Humphris v Harbour Radio Pty Ltd

[1999] VSC 253

SUPREME COURT OF VICTORIA
CORPORATIONS LIST	Do not Send for Reporting
Not Restricted

No. 5965 of 1999

MICHAEL JAMES HUMPHRIS	Applicant
V
HARBOUR RADIO PTY LTD & ORS	Respondents

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JUDGE:	Byrne J
WHERE HELD:	Melbourne
DATE OF HEARING:	1 July 1999
DATE OF JUDGMENT:	2 July 1999
CASE MAY BE CITED AS:	Humphris v. Harbour Radio Pty Ltd
MEDIA NEUTRAL CITATION:	[1999] VSC 253

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Corporations – Former Federal Court proceeding – Voidable transaction – Application out of time – Adjournment pending remedial legislation

Practice and Procedure – Adjournment – Amendment – Legislation pending – Whether relevant to discretion

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APPEARANCES:	Counsel	Solicitors
For the Applicant	Ms J. Dodds-Streeton	Arnold Bloch Liebler
For the First and Second Respondents	No appearance
For the Fourth Respondent	Mr. P.W. Lithgow	Hughes Solicitors
For the Fifth Respondent	No appearance
For the Sixth Respondent	Mr Weston	William Weston
For the Seventh Respondent	Mr D. Masel	Madgwicks

HIS HONOUR:

1. On 29 June 1999, the applicant, Michael James Humphris, as liquidator of ACN 055 728 348 Pty Ltd and Communications Corporation of Australia Pty Ltd, applied to this court in effect to pursue proceeding number VG 3343 of 1998 commenced in the Federal Court of Australia on 8 October 1998.

1. In the Federal Court proceeding the applicant, as liquidator of the two companies, sought orders pursuant to s.588FF of the Corporations Law with respect to certain transactions of the companies in favour of one or more of the eight respondents to this proceeding, which transactions are said to be voidable under s.588FE. The pleadings are complete but the case has not been heard. The applicant has settled his claims against five of the respondents. The fourth-named respondent, Radio 2UE Sydney Pty Ltd ("2UE"), did not file an appearance in the Federal Court proceeding. The sixth-named respondent, Aluminium Express Australia Pty Ltd ("Aluminium Express"), appeared but did not file a defence. Only the seventh‑named respondent, Skandia Electronics Pty Ltd ("Skandia"), defended the claims against it. On 17 June 1999, the Federal Court made orders referring the claims against Aluminium Express and Skandia to mediation, but this has not taken place. Following the decision of the High Court on the same day, 17 June 1999, in Re Wakim; ex parte McNally (1999) 163 ALR 270, the mediations have not proceeded. I have been told that the judge in the Federal Court who is managing the case has convened a directions hearing on 29 July with a view to determining the future of the Federal Court proceeding.

1. Against this background, the applicant has bought this application by notice of motion seeking orders nunc pro tunc in terms of orders previously made in the Federal Court proceeding. This does not conform with the requirements of my Notice to Corporations Practitioners of 18 June and it will be necessary for the applicant to amend the notice of motion to claim the relief which he ultimately seeks in this proceeding, that is, relief under s.588FF.

1. Counsel for Aluminium Express and Skandia oppose the application to amend, arguing that it is futile since the application, as amended, must inevitably fail and they seek orders summarily dismissing the proceeding.  They contend also that I should not allow the amendment because this would mean that the applicant was seeking the same relief in this court as he seeks in the Federal Court in a proceeding which is still on foot.

1. On behalf of the applicant, counsel conceded that the application under s.588FF must fail because, by reason of s.588FF(4), it was commenced in this court more than three years after the relation back date. She accepted that, having regard to the reasoning in David Grant & Co Pty Ltd v Westpac Bank Corporation (1995) 184 CLR 265, this court could not extend that time. She submitted, however, that the proper course was to adjourn the proceeding with or without the amendment to a date to be fixed, in the expectation that remedial legislation will be passed. She said that it would be more convenient to adopt this course than to put the applicant to the trouble and expense of recommencing the proceeding when that legislation has been passed.

1. The respondents opposing this course relied upon the principle expressed in the dictum of Starke J in Ramsay v Aberfoyle Manufacturing Co (Australia) Pty Ltd (1953) 54 CLR at 253:

"Courts of law, however, can only act upon the law as it is, and have no right to, and cannot, speculate upon alterations in the law that may be made in the future."

1. In that proceeding the plaintiff sought an injunction restraining the defendants from erecting a factory on certain land in the City of Essendon.  The municipality had previously made a by-law under which the development was lawful, but that by‑law had been quashed for some procedural defect.  The municipality proposed to make a further by‑law in the same terms, but it had not yet done so.  The majority were for refusing the injunction on various grounds.  Of these justices, Rich J at p.244 refused relief on discretionary grounds, saying that it was a relevant matter that the plaintiff's benefits from the injunction sought was likely to be only transient.  Starke J dissented.  Having concluded that the development was unlawful under the law as it stood, His Honour was not moved to refuse relief on the basis that the law might be changed.

