ACN 118 023 868 v Cubelic

REASONS FOR JUDGMENT 1 This claim arises from the unfortunate breakdown of a relationship between the first plaintiff, Mr Ciccarello and the first defendant, Mr Steve Cubelic and the second defendant, Mr Tony Cubelic. 2 They agreed to enter into a property development venture in late 2005 or early 2006, but it has not worked as they had initially expected. It is in the throes of being wound up. The issue at present is as to who should control that process. 3 The structure for their proposed property development venture involved the incorporation of Adelaide Property Development Pty Ltd (APD) on 24 January 2006. Mr Ciccarello and Mr Steve Cubelic and Mr Tony Cubelic became its directors. Its shareholders, with shares issued in equal numbers to each, were three companies with which they were respectively associated: the second plaintiff, and the fourth and fifth defendants. APD became trustee of the Adelaide Property Unit Trust (APUT), established on 27 January 2006. It had three equal unit holders: Mr Ciccarello, Mr Steve Cubelic and Mr Tony Cubelic. Where it is convenient hereafter, I will call Mr Steve Cubelic and Mr Tony Cubelic together "the Cubelics". 4 It is clear enough, without going into the reasons why it occurred, that the relationship between the three men had broken down by about July 2007. The evidence is also clear, and not disputed, that since that time the Cubelics have conducted the business and affairs of APD to the exclusion of Mr Ciccarello. They have made significant decisions on behalf of APD as to how its business will continue to be operated, including the disposition of assets, and as to the appropriation of funds resulting from the disposition of assets. There is common ground that the relationship will not be able to be re-established. 5 The principal relief sought in the amended application of 14 December 2007 seeks orders under ss 233, 232 and 233(1)(d) of the Corporations Act 2001 (Cth), and under s 1324 of the Corporations Act as well as declaratory relief. The nature of the declaratory relief indicates the foundation for the orders sought under those provisions of the Corporations Act. It is that the Cubelics have conducted the affairs of APD in a way which is contrary to the interests of its members as a whole, or alternatively, in a way which is oppressive to, or unfairly prejudicial to, or unfairly discriminatory against its shareholder Andrew Ciccarello Pty Ltd. Orders are also sought under s 233 regulating the affairs of APD, and restraining the Cubelics from dealing with the assets of APD. Alternative relief is also sought. For present purposes, it is not necessary to refer to it, other than to note a discrete claim for an order pursuant to s 290(2) and (3) and s 198F(1) and s 247A of the Corporations Act that the plaintiffs be authorised to inspect and take copies of the books of APD. 6 On 2 November 2007, upon the usual undertaking, I made an interlocutory order by consent that the defendants make available for inspection and copying by the plaintiffs the books and records of APD. I also ordered the defendants be restrained from disposing of, charging or encumbering the land situate at 31 Beach Road, Brighton and the land situate at 34 Wingfield Road, Wingfield without providing to solicitors for the plaintiffs seven days prior written notice of the proposed disposition, charge or encumbrance and with sufficient detail to enable the plaintiffs to provide their prior written consent to the solicitors for the defendants within four days of the receipt of the notice. The defendants were also restrained from expending for or on behalf of APD any sum in excess of $2500 without a similar notice process. 7 That order has since remained in force, apparently without causing difficulty to either the plaintiffs or the defendants. 8 The activities of APD as trustee for APUT have involved the acquisition and potential development of three properties, one at Beach Road, Brighton, one at North Brighton and one at Wingfield. 9 The Beach Road, Brighton property was purchased on 25 May 2006 for $850,000 to the intent that it would be developed by building four units upon it, and that ultimately those units would be sold at a considerable profit to APUT, to flow through to the unit holders of APUT. At present, those units have been completed, and one is for sale. The precise timing of that unit being offered for sale in relation to the orders made on 2 November 2007 is unclear. 