X Pty Ltd (Administrator Appointed) and Milstead & Anor
[2015] FamCAFC 50
•30 March 2015
FAMILY COURT OF AUSTRALIA
| X PTY LTD (ADMINISTRATOR APPOINTED) & MILSTEAD AND ANOR | [2015] FamCAFC 50 |
| FAMILY LAW – APPEAL – NOTICE OF APPEAL – Where the primary judge made property settlement orders as between the first respondent and the second respondent which affected the appellant – Where the appellant was placed into administration whilst judgment was reserved – Where the appellant submitted that the primary judge erred in making orders contrary to ss 440D, 556 and 437D(2) of the Corporations Act 2001 (Cth) – Where the appellant further submitted that the Federal Circuit Court of Australia lacked jurisdiction to make the orders pursuant to Pt 5.3A of the Corporations Act 2001 (Cth) – Whether the court delivering reasons for judgment and making orders is “proceeding with” a proceeding such that s 440D(1) of the Corporations Act 2001 (Cth) applies – Where there is merit in this ground of appeal – Where it is not necessary to address the other grounds of appeal – Appeal allowed – Remitted for rehearing – Notice of Cross-appeal filed by the second respondent and Application in an Appeal filed by the first respondent dismissed in default of submissions by either party to the contrary. FAMILY LAW – APPEAL – NOTICE OF APPEAL – COSTS – Where the appellant sought an order for costs against the first respondent – Where the appellant did not pursue an order that the proceedings be stayed but instead gave an undertaking to the court – Where it is not appropriate to make an order for costs – Where it is further not appropriate that costs certificates issue pursuant to the Federal Proceedings (Costs) Act 1981 (Cth). |
| Acts Interpretation Act 1901 (Cth) – s 15AA and s 15AB Corporations Act 2001 (Cth) – s 435A, s 437D(2), s 440D, s 444E, s 471B, s 556 and Division 6 of Part 5.3A Family Law Act 1975 (Cth) Federal Proceedings (Costs) Act 1981 (Cth) |
| Artahs Pty Ltd v Gall Stanfield & Smith (A Firm) [2013] 2 Qd R 202 | ||
| APPELLANT: | X Pty Ltd (Administrator Appointed) | |
| FIRST RESPONDENT: | Mr Milstead |
| SECOND RESPONDENT: | Ms Richards |
| FILE NUMBER: | LNC | 481 | of | 2010 |
| APPEAL NUMBER: | SOA | 20 | of | 2014 |
| DATE DELIVERED: | 30 March 2015 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Thackray, Strickland & Tree JJ |
| HEARING DATE: | 3 July 2014 |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 21 February 2014 |
| LOWER COURT MNC: | [2014] FCCA 13 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Settle |
| SOLICITOR FOR THE APPELLANT: | HDL Legal & Consulting Pty Ltd |
| COUNSEL FOR THE FIRST RESPONDENT: | Mr Gunson |
SOLICITOR FOR THE FIRST RESPONDENT: | Chris Boland Lawyers |
| THE SECOND RESPONDENT: | In person |
Orders
The appeal be allowed.
The orders made on 21 February 2014 be set aside.
The proceedings be remitted to the Federal Circuit Court of Australia to be reheard by Judge McGuire.
There be no order as to costs.
The applications for costs certificates pursuant to the provisions of the Federal Proceedings (Costs) Act 1981 (Cth) be dismissed.
In the event that within 21 days of the date of these orders neither the husband nor the wife seeks to make submissions otherwise, the Notice of Cross-appeal filed by the wife on 19 March 2014 and the Application in an Appeal filed by the husband on 30 June 2014 be dismissed as on and from 23 April 2015.
IT IS NOTED that publication of this judgment by this Court under the pseudonym
X Pty Ltd & Milstead and Anor has been approved by the Chief Justice pursuant to
s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT MELBOURNE |
Appeal Number: SOA 20 of 2014
File Number: LNC 481 of 2010
X Pty Ltd
(Administrator Appointed)
Appellant
And
| Mr Milstead |
First Respondent
And
| Ms Richards |
Second Respondent
REASONS FOR JUDGMENT
Introduction
By Notice of Appeal filed on 17 March 2014 Mr I (in his capacity as Voluntary Administrator of X Pty Ltd (Administrator Appointed)) (“X Pty Ltd”)) appeals all orders made by Judge McGuire of the Federal Circuit Court of Australia on
21 February 2014.
The appeal is opposed by Mr Milstead but is supported by Ms Richards. These parties were in a de facto relationship, however, for ease of reference in these reasons we will refer to them as the husband and the wife respectively.
