CORPORATIONS - Liquidation - Costs - Liquidators' application for directions and approval of compromise - Application refused - Appeal dismissed - Whether costs ordered against liquidator personally or from assets of company - Different position regarding costs at first instance and on appeal - Costs of appeal ordered against liquidators personally - Silvia v Brodyn Pty Ltd

CORPORATIONS - Liquidation - Costs - Costs of appeal ordered against liquidators - Liquidators' right of indemnity against company - Whether costs properly incurred - Risk of exhausting assets of company through appeals - Onus on liquidators to establish costs of appeal honestly and reasonably incurred - Creditors opposed to application - Collateral benefit to liquidators - Onus not discharged - Indemnity not available - Insolvency Practice Schedule (Corporations) ss 45-1, 45-5, 90-15 - Arena Management Pty Ltd (rec & mgr apptd) v Campbell Street Theatre Pty Ltd [2011] NSWCA 128; (2011) 80 NSWLR 652, Australian Incentive Plan Pty Ltd v Attorney-General [No 2] (2012) 44 VR 661, Re Beddoe; Downes v Cottam [1893] 1 Ch 547, considered; Adsett v Berlouis [1992] FCA 368; (1992) 37 FCR 201, Rosenthal v Rosenthal [1910] ArgusLawRp 94; (1910) 11 CLR 87, 99, applied.

1 On 19 February 2019, the Court granted the appellants leave to appeal but dismissed their appeal from orders of an associate judge refusing their application for orders under ss 477(2B) and 511 of the Corporations Act 2001 (Cth) ('the Act') directing that they were justified in compromising a proceeding and approving their entry into terms of settlement accordingly.[1] At the handing down of judgment, directions were made for the filing of written submissions on the question of costs.

2 The Federal Commissioner of Taxation ('the Commissioner'), who had been given leave to appear as a contradictor both at first instance and on the appeal, seeks orders that the appellants pay his costs of the application for leave to appeal and of the appeal personally. He also seeks orders that the appellants are not entitled to have their own costs of the application for leave to appeal or the appeal (or, as we read the submissions, any costs they are ordered to pay) paid out of the assets of Lonnex Pty Ltd (in liq) ('Lonnex') or treated as a cost or expense in its liquidation. In addition, he seeks orders that he is entitled to have his costs of the proceeding at first instance paid as costs in the liquidation. The Commissioner submits that it was appropriate and necessary for him to appear and make submissions in opposition to the orders sought by the appellants, and that those submissions were accepted both at first instance and on appeal.

3 The Commissioner submits that, if proceedings are brought by a liquidator and those proceedings are unsuccessful, an order for costs is generally made against the liquidator personally.[2] He did not dispute that the liquidator would usually be entitled to recover those costs from the assets of the company.

4 The Commissioner further submits that if a trustee appeals against a court's determination after seeking the advice of the court, the trustee is regarded as being in much the same position as any other appellant and, if unsuccessful, will be ordered to pay the costs of the appeal personally.[3] It is submitted that in the current case, the appellants' position as liquidators of Lonnex was no different to that of a trustee of a fund and that they appealed at their own risk. As such, the Commissioner submits that his costs and the appellants' own costs should not be borne by Lonnex and its creditors but should be paid by the appellants personally. The Commissioner submits that the failure of the appellants to convene a meeting of creditors when one was requested provides a further reason why they should be ordered to pay the Commissioner's costs personally and not have their costs of the appeal paid out of the assets of Lonnex.

5 The appellants submit that the costs of both parties should be costs in the winding up of Lonnex, both at first instance and on appeal. They submit that the usual position is that a liquidator is entitled to an indemnity out of the assets of the company in respect of costs ordered against the liquidator in proceedings unsuccessfully brought by the liquidator, so long as the proceeding was properly brought and was not an abuse of process.[4]

6 The appellants point out that the Commissioner does not contend that the appeal was brought improperly, for an ulterior purpose or dishonestly, or that it was obviously misconceived. In the circumstances, it is submitted that in the absence of an order to the contrary, the liquidators would be entitled to be indemnified out of the assets of the company for their costs of the appeal. The liquidators seek an order to that effect.

7 The appellants further submit that the Commissioner was an appropriate contradictor in the appeal and should be entitled to recover his costs out of the assets of the company, and that an order should be made to that effect.[5]

8 The appellants seek to distinguish the authorities relied upon by the Commissioner for the proposition that the appellants should pay the costs of the unsuccessful appeal personally. They submit that Re McIntyre was not a case of a trustee or liquidator seeking directions, but an instance of an unsuccessful appeal by a beneficiary under a will, acting in her own capacity. They point out that it was stated in Australian Incentive Plan only that a trustee appealing against a court's determination upon an application for advice was 'ordinarily' regarded as being in the same position as any other appellant. It is pointed out that an exception was made in that case on the basis of the uncertainty surrounding the issues, and it is submitted that the issues in the present appeal were not so certain or obvious as to call for any different result.

9 The appellants make the same submissions with respect to the costs at first instance.

10 The associate judge reserved the costs at first instance. Both the appellants and the Commissioner seek orders that their costs of the proceeding before the associate judge be paid as costs in the liquidation of Lonnex. The Commissioner does not seek an order that his costs be paid by the appellants personally, with a right of recoupment out of the assets of the company as part of the liquidation. We shall consider the costs of the appellants and of the Commissioner in turn.

11 The question of indemnity in respect of the costs incurred by a liquidator is determined by deciding whether the liability to costs was properly, in the sense of reasonably and honestly, incurred.[6]

12 In the context of applications for directions, it must be borne in mind that it is generally desirable that liquidators, like trustees, should use the resources of the court to seek directions as to the discharge of their responsibilities.[7] On the other hand, a liquidator has no automatic right to costs even in that situation.[8]

13 In the absence of any opposition by the Commissioner or any suggestion that the applications to the associate judge were improperly brought, it follows that there should be an order that the appellants' costs of the proceeding at first instance be paid out of the assets of Lonnex.

14 Turning to the Commissioner's costs, the general position in relation to the costs of a party to litigation commenced by a liquidator was explained in Silvia v Brodyn as follows:

If proceedings are brought by a liquidator in relation to a company's affairs, generally an order for security for costs will not be made; but if those proceedings are unsuccessful, then an order for costs will generally be made against the liquidator personally: Re Wilson Lovatt ... In that case, at 285, Oliver J said this:

I think that a review of the authorities does disclose that a clear dichotomy between the case where the liquidator is sued and the case where the liquidator initiates proceedings, is established, and indeed it seems me to be a perfectly reasonable one. I cannot at the moment see why it should be contended that a liquidator who takes it on himself to institute proceedings, to bring parties before the court, to subject them to costs, and as against whom it is quite clearly established that no order for security can be made, should then be entitled to plead that he is not responsible beyond the extent of the assets in his hands. I can see no reason at all why a liquidator should be entitled to an immunity which is not conferred on other litigants. A trustee or a personal representative who institutes proceedings no doubt has a right to indemnity out of the estate which he represents but, if he litigates, he litigates at his own risk and so, in my judgment, it should be with the liquidator, and the authorities which point that way seem to me, if I may say so respectfully, to be completely reasonable.

I can quite see that there may be very powerful reasons of policy for a rule that a liquidator, when carrying out his functions and thus subjecting himself to the possibility of proceedings against him by parties who are discontented with the way in which he has carried out those functions, must be entitled to defend himself without being subjected to the risk of having costs awarded against him personally, because of course he cannot protect himself against claims being made. Unless there were some such rule it might be very difficult to get persons to take on the heavy responsibility of the liquidation of companies. It seems to me that it is quite a different matter where the liquidator himself takes it on himself to institute proceedings, whether they be proceedings in the winding-up or otherwise.

The liquidator would generally be entitled to an indemnity from the assets of the company, although that may be denied if the liquidator has acted unreasonably: In Re Silver Valley Mines (1882) 21 Ch D 381.[9]

15 The above principles must again be applied in the present context having regard to the desirability of liquidators approaching the courts for directions, as well as the desirability of a legally represented contradictor being involved, where appropriate, in such proceedings. As noted, the Commissioner did not seek an order against the appellants personally in respect of his costs at first instance. However, the Commissioner should have his costs out of the assets of the company. The appellants submitted that this was the appropriate order in respect of the appeal and there is no reason why the same order should not be made in respect of the costs at first instance.[10]

Costs of the application for leave to appeal and the appeal

16 As explained earlier, the appellants sought to have the same principles applied to the costs of the application and appeal in this Court. They emphasised that the Commissioner had not submitted that the appeal was brought improperly, for an ulterior purpose or dishonestly, or that it was obviously misconceived. In doing so, the appellants sought to apply the approach taken by the courts in cases at first instance, as explained in Adsett,[11] to which we will return.[12]

17 The Commissioner's submissions sought to draw a distinction based on the fact that the present proceeding was, at heart, an application for directions. He relied on the following observations of Nettle JA regarding trustees, in Australian Incentive Plan:

The general rule is that a trustee is justified in taking the opinion of the court at first instance and that the trustee's costs of an application for advice will be paid out of the trust fund as between solicitor and client. Similarly, if there is a successful appeal against the judicial construction of a will or trust, a trustee who is joined as a respondent to the appeal is ordinarily entitled to have its costs and expenses of the appeal paid out of the fund as between solicitor and client.

Contrastingly, however, as Lord Esher MR said in Re Earl of Radnor's Will Trusts, if a trustee, after taking the advice of the court at first instance, appeals against the court's determination, the trustee is ordinarily regarded as being in much the same position as any other appellant and so, if unsuccessful in the appeal, will be ordered to pay costs personally.

In Rosenthal v Rosenthal, Higgins J referred to the latter rule as one of long standing that, although trustees are entitled to their costs out of the estate of getting the guidance of the court in cases of difficulty, they appeal at their own risk and ordinarily must take the usual consequences. More recently, the rule was applied by the Full Court of Western Australia in Re Bubnich and was considered by this court in Forsyth v Sinclair (No 2). Plainly, the purpose of the rule is that, but for its existence, estates would very frequently be frittered away in costs.

Of course, the rule is subject to exceptions or, perhaps more accurately, it is to be applied according to all the circumstances of the case.[13]

18 The Commissioner submitted that the same approach should be taken in respect of the appeal in the present matter. He submitted that there should be an order that the appellants pay his costs personally, and an order that they not have recourse to the assets of the company for their own costs or, as we understood it, for their liability to pay the Commissioner's costs.

19 In our opinion, the principles explained by Nettle JA in relation to an appeal by a trustee against a court's determination of an application for advice apply also to an appeal by a liquidator against a court's determination on an application for directions under s 511 and like provisions. The principle in Silvia v Brodyn as set out above and explained by Oliver J in Re Wilson Lovatt derives from the close analogy between the position of trustees, with respect to the trust property under their control, and that of liquidators with respect to the property of the company. In both cases, the risk to which Nettle JA adverted, namely that the assets will be frittered away in costs, is the same. Moreover, as Higgins J put it in Rosenthal v Rosenthal,[14] a trustee's right to come to court is based on the principle that they ought not be expected to take a risk as to the law, and the advice of the court will, ordinarily, give the trustee 'unimpeachable protection'.[15] The same may be said of the liquidator seeking directions. This consideration lies at the heart of the different treatment of appeals of this kind.

20 In general, therefore, a liquidator who appeals unsuccessfully from a determination of a court upon an application for directions ought to pay both the liquidator's own costs and those of the successful party personally.

21 No reason appears in the present case to depart from this approach. The case did not involve any controversy as to legal principle. The appeal was entirely unsuccessful. It is true, as the appellants pointed out, that the Commissioner's willingness to offer to fund Mr Yeo, as liquidator, on the Commissioner's usual terms, was not disclosed until the hearing of the appeal. Nor was Mr Yeo's consent to act as liquidator of Lonnex revealed earlier. However, the evidence before the associate judge was that, if the creditors of Lonnex were to remove the appellants as liquidators, it would be proposed that Mr Yeo be appointed in their place and, if that occurred, the Commissioner would 'enter into discussions' with him in relation to the continued funding of the Lonnex proceeding. The matters disclosed to the Court at the hearing took the matter only a little further.

22 The appellants submitted that the issues in the appeal were not so certain or obvious as to warrant an order denying them their usual right to an order that costs be borne by the winding up. They also emphasised, as we have said, that the Commissioner did not allege impropriety. However, the above authorities show that these are not the correct questions and there is no such usual right on appeal. The issue is, rather, whether there are grounds for departing from the ordinary rule that when a liquidator unsuccessfully seeks to appeal against a refusal to give directions, costs should be ordered against the liquidator personally. For the reasons given, in our view there are not.

23 We should add that we are conscious that this was an application not only for directions but also for approval of a proposed compromise under s 477(2B). The proceeding went beyond the request for advice and involved an application for permission to do something not otherwise allowed. However, for the reasons given in the substantive judgment, both issues were subject to the same considerations and reasoning. In substance, the proceeding sought a judicial imprimatur for the appellants' proposed course of conduct and that imprimatur was refused. In a practical sense, therefore, it closely resembled a trustee's application for judicial advice.

24 The Commissioner sought an order that the appellants have no right of indemnity from the assets of the company in respect of their own costs of the appeal or those of the Commissioner that they are ordered to pay. This takes the issue beyond the question already addressed, as to what orders for costs should be made. The Full Court of the Federal Court explained in Adsett:

The obligation of a trustee in bankruptcy to pay costs to another party involved in litigation unsuccessfully instituted or defended by the trustee is a matter distinct from the trustee's entitlement to recoupment out of the bankrupt's estate. Ordinarily, an unsuccessful trustee will be ordered to pay the costs of the successful party. Such an order imposes a personal obligation on the trustee. In such a case, the question then arises as to whether or not the trustee has a right to be reimbursed out of the trust estate. This latter question arises in the administration of the bankruptcy, not in the original litigation.[16]

25 So, in Rosenthal, Higgins J would have ordered the trustees to bear the costs personally, and indicated that, if they sought indemnity from the estate, it would be for the trustees to justify that course if the beneficiaries should object.[17] In other words, the question of indemnity would have been left for another day. That seems to have been because the Court had no evidence of the facts that may have justified the trustees in appealing. In the majority, Griffith CJ and Isaacs J ordered that the trustees should have their costs out of the trust property, for reasons that are not presently relevant.[18]

26 The Court's jurisdiction to make an order concerning the liquidator's right of indemnity derives from ss 45-1, 45-5 and 90-15 of the Insolvency Practice Schedule (Corporations).[19] In particular, s 45-5 of the Schedule states that:

(1) ... the Court may make orders in relation to a registered liquidator that deal with the costs of a matter considered by the Court.

(a) the registered liquidator is personally liable for some or all of those costs; and

(b) the registered liquidator is not entitled to be reimbursed by a company or its creditors in relation to some or all of those costs. [20]

27 Provided that the requirements of procedural fairness have been met, it is desirable for the Court to decide such matters at the conclusion of the litigation.[21] Unlike in Rosenthal, the matter has been fully ventilated by the appellants and the Commissioner (who, in a practical sense, represented the interests of creditors) and this Court should now resolve it.

28 The general position regarding the costs payable personally by an unsuccessful liquidator seeking to appeal from a refusal to give judicial directions does not automatically extend to a general denial of the liquidator's right of indemnity in those circumstances. That is plain from the judgment of Higgins J in Rosenthal, upon which Nettle JA relied in Australian Incentive Plan. Nettle JA did not refer to the separate question of the right of indemnity.

29 Even if a liquidator is ordered to pay costs personally, he or she may still be entitled to an indemnity from the assets of the company.[22] The test is whether the costs have been properly, in the sense of reasonably and honestly, incurred.[23]

30 The Commissioner submitted that the appellants ought to have convened a meeting of creditors, submitting to their replacement as liquidators, as the creditors had directed under the legislation. The basis upon which a meeting had been refused was the appellants' assertion that the direction to convene a meeting was unreasonable.[24] The refusal was based, in part, on an argument that the creditors' direction was vexatious in light of the pending application for judicial direction from the associate judge. We do not think it can be said, nor is it now alleged, that it was improper for the appellants to make the applications to the Court at first instance. In those circumstances, their refusal to convene a meeting of creditors, in order to approach the Court instead, is not in itself a basis for denying their indemnity. The same applies in respect of costs of the appeal, which was commenced well after the direction for convening a meeting had already been refused.

31 However, this does not determine the matter, because for the reasons set out below, in the context of the indemnity the onus of establishing that the costs were properly incurred lies on the appellants rather than the Commissioner.

32 The authorities to which we have referred do not make it altogether clear which party bears the onus on the question of indemnity, once it has been found to be appropriate to order a trustee (or liquidator) to pay personally the costs of an appeal they have brought following an unsuccessful request for advice or directions. However, in principle it would be strange if the onus lay on the successful respondent to the appeal. Both Higgins J and Nettle JA justify the general rule that the trustee (or liquidator) ordinarily pays the costs of an unsuccessful appeal in a directions proceeding on the basis that there would otherwise be a risk that the estate (or the assets of the company) would be 'frittered away in costs'.[25] If the trustee (or liquidator) could none the less ordinarily have recourse to that estate or those assets to discharge that obligation, the general rule would be substantially undermined.

33 It is instructive that in Rosenthal, Higgins J envisaged that the onus would rest on the trustees in this regard. He said:

when the trustees seek to include the expenses of the appeal in their accounts, it would be for them to justify the inclusion, if the beneficiaries should object.[26]

34 While not framed in terms of impropriety, the clear import of the Commissioner's submissions was that, because directions had already been sought and declined, the costs of appealing from that decision should 'ordinarily' be borne by the liquidators without recourse to the company's assets. We have accepted that to be the correct position. Departure from the 'ordinary' position will be justified where the unsuccessful appellant establishes that the costs were properly incurred.

35 The appellants pointed out that there was no allegation or finding that the appeal was brought improperly, for an ulterior purpose or dishonestly, or that it was obviously misconceived. While these submissions were directed to the preservation of what was said to be the appellants' 'entitlement' to an indemnity, they may be taken as also urging a departure from the general position we have identified, namely that in a case of this kind there is ordinarily no such entitlement.

36 The question is whether the appellants have shown that, despite being ordered to pay the Commissioner's costs of the appeal and bear their own costs, each of those sets of costs was properly incurred, in the sense of honestly and reasonably incurred, so that they should be indemnified from the assets of the company in respect of those costs. In our opinion, the issue is not resolved by considering only whether the appellants acted honestly, or upon advice, in bringing the appeal. Mere bona fides is not the test.[27]

37 What is striking about this case is that all the creditors of the company opposed the course adopted by the appellants. Notwithstanding the appellants' view that the compromise was in the best interests of the creditors, it cannot be avoided that, as a matter of objective fact, the entry into the compromise would also have been of benefit to the appellants as it would have secured payment to them of outstanding liabilities and averted the risk of future adverse costs orders. The fact that such a benefit was sought, even if only collaterally, over the objections of the creditors, by way of an appeal that was wholly unsuccessful, means in our opinion that the incurring of the costs liabilities in respect of the appeal cannot be regarded as reasonable.

38 Since the appellants have not satisfied us that the costs were properly incurred, there should be an order that they not be entitled to indemnity from the assets of the company in respect of those costs.

39 There will be orders that the appellants pay the Commissioner's costs of the application for leave to appeal and the appeal and that the appellants have no right of indemnity against the assets of the company in respect of those costs or their own costs of the application and the appeal.

40 The appellants' and the Commissioner's costs of the proceeding at first instance should be paid out of the assets of the company.

[1] [2019] VSCA 23. These reasons assume knowledge of the contents of our earlier judgment.

[2] Silvia v Brodyn Pty Ltd [2007] NSWCA 55; (2007) 25 ACLC 385, 393-4 [50] (Hodgson JA, with Ipp and Basten JJA agreeing) ('Silvia v Brodyn'); Re Wilson Lovatt & Sons Ltd [1977] 1 All ER 274, 285 (Oliver J) ('Re Wilson Lovatt').

[3] Australian Incentive Plan Pty Ltd v Attorney-General [No 2] (2012) 44 VR 661, 692-3 (Nettle JA, with Tate JA and Davies AJA agreeing) ('Australian Incentive Plan'); Re McIntyre [1993] 2 Qd R 383, 388 (Thomas J).

[4] Adsett v Berlouis [1992] FCA 368; (1992) 37 FCR 201, 210, 211-12 (Northrop, Wilcox and Cooper JJ) ('Adsett'); The Bell Group Ltd (in liq) v Westpac Banking Corporation (1997) 16 ACLC 65, 69 (Templeman J); Kirwan v Cresvale Far East Ltd (in liq) [2002] NSWCA 395; (2002) 44 ACSR 21, 84 [259] (Giles JA, with Meagher JA agreeing).

[5] Tan v The Owners Strata Plan 22014 [No 3] [2016] NSWSC 896 [21] (Robb J) ('Tan').

[6] Mead v Watson [2005] NSWCA 133; (2005) 23 ACLC 718, 721-2 [11]-[16] (Sheller, Ipp and Tobias JJA), citing Adsett [1992] FCA 368; (1992) 37 FCR 201, 211-12 (Northrop, Wilcox and Cooper JJ).

[7] See Australian Incentive Plan (2012) 44 VR 661, 694 [15] (Davies AJA).

[8] See, eg, Re AMN Pty Ltd (in liq) (1997) 15 ACLC 368, 369 (Cooper J).

[9] [2007] NSWCA 55; (2007) 25 ACLC 385, 393-4 [50]-[51] (Hodgson JA, with Ipp and Basten JJA agreeing); see also Kitay v Frigger [2018] WASCA 100 [11] (Mitchell and Beech JJA); Federal Commissioner of Taxation v Warner [No 2] [2015] FCA 1281; (2015) 244 FCR 498, 508 [39] (Perry J).

[10] See, in a different context, Tan [2016] NSWSC 896 [21] (Robb J) and the authorities there referred to.

[11] [1992] FCA 368; (1992) 37 FCR 201, 210-12 (Northrop, Wilcox and Cooper JJ).

[13] (2012) 44 VR 661, 692-3 [3]-[6] (citations omitted) (Tate JA and Davies AJA agreeing).

[14] [1910] ArgusLawRp 94; (1910) 11 CLR 87, 99 (dissenting, but not on the point of principle).

[15] See also Re Earl of Radnor's Will Trusts (1890) 45 Ch D 402, 423 (Lord Esher MR); Park v Whyte [No 3] [2017] QSC 230 [61]-[63] (Jackson J).

[16] [1992] FCA 368; (1992) 37 FCR 201, 210 (Northrop, Wilcox and Cooper JJ) (citations omitted). See also Arena Management Pty Ltd (rec & mgr apptd) v Campbell Street Theatre Pty Ltd [2011] NSWCA 128; (2011) 80 NSWLR 652, 677-8 [101] (Campbell JA, with McColl and Macfarlan JJA agreeing) ('Arena Management').

[17] [1910] ArgusLawRp 94; (1910) 11 CLR 87, 99.

[19] The Act, sch 2 ('Insolvency Practice Schedule').

[20] For the earlier position under the repealed ss 477(6) and 536 of the Act, see Arena Management [2011] NSWCA 128; (2011) 80 NSWLR 652, 660-2 [30]-[38] (Campbell JA, with McColl and Macfarlan JJA agreeing). The Court also has an inherent jurisdiction over the right of indemnity of court-appointed liquidators, which in this matter would include Mr Potts: at 659-60 [27]-[29] (Campbell JA, with McColl and Macfarlan JJA agreeing).

[22] Silvia v Brodyn [2007] NSWCA 55; (2007) 25 ACLC 385, 394 [51] (Hodgson JA, with Ipp and Basten JJA agreeing); Re Wilson Lovatt [1977] 1 All ER 274, 285 (Oliver J).

[23] Adsett [1992] FCA 368; (1992) 37 FCR 201, 210-12 (Northrop, Wilcox and Cooper JJ); Re Beddoe; Downes v Cottam [1893] 1 Ch 547, 562 (Bowen LJ); Re Silver Valley Mines (1882) 21 Ch D 381, 385-6 (Jessel MR), 391 (Brett LJ), 392 (Cotton LJ); Arena Management [2011] NSWCA 128; (2011) 80 NSWLR 652, 656 [11], 662 [38], 663 [41] (Campbell JA, with McColl and Macfarlan JJA agreeing). Plainly, if costs are awarded personally on the basis that the proceeding was improperly commenced, then that test will not be satisfied: G E Dal Pont, Law of Costs (LexisNexis Butterworths, 4th ed, 2018) 725-6 [20.17].

[24] Insolvency Practice Schedule s 75-15(2).

[25] Rosenthal v Rosenthal [1910] ArgusLawRp 94; (1910) 11 CLR 87, 99; Australian Incentive Plan (2012) 44 VR 661, 693 [5].

[26] Rosenthal v Rosenthal [1910] ArgusLawRp 94; (1910) 11 CLR 87, 99.

[27] Re Beddoe; Downes v Cottam [1893] 1 Ch 547, 562 (Bowen LJ).