Case: Re Testro Bros Consolidated Ltd [1965] VR 18
Outcome: considered
The applicants submitted that the Court has jurisdiction to entertain this application for leave nunc pro tunc notwithstanding that proceedings were commenced without leave. The applicants relied upon the decision of Re Testro Bros Consolidated Ltd [1965] VR 18, amongst others, in support of the proposition that the absence of leave is not a matter going to jurisdiction and that rather it is an irregularity capable of being corrected by the Court. 38 In that case, Sholl J said at 33 to 34 in the context of provisions of the Companies Act (1961) (Vic), which required leave to commence winding up proceedings: Now it has always been the view of the courts, since the early days of company legislation in England, that sections such as our present ss 199, 230(3) and 263(2) do not impose conditions precedent to the jurisdiction. ... But clearly the absence of leave is not a matter going to jurisdiction, and prohibition or certiorari will not lie; it is an irregularity in procedure, in a matter within jurisdiction...so that the proceedings are not void or "null". 39 His Honour referred to the policy reasons behind the requirement of leave and observed of the statute (at 35): Such legislation is aimed at preserving the control of the Supreme Court over the administration of a company's affairs, a purpose which is sufficiently achieved by interpreting sections like s 199 rather as conferring a control of a directory character on the Court, than as setting up an absolute bar like a statute of limitations. 40 In that case, Sholl J took the view that it was preferable for the court to grant leave nunc pro tunc , rather than require the party who would have been granted leave if they had applied at the requisite time to start again. 42 In Emanuele [1997] HCA 20 ; 188 CLR 114, the Australian Securities Commission had failed to obtain leave before applying for a winding up order under the Corporations Law . The court held by majority that the absence of leave was a defect or irregularity capable of correction by the court. The majority approved the observations of Sholl J in Re Testro Bros [1965] VR 18 (at 125 per Dawson J; at 129 per Toohey J; at 153 per Kirby J). 43 For the majority of the court, the question was whether the relevant provision conditioned the court's jurisdiction. In this context, Toohey J considered the nature of the relevant provision, and held at 128: Not only is s 459P(2) not a jurisdiction conferring provision, it does not create a cause of action or go to the relief that may be granted. 44 Similarly, Dawson J held at 125 (citations omitted): Section 459P does not confer jurisdiction on the Federal Court to make a winding up order; it does no more than identify the parties who may make an application, requiring leave to be obtained in the case of some of them including the Commission. Jurisdiction is conferred on the Federal Court by s 459A of the Corporations Law in conjunction with s 42(3) of the Corporations (South Australia) Act 1990 (SA). The failure to obtain leave was a mere defect or irregularity in the exercise of that jurisdiction. It did not affect the validity of the order made, although it may have provided a ground for staying it or setting it aside. 45 In a separate judgment, Kirby J construed the relevant provision having regard to, amongst other things, the purpose of the legislation. In that context, his Honour observed that it would not promote the objectives of the legislation if the provision in question was construed as requiring strict compliance (at 155). This was so, despite the emphatic words of the section, which, if taken at face value, appeared to make leave an absolute strict requirement. In particular s 459P(2) provided that an application "may only be made with the leave of the Court", and s 459P(3) provided that the Court may give leave if satisfied there is a prima facie case, "but not otherwise".