In the matter of Rocha Pty Limited (No 2)

In a judgment delivered on 29 June 2016 (“the earlier judgment”), with which this judgment should be read, I ordered that the application of the plaintiff Romesh Amar for a declaration (under s 307 of the (NSW) Companies Act 1961) that the dissolution of the company Rocha Pty Ltd is void, and an order (under s 366 of that Act) enlarging the time for bringing the application, be dismissed, but – as the application was unopposed and not unmeritorious, and the issues upon which it foundered were not fully exposed in argument – reserved liberty to the plaintiff to apply within one month to set aside that order and for other orders, in case some alternative basis for relief could be formulated. [1] That liberty was exercised on 26 July 2016. Essentially, the plaintiff now contends that when the 1961 Act was repealed on 1 July 2008, [2] the plaintiff had an “accrued right” within the meaning of (NSW) Interpretation Act 1987, s 30(1)(c), to make an application under s 307, and that the Court retains jurisdiction to make an order under s 307, notwithstanding the repeal of the 1961 Act before the commencement of these proceedings. This contention was thoughtfully, carefully and comprehensively elaborated in the able written submissions of Mr Dooley, dated 4 August 2016.

Section 30 of the Interpretation Act relevantly provides as follows:

It is worth observing at this point that s 30(1)(c) preserves any right which is acquired or accrued under a repealed Act before its repeal, and the concluding paragraph of s 30(1) preserves the ability to institute legal proceedings in respect of such an accrued right, after the repeal of the relevant Act. Section 30(1)(c) is concerned with the substantive right, and the concluding paragraph with the proceeding to enforce it.

Section 307 of the 1961 Act provided that where a company has been dissolved, the Court may, within two years after the date of dissolution, on application of the liquidator of the company or of any other person who appears to the Court to be interested, make an order upon such terms as the Court thinks fit declaring the dissolution to have been void, whereupon proceedings may be taken as if the company had not been dissolved. Section 307 thus created a discretion to declare a dissolution void. A person with standing to apply under s 307 had no right to an order, but no more than the right to apply for an order; legal rights and status were affected only if the court exercised its discretion in favour of the applicant. [3]

Recognising this, the plaintiff submitted that the (mere) right to apply for an order under s 307 in respect of a company that had been dissolved was an acquired or accrued right within Interpretation Act, s 30(1)(c). For that proposition, reliance was placed chiefly on Colley v Futurebrand FHA Pty Ltd. [4] That case concerned (NSW) Industrial Relations Act 1996, s 106, which gave the Industrial Relations Commission a discretion to make orders in respect of a contract, if it found that the contract was an unfair contract. Handley JA, with whom Giles JA agreed, said:

Thus, the Court of Appeal held that the mere right to make an application for discretionary relief under s 106 was not an “accrued right”; there was no accrued right until an application was filed, whereupon a right to have it considered and determined accrued.

Here, the plaintiff invoked the distinction, adverted to in [32] of the judgment in Colley, of cases in which a right or entitlement “automatically accrues or is acquired on an event”. [5] It is instructive to identify the nature of the rights that were involved in the cases mentioned by Handley JA.

In Hamilton Gell v White, [6] (UK) Agricultural Holdings Act 1908, s 11, provided that where, in view of a sale, the landlord of a holding terminated a tenancy by notice to quit, the tenant would be entitled to compensation for the loss or expense directly attributable to his quitting the holding, and in order to be entitled to compensation, had to give notice of intention to claim within two months after receiving the notice, and make the claim within three months after quitting the holding. Bankes LJ said: [7]

Scrutton LJ said: [8]

Atkin LJ said: [9]

Thus the right given to the tenant, which accrued upon the giving of the notice to quit, was a substantive right to compensation, not merely standing to make an application for the favourable exercise of a discretion; and the conditions were conditions of enforcement, not of acquisition, of that right.

In Resort Management Services Ltd v Noosa Shire Council, [10] (QLD) Local Government Act 1936, s 33(10)(a) conferred an entitlement to obtain compensation from a local authority in the event that a planning scheme was changed. That entitlement was held to accrue upon the repeal of the town planning scheme in question – not upon a claimant lodging a claim for compensation. McPherson JA said: [11]

Again, the right given was not merely one to make an application to have a discretion exercised, but a substantive right to compensation, albeit that it had to be claimed if the right were to be enforced.

