JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION : FRIGGER -v- PROFESSIONAL SERVICES OF

AUSTRALIA PTY LTD [2015] WASCA 167

CORAM : BUSS JA
MURPHY JA

HEARD : 7 AUGUST 2015

DELIVERED : 7 AUGUST 2015

PUBLISHED : 28 AUGUST 2015

FILE NO/S : CACV 100 of 2015

BETWEEN : ANGELA FRIGGER

First Appellant

HARTMUT FRIGGER
Second Appellant

AND

PROFESSIONAL SERVICES OF AUSTRALIA PTY

LTD
First Respondent

DONALD CAMPBELL-SMITH as Executor for the

Estate of MARTIN PAUL BANNING
Second Respondent
ON APPEAL FROM:

Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA

Coram : SIMMONDS J
Citation : COMPUTER ACCOUNTING AND TAX PTY LTD (in
liq) -v- PROFESSIONAL SERVICES OF AUSTRALIA
PTY LTD [No 8] [2015] WASC 166
File No : CIV 2265 of 2006

Catchwords:

Practice and procedure - Application to commence an appeal by a non-party to the

primary decision - Leave purportedly sought under s 471C of the Corporations Act
2001 (Cth) - No power - Discretionary reasons not to grant application in any event

Legislation:

Corporations Act 2001 (Cth), s 471C

Result:

Application for leave to appeal dismissed

Category: B

Representation:

Counsel:
First Appellant : In person
Second Appellant : In person
First Respondent : Mr T Stephenson
Second Respondent : Mr T Stephenson

Solicitors:
First Appellant : In person
 Second Appellant : In person
First Respondent : Eastwood Sweeney Law
Second Respondent : Eastwood Sweeney Law

Case(s) referred to in judgment(s):

Computer Accounting and Tax Pty Ltd (in liq) v Professional Services of Australia
Pty Ltd [No 7] [2014] WASC 360
Computer Accounting and Tax Pty Ltd (in liq) v Professional Services of Australia
Pty Ltd [No 8] [2015] WASC 166
Frigger v Professional Services of Australia Pty Ltd [2015] WASCA 3
Frigger v Professional Services of Australia Pty Ltd [No 3] [2014] WASCA 69
Krishell Pty Ltd v Nilant [2006] WASCA 223; (2006) 32 WAR 540
Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty
Ltd [No 2] [2009] WASCA 183 (S)
Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty
Ltd [No 2] [2009] WASCA 183; (2009) 261 ALR 179
Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty
Ltd [No 3] [2010] WASC 93
Witness v Marsden [2000] NSWCA 52; (2000) 49 NSWLR 429

REASONS OF THE COURT:

1 The applicants (Mr and Mrs Frigger) applied, pursuant to s 471C of the
Corporations Act 2001 (Cth) for leave to commence an appeal against a
decision of Simmonds J, published 8 June 2015: Computer Accounting and
Tax Pty Ltd (in liq) v Professional Services of Australia Pty Ltd [No 8]1
(the primary decision).

2 We dismissed the application on 7 August 2015, and said we would

publish our reasons. These are our reasons.

Background

3 Mr and Mrs Frigger were not parties to the primary decision. The
parties to that decision were the parties in the litigation to which that
 decision related - CIV 2265 of 2006. In that litigation (relevantly, for
present purposes), Computer Accounting and Tax Pty Ltd (in liq) (CAT) was
the plaintiff; Professional Services of Australia Pty Ltd (PSA) was the first
defendant; and Donald Campbell-Smith as executor of the estate of Martin
Paul Banning (Banning Estate) was the second defendant.

4 In these reasons, PSA and Banning Estate will be referred to

collectively as 'the defendants'.

5 The history of the litigation in CIV 2265 of 2006 up to 2010 included,

relevantly, that:2

(a) Simmonds J, as the trial judge, awarded damages in favour of CAT

against the defendants in a sum exceeding $960,000 plus interest;

(b) there was an appeal by the defendants to the Court of Appeal against
that decision;

(c) the defendants' appeal was successful to the extent, inter alia, that the
defendants succeeded in reducing the award of damages, and that
certain costs orders made by Simmonds J on 6 May 2009 were set
aside;3

(d) the defendants had applied for a stay of the orders made by
Simmonds J pending the determination of the appeal, but the stay
application was refused with the result that the defendants paid CAT
the judgment sum in excess of $1.1 million; and

(e) following the judgment of the Court of Appeal, CAT was, in effect,
obliged to repay the defendants an amount in excess of $800,000, but
did not do so (the $800,000 debt).

