Grant Samuel Corporate Finance Pty Limited v Fletcher and Ors; JPMorgan Chase Bank, National Association and Anor v Fletcher and Ors

[2014] HCATrans 248

[2014] HCATrans 248

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S228 of 2014

B e t w e e n -

GRANT SAMUEL CORPORATE FINANCE PTY LIMITED (ACN 076 176 657)

Appellant

and

WILLIAM JOHN FLETCHER AND KATHERINE ELIZABETH BARNET AS LIQUIDATORS OF OCTAVIAR LIMITED (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) AND OCTAVIAR ADMINISTRATION PTY LIMITED (IN LIQUIDATION)

First Respondent

OCTAVIAR LIMITED (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION)

Second Respondent

OCTAVIAR ADMINISTRATION PTY LIMITED (IN LIQUIDATION)

Third Respondent

Office of the Registry
  Sydney  No S229 of 2014

B e t w e e n -

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION (ACN 074 112 011)

First Appellant

J.P. MORGAN SECURITIES AUSTRALIA LIMITED

Second Appellant

and

WILLIAM JOHN FLETCHER AND KATHERINE ELIZABETH BARNET AS LIQUIDATORS OF OCTAVIAR LIMITED (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) AND OCTAVIAR ADMINISTRATION PTY LTD (IN LIQUIDATION)

First Respondent

OCTAVIAR LIMITED (RECEIVERS AND MANAGER APPOINTED) (IN LIQUIDATION)

Second Respondent

OCTAVIAR ADMINISTRATION PTY LTD (IN LIQUIDATION) (ACN 101 069 390)

Third Respondent

FRENCH CJ
HAYNE J
KIEFEL J
BELL J
GAGELER J
KEANE J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 12 NOVEMBER 2014, AT 10.17 AM

Copyright in the High Court of Australia

____________________

MR A.J.L. BANNON, SC:   May it please the Court, I appear with my learned friend, MR P.M. KNOWLES, for Grant Samuel in matter S228/2014.  (instructed by Watson Mangioni Lawyers Pty Limited)

MR C.R.C. NEWLINDS, SC:   May it please the Court, I appear with my learned friend, MR N.M. BENDER, in the second matter, S229/2014.   (instructed by Corrs Chambers Westgarth Lawyers)

MR B.A.J. COLES, QC:   May it please the Court, in each of these matters, your Honour, I appear with my learned friends, MR P.J. DOWDY and MR A.K. FLECKNOE‑BROWN, for the respondents.  (instructed by Henry Davis York)

FRENCH CJ:   Thank you.  Yes, Mr Bannon.

MR BANNON:   I invite your Honours’ attention briefly to our outline of oral submissions.  So I just propose to go through very briefly and then come back to flesh some matters out. 

FRENCH CJ:   Yes, thank you Mr Bannon.

MR BANNON:   Your Honours, the first proposition we identified in paragraph 1 is essentially this, that as a matter of construction, we say section 588FF(3)(b) does not envisage that a competent extension order made pursuant to an application filed within the relevant period would or could be the subject of further extension pursuant to a reconsideration of the order after the expiry of the three‑year period.  That really poses this question.  Does a reading of that section invite this conclusion that the legislature was agnostic or indifferent to that order being subsequently subject to variation, essentially based on evidence where the liquidator seeks more time?

Jumping ahead to our outline, in paragraph 9, we have put a form of rules – it is not precisely the 36.16 rule, but we say it is the effect of it.  It does not have the ex parte element, but the ex parte element is inconsequential.  One really tests the proposition, would a rule which said any order made – and specifically referring to 588FF – permit an extension on the application of the liquidator at any time.  It does not have to be before or after the extended period. 

On the basis of evidence demonstrating the insufficiency of time can be varied, if one stood that against 588FF(3)(b), would one say that is inconsistent?  We submit that that is the question which is posed, and we submit, looked in that way it is, in our submission, plainly inconsistent.  If one goes to the actual terms of 588FF(3)(b), which obviously appears in the section which deals with the ability of the court to make orders about voidable transactions, as appears from subsection (1), we emphasise within the language in subsection (3) the words:

An application under subsection (1) may only be made –

and we emphasise only –

(a)during the –

three year relation‑back period – I can leave aside subparagraph (ii), or –

(b)within such longer period –

and there is the use of singular, so we emphasise that it does not say “period or periods”—

as the Court orders on an application under this paragraph made by the liquidator during the paragraph (a) period.

What in fact happened here, as your Honours appreciate, is that the three‑year period from the relation‑back period expired on 4 June 2011, the relation‑back date being 4 June 2008.  On 30 May 2011, Justice Hammerschlag, pursuant to an application obviously filed before that date, made an order under the subsection extending time until 3 October 2011, but on 19 September 2011, Justice Ward made an application varying the order made by Justice Hammerschlag so that it would extend time to 3 April 2012.  It was on 21 March 2012 that the proceedings were commenced against my client.  So what in fact happened was an order was made which was a component order.  No one suggested it was the subject of vitiation, that there was an improper exercise of discretion.  The task envisaged by the extension subsection was fulfilled. 

After the three‑year time period, that is, after 4 June 2011, a further application was made to vary it, expressed in terms to be, in substance, an extension of time and expressed in terms to be reliant on further evidence of further difficulties the liquidator was having in working out whether it should pursue claims and how many such claims.  In other words, exactly the same considerations which the section envisages, it might be thought, inform the exercise of the power to extend on the application made before Justice Hammerschlag. 

Just to make good that point ‑ and these points are picked up in point 7 of our note of oral argument ‑ if one goes to the appeal book at page 56, that is the transcript before Justice Ward, and there are two applications before her Honour:  one was for the first, an original order in relation to Octaviar Administration, that does not concern this case.  The second was the variation order in relation to Octaviar Ltd.

FRENCH CJ:   In fact, the application relied in the alternative, initially upon 588FF(3) and rule 36.16, but the first limb of it was not pressed.  Is that correct?

MR BANNON:   That is right.  It was recognised; one can see through the transcript here that that would have posed a difficulty, but at about 50 on the appeal book numbering it says, about line 40 of the transcript:

One is an original application by Octaviar Administration, and that is a true extension of time application –

We are not concerned with that –

What your Honour is otherwise dealing with is perhaps less an extension of time application under the relevant Corporations Act provision although it plainly has and is intended to have that effect but rather an application to vary the order made by Hammerschlag J on 30 May so that instead of his Honour’s order operating for 3 October it may operate for the further period specified.

That is an accurate characterisation of what, in fact, happened and what was the purpose of the application.  Then one sees again over on page 57 of the appeal book at line 20 of the transcript:

Number 3 then refers to which is really the subject of the Interlocutory Process, namely, the prolongation of the date to a six‑month period hence ‑

Then at line 30, my learned friend says ‑

I will get your Honour a signed copy.  Can I trouble your Honour again just by way of background Hammerschlag J’s short reasons may be found in the file and I will draw attention to those.  Your Honour will have to consider the matter in effect afresh ‑

which is exactly what does occur.  Going on in the transcript in relation to the matter raised by your Honour the Chief Justice, my learned friend does explain there is a recognised difficulty of pursing, in effect, an out and out further extension application.  And then in her Honour’s reasons, which start at 158 of the appeal book, her Honour addresses the history of the matter by reference, for example, to paragraph 7 on page 161, referring to what his Honour Justice Hammerschlag had said.

Then, over the page, 162, paragraph 11, her Honour refers to things which have happened since that time, and paragraph 12 her Honour summarises the reasons for the further extension – last few lines - of our “finalisation of the insolvency report” and other matters.  Then paragraph 15 over the page towards the bottom of the page, again referring to the fact that liquidators have “expended considerable time” and essentially needed more time.  Paragraph 19, in relation to Octaviar - this is on page 164:

the issue is more complicated because an extension of time has already been granted.

That is dealing with the issue as to power.  Then the conclusion at paragraph 22, the bottom of 165, her Honour concludes that:

the benefit of the established time bar has not yet in effect arisen –

But at the end of that page:

I am not satisfied that it would be in the interests of the just, quick and cheap determination of the real issues –

and over the page addresses matters, the substance of which are the same sorts of considerations which would inform an original exercise of discretion of the extension power.  So that simply confirms what her Honour the learned President of the Court of Appeal found that in substance this was an application for further extension informed by the same sorts of considerations which would inform an original application for an extension.  So against that background one comes back to the wording of 588FF(3)(b) when it says:

within such longer period –

singular –

as the Court orders on an application under this paragraph made by the liquidator during the paragraph (a) period -

which is the three‑year period relevantly, one asks did the legislature contemplate or envisage or was it agnostic or indifferent to this proposition that an application made within such longer period or periods as the court may at any time order on that application without limit, was it agnostic as to a procedural rule, if that is the way to describe it, or a rule or State law which would permit that.  We say it ‑ ‑ ‑

HAYNE J:   Well, is the point one that turns upon plurality of applications or is the point one that turns only upon the engagement of the time?

MR BANNON:   It is the singularity of the word “order” and ‑ ‑ ‑

HAYNE J:   Be it so ‑ ‑ ‑

MR BANNON:   ‑ ‑ ‑ I should say, and captures singularity of application as well.

HAYNE J:   ‑ ‑ ‑ could not a liquidator within the three‑year period make first an application for an extension say of a month, but then before the end of the three‑year period come back and say, look, for whatever reason I am going to need six months, not one month.

MR BANNON:   Your Honour, this raises the issue as to whether or not the section contemplates or admits of more than one application - at least that is one way of looking at it, within the time period.

HAYNE J:   What I am suggesting to you is that the singularity of application may be a distraction.

MR BANNON:   Yes.  We have submitted below that one should take the view espoused by Justice Spigelman at least on one view in BP that it is a single determinate period but we are certainly not wedded to that view and we can see a good reason why – perhaps the reason your Honour mentioned that there may be nothing offensive to the section to have multiple applications provided the last one, if you like, is filed before the expiry of the period so that at least a person in the position of a creditor would know that that will be the application which will determine the length and once an order is made on that application, a singular order, then that provides the certainty within which or by which the creditor can organise their affairs.  So I think I am more or less agreeing with your Honour that the singularity of the application is perhaps a distraction.

HAYNE J:   While keeping the back door open, Mr Bannon.  I understand that.

MR BANNON:   But the emphasis is perhaps the collocation of application and order that what it does not contemplate is what happened here.  In fact, it is contradictive of that proposition.

KIEFEL J:   Justice Ward’s order, I think, appears at appeal book 168.

MR BANNON:   Yes.

KIEFEL J:   What does paragraph 1 mean?

