Commissioner of the Australian Federal Police v Pharmacy Depot Hurstville Pty Ltd

Legal principles

1. In Southwell v Bennett [2010] NSWSC 1372, Hallen ASJ (as his Honour then was) said at [15]: I take the principles that apply in determining whether to make an order for the separate determination of a question under the rule to be: (a) The rule speaks of "questions" and not "issues" and does not differentiate between questions of fact, or law, or partly of fact and partly of law. (b) The judicial determination of a "question" must involve a conclusive, or final, decision based on concrete and established, or agreed, facts, for the purpose of quelling a controversy between the parties: Bass v Permanent Trustee Co Ltd [1999] HCA 9; (1999) 198 CLR 334, at [45] and [51]. (c) The rule permits the Court to hear and determine the separate question at any point before, at, or after, any trial or further trial in the proceedings, rather than only as a preliminary question. (d) Whether such an order should be made is a matter for the court's discretion, which discretion must be exercised judicially, but cannot otherwise be fettered: Dunstan v Simmie & Co Pty Ltd [1978] VR 669, at 670; Idoport Pty Ltd v National Australia Bank Ltd [2000] NSWSC 1215 at [7]. (e) As a general rule, the discretionary power to order separate determination of a question should be approached with caution: Perre v Apand Pty Ltd [1999] HCA 36; (1999) 198 CLR 180 at [436], per Callinan J; Tepko Pty Limited v The Water Board [2001] HCA 19; (2001) 206 CLR 1, at [168]-[170] per Kirby and Callinan JJ: Commonwealth Bank v Clune [2008] NSWSC 1125 at [6], per Johnson J; Bailey and Bailey v Director-General Department of Energy Climate Change and Water and Ors [2010] NSWSC 979 at [4] per Studdert AJ. (f) In exercising its discretion, the overriding purpose of the Civil Procedure Act 2005, namely the just, quick and cheap resolution of the real issues in the proceedings (s 56) must be given effect. (g) Generally, all questions of fact and law should be determined at the one time: Tallglen Pty Ltd v Pay TV Holdings Pty Ltd (1996) 22 ACSR 130 at 141-42; SPI Spirits (Cyprus) Ltd v Diageo Australia Ltd [2006] FCA 14. If the Court is to depart from that position, the party seeking the separate determination of a question must satisfy the Court that it would be 'just and convenient' for that order to be made: Reading Australia Pty Ltd v Australian Mutual Provident Society [1999] FCA 718 at [8]-[9], see also Energy Australia v Australian Energy Limited [2001] FCA 1049. (h) While it may appear attractive, superficially, to order the trial of a separate question, experience often shows that it will not be so, for example, because of the complications that can arise in relation to appeals, or to overlapping factual issues, or to questions of credit, if the same witnesses have to give evidence in relation to a question that is separated and those questions that are not: Idoport Pty Ltd v National Australia Bank Ltd [2000] NSWSC 1215 at [7(6)] per Einstein J.; Owners Corporation Sp 70672 v Trustees of Roman Catholic Church [2010] NSWSC 946 at [16] per Ball J. (i) The experience of courts suggests that the separation of proceedings often does not result in the quicker and cheaper resolution of proceedings, but often has the reverse effect. It sometimes happens that it turns out to be productive of the disadvantages of delay, extra expense, appeals and uncertainty of outcome which it is intended to avoid: Idoport Pty Ltd v National Australia Bank Ltd; Tepko Pty Limited v The Water Board at [168]. (j) Before a question is to be separately determined, it must be possible to clearly see that it will facilitate the quicker and cheaper resolution of the proceedings: Tallglen v Pay TV Pty Ltd at 142, per Giles CJ in Comm D; Parramatta Stadium Trust v Civil and Civic Pty Ltd; Century Medical v THLD (NSWSC, 27 August 1996, unreported). (k) Where findings as to the credit of a witness is, or of witnesses are, or may be, involved in the consideration of the evidence relevant to the question, it is inappropriate to order a separate trial: ABB v Freight Rail [1999] NSWSC 1037. (l) Often, a separate question is heard on the basis of: (i) agreed statements of fact; (ii) a narrow point to be determined; and (iii) a hearing that is able to be conducted within a short time (or a short time relative to the total length if the hearing of the separate question were not to be dealt with). (m) Factors that tend to support the making of an order, include that the separate determination of the question may: (i) contribute to the saving of time and cost by substantially narrowing the issues for trial, or even lead to disposal of the proceedings: Tallglen v Pay TV Holdings; (ii) contribute to the settlement of the litigation (CBS Productions Pty Ltd v O'Neill (1985) 1 NSWLR 602 per Kirby P at 607). (n) It may be appropriate to determine a separate question, even if