10 The North Brighton property was purchased on 19 April 2006 for $720,000. After the breakdown of the relationship, it was sold on 7 September 2007 for $825,000. The settlement required discharge of the first mortgage to Westpac Banking Corporation of $623,426, and after the usual adjustments and expenses, provided a balance of $171,914. It is now clear that that sum was received by APD, and on 12 September 2007 transferred pursuant to "funds transfer 7901", as it appears in the Commonwealth Bank statement of APD. Those funds were in fact transferred to SA Prawns Pty Ltd. That is a company of which the Cubelics are directors. I shall refer to the context in which that payment came to be made shortly. 11 The property at Wingfield was purchased on 7 July 2006 for $902,000. It remains in the name of APD. 12 The present issue arises on the notice of motion of the plaintiffs of 1 February 2008 for orders that a receiver and manager of all the property of APD be appointed pursuant to s 233 of the Corporations Act, and alternatively that the proceeds of sale of Unit 3, 31 Beach Road, Brighton be preserved in the trust account of the selling real estate agent. The orders sought have been refined to include an order that the receiver and manager appointed provide a report within 21 days of the appointment as to the assets and liabilities of APD and what should be done to preserve its business. 13 The power for the appointment of a receiver was said to lie with the Court under s 57 of the Federal Court of Australia Act 1976 (Cth) (the FCA Act) and under s 233 of the Corporations Act. I shall refer to the dispute about the circumstances in which those powers should be exercised in due course. Before doing so, it is appropriate to look at the foundation upon which the motion is now pressed. In essence, it is that (1) Mr Ciccarello has been excluded from the management of APD, including in his role as a director, since about July 2007 and has not been consulted about significant decisions made by APD since that time; (2) as a result of that exclusion, he has not been given access to the business records of APD in a way which enables him to understand what has been occurring in relation to its business and, in particular, as to the disposition of the surplus funds from the proceeds of the sale of the North Brighton property; and (3) in fact, the proceeds of the sale of the North Brighton property were credited to an entity of which the Cubelics are directors when they should have been applied to reducing the overdraft or facilities presently granted to APD by Westpac so as to reduce the imposition of penalty interest. 14 The first of those matters is clear enough. It is not really in dispute. It is the consequence of the breakdown in the relationship between Mr Ciccarello on the one hand and the Cubelics on the other. As with all such breakdowns, there are two sides to the story. It is probably not helpful to explore in detail at present why that breakdown occurred. Mr Ciccarello says he was simply excluded by the Cubelics because they wished to conduct the affairs of APD in a certain way and that they were unhappy with his continued involvement, particularly in his role securing building services supplied to APD through an entity called Civil Works Group (SA) Pty Ltd (CWG). CWG is a civil engineering company of which the directors are Mr Ciccarello, Mr Steve Cubelic and Mr McNamara, and of which the shareholders are Mr Ciccarello, Able Property Development Pty Ltd (a company controlled by Mr Ciccarello and his wife) and Cubelic and Sons Pty Ltd (a company controlled by the Cubelics). Apparently in about July 2007, the Cubelics came to be concerned (whether rightly or wrongly it is not necessary to explore) that services provided by CWG to APD were not being provided effectively and at an appropriate price. The Cubelics for their part say that each of the three directors participated on the basis that they would respectively contribute equal sums of money by way of loans into APD to enable it to finance the proposed development projects beyond the finance provided from banking institutions, and that Mr Ciccarello simply was unable, and therefore declined, to do so. They say (and it appears to be the case) that through entities associated with them they have advanced substantial funds to APD either to assist in the acquisition of the three properties or in the development works. 15 Be that as it may, Mr Ciccarello having been excluded from any real role in APD, came to learn of the imminent sale of the North Brighton property. In early September 2007, through his solicitors (by that stage the parties were only communicating through solicitors) he sought access to the records of APD to show how the sale decision had been made and how it was proposed to apply the proceeds of sale. He proposed certain alternatives, including that one third of the net proceeds of sale be paid to his interests, or that the surplus funds from the sale be paid in reduction of the claims of CWG and its subcontractors in relation to work undertaken for APD. 16 He was, in my view on the material presently before me, given the run around. As noted above, the available settlement funds from the sale were paid to SA Prawns Pty Ltd, a company associated with the Cubelics. 