Fortress Credit Corporation (Australia) II Pty Limited & Anor v William John Fletcher and Katherine Elizabeth Barnet as Liquidators of Octaviar Limited (Receivers and Managers Appointed) (In Liquidation) and...

[2013] HCATrans 186

[2013] HCATrans 186

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney            No S72 of 2013

B e t w e e n -

FORTRESS CREDIT CORPORATION (AUSTRALIA) II PTY LIMITED (ACN 114 624 958)

First Applicant

FORTRESS INVESTMENT GROUP (AUSTRALIA) PTY LIMITED (ACN 111 940 713)

Second Applicant

and

WILLIAM JOHN FLETCHER AND KATHERINE ELIZABETH BARNET AS LIQUIDATORS OF OCTAVIAR LIMITED (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) AND OCTAVIAR ADMINISTRATION PTY LIMITED (IN LIQUIDATION)

First Respondent

OCTAVIAR LIMITED (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) (ACN 107 863 436)

Second Respondent

OCTAVIAR ADMINISTRATION PTY LIMITED (IN LIQUIDATION) (ACN 101 069 390)

Third Respondent

Application for removal

HAYNE J
CRENNAN J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 16 AUGUST 2013, AT 10.13 AM

Copyright in the High Court of Australia

____________________

MR N.C. HUTLEY, SC:   If your Honours please, I appear with my learned friend, MS R.C.A. HIGGINS, for the applicants.  (instructed by Baker & McKenzie Solicitors)

MR B.A.J. COLES, QC:   If your Honours please, I appear with my learned friends, MR P.J. DOWDY and MR A.K. FLECKNOE‑BROWN, for the respondents.  (instructed by Henry Davis York Lawyers)

HAYNE J:   Yes, Mr Hutley.

MR HUTLEY:   Your Honour, on 19 September 2011, Justice Ward made an order for the purposes of section 588FF(3)(b) of the Corporations Act extending time for the making of applications in respect of Octaviar Administration Pty Limited (In Liquidation) under 588FF.  The order extended time for the making of such applications to 3 April 2012.  It was in the form of a general dispensation, or what has come to be called a shelf order.  But for the order, the time for making such applications would have expired on 3 October 2011.

On 3 April 2012, the liquidators of Octaviar Administration commenced proceedings under section 588FF in the Supreme Court of Queensland against my clients.  Whether an order in general terms extending time is permitted under the relevant subsection of 588FF is the primary question to which the application is directed.  On the application before Justice Black when my client applied to discharge the order his Honour noted at application book 19, paragraph 17, our formal submission is it is the power of the court to make such an order.

His Honour, of course, was bound by the decision in the Court of Appeal in BP Australia Ltd v Brown (2003) 58 NSWLR 322 in the terms quoted by his Honour Justice Black in paragraph 18. That decision, as your Honours know, was approved by the Full Court of South Australia ‑ Supreme Court of South Australia in Ansell Ltd v Davies (2008) 219 FLR 329, the relevant paragraphs being 53 and 54 in the judgment of the Chief Justice.

Special leave was granted by this Court on 13 November 2008 and the transcript is in the materials, and your Honour Justice Hayne participated in that decision on the very point, the first point, in respect of which we seek special leave.

HAYNE J:   Well, I think you are seeking removal, not leave.

MR HUTLEY:   Yes, quite.  I understand that, your Honour.  I accept that, your Honour.

HAYNE J:   There is the point, is it not, Mr Hutley?  Should it go by the intermediate court or should it be removed at this point?  Why remove it now?

CRENNAN J:   What is urgent about it, Mr Hutley?

MR HUTLEY:   Your Honours, there is no particular urgent – I cannot put – there are proceedings on foot which are going to be set down in Queensland, anticipated for next year.

CRENNAN J:   We understand that.

MR HUTLEY:   I cannot say the sort of burning urgency, but we are in this position, that it is an important question.  To advance the matter before the Court of Appeal, assuming they sit five as they may well, one would have to not only establish that the former Court of Appeal was clearly wrong but also that the South Australian Full Court was clearly wrong in not thinking that they had been clearly wrong.  Now, at a certain point you move into ‑ because of the principles in an exercise, the chances of which are so vanishingly small that the utility of putting the parties through the process of going back to the Court of Appeal to go through that exercise is so small, so slight, that the capacity of this Court to take that point up is justified.

Now, if the Court, of course, takes the view that that chance – what we would call the vanishingly small chance of convincing a newly constituted Court of Appeal in New South Wales that two Full Courts, one of South Australia and one of New South Wales, were clearly wrong on this point ‑ ‑ ‑

CRENNAN J:   We still get the benefit of the set of reasons from a court which will have had the advantage of hearing from you, Mr Hutley.

MR HUTLEY:   Well, your Honour is – wow, I just feel like saying, can this be reported?  Your Honour, the reality ‑ ‑ ‑

HAYNE J:   Taken down and noted, Mr Hutley.

MR HUTLEY:   Your Honour, the chances are just so small that a question arises is whether there is any utility from the point of view of this Court, which is the principal matter for that to occur, because if the court is not persuaded it is clearly wrong they will not embark upon a process of reasoning, so the debate will be is it clearly wrong, and we have two reasoned judgments of Full Courts, I mean, of – can I say eminently constituted Full Courts – and they have come to the conclusion that that is the preferred view.  If your Honours are still ‑ ‑ ‑

CRENNAN J:   Well, there is, I think, an important difference in wording between section 588FF(3)(b) and 588FF(1) ‑ ‑ ‑

MR HUTLEY:   I accept that, your Honour.