it will not resolve all the issues, provided that there is a strong prospect that the parties will agree upon the result when the core of the dispute has been decided, or if the decision will obviate unnecessary and expensive hearings of other questions: City of Swan v Lehman Brothers Australia Ltd [2009] FCA 784; (2009) 73 ACSR 86 at [27] per Rares J. The determination of the one question should enable a sensible reassessment of litigation risks, which is generally likely to encourage some form of settlement discussions. (o) Relevantly, one factor that may tell against the making of an order would be where there is likely to be a significant overlap between the evidence adduced on the hearing of the separate question and at trial - possibly involving the calling of the same witnesses at both stages of the hearing of the proceeding: Reading Australia Pty Ltd v Australian Mutual Provident Society at [8]. There is always a risk of inconsistent findings arising from determination of separate questions. (p) Whilst the decision is ultimately one for the court to determine, it will have regard to the attitude of the parties: TVW Enterprises Limited v Duffy (Federal Court of Australia, 28 March 1985, unreported) Toohey J. (q) It is a relevant consideration to weigh the time likely to be taken in the hearing of a separate question and the availability of hearing dates for that purpose, against the time and expense of a substantive hearing and the length of time likely to elapse before such a hearing will take place: TVW Enterprises Limited v Duffy at pp 4-5. (r) Each case will have its own dynamics that dictate the relative importance of various factors to be considered in exercising the discretion conferred. (s) It is necessary that there be precision, both in formulating the question, and in specifying the facts upon which it is to be decided: Jacobson v Ross [1995] 1 VR 337 at 341.
2. In Crawley v Vero Insurance Ltd & Ors [2012] NSWSC 593, Beech-Jones J adopted those principles and made five further points as follows: [16] First it is trite to observe that the power conferred by rule 28.2 is to be exercised by reference to the overriding purpose of the Civil Procedure Act 2005 "to facilitate the just, quick and cheap resolution of the real issues in the dispute or proceedings" (s 56). One aspect of that command which my analysis below seeks to emphasise is the desirability of the proceedings being "cheap". I am under no illusion that these proceedings will be anything other than expensive for the parties, but that is not an excuse to let considerations of cost fall away. The system of litigation in this State expects that counsel appearing will be across all issues in the case and that the legal representatives will marshall all relevant evidence concerning those issues. Experience demonstrates that those steps in turn require a much larger body of material to be considered. All of this effort involves cost. Sometimes it is rendered futile because the focus of all this attention is rendered otiose by the Courts' determination of some other issue. [17] Second, an interlocutory order for the separate determination of issues is an exceptional measure, distinct from the ordinary course taken of determining the issues in their totality: Street v Luna Park Sydney Pty Ltd [2007] NSWSC 697 at [5]. Consequently, the applicant bears the burden of demonstrating the appropriateness of the order, but it may be appropriate for the judge to take a more "interventionist role" in crafting the precise scope of the question: Intergral Home Loans Pty Ltd v Interstar Wholesale Finance Pty Ltd [2006] NSWSC 1464 per Brereton J at [6]; Commonwealth Bank of Australia v Clune [2008] NSWSC 1125. The counter to the observations in [16] is that sometimes issues are separated in the expectation that their resolution will determine the balance of the proceedings but that proves illusory. On other occasions a matter determinative of, and fatal to, the proceedings is decided but then appealed and overturned with the outcome that the parties find themselves back in the same position they were prior to a trial but with years having passed. Kirby and Callinan JJ noted in Tepko Pty Ltd v The Water Board [2001] HCA 19; (2001) 206 CLR 1 at [168] that the benefits of a separate question order "are often more chimerical than real. Common experience demonstrates that savings in time and expense are often illusory...". [18] Third, one real problem with ordering separate hearings is the potential for credibility findings to be made in one hearing in respect of a witness who may have to give evidence at the second hearing. This can create significant difficulties including, but not restricted to, the potential for the trial judge to disqualify themselves (see Warragamba Winery Pty Ltd v New South Wales [2010] NSWSC 66 at [10] to [14] per Harrison J). [19] Fourth, the power conferred by rule 28.2 is not one that enables the severing