Senne & Allan and Ors (Extension of time) [2010] FamCAFC 217; (29 October 2010)

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Senne & Allan and Ors (Extension of time) [2010] FamCAFC 217 (29 October 2010)

Last Updated: 10 November 2010

FAMILY COURT OF AUSTRALIA

SENNE & ALLAN & ORS (EXTENSION OF TIME)

[2010] FamCAFC 217

FAMILY LAW - APPLICATION TO EXTEND TIME FOR LEAVE TO APPEAL – Where the applicant sought an extension of time to file an application for leave to appeal – Where proposed grounds of appeal are arguable – Where there is a satisfactory explanation for delay – Where there is no real prejudice if time extended – Extension of time granted. FAMILY LAW - COSTS – Where applicant caused additional expense to be incurred by the wife and receivers – Where the Court grants indulgence to the applicant – Where the circumstances justified a departure from s 117(1) of the Family Law Act 1975 (Cth) – Applicant to pay the wife and receivers’ costs of and incidental to the application.

Corporations Act 2001 (Cth), s 1337C Family Law Act 1975 (Cth), ss 79, 94, 114, 117(1) Family Court Rules, Chapter 22

Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 Bass v Permanent Trustee Co Ltd [1999] HCA 9; (1999) 198 CLR 334 Gallo v Dawson [1990] HCA 30; (1990) 93 ALR 479 Kennon v Spry [2008] HCA 56; (2008) 238 CLR 366; (2008) 251 ALR 257 Kowalski v MMAL Staff Superannuation Fund Pty Ltd [2009] FCAFC 117; (2009) 259 ALR 319 McMahon & McMahon [1976] FamCA 22; (1976) FLC 90-038 Sharman License Holdings Ltd & Anor v Universal Music Australia Pty Ltd & Ors [2005] FCA 802 SGY & Anor & Company Z (In Liquidation) [2008] FamCAFC 92 Tormsen & Tormsen (1993) FLC 92-392

APPELLANT:

Mr Senne

1ST RESPONDENT:

Mrs Allan

2ND RESPONDENT:

Mr Allan

3RD RESPONDENT:

W Nominees No 2 Pty Ltd

4TH RESPONDENT:

Ms C Allan

5TH RESPONDENT:

Mr L Allan

6TH RESPONDENT:

Ms H Allan

7TH RESPONDENT:

Ms E Allan

8TH RESPONDENT:

Mr D and CP

FILE NUMBER:

SYC

3842

of

2008

APPEAL NUMBER:

EA

87

of

2010

DATE DELIVERED:

29 October 2010

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Boland J

HEARING DATE:

24 August 2010, 12 October 2010

LOWER COURT JURISDICTION:

Family Court of Australia

LOWER COURT JUDGMENT DATE:

17 June 2010

LOWER COURT MNC:

[2010] FamCA 479

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Burbidge QC Mr O’Brien

SOLICITOR FOR THE APPLICANT:

Delaney Lawyers

SOLICITOR FOR THE 1ST RESPONDENT:

Paul & Paul Lawyers

SOLICITOR FOR THE 2ND RESPONDENT:

John de Metre & Co

SOLICITOR FOR THE 3RD TO 7TH RESPONDENTS:

Horowitz Bilinsky

COUNSEL FOR THE 8TH RESPONDENT:

Mr Roberts

SOLICITOR FOR THE 8TH RESPONDENT:

Kelly & Co Lawyers

ORDERS

(1) The time in which the trustee may file an application for leave to appeal, and if leave is granted, to appeal against Order 5 of the orders made by the Honourable Justice Watts on 17 June 2010 is extended to 5 November 2010.
(2) The trustee of the AM Trust, Mr Senne, pay the costs of and incidental to this application of the wife and the receivers of W Nominees No. 2 Pty Ltd, Mr D and CP, as agreed and failing agreement, as assessed under Chapter 19 of the Family Law Rules, 2004.

IT IS NOTED that publication of this judgment under the pseudonym Senne & Allan and Ors (Extension of time) is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

IN THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY

Appeal Number: EA 87 of 2010
File Number: SYC 3842 of 2008

Mr Senne

Applicant

And

Mrs Allan

1st Respondent

And

Mr Allan

2nd Respondent

And

W Nominees No 2 Pty Ltd

3rd Respondent

And

Ms C Allan

4th Respondent

And

Mr D Allan

5th Respondent

And

Ms H Allan

6th Respondent

And

Ms E Allan

7th Respondent

And

Mr D and CP

8th Respondent

REASONS FOR JUDGMENT

INTRODUCTION

1. These reasons are in respect of an application in an appeal filed by Mr Senne on 20 July 2010. Mr Senne is the trustee of the AM Trust (“the trust”). For convenience I will refer to Mr Senne as “the trustee”. The trustee’s application is for an extension of time in which to file an application for leave to appeal, and if leave is granted, to appeal an interlocutory order made by the Honourable Justice Watts on 17 June 2010. However, before me senior counsel for the trustee argued that the effect of Watts J’s order is that it is a final order and leave to appeal is not required.
2. The substantive proceedings before the Court are proceedings for settlement of property under s 79 of the Family Law Act 1975 (Cth) (“the Act”). The parties to the proceedings include Ms Allan (“the wife”) as applicant, Mr Allan (“the husband”) as 1st respondent, a company W Nominees No. 2 Pty Ltd (“the company”) as 2nd respondent, the adult children of the husband and wife, Ms C Allan, Mr D Allan, Ms H Allan and Ms E Allan as respectively the 3rd, 4th, 5th and 6th respondents (“the children”) and the receivers of the company, Mr D and CP (“the receivers”) as interveners in the proceedings. The trustee is the 12th named respondent.
3. The order, the subject of the application, is an order which empowered the receivers to sell at public auction chattels held by the trustee as trustee of the trust, and by the company as corporate trustee of another trust. The chattels included valuable antique furniture and art works. The chattels are described in the primary Judge’s reasons as “the collectables”. There is no dispute an auction was held in June 2010 and resulted in proceeds of sale of approximately $13.2M.
4. The trustee’s application for an extension of time is opposed by the receivers. The receivers filed a Response to the Application in an Appeal on 20 August 2010. They seek orders for dismissal of the application, and for costs against the applicant on an indemnity basis and in the alternative on a party/party basis.
5. The application was initially consented to conditionally by the solicitors for the wife subject to an appeal against Orders 7, 8 and 9 of the primary Judge made on 17 June 2010 not being subject to challenge. The trustee has agreed not to pursue an appeal against those orders. However, the wife changed her position and opposed the trustee’s application.
6. No formal position was taken by the husband and the children to this application, and no material was filed by or on their behalf, nor was there any appearance by or on their behalf. Senior counsel who appeared before me for the trustee (and before the primary Judge for the husband), submitted that as the wife and the children were the only beneficiaries of the trust, their interests would be advanced by leave being granted to extend time to the trustee in which to file an application for leave to appeal.
7. The matter was listed before me for hearing initially on 24 August 2010. On that day senior counsel for the trustee sought that I grant leave to the trustee to file an amended proposed Notice of Appeal. Counsel for the receivers sought, if leave was granted to file an amended proposed Notice of Appeal, that he be afforded the opportunity to provide written submissions. The wife’s solicitor also sought the opportunity to file written submissions.
8. At the conclusion of the hearing on 24 August 2010, when I heard oral submissions on behalf of the trustee in support of the application, senior counsel indicated that the trustee did not wish to have the opportunity to provide further written submissions save and except the right to file submissions in reply to those filed by the receivers. Senior counsel for the trustee submitted the matter could then be dealt with by me in chambers without the necessity for further appearance by the parties.
9. The wife’s solicitor did not file the written submissions in accordance with my orders of 24 August 2010 and sought the consent of the other parties for an extension of time in which to file those submissions. The receivers consented to the extension sought, but it was opposed by the trustee’s solicitors. The matter was accordingly relisted before me on 12 October 2010. At the hearing on that day the trustee’s solicitor consented to the late filing of the wife’s submissions. The trustee, who mentioned the matter on behalf of the receiver, and the wife’s solicitor agreed the matter could be determined by me without further oral submissions. I will shortly refer to both the oral and written submissions.