17 That was different from what the solicitors for the defendants conveyed to solicitors for the plaintiffs. 18 Although the payment to SA Prawns Pty Ltd had been made on 12 September 2007, it was not disclosed in those terms to the plaintiffs until late in January 2008. 19 By notice of 7 September 2007, Mr Ciccarello called a directors meeting of APD for 14 September 2007 to consider a resolution that the surplus funds from the sale of the North Brighton property be used to pay the company's outstanding creditors ahead of any director and/or shareholder's loan. Notwithstanding that notice, the payment was made on 12 September 2007 without notice to Mr Ciccarello between the notice of the meeting and its date. Mr Ciccarello and the Cubelics attended the meeting, the Cubelics with their solicitor. Mr Ciccarello was unhappy with that and sought an opportunity to arrange for his solicitor to be in attendance as well, and left the meeting. 20 On 13 September 2007, the solicitors for the Cubelics informed the solicitors for Mr Ciccarello: We expect that the company will utilise any surplus on the sale of the Gladstone Road property toward either its holding costs of its other properties or completion of the development of the Beach Road property. … That response was duly noted by solicitors for Mr Ciccarello in their response of 13 September 2007. On the following day, concerning more general matters, the solicitors for the Cubelics reasserted that position when discussing the completion of works at the Beach Road Brighton property. They said: You and your client are aware that the works at Beach Road, Brighton SA are close to completion for presentation to sale. Additional monies are required for completion and this may, in part, come from the surplus on the sale of the Gladstone Road properties. [a reference to the North Brighton property] … 21 The defence filed on 31 January 2008, together with the affidavit of Mr Steve Cubelic also sworn on that date, was the first occasion on which the Cubelics specifically disclosed that the net proceeds of sale of the North Brighton property were "refunded" to SA Prawns Pty Ltd on 12 September 2007. 22 Although counsel for the defendants insisted that that fact had not been previously concealed, and that the defendants have made substantially available to the plaintiffs all records which they wish to inspect, in my view on the material presently before me, and particularly in the light of the terms of the two letters written on 13 and 14 September 2007, the defendants have misrepresented or concealed the fact of that payment until forced to disclose it. 23 They explain the payment in the affidavit of Mr Steve Cubelic. It is said that, beyond the available banking facilities to APD, significant funds had been required both up to July 2007, and from September 2007 when the Cubelics decided to reactivate the development and finish the development of the Beach Road Brighton property rather than have it simply sit pending resolution of this dispute. To provide those funds, the Cubelics through certain entities undertook further borrowing of some $320,000. They say that they provided those funds, including through entities which had borrowed them from banking institutions, to facilitate the completion of the projects. There is no evidence as to why the funds were procured through borrowing through other entities rather than through APD, at least to the extent to which the funds were borrowed. However, the present evidence indicates that funds from banking institutions were originally insufficient to acquire the North Brighton property, and that the Cubelics made available funds to pay the original deposit, and the land tax from time to time, through SA Prawns Pty Ltd. So the issue does not appear to be that APD did not owe substantial funds to SA Prawns Pty Ltd at 12 September 2007, or that the Cubelics have not procured other advances to APD to support the development at least of the Beach Road Brighton Property. 