting leave to help avoid the drastic commercial consequences which may follow the issue of process for winding up. However, he considered that there were policy considerations which favoured taking a liberal view of the requirements of s 459P, especially in urgent applications.[56]
[55]Ibid 131 (Toohey J, Dawson J agreeing at 124).
[56]Ibid.
Kirby J commenced by highlighting that general statutory construction principles were relevant.[57] He considered that there were a number of factors which supported the appellants’ position. This included the emphatic language of s 459P, as well as the damaging effect of applications to wind up in insolvency.[58] However, he ultimately rejected these arguments in favour of the respondent. In so doing he noted that the power to make a slip rule order is one granted to avoid injustice (citing Elyard in so doing).[59] He also highlighted that no express provision was made for the consequences of a failure to obtain leave, and that the strict approach sought would not promote the objectives of the legislation that the process for winding up insolvent companies should be speedy.[60]
[57]Ibid 146–8.
[58]Ibid 150–2.
[59]Ibid 152 n 122.
[60]Ibid 155.
Kirby J also considered the decision of David Grant but concluded that s 459G was ‘quite different’ in that it conferred private rights and was clearly intended to establish a ‘complete code’ for resolution of disputes involving statutory demands. By contrast, s 459P was dealing with a procedure to be followed in making an application which was undoubtedly before the court which has jurisdiction. He continued:[61]
That jurisdiction having attached in the present case, it may be inferred that Parliament contemplated that oversight and inadvertence would sometimes occur for which the Court’s general powers of correction would be available, within the limited area of operation and compatibly with the statutory requirement that ordinarily leave should be first obtained.[62]
[61]Ibid 156 (citation in original).
[62]Cf Elyard Corporation Ply Ltd v DDB Needham Sydney Pty Ltd (1995) 61 FCR 385 at 405–406.
He concluded, again citing Elyard, that the power to make the order under the slip rule was not ‘excluded’ by the express provisions of the Law.[63]
[63]Emanuele (1997) 188 CLR 114, 157; [1997] HCA 20, citing Elyard Corporation Pry Ltd v DDB Needham Sydney Pty Ltd (1995) 61 FCR 385 at 391–392, 401–402, 404–405.
Both Brennan CJ and Gaudron J criticised the division of provisions into whether they were ‘procedural’ or ‘jurisdictional’.[64] Brennan CJ considered that the question was whether the irregularity (in failing to obtain leave) was ‘fundamental’ on its true construction and held that it was, having regard to the purpose of s 459P.[65] Gaudron J considered that the question of leave could not be asked after the winding up order had already been made.[66]
[64]Ibid 124 (Brennan CJ), 135 (Gaudron J).
[65]Ibid 124.
[66]Ibid 139.
The judgment in Emanuele highlights the importance of the process of statutory construction in considering whether a provision such as s 459P — or s 459R — is intended to exclude the court’s ordinary powers of supervision under the slip rule. The majority reasoning also generally endorses aspects of the reasoning in Elyard, although the Court was not concerned with the construction of s 459R.
However, in the subsequent decision of Amorin Constructions v Kamtech Electrical Services Pty Ltd (‘Amorin’)[67] a single judge of the Supreme Court of New South Wales considered that Elyard was plainly wrong on the basis that the slip rule could not be invoked in respect of s 459R because it involved the exercise of an independent discretion.
[67](2008) 73 NSWLR 627; [2008] NSWSC 285.
Despite the views in Amorin, the Elyard decision has otherwise been generally accepted by intermediate courts in bankruptcy cases, albeit with some reservations. Thus, for example:
(a)In Griffiths v Boral Resources (Qld) Pty Ltd (‘Griffiths’)[68] the Full Court of the Federal Court stated that it was ‘a little uncomfortable’ with the decision, although it considered that a different approach would cause substantial confusion in insolvency practice. The Court emphasised the importance of the policy that insolvency proceedings should be ‘speedily resolved’ and that the decision in Elyard ‘should not be taken as establishing an unlimited power to avoid this statutory policy’.[69]
(b)In Flint v Richard Busuttil Pty Ltd (‘Flint’)[70] the Full Court of the Federal Court acknowledged that criticisms had been made of Elyard in Griffiths and Amorin, but considered that it was unnecessary for the Court to reconsider Elyard given a finding was made that the slip rule was not engaged on the facts in that case.[71] Moreover, in relation to the suggestion that there is no room for the operation of the slip rule where an independent discretion must be exercised (as enunciated in Amorin), the Court made two observations:
•first, that in Shaddock the High Court invoked the slip rule to amend an order to include an award of pre-judgment interest even though an award of interest is in the court’s discretion; and
•secondly, if it can be concluded that proper attendance to the matter could only have resulted in the discretion being exercised in one way, it was difficult to see why the rule should not apply.[72]
(c)In Luck v University of Southern Queensland (‘Luck’),[73] Mortimer J (with whom Logan J agreed) applied Elyard.[74]
(d)In Endresz v Commonwealth (‘Endresz’),[75] Rares and Markovic JJ did not consider Elyard to be binding given it concerned a different statutory regime, and therefore it was not necessary to consider its correctness.[76] However, they endorsed the statements in Flint, above, and confirmed that the slip rule may be exercised in circumstances where an independent discretion must be exercised.[77]
[68](2006) 154 FCR 554; [2006] FCAFC 149.
[69]Ibid 562 [31]–[32] (Spender ACJ, Dowsett and Collier JJ).
[70](2013) 216 FCR 375; [2013] FCAFC 131.
[71]Ibid 384 [34], [43] (Allsop CJ, Katzmann and Perry JJ).
[72]Ibid 384 [45]–[46].
[73](2018) 265 FCR 304; [2018] FCAFC 102.
[74]Ibid 318 [69] (Mortimer J, Logan J agreeing at [3]). Charlesworth J considered that it was appropriate for the Court to apply the principles in Elyard without expressing any view as to its correctness, given that the appellant did not advance any unambiguous argument to the effect that Elyard was wrongly decided and should not be followed: ibid 335 [170].
[75](2019) 273 FCR 286; [2019] FCAFC 197.
[76]Ibid 314 [83].
[77]Ibid 314 [81]. Charlesworth J considered the reasoning in Elyard was not able to be distinguished from similar questions arising under the bankruptcy regime and noted ‘it may be necessary’ for the Full Court to later consider whether Elyard was correctly decided: ibid 329 [145].
The decision of Elyard has also been applied in a number of decisions of single judges.[78]
[78]And see, eg: Westpac Banking Corporation v E & W Jury Pty Ltd (1998) 16 ACLC 547, 550–1 (Emmett J) (‘E & W Jury’); Edwards v Waterproofing Manufacturers (Chendu) Pty Ltd [2000] NSWSC 1227, [12] (Hodgson CJ in Eq); Timms v Dellaplus Pty Ltd (2008) 99 SASR 578, 588 [41] (Sulan J); [2008] SASC 17; Australian Securities and Investments Commission v Maxwell (2005) 52 ACSR 147, 151 [14] (Barrett J); [2005] NSWSC 49.
Notwithstanding, then, some reservations expressed in respect of the decision, the only case where Elyard was considered to be wrongly decided was in the case of Amorin.
The applicant, however, placed significant weight on Hrycenko,[79] a case determined under the Bankruptcy Act by the Full Court of the Federal Court in 2022.
[79](2022) 294 FCR 233; [2022] FCAFC 152.
In that case, by order of 14 May 2021 the hearing of a creditor’s petition was adjourned to 30 August 2021 — which was a date after the petition had lapsed (on 28 July 2021). The hearing was subsequently adjourned to 29 September 2021 at which time the petition was heard. On 28 October 2021, the judge made a sequestration order. On 14 January 2022, the judge made an order under the slip rule that the orders made on 14 May 2021 be amended nunc pro tunc by the addition of an order extending the life of the petition to 15 July 2022.