THE PRIMARY JUDGE’S ORDERS

10. In order to understand the issues raised in this application, it is necessary I set out Order 5 of the orders made by Watts J on 17 June 2010. That Order provides as follows:

Subject to order 2 and subject to any other order, by any court, in favour of a party who is not a party to these proceedings, the Receivers forthwith do all acts and things and execute all documents so as to seize, take into their possession and to cause to be offered for sale and sell for the best price reasonably available:

5.1 all assets of [the trust]; and

5.2 all property being antiques, artworks, furniture and furnishings and other items (“the collectables”) being the items referred to and listed in the affidavit of [Mr D] sworn 30 April 2010 and the various annexures thereto including the alleged missing items, and/or the items particularised in the [Z Auction House] catalogue “The [W] Collection”

and upon the sale of the collectables the proceeds of sale be applied in payment of liabilities of [the company] as are secured by the mortgage debenture PROVIDED THAT the proceeds of the sale of the 23 items referred to in the schedule to these orders, be placed in a controlled monies account, controlled by the lawyers for the Receivers, pending the finalisation of these proceedings.

11. Order 2 of the orders provides as follows:

Until further order [the receivers] (“Receivers”) in their capacity as Receivers and Managers of [the company] (Receivers and Managers appointed) (“[the company]”) be restrained from disposing of or encumbering paintings described as “[painting 1]” and “[painting 2]” unless they give the 6th respondent and the 4th respondent respectively 28 days notice of their intention to dispose of or encumber the paintings and provided no request has been made pursuant to order 1.

12. Schedule 5 to the Order is set out in the primary Judge’s orders and is as follows:

Schedule referred to in Order 5

[removed for publication]

EVIDENCE

13. The trustee’s application was supported by an affidavit of Michel John Delaney (“Mr Delaney”). Mr Delaney’s affidavit is short and is directed solely to the reason for the delay in filing the Notice of Appeal. As I indicated at the hearing, and it was accepted by the receivers, there is no real issue that delay has any relevance, rather it is accepted that the delay in filing the Notice of Appeal was only one day, and that delay was more than adequately explained by Mr Delaney.
14. The receiver relied on the affidavit of Mr D filed on 20 August 2010. Mr D is one of the receiver managers of the company. He was so appointed on 27 March 2009 on the application of AS Limited pursuant to a Deed of Charge. The receivers were granted leave to intervene in the proceedings between the husband and wife under s 79 of the Act on 17 September 2009.
15. Mr D deposed that following the making of orders by Watts J of 17 September 2009 the receivers took possession “of a large number of collectables” in various Australian states. He testified that the auctioneers, Z Auction House, conducted a sale of the collectables on [dates omitted] pursuant to orders made by Watts J on 17 June 2010.
16. Mr D testified in paragraph 7 of his affidavit that correspondence between the trustee’s solicitors and Z Auction House disclosed that Mr Delaney’s firm was retained by the trustees no later than 23 June 2010.
17. In paragraph 11 of his affidavit, Mr D relied on an order made by Watts J on 2 December 2009 which provided as follows:

In the event the husband or any third party wishes to oppose the receivers’ application for the sale of the collectables which are the subject of the enforcement warrant, any such application will be dealt with on 1 February 2010, and any person wishing to make such an application is to file and serve any affidavits they rely upon on or before 22 January 2010.

18. Mr D deposed that “No such application was made by the husband or any third party, including the Appellant”. I pause here to note that the trustee was not then a party to the proceedings. Mr D referred however to paragraphs 90 and 91 of the primary Judge’s reasons where his Honour said:
    90. I find generally that the trustee has been on notice for a considerable period of time about the Receivers’ intentions (since orders were made in 2009). If I am wrong about that then it is clear that the trustee was on notice as a result of seizures and the taking of books since December 2009 of what the Receivers were doing.
    91. I accept that [the trustee’s] delay weighs heavily against the exercise of discretion in favour of the trust.
19. Mr D further deposed that, on 28 May 2010, the trustee was granted leave to “become a party to the Action” and the primary Judge on that day fixed the hearing for injunctive relief for 10 June 2010. He also deposed to the orders made by the primary Judge to ready the matter for hearing. Those orders included a requirement for the trustee to discover all books and records of the trust within particular categories specified by his Honour.
20. Mr D deposed that no records of the trust were produced for the period July 1985 “to the present”, save for the financial statements in respect of the year ended 30 June 1994.
21. Mr D also deposed that further orders for discovery were made requiring discovery of various documents by the receiver including valuations and marketing plans in connection with the sale of the collectables. He deposed that the receivers complied with these orders on 2 June 2010, but the trustee did not inspect the documents discovered, nor seek photocopies of them.
22. At paragraph 23 of his affidavit the receiver deposed:

During the course of the hearing on 28 May 2010, counsel for the Appellant foreshadowed a claim against the Receivers in respect of the conduct of the forthcoming auction sale, presumably pursuant to section 420A of the Corporations Act, 2001. That application was ultimately not pursued. (original emphasis)

23. Mr D then deposed that the trustee’s application was dismissed and the injunction sought to restrain the sale was refused.
24. Having referred to the orders made by the primary Judge (the subject of this application) Mr D deposed that the auction which was carried out on [date omitted] 2010 “was extremely successful, raising in the order of $13.2 million”.
25. At paragraph 28 of his affidavit Mr D deposed:

The auction sale included the 23 items that [the trust] had claimed were its property (as particularised in the Schedule to Justice Watts’ order of 17 June 2010).

26. Immediately below the heading “Futility of the Appeal” Mr D set out the orders sought in the original Notice of Appeal, and again deposed that the collectables had been sold and that the proceeds of sale had been distributed in accordance with his Honour’s orders.