MR BANNON:   That is in relation to the other company, Octaviar Administration, and I rushed over that a little bit, but there were two applications before Justice Ward, one which is not the subject of complaint, that is, in relation to a different company, Octaviar Administration.

KIEFEL J:   I see.

MR BANNON:   In respect of which there had been no order for extension.

FRENCH CJ:   Part of this extension timing was designed to try and bring Octaviar Limited into sync, as it were, with Octaviar Administration, was it not, which had a later relation back ‑ ‑ ‑

MR BANNON:   That is exactly right.

FRENCH CJ:    ‑ ‑ ‑ period commencement.

MR BANNON:   If one gets into a little bit of the detail of liquidators’ evidence it is to the effect that Octaviar Administration was, as the company name sounds, an administration company which would pay money – be the entity which would pay moneys out but, by way of example, a preference claim against my client, as actually filed, is that the moneys were paid, although physically paid by Octaviar Administration, were in fact moneys paid – moneys of Octaviar Limited and it is unlikely to be an issue in relation to that.  But your Honour the Chief Justice is right, there was that attempt to try and make things coordinate.  So order 1 is directed only to administration as order 2, which is the order about which we complain.  If I could jump to point 4 on our outline, we say:

The starting point for any analysis of whether s. 79 . . . “picks‑up” a state law . . . is the relevant Federal legislation ‑

That is the correct end of the telescope through which to peer, and looking at the next proposition ‑

The relevant time . . . is the point in time at which [the particular State law or rule] is sought to be invoked ‑

and that was on 19 September.  That is when one tests whether, we respectfully submit, that the question of whether or not the rule or law is picked up.  As we say at point 6 ‑

At that point in time, a competent extension order had been made . . . extending time –

and “The occasion” in 7 was simply the need for a further extension.  There are three cases I wish to take your Honours to in a little bit of detail, and they are Gordon v Tolcher, but also, and not unimportantly, Air Link and Agtrack.  Might we say that each of those three cases support the proposition that you look at the particular rule in the particular circumstances which operate, and there may be some circumstances where some rules will actually work.

For example, in Air Link, as we will come to, there was an amendment power and in certain circumstances this Court said the amendment power could work, but in other circumstances it could not, it could not work if the effect of it was to overturn what we will see is a not dissimilar provision about limitations.  So if I could first go to Gordon v Tolcher 231 CLR 334, and pick it up at page 343, paragraph 17, which identifies that:

On 2 May 2003, that is to say shortly before the end of the three year period fixed by para (a) of s 588FF(3), the respondents instituted by statement of liquidated claim filed in the District Court . . . in respect of certain alleged uncommercial . . . insolvent transactions . . . said to be voidable –

Paragraph 18 records that –

the statement of liquidated claim had not been served –

as of 1 December –

and, accordingly, no notice of grounds of defence had been filed –

Therefore under Part 18, rule 9, the right of –

certain “dormant” actions are “taken to be dismissed”.

FRENCH CJ:   So, I mean, the focus of this – although the statements in the judgment range wider – was the application of procedural rules to an application under 588FF(1).

MR BANNON:   Yes, and perhaps even more so, we would put it, the particular procedural rule, or combination of procedural rules, because I think that our learned friends seek to say, well, Gordon v Tolcher stands for the proposition that across the board any State law, once you file an application, applies regardless without further consideration.  I may have overstated their position but ‑ ‑ ‑

KIEFEL J:   And I think, as your written submissions point out, importantly the procedural rules which were applied to the application were not in the nature of rules purporting to have the effect upon application to extend the time for the bringing of the proceedings, but rather they worked upon the application which was instituted.

MR BANNON:   Yes.

KIEFEL J:   The orders made, even in the Court of Appeal, were not in the nature of extensions of time for the bringing of proceedings, they were to file a statement of claim and, thus, overcome the dormant rule.  Is that right?

MR BANNON:   Yes, it was, in effect, to revive, relying on one rule, what had been sent dormant by another rule.

KIEFEL J:   Yes.

MR BANNON:   Oddly enough, the party in that case was trying to rely on one rule to say it was dormant and dismissed, but then ignored the other rule.

FRENCH CJ:   Any general statement about the application of procedural – State procedural rules – must depend upon their compatibility with the substantive provision, that is your – that is what it has to boil down to.

MR BANNON:   That is our point, and very briefly, in paragraph 19, they refer another – that is the other aspect of that rule.  Then over the page at 344, there was another rule identified in paragraph 23 and 24 – well, 23 was the extension rule, but 24 was the:

Pt 18, r 9 uses the phrase, “the action is taken to be dismissed” . . . The term “dismiss” is defined in Pt 1, r 4(1) as follows:

“dismiss, in relation to any proceedings, means finally dispose of the proceedings, but . . . without prejudice to any right to commence fresh proceedings ‑

and 25 really reinforces the point I have been making, that ‑

The reference to “any right to commence fresh proceedings” would not have availed the respondents in this litigation; given the lapse of time, that “right” could not exist in the face of ss 588FF(3) and 79 of the Judiciary Act would not have picked up so much of the Rules ‑.

So there was one of the rules which applied in the District Court which said, if you do lapse, you can start again, but this Court was pointing out that, well, that is not a rule which could be picked up because it would offend the intent of 588FF(3).  So within the same judgment, one has an example of the sort of – of 79 operating differentially, depending on the effect of a particular rule.  Then we emphasise in paragraph – if I could just go to paragraph 32 – sorry, I should have emphasised paragraph 29.  The Court emphasised the fact that in 1337A(2) of the Corporations Act, looking at the second sentence:

The section excludes the operation of s 39B of the Judiciary Act –

but the next sentence:

Div 1 does not limit the operation of the other provisions of the Judiciary Act -

So, in other words, the Court emphasised the fact that 79 was still expressed to have specifically a role to play, notwithstanding jurisdiction was conferred on particular courts.

HAYNE J:   That is stated in 1337A(3).

MR BANNON:   Yes.

HAYNE J:   It is an express statement.

MR BANNON:   Exactly, yes.

HAYNE J:   Yes.

MR BANNON:   Then if I could go over to paragraph 32 on page 346 – and I think this is the paragraph which our learned friends seek to place great reliance on – the last sentence says:

Secondly, subject to any operation of other provisions of the Corporations Act, after the institution of an application the procedural regulation of the conduct of a matter is left for that particular State or territorial procedural the law which is to be picked up by s 79 of the Judiciary Act.

Our learned friends say, and I think it is fair to say the majority of the Court of Appeal said, well, that is the imprimatur to say whatever happens then this Court has said happens, because of that sentence.  But there are two things to say.  The context of everything said in that case was about the particular circumstances of the particular rule, but even that sentence recognises that it has to be a procedural regulation, and if the effect of the regulation has a substantive effect as found by the learned President in the minority, then plainly this Court was not endorsing such approach.

Then over the page at 347, we have emphasised in our submissions and we will not go back to it, but 36 and 37 emphasises that the particular provisions in FF(1) are elements of the right, and endorse some statements made by Chief Justice Spigelman in BP.  At paragraph 40 over on page 348 the Court concludes:

Accordingly, s 588FF is dealing, as an essential aspect of the regime it creates, with the period within which the application must be made . . . Thereafter, and subject to any other relevant provisions . . . the conduct of the litigation is left for the operation of the procedures . . . The scheme of the Corporations Act is not to impose a direct federal and universal procedural regime.  Rather, s 79 of the Judiciary Act is left to operate according to its terms in the particular State or Territory concerned.

Again, emphasising 79 will operate as it does or does not, depending on the particular regulation.  The conclusion in 41:

Thus the relationship between ss 588FF and 79 . . . is not one of which it may be said that the former provision is a law of the Commonwealth which “otherwise provides” so as to deny the operation of s 79 in this case to pick up so much of the Rules as supported the orders made by the Court of Appeal.

That is really the ‑ ‑ ‑

KEANE J:   So far as section 79 of Judiciary Act is concerned, is not the best point for you in Gordon v Tolcher the first sentence of paragraph 37?

MR BANNON:   Yes, it is.  Yes, and I did not mention it as I went through, and I perhaps should have, but we do emphasise that in our written submissions, but that is a critical element.  We agree with that, your Honour.  Could I then just go to the other two cases I wish to take your Honours to?  The first is Air Link in 223 ‑ ‑ ‑

HAYNE J:   With a view to showing us what out of these cases?  What do we get out of them, relevantly?

MR BANNON:   Air Link was a case where there was an amendment power – perhaps this goes to the same proposition and perhaps I do not need to go through it, but Air Link was ‑ ‑ ‑

HAYNE J:   I am not stopping you going.  I just want to know why we are going, what we are looking for.

MR BANNON: Yes. There was a general amendment power which did not permit the amendment of a statement of claim to raise an air carrier’s claim out of time, provided in section 34 of the air carriers’ legislation, but it was available to be used to tidy up the claim if the claim had originally sufficiently attracted the relevant jurisdiction under the air carriers’ legislation. So, again, it is another example of one looks at the particular circumstances of the particular rule rather than saying, in a broad brush fashion, every rule applies simply because it is procedural, so that is the point. This is 223 CLR 283. If I could start at – the plurality judgment starts at 293 and at the foot of that page it refers to the fact that an:

ordinary statement of claim issued out of the District Court of New South Wales at Dubbo on 22 September 2000, Mr Paterson claimed damages in respect of personal injuries he allegedly sustained on 25 September 1998 when alighting at Dubbo Airport –

It was defence which said that the carriage had:

been subject to Pt IV of the Civil Aviation (Carriers’ Liability) Act –

Part IV, looking at paragraph 3, effectively said that is the only liability one gets in air carriage circumstances, relevant air carriage circumstances.  Paragraph 4:

Judge Black dismissed a motion by Air Link that the proceeding be dismissed and . . . struck out an allegation in the grounds of defence that the action was not maintainable.  His Honour rejected Air Link’s submission that the statement of claim did no more than allege actions in negligence and contract and could not be regarded as an action brought under Pt IV of the Carriers’ Act.

Then there was an appeal referred to, Air Link [No 1], and in that judgment the Court of Appeal held that the claim was not sufficiently pleaded.  Then, paragraph 6, they went back to the District Court to Judge Graham, and they sought leave to amend the claim and his Honour allowed that leave, looking at paragraph 7.  Then paragraph 7 also refers to:

An appeal by Air Link to the Court of Appeal –

and they dismissed the appeal against the decision allowing the claim.  So, that is Air Link [No 2] and then paragraph 8 refers to the fact that Agtrack was heard at the same time in this Court.  Paragraph 9 refers to a general statement and paragraph 10 identifies that – particularly in the second sentence:

There is a risk of unconscious assumption that the controlling body of law is that ordinarily applied by the State court under the laws of the State or, at least, that those laws provide the starting point for legal analysis.  Such a tendency was apparent in some of the submissions –

That is just emphasising you start at the right end of the telescope.  Then:

The first of the two proceedings for determination here is an appeal by Air Link against Air Link [No 2].  The issue in that proceeding turns upon the construction of s 34 of the Carriers’ Act, in particular the term “is extinguished”.  It follows from the reasoning in Agtrack that it was only open to Judge Graham to permit the amendment if in the events that had happened an action had been brought by Mr Paterson within two years of 25 September 1998.

