Macks, in the matter of Addstone Pty Ltd (in liq)
[2000] FCA 205
•1 MARCH 2000
FEDERAL COURT OF AUSTRALIA
Macks, in the matter of Addstone Pty Ltd (in liq) [2000] FCA 205
SG 3080 of 1995 IN THE MATTER OF ADDSTONE PTY LTD
(IN LIQUIDATION) ACN 010 764 977; PETER IVAN MACKSSG 3075 of 1995 IN THE MATTER OF ELIZABETH HOUSE PTY LTD
ACN 007 548 487; PETER IVAN MACKSSG 3057 of 1995 IN THE MATTER OF ROCLIN PTY LTD
ACN 007 841 161; PETER IVAN MACKSSG 3050 of 1995 IN THE MATTER OF HENDON INDUSTRIAL PARK PTY LTD
ACN 007 890 708; PETER IVAN MACKSSG 3074 of 1995 IN THE MATTER OF SAYER PROPERTIES PTY LTD
ACN 007 714 927; PETER IVAN MACKSSG 3076 of 1995 IN THE MATTER OF EMANUEL (SOUTH AUSTRALIA)
PTY LTD ACN 007 963 466; PETER IVAN MACKS
SG 3077 of 1995 IN THE MATTER OF HONDEL PTY LTD
ACN 007 901 144; PETER IVAN MACKSSG 3078 of 1995 IN THE MATTER OF WORANDO PTY LTD
ACN 007 511 739; PETER IVAN MACKSSG 3079 of 1995 IN THE MATTER OF LIBRA PTY LTD
ACN 007 588 490; PETER IVAN MACKSSG 3124 of 1995 IN THE MATTER OF ESTABLISHMENT HOLDINGS
PTY LTD ACN 007 736 218; PETER IVAN MACKS
MANSFIELD J
1 MARCH 2000
ADELAIDE
IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
SG 3080 of 1995
IN THE MATTER OF ADDSTONE PTY LTD
(IN LIQUIDATION) ACN 010 764 977PETER IVAN MACKS
Applicant
SG 3075 of 1995
IN THE MATTER OF ELIZABETH HOUSE PTY LTD
ACN 007 548 487PETER IVAN MACKS
Applicant
SG 3057 of 1995
IN THE MATTER OF ROCLIN PTY LTD
ACN 007 841 161PETER IVAN MACKS
Applicant
SG 3050 of 1995
IN THE MATTER OF HENDON INDUSTRIAL PARK
PTY LTD
ACN 007 890 708PETER IVAN MACKS
Applicant
SG 3074 of 1995
IN THE MATTER OF SAYER PROPERTIES PTY LTD
ACN 007 714 927PETER IVAN MACKS
Applicant
SG 3076 of 1995
IN THE MATTER OF EMANUEL (SOUTH AUSTRALIA) PTY LTD
ACN 007 963 466PETER IVAN MACKS
Applicant
SG 3077 of 1995
IN THE MATTER OF HONDEL PTY LTD
ACN 007 901 144PETER IVAN MACKS
Applicant
SG 3078 of 1995
IN THE MATTER OF WORANDO PTY LTD
ACN 007 511 739PETER IVAN MACKS
Applicant
SG 3079 of 1995
IN THE MATTER OF LIBRA PTY LTD
ACN 007 588 490PETER IVAN MACKS
Applicant
SG 3124 of 1995
IN THE MATTER OF ESTABLISHMENT HOLDINGS
PTY LTD
ACN 007 736 218PETER IVAN MACKS
Applicant
JUDGE:
MANSFIELD J
DATE:
1 MARCH 2000
PLACE:
ADELAIDE
REASONS FOR JUDGMENT
Peter Ivan Macks (“Mr Macks”) is the liquidator of Emanuel Management Pty Ltd (In Liquidation) and sixty-three other companies together known as the Emanuel Group. Those sixty-three companies are listed in Schedule A of his affidavit of 10 November 1999 (filed in Matter 3076 of 1995). I shall refer to them as the Emanuel Group.
Mr Macks was appointed liquidator of each of the companies in the Emanuel Group on various days between 13 June 1995 and 24 June 1996, except for the company Emanuel Investments Pty Ltd (In Liquidation) of which he was appointed liquidator on 9 January 1995 by resolution of its creditors. In respect of the other companies in the Emanuel Group, they were wound up by orders of this Court on various days between 10 June 1995 and 24 January 1996 in the actions and upon the dates specified in Schedule A to Mr Macks’ affidavit to which I have already referred.