6 The non-payment of the $800,000 debt was the subject of a statutory

demand against CAT. There was no application to set aside the statutory
demand. CAT was presumed to be insolvent and no evidence was led on the
winding up application of CAT which displaced the presumption of
insolvency. Accordingly, CAT was wound up in insolvency by order of the
court on 6 May 2010.4 Mr and Mrs Frigger had appeared, through solicitors,
as directors of CAT on the hearing of the application to wind up CAT. In
the master's reasons for decision, the learned master said:5
Thirdly, and perhaps most importantly, the investigations by Mr Kitay [the
 provisional liquidator of CAT] indicate [that CAT] is insolvent. No elaborate
examination of Mr Kitay's evidence is necessary. [CAT] is indebted to
[PSA/Banning Estate] in an amount of over $800,000. It does not have the capacity
to make that payment. It is therefore not able to meet its debts as and when they
fall due and it is prima facie insolvent.

In opposition to this application Mrs Frigger filed two affidavits, the first sworn 3
March 2010 and the second sworn 27 April 2010. In both affidavits Mrs Frigger
pointedly fails to address Mr Kitay's claim she has refused to produce the books and
records of [CAT] and has failed to complete a [sworn] report as to activities. That
does not go to the question of whether or not [CAT] is insolvent. It does, however,
raise questions as to Mrs Frigger's bona fides.

Given the position of [CAT] the only way that Mrs Frigger's evidence could
establish [that CAT] is solvent would be for her and her husband to personally
undertake they would meet the debts of [CAT] as and when they fell due. No such
undertaking is found in either affidavit. Mrs Frigger does maintain she and her
husband have sufficient assets to meet the debts of [CAT], but they do not
undertake to make payment of those debts.

Much of the material in Mrs Frigger's affidavits is irrelevant to the questions at

issue. It seems rather more directed to the question of what assets a liquidator may
be able to recover from Mr and Mrs Frigger during the course of a liquidation.
There is simply no evidence which would justify a conclusion [that CAT] can meet
its debts as and when they fall due. The presumption of insolvency has not been
displaced.

There was no appeal against the master's decision.

The primary decision published 8 June 2015

7 The primary decision concerns certain costs orders sought by the

defendants against CAT in CIV 2265 of 2006 in relation to:

(a) the costs issues remitted to the primary judge for determination
following the Court of Appeal's decision to reduce the award of
damages, referred to in [..(c)] above;6 and

(b) other proposed costs orders.

8 In relation to the first category of costs orders, the primary judge

observed:7
 Orders were made on the appeal in PSA [No 2] WASCA (S) [21] that included,
materially for my purposes, the following:

8. The costs orders made on 6 May 2009 by the trial judge be set aside and
the question of the costs of the trial be remitted to the trial judge for
reconsideration in light of the reasons of this court.

It may be noted that the remitter described is for 'the costs of the trial'. It may
further be noted from Appendix 1 that my May 2009 costs orders include, but
extend beyond, 'the costs of the trial'. I consider that the effect of the orders made
on the appeal is that either all of the proceedings the subject of my May 2009 costs
orders were the subject of the remitter; or, to the extent that they were not, orders as
to costs remain to be made on the proceedings in question.

9 The primary judge referred to these costs orders in his decision as 'the
proposed costs orders in place of my May 2009 costs orders'.8 For present
purposes, we will refer to them as 'remitter costs orders'.

10 The primary judge referred to the second category of costs orders as

'the other proposed costs orders'.9 We will refer to them in the same way.

11 The remitter costs orders, and the other proposed costs orders, were the
subject of a minute of proposed orders by the defendants, which the judge
described as 'the defendants' Minute'.10 We will also use that term.

12 Proposed costs orders 1 - 8 of the defendants' Minute related to the

remitter costs orders.11 Proposed orders 9 - 24 of the defendants' Minute
related to the other proposed costs orders.12

13 His Honour addressed the remitter costs orders in [23] - [92] of the
primary decision, and the other proposed costs orders in [93] - [231] of the
primary decision.