24 At present, I do not have a clear picture of the level of advances by SA Prawns Pty Ltd or other entities associated with the Cubelics to APD. Nor do I have a clear picture of the level of indebtedness of APD to its trade creditors including CWG. Nor do I have a clear picture of the extent to which, if at all, Mr Ciccarello disputes the advances made through the Cubelics to APD or if the extent to which APD (presumably through the Cubelics) disputes its indebtedness to its trade creditors, including CWG. However, Mr Ciccarello through his counsel acknowledged that such advances as have been made to APD through the Cubelics are properly part of its liabilities, and should be accounted for prior to APD as trustee making any distribution to the unit holders of APUT. 25 There were other matters debated between the parties through their respective affidavits: the performance of Mr Ciccarello as the manager of APD up to June 2007, the adequacy of the financial records of APD maintained by him or under his supervision, including the adequacy of the financial statements of APD and of APUT at 30 June 2007, the extent to which the Cubelics had provided access to the books and records of APD from about September 2007 even to the present time, and whether a careful analysis of such records, as were made available to Mr Ciccarello and his advisers, would have revealed the payment of the surplus proceeds of sale of the North Brighton property to SA Prawns Pty Ltd on 12 September 2007. 26 I observe first that, on the material before me, the Cubelics through their solicitors chose at least to obfuscate concerning the application of the surplus proceeds of sale of the North Brighton property, and second that the Cubelics have run APD as trustee of the APUT from about July 2007 without convening a meeting of its directors. Beyond those preliminary conclusions (they must be preliminary as there has been no full hearing) and the matters I have earlier referred to, I do not need to address the issues referred to in the preceding paragraph. I do not think their preliminary resolution would be of any real significance in addressing the motion for the orders as now formulated. 27 Counsel for the defendants, as I understood their position, put three propositions: (1) because APD was a sole trustee, it owed duties to the beneficiaries of the trust rather than to its directors and shareholders, and the proper remedy is to seek the removal of the trustee under the Trustee Act 1936 (SA); (2) the appointment of a receiver and manager, or a liquidator, would disqualify APD from continuing as trustee of the APUT by reason of cl 41.1.2 of the trust deed, and it would then become the unit holders by special resolution to appoint a new trustee, or for a court to do so under the powers in the Trustee Act; and (3) the appointment of a receiver and manager would, in any event, be inappropriate because it would simply add to the costs of realising the remaining trust assets (the Beach Road Brighton property and the Wingfield property), especially as the Cubelics or entities associated with them have advanced substantial funds to APD and would in the end (assuming, as appeared to be a common expectation in the course of submissions, that after sale of the trust assets and payment of creditors there would be a surplus of funds available for distribution), be paying two-thirds of those expenses and as APD and the Cubelics must abide by the order of the Court of 2 November 2007 in any event. 28 The preponderance of authority is to the effect that, where oppression has occurred in a company which is a bare trustee so that all its assets are held in trust, relief under s 232 and s 233 of the Corporations Act is inappropriate. Oppressive conduct by the trustee does not result in diminution in the value of the shares in the trustee company. See Kizquari Pty Ltd v Prestoo Pty Ltd (1993) 10 ACSR 606; McEwen v Combined Coast Cranes Pty Ltd (2002) 44 ACSR 244; Surf Road Nominees Pty Ltd v Tass James [2004] NSWSC 61. It does not follow, as was suggested by counsel for the defendants, that if ultimately the only appropriate source of relief (if the plaintiffs establish an entitlement to relief) is the Trustee Act, that the Court does not have jurisdiction to grant such relief. It is not said that the plaintiffs' claims under the Corporations Act are contrived so as to create jurisdiction in the Court. In my view the Court has jurisdiction to resolve the whole matter: see Moorgate Tobacco Company Ltd v Phillip Morris Ltd (1980) 145 CLR 457. That would include, if APD as trustee or the Cubelics as two of its directors are found not to have acted in accordance with their respective obligations, holding them to account in equity: Barnes v Addy (1874) LR 9 Ch App 244. 