It is not every day that FCW Lawyers has a matter in the High Court of Australia. However, a recent win by Catherine Pulverman and her Dispute Resolution & Insolvency team in the High Court for a Liquidator highlights the importance of adherence to the time requirements for the determination of a winding up application. Creditors must keep in mind that a winding up application in respect of a company must be determined within 6 months after it is made (unless an extension of that period is granted under section 459R of the Corporations Act 2001 (Cth) (the Act)).
The application for special leave to the High Court sought to appeal a decision of the Victorian Court of Appeal. The issue for determination concerned the operation of section 459R of the Act and whether the slip rule in rule 36.07 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) can be used to retrospectively extend the time (after the time has already expired) for determination of a winding up application. Section 459R provides that a winding up application must be determined within 6 months after it is made. An extension to extend the time must be made within the period or as last extended and where special circumstances justify the extension. If the winding up application is not determined within the 6-month period, it is dismissed.
The facts were relatively simple. Our client was appointed Liquidator pursuant to a winding up order made in September 2020. The director sought leave to appeal out of time and 2 years after the winding up order was made (based on a bankruptcy case concerning the use of the slip rule being Hrycenko v Hrycenko). The director argued that a case from 1985, Elyard Corporation v DDB Needham, was wrongly decided and based on other cases in the bankruptcy jurisdiction, the slip rule cannot be used to extend the period under section 459R once that period had already expired.
The application for leave to appeal before Justice Hargrave in the Supreme Court of Victoria was dismissed and the director then lodged an application for leave to appeal in the Court of Appeal. In a unanimous decision by all 3 judges, the Court of Appeal granted leave to appeal but dismissed the appeal and found that the Associate Justice properly exercised his decision to correct his earlier order, by the use of the slip rule and including an extension of time, and he had power to subsequently make the winding up order.
Together with the petitioning creditor, the Liquidator successfully opposed the application for leave to appeal in the Supreme Court of Victoria and the appeal in the Court of Appeal.
The petitioning creditor opposed the application for special leave in the High Court and the Liquidator sought to be heard as amicus curiae which was granted and filed detailed written submissions on the issue. The application for special leave was refused by all 7 judges of the High Court “as it would not be in the interests of justice generally or in the particular circumstances of this case to grant special leave.”
Catherine undertook all preparation for the appeals and appeared as Counsel in all three applications for leave (although the High Court did not require appearances for oral submissions as the application was dealt with on the papers). The issue was a technical legal argument however, these applications for leave to appeal effectively stayed the liquidation pending the outcome of all appeals (whilst debts to creditors continued to accrue in the meantime).
(See Donchiod Pty Ltd v Merrion B Pty Ltd [2024] HCASL 183 in respect of an application for special leave to appeal from the Court of Appeal’s decision in Donchiod Pty Ltd (In Liq) v Merrion B Pty Ltd [2024] VSCA 44 and which arose from the application for leave to appeal in the decision in Merrion B Pty Ltd v Donchiod Pty Ltd (In Liq) [2023] VSC 111).
