In the Matter of DDS Investments Pty Ltd Galler, David & Ors v DDS Investments Pty Ltd

[1997] FCA 235

CATCHWORDS

CORPORATIONS LAW - Winding up - Substitution of parties - Period within which winding up application must be brought - Extension of period - Use of slip rule

Corporations Law s 459R
Federal Court Rules O 35 r 7

Elyard Corporation Pty Ltd v DDB Needham Sydney Pty Ltd (1995) 61 FCR 385

DAVID GALLER & Ors v DDS INVESTMENTS PTY LTD
VG 3488 of 1996

Before:          NORTH J
Place:            MELBOURNE
Date:             7 MARCH 1997

IN THE FEDERAL COURT
OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VG 3488 of 1996

IN THE MATTER OF DDS INVESTMENTS PTY LTD
(ACN 069 836 764)

B E T W E E N :

DAVID GALLER  Applicant
  ELIZABETH AITKEN  Second Applicant
  FRANK MULVIHILL  Third Applicant
  JAMES HADFIELD ZOHRAB       Fourth Applicant
  PATRICIA ROSEMARY ZOHRAB   Fifth Applicant
JEROME GLAZEBROOK WHYTE &
  MARGARET ANN WHYTE (as Trustees
  of the Kennels Trust)  Sixth Applicant
JOHN MUNDELL EWART           Seventh Applicant
  JENNIFER ELIZABETH EWART  Eighth Applicant

AND
  DDS INVESTMENTS PTY LTD
(ACN 069 836 764)  Respondent

MINUTES OF ORDERS

BEFORE:     North J
PLACE:       Melbourne
DATE:         7 March 1997

THE COURT ORDERS THAT:

1.  The application for substitution is adjourned until 10.15 on 24 March 1997.

2.  The respondent to file and serve any further affidavits on which it intends to rely by 14 March 1997.  

3.  The applicants for substitution to file and serve any further affidavits in reply by 21 March 1997. 

4.  The respondent pay the applicants’ costs of and incidental to the hearings on 4 March and 7 March 1997.

NOTE:  Settlement and entry of orders is dealt with by Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT
OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VG 3488 of 1996

IN THE MATTER OF DDS INVESTMENTS PTY LTD
(ACN 069 836 764)

B E T W E E N :

DAVID GALLER  Applicant
  ELIZABETH AITKEN  Second Applicant
  FRANK MULVIHILL  Third Applicant
  JAMES HADFIELD ZOHRAB       Fourth Applicant
  PATRICIA ROSEMARY ZOHRAB   Fifth Applicant
JEROME GLAZEBROOK WHYTE &
  MARGARET ANN WHYTE (as Trustees
  of the Kennels Trust)  Sixth Applicant
JOHN MUNDELL EWART           Seventh Applicant
  JENNIFER ELIZABETH EWART  Eighth Applicant

AND
  DDS INVESTMENTS PTY LTD
(ACN 069 836 764)  Respondent

BEFORE:     North J
PLACE:       Melbourne
DATE:         7 March 1997

EX TEMPORE REASONS FOR JUDGMENT

On 21 February 1997, an application by Ross Murray Tanner and Jennifer Anne Fleetwood came on for hearing for their substitution in place of the existing applicants in this winding up application. On that occasion orders were made on the application of the respondent to adjourn the application for substitution until 4 March 1997.  It was implicit in the application for an adjournment that the question of substitution would be determined on or after 4 March 1997. 

When the substitution application came on for further hearing on 4 March 1997, Mr Jacobson, who appeared for the respondent, relied on s 459R(1) of the Corporations Law to submit that the application for winding up had become automatically dismissed under s 459R(3). This followed, he contended, because the six-month time period referred to in s 459R(1) had expired between the date when the application was adjourned on 21 February 1997 and 4 March 1997. Mr Baker, who appeared for the applicant, was given no notice of this point. I therefore adjourned the matter until today so that Mr Baker would be in a position to put argument in relation to it.

Today, Mr Baker sought application of the slip rule, O 35 r 7 of the Federal Court Rules, to correct the order made on 21 February 1997 to include an order for an extension of time for the determination of the winding up application until today.  This application for extension, he contended, would have been granted on 21 February 1997 had the matter been raised.  It was implicit in the orders adjourning the substitution application that the extension of time was granted.  Otherwise, he submitted, the adjournment would have been futile.  He relied for this application of the slip rule on the decision of the Full Court in Elyard Corporation Pty Limited v DDB Needham Sydney Pty Ltd (1995) 61 FCR 385.

Mr Jacobson contended that the slip rule was not applicable in the present circumstances and the Elyard case similarly did not apply.  Factually, this case is different from Elyard because, in Elyard, the slip rule was applied where one of the parties expressly intended to apply for an extension of time. Affidavits had already been filed in support of such application. By mistake, the applicant did not mention the application or seek the order from the Court on the day. In those circumstances, the slip rule was applied to correct the order made prior to the hearing in question. In this case, neither of the parties expressly sought an extension of time under s 459R(2). However, in my view, that distinction is not determinative of this case. On 21 February 1997, it was implicit in the application for an adjournment made by the applicant that the time for determination of the winding up application would be extended. It was also implicit in the orders made by the Court that the time would be extended under s 459R(2). I will, therefore, order that the order made on 21 February 1997 be corrected by adding a paragraph that the time within which the application be determined be extended until the determination of the substitution application.

The respondent should bear the costs of and incidental to the hearing on 4 March 1977 and the costs of and incidental to today. The argument put by Mr Jacobson against the application of the slip rule has been rejected, and consequently it is fair that his client pay the costs which arose from that unsuccessful argument.

ORDERS:

1.  The application for substitution is adjourned until 10.15 on 24 March 1997.

2.  The respondent to file and serve any further affidavits on which it intends to rely by 14 March 1997.  

3.  The applicants for substitution to file and serve any further material or any further affidavits in reply by 21 March 1997.            

4.  The respondent pay the applicants’ costs of and incidental to the hearings on 4 March and 7 March 1997.

I certify that this and the preceding
three (3) pages are a true copy of the reasons
for judgment of his Honour Justice North.

Associate:
Dated:           8 April 1997

APPEARANCES

Counsel appearing for the applicant:        Mr K. Baker
Solicitors for the applicant:  Coadys

Counsel appearing for the respondent:      Mr A. Jacobson
Solicitors for the respondent:                  George James

Date of hearing:  7 March 1997
Date of judgment:  7 March 1997