of "issues" but instead the isolation of "questions". The question needs to be identified with precision. One advantage of doing that in advance of hearing a motion such as this one is that the various considerations for and against exercising the power can be considered against the precise question that is proposed to be determined separately. Many of the cases involving applications of this kind involve attempts to undertake a Solomon style severing of all issues of liability and quantum without any precise identification of what the "question" to be determined separately is. For the reasons discussed below I reject that approach here although I consider it appropriate to sever a relatively narrow question of quantum which might occupy a disproportionately large portion of the litigation battlefield. [20] Fifth, one aspect of rule 28.2 that is not discussed in many of the cases is that it includes the power to order a question be decided after all other issues in the proceedings. Many of the cases where severance is sought involve an attempt to isolate some preliminary question which one of the parties hopes will give them a Hail Mary pass to the end zone of success. This approach runs the risk of promoting delay because of the potential for appeals from any adverse preliminary determination and the difficulties in isolating some discrete facts that enable the preliminary question to be resolved without overlapping with the balance of the proceedings. These adverse consequences are less likely where the separate question is relatively narrow and will be decided after all other issues in the proceedings. In addition it is always to be borne in mind that an order under rule 28.2 can be revoked if appropriate (see Warragamba). Thus if it appears to a trial judge who is completely cognisant of all the issues and the material that a hearing of the separate question is not warranted they may revoke it or, if appropriate, hear and determine it immediately. There is far less scope to change course for a trial judge who embarks upon a hearing of a question posed prior to the hearing of all other issues in the proceedings.
3. In Allandale Blue Metal Pty Ltd v Roads and Maritime Services [2013] NSWCA 103 Ward JA made reference to a number of cases that set out principles governing the separate determination questions and said: [89] … [I]t was not suggested in the above cases that it is necessary (for the power to state a separate question to be exercised) that the determination of the separate question be finally dispositive of the litigation or of one or more issues in the litigation; rather, it was contemplated that it might be sufficient if it would substantially narrow the field of litigious controversy (requiring a quantitative assessment to be made). Disposition of a step necessary for the determination of one or more issues in the proceedings might well have the effect in a particular case of substantially narrowing the field of litigious controversy. Thus, while it is submitted for Allandale that, at most, the separate question would resolve a potential step in the determination of the relevant issue in the compensation proceedings, that of itself does not preclude the exercise of the power under Rule 28.2.) [90] Einstein J also set out various circumstances in which he considered that the separate determination of an issue would rarely be seen to be an appropriate procedure (to some of which reference was made by Mr Lancaster SC, Senior Counsel for Allandale), those including where there are intertwined issues of fact or law (such that the determination of the separate question would not have any substantial effect on the width of the field of litigious controversy or the prospect of the settlement of the balance of the litigation) and where there is a possibility that the resolution of the separate issue will not finally determine the issue but merely result in an appeal from that decision in relation to that separate issue creating what his Honour referred to as a multiplicity of proceedings, interruptions to the court and undesirable fragmentation of the proceedings. [91] In various authorities, caution has been advocated in the exercise of such a power (such as Perre v Apand Pty Ltd (1999) 198 CLR 180 at [436] per Callinan J; Allstate Explorations NL v Beaconsfield Gold NL [1999] NSWSC 832 at [24] per Santow J, as his Honour then was; Tepko Pty Ltd v Water Board (2001) 206 CLR 1 at [168] per Kirby and Callinan JJ; Strathfield Municipal Council v Poynting (2001) 116 LGERA 319 at [112] - [113] per Young CJ in Eq, as his Honour then was). In Idoport, Einstein J noted the reason for such caution in the following passage: The experience of courts suggests that the separation of proceedings often does not result in the quicker and cheaper resolution of proceedings as anticipated, but often has the reverse effect, merely causing added delay and expense to the resolution of the