The appellant bankrupt contended that the primary judge had erred in making the sequestration order in circumstances where the creditor’s petition had lapsed, and not been extended, before the making of a sequestration order. The Court unanimously allowed the appeal and set aside the sequestration order. As identified by the judge in this case,[80] the reasoning of each judge was different:
(a)Bromberg J found that the existence of a creditor’s petition underpins the jurisdiction of a bankruptcy court to make a sequestration order. In reliance on the reasoning in Emanuele he therefore considered that a retrospective corrective order was not available to cure the absence of jurisdiction.[81] He concluded that ‘an invalidity arising because a sequestration order was made in the absence of a subsisting creditor’s petition, cannot be cured by an order made under the slip rule to retrospectively enliven the creditor’s petition.’[82] Bromberg J did not make any reference to Elyard in his reasons.
(b)Moshinsky J based his decision on the fact that it was ‘not clear’ what order would have been made had an application been made on 14 May 2021 to extend the petition.[83] In so doing he referred to, and applied, the approach in Elyard, Flint and Endresz.[84] It followed that the slip rule was not available and it was not ‘necessary’ for him to consider whether the rule could be relied upon after a sequestration order was made.[85]
(c)McElwaine J came to a similar conclusion to Bromberg J, finding that ‘the existence of a creditor’s petition that has not lapsed is a jurisdictional condition to the exercise of the power to make a sequestration order’,[86] and if a sequestration order is to be made in the absence of a subsisting creditor’s petition ‘the slip rule cannot be retrospectively applied to invest jurisdiction that did not exist’.[87] McElwaine J did not expressly state in his reasons that he agreed with criticisms of the correctness of Elyard, or that Elyard should be regarded as wrong. In fact, McElwaine J noted that the appellant in Hrycenko did not submit that Elyard was wrongly decided or that ss 52(4) and (5) of the Bankruptcy Act operated ‘as an exclusive code so as to displace the potential application of the slip rule’.[88] Rather, the argument was that the slip rule power was inapplicable because it could not be engaged to correct a jurisdictional defect that existed when the sequestration order was made. In this way he considered that ‘this case is to be contrasted with others that have considered the potential application of the slip rule to extend the life of a creditor’s petition before the making of a sequestration order.’[89]
[80]Judge’s Reasons, [53].
[81]Hrycenko (2002) 294 FCR 233, 238 [18]; [2022] FCAFC 152.
[82]Ibid 239 [20].
[83]Ibid 244–5 [44], 245–6 [46]–[52].
[84]Ibid 242 [33], 243–4 [42], 244 [43].
[85]Ibid 246 [53].
[86]Ibid 257 [99].
[87]Ibid 266–7 [135].
[88]Ibid 263 [124].
[89]Ibid.
The decision in Hrycenko is not of great assistance to the applicant in this case. First, as the judge observed, none of the three judges expressly stated that the reasoning in Elyard was wrong or plainly wrong. Secondly, the slip rule order in this case was made prior to the date that the winding up order was made. Finally, and most critically, the case was concerned with different legislation in circumstances where the ultimate question must turn on an examination of the relationship between the particular statutory provision and the slip rule power.

