Mystic Crystals v Vynotas Pty Ltd

[1999] HCATrans 407

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Brisbane  No B44 of 1999

B e t w e e n -

MYSTIC CRYSTALS FRANCHISES (AUSTRALIA) PTY LTD

Plaintiff/Applicant

and

VYNOTAS PTY LTD

First Defendant/Respondent

NORWICH UNION LIFE AUSTRALIA LIMITED

Second Defendant/Respondent

JLW (Qld) Pty Limited

Third Defendant/Respondent

ROBERTS, LEU & NORTH (A FIRM)

Fourth Defendant/Respondent

Application for interim orders

GUMMOW J

(In Chambers)

TRANSCRIPT OF PROCEEDINGS

FROM BRISBANE BY VIDEO LINK TO CANBERRA

ON FRIDAY, 19 NOVEMBER 1999, AT 2.30 PM

Copyright in the High Court of Australia

__________________

MR S.R. DART:   May it please your Honour, I seek leave to appear on behalf of Mystic Crystals Franchises and members of my family, my wife, my son and myself.

MR D.B. FRASER, QC:   If it please the Court, I appear with my learned friend, MR A.J. MOON, for the first respondents.  (instructed by Roberts Leu & North).  And for the second respondents.  (instructed by Connolly Suthers)

HIS HONOUR:   Yes, and your client was the lessor, was that right?

MR FRASER:   Yes, your Honour.

HIS HONOUR:   Thank you.

MRS S.A. WINN:   Your Honour, I appear for the third respondent.  (instructed by Flower & Hart Solicitors)

HIS HONOUR:   And that was JLW (Qld) Pty Limited?

MRS WINN:   Correct, yes. 

MR D.G. CLOTHIER:   May it please the Court, I appear for the fourth defendant, Roberts Leu & North.  (instructed by Corrs Chambers Westgarth)

HIS HONOUR:   Yes, thank you.  There are three summonses before the Court, two filed by Mr Dart and one by Mr Fraser’s client, I think.  That is right, is it not, Mr Fraser?

MR FRASER:   Yes, your Honour, that is the case.

HIS HONOUR:   What is the basis of your strike‑out application?  We should perhaps look at that first.

MR FRASER:   Your Honour, it depends upon Mr Dart’s application.  He seeks leave to maintain a special leave application on behalf of a company in liquidation.  If he does not get that leave, the liquidator has indicated that he does not wish to prosecute the special leave application, and accordingly the application for special leave would appear to have no utility in that instance.

HIS HONOUR:   The incapacity that you point to, is that based on 471A of the Corporations Law?

MR FRASER:   Yes, your Honour.

HIS HONOUR:   How does that bind this Court? It is a law of the State of Queensland. The jurisdiction which is sought to be attracted by grant of special leave is jurisdiction conferred by section 73 of the Constitution as supplemented by any applicable Commonwealth law. What Commonwealth law would pick up 471A?

MR FRASER:   Your Honour, it had not actually been approached quite in that way.  We anticipated that ‑ ‑ ‑

HIS HONOUR:   It is best to start at the beginning.  That is the beginning.

MR FRASER:   Yes, your Honour.

HIS HONOUR:   It seems to me, Mr Fraser, that being a question - and the question really, I suppose, is whether section 79 of the Judiciary Act picks it up, but that itself presents a question as to whether this Court is exercising jurisdiction in any particular State, if you see what I mean.

MR FRASER:   Yes, I see your Honour’s point.

HIS HONOUR:   Is not the best thing that can be done here to stand over these objections to competency to grant such leave as is necessary to enable Mr Dart to prepare the special leave application and to list the objections to competency and the special leave application together and get it dealt with.  A lot of time and energy seems to be being spent, particularly by Mr Dart, with interlocutory toing-and-froing, in respect of what is, after all, just a special leave application.

MR FRASER:   That is the case, your Honour, and we are here, of course, responding to his application for leave.

HIS HONOUR:   I know you are.

MR FRASER:   It would seem if his argument were logically correct, then it would follow that we should respond likewise, as your Honour points out.

HIS HONOUR:   Yes, I understand that.

MR FRASER:   It may be that that has proved to be somewhat of a distraction.

HIS HONOUR:   Yes, it certainly looks like it.  Perhaps I should speak to Mr Dart.

MR FRASER:   Thank you, your Honour.

HIS HONOUR:   You have two summonses, Mr Dart.