In summary, the orders made by primary judge determined the property matters between the parties. The orders provided that $259,808 be paid jointly or severally by the wife and X Pty Ltd to the husband, and that if that payment is not made within 60 days, the real property owned by X Pty Ltd known as “Property M” be sold and the proceeds distributed in accordance with the terms of the cash payment. Further orders were made dealing with ancillary matters, not presently relevant to this appeal.
In this appeal, X Pty Ltd submits that all orders made by Judge McGuire were made contrary to ss 440D, 556 and 437D(2) of the Corporations Act 2001 (Cth) (“the Corporations Act”). Furthermore, X Pty Ltd submits that the Federal Circuit Court of Australia did not have jurisdiction to make orders concerning the administration of a company pursuant to Pt 5.3A of the Corporations Act.
On 19 March 2014 the wife filed a Notice of Cross-Appeal seeking to appeal two of the orders for property settlement made by the primary judge on
21 February 2014. It was common ground that this cross-appeal should await the determination of the appeal, and to that end on 23 April 2014 the appeal registrar delayed the filing of the appeal books for the cross-appeal until six weeks following the determination of the appeal.
On 30 June 2014 the husband filed an Application in an Appeal seeking an extension of time to file a Notice of Appeal against the orders made by the primary judge. That application is also awaiting the determination of this appeal.
Relevant Factual Background
X Pty Ltd is a trustee company in which the wife is alleged to hold a controlling interest, and at trial it was alleged that some of X Pty Ltd’s assets were used for her own benefit. X Pty Ltd is the trustee of the Mr B Trust (“the Trust”).
The Trust was established in 1997 by the wife’s late father, Mr B. Pursuant to a deed executed in 2003, the wife became the guardian and appointor of the Trust upon Mr B’s death in August 2011.
At trial the husband was 60 years of age, and was employed as a consultant.
The wife, who was 53 years of age at trial, suffers from Parkinson’s disease. She is currently in receipt of government benefits.
The parties met between September 1999 and January 2000, and separated on
5 March 2010.
There are no children of the relationship, however, both parties have children from previous relationships.
The wife lived in a country property known as “Property M” in Tasmania. The Trust purchased this property in about 1998 for $170,000, a home was constructed in 1999, and the parties lived there during their relationship. The wife asserted at trial that the property continues to operate as a farm, with little profitability.
The sole director of X Pty Ltd is Mr J, who, as the primary judge accepted, has a long standing relationship with the wife and her family.
In about 2005, X Pty Ltd and the husband established a partnership to operate a farming enterprise. There was no written partnership agreement, but a substantial part, if not all income earned by the husband, was paid into the accounts of this partnership.
At about the same time, X Pty Ltd and the husband purchased a farming property known as “Property R” in Tasmania. The Property M property was used as security for this purchase. The property was purchased as tenants in common as to 60 per cent to X Pty Ltd and 40 per cent to the husband, the partnership otherwise operating on a 50/50 basis.
Prior to entering the relationship with the wife, the husband sold various properties achieving proceeds of about $200,000. This was accepted by the primary judge as the wealth the husband brought into the relationship.
Property R was sold in mid-2011, with a shortfall of the amount to discharge the mortgage of $38,240.
The wife’s uncle by marriage, Mr R, who was 99 years old at trial, gave the wife around $3,000 per week when she visited him, and $1,000 per week when she did not visit him. The primary judge accepted these visits as voluntary and the money given as a gratuity, however his Honour opined that Centrelink may take a different view. These payments were made, either wholly or in part, through the accounts of X Pty Ltd, and separate payments were made to a former director Mr S. The primary judge accepted that Mr R has been generous to the wife and to X Pty Ltd.
Reasons for Judgment Delivered on 21 February 2014
A substantial part of the reasons of the primary judge concern the property division between the husband and the wife, and his Honour only briefly considered the question of orders being made that affect X Pty Ltd. The Notice of Appeal only asserts errors by the primary judge in relation to that topic, and thus we will limit our consideration of the reasons accordingly.
X Pty Ltd was not in administration at the time of the trial. The primary judge recorded (at [154]) that the evidence had closed on 16 August 2013, with final written submissions provided in October 2013. His Honour further recorded that Mr J had placed the company into voluntary administration in December 2013, whilst judgment was reserved.