14 The hearing before Simmonds J took place on 19 and 23 September

2014 and 6 October 2014. CAT was represented by Mr P J Griffin of Peter J
Griffin & Co.

15 Mr Griffin appeared on behalf of CAT pursuant, in effect, to leave

given to Mrs Frigger by Simmonds J on 18 February 2011, with the consent
of CAT's liquidator, to conduct (on behalf of CAT) the defence of claims for
costs against CAT made by the defendants referred to in certain minutes of
order13 which were consolidated into the defendants' Minute. Leave was
given on condition that Mrs Frigger appoint solicitors for that purpose.14 We
will call this the '2011 Frigger leave order'. The 2011 Frigger leave order led
 to Mr Griffin's engagement.

16 Mr and Mrs Frigger applied to Simmonds J, subsequent to the 2011

Frigger leave order, for leave to have themselves joined as parties to the
primary proceedings, CIV 2265 of 2006, ostensibly for the purpose of
dealing with costs orders against CAT.15 That application was refused in
light of the earlier 2011 Frigger leave order.16 Mr and Mrs Frigger appealed
against that decision (the joinder decision).17 That appeal (joinder appeal) is
yet to be heard. However, in an interlocutory application for a stay by Mr
and Mrs Frigger of Simmonds J's orders refusing their joinder, this court
declined the stay, including on the basis that a preliminary review of the
ground of appeal and submissions indicated that 'the appellants may well not
enjoy good prospects of success'.18

17 As noted earlier, Mr and Mrs Frigger rely upon s 471C of the

Corporations Act for leave to commence the appeal against a decision to
which they are not a party.

18 The affidavit in support of the application for leave to commence the

appeal was sworn by Mrs Frigger on 23 June 2015. It states, relevantly:
LEAVE TO COMMENCE APPEAL AGAINST COST ORDERS OF 8 JUNE
2015

4. On 12 June 2015 I filed a notice of appeal against the costs orders of Justice
Simmonds made on 8 June 2015 …

5. On 12 June 2015 I received an email from the registrar advising that the
notice could not be accepted for filing …

6. Attached and marked 'AF3' is a copy of a draft case statement to support the
appeal against cost orders made by Justice Simmonds on 8 June 2015.

7. The current liquidator of CAT has refused to take any part in any of the
unresolved litigation that CAT was involved in for fear of an adverse cost
order against him personally, although we made numerous offers of finance
to pay legal fees as well as $850,000 for the purposes of the liquidation of
CAT. Attached and marked 'AF4' are copies of the offers made by the
appellants personally and by their lawyers on their behalf.

8. At no time since his appointment on 21 January 2010 has the current

liquidator of CAT taken any proceeding to set aside the Fixed Charge.

9. I believe that it would be more efficient use of the court time for the two
appeals to be heard together and for fairer costs orders to be made by this
 Honourable Court without the necessity of returning to the trial judge.

19 The documents attached as annexure 'AF 4' referred to in par 7 of the

affidavit were various documents ranging in dates between 21 January 2010
and 1 June 2010. None of the materials annexed cover the period after the
grant of the 2011 Frigger leave order. Also, the evidence as to the
motivation imputed to the liquidator of CAT is speculative in form.

20 Paragraph 8 of the affidavit referred to a 'Fixed Charge'. The charge

was not annexed.

21 Section 471C of the Corporations Act appears in div 1A of pt 5.4B of

the Corporations Act. Division 1A provides:
471 Effect on creditors and contributories

An order for winding up a company operates in favour of all the creditors

and contributories of the company as if it had been made on the joint
application of all the creditors and contributories.

471A Powers of other officers suspended during winding up

(1) While a company is being wound up in insolvency or by the Court,

a person cannot perform or exercise, and must not purport to
perform or exercise, a function or power as an officer of the
company.

(1A) Subsection (1) does not apply to the extent that the performance or
exercise, or purported performance or exercise, is:

(a) as a liquidator appointed for the purposes of the winding

up; or

(b) as an administrator appointed for the purposes of an

administration of the company beginning after the winding
up order was made; or

(c) with the liquidator's written approval; or

(d) with the approval of the Court.

Note: A defendant bears an evidential burden in relation to the matters in

subsection (1A), see subsection 13.3(3) of the Criminal Code .