Judge’s approach on Elyard

The judge carefully considered and set out a comprehensive review of the decision in Elyard, as well as the relevant authorities which have been set out above. He stated that he was bound to apply the reasoning in Elyard unless convinced that it is ‘plainly wrong’.[90]
[90]Judge’s Reasons, [70], citing Australian Securities Commission v Marlborough Goldmines (1993) 177 CLR 485, 492; Farah Constructions Pty Ltd (2007) 230 CLR 89, 151–2 [135] (‘Farah’).
He identified some doubts about Elyard:
(a)the reasoning depends on the identification of an order to which the slip rule can attach. He considered that there was therefore a degree of randomness at play when a matter so fundamental as the existence of jurisdiction is at issue;[91]
(b)that it sits ‘somewhat uneasily’ with the ‘tightly conditional language’ of s 459R(2)(b) and the ‘clear language’ of s 459R(3);[92] and
(c)the reasoning may also be inconsistent with the policy of speedy resolution underlying pt 5.4 of the Act. However, he also considered it arguable that the policy is in fact consistent with the application of the slip rule in circumstances such as the present, given that the discretion to apply the slip rule is controlled by the need for ‘special circumstances’ and for the order to be clearly appropriate to avoid injustice.[93]
[91]Ibid [71].
[92]Ibid [72].
[93]Ibid [73], citing Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corporation Ltd (2008) 232 CLR 314, 324–5; [2008] HCA 9.
He concluded:
Even if I thought the reasoning in Elyard was plainly wrong, I would be reluctant, as a single judge, to refuse to apply it. This is because it is a principled and carefully worked out decision of an intermediate appellate court which has been repeatedly applied by judges and intermediate appellate courts, has served a useful purpose in avoiding injustice, and is productive of convenience to busy courts and parties in contested matters. In such circumstances, intermediate appellate courts, more so single judges, should be very cautious before departing from an earlier decision. Moreover, I agree with the statement of the Full Court of the Federal Court in Griffiths, that Elyard concerns the practice of courts in relation to the operation of the analogous provisions of the Bankruptcy Act and the Act, and has stood since 1995 without legislative intervention. To now take a different approach would cause ‘substantial confusion in insolvency practice’.[94]

Applicant’s submissions

[94]Ibid [74] (citations omitted).

The applicant submitted that the court had no jurisdiction to make the slip rule order, or the winding up orders, in circumstances where the winding up application had already been dismissed under s 459R(3). It submitted that the slip rule cannot be used to create a substantive right to proceed with a winding up application that has already been dismissed, as opposed to rectifying a mere ‘procedural “slip” or error’ in a judgment or order.
In oral submissions senior counsel placed reliance on the decision in Emanuele. Although the majority in that case found that the defect was not ‘jurisdictional’, counsel submitted that s 459R operates differently since s 459R(3) provides that the application was dismissed once time expired. Although he accepted that the power to extend time involved a procedural step, the consequences of failing to apply for such an extension was that the proceeding was dismissed — which was ‘substantive’.
The applicant also submitted that it was the ‘plain and expressed intention’ of s 45R(2)(b) that an order extending time can only be made during the period of the currency of the application and not retrospectively. This is to implement the legislative intention that winding up applications be determined promptly. The applicant cited Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corporation Ltd (‘Aussie Vic’)[95] in support of this contention and submitted that the slip rule should not be able to be used to controvert the plain intention of Parliament.
[95](2008) 232 CLR 314, 324–5 [17]–[18]; [2008] HCA 9.
The applicant placed particular reliance on Hrycenko, which it submitted was ‘highly persuasive’. It submitted that on either the analysis of Bromberg and McElwaine JJ, or the analysis of Moshinsky J, the associate judge had no power retrospectively to revive the winding up application once it had been dismissed. The applicant accepted that in Hrycenko the purported revival of the lapsed creditor’s petition did not occur until after a sequestration order had been made, whereas in the present case the reviving order was made before the making of a winding up order. However, on Bromberg and McElwaine JJ’s analysis, there was no valid subsisting proceeding or ‘application’ in which orders could be made under the slip rule. On Moshinsky J’s analysis, this was not a situation where ‘no real difference of opinion can exist’ (which was relevant to proposed ground 1(b)).
The applicant therefore submitted that Elyard was wrongly decided and should not be followed in Victoria, such that this Court should find that it was plainly wrong. In so doing it highlighted the ‘disquiet’ about the correctness of Elyard expressed in a number of Full Court of the Federal Court decisions, as well as in Amorin.