His Honour went on to record that, in January 2014 the husband filed an interlocutory application seeking the following order:
That until further order the appointment of Mr [I], Registered Liquidator No. […] and partner in the firm […] as External Administrator be stayed.
His Honour described the circumstances of this application as follows (at [156]):
The application was supported by an affidavit from the applicant’s solicitor, Mr Boland. The administrator was then represented by separate Counsel and solicitors, or more properly, [X Pty Ltd] was now separately represented from [the wife]. Affidavit material was filed from the administrator, Mr [J] and [the wife]. The material advises that Mr [J] was anxious to ensure that [X Pty Ltd’s] debt situation did not result in it trading whilst insolvent. It seems that “Maggie Orman solicitor” who had represented [the wife] and [X Pty Ltd] prior to the commencement of the trial has obtained an assessment of costs against [them] claiming $156,466.62. Mr [J] also notified other liabilities of [X Pty Ltd] in the voluntary administration some of which are dealt with in my reasons above.
The documents filed are suggestive of some other minor liabilities of [X Pty Ltd] not disclosed at the trial and I can therefore only assume them to be accrued recently. I repeat however that the motivation for the voluntary administration seems to have been this significant liability to Maggie Orman, solicitor. I comment only to the references in my reasons above as to evidence from [[X Pty Ltd] and the wife] at the trial in respect of this situation and, in particular, the alleged purpose of the advancement of $200,000 from Mr [R].Relevantly, in relation to the issue of whether his Honour had jurisdiction to make the orders now the subject of the appeal, his Honour said this at [157]:
Issues of my jurisdiction to make the orders sought by the applicant were raised on 17 January with the result being that an undertaking was received from the administrator not to dispose of or encumber the assets of [X Pty Ltd]/the trust. No other application to re-open the proceedings was otherwise before me. I do note however that the administrator has particular duties and obligations in respect of essentially the same assets and liabilities dealt with in this litigation. It seems that the administrator also has further and separate liabilities to consider. In those circumstances there will be an order giving leave for the administrator of [X Pty Ltd] as delegated trustee of the [Trust] to apply in respect of the implementation of my orders.
Grounds of Appeal
X Pty Ltd advances the following grounds of appeal in the Notice of Appeal filed 17 March 2014:
1.The First Respondent to the appeal, being the Applicant in the proceeding before his Honour Judge McGuire, did not seek the leave of the Family Court of Australia or the Federal Court of Australia to proceed with the proceeding against the Appellant company during the administration of the company contrary to section 440D of the Corporations Act 2001.
2.The Federal Circuit Court of Australia did not have jurisdiction to make Orders concerning or affecting the administration of the Appellant company’s administration under Part 5.3A of the Corporations Act 2001.
3.The Orders against the Company give the First Respondent a priority over other unsecured creditors contrary to section 556 of the Corporations Act 2001.
4.The Orders concerning the property of the Appellant company are contrary to section 437D(2) of the Corporations Act 2001.
In his oral submissions counsel for X Pty Ltd sought to “rest” on Ground 1, saying that the other grounds fall away if that ground is successful.
Orders Sought
X Pty Ltd seeks the following orders on appeal:
1. That the appeal be allowed.
2.That leave be granted for the proceeding be [sic] proceeded with under section 440D of the Corporations Act 2001 (subject to the following orders).
3.That the amount the Appellant is ordered to pay the First Respondent, the amount be an unsecured debt.
4. There be no order in relation to any of the Appellant’s property.
Relevant Statutory Framework
In asserting that the orders made by the primary judge concerning X Pty Ltd were made in error, X Pty Ltd relies primarily on s 440D of the Corporations Act, which provides as follows:
440D Stay of proceedings
(1)During the administration of a company, a proceeding in a court against the company or in relation to any of its property cannot be begun or proceeded with, except:
(a)with the administrator’s written consent; or
(b)with the leave of the Court and in accordance with such terms (if any) as the Court imposes.
…
To the extent that s 440D(1)(b) above refers to “the Court”, s 58AA of the Corporations Act provides that the Family Court of Australia may be such a Court.
X Pty Ltd also relies on ss 556 and 437D(2) of the Corporations Act in asserting that the orders made by his Honour were made in error. Relevantly, s 437D(2) of the Corporations Act provides as follows:
437D Only administrator can deal with company’s property
(1) This section applies where:
(a) a company under administration purports to enter into; or
(b)a person purports to enter into, on behalf of a company under administration;
a transaction or dealing affecting property of the company.