litigation. Thus, before an issue is to be separately determined, it must be possible to clearly see that it will facilitate the quicker and cheaper resolution of the proceedings [his Honour there citing Tallglen v Pay TV Holdings Pty Limited; Parramatta Stadium Trust v Civil and Civic Pty Ltd (unreported, Supreme Court of NSW, 27 August 1996, per Hunter J) and Century Medical v THLD [2000] NSWSC 5 (unreported, Supreme Court of NSW, 3 February 2000, per Rolfe J)]. (my emphasis) [92] However, it has also been recognised that if the separate determination of particular discrete issues may achieve economies in time and expense in the resolution of the proceedings or obviate the necessity for a trial on all issues then it may be both appropriate and desirable for there to be such an order (Flore v NSW Department of Education and Training [2006] NSWSC 1227 at [32]; Street & 7 ors v Luna Park Sydney Pty Limited & 3 ors [2007] NSWSC 697 at [6]; Stewart v Ronalds [2009] NSWSC 455; Hubertus Schuetzenverein Liverpool Rifle Club Limited v Commonwealth of Australia (1994) 51 FCR 213, (1994) 85 LGERA 37 - though in the last case the order for separate determination was by consent).

Submissions

1. The liquidators submitted that the core issue between the parties could be formulated into a precise question, capable of discrete determination through a separate hearing. They submitted that there appear to be no controversial facts.
2. The liquidators submitted that the central reason for ordering a separate determination was to reduce the costs of the parties. That would be achieved by avoiding running the same legal argument twice; the first on the application for leave under s 471B of the Corporations Act and, secondly, at the final hearing.
3. The liquidators submitted further that if the separate question was resolved in favour of the Commissioner, then the liquidators would only have a very limited role in the balance of the proceedings. The written submissions suggested that that limited role would be dealing with the matters in prayers 2 and 3 of the notice of motion to exclude property pursuant to s 24 of the POCA. If the liquidators were successful on the separate question then the only remaining issue relevant to them is likely to be the payment of a penalty. In that way, whatever the outcome, there would be a speedy outcome for the creditors.
4. The liquidators submitted that the resolution of the separate question would involve legal argument only. In that way it could be determined at an early time and would not be of lengthy duration.
5. The Commissioner submitted that the proposal to proceed by separate question seeks to forestall the determination of his application for leave to proceed with the substantive proceedings. Proceeding in that way risks preventing him, in his capacity as the Proceeds of Crime Authority, from utilising the procedures available under the POCA to pursue the objects of the Act.
6. The Commissioner submitted that the fact that the claim that the liquidators wish to pursue can be progressed in accordance with the specific provisions of the POCA highlights that the separate question proposed is unlikely to save money or costs. The Commissioner pointed in that regard to prayers 2 and 3 in the notice of motion.
7. The Commissioner submitted that the question as articulated is broad and lacks the precision or detail required to qualify for consideration as one for separate determination. Further, the liquidators have failed to identify the facts upon which the question falls to be determined. In the absence of those facts the question is wholly hypothetical. The Commissioner set out a number of issues which would need to be determined on the separate question when no facts are articulated.
8. The Commissioner submitted that an understanding of the facts in which statutory provisions fall to be considered is fundamental to the exercise of statutory construction in reliance on Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355 at [78], and Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) (2009) 239 CLR 27 at [47].
9. The Commissioner submitted that whether the defendants engaged in conduct that constitutes an indictable offence for the purposes of the Criminal Code is an issue that will require hearing notwithstanding the determination of the separate question.
10. The Commissioner submitted that the novelty of the issues raised by the separate question gives rise to a high probability of one or more appeals from that determination. This would result in fragmentation of the proceedings and delay its resolution.
11. The Commissioner submitted that by the terms of s 471B of the Corporations Act it is necessary, in any event, for leave to be given before the separate question can proceed. In that way the Court at least must consider whether it is appropriate for leave to be given on the basis of the argument sought to be determined at the separate question hearing.