The Court has from time to time made orders with respect to matters arising in the course of the winding up of certain of the companies in the Emanuel Group thereafter. The Court is also aware that Mr Macks had instituted certain proceedings in the Supreme Court of South Australia, and in the Supreme Court of Queensland, in respect of matters arising from his consideration of the circumstances of the Emanuel Group or certain companies in the Emanuel Group, and that those proceedings presently are extant.
On 17 June 1999 the High Court delivered its decision in Re Wakim; Ex parte McNally (1999) 163 ALR 270 (“Wakim”). Wakim decided that this Court could not exercise State jurisdiction which meant that it could not entertain a range of matters in which previously it had been thought to have jurisdiction under the Corporations Law, or under certain other cross-vesting legislation. It found that State jurisdiction could not be conferred on this Court by legislation of a State parliament, even with the acquiescence of the Commonwealth.
In light of that decision, Mr Macks applied for an order from this Court that it has no jurisdiction to deal with these proceedings or with the other proceedings in which the winding-up orders were made by the Court concerning the companies in the Emanuel Group. He indicated that he intends to apply in the Supreme Court of South Australia, and in the Supreme Court of Queensland, pursuant to s 11(2) of the Federal Courts (State Jurisdiction) Act 1999 of South Australia and of Queensland for orders from those respective Supreme Courts that the proceedings in this Court be treated as proceedings in the Supreme Court of those jurisdictions. It is unclear whether he intends to make those applications with respect to each of the proceedings in the Court so that some go to the Supreme Court of South Australia and some go to the Supreme Court of Queensland, but I accept that his intention is to have the matters treated as proceedings in an appropriate Supreme Court.
When the matter first came before me, I raised, for Mr Macks to consider, the question of whether this Court had jurisdiction to continue to entertain these proceedings on the basis that the commonwealth was a party to the several proceedings. In many of the winding-up applications, the Commissioner of Taxation (effectively the Commonwealth), was the petitioning creditor and, in a number of the other applications for winding up, the Commissioner of Taxation was a supporting creditor. I invited submissions from Mr Macks, through his counsel, as to whether, in those circumstances, this Court had jurisdiction to continue to entertain the matters by reason of s 39B(1A)(a) of the Judiciary Act 1903 (Cth) and being jurisdiction which the High Court could exercise under s 75(iii) of the Constitution as the Commonwealth is a party to the proceedings.
Subsequently, this Court, in the matter of Edensor Nominees Pty Ltd v Australian Securities Investment Commission (2000) 168 ALR 676, a decision published on 10 December 1999, has determined that this Court has no jurisdiction to make orders under the Corporations Law, even if it has jurisdiction in a matter in which issues under the Corporations Law arise. The Court decided that the definition of “court” in s 58AA of the Corporations Law meant that the power to grant relief under the Corporations Law was restricted to courts as defined in the Corporations Law, and that the definition applies to the Federal Court only in so far as it is exercising the jurisdiction of a State. Wakim has decided that this Court cannot e given the jurisdiction of a State by that State’s Corporations Act.
Accordingly, it is my view that the matter upon which I first sought submissions from counsel for Mr Macks has been determined by that decision and, subject to events to which I am about to refer, the Court should make an order either that it has no jurisdiction to hear these proceedings or any step in these proceedings, or staying the proceedings further for lack of jurisdiction.
On or about 8 February 2000, the Court was made aware of a proposed application to be made in the High Court of Australia for certain prerogative relief including an order to show cause why a Writ of Prohibition should not issue out of the High Court against the judges of this Court prohibiting them from taking any steps, including making any orders, to give effect to or enforce the orders which have already been made in the proceedings concerning the Emanuel Group. The proposed applicant (Mr Saint) is, I was told by counsel for Mr Macks, a defendant in certain proceedings brought by Mr Macks in his capacity as liquidator of the Emanuel Group against Mr Saint and others in the Supreme Court of South Australia.
It was unclear to me whether the Court, by entertaining the application of Mr Macks for a declaration that it has no jurisdiction in this matter and in the other matters involving the Emanuel Group, might be taking some step which Mr Saint in that proceeding was seeking to prohibit the Court from taking. That may not have been the case. The proposed orders may have been intended to prohibit the Court from taking any further steps in the proceedings, rather than simply determining that the Court had no jurisdiction to take any step in the proceedings.
