A E Goodwin Ltd v AG Healing Ltd

CATCHWORDS : CORPORATIONS [196]- Receivership- Group of 12 companies administered by two receiver/managers- Receivers in receipt of surplus- Court approached for directions as to how to deal with surplus- Companies operated on consolidated basis- Affairs intermingled- Difficulties arising in determining individual subsidiary's contribution to holding company's indebtedness when operated on consolidated basis.

LEGISLATION CITED : Corporations Act 2001 (Cth) s 424

A E Goodwin Ltd v AG Healing Ltd (1979) 7 ACLR 481 Albion Insurance Co Ltd v GIO (NSW) (1969) 121 CLR 342 Dean-Willcocks v Soluble Solution Hydroponics Pty Ltd (1997) 24 ACSR 79 Kassem v Sentinel Properties Ltd [2005] NSWSC 403 CASES CITED : Re Dean-Willcocks; Alpha Telecom (Aust) Pty Ltd (in liq) (2004) 208 ALR 414; 50 ACSR 15 Rogers v ANZ Banking Group Ltd [1985] WAR 304 Seabird Corporation Ltd v Sherlock (1990) 2 ACSR 111 Tayeh and de Vries v The Black Stump Enterprises Pty Ltd [2005] NSWSC 475

COUNSEL : A G Bell SC and N J Owens (Applicant)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST

3172/05 - RE TVSN LIMITED JUDGMENT 1 HIS HONOUR: This is an application by Mr Winterbottom, one of two receivers of a group of 12 corporations, of which the lead company is TVSN Ltd, for directions pursuant to s 424 of the Corporations Act 2001 (Cth) as to how he should administer those corporations. The problem concerns how the receiver should deal with a surplus in his hands. 2 I heard the application on 1 July 2005. Mr AG Bell SC and Mr NJ Owens appeared for the receiver. There were submitting appearances from the administrators of the companies and a secured creditor, Mr Moshe Ozama. 3 The case for the receiver was presented with clarity and detailed consideration of the issues involved and I am much indebted for that assistance. 4 The background facts as presented to the court are that the TVSN Group consists of thirteen companies. Twelve are in receivership, the exception being Princess Household Appliances (Australia) Pty Limited ("Princess"). I will refer to the TVSN Group as indicating the twelve companies under receivership. 5 The companies in the Group, other than TVSN Interactive and Shop From Home International which were non-trading entities with no assets or liabilities, were each involved in some way in the sale of a wide variety of merchandise. 6 The ambiguity inherent in that description of the role of those companies is a consequence of the fact that, in many important respects, the TVSN Group operated on a consolidated basis. The separate legal personality of individual companies tended to be disregarded, and instead the TVSN Group was treated as being comprised of four "business units": a. The " TVSN/Expo Channel Unit " was the TVSN Group's pay television business, and consisted of TVSN and Expo Channel. The TVSN/Expo Channel Unit operated two pay television channels which advertised merchandise 24 hours a day.

b. The " Danoz Direct Unit " was the TVSN Group's free-to-air television business, and consisted of Danoz Holdings and Danoz Direct. Chiefly, the Danoz Direct Unit placed advertisements on free-to-air television. It also, however, marketed products directly to customers who had previously purchased goods from it.

c. The " Danoz Directions Unit " was the TVSN Group's retail business, and consisted of Danoz Directions, Danoz Direct Retail, Danoz Direct Ashfield, Danoz Direct Warringah and Danoz Directions Campbelltown. The Danoz Directions Unit owned or franchised 43 retail stores throughout Australia.

