MYT Engineering & Ors v Mulcon Pty Ltd

[1998] HCATrans 269

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S96 of 1997

B e t w e e n -

MYT ENGINEERING PTY LIMITED

Applicant

MARTIN JOHN GREEN

Second Applicant

GRANT EDMONDS

Third Applicant

and

MULCON PTY LIMITED

Respondent

Application for special leave to appeal

GAUDRON J
McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 7 AUGUST 1998, AT 2.43 PM

Copyright in the High Court of Australia

MR C.R.C. NEWLINDS:   If the Court pleases, I appear for the applicants.  (instructed by Cunich Lawyers)

MR A.I. TONKING:   May it please the Court, I appear for the respondent.  (instructed by Helliars City Solicitors)

GAUDRON J:   Yes, thank you, Mr Newlinds.

MR NEWLINDS:   If the Court pleases.  This application raises two points.  They are both concerned with questions of statutory construction of the Corporations Law. The first concerns the proper construction of section 445G of the Corporations Law and, in particular, what work does the words “substantial compliance” have to do, and the second concerns the proper construction of section 447A and, in particular - - -

GAUDRON J:   The first question in respect to 445G is whether it applies at all, is it not?

MR NEWLINDS:   Yes, your Honour.  The second question that is raised is a 447A point and that is simply whether that section can have a retrospective as well as a prospective operation.

GAUDRON J:   It seems to have been assumed that 447A can apply even if 445G does not.  That seems an odd assumption, does it not?

MR NEWLINDS:   That was a submission that was put but the way the case is put is as a 445G case firstly and foremost, but as an alternative, if it is not a 445G case, that 447A would then apply.  Now, your Honours know ‑ ‑ ‑

GAUDRON J:   Retrospectively.

MR NEWLINDS:   Retrospectively.

GAUDRON J:   Yes.  It seems a difficult submission to make, does it not, if 445G does not apply?

MR NEWLINDS:   Can we come to that?  I will deal with 445G first because, in my submission, it does.  Your Honours know that the way the Court of Appeal unanimously dealt with the issue of execution was that they were of the view that the discussion between the directors on the telephone on 18 October did amount to a resolution of the company that the company execute the deed and did amount to a resolution that it be executed on behalf of the company by one of the directors, Mr Edmonds.  That resolution complies with the requirements of 444B of the Corporations Law which provides that:

The board of the company may, by resolution, authorise the instrument -

that is the deed -

to be executed by or on behalf of the company.

However, the Court of Appeal by a majority were of the view that because the instrument that was to be executed was a deed, that any authority authorising an agent to execute it on behalf of the company had to, itself, be under seal.  See the Conveyancing Act and the general law.  They then went on to say - - -

GAUDRON J:   Nobody purported to execute it on behalf of the company any way.

MR NEWLINDS:   That is the next thing they said.  They said, in any event, because Mr Edmonds purported to execute it as the company and did not purport to execute it on behalf of the company, what he had done was not an execution on behalf of the company.

Now, the first submission, if leave was granted, would be that the underlying assumption that what was being executed was required to be executed as a deed is itself flawed.  That proposition is supported by ‑ ‑ ‑

GAUDRON J:   You wish to argue, do you, that it was in fact executed?

MR NEWLINDS:   No, I do not.  It has never been my case that the instrument was executed by the company.  I wish to argue that it was executed on behalf of the company.

GAUDRON J:   That is hardly a matter of great moment, is it?

MR NEWLINDS:   The operation of 445G is - and we come to that in this way:  the underlying proposition was that what was being executed was a deed and therefore it had to be executed as a deed.  That, in my submission, is a wrong assumption because if one looks at 444B(3) one sees that it is contemplated by the legislature that what was to be executed could be executed by the company “or on behalf of the company” and that all that is required for someone to have authority to execute on behalf of the company is a resolution of the company, thereby sidestepping, if you like, the formal requirements of the Conveyancing Act and equivalent legislation for authority to execute deeds to be itself under seal.

