Reported Decision : 50 ACSR 668 New South Wales Court of Appeal CITATION : Aroona Developments Pty Limited (In Liq) v Killen [2004] NSWCA 363 HEARING DATE(S) : On the papers JUDGMENT DATE : 6 October 2004 JUDGMENT OF : Ipp JA at 1 DECISION : Application to strike out the appeals dismissed with costs. CATCHWORDS : Application to strike out appeals under s 1321 Corporations Act 2001 (Cth) - whether statutory financial limitations threshold under s 101(2)(r) Supreme Court Act 1970 be determined by amount in judgment (in proceedings involving liquidation) or determined by amount the party can or does pay against such a judgment - Held: Whether statutory threshold of s 101(2)(r) is met is determined by amount on judgment, not amount paid or able to be paid: Oertel v Crocker 75 CLR 261 - Moller v Roy 132 CLR 622 - leave under s 471B Corporations Act 2001 (Cth) not required, leave granted nunc pro tunc: Re Gordon Grant & Grant Pty Ltd (1982) 1 ACLC 196. D Corporations Act 2001 (Cth), ss 132(1), 471B LEGISLATION CITED : Judiciary Act 1903 (NSW), s 35(1)(a)(2) Supreme Court Act 1970, s 101(2)(r) Supreme Court Rules, Pt 51, r 8 Moller v Roy (1975) 132 CLR 622 CASES CITED : Oertel v Crocker (1947) 75 CLR 261 Re Gordon Grant & Grant Pty Limited (1982) 1 ACLC 196 PARTIES : Aroona Developments Pty Limited (In Liquidation) (Claimant) Rosanne Lyle Fulton Killen (Opponent) FILE NUMBER(S) : CA 40044/04; 40054/04 COUNSEL : SOLICITORS : Watson Mangioni (Claimant) McKell's (Opponent) LOWER COURT Supreme Court JURISDICTION : LOWER COURT ED 4112/02; ED 1810/02 FILE NUMBER(S) : LOWER COURT Austin J JUDICIAL OFFICER : IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40044/04 ED 4112/02 CA 40054/04 ED 1810/02 IPP JA Wednesday, 6 October 2004 AROONA DEVELOPMENTS PTY LIMITED (IN LIQUIDATION) v ROSANNE LYLE FULTON KILLEN Judgment 1 IPP JA: On 8 December 2003 Austin J delivered judgment in respect of two sets of proceedings before him. The claimant, Aroona Developments Pty Limited (In Liquidation) ("Aroona"), was the plaintiff in one set of proceedings. The opponent, Mrs Rosanne Killen, was the plaintiff in the other. 2 Both sets of proceedings were appeals under s 1321 of the Corporations Act (Cth) 2001. The appeals were against decisions by Mr Rennie, the liquidator of Rotor-Work Pty Limited ("Rotor-Work"), whereby Mr Rennie had rejected proofs of debt lodged by Aroona and Mrs Killen. 3 Mrs Killen was a party to the appeal brought by Aroona and Aroona was a party to the appeal brought by Mrs Killen. The liquidator submitted to the orders of the Court, except with respect to costs. Austin J ordered that the two appeals be heard together, and that the evidence in one be evidence in the other. 4 The proofs of debt of Aroona and Mrs Killen related to the same facts and transactions and the hearing before Austin J proceeded on the basis that both Aroona and Mrs Killen claimed the sum of $616,041. 5 The proof of debt of Aroona described the debt as "loan funds". Mrs Killen's proof of debt described the amount claimed as "monies beneficially owned by me, loaned by my trustee, Aroona Developments Pty Limited, to Rotor-Work Pty Limited". 6 Before Austin J, Aroona sought an order that its proof of debt in the amount of $616,041 be admitted in the liquidation of Rotor-Work. This was opposed by Mrs Killen who, in the alternative, sought a declaration that any monies received by Aroona, pursuant to the admission of its proof of debt, were to be held in trust for her. Mrs Killen, in her appeal before Austin J, sought an order admitting her proof of debt in the amount of $616,041. 7 Austin J dismissed Mrs Killen's appeal but upheld that of Aroona. His Honour ordered that Aroona be entitled to prove as an unsecured creditor in the winding up of Rotor-Work in the sum of $616,041. He made no declaration in the terms sought by Mrs Killen. 8 Mrs Killen's amended notice of appeal relating to the proceedings brought by Aroona before Austin J seeks an order setting aside his Honour's orders, including that Aroona's proof of debt be admitted, and "[i]n lieu thereof an order dismissing [Aroona's] appeal". 