(2) While a provisional liquidator of a company is acting, a person

cannot perform or exercise, and must not purport to perform or
exercise, a function or power as an officer of the company.
 (2A) Subsection (2) does not apply to the extent that the performance or
exercise, or purported performance or exercise, is:

(a) as a provisional liquidator of the company; or

(b) as an administrator appointed for the purposes of an

administration of the company beginning after the
provisional liquidator was appointed; or

(c) with the provisional liquidator's written approval; or

(d) with the approval of the Court.

Note: A defendant bears an evidential burden in relation to the matters in

subsection (2A), see subsection 13.3(3) of the Criminal Code .

(2B) An offence based on subsection (1) or (2) is an offence of strict

liability.

Note: For strict liability , see section 6.1 of the Criminal Code .

(3) This section does not remove an officer of a company from office.

(4) For the purposes of this section, a person is not an officer of a

company merely because he or she is a receiver and manager,
appointed under a power contained in an instrument, of property of
the company.

471B Stay of proceedings and suspension of enforcement process

While a company is being wound up in insolvency or by the Court, or a

provisional liquidator of a company is acting, a person cannot begin or
proceed with:

(a) a proceeding in a court against the company or in relation to

property of the company; or

(b) enforcement process in relation to such property;

except with the leave of the Court and in accordance with such terms (if
any) as the Court imposes.

471C Secured creditor's rights not affected

Nothing in section 471A or 471B affects a secured creditor's right to realise

or otherwise deal with the security interest.

22 It is evident that s 471C of the Corporations Act does not confer power
 on the court to enable a person who is not a party to orders made in a curial
decision, in proceedings in which that person is not a party, to commence an
appeal against such a decision.

23 The application for leave to appeal, purportedly under s 471C of the

Corporations Act, was dismissed for that reason.

24 In written submissions and orally at the hearing, Mr and Mrs Frigger

also sought to rely additionally upon various authorities concerning leave to
appeal unrelated to s 471C of the Corporations Act. For example, the
applicants referred to the observations of Heydon JA (as his Honour then
was) in Witness v Marsden:19
The plaintiff referred to Cuthbertson v Mayor, Aldermen and Citizens of the City
of Hobart (1921) 30 CLR 16 at 25 where Knox CJ and Starke J said:

'Under the practice which exists in England "parties to" an action and all
persons served with matters of judgment may appeal without leave. But a
person not a party to the proceedings cannot appeal from an order or judgment
except by leave of the Court ... Leave to appeal is given as a rule if the person
applying though not a party to the proceedings might properly have been one.
"The test is, could or could not the applicant by possibility be made a party to
the action by service" ... The appellate jurisdiction of the High Court is not
identical with that of the Court of Appeal in England, but we see no reason to
doubt the jurisdiction of this Court to act in accordance with that practice, or
the expediency of doing so, in relation to appeals from the Supreme Courts of
the States.'

Their Honours do not appear to have been propounding an exhaustive test for leave
to appeal. The test propounded, in any event, must give way to the structure of
legislation and rules within which the court in question works: rights of appeal
depend on statute, not common law. The Supreme Court of New South Wales is in
part controlled by Pt 37 r 8, as expounded by authority since the time of
Cuthbertson's case. Section 101 of the Supreme Court Act and equivalent
provisions in other jurisdictions are construed in the light of more generous
standing tests such as whether persons are 'aggrieved' or 'sufficiently interested'.
(original emphasis)

25 Even accepting that to be the test,20 we considered that we would not

exercise any discretion in favour of the applicants for the following reasons.

26 First, Mr and Mrs Frigger submitted in effect that they are 'aggrieved'
or 'sufficiently interested', in the orders made pursuant to the primary
decision, to warrant the grant of leave to appeal. In this regard, Mr and Mrs
Frigger submitted that Simmonds J found, at [43] of the joinder decision,
 that the applicants were 'directly affected by the costs of the action'.21 That
submission is wrong. At [43] of the joinder decision, Simmonds J said he
would proceed on the basis set out in [42] of his reasons. In [42] of his
reasons, Simmonds J made it plain that he was not deciding whether any
costs orders would have a direct effect on Mr and Mrs Frigger, but would
nevertheless proceed on that basis (in their favour) for the purposes of the
disposition of their application.