The next provision that points in the other direction is 444B(6) which notes that upon execution of the deed by the administrator, not by the company, it “becomes a deed of company arrangement.”  The word “deed” is a defined term in the Corporations Law and it includes an instrument having the effect of a deed.  So, the submission is that what we are dealing with here is a statutory deed that does not require execution to be - - -

GAUDRON J:   Is it?  We have not seen it, of course, but it surely - - -

MR NEWLINDS:   It is called a deed and it has words “signed, sealed and delivered” on it. 

GAUDRON J:   Looks like a deed?

MR NEWLINDS:   Looks like a deed but does not need to be a deed to be effective, is the submission.

GAUDRON J:   The question is does it purport to be a deed?

MR NEWLINDS:   It purports to be a deed.

GAUDRON J:   In the ordinary sense?

MR NEWLINDS:   It looks like a deed, it is called a deed, it is purported to be signed, sealed and delivered, however, the submission is that it does not need to be a deed to be effective as a deed of company arrangement because it becomes a deed, whatever else it might have been before that, upon the administrator executing it and he executes it after the company - - -

GAUDRON J:   So, you want us to engage on a fact-finding - - -

MR NEWLINDS:   No.

GAUDRON J:   Well, I think you do, do you not?  You want us to ascertain whether the board authorised execution on behalf of the company?  You are not suggesting that it was executed by the company, are you?

MR NEWLINDS:   No.

GAUDRON J:   Only on behalf of?

MR NEWLINDS:   Yes, and all three members of the Court of Appeal accepted that Mr Edmonds had authority to execute the deed on behalf of the company.  However, they said that authority was not valid if what was required to be executed was a deed and they said that in any event, because he purported to execute it as the company, not on behalf of the company, he had not executed the deed. 

Now, this all leads to the consideration of whether 445G can save the situation.  If I can ask your Honours to look at 445G.  Subsection (1) is the gate through which one must go to get the jurisdiction and there has to be doubt as to a specific ground as to:

whether a deed of company arrangement was entered into in accordance with this Part -

Now, the doubt that existed in relation to this deed, albeit, only brought to light by the respondent some seven or eight months after the deed was executed, was that it had not been executed as required by 444B(2) by the company or on behalf of the company within 21 days.

McHUGH J:   Yes, but, Mr Newlinds, the case concerns the application of a section of the Corporations Law to a particular set of facts.  There is nothing special about the case, nothing that requires the grant of special leave.

MR NEWLINDS:   The reasoning of the majority in the Court of Appeal was that the words in section 445G(3)(a) requiring the provision that had been breached to have been substantially complied with to be satisfied before the court can declare a deed that is otherwise invalid, valid, was this: their Honours said that - perhaps in the same way one cannot be a little bit pregnant - when one is talking about execution, a document is either executed or it is not executed. There is no shades of grey; there is no in between and therefore there is no room for a concept such as “substantially complied with” and, in my submission, it is wrong.

McHUGH J:   Whether it is or whether it is not, what is special about it?  Why should this Court take up its time to hear a case concerning such an issue?

MR NEWLINDS:   Because this section is an important section to the operation of Part 5.3A, the voluntary administration provision.

McHUGH J:   It may be.  It does not make it a special leave case.  The idea that simply because you have a statute, passed by the Federal Parliament, whose interpretation is contested makes it a special leave case only has to be stated to be rejected.

MR NEWLINDS:   Yes.  Well, I have not stated that, your Honour.

McHUGH J:   You have gone close enough to it.

MR NEWLINDS:   Although it is important that I satisfy your Honour that the case is more than arguable, and that is what I am seeking to do.  If I can move to why it is an appropriate case for special leave.

Firstly, this provision is a provision which, obviously, the purpose of which is to save administrations from what might be described as “technical points”.  This case is a classical example of what might be described as a good, old-fashioned technicality.  If I can bore your Honours for perhaps two minutes with the facts - - -

GAUDRON J:   It may be but the fundamental question is whether there was an administration or there is not.