d. The " Emjoi/Princess Unit " was the TVSN Group's wholesale business, and consisted of Emjoi and Princess. The Emjoi/Princess Unit distributed merchandise to a number of retail chains in Australia. 7 TVSN was provided with financial accommodation by St George Bank Limited ("St George") in the form of various facilities. TVSN would draw down those facilities either for its own benefit or, if it considered it desirable to do so, for the benefit of other members of the TVSN Group. 8 Various forms of security were provided to St George for the provision of those facilities, including: (a) fixed and floating charges over all members of the TVSN Group; (b) an authority from TVSN to St George to set-off monies deposited by TVSN in certain St George bank accounts; (c) a guarantee and indemnity given by each of TVSN's subsidiaries in the TVSN Group; (d) What was described as a deed of cross-collateralization between each of the members of the TVSN Group and St George. 9 TVSN was also lent $1,500,000 on a secured basis by Mr Moshe Ozana. By a deed of priority entered into between TVSN, Mr Ozana and St George, Mr Ozana agreed that his security was to be subordinated to St George. Mr Ozana later released TVSN from the obligation to repay $500,000 of that debt, with the result that today, Mr Ozana is a secured creditor of TVSN in the amount of $1,000,000. 10 On 28 October 2004 administrators were appointed to the TVSN Group and Princess. On the same day, St George appointed Mr Winterbottom and Mr Martin Madden joint and several receivers and managers over each of the members of the TVSN Group. The receivers were appointed pursuant to the charges referred to in 8(a) above. 11 As at 28 October 2004, TVSN owed $8,146,102 to St George. That amount, plus the costs of the receivership, is the debt secured by the charges pursuant to which the receivers were appointed (the "Secured Debt"). In order to recover for St George the amount of the Secured Debt, the receivers initially set-off amounts held on deposit by TVSN with St George and then proceeded to sell the businesses operated by the TVSN Group. The result of these efforts appears to have been to generate more money than is required to satisfy the Secured Debt. 12 The receiver has estimated that the amount of the surplus will be $2,563,000. The reason it is not yet possible to state the amount of the surplus with precision is twofold. First, because the Secured Debt includes the costs of the receivership, so long as the receivership continues, the ultimate size of the Secured Debt is unknown. Secondly, it is not yet possible to determine the exact realization from the sale of the TVSN Group's businesses as there are still outstanding realizations and contingent liabilities that, at this point, can only be estimated. 13 In these circumstances the receiver applies for directions as to the application of the surplus. 14 With sufficient funds to discharge the Secured Debt having been realized, and with the sale of the TVSN Group's businesses, for all intents and purposes, complete, the receivers wish to retire, subject to determining any receivership liabilities. Obviously, before they retire the receivers must distribute the surplus funds that they hold to the members of the TVSN Group entitled to it. Given the complexity of the TVSN Group that is not a straightforward exercise. 15 I should make four preliminary observations before I deal with the facts and merits of the present case. 16 First, there are considerable intricacies in the law of guarantees and in ascertaining the rights of subsidiaries which have contributed to pay part of their holding company's indebtedness; see eg AE Goodwin Ltd v AG Healing Ltd (1979) 7 ACLR 481. 17 Secondly, the Court is reluctant to give authority to a liquidator or the like to consolidate the assets and liabilities of a group of companies rather than deal with each company individually. Indeed, in a liquidation, there are severe problems in attempting to do so unless the creditors all consent; see eg Re Dean-Willcocks; Alpha Telecom (Aust) Pty Ltd (in liq) (2004) 208 ALR 414; 50 ACSR 15; Kassem v Sentinel Properties Ltd [2005] NSWSC 403. See also Dean-Willcocks v Soluble Solution Hydroponics Pty Ltd (1997) 24 ACSR 79 and Tayeh and de Vries v The Black Stump Enterprises Pty Ltd [2005] NSWSC 475. 18 Thirdly, notwithstanding what I said in the preceding paragraph, there are circumstances where the court can see that it is to no-one's advantage that time and cost be spent in working out what entitlements or liabilities each company in a group may have where there is mostly speculative material on which to work. In such a case, a consolidated distribution may be approved; see eg the cases referred to in [17]. 19 Fourthly, it is possible to be sidetracked in the present sort of matter by exploring avenues replete with fascinating legal distinctions hanging from every branch of every tree. However, to so explore, whilst providing intellectual amusement for the judge and counsel does little for commercial reality. I will thus endeavour to keep to the essential matters. 