12. The Commissioner in his oral submissions pointed out various provisions in the POCA to suggest that what was being sought by the liquidators was effectively either an advisory opinion or a decision on a hypothetical question. This was because the property was already in the custody and control of the Official Receiver pursuant to the restraining orders and the custody and control orders made some years before the Liquidators were appointed. Further, the provisions of the POCA are prescriptive and are to be contrasted with the general and permissive terms of s 474 of the Corporations Act.
13. The Commissioner submitted further that it would be necessary for the Liquidators to make an application under one of the exclusionary provisions of the POCA, and that a determination in reliance on those sections involved consideration of precise facts. In that way the determination of the separate question put forward, or even modifications to it, was at too high a level of generality. The Commissioner submitted further that the provisions of the POCA meant that even if the liquidators were unsuccessful on the determination of the separate question they would be in a position to continue to make application under the exclusionary provisions. In the same way, it was submitted, if the Commissioner was unsuccessful on the separate question he would not be precluded from making a further application for orders under the POCA.
14. In response, the liquidators submitted that there was no need for any particular factual assumptions to be made. If the general factual matters were assumed in favour of the Commissioner, the separate question could be adequately answered.
15. However, in the liquidators' submissions in reply it was said that the resolution of the question could be determined on the assumption of the following matters: a. the first defendant is a company in liquidation; b. the assets under restraint are otherwise the property of the first defendant which, if returned, would be dealt with by the liquidators of the first defendant in accordance with the Corporations Act 2001 (Cth); c. the making of a pecuniary penalty order under the Proceeds of Crime Act 2002 (Cth) would create a statutory charge in favour of the Commonwealth over the restrained property, purportedly excluding the property from the operation of the Corporations Act 2001 (Cth); d. the making of forfeiture orders under the Proceeds of Crime Act 2002 (Cth) would similarly purport to exclude the property from the operation of the Corporations Act 2001 (Cth).

Consideration

1. Section 471B of the Corporations Act provides: 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.
2. In my opinion, before an order could be made for the hearing of a separate question it would be necessary for leave to be granted under this section. The restriction prevents "a person" from proceeding with a proceeding in a court against the company. An application for the hearing of a separate question is embraced by the words "or proceed with" the present proceedings. In those circumstances, it is not possible as the liquidators have suggested, to avoid two hearings where the legal issue between the parties will need to be determined to a greater or lesser extent.
3. I accept that, on an application for leave under s 471B, there would not need to be any lengthy or detailed argument to persuade the Court that there was a serious question to be tried on that issue to justify the grant of leave in circumstances where the Commissioner has no right to lodge a proof of debt. Indeed, I note what was said by counsel for the liquidators, that they would consent to leave being granted for the limited purpose of determining the separate question. If I was otherwise minded to order the hearing of a separate question, I would grant leave under s 471B.
4. The parties were agreed on the principles that apply to a consideration of whether a separate question should be ordered. Those principles are contained in the authorities earlier set out.
5. However, I am not persuaded that there is any utility in the determination of a separate question. Moreover, I have considerable difficulty seeing how the question could be resolved when it is effectively at such a high level of generality.
6. The desire of the first defendant to minimise the costs associated with these proceedings is understandable and is, in any event, entirely consonant with s 56 of the Civil Procedure Act 2005 (NSW). However, the various provisions of the POCA point against the separate question being a straightforward one to formulate or ultimately determine. The question cannot be, and is not, posed in terms of whether there is inconsistency between the provisions of the POCA and the Corporations Act or whether the provisions of one of those Acts has precedence over the other. Both are directed to different ends although the factual situation in the present matter indicates a tension, and possibly a collision, between those objects in some circumstances.