Putting that perhaps more fully, what their Honours were saying if in fact they had sufficiently pleaded the case to actually attract the relevant section, then the amendment which tidied the thing up and made it more explicit was permissible.  If they had not pleaded it, an amendment to plead it for the first time which was out of time and beyond the section 34 limitation time under the civil carriers’ liability legislation, that power could not be used.  Then at paragraph 12 their Honours indicate:

That raises the issue in the second proceeding, an application for special leave to appeal from Air Link [No 1].

The question is whether, in effect, the action had been properly pleaded:

That issue should be answered favourably to Mr Paterson.  Special leave should be granted in respect of Air Link (No 1], the appeal should be treated as heard instanter and should be allowed.

Then over the page, paragraph 14:

The consequence of this outcome in Air Link [No 1] is that it was competent for the District Court to grant leave for the filing of the amended statement of claim and that the order of the Court of Appeal in Air Link [No 2] dismissing the appeal from that order should stand.  However, the reasoning of the Court of Appeal for this conclusion turned upon a construction of s 34 of the Carriers’ Act which is contrary to that now explained in Agtrack.

So it is a little bit dense to capture all of that, but then their Honours dealt with whether or not the thing had claimed to have been properly pleaded.  At paragraph 30 at page 299, their Honours said:

Although the statement of claim identified the particular ticket number it did not set out the sectors of carriage for which the ticket provided.  However, as explained in Agtrack, the determination of an issue whether an action under Pt IV had been brought . . . is not dictated by the rules of pleading, if any, which applied in the court –

and they refer to the District Court.  In other words, her Honour says well, whether or not the action has been brought is by reference to the federal legislation.  We have an alternative way of putting our argument to say if one can look at whether or not what happened before Justice Ward was the same application that is not determined by the Supreme Court Rules because that assumes in your favour that the Supreme Court Rules apply and that the variation order applies. 

You actually start with the federal legislation and you ask when that says an application is that an application made within the period here as an alternative way of looking at the case as their Honours did here.  We do not get fixated by what the District Court Rules or the Supreme Court Rules say about whether there is an application or whether it is still on the same application.  You ask construing that federal section is what happened before Justice Ward the same application or not?  We say it is a matter of substance, plainly it was not.  So that is an alternative way of putting the matter, but they perhaps devolved for the same conclusion.  Then the only other matter briefly was Agtrack 223 CLR 251which has similar considerations to Air Link.  At 254 we have derived ‑ ‑ ‑

FRENCH CJ:   This is really all just going to a fairly general proposition that the critical question is the proper construction of the federal provision and whether that and the State provision can stand together.

MR BANNON:   Yes, and that you look at it with particular circumstances.

HAYNE J:   The multiplication of examples does what for us?

MR BANNON:   Probably not much.  But I think that the references we have given in relation to Air Link probably inform the matters we want to say about Agtrack as well, so I will not trouble your Honours in relation to that.  So that alternative way of putting it is referred to in paragraph 12 of this outline, and we have given the references.  But I think on the special leave application I said this is a short point, it is still a very short point, and as I say, you start with a proposition of the construction of 588FF.  We put in writing and orally what we say it is intended to capture and we say it is completely inconsistent with what occurred here. 

Justice Beazley adopted the correct approach of considering the matter by reference to the particular circumstances.  We say that the minority fell into error by really taking a more mechanistic approach and not considering the particular rule and the particular circumstances which operate.  The only other matter I would really wish to emphasise is that you get odd ‑ ‑ ‑

FRENCH CJ:   I notice in paragraph 13 you have a reference to Fortress.

MR BANNON:   Yes, it is the same company.  It is an active litigant, or defendant, perhaps I should say.  It is not the other piece of litigation which I know is coming up to this Court.  Paragraph 13 just demonstrates the sort of arbitrary outcomes you can have.  In this particular case, as it turns out, what the first reference indicates in one of the liquidator’s affidavits is that before – within the three‑year period, they commenced the claim against Fortress for preference claims which dictated you must make assertion

about insolvency in relation to payments in February 2008, December 2008 and other dates.  We got a letter of demand from the respondents on 19 April again but in the period, alleging that we had received a preference, and that is the second point.

An extension order was made by Justice Hammerschlag on 30 May – still no proceedings filed against us.  A variation order was made by Ward J on 19 September – still no proceedings filed.  It is not until 21 March we get the proceedings which are in respect of exactly the same payments, a single payment on a date which is 21 March.  So the sort of arbitrary, capricious results which can result by this sort of order where a liquidator can go up to the court and say, well listen, I am really having a lot of trouble, we are not getting funding, and one…..criticising the liquidator for having those issues, they arise, but it produces the potential for this rule and the application of it or any equivalents, arbitrary, capricious results, which are foreign, we say, for the legislative purpose espoused in 588FF(3)(b).

HAYNE J:   Well, if there is room for caprice ‑ and I do not know whether there is ‑ it arises from the division of the process which has led to two appeals in this Court.

MR BANNON:   Yes.  Subject to any other matters, much as I would like to keep talking ‑ ‑ ‑

FRENCH CJ:   Yes, all right, thank you, Mr Bannon.  Mr Newlinds.

MR NEWLINDS:   Your Honour, we have also distributed our three‑page document.  If your Honours just want to spend a minute glancing at that, your Honours will see where I propose to go.  The plan is ‑ ‑ ‑

HAYNE J:   Is that to a different destination or by a different path from that which has been outlined?

MR NEWLINDS:   Hopefully same destination, similar path, and simply emphasising or amplifying a couple of points.  The plan is I am not going to be long, your Honours.  The first point is this, in picking up a question from Justice Hayne, and this is really paragraphs 1, 2 and 3 of the outline.  We would accept that, to the extent the statement by Justice Spigelman extracted in Gordon v Tolcher might suggest that you can only ever have one single determinative extension of time as an across the board proposition, overstates the position because we would accept that if a series of applications were filed within the three‑year period, that is, applications under 588FF(3)(b), then on each application it is permissible to obtain an extension of time.

So a liquidator goes up with one month to go, files an application, gets an order extending the time for six months, two weeks later goes up, files a fresh application; there is no problem, in our submission, with there being a further extension granted within that time.  In other words, the requirement for a single ‑ ‑ ‑

HAYNE J:   Well, let us unpack that just a little.  If the liquidator is making an application in respect of a defined party with respect to proposed defined proceedings, there would seem to be at least much to be said for the view that the liquidator can make an application in respect of that proceeding, possibly make a later application within time with respect to that proceeding, but certainly if the applications relate to separate clawback defendants ‑ ‑ ‑

MR NEWLINDS:   No problem.

HAYNE J:   ‑ ‑ ‑ there can be as many applications as defendants, I would have thought.

MR NEWLINDS:   One would accept that, but the applications have to be filed within the period.  That is the point.

HAYNE J:   The time.

MR NEWLINDS:   So the qualification I am accepting on the broad proposition, the purple passage from Justice Spigelman in BP v Brown, is simply that we would suggest the correct analysis is one single determinative extension on each application, the applications only being applications filed in accordance with 588FF(3)(b).  That is the first point.  It does not matter for the purpose of this case.  It is going to come up perhaps in December when your Honour considers the shelf order concept that arises out of this section.

So that is our first point.  Our second point is in paragraph 4, and it is simply this:  we identify that the result in BP v Brown, relevantly, was that the saving provisions or extension provisions found in 1322(4), and I think it is relevantly (a) and (d) of the Corporations Act, were not available to achieve the very result that the liquidator set out to achieve in this case.

HAYNE J:   Sorry, which provisions were those?

MR NEWLINDS:   Section 1322(4).

HAYNE J:   Section 1322.

MR NEWLINDS:   Paragraph (d) is the usual one, which is extending any time, that is what people usually look at, but if you look at (a), that also allows a court to relieve any person from any contravention of the Act.  Now, the conclusion in BP v Brown, which no one challenges, is as a matter of construction within the federal legislation, those saving provisions or extension provisions are not available for the purpose of a 588FF(3) time limit.

HAYNE J:   That is consistent with David Grant in the ‑ ‑ ‑

MR NEWLINDS:   It is exactly consistent with David Grant.

HAYNE J:    ‑ ‑ ‑ winding‑up context.

MR NEWLINDS:   Exactly.  Well, David Grant is referred to by Chief Justice Spigelman.  But, of course, it is just a question of a construction, perhaps it comes down to as simple as, there is a general saving provision but a specific mechanism within the power.

FRENCH CJ:   The same would apply to section 70.

MR NEWLINDS:   Of?

FRENCH CJ: The Corporations Act.

MR NEWLINDS:   Yes.  So there is no provision within the Corporations Act to which a liquidator can resort to extend the time for asking for an extension period, or, we would say, for asking for more than one extension period; that is the first point.  The Court of Appeal in Queensland in Greig v Stramit, which we refer to in paragraph 4, that case, same topic, the liquidator sought to rely on the general amendment power found in the Queensland Supreme Court Act; answer, not available.  ©

The submission we make on that is it really is a crazy world if the legal position is that the saving or extension provisions built into the federal legislation under consideration are, as a matter of construction, not available to assist the liquidator to escape the consequences of 588FF(3), and yet a State rule can be picked up under section 79 to have that very same effect, and that is why we say it is ‑ ‑ ‑

HAYNE J:   The liquidator can resort to any State court in respect of the winding‑up regardless of the fact in this case.  What, it was a Queensland winding‑up order, was it not?

MR NEWLINDS:   Yes.  So they can go to any State court.  Now, the next point is, looking at paragraph 5, is that just as a matter of construction if it be right that the federal legislation contemplates and accepts that you can get a series of extensions, then the requirement for the application itself to be made ‑ and everyone accepts that “made” in this context means “filed” ‑ the requirement for that process to be filed within the three‑year period becomes wholly arbitrary, it is pointless.  That just gives one an insight or support for the construction for which we contend.