Respondent’s submissions

The respondent emphasised the nature of the slip rule order which operated retrospectively from 2 March. It followed that the application was not dismissed on 3 April 2020, despite s 459R(3).[96] It also highlighted that in Shaddock, the slip rule was applied even though no order was applied for and so as to affect substantive rights (entitlement to interest), not just ‘procedural’ rights.
[96]Citing Shaddock (1982) 151 CLR 590; [1982] HCA 59.
The respondent submitted that Elyard was not wrongly decided. It pointed to the fact that the Elyard decision has existed without judicial intervention since 1995 and has been applied in several important later cases, including by the High Court in Emanuele.
The respondent accepted that Elyard has been questioned in some cases in the bankruptcy jurisdiction, however highlighted that none of these cases stated that Elyard was wrongly decided. Further, although the trial judge in Amorin decided not to follow Elyard, the trial judge’s reasoning for not doing so was expressly disapproved by the Full Court of the Federal Court in Flint[97] (with these obiter comments endorsed by Rares and Markovic JJ in Endresz).[98] To depart from Elyard would cause confusion in insolvency practice (as indicated in Griffiths).[99]
[97](2013) 216 FCR 375, 384 [44]–[46] (Allsop CJ, Katzmann and Perry JJ); [2013] FCAFC 131.
[98](2019) 273 FCR 386, 314 [81]; [2019] FCAFC 197.
[99]Griffiths (2006) 154 FCR 554, 562 [30] (Spender ACJ, Dowsett and Collier JJ); [2006] FCAFC 149.
In oral submissions, counsel submitted that the proper use of the slip rule was not inconsistent with the speedy resolution of winding up applications in insolvency, citing the relevant passages from Lockhart and Lindgren JJ.[100] He highlighted that s 459R contemplates that there may be multiple extensions in recognition of the fact that a court may not able to be deal with applications within 6 months.
[100]Elyard (1995) 61 FCR 385, 392 (Lockhart J), 405 (Lindgren J). See above [42], [46].
Further, the respondent contended that Hrycenko does not displace Elyard as authority for the proposition that the slip rule may be applied retrospectively to extend time under s 459R(2). It submitted that Hrycenko is distinguishable as it considers an entirely different statutory regime, and because Hrycenko involved an ‘entirely novel and unique factual circumstance’ of the trial judge applying the slip rule to make orders to extend time after the trial judge had already made sequestration orders. It also emphasised that no judge said that Elyard was wrong.

Liquidator’s submissions

The liquidator appeared and generally made submissions consistent with, and supportive of, the submissions of the respondent. He highlighted that other cases have followed Elyard and have not determined that it is wrongly decided.[101]

Consideration

[101]Citing Soil and Contracting Pty Ltd v Boban Pty Ltd [2014] WASC 402; Australian Securities and Investments Commission v Maxwell [2005] NSWSC 49; Polygram Pty Ltd v CEL Entertainment Pty Ltd (1998) 157 ALR 156; Aboriginal Enterprises Co Pty Ltd v Ngangganawill Community Incorporation (1998) 16 ACLC 1460; Mercury International Investment Pty Ltd v Queensland One Homes Pty Ltd (2016) FCA 701.