MR DART:   Yes, your Honour.

HIS HONOUR:   Have you managed to hear what I was saying to Mr Fraser?

MR DART:   I did.

HIS HONOUR:   It seems to me the compelling interest is in getting this application ready for hearing and dealt with one way or the other, rather than taking up further energies with other matters en route, as it were.  You seek leave to prepare the application for special leave and, as I have indicated to Mr Fraser, there is a question of law involved in all of that which is not an easy one but it would be best, as it seems to me, to give you such leave as you need to get the matter ready for special leave hearing and progress it that way.  You also seek, in your summonses, orders with respect to the winding up orders and various other matters in the Supreme Court.  Those orders would not be appropriate orders at this very preliminary stage of a mere special leave application which has not borne fruit yet in an actual grant of leave, if you see what I mean.

So, it strikes me at the moment, and I will ask you what you say about it, then I will ask Mr Fraser and the others, that the best course is to grant you such leave as you need to prepare the leave application to put aside the other orders that you seek and to stand over the objection to competency so that that is dealt with at the same time as the leave application.  Do you understand that?

MR DART:   Yes, your Honour, I do.

HIS HONOUR:   I have looked through the affidavit materials and there is an affidavit indicating a decision of the Queensland Court of Appeal on 17 November.  I am not seeking to bind you, but is that likely to bring another special leave application?

MR DART:   I would expect that it would, your Honour, yes.  We only received a copy of that this morning and have not had time to digest that thoroughly.

HIS HONOUR:   Yes, I understand that.  I mention it because if any special leave application is brought in respect of that matter, that should be got ready and brought on at the same time as the other one.  Does that make sense?

MR DART:   Understood, your Honour.  What your Honour is suggesting is that we combine the whole thing into one special leave application?

HIS HONOUR:   Yes.

MR DART:   Yes, your Honour.

HIS HONOUR:   Very well.  Is there anything you want to add to that proposed method of proceeding?

MR DART:   I will rest with the decision of the Court, your Honour.

HIS HONOUR:   Yes, very well.  Yes, Mr Fraser.

MR FRASER:   Your Honour, given Mr Dart’s intimation that there will be yet another application to the Court, it is a matter then of seeking to regularise the proceedings and how that would be done.  I am not sure whether your Honour has looked through the outlines.  There is one case in the list of authorities that has been referred to your Honour of Pacific Commerce Finance Ltd (in liq) v Cleargate Pty Ltd, a decision of Justices Dawson, Toohey and McHugh on 22 June 1995, which did rather suggest that the application for special leave in that case was incompetent because the directors could not give approval under section 471 of the Corporations Law.  It is a case that did seem to be on all fours and I wondered if your Honour’s attention had been drawn to that.

HIS HONOUR:   Yes, that is right but their Honours’ attention had not been drawn to the point I was making to you.  That is what presents the problem, which I really do not want to have to sort out this afternoon.

MR FRASER:   Certainly ‑ ‑ ‑

HIS HONOUR:   It can be sorted out, if it is to be sorted out, on the hearing of the special leave application, I think.  This matter has already been in the Court since July, has it not?  It really should be got ready for hearing.

MR FRASER:   Yes, your Honour.  That was the only matter I thought I should draw to your Honour’s attention.

HIS HONOUR:   I thank you for the reference.  Do any of the other parties who are represented wish to say anything?

MR CLOTHIER:   No, your Honour.

MRS WINN:   No, your Honour, thank you.

HIS HONOUR:   There is pending in this Court an application made on 13 July 1999 in the name of Mystic Crystals Franchises (Australia) Pty Limited, which I will call Mystic Crystals, seeking special leave to appeal against orders made on 15 June 1999 by the Queensland Court of Appeal.  The orders related to matters of practice and procedure.  In the absence of a point of principle with respect to such matters, a grant of special leave by this Court would be unusual.

The Court of Appeal ordered that an appeal to that Court be stayed if security for costs not be provided by 15 July 1999.  The appeal in question is an appeal to the Queensland Court of Appeal against orders made by the Supreme Court of that State by Justice Muir on 11 March 1999.  His Honour dismissed an application to set aside a statutory demand made under the Corporations Law on Mystic Crystals.