RELEVANT STATUTE LAW AND RULES

27. Section 94 of the Act provides for appeals to the Family Court from courts other than the Federal Magistrates Court. Section 94(1A) provides as follows:

An appeal under subsection (1) or (1AA) shall be instituted within the time prescribed by the standard Rules of Court or within such further time as is allowed in accordance with the standard Rules of Court.

28. Sections 94(2D), (2E) and (2F) are also relevant. They provide:

(2D) Applications of a procedural nature, including applications:

...

(e) for an extension of time within which to file an application for leave to appeal;

...

may be heard and determined by a Judge of the Appeal Division or other Judge if there is no Judge of the Appeal Division available, or by a Full Court of the Family Court.

(2E) The standard Rules of Court may make provision enabling applications of a kind mentioned in subsection (2D) to be dealt with, subject to conditions prescribed by the standard Rules of Court, without an oral hearing.

(2F) No appeal lies under this section from an order or decision made under subsection (2B) or (2D).

29. Chapter 22 of the Family Law Rules 2004 deals with appeals.
30. Rule 22.02 sets out how an appeal is to be commenced, namely by filing a Notice of Appeal.
31. Rule 22.03 provides that a Notice of Appeal must be filed within 28 days after the order appealed from is made. Rule 22.11 provides that the filing of an appeal does not operate as a stay of the operation or enforcement of the order in respect of which the appeal is filed.
32. Rule 22.02 provides for a party to make an application for leave to appeal.

RELEVANT LEGAL PRINCIPLES – APPLICATION FOR LEAVE TO APPEAL OUT OF TIME

33. I have already recorded that senior counsel for the trustee submitted that the order for sale of the collectables was a final order, and therefore the trustee was entitled, subject to an extension of time to file a Notice of Appeal, to appeal as of right. I will later in these reasons consider briefly whether the order was final or interlocutory. I do not consider, particularly as I did not have the benefit of extensive argument on the topic, that it is necessary for me to determine that question in this application, and the question may, if an extension of time is granted, be argued before the Full Court. I will accordingly deal with the relevant legal principles to be applied both if the order the subject of the proposed appeal is interlocutory or final.
34. The relevant principles to be applied by a Judge in deciding whether it is appropriate to extend time for filing an appeal are set out in Gallo v Dawson [1990] HCA 30; (1990) 93 ALR 479. These principles are not completely identical to the principles to be applied in dealing with an application to extend time for leave to appeal. The applicable principles in the latter circumstance, albeit in the context of the Federal Court Rules, are set out by Lindgren J in Sharman License Holdings Ltd & Anor v Universal Music Australia Pty Ltd & Ors [2005] FCA 802 as follows:
    20. In order for the Court to allow further time for the filing and serving of an application for leave to appeal from an interlocutory judgment, the following conditions must be satisfied:
        1. There must be a satisfactory explanation for the delay beyond the seven-day time limit fixed by O 52 r 10(2)(b) (see, for example, Deighton v Telstra Corporation Ltd (unreported, Full Court, 17 October 1997));
        2. The application for leave to appeal must have such prospects of success as not to render the extending of time an exercise in futility. Since the test for the granting of leave to appeal from an interlocutory judgment is that the decision must be attended with sufficient doubt to warrant its being reconsidered by an appellate court, and that substantial injustice would result if leave were to be refused, supposing the decision to have been wrong (Décor Corporation Pty Ltd v Dart Industries Inc [1991] FCAFC 844; (1991) 33 FCR 397 at 398–400), in principle the question on an application for an extension of time is whether this test has sufficient prospects of being satisfied, to warrant granting the extension. In practice, the debate and treatment of the ‘arguable error’ question on an application for an extension of time, will be no different from what the debate and treatment of it would be on the application for leave to appeal itself.
        3. Since an applicant for extension of time within which to appeal as of right must show ‘special reasons’ (O 52 r 15(2)), nothing less should be required of an applicant for an extension of time within which to apply for leave to appeal (Deighton v Telstra Corporation Ltd, above).
35. Thus it may be seen in the context of the Federal Court Rules the test for the granting of an extension of time for leave to appeal is, in practical terms, more rigorous than the test applied in respect of an extension of time in which to appeal. In the latter case the granting of leave is not automatic but involves the exercise of discretion. The discretion to extend time is given for the sole purpose of enabling the Court to do justice between the parties. In determining whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the nature of the litigation and the consequences for parties of the grant or refusal of the leave.
36. The exercise of discretion also involves an assessment of the prospects of a successful appeal.
37. The principles which relate to an application for an extension of time in which to institute an appeal have been referred to in a number of cases, including McMahon & McMahon [1976] FamCA 22; (1976) FLC 90-038 at 75,144, Tormsen & Tormsen (1993) FLC 92-392 at 80,017.

THE FURTHER AMENDED PROPOSED NOTICE OF APPEAL

38. In his further amended proposed Notice of Appeal the trustee seeks to rely on five grounds of appeal. They are as follows:
    1. The Sale Order was an order made by the primary judge that was in the nature of a final mandatory injunction and having regard to the primary judge’s determination in [126] of the Reasons for Judgment which affected the common law and equitable rights of the Appellant on a final basis. The primary judge was mistaken in granting the Sale Order.

(a) on an interlocutory application by the First Respondent;

(b) on the basis of the preliminary findings of fact made by the primary judge; and

(c) on the basis of the evidence then before his Honour.

2. In the alternative to ground 1, the Sale Order was an interim or permanent order as to the sale or partition or possession of the Appellant’s property. In those circumstances, the primary judge was mistaken in granting the Sale Order:

(a) when his Honour did not have jurisdiction to make the Sale Order without first making a declaration as to the Appellant’s right and interest in the assets of [the trust] affected by the Sale Order;

(b) further, or alternatively;

(i) on an interlocutory application by the First Respondent;

(ii) on the basis of the preliminary findings of fact made by the primary judge; and

(iii) on the basis of the evidence then before his Honour.

3. The primary judge was mistaken in making the Sale Order on an interlocutory application by the First Respondent, in circumstances where:

(a) there were no exceptional circumstances warranting the making of that order on an interlocutory application; and

(b) the First Respondent and the Receivers did not contend for the existence of exceptional circumstances to warrant the primary judge making the Sale Order on the basis of an interlocutory application.