It does become, we would think ‑ and perhaps with excellent drafting one could get around it – it does actually make it very hard for the Commonwealth Parliament to craft any section in any piece of federal legislation trying to make a drop‑dead time limit if the answer to the question when you get to a State court exercising that federal jurisdiction is, well, Gordon v Tolcher says, once you have started, it is all down to the State rules, therefore, you have started, here is a rule which we can shoehorn the situation into, liquidator saved.  We say intention and proper construction of the federal legislation thereby subverted.

Can we also make the point which we make in paragraph 6 – is that your Honours will have picked up that the particular rule we are talking about ‑ and I have pressed the point at first instance in the Court of Appeal but lost both times, and it is not alive here, is this is a rule that most people would think was designed for the missing party, the party who was not there when an ex parte order was made, to apply to set aside or vary that order.  Such a right is a natural incident of procedural fairness, would exist as a matter of law, in any event, without the law. 

This rule has been construed so as to be available to support an application not just by the missing party, but by the moving party.  In our respectful submission, it is a very undesirable result, because if it be right, it is going to create a very strong incentive on liquidators to move ex parte, because if they moved inter partes on notice, this rule would not be available.  That is an odd result which we submit simply supports our position.

Now, where we say the Court of Appeal goes wrong, and at the end I will come to where we say the error is, is ultimately both Justice Macfarlan and Justice Gleeson fix on the question of, well, is this the same application, and answer that question in the affirmative.  We say even if that is right, it is only half the equation.  You still have to grapple with the proposition that only one single determinative extension is available on each application.  That is our first point.  The majority simply do not deal with that.  Now, if that is right, that is the end of the case, but the alternative way of looking at it is this question of, is it the same application, or not?  Our first submission is this, on any view ‑ ‑ ‑

HAYNE J:   What does this notion of the same application mean?  Same bit of paper?

MR NEWLINDS:   Yes.

HAYNE J:   Same bit of paper seeking the same order?  Same bit of paper seeking the same kind of order?  “Some application” is masking a lot ‑ ‑ ‑

MR NEWLINDS:   What it must mean, we would suggest, is firstly, it has got to be the same piece of paper, because everyone would accept that the application being made – now, you could have an oral application, but in this case there was a piece of paper filed that was returnable, it was filed in court – and so we would accept that was the application.

KIEFEL J:   But an order has been made upon it, and surely one could only reopen the application after an order finally disposing of it in accordance with the rules.

MR NEWLINDS:   Yes, that is right, but our learned friend’s case, as we read their submissions, and we think the reasoning of the majority, is once the order has been – once the application is the subject of the application under the rules, which is a separate application, then somehow the 588FF(3)(b) application has been revived, reinvigorated, brought back from the dead.

HAYNE J:   Well, the proposition seems to be that once the liquidator has said “I want an extension of time” ‑ ‑ ‑

MR NEWLINDS:   He has made his application.

HAYNE J:   ‑ ‑ ‑ then the liquidator can come back more than once to say what time he or she wants.

MR NEWLINDS:   Correct, and we say that is wrong because that was our first point.

KIEFEL J:   But your first point deals with the second point, the one determinate period of time affects ‑ ‑ ‑

MR NEWLINDS:   That is right.

KIEFEL J:   Includes both.

MR NEWLINDS:   But what I am now saying, I am now dealing with the proposition that it is the same application, because our learned friends need, we think, to win on that.  Our simple point is this.  On any sensible view of what happened, the orders that were made by Justice Ward were made on an application under the rules.  They were not made on an application that had been filed within the three‑year period under 588FF(3)(b).  They were made on a different application.  So they simply do not pass the (3)(b) test.

They are not orders made on the application filed within the three‑year period.  In fact, they were orders made on an application filed pursuant to the rules.  You can stop there, but I can add “and filed outside the three‑year period”.  Test it this way.  There is no power within the Corporations Act to vary or set aside the orders, so what I have just said must be right.  The power – the variation was made on an application under the rules pursuant to the rules.  So it fails in limine.

KIEFEL J:   There is no power under the Corporations Act to vary an order made under 588FF(3), as we were discussing earlier.  Normally, once an order is made under Rules of Court, it can only be reopened by reference to the rules, but we are in different territory with 588FF(3).  You would have to look at variation provisions and ‑ ‑ ‑

MR NEWLINDS:   There are not any.

KIEFEL J:   There are none relied upon within the Corporations Act itself to vary the order.

MR NEWLINDS:   Exactly.  So the simple point is ‑ ‑ ‑

KIEFEL J:   There would have to be a fresh application within the period.

MR NEWLINDS:   Correct, so the point is the orders that our learned friends obtained, which are the orders the subject of appeal, were not made on an application filed pursuant to the Act within the relevant time.  They were made on a different application.  We endorse what the President Justice Beazley said in that regard and we point out in paragraph 11 – we remind your Honours of what I think Justice Gummow said in the David Grant Case when he came to the question of construction as to the statutory demand 21‑day period which was endorsed in the Emanuele decision, both of which are extracted by Chief Justice Spigelman at paragraph 65 of the BP v Brown decision, and that is this.  Properly understood, the time limits under 588FF attach a limitation or a condition on the jurisdiction of the court to make the order, and therefore it is a very unusual – indeed, we would say inapt – state of affairs if pursuant to a court variation rule that limitation of jurisdiction can be in effect extended.

GAGELER J:   Do you need to go as far as you do in paragraph 12?

MR NEWLINDS:   No, but I do put the submission.  Certainly, in this litigation no such power has been identified.  It might be for another case to determine the question, but in this case the only power identified to make the variation order is the power invested in the Supreme Court by its rules.

FRENCH CJ:   Your appeal to the Court of Appeal was against the order of Justice Black.

MR NEWLINDS:   I am so sorry, your Honour is right.

FRENCH CJ:   And the interlocutory application before Justice Black – I do not think anything in particular turns on it, but was that an application in the proceedings which had been commenced against your client under 588FB(1)?

MR NEWLINDS:   Just excuse me, your Honour.  It was a motion filed in the proceedings to get the extension, as I understand it. 

HAYNE J:   Where you came back inter partes to discharge that which had been done ex parte.

MR NEWLINDS:   Exactly.  Pursuant ironically ‑ ‑ ‑

FRENCH CJ:   What had been made as a shelf order ‑ ‑ ‑

MR NEWLINDS:   ‑ ‑ ‑ to the same rule, I would imagine.

FRENCH CJ:   But at that stage you had been named in a claim under subsection (1).

MR NEWLINDS:   We had, yes, filed, we say, out of time.

FRENCH CJ:   Yes, but, in any event – so you say that it was not in that proceeding that you made an interlocutory application, it was in the subsection (3) proceeding.

MR NEWLINDS:   Correct.  Can I then conclude with simply identifying where we take issue with the majority?  Firstly, and Mr Bannon has dealt with this, we say the analogy with Gordon v Tolcher simply fails.  Gordon v Tolcher is a completely different case.  Ultimately, in these section 79 cases, they will always turn on their own facts, the facts being the proper construction of the federal law being exercised by a State court and whatever local rule or court is picked up, but I just remind your Honour the case in Gordon v Tolcher is a District Court claim filed by a liquidator had a number.  Now, by operation of the rules because something was not done within a particular time limit it was then “dismissed” under the rules.

FRENCH CJ:   Deemed to be dismissed.

MR NEWLINDS:   Deemed to be dismissed under the rules.  Under the very next rule it is then un‑dismissed, and when it comes back into the court lists it has the same number, it is in the same file package, it is the same case.  So one can well understand and accept the reasoning that well, therefore, you look at 588FF(3), that is all about when you can start a claim, and the Court said in Gordon v Tolcher well, this claim was started within time, it is still the same claim.  What might have happened to it along its way is a matter for the State rules.  It is a completely different state of affairs to what we are dealing with here.  So it is easily distinguishable and ought not be read as some broad statement to the effect that once you have started it is over to the State rules.

KIEFEL J:   Perhaps the relevance of Gordon v Tolcher to this case is the apparent acceptance by the Court at paragraph 39 of statements by Chief Justice Spigelman in BP v Brown concerning the policy underlying 588FF(3) and the commercial certainty to which it was directed.

MR NEWLINDS:   Correct, and, what I call the purple passage, the single determinative extension finding, we submit – this is one of these fabulous cases where both sides are furiously relying on the same case, but we say that this Court very much endorsed his Honour’s construction of the federal legislation, and there is no getting around that.  But to the extent that then Gordon v Tolcher resolves the apparent tension between the federal legislation and the court rules was a matter for the peculiar circumstances of the particular section and the particular rules.  That is the first point.

His Honour equally, at paragraph 160, sought to distinguish Greig v Stramit, the Queensland case that said the Supreme Court Act of Queensland amendment power did not work in, we say, a way that was unpersuasive. Then finally – and both Justice Macfarlan and Justice Gleeson fall into this error, in our submission – they deal, we say erroneously, with the question of application and was this the same application without turning their minds to the other important question, can you get more than one extension of time on an application. They just do not deal with that.

Now, perhaps that is being unfair to Justice Gleeson, because in paragraph 173 his Honour analyses the matter, as we understand it, by saying, well look, it is all a matter for the purpose of determining the federal dispute that is in the hands of the State court and, therefore, anything that happens within that matter is okay.  That may be right, except for the problem that just overlooks that what you need to find as the gate to the power is an application filed within the three‑year period.

So we say it is just not to the point that it may be all happening within the same matter, you still need to find an application within the relevant time that triggers the exercise of discretion.  So for those reasons, we say that the majority’s reasoning is flawed, and the precedence is to be preferred, and for the reasons we have otherwise developed in our written submissions that is my submission.

FRENCH CJ:   Thank you, Mr Newlinds.  Yes, Mr Coles.

MR COLES:   Could I perhaps pause while your Honours overview the three‑page outline of oral argument.

FRENCH CJ:   Yes.  Yes, thank you, Mr Coles.

MR COLES:   If your Honours please.

FRENCH CJ:   Much would seem to turn on the word “applicable” in paragraph 4.

MR COLES:   Your Honours, it is common ground that the question before the Court is one of the proper construction of, relevantly, section 588FF(3), and whether, by force of its terms, the Commonwealth legislation otherwise provides so that the relevant provision under the Civil Procedure Rules is not picked up by section 79.  The first matter we would wish to emphasise is, of course, that the task of construction necessarily begins with the text itself. 

Concepts of purpose and notions, for example, of certainty will be relevant matters to take into account, but they are not the commencing point of the constructional exercise, and in particular, we would respectfully suggest that where one encounters, as you do in this case, an understandable reaction to what is asserted to be the substantive effect of a particular order, recognition of a substantive effect may of course cause one to pay close attention to the text to ascertain its real terms, but notions or recognition of perceptions of what are said evaluatively to be, in the eye of the beholder, a similar or substantial effect, are of course not the determinant.  They be the, perhaps – pose a proper reason for analysing closely the text in question.

