JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: LOW -v- JOONDALUP GOLF MANAGEMENT (AUST) PTY LTD [2023] WASCA 33
CORAM: BUSS P
MURPHY JA
VAUGHAN JA
HEARD: 17 JUNE 2022 & SUPPLEMENTARY SUBMISSIONS FILED 8 & 27 JULY 2022 & 5 AUGUST 2022
DELIVERED : 17 FEBRUARY 2023
FILE NO/S: CACV 67 of 2021
BETWEEN: TUCK KWONG LOW
Appellant
AND
JOONDALUP GOLF MANAGEMENT (AUST) PTY LTD
Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram: ALLANSON J
File Number : COR 91 of 2021
Catchwords:
Winding up application on ground of insolvency - Where leave required under s 459P of the Corporations Act 2001 (Cth) - Standing of director - Where applicant for leave to wind up was a director at the time of the filing of the winding up application but was subsequently removed as a director before hearing of application - Whether director's subsequent removal precluded continuation of winding up application - Whether abuse of process
Winding up application on ground of insolvency - Where trial judge erred in dismissing winding up application as an abuse of process - Whether remitter available where respondent alleged period in s 459R of Corporations Act had expired
Practice and procedure - Where primary judge found appellant's application for leave to wind up in insolvency and to wind up an abuse of process on grounds that the proceedings were vexatious - Whether primary judge's order dismissing application for leave and to wind up a final or interlocutory order - Whether leave to appeal should be granted
Legislation:
Corporations Act 2001 (Cth), s 459A, s 459C, s 459P, s 459R, s 459S, s 465A, s 465B, s 467, s 467A, s 470
Result:
Leave to appeal refused
Appeal dismissed
Category: B
Representation:
Counsel:
| Appellant | : | S Penglis SC |
| Respondent | : | G R Donaldson SC |
Solicitors:
| Appellant | : | KD Legal (Perth) |
| Respondent | : | CX Law |
Case(s) referred to in decision(s):
A Hudson Pty Ltd v Legal & General Life of Australia Ltd (1985) 1 NSWLR 701
AB v State of New South Wales [2014] NSWCA 243
Allmark v Mossensons (a firm) [2006] WASCA 127
Ann Street Mezzanine Pty Ltd (in liq) v Beck [2009] FCA 333; (2009) 175 FCR 532
A‑Pak Plastics Pty Ltd v Merhone Pty Ltd (1995) 13 ACLC 896
Asian Century Holdings Inc v Fleuris Pty Ltd [2000] WASCA 59
Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corporation Ltd [2008] HCA 9; (2008) 232 CLR 314
Australian Beverage Distributors Pty Ltd v The Redrock Co Pty Ltd [2008] NSWSC 3; (2008) 26 ACLC 74
Australian Securities and Investments Commission v Lanepoint Enterprises Pty Ltd [2011] HCA 18; (2011) 244 CLR 1
Australian Securities and Investments Commission v Neilodo Holdings Pty Ltd [2006] QCA 266
Barboutis v The Kart Centre Pty Ltd [2019] WASCA 184
Bidald Consulting Pty Ltd v Miles Special Builders Pty Ltd (2005) 189 FLR 309
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- Case
- [2023] WASCA 33
- Decision Date
CaseChat Overview and Summary
The Court examined the legislative framework and the principles established by previous case law, particularly the High Court's decision in Emanuele. It was determined that section 459P does not confer jurisdiction to make a winding-up order; instead, it merely identifies who may apply for such an order and requires leave for certain applicants. Jurisdiction to order a winding up is conferred by section 459A. The Court held that the absence of leave under section 459P(2) is a procedural defect rather than a jurisdictional defect. Consequently, the Full Court had the authority to cure this defect by granting leave nunc pro tunc, as it did in the case of Emanuele. This reasoning aligns with the High Court's view that procedural errors, such as the failure to obtain leave, do not invalidate the winding-up order but may provide grounds for staying or setting it aside.