20 The present matter is complicated by the fact that the companies were operated on a consolidated basis, with the affairs of each being intermingled to a considerable degree. It is thus almost impossible to determine the assets and liabilities of each company on a separate legal entity basis. To the extent that divisions were recognized within the TVSN Group, they were not divisions based on legal entities, but rather "business units". This meant that when the receivers came to sell TVSN's businesses, the businesses were sold by "business unit", and not by legal entity. 21 The result is that, while the receivers can accurately identify the amount realized in respect of the assets of a group of companies comprising a particular business unit, it is not a simple matter to apportion that amount between those constituent companies. The receivers have proceeded to apportion the amounts they have received in accordance with various assumptions, which, they consider, provide a fair and rational basis for the allocation. 22 I agree that in the circumstances this is the sensible approach. It is significant that no-one has sought to challenge it. 23 The application of those assumptions is set out in Mr Winterbottom's affidavit at paragraphs 42-66. These were presented in submissions in summary form as set out in the following paragraphs. The Fundamental Assumptions 24 The fundamental assumptions proposed to be made are that the amount realized from each Business Unit is: (a) an amount attributable to one or more of the companies comprising that Business Unit; and (b) an amount that is not attributable to any company that does not comprise that Business Unit. The TVSN/Expo Channel Business Unit 25 The TVSN/Expo Channel Business Unit is comprised of TVSN and Expo Channel. 26 The total amount estimated to be realized from the sale of the businesses carried on by that Business Unit is $4,411,000. That total figure is arrived at by aggregating the individual amounts set out in the spreadsheet at Tab 42 of Exhibit DJW1. In order to allocate that total amount between TVSN and Expo Channel it is proposed to allocate those individual amounts between TVSN and Expo Channel in the following manner: (a) Goodwill: It is intended to allocate the amount received in respect of goodwill 50% to TVSN and 50% to Expo Channel. The reason for this is because although TVSN was a loss-making business, and Expo Channel was profitable, the reason TVSN was loss-making was because it was responsible for expenditures that benefited the entire TVSN Group. (b) Deductions in sale contracts: It is possible, and it is thus intended, to allocate these deductions exactly between TVSN and Expo Channel. (c) Fixed Assets: The net book value of these assets was with TVSN, and there is no reason to question the accuracy of that allocation. Therefore, this entire amount is proposed to be allocated to TVSN. (d) Debtors: Expo Channel's debtors were not sold, and thus this entire amount is proposed to be allocated to TVSN. (e) Inventory: Expo Channel held no inventory, and thus this entire amount is proposed to be allocated to TVSN. (f) Pre-Appointment Debtor Recoveries: It is possible, and it is thus intended, to allocate these recoveries exactly between TVSN and Expo Channel. (g) Net Trading Loss: Because TVSN was a loss-making business, and because Expo Channel was profitable, it is proposed to assign the entirety of the net trading loss to TVSN. (h) Payments of Necessity: It is possible, and it is thus intended, to allocate these expenses exactly between TVSN and Expo Channel. (i) Retention of Title Liabilities: Certain suppliers claimed title to goods held by the business. Because only TVSN had contracted for the supply of stock with the suppliers in question, it is proposed to assign the entirety of this cost to TVSN. (j) Employee Entitlements: Because all employees were employed by TVSN, it is proposed to allocate the entirety of this expense to TVSN. 27 The result of the above allocations are that the net assets realized by TVSN are $2,384,000 and the net assets realized from Expo Channel are $2,027,000. The Danoz (TV) Business Unit 28 The Danoz (TV) Business Unit is comprised of Danoz Direct and Danoz Holdings. 29 The total amount estimated to be realized from the sale of the businesses carried on by that Business Unit is $1,561,000. That total figure is arrived at by aggregating the individual amounts set out in the spreadsheet at Tab 43 of Exhibit DJW1. 30 Danoz Holdings was the parent company of Danoz Direct. It had only one asset, viz an investment in other members of the TVSN Group (in the amount of $500,000). Danoz Holdings also had only liability, viz. a loan to Danoz Direct (in the amount of $2,500,000). Because of the arbitrary nature of the way in which investments and loans were recognized amongst the TVSN Group, it is proposed to allocate the entirety of the proceeds of the sale of this Business Unit to Danoz Direct. 31 As such, on the current estimated figures, $1,561,000 will be allocated to Danoz Direct, and $0 will be allocated to Danoz Holdings. The Danoz Directions Business Unit 32 The Danoz Directions Business Unit is comprised of Danoz Direct Retail, Danoz Direct Ashfield, Danoz Direct Warringah, Danoz Directions and Danoz Directions Campbelltown. 