4. The primary judge failed to give any, or alternatively, to give sufficient reasons for the making of the Sale Order.
5. His Honour mistakenly determined that the Appellant would have no future right to challenge the sale of the assets of [the trust] to a bona fide purchaser at auction by the Receivers (at [126] of the Reasons for Judgment) where:
   • (a) there was no application before the primary judge for such an order or for such relief; and
   • (b) neither the First Respondent nor the Receivers contended that such an order or such relief should be granted.
39. In the event leave, if necessary, is granted and the appeal upheld, the trustee seeks the following orders:
    1. That Order 5 of the Orders of Mr Justice Watts of 17 June 2010 be set aside so far as that Order directs the Receivers to seize, take into possession and sell assets the property of [the trust] and to apply the proceeds of sale of those assets in payment of liabilities of [the company] secured by the mortgage debenture between that company and [AS] Limited of 3 December 2003.
    2. Order that such monies as have been paid into a controlled monies account controlled by the Receivers be paid forthwith together with accrued interest to the solicitors for [the trust], and held by them in a controlled monies account to await further Order of the Court.
    3. Noted that the setting aside of part of his Honour’s Order 5 has effect to permit [the trust] to pursue such action as it may be advised in respect of such of its assets as may have been sold at [Z Auction House] of Collectibles in Sydney on [dates omitted].
    4. The primary judge’s reasons
40. I do not intend on this application to summarise his Honour’s reasons in detail. However, as the basis of the application before me was centred, not on the delay in filing the Notice of Appeal, but the question of whether or not there was any utility in the proposed appeal, it is necessary that I refer briefly to those reasons.
41. It is also unnecessary I refer to all the applications which were before the primary Judge. I propose to limit my discussion to those relevant to this application. There were two principal applications before the primary Judge which his Honour identified in paragraphs 3 to 5 of his reasons. In summary those applications were:-
    • An application by the trustee to restrain the proposed auction of the collectables, or in the alternative, an order restraining the sale of the collectables which “may be owned by [the trust]”,
    • An application by the wife in which she sought orders “confirming” the receivers could sell the collectables, and upon sale the proceeds be applied to the debts of [the company]. The wife also sought orders restraining the husband and the trustee from dealing with any other collectable items of the trust in the control of the trustee or the husband.
42. The primary Judge explained that wife’s applications for “an express power of sale” of the collectables was supported by the receivers. However, his Honour went on to note (in paragraph 5) in the alternative to paying the proceeds of sale in reduction of the funds owing pursuant to the mortgage debenture, that the proceeds of the 23 items the trustee had identified and claimed belonged to the trust should be retained in a controlled monies account pending the final hearing.
43. At paragraph 6 of his reasons, the primary Judge summarised what he discerned to be the position of the husband. His Honour recorded the husband did not oppose the auction proceeding, but he opposed any order which “would give legitimacy to the auction proceedings”. Having commented on the position of the husband, his Honour went on to record that:

...Towards the end of his submissions, senior counsel for the husband went so far as to suggest that an order should be made that any person who might successfully bid for an item at the auction with an intention of removing that item from Australia, should be restrained from doing so for an “appropriate” period of time so that there could be an opportunity to further litigate about the ownership of the particular item that had been purchased.

44. His Honour also observed later in his reasons, that none of the beneficiaries of the trust opposed the sale orders sought by the wife and supported by the receivers.
45. Significantly, at paragraph 13 of his reasons, his Honour observed that the order permitting the receivers to exercise a power of sale in respect of the collectables had been made on 17 September 2009 by consent. I pause to note that no appeal or application for leave to appeal was filed against that order by the trustee or any other party to the proceedings.
46. Earlier, at paragraph 9, his Honour explained that the children did not oppose the auction as long as it was conducted to maximise the interests of the parties.
47. At paragraphs 59 to 72 of his reasons, the primary Judge discussed the trust. His Honour commenced by setting out details of the trust, including that the husband was the protector of the trust (with it appears the power to appoint and remove the trustee), that the original trustee (a company) was controlled by the husband and that the husband removed the original trustee and appointed the present trustee. His Honour also recorded that in 2002 the trustee had appointed five persons (the wife and children) to be the appointed class of beneficiaries of the trust.
48. After explaining that he had not had the benefit of considered argument about the construction of the trust, his Honour then said his following findings were “preliminary” findings in the context of an interlocutory application.
49. His Honour then referred to the well known jurisprudence developed in this Court and the High Court of Australia in relation to discretionary trusts concluding his discussion with reference to the judgment of French CJ in Kennon v Spry [2008] HCA 56; (2008) 238 CLR 366; (2008) 251 ALR 257. His Honour concluded at paragraph 65:

Whatever the position in relation to the ultimate ownership of the trust property, the husband controls the trust today.

50. His Honour, at paragraph 71, recorded the positions of the parties in respect of the effect of the injunctive relief sought (and although not identified in the preamble to the paragraph, the relief sought in respect of the sale of the collectables) noting that the children (the remaining beneficiaries) had taken a “neutral” position, but did not oppose the sale proceeding, and the husband (the protector) “had a somewhat confused and changing position”. I pause here to note that a number of the submissions of the husband recorded by the primary Judge were identical to submissions made before me by senior counsel for the trustee.
51. His Honour concluded his findings about the trust at paragraph 72. There his Honour said:

The [trust] is not an unrelated third party. This hearing is not the occasion to make declarations about the respective rights of various parties to these proceedings in the assets (if any) of [the trust]. It is clear, however, that parties to these proceedings control the trust and are beneficially entitled to the assets in the trust and that is an important matter when considering how any discretion in relation to the injunctive applications by the 12th respondent, is exercised.

52. I observe that in the proposed amended Notice of Appeal in ground 2(a), it is asserted that the primary Judge erred in granting the sale order where he did not have jurisdiction to do so “without first making a declaration as to the Appellant’s right and interest in the assets of [the trust] affected by the Sale Order”.
53. In paragraphs 73 and 74 of his reasons the primary Judge, under the heading “Jurisdiction”, referred to submissions made by senior counsel for the husband about jurisdiction.
54. In paragraph 74, after identifying s 114 of the Act as the source of power to grant the injunctive relief sought, his Honour explained:

...So far as declarations are sought, there is ample power under s 78 FLA to entertain the substantive relief (which is not the subject of any determination by me today). On the last occasion the lawyer for the wife also indicated that it will be probable (if it is necessary) that there be a challenge to [the trust] pursuant to the provisions of s 85A FLA. Prima facie, [the trust] would be a trust that falls within the description of a “post-nuptial settlement”...

55. His Honour concluded his jurisdictional findings by saying:

...There would also be a strong argument, if it is needed, that the court could rely on accrued jurisdiction given the nature of the closely related sub stratum of facts, relevant to the creation of and the operation of [the trust].

56. Thus his Honour concluded in paragraph 75 that he had jurisdiction to “entertain the current application”.
57. I observe that it appears his Honour did not refer, at this point in his reasons, to either the Court’s jurisdiction under the Corporations Act 2001 (Cth) (s 1337C) in respect of the receivers’ power of sale nor did he refer to the accrued jurisdiction in the context of the sale of the collectables which were the property of the company. I record at this point on 17 September 2009 his Honour made orders by consent, including the following:

...

3. By no later than 10am on 18 September 2009, [the company], the husband and any entity controlled by him permit and facilitate forthwith entry into by the Receivers and their employees, servants and agents:

3.1 the property known as “[F]”, [in a western Sydney suburb];

3.2 the property known as “[S]”, [in Western Australia]; and

3.3 the storage facility leased by the husband or any entity controlled by him at [F] Property Services, [in Western Australia].

4. By no later than 10am on 18 September 2009 [the company], the husband and any entity controlled by him permit and facilite forthwith the Receivers and their employees, servants and agents:

4.1 to inspect the state and condition of the collectables, antiques and all other chattels charged by the Mortgage Debenture dated 3 December 2003 entered into by the second respondent in favour of [AS] Limited (“Mortgage Debenture”);

4.2 to recover all of the folder files containing records relating to the collectables, antiques and any other chattels charged by the Mortgage Debenture; and

4.3 to enter into possession of and to recover the collectables, antiques and any other chattels charged by the Mortgage Debenture.