27 Secondly, the proper appellant is CAT and the time for filing an appeal
by CAT has expired. There was no evidence that Mr and Mrs Frigger either
sought and obtained the consent of the liquidator of CAT to bring the
application, or put the liquidator in funds to consider whether it was in the
interests of creditors to bring an appeal.

28 Thirdly, if Mr and Mrs Frigger were successful in the joinder appeal, an

outcome for which they would presumably contend is that the primary
decision should be set aside in any event for non-joinder of proper parties.
Any final orders to that effect on that appeal would render the proposed
appeal herein otiose.

29 Fourthly, if leave were to be given to Mr and Mrs Frigger to appeal the

primary decision, and if the joinder appeal were ultimately dismissed, the
grant of leave would effectively circumvent the proper disposition of the
joinder appeal, as it would give Mr and Mrs Frigger a right to agitate the
costs issues against CAT on appeal, when (if the joinder appeal were
dismissed) they had no right to be heard on those matters in the first
instance.

Conclusion

30 Mr and Mrs Frigger's application dated 23 June 2015 for leave to

appeal was accordingly dismissed. The application also sought to adduce
additional evidence on the appeal if leave were granted to commence an
appeal. For the foregoing reasons, leave was not granted.

Costs

31 Finally, there was a question of costs which were sought by counsel for
the respondents. It was in the context that the form of the application was ex
parte, and the registrar's notice to attend was not sent to the respondents'
 solicitors, although counsel said that his solicitors had been served with
some limited papers by Mr and Mrs Frigger. The respondents did not file
any affidavits or written submissions. Counsel was not invited to and did
not make any oral submissions at the hearing. Had the court formed the
view after hearing from Mr and Mrs Frigger that the application had any
prima facie merit, the court would likely have required a full set of papers to
be served on the respondents and made the usual directions for affidavits and
submissions in response. However, none of that was necessary. We
considered that in all the circumstances there should be no order as to costs.

______________________________________

1 Computer Accounting and Tax Pty Ltd (in liq) v Professional Services of Australia Pty Ltd [No 8] [2015]
WASC 166.
2 The history, outlined in this paragraph, is conveniently collected in, and taken from, Frigger v Professional
Services of Australia Pty Ltd [No 3] [2014] WASCA 69 [4], [6], [8], [11] - [13].
3 See Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [No 2] [2009] WASCA
183.
4 Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [No 3] [2010] WASC 93 [4],
[5], [13], [20], [21].
5 Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [No 3] [2010] WASC 93
[17] - [29].
6 Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [No 2] [2009] WASCA 183;
(2009) 261 ALR 179 (PSA [No 2]); Professional Services of Australia Pty Ltd v Computer Accounting and Tax
Pty Ltd [No 2] [2009] WASCA 183 (S)[21].
7 Primary decision [14] - [15].
8 Primary decision [5].
9 Primary decision [6].
10 Primary decision [19].
11 Primary decision [19].
12 Primary decision [20].
13 See Frigger v Professional Services of Australia Pty Ltd [2015] WASCA 3 [18].
14 Computer Accounting and Tax Pty Ltd (in liq) v Professional Services of Australia Pty Ltd [No 7] [2014]
WASC 360 [23]; Frigger v Professional Services of Australia Pty Ltd [2015] WASCA 3 [18].
15 Computer Accounting and Tax Pty Ltd (in liq) v Professional Services of Australia Pty Ltd [No 7] [2014]
WASC 360; Frigger v Professional Services of Australia Pty Ltd [2015] WASCA 3.
16 Computer Accounting and Tax Pty Ltd (in liq) v Professional Services of Australia Pty Ltd [No 7] [2014]
WASC 360; Frigger v Professional Services of Australia Pty Ltd [2015] WASCA 3.
17 Appeal CACV 118 of 2014.
18 Frigger v Professional Services of Australia Pty Ltd [2015] WASC 3 [38].
19 Witness v Marsden [2000] NSWCA 52; (2000) 49 NSWLR 429 [81].
20 cf Krishell Pty Ltd v Nilant [2006] WASCA 223; (2006) 32 WAR 540 [74].
21 Applicants' written submissions 06/08/15 par 10.

CatchwordArray: Practice and procedure - Application to commence an appeal by a non-party to the

primary decision - Leave purportedly sought under s 471C of the Corporations Act 2001 (Cth) - No power
- Discretionary reasons not to grant application in any event