33 The total amount estimated to be realized from the sale of the businesses carried on by that Business Unit is $89,000. That total figure is arrived at by aggregating the individual amounts set out in the spreadsheet at Tab 44 of Exhibit DJW1. In order to allocate that total amount between the companies comprising the Danoz Directions Business Unit it is proposed to allocate those individual amounts between those companies in the following manner: (a) Goodwill: It is proposed to allocate the amount received in respect of goodwill between the companies according to the number of stores and franchises operated by each company. For example, Danoz Directions operated 34 out of a total of 36 stores (94%), and it is thus proposed to allocate 94% of the amount received in respect of goodwill to Danoz Directions. (b) Fixed Assets and Inventory: It is proposed to allocate the amount received in respect of fixed assets and inventory between the companies according to the proportion of the net book value of the assets and inventory held by each company prior to the appointment of the receivers. That proportion is revealed in the "Report as to Affairs" prepared by the directors of the companies upon the receivers' appointment. (c) Deductions in Sale Contract: These deductions relate to employee liabilities that were not transferred to the purchaser of the businesses. Because the employees in question were all employed by TVSN, it is proposed to allocate the expense between the companies based upon the companies' allocation of the total sale proceeds. For example, because it is proposed that Danoz Directions will receive 99% of the sale proceeds, it is proposed to allocate 99% of these deductions to Danoz Directions. (d) Pre-Appointment Debtor Recoveries: The debts in respect of which these recoveries were made were owed entirely to Danoz Directions. As such, it is proposed to allocate all of these recoveries to Danoz Directions. (e) Net Trading Loss: Because the companies comprising this Business Unit did not trade independently, their respective trade losses cannot be ascertained. It is thus proposed to allocate such losses according to each company's percentage of the estimated total gross asset realization. This is because the gross asset realization reflects the size of the business, and is thus a reasonable basis upon which to base the allocation of trading losses. 34 The result of the above allocations are that the net assets realized by Danoz Direct Retail are $0, net assets realized by Danoz Direct Ashfield are $0, net assets realized by Warringah are $1,000, net assets realized by Danoz Directions are $88,000 and net assets realized by Danoz Directions Campbelltown are $0. The Emjoi/Princess Business Unit 35 The Emjoi/Princess Business Unit is comprised of Emjoi and Princess. 36 The total amount estimated to be realized from the sale of the businesses carried on by that Business Unit is $3,814,000. That total figure is arrived at by aggregating the individual amounts set out in the spreadsheet at Tab 45 of Exhibit DJW1. 37 All of the business assets sold from the Emjoi/Princess Business Unit, with one exception, were owned by Emjoi. The exception was certain product files, which were sold for a small sum, the proceeds of which were used to pay Princess' administrators. As such, it is proposed to allocate the entirety of the net proceeds of the sale of the Emjoi/Princess Business Unit to Emjoi. 38 As such, on the current estimated figures, $3,814,000 will be allocated to Emjoi. Other Entities 39 TVSN Interactive and Shop From Home International were non-trading entities, with no assets or liabilities. As such, those entities have been treated as having contributed nothing to the funds held by the receivers. 40 The applicant seeks a direction in the form of Direction 1, to the effect that the receivers may treat the members of the TVSN Group as having contributed to the funds held by the receivers in accordance with those assumptions and the process set out in those paragraphs. 41 Counsel indicated that they considered that the following directions ought to be given:

1. In respect of the funds (the " Fund ") held by the receivers of the TVSN Group on account of the realization of the assets of the TVSN Group, the receivers to treat each member of the TVSN Group as having contributed to the Fund in an amount determined in accordance with the assumptions and the process set out in the affidavit of David John Winterbottom sworn on 26 May 2005 at paragraphs 42-66; 2. The receivers to distribute no part of the Fund to TVSN Ltd (Administrators Appointed) (Receivers and Managers Appointed) (" TVSN ") unless the amount of the debt owed by the TVSN Group to St George Bank Limited (the " Secured Debt "), which amount includes the fees and expenses of the applicant and like amounts, is less than the amount determined to have been contributed by TVSN in accordance with direction 1 above, in which case the receivers to distribute to TVSN an amount equal to the difference between the amount of the Secured Debt and the amount determined to have been contributed to the Fund by TVSN; 3. In circumstances where no part of the Fund is distributed to TVSN, the receivers to distribute the Fund between TVSN's subsidiaries (the " Subsidiaries ") in accordance with the following procedure: (a) the difference between the amount of the Secured Debt and the amount of the assets realized from TVSN should be calculated (the " Shortfall "); (b) that amount should be divided by the number of Subsidiaries (the " Base Contribution Amount "); (c) the Base Contribution Amount should be notionally deducted from the amount of the assets realized from each Subsidiary; (d) if the amount realized from any subsidiary is less than or equal to the Base Contribution Amount, that Subsidiary (an " Under-Contributing Subsidiary ") should receive nothing; (e) the Base Contribution Amount should then be multiplied by the number of Under-Contributing Subsidiaries (the " Under-Contributing Subsidiaries' Share "); (f) the Under Contributing Subsidiaries' Share should be deducted from the amount of the assets realized from the Under-Contributing Subsidiaries (the " Contribution Shortfall "); (g) the Contribution Shortfall should be divided by the number of Subsidiaries (each, a " Contributing Subsidiary ") who are not Under-Contributing Subsidiaries (the " Additional Contribution Amount "); (h) the Additional Contribution Amount should be added to each Contributing Subsidiaries Base Contribution Amount (the " New Contribution Amount "); (i) the New Contribution Amount should be notionally deducted from the amount of assets realized from each Contributing Subsidiary; (j) if the amount realized from any Contributing Subsidiary is less than or equal to the New Contribution Amount, that subsidiary becomes an Under-Contributing Subsidiary and should receive nothing; (k) the process set out in paragraphs (e) through (i) inclusive may need to be repeated, with appropriate modifications, until the Shortfall has been fully distributed between the Subsidiaries; and (l) to the extent that the assets realized from any Subsidiary exceed its final Contribution Amount, that amount should be returned to that subsidiary. 42 They also suggested that an order be made that the costs of these proceedings be an expense in the receivership of the members of the TVSN Group. 43 I agree that I should give those directions substantially for the reasons that were put to me during argument. 44 The directions sought assume, properly in my view, that TVSN's assets should be exhausted completely before its subsidiaries are required to contribute to the satisfaction of the debt. 45 An avenue to explore might be whether TVSN's subsidiaries are liable to St George as principal debtors or whether they are only secondarily liable. 46 However, whatever the result of that exploration, whether a surety is liable under a guarantee or an indemnity, the surety is entitled to be indemnified on the same legal basis. In the context of guarantees proper, such a right will be found to exist unless the guarantee was furnished without the request or knowledge of the principal debtor. By parallel reasoning, therefore, TVSN's subsidiaries would be entitled to be indemnified by TVSN unless they provided the guarantee and indemnity to St George without TVSN's request or knowledge. 47 It should be inferred that TVSN requested, or knew, that its subsidiaries were providing a guarantee and indemnity for the purpose of enabling it to obtain finance from St George. Such an inference should be drawn, in particular, from the fact that TVSN and its subsidiaries were (obviously) related companies, that the subsidiaries were controlled by TVSN, and that Mr Ozana was a director of TVSN and a director or the sole director of all but two of the subsidiary members of the TVSN Group. In circumstances where St George evidently required the guarantees and indemnities to be put in place before it would extend finance to TVSN, it is submitted that those guarantees and indemnities should be treated as having been offered at the request, or with the knowledge, of TVSN. 48 The courts have been willing in similar circumstances to infer that securities were provided at the request or with the knowledge of a related entity; see eg Seabird Corporation Ltd v Sherlock (1990) 2 ACSR 111 at 115 per Cohen J and Rogers v ANZ Banking Group Ltd [1985] WAR 304 at 313. 49 In the present case, as it appears that the subsidiaries entered into the guarantee and indemnity at the request, or with the knowledge, of TVSN, the subsidiaries are entitled to be indemnified by TVSN in respect of any amounts they may have paid to St George. 50 Direction 2 provides that TVSN is to receive no part of the surplus funds unless it has out of its own assets satisfied the entirety of the Secured Debt. 51 This is appropriate because if one treats the subsidiaries, vis a vis TVSN, as having in substance secondary obligations entitling them to an indemnity from TVSN, then it follows that, to the extent possible, the burden of paying the Secured Debt should fall on TVSN alone and the subsidiaries are to be treated as equally liable for the shortfall. 52 Turning to the figures, it is currently estimated that TVSN will have contributed $2,384,000 to the total amount realized by the receivers. Because that is less than $7,312,000 (the estimated amount of the Secured Debt after setting off the cash deposits), it appears unlikely that TVSN will have any part of the surplus funds distributed to it. 53 If it is in fact the case that TVSN will not have discharged the Secured Debt entirely out of its own assets, it is necessary to consider the extent to which TVSN's subsidiaries are required to contribute. 54 Thus the first step is to determine the total amount required to be borne by the subsidiaries collectively. That amount is the amount of the Secured Debt, less the total amount paid by TVSN. This calculation is found in Direction 3(a). 55 Having determined the total amount to be borne by the subsidiaries (the "Shortfall"), it is necessary to determine the proportion of the Shortfall to be borne by each individual subsidiary. Under the principles applied in this sort of case (see Albion Insurance Co Ltd v GIO (NSW) (1969) 121 CLR 342 at 350), the subsidiaries should each be required to contribute to that Shortfall equally, and to the extent that the subsidiaries contributed unequally, over-contributing subsidiaries would be entitled to contribution from the under-contributing subsidiaries. 56 As such, the amount required to be paid in satisfaction of the Secured Debt by each subsidiary is the Shortfall, divided by the number of TVSN's subsidiaries (the "Base Contribution Amount"). This calculation is found in Direction 3(b). 57 If all subsidiaries had assets greater than the Base Contribution Amount, it would be a simple matter of deducting the Base Contribution Amount from each subsidiary's assets, and returning the amount of the remainder to the relevant subsidiary. It appears, however, that not all subsidiaries will have assets in excess of the Base Contribution Amount. The calculation to determine whether any given subsidiary has assets in excess of the Base Contribution Amount or not is found in Direction 3(c). 58 If the Base Contribution Amount is greater than a subsidiary's assets (that subsidiary being an "Under-Contributing Subsidiary"), that subsidiary will have to contribute all of its assets, and receive no part of the surplus. That conclusion is reflected in Direction 3(d). 59 If there are Under-Contributing Subsidiaries, the principle that each subsidiary should bear the burden of satisfying the Secured Debt equally means that the burden of paying the amount that should have been, but was not, contributed by the Under-Contributing Subsidiaries should be shared equally amongst those subsidiaries who do have assets greater than the Base Contribution Amount. 60 The amount that should have been contributed by the Under-Contributing Subsidiaries but was not is determined by multiplying the Base Contribution Amount by the number of Under-Contributing Subsidiaries, and deducting from that number the total amount of assets realized from the Under-Contributing Subsidiaries. This amount may be referred to as the "Contribution Shortfall", and the calculation by which it is obtained is found in Directions 3(e) and (f). 61 So that the burden of the Contribution Shortfall is shared equally amongst the remaining subsidiaries, the amount of the Contribution Shortfall must be divided by the number of remaining subsidiaries, and that amount (the "Additional Contribution Amount") must be added to each of those remaining subsidiaries' Base Contribution Amount. In that way each remaining subsidiary is responsible for paying, in addition to the Base Contribution Amount, an equal share of the Contribution Shortfall. That combined amount may be referred to as the "New Contribution Amount", and the calculation by which it is obtained is found in Directions 3(g) and (h). 62 If all remaining subsidiaries have assets in excess of the New Contribution Amount, it would be a simple matter of deducting the New Contribution Amount from the assets of each company, and returning the surplus to the relevant subsidiary. It appears, however, that not all remaining subsidiaries will have assets in excess of the New Contribution Amount. The calculation to determine whether any particular remaining subsidiary has assets in excess of the New Contribution Amount or not is found in Direction 3(i). 63 If the New Contribution Amount is greater than a subsidiary's assets, that subsidiary becomes an Under Contributing Subsidiary and will accordingly have to contribute all of its assets, and receive no part of the surplus. That conclusion is reflected in Direction 3(j). 64 The process set out in Directions 3(e) to (i) will then need to be repeated so as to distribute equally amongst the remaining subsidiaries the amount that Under Contributing Subsidiaries were required to pay but could not. This process is set out in Direction 3(k). 65 Finally, when there are subsidiaries with assets greater than the final amount they are required to contribute, those subsidiaries should have returned to them the amount by which their assets exceed their final Contribution Amount. This conclusion is set out in Direction 3(l). 66 Mr Winterbottom's evidence sets out calculations for each member of the TVSN Group using the above methodology and the current estimated numbers. The result of those calculations is that, using the current estimated numbers, Expo Channel should receive $388,000 and Emjoi should receive $2,175,000. In that way, the entirety of the currently estimated $2,563,000 surplus will be distributed. 67 I accordingly give the above directions (ie those set out in paragraph 41 above). I agree also that it is proper to order that the costs of these proceedings be an expense of the receivership of each of the members of the TVSN Group. 68 I have initialled the Short Minutes of Order that counsel have provided me which contain those directions, so that my order may be simply recorded as "Orders as per Short Minutes of Order initialled by me dated and placed with the papers."

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