MR NEWLINDS:   Of course that is the fundamental question.

GAUDRON J:   It may be but a technicality but your proposition focuses on when an administration has come into operation and it is, prima facie, correct but it does not deal with this problem.

MR NEWLINDS:   If the deed is not executed within 21 days the administration comes to an end and the company goes into liquidation.  The facts of this case were that everyone, that is, creditors, including respondent, administrator, directors and anyone else who was involved, acted on the assumption that this company was under administration until June or July of the next year.  The deed of company arrangement that was entered into contained provisions that were put there at the request of and for the protection of and for the benefit of the respondent.  They allowed the respondent to sue directly an insurance company for a cause of action that they had against the company.  They did that.  Something went wrong in those proceedings and they suffered an order for costs against them by the insurance company and they then moved the court to set aside the deed of company arrangement, eight or nine months later, on this ground.

The trial judge and the majority in the Court of Appeal all said there was no saving the situation, having decided that the deed was not executed properly, albeit, it was an honest bona fide attempt by Mr Edmonds with the consent of the board to execute the deed on behalf of the company.

McHUGH J:   The trial judge went even further, did he not, because he said even if your basic submission was right, in the exercise of his discretion, he would not have made the order?

MR NEWLINDS:   Yes.  Well, he said that in relation to 447A but, of course, the trial judge’s reasoning in relation to the exercise of discretion was flawed because his Honour was of the view that there had been no resolution.  Now, all of the members of the Court of Appeal disagreed with that proposition but came at the problem from a different angle.  But, your Honour, the facts that I have just outlined were - - -

GAUDRON J:   In any event, you made no application for an exercise of discretion under the latter section until very late in the day, did you?

MR NEWLINDS:   Justice Handley points that out.  It is true the application was made at the trial but, with respect, the fact that an application - - -

GAUDRON J:   It must be an exceptional situation if section 445G(3), which is a specific provision dealing with technical defects in deeds, did not operate and yet, as a matter of discretion, you would achieve the same result.

MR NEWLINDS:   By 447A?

GAUDRON J:   Yes.

MR NEWLINDS:   Yes, but I only put 447A as a true alternative.  I only seek to rely on it if I am wrong in the submissions I make under 445G(3).

GAUDRON J:   I am dealing with the discretionary aspect of it.

MR NEWLINDS:   Yes, but discretion only comes into it with 447A.  All the judges who have dealt with it to date said the end of 445G is because you cannot substantially execute something.  You either execute it or you do not. 

Now, your Honours, the reason that it is an appropriate case for special leave is, firstly, that that construction of 445G, in my submission, is wrong and clearly so.  The second is that the provision itself is self‑evidently there to promote the purpose that the part work in an impartial, effective and expeditious way.  At application book, page 26, Justice Powell quotes from the Harmer report, and that is the intention of this section.  It is meant to be done without lawyers, without the supervision of the court in a non-technical informal way as cheaply and efficiently as possible.  If this section does not - - -

GAUDRON J:   But properly done.

MR NEWLINDS:   Properly done, of course.  If this section really does mean that if a deed is invalid - - -

GAUDRON J:   Yes, the section does deal with the question of a deed being invalid.  But here there is an anterior question:  is there any deed at all?

MR NEWLINDS:   But with respect, your Honour, 445G talks about “invalid deeds”.  The starting point is that:

the Court may declare the deed, or a provision of it, to be valid ‑

It must follow from that that what one is dealing with is an invalid - - -

GAUDRON J:   Yes, it is a deed.  But you are dealing with a deed.

MR NEWLINDS:   No, with respect, you are dealing with an invalid deed.  Now, the “deed” is just the word that is used to describe the instrument that the part is dealing with, but the starting point, when one looks at the very words of the section, is that we are dealing with something that is invalid and the courts are making an order that would make something that is otherwise invalid, valid.  In my submission, it is obvious from that that the section does have work to do in circumstances where the deed has not been properly executed.

