Harris Scarfe Ltd (in Liq) And Harris Scarfe Wholesale Pty Ltd (in Liq) (No 4)

[2008] SASC 87

Supreme Court of South Australia

(Civil)

Re: HARRIS SCARFE LTD (IN LIQ) AND HARRIS SCARFE WHOLESALE PTY LTD (IN LIQ) (No 4)

[2008] SASC 87

Judgment of The Honourable Justice Debelle (ex tempore)

3 April 2008

APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - RIGHT OF APPEAL - WHEN APPEAL LIES - FROM INTERLOCUTORY DECISIONS

Preliminary points of law heard and determined – determination of points of law will affect liquidators’ ability to apply for extension of time pursuant to s 588FF(3) of Corporations Act 2001 (Cth) – leave to appeal to Full Court granted – whether appeals should be heard before determination of the whole action – relevant considerations – appeals to be heard by Full Court.

RE: HARRIS SCARFE LTD (IN LIQ) AND HARRIS SCARFE WHOLESALE PTY LTD (IN LIQ) (No 4)
[2008] SASC 87

Civil

1. DEBELLE J.        On 16 May 2007 I made an order substituting the current liquidators for the original liquidators as the plaintiffs in these proceedings. Mr Hoffmann QC, who appeared for a number of creditors, applied for leave to appeal. I granted leave to the extent that leave was necessary.

2. On 14 March 2008 I determined an application for joinder made by the current liquidators. I held that the current liquidators are entitled to a re-hearing of the application as against the 19 creditors so that it is not necessary for the liquidator to join them as defendants. I further held that, even if it was necessary to join them, the application had been made within time. I granted leave to appeal from that decision.

3. The 19 creditors have applied for an order that the time within which to appeal against those decisions be extended to a date 21 days after the date of the delivery of judgment on the proposed re-hearing of the liquidators’ applications for an extension of time filed on 31 March 2004. The application was opposed by the current liquidators who contend that it is preferable that the appeals be heard as soon as is reasonably possible.

4. These proceedings involve 19 applications for an extension of time against 19 separate creditors. It is reasonable to suppose that in the case of some of those 19 creditors there may be issues common to a small number of them. However, the ordinary course of commercial affairs suggests that the real likelihood is that it will be necessary for each of those 19 applications to be heard separately, or at least the greater number of them be heard separately, as there will be issues which will be idiosyncratic to each creditor.  It is not possible at this stage to determine the time to be occupied by the hearings of each application for an extension of time but, given that there are separate applications against 19 separate creditors, it would not be unrealistic to conclude that it is a matter which could occupy at least a day in respect of each creditor, that is to say, a total hearing time of some three weeks.

5. It is appropriate to add that, in the ordinary course, appeals on interlocutory points of this kind would wait until all other issues have been heard and determined so that there is one appeal, and one appeal only, in respect of all issues in the action. In addition to those considerations, it is necessary to exercise a good deal of caution before ordering that appeals on preliminary points be heard before the determination of the whole action.

6. Those considerations must be weighed with the following considerations.  The first is that the two issues, that is to say, the issue as to substitution and the issue as to joinder, are issues common to all 19 creditors. Indeed, that was the basis upon which both issues were argued as preliminary points. The next consideration is that both issues involve questions which are capable of ready determination and are quite limited in their scope. Expressed another way, the argument on the issues will not occupy a long time and the issues are capable of ready determination. Thirdly, the state of the Full Court list is such that it is possible for the appeal to be heard very promptly. If the parties exercise no more than a little haste, the appeal could be heard in the May sittings of the Full Court.

7. The issues, I think, boil down to a question of balance of convenience and cost.  The reasons I have just given indicate that a comparison of the costs that will be incurred on an appeal and on hearing the 19 applications weigh very heavily in favour of an early determination of the appeals. Plainly, the costs to be incurred in the hearing of the 19 separate applications for an extension of time  will be substantial. The costs of what in all likelihood will be a relatively short appeal lasting little more than a day will be very small in comparison. In addition to that consideration, it is relevant to have regard to the fact that, if the liquidators should fail on the hearing of the appeal, they will avoid the substantial costs which will necessarily be incurred in arguing the 19 separate applications for an extension of time.

8. Mr Hoffmann QC has properly informed the court that at least some of his clients wish to pursue the issues of substitution and joinder to the highest level so that, if they should fail in a hearing before the Full Court, they will apply for special leave to appeal to the High Court. I repeat, it was very proper for him to alert the court to that fact. In my view that fact only serves to underline the desirability of resolving these questions of law at the earliest opportunity.

9. I repeat, I am very conscious of the fact that it is unusual to allow an appeal on interlocutory issues to proceed before a hearing and determination of the issues in the action. However, I am persuaded this case is out of the ordinary and it is proper, therefore, to order that the appeals be heard as soon as is reasonably possible.

10. No date was fixed for the time within which the appeal had to be lodged in respect to the orders that were made on 16 May 2007. A time of 21 days was fixed within which to lodge the Notice of Appeal against the orders made on 14 March 2008. In all the circumstances, it is appropriate to fix a fresh time within which the creditors, who wish to do so, may appeal.