In New South Wales Aboriginal Land Council v Minister, [12] the relevant Act entitled an Aboriginal Land Council to claim “claimable lands”, and the Minister if satisfied that the lands were “claimable Crown lands” was required to grant the claim; there was no discretion. Hope JA referred to the non-discretionary nature of the decision amongst the features which preserved the claim (emphasis added): [13]

Indeed, it may well be that satisfaction of the proviso – that the requisite statutory machinery has been set in train – is unnecessary. But the right in question was a substantive right, not a mere right to apply for the favourable exercise of a discretion.

In Chief Adjudication Officer v Maguire, [14] the respondent suffered from a disabling condition which entitled him to claim serious hardship allowance under the (UK) Social Security Act 1975, s 60, but had made no such claim before the repeal of that section in October 1986. Subsequently, he made a claim for allowance, from April 1985 until the repeal. The issue arose as to whether his failure to claim before the repeal of s 60 precluded him from receiving allowance in respect of the pre-repeal period. Section 16(1)(c) of the (UK) Interpretation Act 1978 provided that the repeal of an enactment did not affect any right acquired or accrued under that enactment, unless the contrary intention appeared. The Court of Appeal held that a right could be acquired under an enactment before its repeal, even though it was contingent on an event which occurred only after repeal, and that where a person had an entitlement to money or other certain benefit at the time of repeal, the fact that it might be necessary to take further steps to prove the existence or true extent of that entitlement did not preclude it from being regarded as a right. A person acquired a right under s 60 of the 1975 Act when its substantive criteria were satisfied, not when the claim was made, and thus the respondent had acquired a right under s 60 at the time of its repeal, and it was immaterial that he had sought to enforce it only after repeal.

The right or entitlement in question in Maguire was thus a substantive non-discretionary right to a benefit, which accrued when the criteria for eligibility were satisfied – not a mere right to apply for a discretionary benefit.

Accordingly, in every one of those cases, there was – in the words of Handley JA – an ascertainable substantive right or entitlement, defined by reference to past facts. [15] None involved a mere right to apply for a favourable exercise of a discretion.

His Honour also referred to cases in which what was involved was an application for the favourable exercise of a discretion: Esber v The Commonwealth, [16] Gerrard v Mayne Nickless Ltd, [17] and Director of Public Works v Ho Po Sang. [18]

In Director of Public Works v Ho Po Sang, [19] steps had been taken to obtain a certificate from the Governor of Hong Kong in Council, but the proceedings were not saved by the Interpretation Ordinance, because the appellant had no more than a hope or expectation – not an enforceable right. The Privy Council drew a distinction between an investigation in respect of a right, and one to decide whether a right should be created; while the former recognises an existing – “accrued” – right, the latter involves a discretionary decision as to whether legal rights or status are to be affected. Because of the nature of the broad unfettered executive discretion given to the Governor in Council, not even the commencement of an application created an accrued right; but in that respect, as Handley JA pointed out, such an unfettered executive discretion is different from a judicial discretion such as that conferred by Industrial Relations Act, s 106.

In Esber v The Commonwealth, [20] Mason CJ, Deane, Toohey and Gaudron JJ explained the significance of commencing proceedings, where the claim is for discretionary relief (emphasis added): [21]

Similarly, in Gerrard v Mayne Nickless Ltd [22] (which concerned applications to the Australian Industrial Relations Commission under sections, later repealed, which broadly corresponded with (NSW) Industrial Relations Act, s 106), the Industrial Relations Court said: [23]

As Handley JA pointed out, [24] while neither case affirmatively decides that no right had accrued or been acquired before an application was made under the repealed legislation, both decisions were based on the effect of the pending application, rather than on any suggestion that there was an accrued right before an application was made.

