Huber v CellOS Software Ltd (in liq) (No 2)

• Jurisdiction: Australia Federal only
• Judgment Date: 12 May 2023
• Neutral Citation: [2023] FCA 459
• Date: 12 May 2023
• Court: Federal Court

Federal Court of Australia

Huber v CellOS Software Ltd (in liq) (No 2) [2023] FCA 459

File number(s):	VID 458 of 2022VID 545 of 2022
Judgment of:	MCELWAINE J
Date of judgment:	12 May 2023
Catchwords:	CORPORATIONS – Application to stay the liquidation of respondent until the determination of the appeal pursuant to s 482 of the Corporations Act 2001 (Cth) – application without merit – leave to appeal not granted – application dismissed PRACTICE AND PROCEDURE – Application pursuant to s 500(2) of the Corporations Act 2001 (Cth) for leave to continue appeal against company in liquidation – where applicant seeks to re-agitate matters heard at trial – where appellant seeks to challenge every adverse factual finding at trial – where appeal grounds fail to identify specific error, are without merit and in part unintelligible – prolix grounds that are inconsistent with the overarching purpose of the civil practice and procedure of the Court pursuant to ss 37M and 37N of the Federal Court of Australia Act 1976 (Cth) – application dismissed
Legislation:	Corporations Act 2001 (Cth) ss 439C, 482(1), 500(2) Federal Court of Australia Act 1976 (Cth) ss 25(2)(b), 37M, 37N Federal Court Rules 2011 (Cth) r 36.05
Cases cited:	Allesch v Maunz (2000) 203 CLR 172; [2000] HCA 40 Ancient Order of Foresters in Victoria Friendly Society Ltd v Lifeplan Australia Friendly Society Ltd (2018) 265 CLR 1; [2018] HCA 43 Australian Securities and Investments Commission v Saxby Bridge Financial Planning Pty Ltd (2003) 133 FCR 290; [2003] FCAFC 244 Bahonko v Sterjov (2008) 166 FCR 415; [2008] FCAFC 30 BQQ15 v Minister for Home Affairs [2019] FCAFC 218 Briginshaw v Briginshaw (1938) 60 CLR 336 Caruso v Built It Pty Ltd (in liq) (No 2) (2019) 134 SASR 280; [2019] SASC 125 CellOS Software Ltd v Huber (No 2) (2020) 144 ACSR 267; [2020] FCA 505; CellOS Software Ltd v Huber (2019) 132 ACSR 468; [2018] FCA 2069; Coulton v Halcombe (1986) 162 CLR 1 at 7 Da Costa v Cockburn Salvage & Trading Pty Ltd (1970) 124 CLR 192 DOQ17 v Australian Financial Security Authority [2020] FCAFC 219 Dynasty Pty Ltd v Coombs (1995) 59 FCR 122 Giddings v Australian Information Commissioner [2017] FCAFC 225 Huber v CellOS Software Ltd (in liq) [2022] FCA 744 Lee v Lee (2019) 266 CLR 129; [2019] HCA 28 Leveraged Capital Pty Ltd (in liq) v Modena Imports Pty Ltd (in liq) [2010] NSWSC 739 Manolakis v Carter [2008] FCAFC 183 Massoud v Nationwide News Pty Ltd [2022] NSWCA 150 Mawhinney v Australian Securities and Investments Commission (2022) 405 ALR 292; [2022] FCAFC 159 Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd (2015) 234 FCR 549; [2015] FCAFC 157 Tu’uta Katoa v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (2022) 96 ALJR 819; [2022] HCA 28 Vagrand Pty Ltd (in liq) v Fielding (1993) 41 FCR 550 Vita Group Ltd, In the matter of Vita Group Ltd [2023] FCA 400 Warman International Ltd v Dwyer (1995) 182 CLR 544 Young v Crime and Corruption Commission [2018] QCA 55 ZOLL Medical Australia, in the matter of Cardiac Defibrillators Australia Pty Ltd (in liq) v Cardiac Defibrillators Australia Pty Ltd (in liq) [2022] FCA 167 Katzmann A, ‘Pleadings and case management in civil proceedings in the Federal Court of Australia’ (Speech, The College of Law Judges’ Series, 5 November 2015) McHugh M, Preparing and arguing an appeal (2010) NSW Bar News 85
Division:	General Division
Registry:	Victoria
National Practice Area:	Commercial and Corporations
Sub-area:	Corporations and Corporate Insolvency
Number of paragraphs:	109
Date of hearing:	8 February 2023
Counsel for the Applicant:	The Applicant appeared in person
Counsel for the Respondent:	The Respondent did not appear
Solicitor for the Respondent:	Mills Oakley

ORDERS

		VID 458 of 2022 VID 545 of 2022
BETWEEN:	JASON JOSEPH HUBER Applicant
AND:	CELLOS SOFTWARE LTD (IN LIQUIDATION) Respondent

order made by:	MCELWAINE J
DATE OF ORDER:	12 May 2023

THE COURT ORDERS THAT:

1. The application for leave to proceed with the appeal in proceeding VID 338 of 2020 filed 8 August 2022 is dismissed.

2. The application for a stay of the liquidation of CellOS Ltd (in liq) filed 29 August 2022 is dismissed.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

MCELWAINE J:

1. In proceeding VID338/2020 (the appeal), Mr Huber seeks to appeal orders made by Beach J on 17 April 2020, where inter alia his Honour declared that Mr Huber breached his statutory and fiduciary duties owed to CellOS Software Ltd (CellOS) by procuring, through a complex number of related off-shore companies, shares in CellOS which were then sold at a profit and which diverted investors from taking up shares in CellOS and at a higher price. Those orders were made following a protracted liability trial which his Honour determined adversely to Mr Huber and associated corporations for reasons published on 20 December 2018: CellOS Software Ltd v Huber (2019) 132 ACSR 468; [2018] FCA 2069 (liability judgment or LJ). His Honour also ordered that Mr Huber and other related corporate respondents must account to CellOS in the amount of $42 million: CellOS Software Ltd v Huber (No 2) (2020) 144 ACSR 267; [2020] FCA 505 (relief judgment or RJ).

2. CellOS was placed into administration on 10 January 2022 and, following the second meeting of creditors, was voluntarily wound up pursuant to s 439C(c) of the Corporations Act 2001 (Cth) on 19 April 2022.

3. Mr Huber as the single appellant attempted to file a notice of appeal from the relief judgment on 15 May 2020, but was unsuccessful due to difficulties in relation to the payment of the filing fee. Eventually, his notice of appeal was accepted for filing on 25 May 2020, 10 days out of time. He requires an extension of time: s 25(2)(b) Federal Court of Australia Act 1976 (FCA Act). That is not the only discretion to be exercised in favour of Mr Huber so that his appeal may proceed. On 29 June 2022, I determined, as a separate question in the appeal, that Mr Huber required leave to proceed pursuant to s 500(2) of the Corporations Act: Huber v CellOS Software Ltd (in liq) [2022] FCA 744 (leave judgment).

4. On 12 August 2022, Mr Huber commenced proceeding VID458/2022 for leave to continue his appeal (leave application). Separately, on 29 August 2022, Mr Huber commenced proceeding VID545/2022 in which he seeks an order to stay the liquidation of CellOS until the determination of his appeal (stay application) pursuant to s 482 of the Corporations Act.

5. CellOS by its liquidator was represented by Mills Oakley in the appeal. No notice of ceasing to act has been filed in the appeal. Mills Oakley also act for CellOS by its liquidator in the...