5. Other than to the extent that such items are recovered pursuant to order 4 above, by no later than 10am on 16 October 2009 [the company], the husband and any entity controlled by him forthwith deliver up to the Receivers all collectables, including without limiting the generality of that expression, antiques and other chattels, works of art, pieces of furniture, decorative objects and silverware in the possession, custody or control of the husband, [the company] or their respective servants or agents (“Collectables”) including, without limitation, all collectables located at:

5.1 the property known as “[F]”, [in a western Sydney suburb];

5.2 the property known as “[S]”, [in Western Australia]; and

5.3 the storage facility leased by the first respondent at [F] Property Services, [in Western Australia].

6. Other than to the extent that such items are recovered pursuant to order 4 above, by no later than 10am on 16 October 2009 [the company], the husband and any entity controlled by him are to deliver to the Receivers all electronic records and any hard copy records and invoices (including any document recording or evidencing purchase or ownership) relating to the Collectables (“Records”).
7. In the event of non compliance with orders 5 and 6, a warrant be issued authorising an enforcement officer to seize and detain the:

7.1 the Collectables; and

72. the Records.
8. In respect of any Collectables and Records delivered into the possession or custody of the Receivers, the Receivers:

8.1 be permitted to exercise a power of sale in respect of all collectables (together with associated records) charged by the Mortgage Debenture;

8.2 are otherwise to preserve and maintain the Collectables and the Records; and

8.3 are to permit the wife to inspect the Collectables and Records on reasonable notice.

... (original emphasis)

58. At paragraph 76 of his reasons, the primary Judge recorded that the trustee had “made a general claim that unspecified items in the collection ... are the property of the [the trust]”. His Honour then set out a table of 23 items which had been prepared by the receivers, not the trustee, which the receiver asserted could be the property of the trust.
59. His Honour went on to explain that the trustee relied on financial statements of the trust “which pointed to acquisition of various items between 1980 and 1985” (paragraph 79). His Honour said “Exhibit U contains a large number of receipts” (paragraph 80).
60. It is useful that I record at this point that before me there was argument as to whether or not Exhibit U was before his Honour. It was asserted by senior counsel for the trustee that his Honour had looked at a large folder of documents which the trustee had sought to be tendered (as Exhibit U) but that the primary Judge had returned these documents to the bar table. Absent transcript I am unable to resolve that controversy, but I note Exhibit U is described in the exhibits list and a large folder of documents marked “U” is retained on the first instance file.
61. At paragraph 81 his Honour said:

As is clear from the history of the [the trust] set out above, the husband was effectively the trustee of the [the trust], (through his control of [AG] Pty Limited) between the creation of the [the trust] in December 1980 and May 2002. The husband was the protector of the trust from June 1982. Consequently, it was the husband who had knowledge as to how items were collected and how loan accounts and collectables were dealt with from 1980 until the current date. Whilst [the trustee] deposes to the fact that he believes that records show that certain collectables are owned by the [the trust], the evidence for that position has not yet been tested. There is certainly a body of evidence, primarily from the husband, to which I refer below, which indicates that [the trustee’s] stated position is not an accurate one. The husband, who is in the best position to know what happened in the [the trust] in the relevant years, has not sought to file any evidence about it in these interlocutory proceedings. The strength of [the trustee’s] evidence needs to be weighed when considering how discretion should be exercised in these interlocutory proceedings.

62. Having recorded that the wife submitted, and that he accepted, there was no basis for stopping the sale of the collectables in their entirety, his Honour explained that neither the trust, or the husband, asserted that the bulk of the items were not the property of [the company].
63. At paragraphs 84 to 86 his Honour explained:
    84. I agree with the submissions by counsel for the wife that the starting point for the consideration of the applications before me are the orders that I have already made (by consent of the parties to these proceedings) permitting the seizure and sale of the collectables. Those orders have not been appealed.
    85. There next is an attack by the wife on the sufficiency of the description of the property which is to be the subject of the injunction. The wife argues that although [the trustee] refers to the “[the trust’s] collectables”, their identity is less than certain. Even the list of 23 items is suspect. Counsel for the wife took the court to a number of the items referred to by Mr [OK] in the list of 23 items and demonstrated that on the material before the court, there was considerable doubt as to whether or not some of those items were items that were acquired by [the trust] given that they do not appear on the 1984 records produced and annexed to [the trustee’s] affidavit of 27 May 2010.
    86. The wife argues that paragraph 9 of Mr [OK’s] affidavit is difficult from an evidentiary point of view. The exhibits have not been produced. All I have is Mr [OK’s] evidence that he has compared two lots of documents and produced a table accordingly. That summary would be inadmissible on a final hearing but I have allowed this hearsay evidence in the context of this interlocutory hearing. The evidence in paragraph 9 of Mr [OK’s] affidavit however has to be given less weight than it might otherwise have been given, had the material upon which Mr [OK] said he had prepared the table, been made available to the Receivers and to the wife (in accordance with previous orders made).
64. In subsequent paragraphs his Honour went to note his general agreement with submissions made on behalf of the wife that the trustee had failed to provide relevant evidence to permit the wife and the receivers to test the general claims made on behalf of the trust, and to consider the delay by the trustee in seeking relief. Those submissions included submissions by the wife that [the trustee] (albeit not in his role as trustee) had participated in meetings with the receivers in the second half of 2009, and that he was aware of the forcible removal of property from a home of the husband and wife in December 2009. His Honour said “it would be unrealistic to think that the trustee and the protector do not communicate with one another” (paragraph 89).
65. His Honour also recorded in paragraphs 92 and 93 that no prejudice was able to be established by the trustee which would arise “as a result of compliance by the Receivers with the prior orders of the court” [presumably the sale order of 17 September 2009] but that no submission had been made by either the trustee or the husband why damages would not be an adequate remedy. Further his Honour noted, at paragraphs 93 and 94, that no beneficiary of the trust opposed the auction proceeding, and that the trustee gave no undertaking as to damages. This latter point has little relevance as the trustee does, understandably where the auction has occurred, seek to challenge his Honour’s order dismissing his application for an injunction restraining that auction.
66. Having summarised, in paragraphs 99 to 101, the submissions of the receivers, his Honour turned to the aspect of the receivers’ submissions dealing with inadequacy of discovery by the trustee. Later his Honour recorded their submissions in respect of the knowledge of the husband regarding the acquisition of assets by the trust during the period up to 2002 when he controlled the trustee. His Honour found significant inconsistencies in the evidence of the husband given in other proceedings and the evidence before him.
67. His Honour concluded it would be inappropriate to permit the trustee to be entitled to rely on his own failure to discover documents to “bolster” his prospects of obtaining an injunctive order. His Honour went on to find if ownership of items sold (it appears other than the identified 23 items) were established to belong to the trust that damages would be an appropriate remedy.
68. Later in his reasons the primary Judge dealt extensively with the sworn evidence of the husband in other proceedings, and earlier in these proceedings which was that all the collectables were owned by the company, and found this to be a matter which he should take into account in the exercise of his discretion.
69. At paragraph 125 his Honour recorded:

Senior counsel for the husband, as already indicated, did not want any order made which would “cover the Receivers’ back”. The husband also wanted an order that would require an international buyer to wait until after they had successfully bid for an item, to have the title of that item determined before they could remove it from Australia. The husband wished to be able to have further litigation about claims arising from [the trust’s] assertion of ownership of items in the catalogue. For reasons set out elsewhere, none of those applications can be sustained.