Two preliminary observations may be made.
First, for reasons given already, the decision in Hrycenko does not resolve the issue for this Court. In particular, it does not resolve the critical issue which concerns the interaction between s 459R and the slip rule power.[102]
[102]See above [66].
Secondly, insofar as the applicant suggested that the slip rule cannot be used post dismissal, this is misconceived. As explained by Lindgren J in Elyard, the application of the slip rule does not involve ‘setting aside the dismissal of the winding up application’.[103] This is because, once the earlier order is corrected, it speaks from the date of the earlier order and is deemed to have always operated from that date. The result is that the application was never dismissed.
[103]Elyard (1995) 61 FCR 385, 393.
This does not mean that the statutory consequence of dismissal is irrelevant. The fact that the statute provides (in s 459R(3)) that an application is dismissed if it is not determined within the requisite time limit is certainly relevant to the process of statutory construction. More particularly, it is relevant to the critical issue as to whether s 459R intends to exclude the operation of the slip rule.[104]
[104]See Emanuele (1997) 188 CLR 114, 155 (Kirby J); [1997] HCA 20.
Returning then to the critical issue, the decision in Elyard should be followed unless it is considered to ‘plainly wrong’.[105] This in turn raises the question as to whether the Court was wrong in that case to find that s 459R could co-exist with the slip rule power.
[105]Farah (2007) 230 CLR 89, 151–2 [135] (The Court); [2007] HCA 22.
There are a number of reasons in favour of the primacy of s 459R. Thus, (as senior counsel for the applicant accepted) although the grant of an extension of a time limit is ‘procedural’ in character, there are indications that s 459R might be intended to be of a more fundamental, different character. Such indicia include the tightly conditional language of s 459R, as well as the statutory consequence of dismissal in s 459R(3).
However, in Emanuele, the High Court found that s 459P did not exclude the operation of the slip rule despite the fact that the provision was also framed emphatically. It is further important to consider the substantive operation of the provision, and not just the form in which the words are expressed. In considering the substance of s 459R, it is of some significance that, although a court may only grant an extension if there are ‘special circumstances’ under s 459R(2), Parliament has otherwise not limited the period of that extension, nor even the number of times that an extension might be granted.
The task of statutory construction also involves an examination of context and purpose, and not just the language used.[106]
[106]Visser v The King (2023) 68 VR 188, 219 [100] (Emerton P, Priest, McLeish, T Forrest and Kennedy JJA); [2023] VSCA 10, citing R v A2 (2019) 269 CLR 507, 520–2 [32]–[37] (Kiefel CJ and Keane J), 545 [124] (Bell and Gageler JJ); [2019] HCA 35.
In terms of context, s 459R is directly concerned with an application which is already validly commenced and directly subject to the control and supervision of the court. In this sense, the proceeding is more advanced than an application issued without leave under s 459P (as concerned the Court in Emanuele). Given this context, it is unlikely that Parliament intended to withdraw the usual powers of the court, especially powers to correct the court’s own record. Yet the approach of the applicant would see those powers removed in all cases, including those where there was an obvious transcription error. Thus, take for example a case where the requisite 6 month period would expire on 15 July and that, on that date, the judge (consistent with everyone’s intentions) pronounced that there should be an extension until 15 August. On the applicant’s approach, if a clerk inadvertently recorded a date of 15 June, the court’s powers to correct such an obvious error under the slip rule power would be unavailable.
It is difficult to justify the applicant’s position by reason of a provision which is focused on, and concerned with, the supervision and determination of a matter by a court. It is, at least, ‘equally tenable’[107] that Parliament must be taken to have contemplated that the court’s usual powers to correct its own record would continue to co-exist.
[107]As explained by Lindgren J: Elyard (1995) 61 FCR 385, 405. See above [47].
A law of the Commonwealth is also not to be interpreted as withdrawing or limiting a conferral of jurisdiction unless that implication is clear and unmistakable.[108] Rule 36.07 reflects the inherent jurisdiction of a court to correct its record for error.[109] The existence of strict time limits of themselves — even with the dismissal sanction — is not inherently inconsistent with the court’s jurisdiction to correct its own record for inadvertence. Like Lindgren J, we can find no clear intention that s 459R was intended to completely remove the power of a court to correct for oversight within the limited area of operation of the slip rule.
[108]Shergold v Tanner (2002) 209 CLR 126, 136–7 [34] (The Court); [2002] HCA 19.
[109]Shaddock (1982) 151 CLR 590, 594 (The Court); [1982] HCA 59.
In terms of purpose, the High Court in Aussie Vic has stated that the evident purposes of pt 5.4 include the speedy resolution of applications to wind up companies in insolvency.[110] Section 459R is found in pt 5.4 and is hence clearly intended to further such purpose. However, two matters are noteworthy. First, in both Aussie Vic and David Grant, the High Court was concerned with the interaction between provisions governing statutory demands and other provisions in the Act.[111] In neither case was the slip rule invoked. Secondly, the provisions governing statutory demands raise unique considerations. As highlighted in Aussie Vic, those provisions are clearly intended to operate strictly having regard to the immediate consequences of the presumed insolvency which results from non-compliance.
[110](2008) 232 CLR 314, 323 [14] (Gleeson CJ, Hayne, Crennan and Kiefel JJ); [2008] HCA 9.
[111]See in particular, the Act, ss 70, 1322.
More importantly, the policy of speedy resolution can be read consistently with the continued existence of both the slip rule power and s 459R — provided the slip rule power is properly constrained and applied. Such a point was made by both Lockhart and Lindgren JJ as cited earlier above.[112] As the judge also observed, the discretion to apply the slip rule in respect of s 459R(2)(b) will be controlled by the need for special circumstances. If anything, it would be contrary to the purpose of speedy resolution to always require parties to ‘start again’ and recommence litigation to wind up an insolvent company, even where a judicial determination was otherwise imminent and intended.
[112]See above [42], [48].
Having regard then to all of the above matters, we are not satisfied that the Court in Elyard was wrong in concluding that s 459R does not render the slip rule to be unavailable. It was certainly not ‘plainly wrong’.[113]
[113]Farah (2007) 230 CLR 89, 151–2 [135] (The Court); [2007] HCA 22.
Proposed grounds 1(a) and 2 are rejected.

Proposed ground 1(b) — Exercise of discretion

Judge’s reasons

The judge considered that the associate judge was well aware that his discretion should only be exercised in clear cases, and with due regard to the policy that insolvency proceedings should be speedily resolved. In his view, the associate judge gave detailed consideration to what he would have done on 2 March 2020 if an application had then been made.[114]
[114]Judge’s Reasons, [86]–[87].

