Appellants v Respondent

Appellants v Respondent - [2014] VSC 75 - VSC 2014 case summary — Zoe

[41]

...Appeal is a term loosely employed to denote a number of different litigious processes which have few unifying characteristics. They vary greatly in the extent to which the appellate court may interfere with the result below. Graded in ascending order, in accordance with the width of the corrective power exercised by the appeal court, they are as follows:

(a) Appeals to supervisory jurisdiction. Only errors going to jurisdiction or denials of natural justice can be ventilated.

(b) Appeals on questions of law only, e.g. from the Workers' Compensation Commission. Undetermined or wrongly determined issues of fact must be remitted.

(c) Appeals after a trial before judge and jury. The result below will be disturbed if the judge fell into error of law, or if the jury's errors of fact transcend the bounds of reason. But, except for the assessment of damages, issues of fact must be redetermined in a new trial.

(d) Appeals from a judge in the strict sense, e.g. appeals to the High Court. If the judge has fallen into error of law, or has made a finding of fact which is clearly wrong, the appellate court will substitute its own judgment. Only such judgment can be given as ought to have been given at the original hearing. Later changes in the law are disregarded and additions to the evidence are not allowed.

(e) Appeals from a judge by way of rehearing, e.g. appeals under s 75A of the Supreme Court Act 1970. Judicial opinion differs on whether a power to receive fresh evidence is implied. Almost invariably, however, it is expressly conferred. If errors of law or wrong findings of fact have occurred below, the appellate court will try the case again on the evidence used in the court below, together with such additional evidence as it thinks fit to receive. Since it will decide the appeal in the light of the circumstances which then exist, changes in the law will be regarded.

(f) Appeals involving a hearing de novo, e.g. appeals from a Court of Petty Sessions to a Court of Quarter Sessions. All the issues must be retried. The party succeeding below enjoys no advantage, and must, if he can, win the case a second time.

[160]

(1) the Court does not simply "rubber stamp" whatever is put forward by a liquidator. As Giles J said in Re Spedley Securities Ltd (in liq) ...

In relation to the powers of the liquidator to compromise claims:

[T]he Court is necessarily confined in attempting to second guess the liquidator in the exercise of his powers, and generally will not interfere unless there can be seen to be some lack of good faith, some error in law or principle, or real and substantial grounds for doubting the prudence of the liquidator's conduct. The same restraint must apply when the question is whether the liquidator should be authorised to enter into a particular transaction the benefits and burdens of which require assessment on a commercial basis. Of course, the compromise of claims will involve assessment on a legal basis, and a liquidator will be expected (as was made plain in Re Chase Corporation (Australia) Equities Ltd to obtain advice and, as a prudent person would in the conduct of his own affairs, advice from practitioners appropriate to the nature and value of the claims. But in all but the simplest case, and demonstrably in the present case, commercial considerations play a significant part in where a compromise will be for the benefit of creditors.

(2) a Court will not approve an agreement if its terms are unclear: Re United Medical Protection (No 4) (2002) 2 ACLC 1,647;

(3) the role of the Court is to grant or deny approval of the liquidator's proposal. Its role is not to develop some alternative proposal which might seem preferable: Corporate Affairs Commission v ASC Timber Pty Ltd ... ;

(4) in reviewing the liquidator's proposal, the task of the Court is:

[Not] to consider all of the issues which have been weighed up by the liquidator in developing the proposal, and to substitute its determination for his in ... a hearing de novo [but] ... simply to review the liquidator's proposal, paying due regard to his or her commercial judgement and knowledge of all of the circumstances of the liquidation, satisfying itself there is no error or law or ground for suspecting bad faith or impropriety, and weighing up whether there is any good reason to intervene in terms of the "expeditious and beneficial administration" of the winding up.

... The Court's approval is not an endorsement of the proposed agreement but is merely a permission for the liquidator to exercise his or her own commercial judgement in the matter;

(5) Further, in judging whether or not a liquidator should be given permission to enter into a funding agreement (whether retrospective or not), it is important to ensure, inter alia, that the entity or person providing the funding is not given a benefit disproportionate to the risk undertaken in light of the funding that is promised or a "grossly excessive profit" ...

(6) Generally, the Court grants approval under s 477(2B) of the Act only where the transaction is the proper realisation of the assets of the company or otherwise assists in the winding up of the company ...[34]

[181]

[26] ....For "special circumstances" to exist it is enough that there is a special feature of the case which affords a reason for modifying or releasing the undertaking and is not usually present. The matter then becomes one of the proper exercise of the Court's discretion, many factors being relevant. It is neither possible nor desirable to propound an exhaustive list of those factors. But plainly they include the nature of the document, the circumstances under which it came into existence, the attitude of the author of the document and any prejudice the author may sustain, whether the document pre-existed litigation or was created for that purpose and therefore expected to enter the public domain, the nature of the information in the document (in particular whether it contains personal data or commercially sensitive information), the circumstances in which the document came into the hands of the applicant for leave and, perhaps most important of all, the likely contribution of the document to achieving justice in the second proceeding.

[27] Consideration of these factors leads me to the conclusion that it is proper to give leave in the present case. Mr Preston's statement was prepared for use in litigation; it was not pre-existing. It does not contain personal data or commercially sensitive material. Although the author of the document does not consent, and would prefer it not used, he does not resist leave or advance any argument of prejudice. The document came into the possession of the present applicant under circumstances which reflect no discredit on it or its representatives. I cannot say that the document will be important to the achievement of justice in the Aetna-Honking Bank case; much depends upon the course of that case and the evidence given in it. But it deals with matters relevant to that proceeding. It is a statement made by a person involved in transactions the subject of that proceeding. It has at least the potential to be important to the proper determination of that case. I propose to grant leave.

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Judgment (279 paragraphs)

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Legislation Cited (10)

Cases Cited (5)