70. His Honour set out his conclusions in paragraphs 126 to 130. At paragraphs 127 to 129 his Honour said:
    127. The 12th respondent has provided no basis at all to found an injunction stopping the auction entirely or to restrict it in some way.
    128. It is appropriate to make an order that the Receivers be able to take possession of and sell for the best price reasonably available, all property being antiques, artworks, furniture and furnishings and other items, whether owned by [the company] or whether owned by [the trust].
    129. I accept the wife’s submissions that apart from the 23 nominated items, the 12th respondent has not sufficiently described the items which could be properly described as the “[the trust’s] collectables”. Whilst I accept there is some considerable doubt about even those 23 items and there is some strength in the argument by the wife and the Receivers that no injunctive order should at all be made, I find, whilst it is a finely balanced decision, that the prudent approach is to require the Receivers to hold the proceeds of the sale of the 23 items identified in the scheduled [sic] referred to earlier in these reasons, in a controlled monies account pending the final determination of the matter.

THE ORAL AND WRITTEN SUBMISSIONS

71. At the commencement of his oral submissions, after referring to the receivers’ position that the proposed appeal was a futile exercise having regard to the orders then sought if the appeal succeeded, senior counsel for the trustee explained the claim made by the trust was far wider (than the 23 items). He submitted “It says that a significant quantity of the material that was sold at auction was, in fact, the property of [the trust]” (transcript, 24 August 2010, p 3).
72. I enquired whether the claim of ownership could be agitated at the final hearing as follows:

HER HONOUR: I don’t know what stage those proceedings are up to, when and where they’ll be listed for hearing, but is this something that could be agitated at the final hearing, rather than requiring to be dealt with by way of an application for leave to appeal against interlocutory orders?

MR BURBRIDGE: Well, of course, the short answer is, of course, you could and, no doubt, would were your Honour to refuse to extend the time. But could I say that we start with the proposition that nonetheless, though, the orders were made in the course of interlocutory proceedings, the order which his Honour has made is final – it’s a final order. It’s – indeed, that is the very defence which is offered to the application by the respondent. He says it’s too late, it’s all done, it’s all over; the orders have been executed, nothing you can do. And it says so in terms in his affidavit, to which I’ll go if your Honour wishes me to do so in a moment.

But whilst I’m simply giving an outline, the short answer to your Honour’s question is that it could be done but it should not be done. And the reason why it should not be done is because the – what has happened is this, so we submit – and I can make this good in due course, but for the moment, at least, what I would seek to do is simply to give you a brief outline of our position, and it is this: there were three applications before his Honour on 10 June. One of those applications was said to be supported by the wife who wanted some positive empowerment to be given to the receiver to sell off the totality of this material.

HER HONOUR: Yes. (transcript, 24 August 2010, pp 4-5)

73. Senior counsel went on to submit, in the course of dialogue with me why leave should be granted and an appeal heard before the substantive s 79 proceedings as follows:

HER HONOUR: Should you need leave, and you can argue whether or not the effect of the order was interlocutory or it was final, based on the authorities that deal with that proposition, what then? Does it go back to another trial judge? How could the Full Court in circumstances redetermine the matter? It would have to go back before another judge for another hearing, would it not?

MR BURBIDGE: Well, your Honour, that depends upon which grounds of appeal were upheld. One of our grounds of appeal – and, I confess, it needs to be clarified within the document that’s before you – is that there was no jurisdiction in his Honour to make such an order, there having been no declaration, as envisaged by section 78, subsection (1). Subsection (2) of section - - -

HER HONOUR: You say that his Honour had to do that before he could make the sale order.

MR BURBIDGE: Yes, precisely.

HER HONOUR: But I come back to the utility.

MR BURBIDGE: Yes.

HER HONOUR: Even if you’re successful and it’s that his Honour was wrong, the reality is, is it not, that these items have been sold.

MR BURBIDGE: Yes, yes. Indeed.

HER HONOUR: There is a pot of money or some moneys.

MR BURBIDGE: No, with respect, we’re not concerned so much about the money. We may at the end of the day be forced to look for money in some recompense.

HER HONOUR: By way of damages, yes, all right.

MR BURBIDGE: But if these items, as we have contended, are those of [the trust] and they are not in any way to be brought into account in terms of owned by the parties for purposes of division and so on, then the auctioneers have given no better title to it than they have. (transcript, 24 August 2010, pp 6-7)

74. Later senior counsel confirmed that what the trustee was seeking to do in the proposed appeal was “to remove from the receivers the protection that they have obtained by having the [Family Court order]” (transcript, 24 August 2010, p 15).
75. Later senior counsel submitted that “whilst there was an application before his Honour to empower the sale, his Honour did not have before him any – certainly none that we can find, did not have any application before him that he direct the receivers to seize sell and pay the money to the account of [the company]...His Honour went beyond that which was before him”. Senior counsel also submitted:

HER HONOUR: Do you also say that his Honour went beyond it in granting the injunction under section 114 when there was no application for final relief under section 78?

MR BURBIDGE: We say that the empowering provision associated with sale is to be found in 78(2) and it is a precondition for the exercise of that power that findings and declarations and the like have been made under 78(1). That’s the jurisdictional point and that is the sole additional point that we would seek to add to the grounds of appeal, which is the page 6 of the draft notice at the moment. (transcript, 24 August 2010, p 16)

76. Later senior counsel submitted that the reason why the trustee sought to pursue its rights in respect of the property of the trust may include seeking the return where possible of the goods sold at auction. To enable that to happen he submitted the primary Judge’s order should be reversed.
77. Senior counsel completed his oral submissions by referring me to the decision of the High Court in Bass v Permanent Trustee Co Ltd [1999] HCA 9; (1999) 198 CLR 334.
78. The receivers relied essentially on their written submissions filed on 17 September 2010. In those submissions it was explained that notwithstanding the filing of the amended proposed Notice of Appeal the receivers still opposed the application for an extension of time to file an application for leave to appeal or an appeal.
79. At paragraph 3 of the written submissions the receivers set out the gravamen of their arguments in opposition to the extension of time. Those submissions are as follows:

The Receivers oppose the application for an extension of time on the basis that the applicant’s appeal is futile, in that:

3.1 even if the Order 5 of the orders made by Watts J on 17 June 2010 was wrong or made without jurisdiction, it remains valid and subsisting unless and until it is overturned: it is futile to now attempt to overturn an order for seizure and sale of assets at a time when the assets have already been sold;
3.2 the Receivers were orders to forthwith seize and sell the assets, and have complied with that order. The assets have been sold and title transferred to third parties. If the Receivers had failed to do so, they would have been in contempt of Court. Each of the orders seek to call into question conduct in compliance with an order of this Honourable Court;
3.3 It is not in contest that the “sale order” made by Watts J which is the subject of appeal has been carried into effect. The applicant’s contentions distil to a single proposition: that the appeal is nonetheless not futile, because a successful appeal will remove the protection (and any associated defence) open to the Receivers from having effected a sale of the collectables pursuant to the sale orders. The fallacy of the argument is that a successful appeal would not operate to avoid the orders ab initio but only prospectively. When this is properly understood, it is clear that there can be no utility in setting aside an order that has already been carried into effect. (footnotes omitted) (receivers’ submissions, 17 September 2010, p 2)

80. In the submissions in reply filed on behalf of the trustee it was submitted that the receivers failed to address the main issue in the appeal.
81. Paragraph 7 of the submission in reply is as follows:

There are still items that are due to be sold at a date yet to be advised to the Applicant in October 2010 by the Receivers over which the Trustee of [the trust] claims he has a proprietary interest. Therefore, the Appeal is clearly not futile as the Trustee is seeking to set aside the order of Watts J on 17 June 2010 (“the Order”) to preserve the remaining property of [the trust]. (applicant’s submissions in reply filed 1 October 2010)

82. I note there was simply no evidence before me that there were other items of collectables which were still to be sold in October 2010. However, on the basis that there may be such property, it is asserted that the proposed appeal will not be futile.
83. It is also argued that there is a serious argument to be dealt with regarding the receivers’ liability if the appeal is successful, but that this is not a relevant consideration in determining the merits of the appeal.
84. The bases on which it was submitted I should exercise my discretion in favour of the trustee were succinctly summarised in paragraph 10 of the submissions in reply as follows:
    1. The extension sought is merely one day. A matter on which no party takes objection;
    2. The learned Judge at the first instance did not hear an application requesting an order to sell, but merely an application for the ability to be able to sell. Further, there was no evidence before him to justify the making of an order in the form of a mandatory injunction, which he did;
    100. The learned Judge did not make a declaration prior to exercising his powers in a manner consistent with those set out in s. 78 (2) of the Family Law Act 1975 (Cth); and
    4. There was no evidence before his Honour that justified a preliminary finding that [the trust] was the alter ego of the Husband. Therefore, his Honour’s application of the principles in Ashford v Ashford 11 Fam LR [semble Ashton & Ashton [1986] FamCA 20; (1986) FLC 91-777; (1986) 11 Fam LR 457] was in error. (Applicant’s submissions in reply filed 1 October 2010)
85. It was further submitted that:
    12. The Orders in their current form, allow for the liquidation of all assets of [the trust]. The Beneficiaries will suffer a great loss as the assets that were held for their benefit will be dissipated.
    13. The grounds of appeal in this matter have good prospects of success. Further, with respect to the arguments raised by the Applicant in oral submissions, the Receivers’ [sic] have failed to address those arguments in their written submissions. (Applicant’s submissions in reply filed 1 October 2010)
86. In the written submissions filed on behalf of the wife by leave on 12 October 2010, her solicitor adopted the receivers’ submissions, and further submitted that as the wife had now filed an amended application seeking an order under s 85A in respect of the trust, that the effect of that application was that the ultimate ownership of the assets would be a matter for determination at the final hearing, and therefore the appeal lacked utility.
87. I propose to consider firstly whether or not his Honour’s order was interlocutory or final. I discussed this topic in SGY & Anor & Company Z (In Liquidation) [2008] FamCAFC 92 as follows:
    85. Whether an order is interlocutory or final has been the subject of consideration in the authorities in this Court (see Rutherford & Rutherford (1991) FLC 92-255, Tudor & Tudor (1992) FLC 92-273, Bennett & Bennett [1985] FamCA 7; (1985) FLC 91-617 and Bigg & Suzi (1998) FLC 92-799).
    86. In his submissions in support of the argument that the second application is incompetent, counsel for Company Z relied on Licul v Corney [1976] HCA 6; (1976) 180 CLR 213 and Carr v Finance Company of Australia Ltd (No 1)[1981] HCA 20; (1981) 147 CLR 246.
    87. Australian authorities dealing with whether an order is interlocutory or final (including Carr) are discussed by the High Court in Re Luck [2003] HCA 70; (2004) 203 ALR 1. In that case McHugh ACJ, Gummow and Heydon JJ referred to a long line of English authorities, and Australian authorities, which discuss whether an order, which struck out a claim on the ground it was frivolous, vexatious or an abuse of process, or that it disclosed no cause of action, was interlocutory in nature. Their Honours said at paragraph 9:

Given the long-established English rule, the decision in Tampion and our decisions in Pye, Hall, Carr and Bienstein, we see no valid reason for departing from the rule laid down in Tampion. An order is an interlocutory order, therefore, when it stays or dismisses an action or refuses leave to commence or proceed with an action because the action is frivolous, vexatious, an abuse of the process of the court or does not disclose a reasonable cause of action.

88. The relevant principles have been subject of recent discussion in the Full Court of the Federal Court (Spender, Gilmore and Graham JJ) in Kowalski v MMAL Staff Superannuation Fund Pty Ltd [2009] FCAFC 117; (2009) 259 ALR 319 at 326. At paragraphs 33 to 38 the Full Court referred to the applicable principles as follows:

[33] The usual test for determining whether an order is final or interlocutory is whether the order, as made, finally determines the rights of the parties in a principal cause pending between them. That question is answered by determining whether the legal effect of the judgment is final or not. If the legal effect of the judgment is final, it is a final order; otherwise it is an interlocutory order: see per McHugh ACJ, Gummow and Heydon JJ in Re Luck (2003) 203 ALR 1; 78 ALJR 177; [2003] HCA 70 at [4] (Re Luck); see also Port of Melbourne Authority v Anshun Pty Ltd (No 1) (1980) 147 CLR 35 at 38; 33 ALR 248 at 249 (Anshun (No 1)).

[34] It may be that the practical effect of an order will be such as to render a further application fruitless unless supported by additional relevant facts, but that does not make an order one which finally determines the rights of the parties in a principal cause pending between them: per Taylor J, Owen J agreeing in Hall v Nominal Defendant [1966] HCA 36; (1966) 117 CLR 423 at 440–1 and 447; [1966] HCA 36; [1966] ALR 705 at 715–16 and 720–1 (Hall); see also per Windeyer J at CLR 444; ALR 718–9; per Gibbs CJ in Carr v Finance Corp of Australia Ltd (No 1) [1981] HCA 20; (1981) 147 CLR 246 at 248; [1981] HCA 20; 34 ALR 449 at 450 (Carr) and, per Mason J, as his Honour then was, at CLR 256– 7; ALR 456–8.