McHUGH J:   Well, the argument against you is that there is no doubt.  That is what the section says:

Where there is doubt....whether a deed of company arrangement was entered into in accordance with this Part -

Well, the argument against you is there is no doubt about the matter at all.  It just was never entered into in accordance with this part.  There is no doubt about it.  It is just a plain case.

MR NEWLINDS:   But with respect, your Honour is assuming that this document has to be executed as a deed.

GAUDRON J:   It has to be executed.

MR NEWLINDS:   As a deed.

GAUDRON J:   Executed.

MR NEWLINDS:   It was executed, with respect.  Mr Edmonds picked up a bit of paper and he marked it and when he did that he believed he was doing that on behalf of the company - - -

GAUDRON J:   It has to be executed by or on behalf of the company.

MR NEWLINDS:   That is right.  Now, it has never been my case that it was executed by the company.  But Mr Edmonds, with authority of the board, so all of the members of the Court of Appeal concluded, believing that he was executing the document on behalf of the company, instead of writing “MYT Engineering per Mr Edmonds” or “for and on behalf of” the company, signed “Mr Edmonds”, affixed the seal of the company and signed his name twice.  But, in my submission, it is a distraction to get worried about the method by which Mr Edmonds marked the paper.  His intention, when he signed the document - this was his uncontested evidence; he was not cross-examined on it - was that he was executing the document on behalf of the company.

Now, the only thing that can be said against that is that it has to be executed as a deed or, alternatively, that because he purported to execute it as the company, he somehow has not executed it on behalf of the company.  Now, all the judges who have looked at this case to date, your Honours, have been firmly of the view that there was a doubt as to these matters.  The doubt is only what gets you through the gate into the section.  Self‑evidently, 445G(3) is not applicable if what you are dealing with is something that has been executed or is something that is valid but, quite clearly, it does operate if what is being talked about or what is being dealt with is something that is invalid.

Your Honours, the deed, of course, was valid to the extent that it was executed after the 21‑day period, and I do not want to bore you with the facts but the contravention - and can I just pause there.  “Contravention” is another defined term.  Almost every word in the Corporations Law seems to have its own definition.  “Contravention” includes failure to comply.  So, when one reads 445G(3) and gets to the part where it says “despite a contravention”, one really needs to read, “despite a contravention which includes a failure to comply.”

Now, not executing a document, if that is what is happening, or if there is doubt about whether it has been executed, is a failure to comply which is a contravention that 445G talks about.

McHUGH J:   These are questions of statutory construction. 

MR NEWLINDS:   I accept that.

McHUGH J:   Ordinarily questions of statutory construction, so far as I am concerned, do not warrant the grant of special leave.  There has to be something very special about them.  Questions of construction are notorious for generating division of opinion and, on the whole, they ought to stop in the Full Courts or Courts of Appeal of the relevant jurisdiction.  This Court can only hear 80 or 90 cases a year.  If it heard every case where there was an argument that the judges had got it wrong about a question of statutory construction it would have to hear 800 a year.

MR NEWLINDS:   I would be repeating myself, your Honour, but seeing I have not got the red light, I will. If it is clearly wrong, if it is a central saving provision in a part such as Part 5.3A, having regard to what this Court said about Corporations Law matters, we have now got at a Court of Appeal level the only decision on the operation of this section.

McHUGH J:   Well, everybody knows what it means now.  You will just have to comply.  People will just have to comply with the Court of Appeal’s view.

MR NEWLINDS:   But it has read down the potential width of the section dramatically and in the day-to-day practice of these administrations, they are done in an informal way.

GAUDRON J:   Let us test your argument a bit further.  What order would you seek?

MR NEWLINDS:   Under 445G(3)?

GAUDRON J:   Yes.

MR NEWLINDS:   A declaration that the deed is valid, notwithstanding that it may not have been properly executed within the 21‑day period, that is all.