The judge recorded that the associate judge expressly recognised that the slip rule order could not have been made unless he had formed the view that there were special circumstances. The judge said:
In my view, the facts stated by the associate justice were special circumstances for the granting of an extension of time. There is no reason to doubt the associate judge’s assessment that, on 2 March 2020, his workload was such that he needed more than one month to complete his reasons for judgment. The matter had some complexity, there was a significant amount of evidence to assess, and the judgment when delivered was 48 pages. At [sic] the hearing was complete, that was all that remained to be done. The associate justice obviously intended at the time that the winding up application would remain alive until his judgment was complete, so that his work in writing the judgment would not be wasted.[115]
[115]Ibid [88] (citations omitted).
The judge also recorded that he took judicial notice of the fact that the associate judge heard many corporate insolvency cases, all of which were subject to the policy of expedition.[116]
[116]Ibid n 127.
The judge further did not accept the director’s contention that it was reasonably open to the associate judge to make an order winding up the applicant with reasons to follow at some indeterminate time, because solvency was the key issue in the judgment which was reserved.[117]
[117]Ibid [90].
In relation to the length of time of any extension the judge stated:
It may be thought that, had the associate judge been asked to extend the six month period during or at the conclusion of the trial on 2 March 2020, he would have extended the period for a lesser period than he later did. This is because, as the associate judge noted, the COVID-19 pandemic was not foreseeable on 2 March 2020. No doubt, as the associate judge explained, the pandemic ultimately impacted as an exacerbating factor in the delay in him delivering his reasons for judgment. In my view, the correct time to consider the appropriate period of the extension was on 14 August 2020, when the associate justice delivered his reasons for making the extension order. The effect of the pandemic on the otherwise busy workload of the associate justice was then a known factor, which allowed the associate justice to fix the period of the extension to 4 September 2020. In my view, it goes without saying that, if a shorter period of extension had initially been granted on 2 March 2020, the period would have been further extended as a matter of course if the associate justice was unable to complete his reasons for judgment in the period of the initial extension.[118]

Applicant’s submissions

[118]Ibid [89].

The applicant submitted that this was not a case where the slip rule applied. It submitted that it was not a situation where ‘no real difference of opinion can exist’ about what order would have been made had an application for extension of time been made prior to the dismissal of the proceeding under s 459R(3).[119] There was ‘room for debate’ about how the discretion might have been exercised.[120]
[119]Citing Hrycenko (2022) 294 FCR 233, 242 [33] (Moshinsky J); [2022] FCAFC 152.
[120]Citing Flint (2013) 216 FCR 375, 384 [44]–[46] (Allsop CJ, Katzmann and Perry JJ); [2013] FCAFC 131; Endresz (2019) 273 FCR 286, 314 [81], 314–15 [84], 315–16 [88]–[89], 316–18 [91]–[94] (Rares and Markovic JJ), 330 [148]–[149] (Charlesworth J); [2019] FCAFC 197.
The applicant accepted that it needed to demonstrate error in accordance with House v the King (‘House’),[121] but submitted that the judge erred in misapplying the test and finding that it was open for the associate judge to make the order he made.
[121](1936) 55 CLR 499; [1936] HCA 40.
In support of this contention, the applicant made two fundamental submissions.
First, it submitted that the matter could have been dealt with in ways other than it was. For example, the associate judge could have determined to reprioritise his workload to deliver his reserved decision before expiry of the time limit; extended time to a different date; or given a decision within time and written reasons later on.
His second submission (further to the second option) was that there was a ‘real difference of opinion’, not just as to whether an extension would have been given, but as to how long any such extension would be, bearing in mind that it was necessary to consider the position as at 2 March. It was not obvious in March that an extension would be given until September (as it ultimately was).
In so saying senior counsel cited a recent decision of Bryant v Badenoch Integrated Logging Pty Ltd (‘Bryant’).[122] In Bryant the relevant order under s 459R(2) extended the period to a ‘date to be fixed’.[123] McElwaine J held that the order was not effective and that the proceeding had thereby already been dismissed under s 459R(3).[124] He considered that the order needed to specify a period which was ‘definite, measured by a period of time’ and could not be a period fixed by reference to the occurrence of an event.[125]

Respondent’s submissions

[122][2024] FCA 97.

[123]The actual form of the order was that the period was ‘extended to a date to be fixed, such date to be not prior to 6 months after the determination of [another proceeding]’: ibid [10] (McElwaine J).

[124]But only insofar as it sought a winding up order in insolvency: ibid [37].

[125]Ibid [28]–[29], citing Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corporation Ltd (2008) 232 CLR 314; [2008] HCA 9, [17]–[19] (Gleeson CJ, Hayne, Crennan and Kiefel JJ).