HAYNE J:   Well, in that regard, did Justice Ward properly characterise the applications with which her Honour was dealing at paragraph 2 of her Honour’s reasons at page 159?

MR COLES:   I think answer is uncontroversially yes.

HAYNE J:   If that is so ‑ ‑ ‑

MR COLES:   She was of course describing – your Honour referred me, I think, to ‑ ‑ ‑

HAYNE J:   Paragraph 2, page 159.

MR COLES:   Yes, your Honour.

HAYNE J:   That is that the application was an application for an extension of time, an application for an extension of time relevantly founded on Part 36, rule 16.

MR COLES:   Yes.  Well, that was its practical object and effect, but of course one is looking – that is the point we wish to emphasise, if your Honours please, that whether that outcome is a permissible one is not controlled by the fact that that may be its practical effect, in our submission.  It requires consideration of whether section 588FF(3) provides against resort being had to the relevant rule to accomplish that effect. 

Now, in our respectful submission, the true focus or the real question, as we have set out, or which we submit, is that 588FF(3)(b) is to be construed on the basis that it stipulates one requirement, one essential requirement, and this Court said so in Gordon v Tolcher, a requirement essential to the operation or the work that the provision does, that is to say that the only requirement made essential by the terms of section 588FF(3)(b) is that within the paragraph, a period, the application be made by the liquidators for the appointment of a longer period.

HAYNE J:   Any longer period is the content of that.

MR COLES:   Yes, any longer period, indeed.

HAYNE J:   So, not a longer period, but within the three‑year time.

MR COLES:   Any longer period.

HAYNE J:   Any application is enough.

MR COLES:   Your Honours have noted what was said in paragraph 37 of Gordon v Tolcher as to the essential quality of that aspect of the provision.  Now, that means, in our respectful submission, that whilst the existence of that central and essential feature of the term may or must be recognised, does it control that which necessarily the legislation itself leaves to, as this Court has also said in paragraphs 32 and 40 of the same case, Gordon v Tolcher, leaves the carrying out or working through of the two questions:  firstly, should there be any extension of time and, secondly, of course, what should be the longer period determined under that application.

Now, the application made by the liquidators as we point out, and it is common ground, of course, that the making – or the application is made by the liquidators when the relevant originating process is filed in the particular court, the particular capital C court, having jurisdiction in the matter according to the procedural requirements of that court.  The application which the liquidators made to Justice Hammerschlag for a longer period was, of course, made on 10 May 2011, and was itself within the paragraph (a) period.  The paragraph (a) period was shorter than it usually is, but it was certainly and uncontroversially made within that paragraph (a) period.

KIEFEL J:   But that application is for a definite period.  The application that was brought before Justice Hammerschlag was for a definite period.  So when you describe the single application that was brought within time, it is not just the piece of paper with “application” headed on it.  It is the application for the period of time concluding on 3 October 2011, is it not?

MR COLES:   Well, the longer – perhaps one needs, in examining the importance of that observation to the issue of construction – the longer period with which the provision is concerned is the longer period which the Court ‑ ‑ ‑

KIEFEL J:   The longer – it is the period in the application.  Within such longer period ‑ ‑ ‑

MR COLES:   As the court orders, yes ‑ ‑ ‑

KIEFEL J:   ‑ ‑ ‑on an application.

MR COLES:   Yes.

KIEFEL J:   Well, it has to be the application that identifies – that seeks the period.  I suppose the court can order a different period.

MR COLES:   The application ordinarily should, and in this case, that was, did nominate a particular period.  Probably a liquidator could say operationally that I would like an extension of time for one year or such further or other period as the court may appoint, but ‑ ‑ ‑

KIEFEL J:   Well, no doubt the court could shorten the period.

MR COLES:   Well, indeed.

KIEFEL J:   That would be where the court’s exercise of discretion would operate.  It would be an extremely unusual case where the court demanded that they take a longer time than was sought in the application.

MR COLES:   In general terms, one would expect that to be the case.

KIEFEL J:   But the thing is that subsection (3)(b) is predicated upon the period being identified in the application, is it not?

MR COLES:   Well, our submission – I will come to this in a moment when I talk about the content of what happens afterwards – but it has not been, I think, contended that the period must be fixed in the application itself, the definitive period, the longer period must be that which is fixed or identified in the application.  May I come to that now?  As we point out, the application was filed within the relevant period, and I should observe, just before I move on, a point made by Mr Bannon about longer period was that the section says “longer period” or “periods”, singular.  But, in our respectful submission, the ‑ ‑ ‑

KIEFEL J:   But I think that is to acknowledge that there might be more than one application brought within the period.

MR COLES:   Yes, and we would call into question the relevance of the proposition anyway because one is looking at the subject matter of the longer period by reference to the question has this particular proceeding in question been commenced or not commenced within or outside the longer period?  So one is simply looking at the longer period in terms of whether that requirement in 3(a) has been satisfied and whether or not there are one or more other longer periods is really a matter quite to the point.  So we point out shortly that so long as the essential condition of making the application within the paragraph (a) period is satisfied, then, of course, the procedural regulation of the conduct of the matter is left to the State court to be picked up.

HAYNE J:   What is the weight you are giving to the epithet “procedural”?  Are you inviting attention to a procedure substance distinction because ‑ ‑ ‑

MR COLES:   No.

HAYNE J:   ‑ ‑ ‑ I would have thought that a point that emerges out of Gordon v Tolcher is that time, relevantly, is substance not procedure?

MR COLES:   We respectfully submit that nothing turns at all on any distinction, if one can make one, and despite observations by this Court that the distinction may be of little real importance.  We think nothing turns on a characterisation of procedural as opposed to substantive, and section 79, of course, is not itself concerned with merely procedural matters.  It picks up State law, Territory law, procedural or substantive, so there is no merit in from our perspective ‑ ‑ ‑

HAYNE J:   But the relevant hierarchy of provisions is Corporations Law first and foremost and rules of procedure second.  Do you accept that?

MR COLES:   I accept that.

HAYNE J:   Do you accept that the Corporations Law prescribes time?

MR COLES:   For the making of the application to extend time, absolutely, and this Court so held.

HAYNE J:   Prescribes time for bringing the application as well as a mechanism for extending that period.

MR COLES:   Yes.

HAYNE J:   Now, once we observe that the application to Justice Ward was an application to extend the time within which the proceeding may be brought – true it is based, so it was said, on the rules of procedure – why is that observation not determinative against you of the position?

MR COLES:   Simply because, in our respectful submission, it is but a shorthand way of describing what was in reality and in truth the actual application that was being made to her Honour, which was an application to vary an order which the court had made.  It was a description of its practical consequence, not a description of the totality of its legal effect, and it was certainly not a description which should be understood as intended to simply mean an out‑of‑time application under subsection (3). 

It was very plain and it was made very clear to her Honour that an out‑of‑time application under subsection (3) was out of the question, but that under the court’s powers her Honour was invited to consider whether notwithstanding – or she was invited to consider in the context of the policy generally to be seen from the provisions whether it was appropriate to vary the order in the particular circumstances.

So our answer to your Honour Justice Hayne’s question is what one may describe that in – so describe it in purely functional terms, but one is concerned, particularly when one is looking at the special question posed by section 79, the construction question is not the purely functional question, but it is the construction question of whether the federal law has operated in such a way upon the State law as to preclude it being picked up.  We go on then, if your Honours please, to point out by contrast what ‑ ‑ ‑

FRENCH CJ:   Well, if the functional operation of the State law is to, in effect, govern Commonwealth law it does tell you something about whether the Commonwealth law otherwise provides, does it not?

MR COLES:   But if the State law said any person may bring an application to extend time for the bringing of proceedings of this kind or, to take a better example, if a State procedural or other law authorised the extension of time to bring an application under section 588FF, then you would there have a plain contradiction or you would there have a federal provision which must operate negatively on that rather ambitious State provision.  It would be a plain instance of the ‑ ‑ ‑

HAYNE J:   But in its relevant operation, why is rule 36.16 any different from that which you have condemned as pernicious?

MR COLES:   Well, the reason we give and the reason which the Court of Appeal, in our respectful submission, correctly accepted, was if the essential base or precondition, the only one which section 588FF demands, is satisfied, namely, that an application is made for a longer period within the paragraph (a) period, here acknowledged to be satisfied, then anything that happens in relation to that application or anything that happens on that application, if it can be so characterised, is capable of – in this case what happened, we say, is that there was generated by Justice Ward’s order an order fixing a longer period made on an application filed in time under subsection (3).

HAYNE J:   If Justice Hammerschlag had rejected the application and dismissed it, do you say that rule 36.16 would have entitled the liquidator to move Justice Ward for a different order extending time?  I think your argument has to be yes.

MR COLES:   Well, I am just wondering why that would not be the case.

HAYNE J:   If that is the case, we are getting into a very odd position, Mr Coles.  So that is why I put the example to you.

MR COLES:   But that of course did not happen.

HAYNE J:   No, no, I know.

MR COLES:   If it had then there might have been various approaches, none of which would have been particularly consonant with absolute certainty if such were a requirement of procedures apart from filing the subsection (3) application because one would then have appeals and so forth.

HAYNE J:   But if your argument hinges about the fact of making application for extension of time within time and that that is enough on which you hang the 36.16 order, at the moment I do not see why the rather odd result I posit would not follow.

MR COLES:   Well, we say that the question, which is one of construction, is, in a given case, with respect to the commencement of a set of proceedings under subsection (1), the only question was the proceeding commenced within such longer period as the court orders on an application made under subsection (3) - in the paragraph “a period” and if the answer to that is yes, then obviously it is well within time.  So that is perhaps the central question then.  Can one say, as we contend, and as I wish to go on to develop in a moment, can one say that what Justice Ward did was truly an application made under subsection (3) because heard and determined in the proceedings which were instituted under that subsection within the time?

KIEFEL J:   Well, quite.  That is what I am still, I am afraid, a little confused about.  The application that you rely upon in respect of which you say Justice Ward made the order is that application which was filed within time under subsection (3).

MR COLES:   Yes, on 10 May.

KIEFEL J:   But then you say her Honour was asked to exercise a power under the Rules of the Supreme Court, but the application upon which you say that that was to be addressed is one which invokes federal jurisdiction to make a specific order.

MR COLES:   Yes.

KIEFEL J:   I just do not see how the two can operate.  Surely, if ‑ ‑ ‑

MR COLES:   If we are right – I am sorry.