GAUDRON J:   You would not seek a declaration that it be deemed to have been executed within the 21 days?  If it was not executed then, it is now some very considerable time since, is it not?

MR NEWLINDS:   Yes, absolutely.  Of course, your Honours might have picked up that his Honour the trial judge, after delivering his judgment, was persuaded to make an order under 447A delaying the liquidation of the company until such time as his orders were made.  However, the fact is this company operated and was conducted by a person, Mr Green, who thought he was an administrator, for a long period of time when, as a matter of fact

and law, unbeknownst to anyone, it was in liquidation.  Now, that throws up a whole lot of very difficult practical problems for administrators administering deeds.

If, for some reason, someone can dream up a technical problem after a deed has been purportedly executed, years down the track, and they manage to persuade a court that that is a good point, then an administrator who has conducted an administration, dissipated moneys that would not form part of a liquidation to creditors and the like, is put into a terribly disadvantageous position.  In my submission, if your Honours consider the practical consequences of the inability of the courts to fix this type of problem, that of itself is a legitimate ground for the special leave application.  Those are my submissions.

GAUDRON J:   Thank you.  Yes, please.

MR TONKING:   Your Honours, this case, with respect, is not a suitable vehicle for the determination of the questions for which the applicant contends.  Stripped of some obiter comments by some of the judges below, this is a case purely about facts and about discretion.

The questions which my friend contends are raised by the case are, firstly, as to section 445G(3) and, in relation to that, the answer is that the case turns entirely on its own facts and the decision below gives rise to no uncertainty. The second point is as to section 447A and there - - -

McHUGH J:   Well, it does seem to hold, nevertheless, that if the deed is not executed, then you cannot apply 445G, does it not?

MR TONKING:   Yes, it does hold that, your Honour.

McHUGH J:   It is pointed out that gives rise to very important practical consequences.

MR TONKING:   But the number of cases in which the deed is not executed would, in my submission, be very few. It would normally be a clear matter as to whether the deed has been executed or not. Section 445G, in my submission, is directed at questions of degree, as was suggested by the majority in the Court of Appeal below, not questions of black and white and all the judges below - - -

McHUGH J:   Why should you adopt that view of the section?  After all, subsection (2) contemplates that:

the Court may make an order declaring the deed, or a provision of it, to be void -

so this hypothesis is that the power may exist even in respect of a deed that is void or can declare it not to be void.

MR TONKING:   Yes, but that, with respect, would go to questions of voidness for reasons other than execution.  The execution or otherwise ‑ ‑ -

McHUGH J:   But why should it?

MR TONKING:   Because it is very fundamental matter, your Honour, and my friend tries to get around that by saying that this is some new type of animal.  It is not really a deed.  It is a deed of company arrangements.  But it would require very express provision - - -

McHUGH J:   But leave that point aside.  Why should you draw a distinction between voidness on the ground of non-execution and voidness on the ground of fraud or illegality or some other reason?  This is an empowering and remedial section.

MR TONKING:   Because the test that the section applies is a dual test.  The dual hurdle that has to be overcome.  The first being substantial compliance and the second being no injustice; not just a degree of lack of injustice but no injustice and that, of course, has not been addressed by my friend.  But concentrating on the substantial compliance question, it is very difficult to see, with respect, how the simple failure to execute something, as all of the judges below found had occurred, can be compliance.

McHUGH J:   But the argument against you is that the provision was substantially complied with because everything was done apart from the relevant authority being there.  Everybody thought that they were executing a deed.

MR TONKING:   The difference, with respect, is this, your Honour, that Part 5.3A makes specific provision for the consequences of not executing a deed within a certain time. It does not make any provision for any other aspects of the deed which might give rise to doubt such as timing matters and so on but section 446A(2) provides that if the deed has not been executed within 21 days of the meeting then there are very serious and very definite consequences and the company moves into a form of administration totally different from that which would obtain had the deed been executed. Therefore, in my submission, the question of compliance is not something that section 445G addresses in relation to the question of straight execution but it goes to matters which are capable of being looked at in terms of degrees, substantiality or otherwise.