7. The matter is not resolved by simply pointing to inconsistency. Orders were made under the POCA sometime before the liquidators were appointed. The result is that it is necessary to find some provision within the POCA which enables the orders already made to be revoked or set aside. There are a number of exclusionary provisions. In the first place, and at the stage the proceedings have reached, s 42 is relevant. That section provides: 42 Application to revoke a restraining order (1) A person who was not notified of the application for a *restraining order may apply to the court to revoke the order. (1A) The application must be made: (a) within 28 days after the person is notified of the order; or (b) if the person applies to the court, within that period of 28 days, for an extension of the time for applying for revocation - within such longer period, not exceeding 3 months, as the court allows. (2) The applicant must give written notice to the *responsible authority and the *Official Trustee of both the application and the grounds on which the revocation is sought. (3) However, the *restraining order remains in force until the court revokes the order. (4) The *responsible authority may adduce additional material to the court relating to the application to revoke the *restraining order. (5) The court may revoke the *restraining order if satisfied that: (a) there are no grounds on which to make the order at the time of considering the application to revoke the order; or (b) it is otherwise in the interests of justice to do so.
8. There is first the difficulty of the time limits in which such application can be made. Assuming that problem is overcome, it is doubtful that paragraph (5)(a) could be satisfied. The alternative in paragraph (b) is that it is otherwise in the interests of justice that the orders should be revoked. Any determination which requires an examination of the interests of justice is essentially a factual enquiry. It is not self-evident, for example, that the mere fact that liquidators have been appointed, when taken together with s 474 of the Corporations Act, means that the interests of justice require the revocation of the orders under the POCA. In that way there would be no utility in making assumptions of fact in the Commissioner's favour, as the first defendant has suggested, to determine the separate question.
9. Other provisions to exclude property from constituting "proceeds" include s 73 where a forfeiture order has been made or is to be made. Section 73 provides: 73 Making exclusion orders (1) A court that made a *forfeiture order, or that is hearing, or is to hear, an application (a forfeiture application) for a forfeiture order, must make an order excluding a specified *interest in property from forfeiture (an exclusion order) if: (a) a person applies for the exclusion order; and (b) the forfeiture order, or the forfeiture application, specifies property in which the applicant has an interest; and (c) if the forfeiture order was (or the forfeiture order applied for would be) made under section 47 or 49 - the court is satisfied that the applicant's interest in the property is neither of the following: (i) *proceeds of *unlawful activity; (ii) if an offence on which the order was (or would be) based is a *serious offence - an instrument of any serious offence; and (d) if the forfeiture order was (or the forfeiture order applied for would be) made under section 48 - the court is satisfied that the applicant's interest in the property is neither proceeds nor an instrument of any of the offences to which the forfeiture order or forfeiture application relates. (2) An *exclusion order must: (a) specify the nature, extent and value (at the time of making the order) of the *interest concerned; and (b) direct that the interest be excluded from the operation of the relevant *forfeiture order; and (c) if the interest has vested (in law or equity) in the Commonwealth under this Part and is yet to be disposed of - direct the Commonwealth to transfer the interest to the applicant; and (d) if the interest has vested (in law or equity) in the Commonwealth under this Part and has been disposed of - direct the Commonwealth to pay the applicant an amount equal to the value specified under paragraph (a).
10. The Commissioner may now, subject to leave being granted under s 471B, seek a forfeiture order under s 47 because six months have elapsed from the making of the restraining orders. The liquidators would need to establish one or more of the matters in paragraphs (c) or (d) of sub-s (1) to have the property excluded. That involves a consideration of the definition of "proceeds" and "instrument" in s 329, and may involve a consideration of the circumstances when property ceases to be "proceeds" or an "instrument" under s 330. In any such enquiry, it is clear that the issues are both factual and legal to determine if the property is not derived from unlawful activity.
11. Similarly, s 94 deals with excluding property from a statutory forfeiture order under s 92. In each case, it is necessary for particular matters to be proved by the person seeking to have the property excluded.
12. When those provisions of the POCA are considered, they tend to suggest that the provisions of both Acts are able to sit together and can operate in a complementary fashion. Significantly, for the present application, they suggest that a question enquiring into the supposed inconsistency of the Acts would not resolve the claim that the liquidators make and which they want resolved by the separate determination. That is because, before inconsistency could be asserted, the liquidators would need to demonstrate that they could not bring themselves within any of the exclusion provisions, or the provisions of s 24. All of those matters involve factual enquiries. It would not be possible to assume facts for that purpose. That is the more so, if those facts were only to be assumed for the purpose of the separate question.
