FEDERAL COURT OF AUSTRALIA
Huber v CellOS Software Ltd (in liq) [2023] FCAFC 198
Appeal from: Huber v CellOS Software Ltd (in liq) (No 2) [2023] FCA 459 File number(s): VID 404 of 2023 Judgment of: ANDERSON, MCEVOY AND BUTTON JJ Date of judgment: 13 December 2023 Catchwords: PRACTICE AND PROCEDURE – leave to appeal –primary judge refusing leave to proceed with appeal under s 500(2) of the Corporations Act 2001 (Cth) – primary judge refusing leave to stay liquidation of respondent pursuant to s 482 of the Corporations Act 2001 (Cth) – whether leave to appeal required – application dismissed Legislation: Corporations Act 2001 (Cth) ss 181, 182, 183, 439C(c), 444E(3), 482, 500(2)
Federal Court of Australia Act 1976 (Cth) ss 24(1A), 25(2)(b)
Cases cited: CellOS Software Ltd v Huber (2018) 132 ACSR 468; [2018] FCA 2069
CellOS Software Ltd v Huber (No 2) (2020) 144 ACSR 267; [2020] FCA 505
HFPS Pty Ltd v Tamaya Resources Ltd (in liq) (No 1) [2016] FCA 442
House v The King (1936) 55 CLR 499
Huber v CellOS Software Ltd (in liq) (No 2) [2023] FCA 459
Huber v CellOS Software Ltd (in liq) [2022] FCA 744
Re Gordon Grant & Grant Pty Ltd [1983] 2 Qd R 314
Division: General Division Registry: Victoria National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Number of paragraphs: 40 Date of hearing: 9 November 2023 Counsel for the Appellant: The Appellant appeared in person Counsel for the Respondent: The Respondent did not appear ORDERS
VID 404 of 2023 BETWEEN: JASON JOSEPH EMMANUEL HUBER
Appellant
AND: CELLOS SOFTWARE LTD (IN LIQUIDATION) (ACN 114 670 094)
Respondent
ORDER MADE BY:
ANDERSON, MCEVOY AND BUTTON JJ
DATE OF ORDER:
13 DECEMBER 2023
THE COURT ORDERS THAT:
1.The appeal is dismissed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
THE COURT:
INTRODUCTION
This is an appeal from a decision of McElwaine J refusing the appellant (Mr Huber) leave to proceed with an appeal against Beach J’s judgment on liability (delivered on 20 December 2018) and his Honour’s judgment and orders on relief made on 17 April 2020, and refusing Mr Huber’s application to stay the liquidation of the respondent (CellOS) pending his proposed appeal: Huber v CellOS Software Ltd (in liq) (No 2) [2023] FCA 459 (PJ). Pursuant to s 500(2) of the Corporations Act 2001 (Cth) (the Act), leave was required to proceed with the proposed appeal as CellOS went into liquidation on 19 April 2022.
The decision below, to refuse leave to proceed with the proposed appeal, is interlocutory and discretionary. Accordingly, leave to appeal is required.
The application proceeded based on a three page notice of appeal dated 3 August 2023, which Mr Huber supported…
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- AGLC
- Huber v CellOS Software Ltd (in liq) [2023] FCAFC 198
- Case
- [2023] FCAFC 198
- Decision Date
CaseChat Overview and Summary
In the case of Huber v CellOS Software Ltd (in liq), the appellant, Mr Huber, sought leave to appeal against a decision of McElwaine J, who had refused him leave to proceed with an appeal under section 500(2) of the Corporations Act 2001 (Cth) and to stay the liquidation of CellOS pursuant to section 482 of the same Act. The appeal before the court challenged the refusal of McElwaine J to grant leave to appeal and to stay the liquidation of CellOS. The key issues revolved around the appropriateness of McElwaine J’s case management decisions, particularly the limitation of the notice of appeal to 10 pages, and the impact of these decisions on the appellant’s ability to effectively pursue his appeal.
The court considered the procedural history and the case management actions taken by both Davies J and McElwaine J. The court noted that while Davies J had accepted a 45-page notice of appeal and set the matter down for a one-day hearing, McElwaine J subsequently limited the notice of appeal to 10 pages. The court examined whether these actions constituted a denial of procedural fairness and whether they prejudiced the appellant's ability to effectively argue his case. After thorough analysis, the court found no procedural unfairness and concluded that McElwaine J's decision to limit the notice of appeal was within his judicial discretion.
The court dismissed the appeal, finding no grounds for the appellant's contentions. The appellant's argument that the case management decisions were unfair and prejudiced his ability to appeal was not upheld. The court affirmed McElwaine J’s decision, stating that the procedural fairness was maintained throughout the process.
The appeal is dismissed.
The court considered the procedural history and the case management actions taken by both Davies J and McElwaine J. The court noted that while Davies J had accepted a 45-page notice of appeal and set the matter down for a one-day hearing, McElwaine J subsequently limited the notice of appeal to 10 pages. The court examined whether these actions constituted a denial of procedural fairness and whether they prejudiced the appellant's ability to effectively argue his case. After thorough analysis, the court found no procedural unfairness and concluded that McElwaine J's decision to limit the notice of appeal was within his judicial discretion.
The court dismissed the appeal, finding no grounds for the appellant's contentions. The appellant's argument that the case management decisions were unfair and prejudiced his ability to appeal was not upheld. The court affirmed McElwaine J’s decision, stating that the procedural fairness was maintained throughout the process.
The appeal is dismissed.