29 In any event, that does not mean that the Court has no interlocutory power, at this point, to appoint a receiver and manager over the trust assets of the APUT held in the name of APD. Section 57 of the Federal Court of Australia Act 1976 (Cth) (the FCA Act) is one such source of power. It may also be the case that s 223 together with s 1323 of the Corporations Act may be a source of such power, especially having regard to s 233(1)(h) and Vanmarc Holdings Pty Ltd v PW Jess and Associates Pty Ltd (2000) 34 ACSR 222 and the remarks of Habersberger J in Cheung v Makmur Australasia Pty Ltd [2002] VSC 335 at [38]. I do not need to decide that question. I am satisfied that the Court is properly seized of the matter and may grant the interlocutory relief sought under s 57 of the FCA Act if a proper basis for doing so is made out. 30 In Yunghanns v Candoora No 19 Pty Ltd (No 2) (2000) 35 ACSR 34, Warren J at 46-50 [64]-[77] discussed the legal principles applicable when a Court is asked to appoint a receiver and manager of the assets of a trust. I gratefully adopt her Honour's explanation. See also the discussion by French J in The University of Western Australia v Gray (No 6) [2006] FCA 1825 at [71]-[73]. Both Warren J in Yunghanns and French J in Gray, in essence, said that the general ground upon which a Court appoints a receiver and manager is ultimately for the protection or preservation of property for the benefit of persons who have an interest in it. There are many examples of such orders contained in the discussion by Warren J referred to above. A recent example is provided by Cadura Investments Ltd v Rototek Pty Ltd [2004] WASC 150. 31 Of course, each application for the appointment of a receiver and manager of the assets of a trust in the name of a trustee company must be considered in its particular circumstances. Apart from recognising that the appointment of a receiver and manager is a drastic step, and ought only to be made when it is necessary to do so, it is necessary to look to the foundation for the present application to determine whether such an order is appropriate. 32 Before doing so, I note the plaintiff's additional application for an order that the receiver and manager provide a report within a specified time as to what the assets and liabilities of APD are and what should be done to preserve its business. That is an order which was made in Vu v Luong (1996) 20 ACSR 493. Again, whether such an order is appropriate depends upon the particular circumstances. 33 One contention of the defendants can be shortly dealt with. It is that the Court should not appoint a receiver or manager of APD because such an appointment would disqualify APD as trustee of the APUT trust. That is based upon cl 41.1.2 of the APUT trust deed which relevantly provides: A trustee shall be disqualified from holding office if …. (in the case of the Company) it goes into liquidation or a receiver or receiver and manager or administrator is appointed to any of its assets or undertaking. It is said that it is most undesirable for the Court to create a void until the appointment of a new trustee, either by the unit holders at a special general meeting, or under the Trustee Act. 34 In my view, the appointment of a receiver and manager of the assets of the APUT trust would not have that consequence. There is a marked difference in the reference to "corpus" of the trust in cl 2.16 of the trust deed compared to the expression "assets or undertaking" of APD in cl 41.1.2. In my view, they are different requests for a receiver and manager to be appointed to the assets or undertaking of APD itself, but only to those assets which it holds as a bare trustee of the APUT trust. 35 From the defendants' point of view, there are a number of matters to be noted which suggest that the appointment of a receiver and manager to the assets of the APUT trust should not be made. I have referred generally to the position of the defendants above, but there are a few matters which by way of summary I should now mention again. Both the plaintiffs and the defendants, and more specifically, Mr Ciccarello on the one hand, and the Cubelics on the other as the unit holders in the APUT trust, have a shared interest in the assets of the trust being realised at the highest price reasonably obtainable, subject to any particular advantages which might enure to one or other of them if a sale for a somewhat lesser price of one or other of the assets was to take place. The defendants, to a degree, have shown a preparedness to make available to the plaintiffs such records of APD as they hold. They now say that they are prepared to do so unconditionally, and have done so in the past. However, it is apparent that they have not done so in as timely a manner as might have been expected, given Mr Ciccarello's status as a director of APD and given the quite specific request for information regarding the application of the net proceeds of sale of the North Brighton property and delay in responding. It would have been quite straightforward for the defendants, by their solicitors, by mid-September 2007 to have said that the net proceeds of sale were paid to SA Prawns Pty Ltd, as an entity which had advanced monies to APD to complete the purchase of the North Brighton property. They also point out that they consented to the order of 2 November 2007 made by the Court requiring them to produce documents of APD to Mr Ciccarello and his representatives, and requiring them not to incur expenditure on behalf of APD in excess of $2500 without following the notification process to Mr Ciccarello through his solicitors which was then made. 36 There is also the question of the cost which will inevitably be incurred in the appointment of a receiver and manager to the assets of APD which it holds on trust for the APUT. They are not quantified but I accept they will not be insignificant. I have taken that into account in the decision which I have reached. I have discussed that aspect a little more below. 