KIEFEL J:   ‑ ‑ ‑ her Honour is said to exercise jurisdiction with respect to an application brought under section 588FF(3) it has to be the jurisdiction to extend time.  That is what her Honour is being asked to do.  It must be the case, must it not?

MR COLES:   To regulate perhaps the terms of that extension, to assess, to hear and determine the issues relating to its propriety and arguments about its duration and the like.

KIEFEL J:   Well, can I put it in another way?  Would not the power under rule 36.16 only operate consistently with Gordon v Tolcher on proceedings once instituted under 588FF(1)?  Gordon v Tolcher only speaks about the rules of the court in question operating upon the proceedings brought under 588FF(1), not operating upon it before the proceedings are validly instituted, surely.

MR COLES:   In one sense, that is correct, but the point we do draw attention to in Gordon v Tolcher is of course the recognition by the Court that an application under subsection (3) is itself a separate matter from an application under subsection (1) and like an ‑ ‑ ‑

KIEFEL J:   It predates, it has necessarily predates ‑ ‑ ‑

MR COLES:   Yes, it does, yes.

KIEFEL J:   That is what I mean.  When Gordon v Tolcher is speaking about rules operating, they are operating with respect to the proceedings brought as a result of the extension provision given under (3), but the proceedings are those brought under 588FF(1).  Is that not right?

MR COLES:   The proceeding – well, we submit that the same observations made about the necessity of having an order made – perhaps I put that badly, but to put the matter shortly, necessarily we accept the subsection (3) application may precede a given subsection (1) application, but the subsection (3) application is a discrete application, a separate matter of its own, and it is of the essence or condition of the right that subsection (3) confers, that it be brought within time, and that if brought in time it is, within the context of section 588FF as a whole, its own separate stand alone and distinct matter but attracting the same – substantially the same consideration in point of what its requirements are, or the essential effect which the provisions have for subsection (3) as well, but not separately or inconsistently with or necessarily detached from subsection (1).

FRENCH CJ:   But the generality of the observation in Gordon v Tolcher about the application of State procedural rules obviously begs the question – I am not saying that in any pejorative sense – begs the question of whether the State procedural rules are compatible with the relevant federal law.

MR COLES:   Absolutely.  Mr Bannon, perhaps, made a little of the proposition that we thought all you have to do is find a federal power conferred on a court with nothing supplying any procedural instruction and automatically section 79 picks up everything.  I think that would be an overstatement of the – I mean, the vast majority, I suspect, of statutes which confer – in federal jurisdiction confer powers on courts probably do not say very much about procedure and the question still remains, there will be picked up as federal law, by section 79, the relevant State law unless the relevant federal law otherwise provides.  The question we are ‑ ‑ ‑

FRENCH CJ:   But it all converges upon the question of construction of one versus application of the other and can the two occupy the same space.

MR COLES:   However, that said, one immediately says it is not an unpromising start if one finds a federal law that contains no procedural instruction, or no instruction – I will excise “procedural” – no instruction about the implementation and working out of the processes of exercising the jurisdiction which it confers.  If there is nothing there then it is perhaps in one sense a promising start to say that the legislation does not self‑evidently provide otherwise.  One has to find something else to eke out the conclusion that federal law otherwise provides if the federal law in question – that being in this case 588FF(3) – does not, by its own terms, have anything to say about – have anything more to say other than that the essential condition is that the application for the subsection (3) order be made within the paragraph (a) period.

That does of itself necessarily compel a conclusion that thereafter an order made by a court under a rule which is – an order varied under a rule of court is in any sense inconsistent with or, in effect, reduced in its ambit by the federal law because incompatible or repugnant with it because there is no repugnance to the federal requirement of institution within the paragraph (a) period involved in the application after the requirement the federal law has itself been completely satisfied by bringing it within the paragraph (a) period. 

There is no repugnance to that requirement in recognising that courts having made orders may, for very good reason under judicial control and supervision, think it appropriate – and I come to this in a moment in our concluding observations, but that is the first point we wish to make about the repugnance question arising from the text itself.  We emphasise the text of subsection (3) and it is not merely that it does not contain any body of law designating procedures and workings out of the administration of the jurisdiction which it confers. 

It is about the fact that the one essential condition which it imposes is the one essential condition which must be found to operate in a way that would trounce or trample the relevant State law by reason of that law being repugnant.  We respectfully say that as a starting point one would not readily identify that outcome from the provision of the Commonwealth law itself. 

The next paragraph we make, if I could just come back to your Honour – I do wish to emphasise this, because what we say is that one does not simply see an absence of procedural regulation or of a mud map for working out how the jurisdiction conferred by subsection (3) is to be exercised.  One also notes that it does leave unregulated or other than by judicial supervision and discretion at the State or first instance stage a large number of matters which either our learned friends deny or which the significance of which may be perhaps overlooked.

One thing one can discern from the affirmative decision to leave important questions of timing to the working through stage in the State courts is to be seen – one effect that has is to invest or instil in the process a very legitimate degree of flexibility necessarily for the purposes of giving effect to the legislative objects to which I come shortly.

BELL J:   That flexibility applies only in the case of an application that is made ex parte. 

MR COLES:   No, with respect, no.  It would apply equally with a ‑ ‑ ‑

BELL J:   I am sorry – well, to the extent that rule 36 is engaged.

MR COLES:   The observations we make in the next paragraph – this is point 5 in the written outline ‑ ‑ ‑

BELL J:   Sorry, yes.

MR COLES:   ‑ ‑ ‑ are generally in relation to the working out of the provisions themselves.

BELL J:   I appreciate that, but what I am just trying to ascertain is to the extent that you rely on considerations of the desirability of flexibility once an application is made within the three‑year period, the way that is achieved under rule 36 only applies in the case of an ex parte application.

MR COLES:   By its terms?

BELL J:   Yes.

MR COLES:   Yes.  The function of ‑ ‑ ‑

BELL J:   I think Mr Newlinds points to the oddity of that in some respects.

MR COLES:   Well, it is simply an element of the particular rule.  He sought to persuade the Court of Appeal the rule did not apply but they did not agree with that.

BELL J:   Accepting that the rule applies, why is flexibility desirable?  Your arguments about flexibility then hinge on the application of a procedural rule which only applies‑ ‑ ‑

MR COLES:   No.  I am sorry, I have misled your Honour ‑ ‑ ‑

BELL J:   I am sorry.

MR COLES:   ‑ ‑ ‑ if your Honour understands that that is not the point.

BELL J:   Yes.

MR COLES:   The observations made about flexibility are made by reference to the content of subsection (3), not the content of rule 36.16.

BELL J:   Yes.

MR COLES:   Regardless of whether rule 36 is engaged or not, the point is made that whilst our learned friends make a great deal of the essentiality as to time and the seemingly pervasive effect which the beacon of that essentiality is supposedly to shed on all other aspects of the administration of the remedy conferred, one needs to question that rather, with respect, superficial assumption because there is so much left that is unregulated, or ungoverned – for example, there is no time limit on virtually anything.  In other words, there is but one time limit and that controls but one essential requirement.  No other time limit controls any other requirement.  Those other matters are really the practical matters which, undoubtedly, are left to the courts which administer the remedy which subsection (3) supplies.

So, I will not go through - your Honours see the point trying to be made but one thing you do not find – and our learned friends in their written submissions for Grant Samuel assert the contrary.  I see Mr Newlinds asserts in, I think, paragraph11 that:

there is no jurisdiction under the Federal statute . . . to fix a “period” for the purposes of s.588FF(3)(b) after the s.588FF(3)(a) period has expired.

With the utmost respect, that is simply wrong.  One may file one’s application for a longer period, as early as or as late as, in the paragraph (a) period, as the circumstances require or justify.  One does not have to have one’s application heard and determined, as we point out.  One may have several applications involving different named defendants – as we point out, they do not have to be heard all at the same time and they do not all have to be for the same longer periods.

KIEFEL J:   But if it is heard and determined, does it remain an extant application which can be revived?

MR COLES:   In our submission, it does and, indeed, this Court touched on – this Court rejected a submission that once an aspect of the application in Gordon v Tolcher – I fully appreciate, of course, the factual matters – but I will take your Honours to – well, might I deal with that now then if it is convenient, your Honours – but what this Court said – rather than simply come back to it.  Could I just give your Honours a reference to what the Court said in paragraph 43 of Gordon v Tolcher.  Their Honours said:

There remains a further but subsidiary point.  It was suggested in the submissions for the appellant that by reason of the operation of Pt 18, r 9 of the Rules ‑

and that was the rule which caused the proceedings to be dismissed, and that dismissal was by the same rules apparently said to be, for what it was worth, final.  It was therefore on the basis of those rules submitted that the –

jurisdiction thereafter was spent.  The application under s 588FF of the Corporations Act was taken to be dismissed by the operation of Pt 18, r 9 . . . of the Rules . . . 

The answer was provided in the submissions . . . The circumstance that the Rules provided in the terms of Pt 18, r 9 for dismissal of that proceeding does not provide a basis for the conclusion that the federal jurisdiction was exhausted on 1 December 2003, unless it be assumed that the “dismissal” was final in all respects.  The Rules, as was emphasised in the course of argument in this Court, are to be read as a whole.  At all times in the District Court and in the Court of Appeal there was a proceeding in the exercise of federal jurisdiction because those Courts were seized of a “matter” arising under a law of the Parliament, namely s 588FF, in respect of which jurisdiction had been conferred on the District Court –

Now, just building on that if I may, if your Honours please.  By virtue of the order of Justice Hammerschlag, the proceedings were not, and with respect could not have been said to be totally and for all purposes at an end.  For example, and I think Mr Newlinds supplied an example in connection with his client – when under the same rule, we think, application was made to Justice Black to set aside the – in the same proceedings as Justice Hammerschlag and Justice Ward had heard, application was made by Justice Black under the same rule to set aside or vary it.

So, for so long as - I mean, the very terms of Part 36, rule 16 provide that in the particular circumstances to which the rule applies a final judgment of the court may in those circumstances be varied or set aside by order of the court.  So, for so long as that rule, if picked up, is available, then it would be very hard to say that the proceedings have, for some other reason, terminated beforehand.

BELL J:   One comes back then to the point that it is not a final order by reason it was made ex parte.

MR COLES:   Well, that may in the particular facts of this case be also true but the rule is, in a sense, a generous incursion on general law notions of finality but it is available as much or as well for final as for interlocutory orders.  Can I give your Honours one further reference?  Justice Spigelman’s decision in BP - we have referred, I think, in the written outline to this, but Justice Spigelman concluded that after the order had been set aside because - after the order extending time in that case had been set aside - in contravention of rules of procedural fairness the following was the case. 