Orders
Orders of the court
1. The appeal is dismissed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
For the reasons that follow, leave to appeal is refused. RELEVANT PROCEDURAL BACKGROUNDChronology of the proceedings It is appropriate at this point to set out an abridged chronology of the proceedings below, to provide context for McElwaine J’s decision, and for the issues raised on appeal. The orders made by Beach J on 17 April 2020 included declarations that Mr Huber had breached statutory and fiduciary duties owed to CellOS. The proceedings before Beach J were commenced by CellOS, and alleged that Mr Huber had carried out a scheme against it involving the buying and selling of CellOS shares through related off-shore companies controlled by Mr Huber. CellOS contended that, by this scheme, Mr Huber breached various statutory and fiduciary duties owed to CellOS, particularly the duties owed under ss 181, 182 and 183 of the Act. A protracted trial on liability proceeded before Beach J in September 2017, and May and June 2018. His Honour published reasons on 20 December 2018 which determined the liability issues adversely to Mr Huber and associated corporations: CellOS Software Ltd v Huber (2018) 132 ACSR 468; [2018] FCA 2069 (liability judgment or LJ). The proceedings before Beach J resumed in October 2019 on the question of relief, and his Honour published reasons and made orders on 17 April 2020: CellOS Software Ltd v Huber (No 2) (2020) 144 ACSR 267; [2020] FCA 505 (remedies judgment). After an initial unsuccessful attempt to file a notice of appeal against the remedies judgment, Mr Huber’s notice of appeal was accepted for filing on 25 May 2020, 10 days out of time. Consequently, he required an extension of time pursuant to s 25(2)(b) of the Federal Court of Australia Act 1976 (Cth) (FCA Act). Mr Huber’s application was initially case managed by Davies J. Her Honour conducted several case management hearings, over which Mr Huber prepared multiple iterations of his notice of appeal. The final iteration was 45 pages long and appears to have been acceptable to Davies J. On 13 August 2021, her Honour set the matter down for a one day hearing. The matter was then transferred to McElwaine J. As will be made clear later in these reasons, the case management of this matter by Davies J, and then McElwaine J, formed a focal point of Mr Huber’s submissions on the appeal to this Court. According to Mr Huber, McElwaine J then limited the notice of appeal to 10 pages, by an email sent from his Honour’s associate on 31 January 2022. CellOS was voluntarily wound up pursuant to s 439C(c) of the Act on 19 April 2022. On 29 June 2022, McElwaine J determined, as a separate question in the proceeding, that absent a grant of leave pursuant to s 500(2) of the Act, Mr Huber could not proceed with his extension application: Huber v CellOS Software Ltd (in liq) [2022] FCA 744. No issue was taken with that decision before this Court. Mr Huber then commenced two further sets of proceedings: on 12 August 2022, he commenced an application for leave to continue his proposed appeal against the liability judgment and the remedies judgment (VID 458 of 2022); and on 29 August 2022, he commenced an application seeking orders staying the liquidation of CellOS pending the determination of his proposed appeal (VID 545 of 2022).
Evidence
Evidence Before The Court
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Decision
Reasons for decision
A protracted trial on liability proceeded before Beach J in September 2017, and May and June 2018. His Honour published reasons on 20 December 2018 which determined the liability issues adversely to Mr Huber and associated corporations: CellOS Software Ltd v Huber (2018) 132 ACSR 468; [2018] FCA 2069 (liability judgment or LJ). The proceedings before Beach J resumed in October 2019 on the question of relief, and his Honour published reasons and made orders on 17 April 2020: CellOS Software Ltd v Huber (No 2) (2020) 144 ACSR 267; [2020] FCA 505 (remedies judgment). After an initial unsuccessful attempt to file a notice of appeal against the remedies judgment, Mr Huber’s notice of appeal was accepted for filing on 25 May 2020, 10 days out of time. Consequently, he required an extension of time pursuant to s 25(2)(b) of the Federal Court of Australia Act 1976 (Cth) (FCA Act). Mr Huber’s application was initially case managed by Davies J. Her Honour conducted several case management hearings, over which Mr Huber prepared multiple iterations of his notice of appeal. The final iteration was 45 pages long and appears to have been acceptable to Davies J. On 13 August 2021, her Honour set the matter down for a one day hearing. The matter was then transferred to McElwaine J. As will be made clear later in these reasons, the case management of this matter by Davies J, and then McElwaine J, formed a focal point of Mr Huber’s submissions on the appeal to this Court. According to Mr Huber, McElwaine J then limited the notice of appeal to 10 pages, by an email sent from his Honour’s associate on 31 January 2022. CellOS was voluntarily wound up pursuant to s 439C(c) of the Act on 19 April 2022. On 29 June 2022, McElwaine J determined, as a separate question in the proceeding, that absent a grant of leave pursuant to s 500(2) of the Act, Mr Huber could not proceed with his extension application: Huber v CellOS Software Ltd (in liq) [2022] FCA 744. No issue was taken with that decision before this Court. Mr Huber then commenced two further sets of proceedings: on 12 August 2022, he commenced an application for leave to continue his proposed appeal against the liability judgment and the remedies judgment (VID 458 of 2022); and on 29 August 2022, he commenced an application seeking orders staying the liquidation of CellOS pending the determination of his proposed appeal (VID 545 of 2022). One of the central premises of Mr Huber’s argument on appeal to this Court was that Davies J had “settled” his 45 page notice of appeal and set the matter down for hearing, and that, upon the proceeding being transferred to McElwaine J, his Honour then changed course and limited the notice of appeal to 10 pages. Mr Huber characterised their Honours’ directions as to the length of his notice of appeal as “conflicting” and “unfair”, and dedicated some paragraphs of his written submissions to explaining the chronology of the development of his notice of appeal. The hearing before McElwaine J
Ratio Decidendi
Legal Principle Established
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