FEDERAL COURT OF AUSTRALIA

Davis v Insolvency and Trustee Service Australia [2010] FCA 518

THE COURT ORDERS THAT:

1.                  Pursuant to s 25(2)(e) of the Federal Court of Australia Act 1976 (Cth) direct that the application for leave to appeal and for an extension of time for leave to appeal be heard and determined by a Full Court.

2.                  Adjourn the hearing of the applications referred to in order 1 to a hearing before the Full Court on a date to be fixed in consultation with the Registrar.

3.                  Grant leave to the applicant to file and serve within 7 days an amended notice of motion, amending paragraph 6 generally in accordance with the proposed amendment filed in Court on 24 May 2010.

4.                  Liberty to both parties to apply on 2 days' notice.

5.                  Costs of the hearing on 24 May 2010 be costs in the cause.

THE COURT NOTES THAT:

The issue whether the appeal and leave application should be heard together or separately is left for determination by the Full Court.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

REASONS FOR JUDGMENT

1                                             The current issue is whether or not having regard to the particular circumstances of this matter, I should make a direction under s 25(2)(e) of the Federal Court of Australia Act 1976 (Cth).  Section 25(2) provides that applications for leave to appeal to the Court must be heard and determined by a single Judge unless, relevantly, under subsection (e) “a Judge directs that the application be heard and determined by a Full Court”.

2                                             By notice of motion filed on 8 March 2010 the applicant seeks both an extension of time for the making of a leave application against a decision of Foster J delivered on 12 February 2010 (Davis v Insolvency and Trustee Service Australia (No 3) [2010] FCA 69) and a grant of leave to appeal from that decision.  The question whether I should make a direction under s 25(2)(e) arises because paragraph 6 of the notice of motion additionally seeks the following:

Alternatively to 5 declaration that Federal Court of Australia Act 1976 Section 24(1D)(b) is invalid insofar as it deems a final judgment of the Court to be interlocutory such as to deny or impair the appellate jurisdiction of this Honourable Court sitting as a Full Court as made in contravention of Chapter III of the Constitution and/or Section 51(xxxi).

3                                             In consequence of the inclusion of that declaration the parties were notified that I would be assisted by hearing from them in respect of the making of a direction under s 25(2)(e).  In so doing I am not indicating to indicatethat the making of such a direction is other than a matter for me in my sole discretion. 

4                                             In hearing from the parties it became apparent that paragraph 6 as drafted contained a logical difficulty.  It refers to s 24(1D)(b) being invalid “insofar it deems a final judgment of the court to be interlocutory”.  As the second respondent properly pointed out, there is a decision of the Full Court in Kowalski v MMAL Staff Superannuation Fund Pty Ltd (2009) 178 FCR 401; [2009] FCAFC 117 in which Spender, Graham and Gilmour JJ decided that a judgment in the nature of summary dismissal under s 31A of the Federal Court of Australia Act is interlocutory.  In so doing their Honours expressly declined to follow certain parts of the decision in Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd (2008) 167 FCR 372; [2008] FCAFC 60.  Accordingly, I gave the applicant an opportunity to redraft paragraph 6 of the notice of motion.  I do not understand the second respondent to suggest that the substance of the redraft is different from that originally notified.  Indeed, the second respondent’s point is that the redrafted version does not cure the problem with paragraph 6; it still assumes that a decision under s 31A is capable of being a final decision in circumstances where Kowalski is binding Full Court authority to the contrary. 

5                                             The redrafted version is as follows:

6.         Alternatively to 5, declaration:

(i)         that Federal Court of Australia Act 1976 Section 24(1D)(b) is invalid insofar as it deems for purposes of determining the applicant’s appeal rights in relation to the judgments and orders of Foster J made in the proceedings NSD 52 of 2009 including the order 12 February 2010 to be interlocutory and not a final judgment of the court. 

(ii)        that as Federal Court of Australia Act 1976 section 24(1D)(b) impairs the appellate jurisdiction of this Honourable Court sitting as a Full Court in contravention of Chapter III of the Constitution and section 51(xxxi) with respect to the appellant’s appeal rights.

6                                             I leave aside the question whether there is a missing subclause at the end of the second subparagraph (given that there is no repetition of the claimed invalidity in that subparagraph).  Be that as it may, the notice of motion seeking leave to appeal raises a constitutional issue.  In addition, the applicant has said that he proposes to submit that Kowalski is either distinguishable on the facts or wrongly decided.  In this regard, at least as to the first claim I, however, read Kowalski as a clear statement that all judgments in the nature of summary dismissal under s 31A are interlocutory. 

7                                             The second respondent is strongly of the view that this matter is suitable for, and should be heard and determined by, a single judge. 

8                                             Having considered this matter, I have reached the conclusion that the application for leave to appeal should be referred to a Full Court, that is, I should make a direction under s 25(2)(e) of the Federal Court of Australia Act.  The reason for this is that, leaving aside the merits or otherwise of the constitutional issue that the applicant seeks to raise, the inescapable fact is that on this application for leave the applicant claims that a section of the Court’s enabling Act is constitutionally invalid.  The relationship of any conclusion which might be drawn in answer to that claim and the decision in Kowalski is a matter of concern.  In this regard I have taken into account the principle that a court must follow the precept that constitutional questions should not be decided unless it is necessary “to do justice in the given case and to determine the rights of parties”” (see ICM Agriculture Pty Ltd v Commonwealth (2009) 240 CLR 140 at 199; [2009] HCA 51 at 141 per Hayne Kiefel and Bell JJ).

9                                             In this case, however, it is not clear to me that the question which the applicant seeks to raise on the leave application is unnecessary to be decided.  The question could not have been raised at any time earlier than the leave application itself.  It having been raised there follows the question of the consequences of any decision in the applicant’s favour on either of those questions for the applicability of the decision in Kowalski.  In these circumstances, and without expressing any view on the merits of what the applicant seeks to raise, I am of the view that it is appropriate that I make a direction under s 25(2)(e). 

10                                          In so doing, however, I should record that I do not consider it appropriate that I make any direction or indeed suggestion that the leave application should be heard and determined at the same time as the appeal.  That will be a matter entirely for the Full Court as and when constituted. 

Associate:

Dated:         24 May 2010