The view that a mere right to apply for a favourable exercise of discretion is not an accrued right is confirmed by the judgment of Kitto J in Continental Liqueurs Pty Ltd v G F Heublein and Bro Incorporated, [25] in respect of a claim by a “person aggrieved” for discretionary relief under (CTH) Trade Marks Act 1905, s 72, which provided that the Court may, on the application of any person aggrieved, in certain circumstances, order the removal of a trade mark from the register. His Honour said that had the application not been pending when the legislation was amended, the applicant’s locus standi to apply as a person aggrieved was not a “right accrued”; although the filing of an application invoked and acquired a right to have the court decide whether it ought exercise its jurisdiction:

This is closely analogous to the present case, in which prior to the repeal of the 1961 Act the plaintiff had no more than locus standi, as a person interested, to make an application to have the dissolution declared void. An instructive contrast – both to Continental Liqueurs and to the present case - is provided by Convex Ltd's Patent. [26] A patent had lapsed on 27 April 1978, just a few weeks before 1 June 1978 when the (UK) Patents Act 1977 came into force in place of the Patents Act 1949. Restoration of a 1949 Act patent could only be ordered under that Act, but the application was not made until after its repeal. In rejecting an argument that there was no accrued right and thus no power to restore, Buckley LJ said: [27]

Critically, the Act in question gave the applicant a right to require its patent to be restored if the relevant circumstances were satisfied, which did not depend on an exercise of discretion. In contrast, s 307 of the 1961 Companies Act does not give a person interested a right to have a dissolution declared void, but only standing to apply for the favourable exercise of the Court’s discretion to make such an order.

The distinction in this context between substantive rights which are preserved, and procedural “rights” to make an application which are not, was recognised by the Court of Appeal in Torrac Nominees Pty Ltd v Karabay; UWS Macarthur Sports & Recreation Association v Karabay, [28] in which Young CJ in Eq, with whom Ipp JA and Handley AJA agreed, said (emphasis added):

The view that s 30(1)(c) is concerned with substantive and not procedural “rights” is also supported by the judgment of the Queensland Court of Appeal in Australand Corp (Qld) Pty Ltd v Johnson, [29] holding that that an acquired or accrued right, in the relevant sense, is not a mere right conferred by an Act of which a person might take advantage, should he or she choose to do so, but a right which might be enforced by the person who propounded it against a person said to be under a liability which corresponded to it.

Thus, although the authorities have sometimes expressed the distinction as one between cases in which a right automatically accrues or is acquired upon the happening of an event specified by the statute which is independent of the act of the individual concerned, and cases in which statutory rights are generally available without the happening of a specific event and do not accrue until some step is taken by a plaintiff, [30] that is really no more than a way of expressing the difference between an extant substantive right on the one hand, and standing to apply for a favourable exercise of discretion on the other. In each of the cases distinguished by Handley JA, a substantive right had arisen, albeit that its enforcement required further steps. In Colley, there was no substantive right – only the procedural “right” to make an application, which was held insufficient. Mere locus standi is equivalent to what Lord Herschell LC described in Abbott v Minister for Lands [31] as “the mere right (assuming it to be properly so called) existing in the members of the community or any class of them to take advantage of an enactment”. The mere right to make an application for a favourable exercise of discretion is not an “acquired or accrued right” for the purposes of s 30(1) – at least until the application has been made, when a right to have it considered and determined may accrue.

In this case, Mr Amar at the time of the repeal of the 1961 Act had, to borrow the words of Handley JA, no substantive right or entitlement defined by reference to past facts, similar to the rights to compensation in Hamilton-Gell v White and Resort Management, the right to the hardship allowance in Chief Adjudication Officer v Maguire, or the land rights claim in New South Wales Aboriginal Land Council v Minister. [32] He had only the procedural right to make an application – a “right” which was not specific to him, but one that he shared with the liquidator and all members of the class of “any other person who appears to the Court to be interested”. This was mere locus standi, not an accrued right.

As the plaintiff did not have an accrued right under s 307 of the 1961 Companies Act at the time of its repeal, Interpretation Act, s 30(1)(c), does not preserve any right to make an application under s 307.

It follows that, for the foregoing reasons, I must decline to set aside the order of 29 June 2016 dismissing the plaintiff’s application.