The respondent submitted that the critical relevant opinion was that of the associate judge who said it ‘goes without saying’ that the extension would have been granted. The case was also different from a number of the other cases where amendments were sought to orders which were made before the hearing of a winding up application (such as in Hrycenko) and several months prior to the lapse of the application or petition. Here the case had reached the determination stage in circumstances where the judge did not have capacity to determine the application within the requisite time.
In oral submissions counsel submitted that the test of certainty went to the question as to whether there would have been an extension at the time of the original order. There did not need to be certainty about the precise length of the extension. Rather, it was permissible for the court to consider the detail as to the precise length of the extension period at the later date when the extension order was made.[126]

Liquidator’s submissions

[126]Citing Flint (2013) 216 FCR 375, 384 [46] (Allsop CJ, Katzmann and Perry JJ); [2013] FCAFC 131; Endresz (2019) 273 FCR 286, 314 [81], 316 [91] (Rares and Markovic JJ); [2019] FCAFC 197.

The liquidator again generally made submissions consistent with, and supportive of, the submissions of the respondent. He highlighted that the associate judge had reserved his decision and had rejected the alternatives for dealing with the matter put forward by the applicant in the context of a complex matter.

Consideration

As correctly observed by the judge, there have been various formulations as to the circumstances in which the slip rule may be applied in this context.[127] These include that the discretion could only be exercised in ‘one way’[128] and/or that there is not any ‘room for debate’ as to the outcome of the exercise of the discretion.[129]
[127]Judge’s Reasons, [77].
[128]Flint (2013) 216 FCR 375, 384, [46] (Allsop CJ, Katzmann and Perry JJ); [2013] FCAFC 131; Endresz (2019) 273 FCR 286 314 [84] (Rares and Markovic JJ); [2019] FCAFC 197.
[129]Endresz (2019) 273 FCR 286 314, 314 [81], 314 [84], 316 [91] (Rares and Markovic JJ); [2019] FCAFC 197; Flint (2013) 216 FCR 375, 384 [46] (Allsop CJ, Katzmann and Perry JJ); [2013] FCAFC 131.
In this case, the objective circumstances largely speak for themselves. The parties had spent time and money on making both written submissions and oral submissions over the course of the day on 2 March on a matter of some complexity. The associate judge had also allocated a day in hearing the case such that all that remained was for him to make a determination. The Court clearly thereby intended that the application would remain on foot until the delivery of a judgment so that such time and effort was not an exercise in futility. That was the only rational explanation for ordering further submissions and reserving judgment.
Insofar as it is suggested that other options were available, as at 2 March there was only around 1 month until the application would expire, absent an extension. In these circumstances, the associate judge found that ‘it goes without saying’ that he would have allowed more time given his workload in March 2020. There is no basis for the suggestion that he was in a position to reprioritise his workload. Rather, we agree with the judge that there is no reason to doubt the associate judge’s assessment of his own workload. We also agree with the judge that, given the solvency of the company was the key issue in the judgment and a matter of some complexity,[130] it was not reasonably open to deliver a decision earlier and separate from the reasons.
[130]The judgment when delivered was 48 pages.
We therefore consider that it was well open for the associate judge to find that he would have only exercised his discretion ‘one way’, namely, in favour of an extension.
It remains to deal with the submission that the specific period chosen could not have been known as at 2 March and was ‘debateable’.
Insofar as the applicant cited the decision of McElwaine J in Bryant, this does not advance the applicant’s submission. There may be doubt as to whether the approach adopted in that case is appropriate and it certainly does not appear to be universal. For example, in Mercury International Investment Pty Ltd v Queensland One Homes Pty Ltd,[131] Reeves J made an order for an extension until such time as the plaintiff’s application was ‘finally determined by the Court’. In any event, given that the slip rule order in this case did specify a precise period, it is unnecessary to resolve this issue in the current context.
[131][2016] FCA 701.
Rather, in order to deal with the submission, it is appropriate to return to the purpose of the slip rule. As the Full Court of the Federal Court said in Flint:
The purpose of the slip rule is to avoid injustice to litigants … by ensuring that the Court’s judgment or order reflects its intention at the time the order was made or the judgment was published, or reflects the intention that the Court would have had but for the failure that caused the accidental slip or omission …[132]
[132]Flint (2013) 216 FCR 375, 380, [26] (Allsop CJ, Katzmann and Perry JJ); [2013] FCAFC 131 (emphasis added).
The key focus of the slip rule is hence to correctly reflect the court’s true intentions. Consistent with the reasoning of Mortimer J in Luck, the current case is within the second emphasised category, above. She also considered that the relevant ‘intention’ is referable to the ‘whole of the situation the judge or registrar foresaw as existing after the making of the order.’[133]
[133](2018) 265 FCR 304, 314–5 [56]; [2018] FCAFC 102.
Thus, in the present case the associate judge had clearly intended that the situation which would exist after the orders of 2 March would be that the application would continue to exist until he delivered his judgment. His actions on 2 March were otherwise pointless. The order as made however did not reflect that intention because of the failure of the Court and the parties to turn their minds to the issue of expiry.