37 However, without pointing the blame at any particular person or persons, the fact is that the Cubelics as two of the three directors of APD have excluded the third director from any role in its decision-making from July 2007, and until the order of 2 November 2007 also excluded that director from access to such of its records as were available. Indeed, on information presently before me, I think the Cubelics did not disclose the fact of the payment of the net proceeds of sale of the North Brighton property to SA Prawns Pty Ltd, made on 12 September 2007, until late in January 2008 and then only in circumstances where it was almost inevitable that such disclosure would have had to have been made. It was apparent by then that there was a significant sum by way of net proceeds of that sale which had been received by APD on 7 September 2007 and applied by APD on 12 September 2007. How it was applied was obviously a matter which the Cubelics had to address at some point. They did so only when driven to do so. As I observed above, I cannot understand why they did not disclose explicitly that payment in September 2007 in response to the direct requests made by Mr Ciccarello as to the application of the net proceeds of that sale, but instead obfuscated or concealed that payment. I appreciate that, as counsel for the Cubelics said, there is an element of a "two-way street" in that Mr Ciccarello in his affidavits has not disclosed to the Court the fact that the Cubelics or entities associated with them had advanced significant funds to APD prior to July 2007. That omission is unexplained, as is their failure to disclose the payment on 12 September 2007. But it is not an omission in the face of a direct request for information, and in my view has a different character. Moreover, it is not an admission or concealment of a circumstance which touches directly upon the application of the proceeds of sale of the remaining assets of APD held on trust for APUT. 38 I am prepared to assume that, as is probably the case on the material before me, SA Prawns Pty Ltd was procured by the Cubelics to loan funds to APD to assist it in purchasing the North Brighton property and to maintain it until it was sold, and perhaps more recently to assist in the development of the Beach Road Brighton property. But the decision of the Cubelics as to why the net proceeds of sale of the North Brighton property were paid to SA Prawns Pty Ltd as an unsecured creditor, over other unsecured creditors or over the indebtedness to the financial institutions which had advanced funds to APD, is not explained. There is nothing to indicate that that was a decision best made in the interests of APD in its capacity as trustee of the APUT. 39 There is nothing to indicate that SA Prawns Pty Ltd has the capacity to reimburse those funds to APD if, for some reason, it becomes necessary to do so. There is nothing to indicate their understanding of the position of the other unsecured creditors of APD and whether consideration was given to applying those funds in some other way. In the course of submissions, I observed that the accounts of APD at 30 June 2007 did not show SA Prawns Pty Ltd as an unsecured creditor. That may well be because the accounts were not reliable. It is suggested on behalf of the Cubelics that Mr Ciccarello was responsible for maintaining the records upon which those accounts were based, and that he had not done so adequately. In those circumstances, I have placed no weight on the fact that there is no recorded debt in those accounts owing to SA Prawns Pty Ltd. The conduct of the Cubelics satisfies me, at least so far as it is presently demonstrated (and as I have said, that is only a provisional view based upon the material I presently have), that the application of those funds in the best interests of APD as trustee of the APUT may be in jeopardy and may be improperly applied. 40 I therefore propose to make an order appointing a receiver and manager of the Beach Road Brighton property held by APD, without security, pursuant to s 57 of the FCA Act. The intent of that order is that the receiver and manager will take over the realisation of the sale of the Beach Road Brighton property. In the first place, of course, the funds from that realisation will be applied to discharge the secured creditor over that property. The balance will be held pending further directions. 