(2) The transaction or dealing is void unless:
(a) the administrator entered into it on the company’s behalf; or
(b)the administrator consented to it in writing before it was entered into; or
(c) it was entered into under an order of the Court. …
Section 556 of the Corporations Act provides that when a company is wound up, certain payments, including those of external administration, and certain debts are paid in priority over any other unsecured debt. The section provides for the order of payments for such debts.
Discussion
Ground 1
The primary issue here is whether the proceedings before his Honour were “proceeded with” within the meaning of s 440D of the Corporations Act after
X Pty Ltd was placed in voluntary administration. There is of course no doubt that if that is the case, neither the consent of the administrator nor the leave of a court as required by the section was obtained, and his Honour erred in delivering his reasons and making orders.
The timing and the stage of the proceedings are relevant considerations here. In other words, the evidence had closed, final submissions had been made, and judgment was reserved when the administration commenced. All that happened thereafter was his Honour delivered his reasons for judgment and made the orders, and the question becomes whether that can be described as the proceedings being “proceeded with”.
X Pty Ltd argues that the reasons for the enactment of s 440D, and indeed for that part of the Corporations Act where the section resides (Division 6 of Part 5.3A) support the case that the section applies even though all that is left in a proceeding is the making of orders and the delivery of the reasons for judgment. Division 6 concerns the “protection of a company’s property during administration”, and s 440D operates to allow administrators to continue with their central tasks uninhibited. The orders made by his Honour provide for property of the company to go to the husband, and place the husband in a position of having priority over other unsecured creditors; they also clearly interfere with and hinder the administrator in carrying out his tasks.
We find this argument persuasive, but the answer still lies in the interpretation of s 440D. To that end, we turn to consider the relevant legislation and authorities that bear upon this issue.
The relevant principles applicable to statutory interpretation in Australia are well settled. In Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [78] McHugh, Gummow, Kirby and Hayne JJ discussed the legal meaning of a statute as follows (footnote omitted):
Ordinarily … the legal meaning … will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning.
Indeed in Commonwealth legislation, the interpretation of a provision of an Act that would best achieve the purpose or object of the Act is to be preferred to each other interpretation: Acts Interpretation Act 1901 (Cth) s 15AA. The object of Part 5.3A is expressly articulated in s 435A as follows:
The object of this Part is to provide for the business, property and affairs of an insolvent company to be administered in a way that:
(a)maximises the chances of the company, or as much as possible of its business, continuing in existence; or
(b)if it is not possible for the company or its business to continue in existence – results in a better return for the company’s creditors and members than would result from an immediate winding up of the company.
Ascertaining the meaning of s 440D is informed by retracing some relevant legislative history. Section 440D was carried forward into the Corporations Act unaltered from the identically numbered provision in the predecessor Corporations Law (accepting that it was but part of a complex raft of interrelated State and Commonwealth legislation). Section 440D of the Corporations Law was inserted by s 56 of the Corporate Law Reform Act 1992 (Cth). That Act introduced a number of substantial reforms to Australian corporations law, consequent upon the so-called Harmer Report. Amongst those reforms was the introduction of a number of new concepts into that law, including voluntary administration.
The predecessor to s 440D in the Corporations Law was s 444. Relevantly it provided:
444(1)Where a company is under official management, no action or other civil proceeding against the company in a court of this jurisdiction shall, except with the leave of the Court and in accordance with such terms and conditions (if any) as the Court imposes, be begun or carried on until the company ceases to be under official management.
…
The explanatory memorandum to the Bill which led to the 1992 amendments (to which recourse may be had pursuant to s 15AB of the Acts Interpretation Act) relevantly provides as follows at paragraph 521:
The purpose of the moratorium which commences when an administrator is appointed will be to protect the company from all civil actions, so that the administrator can formulate a rational plan for future action. Proposed subsection 440D(1) will advance this purpose by providing that a proceeding in a Court against the company or in relation to any of its property cannot be begun or proceeded with except with the approval of either the administrator or the Court.
It can therefore be seen that the purpose for the initial enactment of what is now s 440D of the Corporations Act was to, so far as possible, and insofar as the company was not the moving party, freeze the financial circumstances of the company in question, to permit the administrator to devise a plan of action for the future of the company in conformity with the statutory objects of s 435A. The legislature did so by prohibiting proceedings or enforcement being commenced, and by statutorily staying any extant proceedings or enforcement process. Given that purpose, it would be anomalous if s 440D permitted the adjudication upon extant proceedings, either against the company or in relation to its property, to nonetheless conclude by judgment during the moratorium period. That is because a judgment may create rights and liabilities which otherwise do not exist either at law or in equity, or adjust rights. The judgment in question is a good example of that, in that it created a liability on the part of X Pty Ltd which did not exist prior to judgment, and further required Property M to be sold to satisfy the debt just created if it was not paid within 60 days.