In light of the above, the Court concluded that the absence of leave under section 459P(2) did not invalidate the winding-up order. The Court upheld the Full Court's decision to grant leave nunc pro tunc and confirmed the validity of the winding-up order. This decision reinforces the understanding that procedural requirements, such as the need for leave under section 459P(2), are distinct from jurisdictional requirements and can be rectified through appropriate legal mechanisms.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
The evident policy of pt 5.4 of the Act, manifested in part by s 459R, is that there be a speedy resolution of applications to wind up in insolvency.[51] By s 513A(e) of the Act, where a winding up is ordered under s 459A, the winding up is taken to begin on the day the order is made, except in the circumstances referred to in s 513A(a) ‑ (dc) (concerning, generally speaking, where the company has previously been under external administration).[51] Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corporation Ltd [2008] HCA 9; (2008) 232 CLR 314 [17] ‑ [18]; Australian Securities and Investments Commission v Lanepoint Enterprises Pty Ltd [2011] HCA 18; (2011) 244 CLR 1 [27]. Section 459A confers jurisdiction on the court to order a winding up in insolvency. Section 459P identifies the persons who may make the application - some of whom require leave - but it does not confer jurisdiction to make the winding up order.[52] Section 459P was introduced into the former Corporations Law (contained in the Corporations Act 1989 (Cth)) following the Corporate Law Reform Act1992 (Cth). The 1988 Law Reform Commission Report No 45 General Insolvency Inquiry (Harmer Report) recommended (par 142) that s 459P be introduced. The relationship between s 459A and s 459P was considered by the High Court in Emanuele.[52] Emanuele (125), (128). In Emanuele, the Australian Taxation Office (ATO) was a substantial creditor of certain companies and applied to have the companies wound up. The companies then entered into a deed of company arrangement which bound the ATO, and prohibited it from pursuing its winding‑up application. The Australian Securities Commission (ASC) intervened in the application to wind up the companies and applied under s 459P of the Corporations Law to wind up the companies in insolvency. At first instance, the Federal Court granted the winding‑up order, but the ASC did not seek, nor was it given, leave under s 459P(2) of the Corporations Law. In an appeal by some of the directors to the Full Court of the Federal Court in relation to the absence of leave, the Full Court granted leave to the ASC nunc pro tunc ('now instead of then')[53] by adding a paragraph to the winding‑up order made at first instance that leave be given nunc pro tunc to the ASC to wind up the companies on the ground of insolvency.[54] On an appeal to the High Court, the appellants contended that the Full Court erred in finding that the requirement for leave under s 459P(2) was procedural in nature, and that it did not impose a condition precedent to the jurisdiction of the court.[55] The High Court held by majority (Dawson, Toohey & Kirby JJ) that the absence of leave was a mere irregularity in the exercise of the court's jurisdiction which did not affect the validity of the winding‑up order, and that the irregularity could be cured by granting leave nunc pro tunc, even by the appellate court. Dawson J said:[56]The short point in the appeal is whether the Full Court of the Federal Court lacked jurisdiction to make a winding up order against a number of companies when it did so on the application of the [ASC] without leave to make the application having been obtained by that body as required by s 459P(2) of the Corporations Law. Section 459P does not confer jurisdiction on the Federal Court to make a winding up order; it does no more than identify the parties who may make an application, requiring leave to be obtained in the case of some of them including [ASC]. Jurisdiction is conferred on the Federal Court by s 459A of the Corporations Law in conjunction with s 42(3) of the Corporations (South Australia) Act 1990 (SA). The failure to obtain leave was a mere defect or irregularity in the exercise of that jurisdiction. It did not affect the validity of the order made, although it may have provided a ground for staying it or setting it aside.Since the failure to obtain leave was procedural and did not go to jurisdiction, there was no reason why the Full Court of the Federal Court should not have cured the defect or irregularity by granting leave nunc pro tunc. (emphasis added)[53] Emanuele (132).[54] Emanuele (118), see also Emanuele v Australian Securities Commission (1995) 63 FCR 54, 67.[55] Emanuele (127).[56] Emanuele (124 - 125).