9 Mrs Killen's amended notice of appeal relating to the other proceedings seeks an order setting aside the orders made by Austin J and, in lieu thereof, an order that she be entitled to prove a claim in the liquidation of Rotor-Work in the sum of $616,041.50. 10 By amended notices of motion filed on 27 September 2004 Aroona seeks orders striking out as incompetent Mrs Killen's appeals against the orders made by Austin J. The parties agreed that the motions be determined on the papers by a judge of this Court in chambers. To this end, the parties filed written submissions. 11 Aroona submits that leave to appeal is required under s101(2)(r) of the Supreme Court Act 1970. Alternatively, Aroona submits that leave is required under s 471B of the Corporations Act 2001. Mrs Killen has not sought leave. 12 I turn firstly to the submissions based on s 101(2)(r) of the Supreme Court Act. 13 Section 101(2)(r) provides: "(2) An appeal shall not lie to the Court of Appeal, except by leave of the Court of Appeal, from – … (r) a final judgment or order in proceedings of the Court, other than an appeal: (i) that involves a matter at issue amounting to or of the value of $100,000 or more, or (ii) that involves (directly or indirectly) any claim, demand or question to or respecting any property or civil right amounting to or of the value of $100,000 or more." 14 Aroona argues that the appeals should be struck out because Mrs Killen "has not filed within the time limited for instituting the appeal[s], or served in that time, an affidavit stating the facts which show that the restriction does not apply in the manner required by Pt 51 r 8 of the Supreme Court Rules". Part 51 r 8 provides: "Where an appeal to the Court of Appeal is restricted by reference in any Act to a specified amount or value, the appellant shall, within the time limited for instituting the appeal, file and serve on each necessary party an affidavit stating facts which show that the restriction does not apply." 15 Mrs Killen contends that the orders made by Austin J involve "a matter at issue amounting to … $100,000 or more" and, hence, the restrictions contained in s 101(2)(r) do not apply to her appeals. 16 In Oertel v Crocker (1947) 75 CLR 261 the High Court was concerned with s 35(1)(a)(2) of the Judiciary Act (NSW) 1903 (which was not, relevantly, substantially dissimilar from s 101(2)(r)). The relevant provisions of s 35 were as follows: "35(1) The appellate jurisdiction of the High Court … shall extend to the following judgments … : (a) Every judgment, whether final or interlocutory, which - (1) is given or pronounced for or in respect of any sum or matter at issue amounting to or of the value of £300; or (2) involves directly or indirectly any claim, demand, or question, to or respecting any property or any civil right amounting to or of the value of £300". 17 Latham CJ said at 265: "Actions for debt or damages are plainly covered by subsection (1). In the case of a claim for a debt of, say, £500, or for £500 damages for breach of contract or tort it is plain that there is a sum or matter at issue. Judgment for the plaintiff for £300 or any greater amount is appealable as of right by the defendant. Judgment for the plaintiff for a smaller amount would not be so appealable. Judgment for the defendant would be appealable as of right by the plaintiff. A judgment for the plaintiff for only £100 upon a claim for £500 would also be appealable by the plaintiff. Where a judgment is given for the recovery of land or for delivery up of a chattel where the land or the chattel is worth more than £300, judgment is not given or pronounced in respect of any particular sum, but it is given or pronounced in respect of a matter at issue amounting to the required value." 