It would be my further submission that the High Court would not want to consider a question which is purely a factual one as to the meaning, in a particular context, of the word “substantial”.

GAUDRON J:   The question upon which it seems to depend is not the meaning of the word “substantial” or, indeed, any of the grounds set out in (a), (b), (c) of the draft notice of appeal at application book 169, but whether or not section 445G(3) is available in a case where there has not been execution.

MR TONKING:   Yes, that question is possibly thrown up.

McHUGH J:   But it is the fundamental question in the case, is it not?  And much as I am generally opposed to questions of statutory construction generating grants of special leave, it is an important point from the point of view of the administration of the general company law.

MR TONKING:   With respect, your Honour, this is a case where the sort of reasoning of the High Court in David Grant would, in my submission, apply.  This is a question of substance and the statute lays down a very definite requirement.  If the interpretation is going to be that the statute will allow a departure from those requirements, and a departure from the consequences which are laid down in 446A as to the fate of the company and the nature of the administration, then there is little point in having those sorts of requirements and the provisions - - -

McHUGH J:   That goes to discretion, does it not?  I mean, a judge may well say, “I am not going to make an appropriate declaration in the exercise of my discretion”, but the argument upon which you rely is that the section just does not apply to such a case.  One would have thought that it was the sort of case that the section may well be directed at.

MR TONKING:   I am putting that argument for this reason, your Honour:  I am simply suggesting that it would seem likely that the Court would take the view that this is the type of requirement that it was found in the David Grant Case could not be ameliorated except by the specific provision that was there to deal with it.  That was an extension of time matter.  This is a matter which is either complied with or is not, and it goes to the substance of the matter, it does not just go to a procedural step.

Your Honours, in the Court of Appeal Justice Dunford, who dissented, attempted to distinguish this situation from the High Court’s approach in David Grant on the basis that the two sections here, 444B, which has the requirement for execution, and 445G, were part of a single scheme, whereas, the two sections being looked at in David Grant had been enacted

at different times and one was a general provision and one was a specific provision.  In my respectful submission, that argument is not to the point in the face of the direct language of the section here.

Your Honours, as to the second ground, which is section 447A, my friend did not develop that greatly.  I do not know whether your Honours wish to hear me - - -

McHUGH J:   He might not have had much time.  No doubt he relies on it.

MR TONKING:   He might have wished to.  Your Honours, the question about retrospectivity, in my submission, does not arise from this case.  If one disregards certain comments of Justice Powell which, in my respectful submission, are obiter, and one looks at the supplementary reasons of Justice Handley, then the majority of the Court of Appeal has held, as indeed the primary judge applied in this case, that section 447A can apply retrospectively and that issue does not arise. 

There have been cases in which it has been applied on that basis and, in my submission, does not arise here because the case could be decided entirely as a matter of discretion.  Consequently, while, no doubt, some of these questions about the interpretation of 5.3A of the Corporations Law are matters of importance, there is nothing of lasting significance that would arise out of this case because it is capable of being decided and viewed entirely on the basis of its own facts and entirely on the basis of the exercise of a discretion.  Those are my submissions.

GAUDRON J:   Yes, thank you.  Yes, Mr Newlinds.

MR NEWLINDS:   It is not a case that turns on its own facts.  It is a case where what was executed within the 21 days has been held not to be a deed.

GAUDRON J:   Let us assume for the moment - and I do not want you to take any great encouragement from this assumption - that the Court were minded to consider the meaning or the availability of section 445G(3) in case of non-execution. Why should this Court bother with whether there had been substantial compliance or not?

MR NEWLINDS:   For the reason that, for reasons that have never been properly articulated by the respondent, the respondent, who was a creditor of the company - - -

GAUDRON J:   Has it been fully argued?

MR NEWLINDS:   Yes.

GAUDRON J:   But there have been no findings with respect to it, except in the minority judgment in the Court of Appeal?