The rule had been set aside.  The paragraph (a) period, as it now is, or the three‑year period as it then was, had elapsed, but nevertheless, the application remained on foot and outside the three‑year period, as it then was, it remained for the court to hear and determine the ex hypothesi undetermined application in the presence of the defendant who had succeeded in setting it aside.

So there is, in our respectful submission, difficulty in readily coming to the conclusion that - particularly where the order was most likely one that was amenable to being set aside because of the rule, because of the particular circumstances in which it was made, namely that although notice was given to Grant Samuel and JPMorgan they were not present when the order was made so they were entitled to come and set it aside and likewise, in our respectful submission, other rules were nonetheless applicable, including rules of variation.

Just building on the observations we have made there, in particular there is nothing in the provision which requires in terms, we submit, that some particular or singular and determinate longer period be settled upon within the paragraph (a) period and, indeed, the actual order providing for the longer period may as well be made outside the paragraph (a) period as we put, or within it, and it may or may not be the one, if any, which the liquidator selects and it may be one which the court appoints, and it may be one which is, for example, shortened if subsequent circumstances, either on the liquidator’s initiative or on that of another ‑ ‑ ‑

GAGELER J:   But your essential point is that it need not be one.  It can be two or three or four.

MR COLES:   Yes, it could.

GAGELER J:   Sequentially.

MR COLES:   But, of course, the second point we make in addition to the flexibility which the statute necessarily confers on the court by not regulating the lengths of extensions or the timing with which they can be obtained is, of course, the point we make about the significance of this being a jurisdiction conferred on a court and consequently with the – well, I suppose, three matters follow from that. 

We have given a reference, I think, in our submissions, to, for example, the well‑known observations of Justice Gaudron in FP v Knight, but the matters that follow from that are:  firstly, being jurisdiction conferred on a court it is not likely to be supposed that its exercise is curtailed by unexpressed limitations; secondly, of course, it is not likely to be supposed – and this affords an answer to Mr Newlinds’ and I think Mr Bannon’s point that you could go on, if you were lucky, applying for variations ad nauseam and ad infinitum and forever - it is regulated and supervised by a court so it is a control ‑ ‑ ‑

HAYNE J:   I think that argument was run and failed in David Grant.  I think that arguments of that kind were at the root of David Grant. 

MR COLES:   Well, that is, of course, dealing with a statutory scheme.

HAYNE J:   Other provisions, I understand.

MR COLES:   Yes, but, of course, here, if the provisions ‑ ‑ ‑

HAYNE J:   But if you begin from the premise of flexibility, Mr Coles, yes, you get to certain conclusions.  The question is, is there flexibility, what is it?

MR COLES:   Well, we respectfully suggest that if one takes into account – and it is not exhaustive – the list of variables, the list of permissible activity or judicially overseen workings through the administration of the jurisdiction subsection (3) confers ‑ ‑ ‑

HAYNE J:   But your proposition seems to be that it would be open to a court under (3)(b) to make an order “to date X (or such further or other order as may hereafter be fixed)”.  Do you go that far?

MR COLES:   I do not think I need to and I do acknowledge that one must commence a proceeding within the longer period and there will be substantial debate as to whether after date X such further period as the court may later appoint would be a longer period but that is a matter which would have to be debated and I am probably inclined to agree with your Honour that one would not be necessarily wanting to uphold – well, for example, there could be real and serious questions about whether an order extending time until further order would be the appointment of a longer period.  That does not need to be decided. 

There may be questions about whether an order could be made conditionally, for example, the time is extended provided the liquidator is able to obtain funding from a litigation lender within three months, then two and a half months later the liquidator may want to come back and say, look, it is going to take me another two weeks.  Would the court refuse him?  If my learned friends are right, they would. 

I am conscious of the need to move on, if your Honours please.  We do point out in particular again in BP exactly what all this is directed to in terms of the purpose of an extinction affording power, and I just want to say these short things about that.  We point out in the next point in the outline when one is looking, of course, at the construction of subsection (3) to best promote or achieve the objects it is there to serve and obviously subsection (3) is there to support and enable an extension of time to be given to a liquidator where the paragraph (a) period is for some reason to be made good by the liquidator, of course, insufficient for the purposes. 

The paragraph (a) period, of course, is a universal “one size fits all” sort of period which does not accommodate in terms – or necessarily accommodate – either issues such as the complexity of the administration or the chaotic nature of the corporation’s affairs.  Nor, of course, does it accommodate too readily problems that arise from the variability, particularly in the present case, of the relation‑back date, so that the paragraph (a) period can often be much shorter than the originally provisionally determined three‑year period within which these matters should be put.

Now, importantly, if I could just give your Honours a reference to, I think, one paragraph in the Court of Appeal’s decision in BP v Brown. I will just tell your Honours - the paragraphs between 182 of Justice Spigelman’s judgment - I am sorry, 58 NSWLR 322 at 356, commencing at 182, his Honour said:

The power in s 588FF(3)(b) to determine a “longer period” confers a general discretion on the court.  Other than the stipulation that an application for such an extension must be made within the original period of three years, nothing in the section specifies any criterion to be taken into account when exercising the discretion –

Coming down to 184, he refers to the aspects described by Chief Justice Dixon in Klein v Domus including leaving the:

scope for the judicial or other officer . . . the judge is entitled to look at every relevant fact and circumstance –

Then to move to the final point on that aspect of the judgment at paragraph 187, the Chief Justice said:

These authorities confirm that the general approach adopted by Austin J of asking what was fair and just in all of the circumstances was an appropriate one.  The alternative approach . . . is inconsistent with the general terms of the discretion conferred on the court by s 588FF(3)(b).

In that same vein, can I then take your Honours back to what the Court said at 170 and 171 because certainly what one is…..by the attractions of certainty and finality and so forth to which our learned friends properly lay emphasis, one needs to balance those considerations in terms of the general objective of a statute conferring power to extend.  If I could just take your Honours to paragraphs ‑ ‑ ‑

HAYNE J:   But what does the consideration of what will govern exercise of the discretion say at all about whether there is power?  We are in the question of, is there relevantly power.

MR COLES:   Yes, but that is really the point I ‑ ‑ ‑

HAYNE J:   Not how is it going to be exercised.

MR COLES:   The point we wish to suggest in that respect, your Honour, is that not only does subparagraph (3) both confer the entitlement to apply for an extension and not only does it impose as an essential condition of that entitlement the limitation that it be within the paragraph (a) period, it does one further thing.  In conferring that jurisdiction it leaves its exercise largely unfettered, that is to say, there is a lot of flexibility, I have called it, liberality, wiggle room one might say, about how one is to go about administering that process, but with the central aim involved of achieving an outcome which accommodates the idea of there being a just and proper outcome, which in turn accommodates or necessarily is directed to a very simple practical proposition which could easily be overlooked in the fortress of legal writing about the topic. 

The whole idea is that when a court gives a liquidator an extension, it should give the liquidator a real, meaningful, genuine and useful extension.  It should not be too long and it should not be too short.  If, perchance, by mistake perhaps on the part of the court I am unaffected by appeal, by mistake on the part of the liquidator, by misjudgement of resources or other matters, an extension once asked for proves to be too short, in general point of observing the purpose for which the extension power exists and in general point of bringing to bear the flexible permission which the section, the Commonwealth provision itself confers and invests in courts, as part of its own terms the mere fact that it does not say anything about it is no less a part of the instruction it gives, in our respectful submission. 

It is not an all one way through the – the paragraph (a) period is all that matters.  If the paragraph (a) period is all that matters but, here you go, do the right thing, produce for the liquidators a useful, meaningful and appropriate – so, doing your best you can, ideal extension, now, no one disputes that if the original time fixed by, say, the first order was too long -  I do not think anyone suggests that the relevant civil procedure rule could not be picked up to shorten it.

HAYNE J:   But all limitation provisions, Mr Coles, whatever their nature, admit of the possibility of formulating some unfair, unjust outcome because time is told.

MR COLES:   Of course.

HAYNE J:   This is a limitation period.

MR COLES:   Well, it is a limitation period for the bringing of an application which was brought within the limitation period.  That is our point.  Our learned friends are trying to convert that requirement into something about how long the extension should be, which is a matter regulated afterwards by the court.  Can I just – I did want to mention to your Honours paragraphs 170 and 171, and one other paragraph of Justice Spigelman’s judgment if it is convenient while your Honours have that.  In paragraph 170, the Chief Justice said:

The power to extend the time limit for commencing proceedings is intended to provide for the circumstance in which a liquidator is not in a position to commence proceedings within three years of the relation‑back day, for whatever reason, subject to the assessment of the court of all relevant circumstances, including the liquidator’s conduct.  It is not difficult to envisage a circumstance in which a liquidator is still ascertaining the identity . . . The power should be broad enough to allow, in those circumstances, for an order granting an extension of time in general terms.

That is the context he is there talking about, and your Honours will evaluate that in due course in other proceedings, but the power should be broad enough, in our respectful submission, for the Court to appoint, pursuant to the application filed in time and made on that application, a period of time which, if too long, can be shortened or, if too short, can be enlarged.  His Honour then says:

The requirement of commercial certainty on the part of those who have had past dealings with the corporation is to be balanced against the conflicting interest of the creditors of the company.  The court, through the discretions it exercises under s 588FF(3) and s 588FF(1), is in a position to control unwarranted delay by liquidators.  Subject to the reasonable expedition of the part of a liquidator –

To adopt Chief Justice Doyle’s observation –

the creditors are entitled to:  “ . . . the benefit of having the affairs of an insolvent company properly investigated and administered in an orderly fashion in terms of the provisions of the law”.

Now, if that is indeed one of the aspects or purposes for which the extension power is conferred then, in our respectful submission, it is not simply to be put to one side because of suggested overriding criteria of certainty and speed and all the rest of it when, for the reasons I have described in the working out of the processes of making the order for a longer period, no such requirements for speed and, indeed, no extrinsic capacity for discerning certainty can be encountered. 

Just before your Honours part from this, although this may be a little - could I specifically mentioned to your Honours 115 of the observations of Justice Spigelman and this is really central to his reasoning that the time limit or that the bringing of the subsection (3) proceeding is, in effect, an essential feature which operates, of course, to the exclusion, as the appellant succeeded in establishing in that case, of section 1322, particularly (4)(d) and the like.  His Honour there said:

A creditor or other person who has received the benefit of a voidable transaction is at risk of having to surrender it.  The time limit in s 588FF(3) has the effect that at the end of the period of three years, such a person will know whether s/he remains at risk.