Three summonses have been filed in this Court in respect of the special leave application.  The first summons was filed on 1 September 1999 by Mr S.R. Dart, a director of Mystic Crystals.  It seeks relief, all but paragraphs 1 and 2 of which would be inappropriate as steps in aid of the special leave application and its prompt disposition by this Court.  The second is a summons filed on 6 October 1999 in which Mr Dart seeks leave to appear on behalf of Mystic Crystals and leave to appear and to serve an amended draft notice of appeal.

The other matters as sought in the summons, orders 3 and 4, are for a stay of a winding up order made on 21 July 1999 against Mystic Crystals by Justice Cullinane in the Supreme Court of Queensland and a stay of the costs orders made in that Court.  Orders 3 and 4 would not be appropriate orders in the circumstances of the application for special leave to appeal which is now pending in this Court.

The third summons is a summons also filed 6 October 1999 but by Vynotas Pty Ltd, the first respondent to the applications for special leave.  It seeks orders striking out the application for special leave on the ground that Mr Dart has no standing to prosecute the application.  It also seeks an order that Mr Dart pay the costs of the application for special leave including the costs of the summons.

Since then, on 17 November 1999, the Queensland Court of Appeal dismissed an application apparently brought by Mr Dart in the name of Mystic Crystals against the winding up order made in the Supreme Court on 21 July 1999. The proposition that, in this Court, Mr Dart has no standing appears to be based on section 471A(1)(d) of the Corporations Law in its operation as part of the statute law of the State of Queensland.  As a matter of Queensland law, a person in the position of Mr Dart cannot perform or exercise a function or power as an officer of Mystic Crystals except, among other things, with the approval of “the Court”.  That term is defined in section 58AA in terms which include the Supreme Court of Queensland but not this Court.  Indeed, it is hard to see how the provision could as a matter of State law control proceedings in this Court.

The jurisdiction sought to be attracted by the grant of special leave is the jurisdiction conferred by section 73 of the Constitution. It is also not readily apparent that section 471A(1) is, in respect of the pending special leave application, picked up by section 79 of the Judiciary Act 1904 (Cth):  see Commissioner of Stamp Duties (NSW) v Owens [No 2] (1953) 88 CLR 168 at 170; John Robertson & Co Ltd v Ferguson Transformers Pty Ltd (1973) 129 CLR 65 at 79, 84, 87, 93; TheCommonwealth v Mewett (1997) 191 CLR 471 at 553.

Mr Fraser, who appears for Vynotas Pty Ltd, refers to what was done in the application in Pacific Commerce Finance Ltd (in liq) v Cleargate Pty Ltd [1995] 12 Leg Rep page 562.  The Court there refused special leave on the ground that the application for special leave was incompetent.  It was said by the Court that the gentleman, Mr Evans, purporting to appear for the company in liquidation had no standing to do so.  It may be that what was said there by the Court controls the present matter but I am not satisfied that it clearly does.

The compelling objective of all procedural steps in this Court must be the preparation and disposition of the pending special leave application.  This was filed, as I have indicated, as long ago as 13 July 1999.

This end is to be achieved, in my view, by orders to the following effect:

(1)  Dismiss paragraphs 3, 4, 5, 6, 7, 8, 9, 10 and 11 of the summons filed 1 September 1999.

(2)  Dismiss paragraphs 3 and 4 of the summons filed on 6 September 1999 by Mr Dart.

(3)  Stand over to the hearing of the special leave application the summons filed 6 October 1999 by Vynotas Pty Ltd.

(4)  The application book for the hearing of the special leave application should be prepared so as to include the summonses, to which I have referred in these reasons, but exclude the affidavit material filed in support of the summonses.

Otherwise, in addition to these reasons, the special leave application book should include the materials ordinarily included as part of the process of preparation of a special leave application for hearing.

It may be that, on the hearing of the special leave application and the adjourned summons, the Court, rather than deciding the issue of competency of representation, may prefer in the first instance to go directly to the merits of the special leave application.

So far as is necessary at this stage, I would grant leave to enable Mr Dart to continue on behalf of Mystic Crystals the preparation of the special leave application, including the filing within 21 days of an amended draft notice of appeal. 

If any application for special leave to appeal against the decision of the Queensland Court of Appeal delivered on 17 November 1999 is instituted, or purported to be instituted, that application, together with any objection to competency, should be listed at the same time as the presently pending special leave application and adjourned objection to competency.

I will certify for the attendance of counsel this afternoon, but otherwise the costs of the proceedings today will be costs of the special leave application.

AT 2.51 PM THE MATTER WAS CONCLUDED