1. There is no shortage of high authority for the view that cases in the courts must be determined on the law as it stands and not as it might stand in the future: R v Whiteway; ex parte Stephenson [1961] VR 168 at 171, per Dean J; Willow Wren Canal Carrying Co v British Transport Commission [1956] 1 WLR 213 at 215-6, per Upjohn J. See, also, Attorney-General (Northern Territory) v Minister for Aboriginal Affairs (1987) 73 ALR 33 at 50-51, where Lockhart and Gummow JJ referred to these cases without disapproval but were not required to apply the principle.

1. In Minister for Minerals and Energy; ex parte Wingate Holdings Pty Ltd [1997] WAR 190, a party to the proceeding sought an adjournment for four months on the basis that legislation was expected to be enacted which would render the point at issue a moot one. Counsel for that party submitted that it should not be required to embark upon what it saw as an exercise in futility. Burt CJ was for refusing the adjournment on the basis that the proceeding must be dealt with as the law stands and not as it might stand. Wallace and Olney JJ, however, granted the adjournment after considering the cases to which I have been referred. Wallace J expressed himself in this way at p.196:

"In my opinion, this application can be distinguished from the facts in each of the above authorities mentioned.  This is not a case where in the normal course of events the action would be ready for hearing.  The order made for it to be heard in March was ex parte and made at the time when the Minister, supported by the Cabinet, had made his actions known.  Nor is it a case of infinite deferral of the respondent's application, nor one where one can clearly say that the law might be amended.  Rather is the case made out that this Court should be asked to deliberate upon a point which, in all probability, will become moot.  Its time is far too valuable.  Finally, this is not a case where the adjournment sought will prejudice the respondent other than in the manner indicated."

1. Olney J at 177-8 observed that:

"There is no real doubt that the foreshadowed legislation will be passed and passed in terms which will unquestionably terminate the dispute adversely to Wingate."

1. I conclude from this that future amending legislation may be a consideration which the court might have regard to, at least in questions concerned with procedural law rather than substantive law.  The exercise of the court's discretion upon an application for adjournment is essentially a procedural matter.  I need hardly add that even in such a case the court must be satisfied to a high degree that the amendment will come to pass.

1. What then is the situation now prevailing in Victoria?  On 21 June, following the decision of the High Court in Re Wakim, the Victorian Attorney-General published the text of the proposed retrospective remedial legislation with a press release which included the following:

"Mrs Wade said the Victorian Model Bill had been drafted in consultation with interstate Parliamentary Counsel and Solicitors-General over a significant period of time in anticipation of an adverse decision from the High Court.

All the States are expected to pass legislation based on the Victorian Model Bill in the near future.

The Federal Courts (State Jurisdiction) Bill will essentially validate judgments of the Federal Courts by giving them the same legal effect they would have had had they been given by the Supreme Court.

This makes them enforceable according to procedures applying to Supreme Court orders, including the law of contempt.  Importantly, the Bill provides for enforcement in relation to breaches of invalid orders both before and after the Bill commences operation.

'Release of the Victorian Model Bill will give practitioners and their clients certainty as to what is proposed,' Mrs Wade said.

'At the same time, it gives affected parties a chance to look at the Bill and make comments prior to its introduction in the Spring Session of parliament'."

1. I proceed, therefore, on the basis that when the Victoria Parliament resumes sitting, the Model Bill or a Bill very similar to it will be enacted into law.  I conclude, too, that there is no real doubt that the foreshadowed legislation will be passed.

1. The terms of cl.11 of the Model Bill disclose a legislative scheme under which it will be open to the applicant in this case to apply to this court for an order that the Federal Court proceeding be treated as a proceeding in this court, provided that the Federal Court makes what is described as a "relevant order". An order dismissing, striking out or staying a proceeding for want of jurisdiction or a determination by the Federal Court that it has no jurisdiction to hear and determine the proceeding would be an order of this kind. If, then, on 29 July or on some other date, such an order is made and if the legislation in this form is enacted and if an order under cl.11(2) of the Bill is made by this court, Federal Court proceeding number VGB343 of 1998 will become a proceeding in this court and the difficulty raised by s.588FF(4) will disappear. I am conscious of the uncertainties created by these three cumulative conditions which will have to be fulfilled. I am conscious, too, that in the event that cl.11 becomes law, it may be that the present application may have to be abandoned or modified in favour of an application in terms of that contemplated by c.11(2).

1. On the other hand, the adjournment which I would grant is not an indefinite one.  Counsel for 2UE consents to such an order.  No prejudice has been suggested on behalf of the other two respondents in question.  In my view, the justice of this very unusual case demands that I allow the adjournment for a relatively short period, and I will do so.  I propose an adjournment for, say, five months until the end of November 1999, which I think is some weeks after Parliament is due to return for the Spring Session.  I will reserve costs and give liberty to all parties to apply.

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