Turning to the authorities, the husband relies primarily on the decision of Judge Taylor of the District Court of New South Wales in Unilever Australia Limited v Rosella Pty Limited (2012) 15 DCLR (NSW) 185 where his Honour found that he was not prevented by s 440D from “giving judgment” (at 202).
Judge Taylor considered that the remarks of Barrett J in Arpic Pty Ltd v Austin Australia Pty Ltd (2004) 49 ACSR 71 at 76-77 meant that the prohibition in
s 440D is only imposed on “a person”. Then, relying on the decision of the Full Court of the Federal Court of Australia in Kizon v Palmer (1997) 72 FCR 409 that a court is not a person, his Honour found that this “supports the conclusion that action by the court alone, not involving the parties, is not within the ambit of [s 440D]” (at 201).
However, as was pointed out by counsel for X Pty Ltd, Barrett J was not suggesting that s 440D only applies to a person. What his Honour in fact said was this (at 76-77):
The Corporations Act employs several different verbal formulations to convey messages generally equivalent with that in s 440D. While that section says that a relevant proceeding “cannot be begun or proceeded with”, ss 444E(3) and 471B prefer to impose a disability on a “person” (a person ‘cannot begin or proceed with … a proceeding’) while the words in s 500(2) are “no … proceeding shall be proceeded with or commenced”. So far as these operative words are concerned, I do not think there is any difference in meaning between the several provisions. There is, in each case a prohibition that precludes any step properly characterised as commencing (or beginning) or “proceeding with” a “proceeding” of the relevant kind. In the case of s 440D as it applies to the present circumstances, the prohibition is upon any step properly regarded as “proceeding with” the “proceedings” commenced by the summons filed on 18 December 2003, they being “proceedings in a court against the company or in relation to any of its property”.
Barrett J then considered that there is no difference in meaning between the various provisions, and because ss 444E and 471B indicate that the disability is imposed upon a “person”, that is also the position in relation to s 440D.
However, Barrett J made his comments in the context of whether leave is required under s 440D for an application for summary judgment; his Honour did not specifically consider s 440D in the context of a court delivering a reserved judgment. Thus, it is clearly arguable that Judge Taylor was incorrect in his analysis of the comments by Barrett J, and we do not consider that they provide a basis to find that s 440D only applies to a person and not to a court. Accordingly, we do not accept that Judge Taylor’s decision in Unilever Australia Limited is authority for the proposition it is cited for.
The husband also relied on a decision of Lansdowne AsJ of the Supreme Court of Victoria in Sovereign MF Limited v Compliance and Risk Services Pty Ltd and Anor [2013] VSC 213. There, shortly before delivery of judgment the plaintiff company went into administration. The plaintiff submitted that, as a result of the administration, judgment could not be delivered, relying on
s 440D. Her Honour rejected this argument, finding that judgment could be delivered. Her Honour drew a distinction between a step taken by a court as opposed to a step taken by a party, however her Honour provided no reasons for this to be a relevant distinction in relation to s 440D and also referred to no authority. Thus, we do not consider that this decision necessarily assists the husband.
Another authority relied on by the husband, MG Corrosion Consultants Pty Ltd v Gilmour (2012) 202 FCR 354 stands for the proposition that there must exist a degree of “substantial or real” connection between the proceedings and the company’s property for s 440D to apply. However, it is beyond doubt that the orders made by the primary judge substantially affect the property held by
X Pty Ltd, and this condition is satisfied.
Finally, the husband also sought to draw analogies from cases where at least one of the issues was what constituted a “step in a proceeding”. For example, he relied on authorities such as Argo Pty Ltd v State of Tasmania (2004)
13 Tas R 69, Coad v Dimmick [2013] TASSC 48, and Artahs Pty Ltd v Gall Stanfield & Smith (A Firm) [2013] 2 Qd R 202. None of these cases specifically considered s 440D, but they all can be taken to have determined that to proceed with the proceeding involves a step taken under rules of court, or sufficiently connected to, or in contemplation of those rules. Thus, it is argued by the husband that the delivery of judgment by a court cannot be characterised as a step in the proceeding.
We do not accept though that the reasoning in these cases can be extended in this way. Indeed, in the decision of the Supreme Court of New South Wales of Blake v Norris (1990) 20 NSWLR 300 at 306 Smart J referred to a number of dictionaries in considering the meaning of the word “proceeding” in s 5 of the Jurisdiction of Court (Cross-Vesting) Act 1987 (NSW). His Honour said this:
…It is apparent from the meaning given in the Oxford Dictionary that “proceedings” can mean either the action itself or a step taken in such an action.
In Stroud’s Judicial Dictionary, 5th ed, vol 4 at 2029-2035, some fifty-five instances are given of the use of the words “proceeding” or “proceedings” in legislation, rules of court or documents having legal significance.
The meaning depends on the context in which the word is used. In some cases it is equivalent to “an action” whereas in others it may mean a step in an action. Sometimes it may include a counter-claim. The Oxford Companion To Law (1980) by Professor Walker states (at 1002-1003) that “proceedings” is sometimes used as including, or meaning, an action or prosecution and sometimes as meaning a step in an action. The word “proceeding” is capable of such a variety of meaning that dictionary definitions as to its ordinary or natural meaning are not of much use. They tend to highlight the number of meanings which the word can bear.(Original emphasis)
Smart J then concluded that any assistance as to the meaning of the word “proceeding” has to be derived from the statutory context and the objects of the legislation in question. We observe that that is the case here and we refer to [34] and [41] above. Particularly we are satisfied that the scheme established by Division 6 of Part 5.3A is (subject to the statutory exceptions) to preclude the institution of new proceedings, and impose a moratorium upon all extant litigation, to which the company is a respondent, or which relates to its property, and hence “proceedings” extends to the adjudication upon that litigation, such that the delivery of judgment would see that litigation “proceeded with”.
Accordingly, this ground of appeal must succeed.
Grounds 2, 3 and 4
As submitted by counsel for X Pty Ltd, given that Ground 1 has merit, these grounds “fall away”.
Although the High Court in Kuru v New South Wales (2008) 236 CLR 1 at 6 tells us in effect that even where one ground of appeal succeeds an intermediate court of appeal should still address the other grounds of appeal, we do not consider that to be necessary here, given that in effect, Grounds 2, 3 and 4 were not pressed.
Conclusion
Having found merit in Ground 1, the appeal must be allowed. The question then is what result should follow.
We have found that his Honour should not have proceeded to deliver judgment and make orders. Thus those orders need to be set aside, and the proceedings remitted to the Federal Circuit Court of Australia for rehearing by his Honour. Of course, what his Honour then does with the proceedings will depend on the stage of the administration of X Pty Ltd. His Honour though would not be able to continue with the proceedings insofar as they affect X Pty Ltd or its property unless s 440D is complied with.
In relation to the cross-appeal, given that we will be setting aside all orders made by his Honour, that appeal will lack utility, and will need to be dismissed. Likewise, the Application in an Appeal cannot proceed and must be dismissed. Although neither that cross-appeal nor that Application in an Appeal were formally listed before this Court, we consider that it is appropriate to make the orders dismissing them now. However, we propose to allow the husband and the wife 21 days to determine whether either of them seeks to make submissions opposing the order that we propose, and to put in place a self-executing order.
Costs
At the conclusion of the hearing of the appeal we sought submissions from the parties as to the question of costs depending upon the result.
In the event that the appeal was successful, X Pty Ltd sought an order for costs against the husband on the basis that s 440D was brought to the notice of the husband at least at the hearing on 17 January 2014 of the application filed by
X Pty Ltd on 9 January 2014. The husband opposed any order for costs given that at the hearing on 17 January 2014 X Pty Ltd did not pursue an order that the proceedings be stayed, but instead gave the undertaking referred to above at [24]. In other words, it is argued that the appeal would have been unnecessary if a stay had been pursued by X Pty Ltd.
We are attracted to the argument of the husband and we do not consider it appropriate to make an order for costs in favour of X Pty Ltd, despite the success of the appeal. In the event that no order for costs was made, each of the parties sought costs certificates pursuant to the provisions of the Federal Proceedings (Costs) Act 1981 (Cth). However, for the same reasons as to why there should be no order for costs, we do not consider it appropriate for such certificates to issue and we propose to dismiss the applications for the same.
I certify that the preceding fifty-nine (59) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court, Thackray, Strickland and Tree JJ (delivered on 30 March 2015).
Associate:
Date: 30 March 2015
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