MR NEWLINDS:   Except by the minority judgment of Justice Dunford.  Well, Justice Powell did not deal with the question.  Justice Handley said that he would not interfere with Justice Bryson’s discretion.  The difficulty with that is Justice Bryson’s discretion integral to that was an incorrect presumption of law, that is that there had been no resolution.

GAUDRON J:   That relates to 447A, does it not?

MR NEWLINDS:   Yes, but the discretionary factors that would go to 447A would be the same discretionary factors as would go to a 445G application, with the additional one, that it would be incumbent on the applicants, my clients, to demonstrate no injustice.  Now, I can tell your Honours that at no level in this case in its history has it ever been suggested that there would be any injustice to the respondent or anyone else if such an order was made.  I was saying to your Honours that it has never been adequately articulated precisely what commercial advantage that the respondent really perceives in setting aside this deed. 

The case has a very strange history.  The deed was lost for a period of time and when the case was commenced at first instance the respondent’s real case was it was never executed at all.  During the course of preparation for the hearing, the deed was found.  People were cross‑examined from the accountant’s office as to whether that was really the deed or something that had been concocted afterwards, but that was never pursued.  There is no injustice.

The answer to your Honour’s question, “Why should this Court bother?”, is firstly because it is an important point, as your Honours have noted.  Why this case should be the case that your Honours should bother about - - -

GAUDRON J:   No, I am concerned with determining matters of substantial compliance and injustice.

MR NEWLINDS:   Well, as I say, on injustice, there has never been any suggestion that there is any injustice, none at all.  So, we are driven back to substantial compliance.  Your Honour Justice Gaudron says perhaps the question is not framed the right way, that the real question is, “Is it a deed at all?”  With respect, I think they are different ways of coming at precisely the same problem.

GAUDRON J:   No. What I was suggesting was that your grounds (a), (b) and (c) at application book 169 really do not present the question of law that arises in relation to section 445G(3).

MR NEWLINDS:   And the real question of law is, “Can the section apply in circumstances where the deed was not executed at all?”

GAUDRON J:   Yes.

MR NEWLINDS:   I accept that.  If an amendment is necessary, well, I am obviously content to make an amendment to throw up that - - -

GAUDRON J:   Well, you may have to seek leave to make it.

MR NEWLINDS:   If your Honour pleases. But that is the precise question of law that it is intended to throw up and if we have not done that in the right way - can I deal with one matter in reply, and I will only do this if your Honours want me to. My learned friends says there are lots of other examples where things could be in a grey area and the word “substantial” has work to do, but if you look at Part 5.3A you actually cannot find any. Section 444A(4) is a series of things that the Act says must be in a deed. They include the name of the administrator; what is going to happen to the creditors, et cetera. Now, on a normal statutory construction, if those things are not in the deed, then it is not a deed for the purpose of the Act. It, therefore, would not have been entered into within the 21 days and we are back to the same problem.

So, the question of whether it is a deed and whether it has been executed within the 21 days are one and the same question and the saving provision must have been intended to save something.  It is very difficult to identify what it was meant to save if it was not meant to save deeds that were invalid, in other words, not deeds.  In my submission, it is an appropriate case.  It is a short point.  I accept the 447A point is a little bit more difficult.  There is a question of discretion there and there is, of course ‑ ‑ ‑

McHUGH J:   You have to accept your time is up.

MR NEWLINDS:   I do.

GAUDRON J:   Mr Newlinds, there will be a limited grant of special leave in this case. Leave will be granted confined to the question whether section 445G(3) of the Corporations Law has any application in a situation in which a deed has not been executed within the time required by the Law.  You may, of course, wish to frame that in some other way at an appropriate time but that is the essence of it.  That will mean that should you succeed on that point, other questions will need to be referred elsewhere for decision.

MR NEWLINDS:   If the Court pleases.

GAUDRON J:   The Court will now adjourn to reconstitute for the next matter.

AT 3.21 PM THE MATTER WAS CONCLUDED