CRENNAN J:   ‑ ‑ ‑ which, of course, refers explicitly to transaction, and your submissions on one view seem to gloss over the distinction between the two sections.

MR HUTLEY:   Your Honour, we accept ‑ your Honour’s very point means that the chances of getting to the point of clearly wrong are small, but it is a point of some significance, and it is a point where I have the advantage here that the presiding judge in the transcript observed upon this point and really, in effect, elucidated it in that application with which the Chief Justice agreed.  So it is an important point, it is certainly arguable.  It is not going to be advanced in all practicality by sending us back to the Court of Appeal.

HAYNE J:   What about the point made by your opponent at application book 153 about questions 2 and 3 being hypothetical?  One, what do you say about that, but two, do we get any advantage, discernible advantage, by having that sort of question thrashed out in the intermediate court?

MR HUTLEY:   The difficulty you will have, your Honour, is this.  There are a number of possible outcomes as a matter of construction of 588FF(3)(b).  One, that the application in respect of which extension sought one has to identify the transaction; one has to identify the party against whom you are seeking the remedy.  There is another argument floating around, as it were, that it is sufficient to give a class of transactions, and the difficulty – the second and third questions are parasitic on the first and their determination could be affected by the determination on the first question as to the ambit of the permission to bring forward an application at a different level of generality, and the Full Court will be unable to give, as it were, obiter assistance to this Court on those questions because they will have to, in effect, go through a hypothetical assumption – assuming they are not going to determine the question – as to the possible constructions in respect of the first question.  So, in other words ‑ ‑ ‑

HAYNE J:   It was not so much that kind of assistance that I thought may be obtained, but rather assistance in the form of refining what the joined dispute between these parties really comes down to.  Now, that is inelegantly expressed but you understand the point.

MR HUTLEY:   I take your Honour’s point.  The difficulty is that the refining is going to only be useful to this Court if the first question has been answered with precision, because the process of determining what is material or immaterial about our particular facts will be a function of the determination of the first question, or could be.  That is why we will be in that situation where the Full Court, in all likelihood, will take the view, if they are not persuaded that it is clearly wrong, that it is inappropriate to embark upon the other two questions because they cannot be of assistance because they have not determined the primary question.

Now, of course, one course is that your Honours take up the first question and leave the second two questions and send us back when that is determined.  That is a possibility and we, of course, are content with that possibility, that the removal extend only of course to the first question, but we see little chance of utility being achieved on leaving the appeal as a whole in the Court of Appeal against the possibility that, despite now High Court recognised brilliance on my part, I am able to persuade the Court of Appeal that two Full Courts have been clearly wrong and which, no doubt, will be helped by your Honour Justice Crennan’s observation about the
point which your Honour rightly observed, one of the things that has to be dealt with.

It will be, with respect, in all likelihood a total exercise in futility, with all due respect to the Court of Appeal of New South Wales, no fault of their own; it just will not advance.  The matter will be delayed, my client will be put to further expense and your Honours, most importantly, will not receive any material assistance.  Those, if the Court pleases, are our submissions as to why this is an appropriate case for removal.

HAYNE J:   Thank you, Mr Hutley.  Mr Coles, we will not trouble you.

We are not persuaded that sufficient cause is shown to interrupt the ordinary processes of appeal in this matter by now removing into this Court the cause now pending in the Court of Appeal of the Supreme Court of New South Wales or any part of that cause.

What do counsel say should be said about costs, if anything?  Is it a matter in which the costs of the application for removal should stand as costs in the proceeding?  Should there be an order made that one party pay the costs?  What should be done?

MR HUTLEY:   Your Honour, if, as we anticipate, the Court of Appeal will return – we will return, on my current instructions, before this Court and what we would submit is that if some order could be fashioned to await the costs of this on the outcome of any application which is subsequently made – I see the procedural difficulties of that, your Honour ‑ ‑ ‑

HAYNE J:   That has a few difficulties about it, Mr Hutley.

MR HUTLEY:   We have taken the choice to move early.  Your Honours are against us, and I say obviously nothing about that.  But the likelihood is that, as it were, in those immortal words “we will be back” and, your Honour, having regard to its past history, the likelihood is that this will be a matter which the Court considers worthy of the Court’s consideration.  There is a real substantial possibility of that, if I can put it as highly as that.

CRENNAN J:   But you accept you had moved prematurely?

MR HUTLEY:   Having regard to your Honour’s determination, I can say nothing about it.  I can say no more than that.  If it was possible to fashion an order whereby, in effect, these costs awaited the ultimate outcome or were subject to reconsideration if there were another application which was successful and by the conduct of such appeal we would entertain it.  I stand here.  Your Honour’s invitation surprised me.  I am not sure that I can fashion one standing here.

HAYNE J:   Yes, Mr Coles, what do you say?

MR COLES:   I seek an order for the respondent’s costs, if your Honours please.

HAYNE J:   The application will stand dismissed with costs.

AT 10.27 AM THE MATTER WAS CONCLUDED