Consistent with this approach, courts have required certainty on the question as to which way the discretion would have been exercised (ie as to whether an extension would have been granted).[134] The slip rule is not designed to enable a court to revisit a decision with hindsight, but merely to reflect an actual intention held, or which would have been held but for the failure that caused the accidental omission. Courts have thereby rejected the application of the rule where it is not clear whether the court might have adopted another course, such as an earlier listing.[135] In such cases it could not be said that the discretion would only be exercised in ‘one way’.
[134]Flint (2013) 216 FCR 375, 384 [46] (Allsop CJ, Katzmann and Perry JJ); [2013] FCAFC 131; Endresz (2019) 273 FCR 286, 316 [91] (Rares and Markovic JJ); [2019] FCAFC 197.
[135]Eg Hrycenko (2022) 294 FCR 233, 246 [49] (Moshinsky J); [2022] FCAFC 152.
However, provided the court clearly intended to grant an extension when retrospectively correcting an order pursuant to the slip rule there is no reason to additionally require that the precise length of the extension must always be known and judged exclusively by reference to information known at the date of the earlier order. It will depend on the circumstances.
The point is well illustrated in the decision of Elyard itself. Thus, in that case, the relevant solicitor had sworn in an affidavit that she had intended to seek an extension to 16 June 1995 (being the adjourned date) prior to the making of the relevant order on 9 June 1995.[136] If the approach adopted by the applicant was taken, then, the only appropriate order under the slip rule when the judge came to consider the matter (in August 1995) would be to extend the time to 16 June 1995. However, this would clearly not reflect the intention that the court would have held ‘but for the failure that caused the … omission’ — which was to keep the application alive. The order actually made thereby extended the time within which the application might be determined until 30 November 1995.
[136]Elyard (1995) 61 FCR 385, 395 (Lindgren J).
A similar observation can be made about the case of Luck, where the registrar made an order under the slip rule in May 2016 (after the lapse of the petition on 8 April 2016) which varied an earlier order of 22 March ‘so that the life of the petition be extended to 8 April 2017’. In circumstances where the court was entitled to grant an extension for a period exceeding 12 months but not exceeding 24 months,[137] it could not be said that the date of 8 April 2017 was the only ‘undebatable’ date that might have been chosen. In the months following the registrar also granted two further adjournments. As explained by Mortimer J however, ‘[t]he intention the Registrar “would have had, but for the accidental omission” was to keep the petition on foot, so that it could be heard after all the other matters Ms Luck sought to have dealt with first were determined.’[138]
[137]Bankruptcy Act, s 52(5).
[138]Luck (2018) 265 FCR 304, 315 [57] (Mortimer J); [2018] FCAFC 102.
This does not mean that the stringent requirements for the application of the slip rule are rendered ineffective. There must be no ‘room for debate’ that the discretion would have been exercised in favour of an extension. The discretion is also controlled by the need for ‘special circumstances’ and for the order to be clearly appropriate to avoid injustice. However, provided that such stringent requirements are met, we do not accept that there must also be certainty as to the period which would have been applicable judged as at the time of the earlier order. Such an approach would frustrate the purposes of the slip rule which is to operate in the interests of justice so as to accurately reflect the court’s intentions.
In this case, we are also concerned with a situation where the application had been heard and the decision reserved. As the judge highlighted, there were also unique circumstances which subsequently exacerbated the delay in delivery of the judgment ie the COVID-19 pandemic. However, the fact that such events could not have been foreseen on 2 March is not fatal to the making of the slip rule order. Rather, we agree with the judge that, if a shorter period had initially been granted on 2 March, the period would have been further extended as a matter of course if the associate judge was unable to complete his reasons.[139] Such an approach clearly reflects the ‘whole of the situation’ the associate judge intended to achieve after reserving his decision — which was to keep the application on foot pending delivery of his decision. His actions in hearing the matter, granting leave to amend the interlocutory process, and giving a direction for further submissions were otherwise a complete waste of time.
[139]See approach of Emmett J in E & W Jury (1998) 16 ACLC 547 especially at 551, where his Honour took a similar approach where there had been multiple directions hearings.
The judge was correct to find that the associate judge did not err in the exercise of his discretion. Proposed ground 1(b) is thereby not sustainable.

Proposed ground 3 — Extension of time

The main bases of challenge in respect of this proposed ground were that there was a failure to give ‘sufficient weight’ to the undertakings of Paul Chiodo; that ‘undue weight’ had been given to the possible effect of setting aside the winding up orders on the ASIC investigation; and that it was not unreasonable to delay the applications until the delivery of the Hrycenko decision on 9 September 2022.
Even leaving aside whether the complaints about ‘weight’ could constitute error under House, the matters raised do not squarely address the extensive delay in this matter of some two years. We also do not consider that the Hrycenko decision can justify any such delay and agree with the judge that the delay was not satisfactorily explained.
Such unacceptable and lengthy delay may well constitute sufficient grounds on its own to refuse the application for an extension of time to set aside orders to wind up an insolvent company. However, it is unnecessary to consider the proposed ground further. Consistent with the proper concession of senior counsel, given that the applicant has failed in respect of both proposed grounds 1 and 2, it would be futile to grant the extensions of time to bring applications which cannot succeed. The judge was therefore correct to refuse the extensions of time.

Conclusion

For the reasons given above, although leave to appeal will be given, the appeal will be dismissed.
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[2024] VSCA 44

25 March 2024