FEDERAL COURT OF AUSTRALIA Yun v Shangri-La Holidays Pty Ltd [2001] FCA 507 CORPORATIONS – Winding up – whether Federal Court has jurisdiction to make order under Corporations Law s 480 COURTS AND JUDICIAL SYSTEM – Cross-vesting – State law vesting State jurisdiction in Federal Court –judgments of Federal Court deemed to be judgments of Equity Division of Supreme Court Corporations Law s 480 Federal Courts (State Jurisdiction) Act 1999 (NSW) ss 4, 6 Re Wakim; ex parte McNally and Another 198 CLR 511 followed ALBERT YUN v SHANGRI-LA HOLIDAYS PTY LTD (IN THE MATTER OF: SHANGRI-LA HOLIDAYS PTY LTD) NG 3530 OF 1995 EMMETT J 24 APRIL 2001 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG 3530 OF 1995 BETWEEN: ALBERT YUN APPLICANT AND: SHANGRI-LA HOLIDAYS PTY LIMITED RESPONDENT JUDGE: EMMETT J DATE OF ORDER: 24 APRIL 2001 WHERE MADE: SYDNEY THE COURT DECLARES THAT: 1. This Court has no jurisdiction to hear and determine any application under s 480 of the Corporations Law in relation to Shangri-La Holidays Pty Limited. 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 NG 3530 OF 1995 BETWEEN: ALBERT YUN APPLICANT AND: SHANGRI-LA HOLIDAYS PTY LIMITED RESPONDENT JUDGE: EMMETT J DATE: 24 APRIL 2001 PLACE: SYDNEY REASONS FOR JUDGMENT 1 On 20 September 1995 Albert Yun filed an application for an order that Shangri-La Holidays Pty Limited ("the Company"), be wound up. On 20 October 1995 a Registrar of the Court ordered that the Company be wound up under the provisions of the Corporations Law and that Sean Condon of Jones Condon & Co be appointed liquidator of the Company. 2 The winding up of the Company has apparently proceeded under the control of Mr Condon. The Court has, in the past, received applications for approval of remuneration under Order 71, Rule 52 of the Federal Court Rules. The winding up of the company is now complete and the liquidator wishes to have an order under s 480 of the Corporations Law. Section 480 provides as follows: "When the liquidator: (a) has realised all the property of the company or so much of that property as can in his or her opinion be realised without needlessly protracting the winding up, and has distributed a final dividend (if any) to the creditors and adjusted the rights of the contributors among themselves and made a final return (if any) to the contributories; or (b) … he or she may apply to the Court: (c) … or (d) for an order that he or she be released and that ASIC de-register the company." 3 It is now clear from the High Court's decision in Re Wakim; ex parte McNally and Another (1999) 198 CLR 511 ("Wakim") that this Court had no jurisdiction to make the orders that have hitherto been made. However, no application has been made to set aside those orders and they still stand as orders of the Federal Court of Australia, or a superior court. 4 The effect of s 6 of the Federal Courts (State Jurisdiction) Act 1999 (NSW) ("the Act") is that the rights and liabilities of all persons are by force of that Act declared to be and always to have been the same as if each "ineffective judgment" of the Federal Court of Australia had been a valid judgment of the Supreme Court of New South Wales in a division constituted by a judge of the Supreme Court. 5 The Act defines an ineffective judgment in s4(1) as follows: "(1) A reference in this Act to an ineffective judgment is a reference to a judgment of a federal court in a State matter given or recorded, before the commencement of this section, in the purported exercise of jurisdiction purporting to have been conferred on the federal court by a relevant State Act." The Federal Court in making the winding up order and other orders in this proceeding purports to exercise jurisdiction conferred by the Corporations Law as enacted by New South Wales. The orders are therefore ineffective judgments within the meaning of s 6. It seems to me, therefore, that it would be open to the liquidator to apply to the Supreme Court of New South Wales for an order under s 480 of the Corporations Law, on the basis that the orders of this Court are deemed to be judgments of the Equity Division of the Supreme Court. 6 However, the solicitor for the liquidator has indicated a concern as to whether the Supreme Court will entertain such an application and has therefore sought an order from this Court under s 480. No evidence has yet been filed since, as I am informed, it is expected that this Court will make a declaration that it does not have jurisdiction to entertain any application under s 480. 7 In light of the decision in Wakim, it appears to me to be the appropriate course in the circumstances. Accordingly, I shall declare that this Court has no jurisdiction to hear and determine any application under s 480 of the Corporations Law in relation to the Company. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett. Associate: Dated: 15 May 2001 Solicitor for the Applicant: Nash O'Neill Tomko Lawyers Date of Hearing: 24 April 2001 Date of Judgment: 24 April 2001