13. The liquidators drew attention to the Court of Appeal's decision in HP Mercantile Pty Ltd v Hartnett [2016] NSWCA 342 to suggest that facts could simply be assumed for the purpose of the determination of the separate question. However, not only did all parties in that matter seek the hearing of the separate question, they all ultimately agreed that the issue assumed for the separate determination would not be re-visited at the final hearing: see at [81]. It is difficult to see how there could be any such agreement in the present case. The liquidators would need to assume that, in the first instance, the Commissioner had lawfully obtained orders under the POCA, which would be to accept that the property amounted to "proceeds" within the meaning of that Act. That assumption could not be maintained at any further hearing when it was sought to set aside the orders made in favour of the Commissioner, because such an assumption would be inimical to any basis for exclusion under the POCA.
14. Seen from a different perspective, on the assumption that the liquidators obtained a ruling that the there was an inconsistency and that they, as liquidators, had the right to have the funds vested in them pursuant to s 474, that ruling would not of itself set aside the orders that have already been made under the POCA. Those orders are orders of a superior court that would need to be set aside. They could, presumably, only be set aside in one or more of the ways already discussed by application under the POCA. Such an application would involve factual determinations. In that way, any determination of the separate question would only be the first step in the process of freeing the funds from the reach of the POCA.
15. Of course, as I have already noted, the separate question does not, in its terms, refer to inconsistency. It simply asks if the property, the subject of the restraining orders, should be delivered up into the control of the liquidators. If such a question must necessarily be answered by a finding of inconsistency, the question would need to be more defined to identify the precise circumstances that inconsistency would result in a favourable outcome for the liquidators, because it cannot be suggested that the provisions of the POCA are invalid to the extent that they apply to the property of any company which is in liquidation or about to go into liquidation. On the other hand, if the question is not answered by a finding of inconsistency, it is difficult to see how the result would come about other than by application of the aforementioned provisions of the POCA to have the property excluded from that Act's provisions.
16. Even if the matters mentioned were able to be resolved satisfactorily by a determination of a separate question, the likelihood of an appeal is relevant. The first defendant drew attention to what I said in BNY Trust Company of Australia Limited v MMJ Real Estate (WA) Pty Ltd [2018] NSWSC 1052 at [28]: An appeal can never be put out of consideration but, if the possibility of an appeal was thought to be a barrier to this separate hearing, the possibility of an appeal would always be a barrier to any separate hearing.
17. The distinction in this matter is that the legal point sought to be ventilated must be regarded as a novel one. The only case of any similarity to the present is the decision of the Court of Appeal of the Supreme Court of Victoria in Loo v Director of Public Prosecutions (Victoria) [2005] VSCA 161. That involved an apparent inconsistency between the provisions of the Corporations Act and the Confiscation Act 1997 (Vic). The matter was ultimately resolved by reference to s 5G of the Corporations Act. As far as the parties are aware, the issue raised in the present case, that is, an apparent conflict between the provisions of the Corporations Act and the provisions of the POCA, has not been previously raised. That makes an appeal against any determination on a separate question far more likely despite suggestions from counsel for the first defendant that it was unlikely the liquidators would appeal because of a scarcity of funds to do so.
18. The increased likelihood of an appeal would be productive of delay in having the final hearing of the proceedings heard.
19. I consider, for all these reasons, that little or no purpose would be served by the determination of a separate question in the terms expressed or to similar intent. I do not consider the separate determination would be confined. I do not consider that there would be a saving in time or expense. I do not consider that, even if the separate question was determined favourably to the liquidators, that would minimise to any appreciable extent the further involvement of the liquidators in the proceedings, as they submitted it would.
20. The appropriate course is for the question of leave to proceed under s 471B to be dealt with first. Thereafter, at the conclusion of the examinations, the matter should proceed to a final hearing subject only to whether any application for exclusion is made by the liquidators under the POCA at or before the final hearing.

Conclusion

1. Accordingly, I make the following orders: 1. The first defendant's Notice of Motion filed 13 July 2018 is dismissed. 2. The first defendant is to pay the Plaintiff's costs of the Motion.

Amendments 22 August 2018 - Order one in para 49 and cover sheet corrected. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 22 August 2018