18 The Chief Justice in the passage quoted drew a clear distinction between a sum or matter at issue amounting to £300 and a sum or matter at issue of the value of £300. Later, also at 265, his Honour emphasised this distinction when saying: "In many cases, however, there is no sum or matter in issue and yet something of the value of £300 may be involved directly or indirectly in the judgment. Sub-paragraph (2) of paragraph (a) of s 35(1) represents an endeavour to deal with these other cases. The judgment may be a judgment for an injunction, for specific performance of a contract, for administration of a trust, for a declaration of right, or for the issue of a prerogative writ. In these cases the judgment is not given for a sum or matter at issue between the parties. But nevertheless the issue between the parties – described as a claim, statement or question – may be capable of an estimate of value. It is the judgment which must involve a claim, demand or question of a particular character." 19 The same point was made by Barwick CJ in Moller v Roy (1975) 132 CLR 622 when dealing with legislation being the Northern Territory equivalent to s 101(2)(r). His Honour said (at 626): "It would seem that, where there is judgment for a sum, it will be the amount of that judgment rather than the matter at issue in the action in which that judgment is given or pronounced, which will determine the right of appeal." The Chief Justice observed later (also at 626): "Where the appellate formula contains the expressions 'matter in dispute' and 'sum or value appealed for' the right to appeal is determined by the extent of the prejudice which the judgment, against which the appeal is brought, produced to the parties seeking to relieve himself of it. The extent of that prejudice will govern the right of appeal. But where it is the amount of the judgment which defines the jurisdiction to hear the appeal, as is the case with paragraph (a), there is, in my opinion, no room for valuing the appeal or determining the extent of the prejudice produced by the judgment in order to determine whether the appeal is competent." 20 In the present case, Aroona has drawn attention to evidence to the effect that a creditor of Rotor-Work in the sum of $600,000 is likely to receive a dividend in an amount substantially below $100,000. 21 But, in my view, that is not to the point. In my view, the judgment of Austin J is a final judgment that involves a matter at issue amounting to "$100,000 or more". The fact that that judgment may produce less, in terms of monetary value to the successful party, is irrelevant. In the same way, for example, a judgment of $100,000 against an impecunious defendant does not give rise to the need, on the part of such a defendant, to obtain leave to appeal against the judgment merely because the plaintiff, on execution, would be likely to receive less than $100,000. 22 I reiterate that, by Austin J's judgment, Aroona became entitled to have its proof of debt admitted and Mrs Killen's claim to an order admitting her proof of debt was dismissed. Each proof of debt involved a claim for a debt due from Rotor-Work of $616,041. The notices of appeal seek to reverse the effect of the judgment. In the circumstances, the "matter at issue" involves $616,041. 23 In my view, in substance, Austin J gave judgment, in each proceeding, in the sum of $616,041.14. In the one proceeding, he allowed Aroona's claim in that amount against Rotor-Work, and in the other he dismissed Mrs Killen's claim against Rotor-Work in the same amount. 24 To paraphrase Barwick CJ in Moller v Roy, when a judgment is given in a specific amount, it is the amount of the judgment that determines the right of appeal. Where the amount of the judgment exceeds $100,000 the "value" of the "matter at issue" is irrelevant to competence of the appeal. 25 In my view, therefore, the s 101(2)(r) argument raised by Aroona fails. 26 Mrs Killen submits that leave under s 471B of the Corporations Act is not required in this appeal. This is not an issue that I propose to resolve. It is sufficient to say that, in my view, the failure to obtain leave at this stage does not justify the striking out of the appeal as the Court of Appeal would be entitled to grant leave nunc pro tunc Re Gordon Grant & Grant Pty Limited (1982) 1 ACLC 196. 27 I would dismiss the application to strike out the appeals with costs. ********** Last Modified: 10/07/2004 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.