41 I have limited the order in those terms, rather than more widely, to the assets of APD generally for two reasons. The first is that, on the material before me, there is no immediate action being taken to realise the Wingfield property or, so far as is apparent, the other assets of APD said to be a series of vehicles. The Cubelics have engaged an accountant to endeavour to assemble the accounts of APD and to present a formal set of accounts showing its assets and liabilities, presumably at 30 June 2007 and currently. That work has partly progressed. There is no suggestion at present that the accountant carrying out that work is not capable of doing so, or would not do so appropriately. Having regard to the cost of a receiver and manager doing that work, I do not see a present need for the order appointing a receiver and manager to be more extensive than it presently is. That in part accommodates the concerns of the Cubelics as to the costs of appointing a receiver and manager, as the order I have presently made will limit the work which they are required to do. I also propose, for the reasons I have given, to restrain APD from selling or offering for sale the Wingfield property or the other assets of APD without giving notice in writing of seven days to the solicitors for the plaintiffs, which notice should indicate the action proposed to be taken to offer for sale or to sell those assets. In the event that either of the plaintiffs considers that the proposed action would be inappropriate, or should not be taken, I will give liberty to apply for directions on short notice in relation to that action. That accommodates my concern about the terms of the order made on 2 November 2007 discussed above. I will also invite the Cubelics to indicate a date by which the accountant undertaking that work anticipates completing it, so that a set of accounts may be presented by him showing the assets and liabilities, and in particular both the trading liabilities and the funds advanced through the Cubelics to APD. It may be that those accounts may not be contentious, as the offer of access to the APD documents made by the Cubelics remains and can be taken up. I do not see why that work needs to be done by an independent receiver and manager at present. In the course of that work, obviously the Cubelics will have to identify, and support to the accountant, what they say are the monies owed to them or to entities associated with them by advances made to APD either to assist in the acquisition of its assets or in the further development of its assets beyond those funds made available through lending institutions. 42 Finally, I note that the Cubelics have put up for sale one of the four units on the Beach Road Brighton property without notice to Mr Ciccarello. It is unclear whether they regard the order of 2 November 2007 as preventing them from doing so, or whether they proposed to sign a contract for the sale and purchase of that unit without notice to Mr Ciccarello, or whether they proposed to complete the sale and purchase without notice to Mr Ciccarello. That order prevents item of expenditure, and it is arguable that items of expenditure do not include repayment of debts. Had the Cubelics taken the view that they could sign a contract for the sale and purchase of that unit of the Beach Road Brighton units, or indeed all of them, that would in effect have transferred the equitable interest in that unit or those units to the purchaser before anything could be done about it by Mr Ciccarello in the event that he was concerned about it. Whilst I do not say that such conduct would have been undertaken by the Cubelics, or if undertaken would have contravened the order of 2 November 2007, the material before me does not indicate on their behalf what view they took of their entitlement to offer that unit for sale, or the contract to sell it, or to settle on any such contract, notwithstanding the order of 2 November 2007 or, perhaps more importantly, notwithstanding Mr Ciccarello's ongoing concern about the application of the net proceeds of sale of the North Brighton property about which, as I have said, they were less than frank. 43 I will give the parties a brief opportunity to reflect the orders which I propose to make by these reasons in a form of minutes of order, preferably to be agreed, and if they cannot be agreed, I will call the matter on for directions on short notice to make formal orders. I direct the plaintiffs to bring in short minutes of order reflecting the orders which I have proposed to make above. I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield.