Commonwealth Bank of Australia v Walker as liquidator of A.B.C. Learning Centres Limited

AND: COMMONWEALTH BANK OF AUSTRALIA AND OTHERS (ACCORDING TO THE SCHEDULE)

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 443 of 2012

BETWEEN: COMMONWEALTH BANK OF AUSTRALIA AND OTHERS (ACCORDING TO THE SCHEDULE)

AND: PETER WALKER AND GREGORY MOLONEY IN THEIR CAPACITY AS THE LIQUIDATORS OF ABC LEARNING CENTRES LTD (IN LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED) (NOW KNOWN AS ZYX LEARNING CENTRES LTD) AND OTHERS (ACCORDING TO THE SCHEDULE)

JUDGES: RARES, FLICK & PERRAM JJ DATE OF ORDER: 10 MAY 2012 WHERE MADE: SYDNEY

1. The Application for Leave to Appeal in proceeding NSD 431 of 2012 be granted.
2. The Application for Leave to Appeal in proceeding NSD 443 of 2012 be granted.
3. The Applicant (Liquidators) in proceeding NSD 431 of 2012 is to file its Notice of Appeal within 7 days.
4. The Applicant in proceeding NSD 443 of 2012 is to file its Notice of Appeal within 7 days.
5. The Appeal in proceeding NSD 431 of 2012 be allowed in part.
6. The Appeal in proceeding NSD 443 of 2012 be allowed in part.
7. The orders of Justice Cowdroy made on 5 March 2012 in proceeding NSD 1257 of 2009 are varied: (a) by setting aside order 2 of those orders; and (b) by ordering in lieu of that order that the Applicants on the second interlocutory process in that proceeding produce to the Court by 23 May 2012 the documents described in schedule 3 to these orders.
8. The Liquidators' costs and expenses of the two proceedings (NSD 431 and NSD 443 of 2012) be costs and expenses of the liquidation of ZYX Learning Centres Limited and the companies listed in schedule 1.
9. The Appeals are otherwise dismissed with no orders as to costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 220 of 2012

BETWEEN: COMMONWEALTH BANK OF AUSTRALIA AND OTHERS (ACCORDING TO THE SCHEDULE)

AND: PETER WALKER AND GREGORY MOLONEY IN THEIR CAPACITY AS THE LIQUIDATORS OF ABC LEARNING CENTRES LTD (IN LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED) (NOW KNOWN AS ZYX LEARNING CENTRES LTD) AND OTHERS (ACCORDING TO THE SCHEDULE)

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 431 of 2012

BETWEEN: PETER WALKER AND GREGORY MOLONEY IN THEIR CAPACITY AS THE LIQUIDATORS OF ABC LEARNING CENTRES LTD (IN LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED) (NOW KNOWN AS ZYX LEARNING CENTRES LTD) AND OTHERS (ACCORDING TO THE SCHEDULE)

AND: COMMONWEALTH BANK OF AUSTRALIA AND OTHERS (ACCORDING TO THE SCHEDULE)

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 443 of 2012

BETWEEN: COMMONWEALTH BANK OF AUSTRALIA AND OTHERS (ACCORDING TO THE SCHEDULE)

AND: PETER WALKER AND GREGORY MOLONEY IN THEIR CAPACITY AS THE LIQUIDATORS OF ABC LEARNING CENTRES LTD (IN LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED) (NOW KNOWN AS ZYX LEARNING CENTRES LTD) AND OTHERS (ACCORDING TO THE SCHEDULE)

JUDGES: RARES, FLICK & PERRAM JJ DATE: 10 MAY 2012 PLACE: SYDNEY

RARES J 1 I will invite Justice Perram to deliver the first judgment.

Perram J 2 Before the Court are three applications for leave to appeal. The parties have reached an agreement disposing of those applications which have been in each case reduced to proposed short minutes of order. A feature common to all three short minutes is machinery whereby the applications for leave to appeal would be granted, and the corresponding appeal allowed in part, with various orders then being made in substitution for some of those made by the learned primary judge. Section 25(2B)(b) of the Federal Court of Australia Act (1976) (Cth) provides that a Full Court 'may make an order by consent disposing of an appeal to the Court (including an order for costs)'. 3 A Full Court of this Court held in Telstra Corporation Ltd v Minister for Broadband, Communications and the Digital Economy (2008) 166 FCR 64 at 77 [51] that a Full Court in such circumstances was under a 'duty to be satisfied, as a condition of the exercise of its power to allow an appeal by consent, that there was an appealable error'. 4 That statement, however, needs to be understood in the context of their later statement at [52]-[54], which appears to proceed on the basis that demonstration of an arguable appealable error is all that is required. 5 This test was applied by a later Full Court in Citigroup Pty Ltd v Mason (2008) 171 FCR 96 at 97 [3] - 99 [7], and it is upon that basis that it seems to me appropriate to proceed. It was not explicitly argued before this Court that it should now depart from the Full Court's reasoning in Telstra, and we have no heard argument as to its correctness. In that circumstance there is no reason to depart from it. 6 Whether Telstra was decided correctly or not and whether the criticisms levelled against it in some obiter dicta in Citigroup Pty Ltd v Mason at 99 [8] - 101 [16] are sound are questions which should await an appropriate occasion for their resolution. In this case, however, I am satisfied that there are at least two arguable appealable errors in the various decisions of the learned primary judge and that these are together sufficient to discharge the requirements of Telstra on the three applications which are before us. 7 One issue on the applications was whether the learned primary judge had dealt with the question of whether the Court had power to vary undertakings inter partes; his Honour noted this issue at [32] of his reasons of 3 February 2012 but it is apparent that he did not later return to resolve it, and that omission will suffice to constitute an arguable appealable error for present purposes. 8 Another issue which arose related to an order for production directed to Mizuho Corporate Bank. No director of that bank was subjected to an examination summons nor was any other officer. The argument was that in those circumstances an order for production of the kind which had been made was not appropriate. It seems to me that it is reasonably arguable that this was an appealable error. 9 In those circumstances I am satisfied that the judgment below is arguably affected by error and the jurisdictional requirement found to exist in Telstra is satisfied. Subject to what follows the Court should make the orders which have been sought. The reservation is this: he short minutes of order propose a notation of an agreement between the parties as to the effect of the suggested orders; in particular, each notes that the orders are without prejudice to the parties' future rights. 10 The parties may so agree, however, if by the notation it is hoped that somehow this Court's support for that view is thereby engendered, then not having heard argument, it is not a view I would wish to express. If the parties do not intend the notation to do more than to record their own agreement then it is of no relevance. In either case there is no occasion for its making. I would propose the Court should make orders in the form of the bank's short minutes of order save that the Court should not note the proposed agreement.

RARES J 12 I also agree with Justice Perram. I would add simply the following observation. 13 Any reconsideration of the correctness of the decision in Telstra 166 FCR 64 will require attention to (1) appropriate policy considerations, including the practice in other appellate jurisdictions, and (2) any relevant extrinsic materials, such as an explanatory memorandum or second reading speech that sheds light on the legislative intention for the conferral of power on the Full Court by s 25(2B)(b). 14 Appellate practices in allowing appeals by consent have varied. For example, in Hadfield v Knowles [1996] 1 WLR 1003at 1004 E-G Sir Thomas Bingham MR and Hirst and Aldous LJJ noted that the Court of Appeal for England and Wales had extended its practice of making consent orders dismissing appeals, on the papers without a hearing to "cases where the Court is prepared to allow an appeal by consent". This included cases involving infants, patients in hospitals and structured settlements. Their Lordships observed that where those acting on behalf of all parties agreed, all necessary approvals from other bodies had been obtained and: '…where the court has no misgivings about the proposed order or settlement, having the matter listed for mention at a hearing with advocates present does not serve any necessary purpose.' 15 More recently that Court has also emphasised that, self evidently, it is not to be taken as a rubber stamp in such matters; GW v Oldham Metropolitan Borough Council [2005] EWCA Civ 1247 at [7] per Wall LJ, with whom Thorpe LJ and Black J agreed. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Rares, Flick and Perram.

Associate: Dated: 29 May 2012 SCHEDULE NSD 220 of 2012 BETWEEN: COMMONWEALTH BANK OF AUSTRALIA First Applicant WESTPAC BANKING CORPORATION Second Applicant NATIONAL AUSTRALIA BANK LIMITED Third Applicant AUSTRALIA & NEW ZEALAND BANKING GROUP LIMITED Fourth Applicant BANK OF AMERICA NA Fifth Applicant CITIBANK NA Sixth Applicant MIZUHO CORPORATE BANK LTD Seventh Applicant BANK OF WESTERN AUSTRALIA LTD Eighth Applicant CBA CORPORATE SERVICES (NSW) PTY LTD Ninth Applicant AND:

PETER WALKER AND GREGORY MOLONEY IN THEIR CAPACITY AS THE LIQUIDATORS OF ABC LEARNING CENTRES LTD (IN LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED) (NOW KNOWN AS ZYX LEARNING CENTRES LTD); CHILD CARE CENTRES AUSTRALIA LIMITED ABN 18 100 250 646; HUTCHINSON'S CHILD CARE SERVICES LIMITED ACN 100 493 874; KIDS CAMPUS LIMITED ACN 009 815 472; PEPPERCORN MANAGEMENT GROUP LIMITED ACN 087 155 860; A.B.C. CANADIAN HOLDINGS PTY LTD ACN 126 839 941; A.B.C. CORPORATE CARE PTY LTD ABN 11 098 738 928 (NOW KNOWN AS ZYX CORPORATE CARE PTY LTD); A.B.C. DEVELOPMENTAL LEARNING CENTRES PTY LTD ABN 82 010 788 502 (NOW KNOWN AS ZYX DEVELOPMENTAL LEARNING CENTRES PTY LTD); A.B.C. EARLY CHILDHOOD TRAINING COLLEGE PTY LTD ABN 68 069 159 566 (NOW KNOWN AS ZYX EARLY CHILDHOOD TRAINING COLLEGE PTY LTD); A.B.C. EDUCATION SERVICES PTY LTD ACN 107 310 743; A.B.C. EMPLOYMENT SERVICES PTY LTD ACN 130 442 394; A.B,C. EUROPEAN HOLDINGS NO. 1 PTY LTD ACN 122 710 123; A.B.C. EUROPEAN HOLDINGS NO. 2 PTY LTD ACN 122 710 132; A.B.C. EUROPEAN HOLDINGS NO. 3 PTY LTD ACN 128 132 829; A.B.C. LAND HOLDINGS PTY LTD ABN 89 108 964 227; A.B.C. LEARNING CENTRES FINANCE PTY LTD ACN 125 820 395; A.B.C. NEW IDEAS PTY LTD ABN 83 112 237 377 (NOW KNOWN AS ZYX NEW IDEAS PTY LTD); A.B.C. QUEENSLAND PTY LTD ACN 129 029 769; A.B.C. USA HOLDINGS PTY LTD ABN 37 121 360 147; A.B.C. USA PROPERTY HOLDINGS NO, 1 PTY LTD ACN 126 641 665; A.B.C. USA PROPERTY HOLDINGS NO. 2 PTY LTD ACN 126 641 674; CHILDCARE DEVELOPMENT SOLUTIONS PTY LTD AS TRUSTEE FOR THE CHILDCARE DEVELOPMENT SOLUTIONS UNIT TRUST ACN 107 241 181; DPPA PTY LTD ACN 114 743 092; RD PTY LTD ACN 096 172 075; FUTUREONE PTY LTD ACN 009 221 470; HCCS OPERATIONS PTY LTD ABN 18 097 846 707; KIDS CAMPUS (W.A.) PTY LTD ABN 45 112 150 099; KIDS CAMPUS AUSTRALIA PTY LTD ABN 13 104 407 187; KIDS CAMPUS HOLDINGS PTY LTD ABN 62 107 379 751; KLENDO PTY LTD ACN 098 366 968; MARSHEN PTY LTD ACN 101 400 104; PEPPERCORN HOLDINGS NO. 1 PTY LTD ACN 095 599 250; PEPPERCORN HOLDINGS NO. 2 PTY LTD ACN 099 074 781; PEPPERCORN HOLDINGS NO. 3 PTY LTD ACN 100 679 374; PEPPERCORN HOLDINGS NO. 4 PTY LTD ABN 84 101 236 766; PEPPERCORN HOLDINGS NO. 5 PTY LTD ABN 42 103 201 136; PEPPERCORN HOLDINGS NO. 6 PTY LTD ACN 103 210 751; PREMIER EARLY LEARNING CENTRES PTY LTD ACN 100 831 856; SELECT CHILD CARE MANAGEMENT PLY LTD ACN 093 925 056 First Respondent IMF (AUSTRALIA) LIMITED (ABN 045 067 298 088) Second Respondent NSD 431 of 2012 BETWEEN:

PETER WALKER AND GREGORY MOLONEY IN THEIR CAPACITY AS THE LIQUIDATORS OF ABC LEARNING CENTRES LTD (IN LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED) (NOW KNOWN AS ZYX LEARNING CENTRES LTD); CHILD CARE CENTRES AUSTRALIA LIMITED ABN 18 100 250 646; HUTCHINSON'S CHILD CARE SERVICES LIMITED ACN 100 493 874; KIDS CAMPUS LIMITED ACN 009 815 472; PEPPERCORN MANAGEMENT GROUP LIMITED ACN 087 155 860; A.B.C. CANADIAN HOLDINGS PTY LTD ACN 126 839 941; A.B.C. CORPORATE CARE PTY LTD ABN 11 098 738 928 (NOW KNOWN AS ZYX CORPORATE CARE PTY LTD) ; A.B.C. DEVELOPMENTAL LEARNING CENTRES PTY LTD ABN 82 010 788 502 (NOW KNOWN AS ZYX DEVELOPMENTAL LEARNING CENTRES PTY LTD) ; A.B.C. EARLY CHILDHOOD TRAINING COLLEGE PTY LTD ABN 68 069 159 566 (NOW KNOWN AS ZYX EARLY CHILDHOOD TRAINING COLLEGE PTY LTD) ; A.B.C. EDUCATION SERVICES PTY LTD ACN 107 310 743; A.B.C. EMPLOYMENT SERVICES PTY LTD ACN 130 442 394; A.B,C. EUROPEAN HOLDINGS NO. 1 PTY LTD ACN 122 710 123; A.B.C. EUROPEAN HOLDINGS NO. 2 PTY LTD ACN 122 710 132; A.B.C. EUROPEAN HOLDINGS NO. 3 PTY LTD ACN 128 132 829; A.B.C. LAND HOLDINGS PTY LTD ABN 89 108 964 227; A.B.C. LEARNING CENTRES FINANCE PTY LTD ACN 125 820 395; A.B.C. NEW IDEAS PTY LTD ABN 83 112 237 377 (NOW KNOWN AS ZYX NEW IDEAS PTY LTD) A.B.C. QUEENSLAND PTY LTD ACN 129 029 769; A.B.C. USA HOLDINGS PTY LTD ABN 37 121 360 147; A.B.C. USA PROPERTY HOLDINGS NO, 1 PTY LTD ACN 126 641 665; A.B.C. USA PROPERTY HOLDINGS NO. 2 PTY LTD ACN 126 641 674; CHILDCARE DEVELOPMENT SOLUTIONS PTY LTD AS TRUSTEE FOR THE CHILDCARE DEVELOPMENT SOLUTIONS UNIT TRUST ACN 107 241 181; DPPA PTY LTD ACN 114 743 092; RD PTY LTD ACN 096 172 075; FUTUREONE PTY LTD ACN 009 221 470; HCCS OPERATIONS PTY LTD ABN 18 097 846 707; KIDS CAMPUS (W.A.) PTY LTD ABN 45 112 150 099; KIDS CAMPUS AUSTRALIA PTY LTD ABN 13 104 407 187; KIDS CAMPUS HOLDINGS PTY LTD ABN 62 107 379 751; KLENDO PTY LTD ACN 098 366 968; MARSHEN PTY LTD ACN 101 400 104; PEPPERCORN HOLDINGS NO, 1 PTY LTD ACN 095 599 250; PEPPERCORN HOLDINGS NO. 2 PTY LTD ACN 099 074 781; PEPPERCORN HOLDINGS NO. 3 PTY LTD ACN 100 679 374; PEPPERCORN HOLDINGS NO. 4 PTY LTD ABN 84 101 236 766; PEPPERCORN HOLDINGS NO. 5 PTY LTD ABN 42 103 201 136; PEPPERCORN HOLDINGS NO. 6 PTY LTD ACN 103 210 751; PREMIER EARLY LEARNING CENTRES PTY LTD ACN 100 831 856; SELECT CHILD CARE MANAGEMENT PLY LTD ACN 093 925 056

BANK OF WESTERN AUSTRALIA LTD Eighth Respondent NSD 443 of 2012 BETWEEN:

PETER WALKER AND GREGORY MOLONEY IN THEIR CAPACITY AS THE LIQUIDATORS OF ABC LEARNING CENTRES LTD (IN LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED) (NOW KNOWN AS ZYX LEARNING CENTRES LTD); CHILD CARE CENTRES AUSTRALIA LIMITED ABN 18 100 250 646; HUTCHINSON'S CHILD CARE SERVICES LIMITED ACN 100 493 874; KIDS CAMPUS LIMITED ACN 009 815 472; PEPPERCORN MANAGEMENT GROUP LIMITED ACN 087 155 860; A.B.C. CANADIAN HOLDINGS PTY LTD ACN 126 839 941; A.B.C. CORPORATE CARE PTY LTD ABN 11 098 738 928 (NOW KNOWN AS ZYX CORPORATE CARE PTY LTD) ; A.B.C. DEVELOPMENTAL LEARNING CENTRES PTY LTD ABN 82 010 788 502 (NOW KNOWN AS ZYX DEVELOPMENTAL LEARNING CENTRES PTY LTD) ; A.B.C. EARLY CHILDHOOD TRAINING COLLEGE PTY LTD ABN 68 069 159 566 (NOW KNOWN AS ZYX EARLY CHILDHOOD TRAINING COLLEGE PTY LTD) ; A.B.C. EDUCATION SERVICES PTY LTD ACN 107 310 743; A.B.C. EMPLOYMENT SERVICES PTY LTD ACN 130 442 394; A.B,C. EUROPEAN HOLDINGS NO. 1 PTY LTD ACN 122 710 123; A.B.C. EUROPEAN HOLDINGS NO. 2 PTY LTD ACN 122 710 132; A.B.C. EUROPEAN HOLDINGS NO. 3 PTY LTD ACN 128 132 829; A.B.C. LAND HOLDINGS PTY LTD ABN 89 108 964 227; A.B.C. LEARNING CENTRES FINANCE PTY LTD ACN 125 820 395; A.B.C. NEW IDEAS PTY LTD ABN 83 112 237 377 (NOW KNOWN AS ZYX NEW IDEAS PTY LTD) A.B.C. QUEENSLAND PTY LTD ACN 129 029 769; A.B.C. USA HOLDINGS PTY LTD ABN 37 121 360 147; A.B.C. USA PROPERTY HOLDINGS NO, 1 PTY LTD ACN 126 641 665; A.B.C. USA PROPERTY HOLDINGS NO. 2 PTY LTD ACN 126 641 674; CHILDCARE DEVELOPMENT SOLUTIONS PTY LTD AS TRUSTEE FOR THE CHILDCARE DEVELOPMENT SOLUTIONS UNIT TRUST ACN 107 241 181; DPPA PTY LTD ACN 114 743 092; RD PTY LTD ACN 096 172 075; FUTUREONE PTY LTD ACN 009 221 470; HCCS OPERATIONS PTY LTD ABN 18 097 846 707; KIDS CAMPUS (W.A.) PTY LTD ABN 45 112 150 099; KIDS CAMPUS AUSTRALIA PTY LTD ABN 13 104 407 187; KIDS CAMPUS HOLDINGS PTY LTD ABN 62 107 379 751; KLENDO PTY LTD ACN 098 366 968; MARSHEN PTY LTD ACN 101 400 104; PEPPERCORN HOLDINGS NO, 1 PTY LTD ACN 095 599 250; PEPPERCORN HOLDINGS NO. 2 PTY LTD ACN 099 074 781; PEPPERCORN HOLDINGS NO. 3 PTY LTD ACN 100 679 374; PEPPERCORN HOLDINGS NO. 4 PTY LTD ABN 84 101 236 766; PEPPERCORN HOLDINGS NO. 5 PTY LTD ABN 42 103 201 136; PEPPERCORN HOLDINGS NO. 6 PTY LTD ACN 103 210 751; PREMIER EARLY LEARNING CENTRES PTY LTD ACN 100 831 856; SELECT CHILD CARE MANAGEMENT PLY LTD ACN 093 925 056