FEDERAL COURT OF AUSTRALIA PRACTICE AND PROCEDURE – Judiciary Act 1903 (Cth)– whether Court under a duty not to proceed – whether notices should issue to Attorneys-General under s 78B – whether any cause pending in the Court arising under the Constitution or involving its interpretation. PRACTICE AND PROCEDURE – Federal Court of Australia Act 1976 (Cth) – whether an extension of time to apply for review of a decision of the Registrar should be allowed – whether application for review doomed to fail Corporations Law ss 596A, 597B, 597(9) Judiciary Act 1903 (Cth) ss 23(2)(a), 78B Federal Court of Australia Act 1976 (Cth) ss 20, 35A Monadelphous Engineering; ex parte McDonald and Watson (1989) 7 ACLC 220 Lombard Nash International v Berentson (1990) 3 ACSR 343 Excel Finance Corporation Ltd, Re; Worthley v Australian Securities Commission (1993) 10 ACSR 255 Gould v Brown (1998) 151 ALR 395 IN THE MATTER OF WHITE CONSTRUCTIONS (ACT) PTY LIMITED (IN LIQUIDATION) AUSTRALIAN COMPANY NUMBER: 008 511 046 MAXWELL WILLIAM PRENTICE Applicant NG 3100 of 1998 BRANSON J SYDNEY 11 AUGUST 1998 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY no. ng3100 of 1998 IN THE MATTER OF WHITE CONSTRUCTIONS (ACT) PTY LIMITED (IN LIQUIDATION) australian company number: 008 511 046 MAXWELL WILLIAM PRENTICE Applicant JUDGE(S): BRANSON J DATE OF ORDER: 11 august 1998 WHERE MADE: SYDNEY THE COURT ORDERS THAT: On the Notice of Motion marked "C" 1. The Notice of Motion be returnable instanter 2. An order extending the time for making the application referred to in paragraphs 1 and 2 of the Notice of Motion be refused 3. An order dispensing with compliance with O 52 r5(2) be refused 4. The persons and companies named in annexure "A" to the Notice of Motion pay the liquidator's cost of the Notice of Motion to include such costs incurred on 10 August 1998. 5. Liberty to apply at short notice. On the first Notice of Motion 1. The Notice of Motion be returnable instanter 2. The adjournment sought in paragraph 1 be refused. 3. On the undertaking of the liquidator by his counsel not to seek to inspect the documents produced to the Court in this matter by the partners of Coopers & Lybrand earlier than 10.15 am on 12 August 1998, an order affirming the decision of the Registrar to allow the liquidator to inspect such documents and an order lifting any stay made by the Registrar with regard to his decision. 4. A stay of the order made by the Registrar on 26 June 1998, and of the summons issued to Messrs Spinks, Duncan, Wells and White issued on or about 29 June 1998, be refused. 5. The persons and companies named in the annexure "A" to the Notice of Motion are to pay the liquidator's costs of the Notice of Motion, to include any such costs incurred on 10 August 1998. 6. Liberty to apply at short notice. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY No. NG 3100 of 1998 IN THE MATTER OF WHITE CONSTRUCTIONS (ACT) PTY LIMITED (IN LIQUIDATION) AUSTRALIAN COMPANY NUMBER: 008 511 046 MAXWELL WILLIAM PRENTICE Applicant JUDGE(S): BRANSON J DATE: 11 august 1998 PLACE: SYDNEY REASONS FOR DECISION (EX TEMPORE) I have before me two notices of motion issued in Action No NG 3100 of 1998 ("the proceeding"). I shall refer to the notice of motion which seeks an adjournment of the proceeding as "the first notice of motion" and that marked "C" annexed to the first notice of motion, but separately filed, or separately to be filed, as "the second notice of motion". The initiating process in the proceeding is an application under sections 596A and 596B of the Corporations Law made by the liquidator of White Constructions (ACT) Pty Ltd (in liquidation). White Constructions (ACT) Pty Ltd ("the company") is a company taken to be incorporated under the Corporations Law of the ACT. The date of the company's incorporation was 10 April 1974. On February 1998, this Court, by a Registrar, ordered that the company be wound-up in insolvency and that Maxwell William Prentice, the applicant in the proceeding, be appointed liquidator of the company. The making of the winding-up order by the Registrar was not opposed. It has not been suggested before me that the company is solvent. No action has been taken or foreshadowed to set aside the winding-up order of 6 February 1998. The order is a valid order of this Court. The proceeding was commenced on 2 June 1998 by the filing of an application under ss 596A and 596B of the Corporations Law. An amended application was filed in court on 26 1998. On 1 July 1998, this Court, by a Registrar, ordered that summonses be issued pursuant to s 596A of the Corporations Law to two persons, that summonses be issued pursuant to s 596B to five additional persons, and further that orders under s 597(9) be made against certain companies and partnerships. On 29 June 1998, summonses to attend for examination concerning the company were issued to the seven individuals named in the amended application. On 2 July 1998, fourteen orders were issued directing the production of documents relevant to matters to which the examinations, or one of them, relate or relates. On 30 July this year, a further ten orders for production were issued. I am informed that service on the parties to whom the summonses were directed was effected on dates between 7 and 13 July of this year. No challenge to the issue of the summonses and orders issued pursuant to ss 596A, 596B and s 597(9) respectively was made earlier than today. That the jurisdiction of this court to issue such summonses was to be challenged was first raised yesterday, 10 August 1998, the date fixed for the commencement of the examinations of the individuals to whom summonses had issued. The persons and companies named in schedule A to the first notice of motion, being the moving parties on the notice of motion ("the present applicants"), are persons who have received a summons issued pursuant to s 596B and companies ordered to produce documents pursuant to s 597(9) of the Corporations Law. They seek by the first notice of motion an order adjourning "proceedings in the cause" to enable notice to Attorneys-General to issue pursuant to s 78B of the Judiciary Act 1903 (Cth), and a reasonable time to elapse for consideration by the Attorneys-General of the questions of an intervention in the proceeding or removal of the cause to the High Court of Australia. The present applicants further seek an order that no documents produced by any person pursuant to the s 597(9) directions be inspected by any person. Additionally, they seek an order that the order made by the Registrar on 26 June 1998, and the summonses to Messrs Spinks, Duncan, Wells & White issued on 29 June 1998, be stayed until a determination of the second notice of motion before me and of any appeal therefrom or until further order. The second notice of motion, also taken out by the parties I have described as the present applicants, seeks an order for the review of the decision of the Registrar to make orders pursuant to s 597(9), an order for the review of the decision of the Registrar to issue the summons pursuant to ss 596A and 596B referred to above and an order extending the time for making application for review of the above decisions of the Registar. Alternatively, leave to appeal from the decision of the Registrar is sought, plus an extension of time within which to seek such leave. It is now conceded that the appropriate order, if any, is one for review of the decision of the Registrar and not for leave to appeal. The first notice of motion, which seeks an order that "proceedings in the cause be adjourned" to enable notices to issue to the Attorneys-General, does not identify the relevant cause. But the notice of motion has been brought in the proceeding, that is, in Action No NG 3100 of 1998. Section 78B of the Judiciary Act is drawn in terms of a cause "pending" in a Federal Court or any court of a State or a Territory. In my view, that which is pending in the proceeding (ie. in Action No NG 3100 of 1998) is the examination of certain persons, possibly the production of certain documents, and now an application for an extension of time to seek a review of decisions of the Registrar. I do not consider that the determinations of the Registrar to authorise the issue of summonses pursuant to ss 596A and 596B and directions pursuant to s 597(9) of the Corporations Law are to be regarded as part of a pending cause within the meaning of s 78B of the Judiciary Act. They have resulted in valid orders of the Federal Court which will remain valid unless and until set aside on an application for review. The order winding-up the company is also a valid order of the Federal Court in respect of which review has not been sought. In the circumstances I am not satisfied that s 78B of the Judiciary Act has any application to the notices of motion before me. That is, whatever the width of the word "cause", I am not satisfied that there is a cause pending in this Court which involves a matter arising under the Constitution or involving its interpretation. Nonetheless, I note the observations of Northrop J in Monadelphous Engineering; ex parte McDonald and Watson (1989) 7 ACLC 220 that an examination of the type now provided for by ss 596A and 596B of the Corporations Law are not in the nature of legal proceedings. I refer also to the decision of Bryson J in Lombard Nash International v Berentsen (1990) 3 ACSR 343 at 345-347 and the decision of O'Loughlin J in Excel Finance Corporation Ltd, Re; Worthley v Australian Securities Commission (1993) 10 ACSR 255 at 262-264. The application for an order adjourning the proceeding is refused. I turn then to the second notice of motion. The explanation for delay in seeking review of the decision of the Registrar is set out in the affidavit of Gregory William Lewis, a member of the firm of solicitors which acts for the present applicants. The explanation is that the point was only identified by counsel over the weekend. No evidence of when legal advice was first sought by the present applicants who, as I have already mentioned, were served with the summonses and directions, as the case may be, some weeks ago, is before me. The review of a decision of a Registrar is ordinarily a matter for a single judge of this Court, although the Chief Justice may direct that it be heard by a Full Court (s 20 of the Federal Court of Australia Act 1976 (Cth)). The only bases upon which it is suggested that the decision of the Registrar should be reviewed are those outlined in a draft s 78B notice which has been handed to me by Mr Rayment QC. The present applicants wish to urge this Court to accept and act on the views expressed by Gaudron J in her reasons for judgment in Gould v Brown (1998) 151 ALR 395. Although the approach adopted by her Honour in Gould v Brown was not expressly considered by the Full Federal Court in that case, or by the other members of the High Court on appeal from the Full Federal Court, I accept the submission of Mr Grieve QC, that the decision of the Full Court in Gould v Brown, now affirmed by operation of s23(2)(a) of the Judiciary Act, is necessarily inconsistent with the approach taken by Her Honour. Similarly, the views of those members of the High Court generally referred to as being in the statutory majority in Gould v Brown are, in my view, inconsistent with Her Honour's views. Whilst Gould v Brown may not be a binding authority in the High Court of Australia, the decision of the Full Federal Court affirmed by the statutory majority in the High Court is a binding authority in this Court. In my view, it will be futile to grant to the present applicants an extension of time within which to seek a review of the orders of the Registrar which they seek to have set aside. The constitutional issues which the present applicants wish to agitate can only sensibly be canvassed in the High Court of Australia. It may, in addition, be open to doubt that this proceeding is an appropriate vehicle in which to obtain a decision of the High Court on the constitutional issues, but that is not a matter upon which it is necessary for me to reach any concluded view. The application for an order extending the time within which to seek a review of the orders of the Registrar is refused. I certify that this and the preceding four (4) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Branson Associate: Dated: 11 August 1998 Counsel for the Liquidator: Mr Grieve QC Solicitor for the Liquidator: Holmes & Bevan Counsel for the Applicants on the Motion Mr Rayment QC Mr White Solicitor for the Applicants on the Motion Mallesons Stephen Jaques Date of Hearing: 11 August 1998 Date of Judgment: 11 August 1998