Because of that concern, notice of the present application was given to solicitors instructed by Mr Saint of the application now before the Court, and of the grounds for it, and of the hearing date. I understand that those proposed proceedings have now been issued in the High Court. Mr Saint’s solicitors have informed the Court by letter of 21 February 2000 that they are instructed not to seek leave to appear on the hearing of this application, and that the position of Mr Saint is that this Court has no jurisdiction in respect of any matter relating to or arising out of the winding up of the Emanuel Group, nor in any other proceedings in which Mr Macks seeks to rely upon orders purporting to appoint him as liquidator of any Emanuel Group company. They add that they do not understand Mr Macks to contend otherwise. Those solicitors have not indicated to the Court the time when the proposed order to show cause why a Writ of Prohibition should not issue is proposed to be heard. I have been informed by counsel for Mr Macks, who is also a respondent to the High Court proceedings, that he also is unaware of when that application is proposed to be heard.
In particular, Mr Saint’s solicitors have not asserted in this response that the Court should not proceed to determine whether it has jurisdiction in these proceedings in the light of the decision in Wakim.
In those circumstances I think it is unfair to Mr Macks, in respect of his personal interests as liquidator in the proper conduct of the winding up of the Emanuel Group, and in the interests of the creditors of the Emanuel Group, simply to decline to entertain the application. That would result in these various proceedings being left in a state of limbo for an apparently indefinite time. There would be no foundation, by a “relevant order”, for any application under s 11(2) of the Federal Courts (State Jurisdiction) Act 1999 of South Australia or of Queensland.
Solicitors for Mr Saint in the High Court proceedings have had a reasonable period within which to pursue an order to show cause for a Writ of Prohibition to issue out of the High Court, which would indicate clearly whether or not this Court should or should not entertain an application that it has no jurisdiction and to make an appropriate order to that effect. They have not done so. They have not indicated to the Court any time within which it is proposed that that application will be heard. They have not proffered any undertaking that they will pursue that application with any particularly expedition.
It is also apparent from the terms of their letter of 21 February 2000, to which I have referred, that they are in agreement with Mr Macks that this Court has no jurisdiction with respect to the proceedings under consideration. As I noted above, the terms of the proposed order to show cause do not clearly indicate that it is intended to seek to prohibit the Court from declaring it has no jurisdiction, or a declaration so as t entitle Mr Macks to make an application under s 11(2) of the Federal Courts (State Jurisdiction) Act 1999 of South Australia or Queensland. They have not clearly asserted that the Court should not proceed to make such a declaration. If the Court were of the view that it had jurisdiction to continue to hear applications in these proceedings as they arose, clearly then the proposed order (if granted) would operate to prevent the Court from proceeding to hear them.
For reasons which I have already expressed I am satisfied that the Court does not have jurisdiction now to deal with these proceedings. For the reasons which I have given I also propose to make orders in terms of subpar (a) of the definition of “relevant order” in s 11(1) of the Federal Courts (State Jurisdiction) Act 1999 of South Australia and Queensland staying these proceedings for want of jurisdiction. That will be a sufficient order to enable Mr Macks to apply, as he intends to do, under s 11(2) of that legislation.
Out of an abundance of caution that the Court not take any step which the High Court might prohibit, when it hears Mr Saint’s application, I propose to direct that the orders be stayed for a period of fourteen days, with liberty to apply granted to Mr Macks or to Mr Saint. If it is sought to argue that the Court should not, by reason of the High Court proceedings, proceed on that basis, notwithstanding the assertion of solicitors for Mr Saint that the Court has no jurisdiction, or if it should be the case that the High Court does make an order in the nature of an order to show cause why a Writ of Prohibition would prohibit such an order, that liberty to apply may be exercised. I consider that a further fourteen days is a reasonable time within which Mr Saint should clearly indicate whether it is the intent of the proposed order to show cause that the Court should not make a declaration that it has no jurisdiction. If he does not do so, then the orders which I propose to make today will come into effect and the proceedings will be stayed. That will entitle Mr Macks to take such action as he may be advised, subject to any order from the High Court in the meantime.
Accordingly, I order that:
(1)this proceeding and each of the proceedings to which reference is made in Schedule A to the affidavit of Mr Macks sworn on 10 November 1999 in Matter SG 3076 of 1995 be stayed for want of jurisdiction;
(2)the orders just made be stayed for a period of fourteen days from today’s date, or for such further period as the Court may order upon the application of Mr Macks or Mr Saint to be made within the period of fourteen days so fixed; and
(3)liberty is given to Mr Macks and to Mr Saint to apply on short notice to the Court to vary or discharge those orders.
I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield. Associate:
Dated: 2 March 2000
Counsel for the Applicant: Mr A Luckhurst-Smith Solicitors for the Applicant: Ward & Partners Counsel for the Creditor Elfic Ltd: Mr A O’Halloran Solicitors for the Creditor Elfic Ltd: Kelly & Co Date of Hearing: 1 March 2000 Date of Judgment: 1 March 2000
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