So, that is the real point of importance, are you still at risk despite the three years in the legislative scheme which seeks to balance conflicting commercial interests.  That appears to me to be a reasonable requirement, and no one has ever disputed that.

Those who have an interest, or who represent those who have an interest, to disturb transactions must indicate, within three years, whether they wish to keep open the option of doing so.  In this, as in other areas, legal policy favours certainty.

The certainty, the only certainty, in our respectful submission, on its true construction, which subsection (3) confers, is the certainty of knowing whether or not the liquidator has made an application to extend time.  You will have the certainty of knowing if he has not that at the end of the paragraph (a) period, or what once was the three‑year period, that he has not and you will have the comfort of knowing that he cannot, and no one disputes that, but that is all the certainty. 

The only other certainty you will have is the certainty of knowing that he has, in fact, in the paragraph (a) period made such an application and it will be up to the court to determine for how many years, days, months, or the like on what terms and the like that extension will operate for and, if our submissions are right, it will add but not appreciably to that certainty or uncertainty – large enough as it is that the not otherwise particularly onerous prospect that you may also know that if the circumstances are sufficient to persuade a fairly rigorous and critical court, then that period may itself – any order may itself for proper grounds necessary to give effect to the purpose for which the extension power exists – be varied by a later order of the court under the court rules without any violence to the express words, let alone the purpose of subsection (3) itself.

I am conscious, your Honour, that I have nearly come to the conclusion of what I wanted to say in oral argument.  Accordingly – just to come to the last portions of our outline – we say an order fixing a long period is not any the less an order made on an application filed within the paragraph (a) period if a variation – we have said “engrafted” but one could choose many words.  If it is very short we emphasise – although we appreciate this appears, at least with some of our friends, at least with Mr Newlinds to be controversial – that Justice Ward was not exercising some fresh or independent or alternative jurisdiction.

It was not like there was sitting there in the Civil Procedure Rules of the courts of New South Wales an equivalent of section 1322(4) which was the subject of the BP Case and was not available because of the explicit provisions of section 588FF(3) itself to be used as simply an optional alternative for the purposes of extending time.  In BP, your Honours will recall that Justice Austin had extended the period within which the liquidator could make an application under section 588FF(3).

If such a thing were in the Civil Procedure Rules that would be the best example of an otherwise provide or the degree of repugnance requisite to displace the continued application of the picked‑up State law that one could imagine.  But, as we have said, it is difficult to see as a matter of construction why subsection (3) must impose itself on the variation power in such a way as, in effect, to negate its operation.  I will come back to that in a minute. 

What we say is quite to the contrary of exercising some fresh or separately conferred stand‑alone, independent, statutory power which either ran alongside 588FF(3) or impacted upon the federal provision as a State provision, for example, authorising an extension of time within which to bring a subsection (3) application under rules or something of that kind.  No such controversial or likely to be otherwise providing provision was to be found, in our respectful provision.

What Justice Ward was doing was entertaining an application in the same proceedings in which application had been made earlier to Justice Hammerschlag and was re‑evaluating in the particular circumstances the then most proper or appropriate duration of any longer period.

HAYNE J:   That is, the general rules of civil procedure were supplementing the power otherwise exercisable under 588(3)(b).

MR COLES:   Yes, the closest section 79 case I can spring to mind – and it is factually a long way away, but Justice Beazley, I am reminded by your Honour’s question, referred to one of the decisions in this Court – De Vos v Daly – where the federal provision provided for a fine and when the contravention was enforced in the State court there was provision for the magistrate to impose a gaol term if the fine was not paid and the question arose as to whether that was picked up by section 79, amongst other questions, and there was a controversy about that because it seemed, so it was said by some, to really add too much. 

A fine was provided for by Commonwealth law.  To pick up a term of imprisonment by State law may be just going a little too far, but their Honours’ eventual conclusion which is the same process of reasoning or the same conclusion we would, with respect, commend here is what the State provision was doing was really enhancing or supplying, as we would put it, really a mechanism that assists in the identification of what really is, upon judicial examination, or further judicial examination, the proper longer period. 

There is a question perhaps of construction of what is meant by the expression “longer period”.  We simply contend that it means the appropriate or proper longer period suitable for or necessary for the particular purposes of the particular administration in relation to which the appointment of that longer period is sought and so understood as with the imprisonment top up in the De Vos Case.  The variation power in effect enhances, works out, supplies a mechanism for the greater utility of the “longer period applying” jurisdiction.  In other words, it gets the liquidator the best longer period, not just a longer period that might have seemed like a good idea at the time. 

FRENCH CJ:   In supplying the omission of the legislature to write into 588F(3)(b) by application made by the liquidator at any time.

MR COLES:   No, the requirement is the longer period be fixed on an application filed in time but once filed in time what happens after that may countenance the prospect that for good reason the time may not be immutable.  As I say, one bears in mind that circumstances can vary and one does not understate the significance of this being a judicial process. 

To take but a simple example in this case, the original application, your Honours will recall, made to Justice Hammerschlag, procured an extension of time of only four months.  That, as your Honour the Chief Justice observed, brought it into sync, I think your Honour’s correct expression was, with the same date upon which the Octaviar Administration company’s time expired, or relation‑back period date ‑ computed from relation‑back date expired and the idea seemingly before Justice Hammerschlag was that by extending the Octaviar Limited’s date by a mere four months one would keep them travelling together.

When that four months was nearly up it was decided, however, that the liquidators needed an extension in the Octaviar administration so they asked for about six months and for good measure thought it appropriate, and the judge after careful examination of the evidence – and no one objects or protests about this as a matter of exercise of judicial discretion – decided that it was good to keep them in sync and brought forward – made the variation order for that purpose. 

Your Honours, may I pause to point out, even after the two variation orders made successively by Justice Hammerschlag and Justice Ward, the totality of the paragraph (a) period for Octaviar Limited was still less by about six and a half months, I think, than the typically three years or thereabouts period thought by the legislature as the kind of abstract ideal for a “one size fits all bring your proceedings” period.

So it is not as if, in our respectful submission, anything remarkably dissident – and one is looking at the legislative policy of the section as a whole – and an informing feature, as Justice Spigelman points out, and our

learned friends rely on it and correctly so – is liquidators should, as it were, not sit on their hands and get up promptly and move and they should be able to do things within the paragraph (a) period, but as Justice Spigelman famously said not necessarily, so you have to have an extension.  But here there was no strain on the – no, if I may call it so, no wider legislative purpose was here being circumvented.  The liquidators were committing themselves to doing within about two and a half years what everybody else might have done in three.

FRENCH CJ:   That is the facts of the particular ‑ ‑ ‑

MR COLES:   That is the facts of the case.  But I mention it, not because they have any impact on the question of construction but when one is looking at the outcomes of particular constructions, you could hardly say this one produces an absurdity.  Indeed, we are the – the reason I mention it is simply to say that this is an instance of the very rule which is said not to be picked up because repugnant, in truth, acting to enhance and promote and make fruitful the very purpose for which the extension power exists, namely to give liquidators the extensions they need for the proper purposes for which such extensions may be sought.  Unless there are any other matters, your Honour, those are our submissions.

FRENCH CJ:   Thank you, Mr Coles.  Mr Bannon.

MR BANNON:   Your Honours, my learned friend agreed at one point that the power might be regarded as supplementing the powers in the Act.  We have given a reference to Macleod v ASIC 211 CLR 287 – this is our submissions in‑chief - in paragraph 44 and quoting from paragraph 22, the quote from incompatibility can arise where the State law “derogates from the Commonwealth law” we did not add, but should have and I do so now, that in that same paragraph, it says “adds to or derogates from” – so, a concession that this supplement to the power runs the risk of falling foul of the recognised incompatibility when one is adding to what otherwise is a more limited Commonwealth power.

Secondly, in dealing with that passage of Chief Justice Spigelman’s judgment in relation to what the risk is run, what the risk is run on our application is that if an application is filed, and let us say, for example, has not been determined by the end of the period, the creditors are at one risk, one risk that there will be an extension on that application.  My friend’s argument is that is an indeterminate risk.  It is not a single risk, it is multiple, an indefinite number of potential risks.  There may be an order that can be varied some unknowable number of times.

Just on that, I think my friend accused us of submitting that you could not make an order outside the three‑year period.  I do not think we

submitted that.  We recognised that if it is filed before it could be determined afterwards, so that is not a penance which we have to pay.

Lastly, I think that a number of the matters raised by my learned friend about how one treats whether the application is still on foot or not fall foul of those parts of Agtrack and Air Link to which we have given reference in our oral outline that you start with the Commonwealth legislation.  You do not assume in advance that the rules apply and work out on the basis of the rules whether something is still on foot or something gone.  One asks the question, as we have said, is this an application on any view and one made before Justice Ward for a further extension and on any view it was.  May it please the Court.

FRENCH CJ:   Thank you.  Yes, Mr Newlinds.

MR NEWLINDS:   My learned friend, Mr Coles, very eruditely gave your Honours a burst on the merits of flexibility.  Now, flexibility is good.  We accept that.  Certainty is good and I could likewise give your Honours a little lecture about why certainty is sometimes good in litigation.  The fact is there is a balance to be struck between certainty and flexibility when one is dealing with a limitation period and our point is the Commonwealth Parliament has struck that balance and built in to the very section a time limit and a mechanism for extending that time limit. 

So a plea to the merits of judges exercising general discretions which allows flexibility to deal with all sorts of fact situation that arise is irrelevant.  Parliament has decided that there will be delegated to the judiciary a discretion, but not a general discretion, and as a matter of construction that must be right because you do not need subsection (b) if what the Commonwealth Parliament intended was that there be a time limit, but a general discretion given to the courts to extend that time limit in appropriate circumstances, because that is what you have in 1322(d).  So that is our first submission. 

The second submission is the other pleas which really go to the merits are beside the point.  We have always put this as a question of power.  If there is power, well, then no one has challenged the exercise of discretion.  But if there is not power, it just does not matter how sensible or otherwise the orders made were. 

Finally, your Honours, can I concede that my learned friend’s criticisms of paragraph 11 in our written outline are good – that does overstate the position – and I take responsibility for that.  The way we say Justice Spigelman’s judgment works is that the period can only be extended on an application that was filed within the three‑year period.  Now, that does leave room for the application being filed within the three‑year period

and the extension being granted afterwards, and to the extent we have suggested something otherwise in paragraph 11, may I withdraw it.  If the Court pleases.

FRENCH CJ:   Thank you, Mr Newlinds.  The Court will reserve its decision.  The Court adjourns until 10 o’clock tomorrow.

AT 12.31 PM THE MATTER WAS ADJOURNED