[35] Re Luck was an appeal from a decision of Gleeson CJ, exercising the original jurisdiction of the High Court to control its own processes. Ms Luck had sought to issue a Writ of Summons in the High Court naming 32 defendants including judges of the High Court, the Supreme Court of Victoria and the Federal Court of Australia, the Attorney-General of the Commonwealth, medical officers and an unnamed telephonist employed by the Federal Police.

[36] McHugh ACJ, Gummow and Heydon JJ summarised the position in that case at [2] of their reasons for judgment as follows:

[2] ... Chief Justice Gleeson held that the statement of claim disclosed no cause of action against any defendant, a holding with which we entirely agree. Not only does the writ and statement of claim fail to disclose any recognisable cause of action against any individual defendant, but they seek to join as defendants in one action many people who have nothing in common except that the applicant claims that each of them has tortured her.

[37] The High Court pointed out that it was not necessary to discuss the merits of Ms Luck’s claims in any detail because she was seeking to appeal against an interlocutory order, a class of order that required the grant of leave to appeal, and none had been granted. The High Court ordered that Ms Luck’s appeal be struck out as incompetent. At [12]–[13], McHugh ACJ, Gummow and Heydon JJ said:

[12] Even if Ms Luck had sought leave to appeal against the decision of Gleeson CJ, we would have refused her application. An application for leave should establish both that the decision, the subject of the proposed appeal, is sufficiently doubtful to warrant a grant of leave and that it is in the interests of the administration of justice for this court to hear it.

[13] The writ of summons that Ms Luck attempted to file does not disclose a cause of action against any of the 32 defendants listed. A grant of leave would be futile because an appeal would have no prospect of success.

[38] An order is an interlocutory order when it stays or dismisses an action or refuses leave to commence or proceed with an action because the action is frivolous, vexatious, an abuse of the process of the court or does not disclose a reasonable cause of action: per McHugh ACJ, Gummow and Heydon JJ in Re Luck at [9].

89. Without determining the issue, it appears to be that his Honour’s order was not final as it has not finally disposed of the rights of the parties in a principal cause pending between them. As the primary Judge noted, in the event that the trustee elects to do so, he can bring a claim against the receivers for damages arising out of the sale. Further, and of more significance are the orders sought in the event the appeal is allowed, namely, that monies received from the sale of the collectables be held in a controlled monies account “to await further Order of the Court”. This clearly indicates that while Order 5 on its face may appear to be a final order, in reality it has not disposed of the rights of the parties.

IS IT APPROPRIATE TO EXTEND TIME?

90. I propose to first consider the evidence and submissions relied on by the trustee. It is not disputed that the trustee’s solicitor, in difficult personal circumstances, endeavoured to file a Notice of Appeal (which notice contains the provision for leave to appeal) within the time provided by the rules, albeit on the last day. No challenge is raised to Mr Delaney’s evidence that the Notice of Appeal was rejected for filing because the relevant orders of the primary Judge were not attached to the notice. The present application was very promptly thereafter filed.
91. I am satisfied that there was no delay in attempting to file the Notice of Appeal or this application. I accept there were valid reasons why the Notice of Appeal was only filed on the last day prescribed by the rules, and that the failure to annex the relevant orders was an administrative oversight.
92. While it would be inappropriate for me on this application to exhaustively consider whether his Honour applied the appropriate principles in determining to make a mandatory injunction for sale of all of the collectables, whether the subject of the charge or otherwise, I accept that the primary Judge did not make any findings as to the ownership of the assets of the trust (see Bass at 357), nor did his Honour make any declaration pursuant to s 78.
93. Section 78 provides as follows:

(1) In proceedings between the parties to a marriage with respect to existing title or rights in respect of property, the court may declare the title or rights, if any, that a party has in respect of the property.

(2) Where a court makes a declaration under subsection (1), it may make consequential orders to give effect to the declaration, including orders as to sale or partition and interim or permanent orders as to possession.

94. I also accept that his Honour’s order provides for the sale of all assets of the trust by the receiver of company. I observe that the receiver is entitled to get in the assets of the company which are subject of the charge.
95. I also note the principles to be applied in considering whether to grant an enforcing mandatory injunction (see Spry, Equitable Remedies, (8th ed, Lawbook, 2010) at 535 – 554; Meagher, Gummow & Lehane’s Equity Doctines & Remedies (4th ed, Lexis Nexis, Butterworths, 2002) at [21-460] – [21-490]).
96. It could not be said that the proposed grounds of appeal are not arguable grounds.
97. The wife submitted that time should not be extended because the issue of ownership would be determined at the final hearing, that the wife had now amended her application to claim the trust was a post nuptial settlement under s 85A and the proposed appeal would simply unnecessarily increase costs. I accept the proposed appeal will increase all parties’ legal costs. I also take into account the appropriate use of the limited Court resources and the time and pressure on the Full Court of this Court (see Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175).
98. Prima facie, these matters weigh against the exercise of discretion in extending time.
99. I turn to consider what other factors I should take into account in the exercise of my discretion. In this consideration I have focused not only on the usual discretionary matters, but in this case the utility of an appeal prior to the final determination of the s 79 proceedings. I consider the relevant factors are:
    • the satisfactory explanation for delay in filing the Notice of Appeal;
    • that the proposed grounds of appeal are arguable, particularly having regard to the principles to be applied in granting a mandatory enforcing injunction;
    • that there may be other collectables owned by the trust not yet sold which may inappropriately be subject of a sale by the receivers; and
    • if the order for sale of all of the property of the trust was erroneously made, the issue of whether or not that asserted error can adequately be rectified at a final hearing, the date of which has not yet been fixed.
100. The matters to which I have referred may appear finely balanced. It must be remembered that the principle which is applicable to this decision is whether or not strict compliance with the rules will work an injustice.
101. I was unable to discern, based on the receivers’ submissions, any real prejudice to the receivers if time was extended.
102. I have reached the conclusion that I should exercise my discretion to extend time to the trustee to file an application for leave to appeal because the remedies available at a final hearing (including the awarding of damages if appealable error is established, particularly in respect of any further sale of collectables or other property of the trust) may not be adequate.
103. In reaching this determination I have carefully taken into consideration the time and costs to all parties in the proposed appeal, particularly in circumstances where the trustee may be entitled to indemnity out of the assets of the trust of which the wife is a beneficiary for such costs if the application for leave to appeal is dismissed.

COSTS

104. All parties to this application agreed that I should determine the costs of this application by reference to the written submissions filed.
105. I accept that while the trustee has been successful in this application, he is being granted an indulgence by the Court. Further, the wife and the receivers were put to the expense of written submissions when the trustee sought at the hearing of this application to be able to file an amended proposed Notice of Appeal to add the ground asserting jurisdictional error, and to amend the orders sought in the event the appeal is allowed. Accordingly, I am satisfied that there are circumstances why there should be departure from s 117(1) of the Act, and that the trustee should pay the wife and the receivers’ costs of this application.

I certify that the preceding one hundred and five (105) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Boland delivered on 29 October 2010.

Associate:

Date: