Equuscorp Pty Ltd v Wilmoth, Field Warne

1. That at different times Equus has contended that its financial position is strong, as, for example, when in 2001 Equus was confronted with a security for costs application (in proceeding No.5232 of 1998) and when in this proceeding in June 2003, Equus sought to be excused from lodging funds or a bank guarantee to secure the provision by WF&W of certain files over which it claimed a lien.

2. That at other times, such as at the second trial in this proceeding in October 2005, Equus has contended that its financial position is vulnerable. The issue, it is said, on that occasion was whether Equus had lost an opportunity in June 2003 to purchase a loan portfolio and mortgage security in respect of a Coonawarra viticulture investment scheme, because it was obliged to provide security by way of a bank guarantee for $700,000 in order to gain the provision of the files over which WF&W claimed a lien.

3. Mr Nicola Russo ("Mr Russo") is the directing mind and will of Equus.

4. On 14 August 2001, Mr Russo swore an affidavit in proceeding No.5232 of 1998 in opposition to a security for costs application against Equus in which he deposed that:

(a) as at 30 June 2001, Equus held $2,585,085 in cash and in various bank accounts in its name (paragraph 9);

(b) as at 30 June 2001, Equus' actual surplus net assets would be $2,944,264 if certain interest which was not payable by Equus were reversed in Equus' 2001 Accounts (paragraph 19);

(c) Equus had substantial cash and other assets from which it could meet its debts as and when they fell due, and could raise approximately $7 million to $9 million in cash reserves as and when needed by mortgaging its unencumbered assets such as the Eagle Ridge Golf Course (paragraph 22);

(d) Equus had no actual or contingent creditors which could materially adversely affect its ability to meet a costs order (paragraph 22);

(e) Equus made a profit before tax of $3,455,735 in the financial year ended 30 June 2001, whereas for the year ended 30 June 2000, Equus had made a loss of $685,641 (paragraph 24);

(f) in the year ended 30 June 2001, Equus recorded an operating profit of $6,760,408 (paragraph 34);

(g) Equus had "ample financial capacity to pay its debts as and when they become due and the financial capacity of Equus would continue to strengthen well beyond the year ended 30 June 2001 and beyond 30 June 2003" and indeed, even in making that affidavit, Mr Russo had not "taken into account the unused credit lines of Equus" (paragraph 35);

(h) Equus had "never failed to pay costs orders made against it ...over the past 10 years or so"; and

(i) there were a number of other assets of Equus which were capable of being readily converted into cash (paragraphs 12, 13, 14, 15, 16, 17 and 20).

5. In the same proceeding, Equus' accountant, the late Mr Tom Linardos, swore an affidavit on 14 August 2001 in which he deposed that he supported the matters set out in Mr Russo's affidavit, that Equus had strong capacity to raise moneys from either cash or the sale of assets within a relatively short period of time (paragraph 7(a)); that Equus had some $140 million worth of litigation claims which were not set out in its balance sheet; and that Equus had a very substantial ability to borrow moneys having regard to its unencumbered real estate assets.

6. On 16 June 2003, Mr Russo swore an affidavit in this proceeding in which he referred to valuable rights of Equus worth "in excess of $139 million" (paragraph 16(b) of the said Affidavit).

7. Contrastingly, on 10 July 2003, Mr Russo swore an affidavit in this proceeding in which he deposed that payment of a sum of $695,197.38 from the cash reserves of Equus would cause considerable financial hardship and financial inconvenience to Equus for various reasons there set out (paragraph 6 of that Affidavit).

8. On 18 February 2005, Mr Russo swore an affidavit in this proceeding in which he referred to a related family company, Katesara Pty Ltd, owned by his wife Carol Russo and daughter Sarah Russo and controlled by his wife (paragraph 4 of that affidavit). At paragraph 7 of that affidavit, Mr Russo deposed that Equus' total indebtedness to Katesara Pty Ltd was $20,146,213.00.

9. At paragraph 8 of his 18 February 2005 affidavit, Mr Russo deposed that "During the Beagle security for costs application Katesara agreed not to charge Equus interest after 1 July 2000. Katesara agreed to do this by a letter agreement dated 1 September 2000". Further, at paragraph 9 of the affidavit, Mr Russo deposed that since early 2003, in view of the fact that Equus had not made any loan principal reductions, his wife and he on behalf of their respective companies had decided that it was in the interests of the Russo family companies as a whole that the 1 September 2000 agreement be set aside and for Equus irrevocably to subject itself to the liability for interest at 10% per annum from 1 July 2000.

10. In his evidence in chief at the October 2005 trial in this proceeding (which was partly by adopted witness statement dated 1 October 2004), Mr Russo swore to an offer which he made (on behalf of Equus) to purchase a loan book held by S.E. Vineyard Finance Pty Ltd for $1.5 million cash and the remainder of the related facility held by Herbert Geer & Rundle (which held first ranking debentures over S.E. Vineyard Finance Pty Ltd) for $5 million (paragraph 42). By paragraph 72 of the adopted witness statement, Mr Russo swore that at the time the SE Finance deal was struck, Equus had three main sources of income:

(a) The Eagle Ridge Golf Course which, in winter 2003, was at its lowest patronage level and had a cash deficit of about $60,000 per month.

(b) many small debt recovery proceedings, which typically generated total income in the vicinity of $10,000 per month.

(c) the ongoing litigation claims handled by WF&W. Mr Russo put the total amount of the claims for those nine matters at approximately $150 million.

11. Contrastingly, during the October 2005 trial in this proceeding, Mr Russo gave the following evidence in cross examination about Equus' financial position and its indebtedness to Katesara Pty Ltd:

(a) the financial position of Equus deteriorated between June 2000 and 2003 (T163 L13) by roughly $700,000 to $800,000 (T163 L28, see also T167 and T168);

(b) the statement made at paragraph 22 of his 2001 affidavit was only true in the sense that it was subject to getting the debenture holder, Katesara, to release its charge (T165 L28 & T166 L1);

(c) Katesara had a registered first mortgage debenture over Equus which owns Eagle Ridge (T166 L4);

(d) Equus did not have the ability in May and June 2003 to raise $1.5 million on the security of its own assets (T169 L10);

(e) in August 2001, Equus had the ability to raise approximately $7m to $9m in cash reserves as and when needed by mortgaging its unencumbered assets (T169 L18), but only if Katesara supported Equus' need to raise money by lifting its debenture charge to allow Equus to raise money (T169 L27 and T170 L1);

(f) Mr Russo assumed that anyone reading his August 2001 affidavit would understand that Equus needed the support of the debenture charge holder to raise money (T172 L29 and T173 L1);

(g) it would be wrong for any person reading his August 2001 affidavit to assume that Equus could raise $7m to $9m as at August 2001 and retain nevertheless adequate security for Katesara's debt (T173 L4);

(j) the debt owed by Equus to Katesara was a debt Equus owed to Beneficial Finance Corporation which Katesara purchased in or about 1995 (T181 L7 and T182 L2);

(k) in the ten or so years that Katesara had held the debt, it had never asked Equus to repay (T182 L3);

(l) there was no formal agreement between Equus and Katesara governing the circumstances in which Katesara might exercise its discretion in respect of the arrangement between Equus and Katesara (T182 L11);

(m) Paragraph 22 of the August 2001 affidavit was sworn by Mr Russo in the context of him being familiar with Equus' balance sheets for 2000 and 2001 (T184);

(n) Equus is technically in default of its obligations owed to Katesara in respect of its debt (T184 L30) but unlike an arm's length lender like Beneficial, Katesara "doesn't give a damn" (T185 L4);

(o) the only time Katesara had expressed any concern was when WF&W asked Equus to keep the $1.9m Beagle settlement moneys separate and apart and when WF&W made a further demand for $700,000 for the non-Beagle files (T185 L12);

(p) Carroll Russo was not prepared to allow Katesara's priority to be deferred to enable Equus to raise $1.5m on its own assets whilst WF&W was insisting that the Beagle settlement proceeds be kept intact (T186 L26);

(q) Mr Russo was not prepared to go ahead and purchase a loan book himself if one were available as he was not prepared to run the risk of running out of money (T186 L8) as he had uncertain funding requirements in respect of Eagle Ridge capital expenditure and possible revenue shortfall (T187 L28).

9 As against that, Mr Russo has sworn two answering affidavits in the first of which, dated 16 May 2006, he deposes that since 1 July 2003 the Equus debt recovery business has generated recoveries of $7,127,030 and incurred expenses of $5, 469,250, and in which he also produces some bank statements showing that as at 30 April 2006 Equus had $4,422,658 cash at bank. He further deposes to various contingent assets as follows:

• $700,000 due under uncompleted contracts of sale for two blocks of land recently the subject of litigation before Osborne, J. in the Trial Division;

• $500,000 and $1,500,000 alleged to be recoverable under a first ranking registered mortgage debenture over the assets of Chelmantau Pty Ltd;

• $180,000 to $240,000 alleged to be recoverable under a mortgage over three blocks of land on the Cornidi Plateau north of Coffs Harbour, New South Wales.

• $27 million approximately said to be the hoped-for sale price of 146 time share titles in respect of the Lake Edge and Sunraysia resorts.

• $410,0000 said to be due under a guarantee of a defaulting loan.

• $9 million alleged to be the value of the Eagle Ridge Golf Course.

• $2,469,767 being what is one day hoped to be recovered from a multiplicity of defendants in proceedings called the Glengallen proceeding which are at present stayed.

10 Mr Russo does not, however, put a firm estimate on the realisable value of those contingent assets and, on the material put forward, it is not possible to put a realistic estimate on the amount which is likely to be recovered.

11 Mr Russo says that Equus does not have any trade creditors other than what he terms its "day to day creditors", with which he says it is completely up to date. He does not disclose, however, whether Equus has any current creditors other than trade creditors.

12 Mr Russo also says that Equus does not have any non-current creditors, other than associated companies. He does not state, however, the value or terms of those obligations.

13 Mr Russo says that Katesara has a number of charges over Equus securing debts of approximately $20,000,000, on which interest at the rate of 10% is payable on demand. He asserts that it is unlikely that Katesara would call in the debt and exercise its security even if WF&W were successful in the appeal. But evidently Katesara is not prepared to agree to limit itself in that way and I note in passing that in an email from Mr Russo to his accountants on 1 March 2006 he instructed them that he wanted Equus to pay back $2 million of the moneys owed by Equus to Katesara. For all that can be told, that has now been done, perhaps out of the $4.4 million which stood as cash at bank as at 1 April 2006; although senior counsel for Equus did say from the Bar table that his instructions were otherwise.

14 Mr Russo does not produce any accounts for Equus. He asserts instead that Equus is a private company and therefore not required to produce accounts. He also says that Equus does not have complete income tax returns. The last tax return lodged was for the year of income ended 30 June 2002, which disclosed a loss for that year of income of $2,072,425 and accumulated tax losses of $4,548,496, and the company's accountants are even now still working on the year end journal entries for completion of the 2003 tax return, at least according to the emails which were exhibited to Mr Russo's affidavit.

15 Counsel for WF&W submitted that it emerges from the affidavit material that the valuation of the assets is variable and in some cases manifestly exaggerated and that, when one discounts the stated value of the assets to allow for exaggeration, it is plain that the value of assets is substantially eclipsed by the value of liabilities; that the utility of contingent assets is at best problematic; and that the absence of proper financial statements is alarming.

16 Counsel for Equus responds that there are plainly assets of very significant value, and a number of contingent assets which are likely to be realised in the near future in terms of successful litigation and real property development; that there is not the slightest hint of Equus having defaulted in the performance of any obligation within the last ten years; and that there is in reality every reason to suppose that Equus will remain astute to meet its obligations as and when they fall due so as to ensure its continuing operation.

17 As in most things, there is something to be said for each point of view. Not all of Equus' assets are apparently overvalued, and it does not necessarily follow from the fact that an asset is contingent that it is not of any real worth. Moreover, the fact that a company has long term liabilities which exceed current assets, or even sometimes total assets, does not necessarily mean that it is doomed to financial disaster. As leading counsel for Equus submitted with some force, if it were otherwise, many of the largest companies would be unable to continue to trade.

18 But be that as it may, it is necessary to make an assessment of the matter on the basis of the material which is before us and on the basis of that material it appears to me that the most that can be said with any confidence about the financial position of Equus is that it appears to be a company that has possibly $4.4 million but maybe only $2.4 million cash at bank; it has a range of assets, some of which appear to be of significant value and others of which are of uncertain value; and it has a clutch of contingent assets which may be of very significant value but as to the true worth of which there are no necessarily reliable estimates. It has no financial statements or tax returns for the last four years of income; it has a trading loss incurred in the company's most recently reported year of operation of $2.4 million; it has generated possible net profits since then of approximately $1.6 million; it has accumulated tax losses of $4.6 million; it has current creditors of unknown amount and standing; it has secured fixed creditors of in the order of $20 million or possibly $22 million, which may or may not be accumulating interest at the rate of 10% per annum; it has further fixed creditors of unknown amount which are said to be associated companies; and it has a dependency for its solvency on the continuing discretionary co-operation of its creditors which, in the event of default, I assume, would be likely to act in their own interests.

19 Of course, I do not express a concluded view on the matter. This is an interlocutory application and we have not had the benefit of cross-examination. It may be that with further exposition what appear now to me to be possible problems would be revealed not to be so in fact. At the same time, however, the absence of proper accounts and financial records is a cause for serious concern. To say the least, it is unsatisfactory that none has been produced and it does not alleviate that concern that Equus may be a private company. Granted that small proprietary companies[2] are no longer required to prepare annual profit and loss accounts or balance sheets or to have those accounts or balance sheets audited,[3] they are still required to keep accounting records in accordance with s.286 of the Corporations Act; and to provide copies of financial statements and reports to members in accordance with s.315; to lodge accounts with ASIC if required to do so, in accordance with s.294; and to permit inspection of records by an auditor or legal practitioner on behalf of a member, in accordance with ss.247A, 247B, 247C.[4] They are moreover required to lodge tax returns with the Commissioner of Taxation, which is hardly possible, I should have thought, without first coming to a true and fair view about their financial position.

Security in respect of the fund

20 The nature of WF&W's rights in respect of the fund are debatable. On one view of the matter, that firm has or had no more than a contractual right under the agreement of June 2003 to keep the fund separate and apart to abide the hearing and determination of the proceeding. On that view of the matter, the fund and the firm's rights in respect of the fund gave the firm no more by way of security than its rights under the Deed of Costs to payment at an increased or higher rate in respect of the Beagle litigation.

21 Another view, however, which I am inclined to prefer, is that the fund once constituted was "trust moneys" in the broad sense that neither Equus nor the firm was beneficially entitled to them.[5] They were held in the Macquarie account subject to the rights of each of Equus and the firm to insist that the fund be kept separate and apart and applied in accordance with the agreement of 30 June 2003. Such if any interest in the fund as that may have conferred on the firm was at best contingent, in the sense that until and unless it was determined that the firm had a right to be paid at the higher rate under the Deed of Costs, it had no right to be paid out of the fund. Nevertheless, once the fund was constituted, it became a security in the broad sense that it was intended to and did improve the position of the firm in its action to recover what it contended was a debt.

22 A relatively long line of authority establishes that a payment into court under the rules of court must be treated as moneys paid into court to abide the event of the action and is security for the sum which the plaintiff may obtain at trial. Consequently, if a defendant becomes bankrupt or goes into liquidation before trial, the money must remain in court until the plaintiff's claim is decided by the court or there is an adjudication upon proof in bankruptcy or in the winding up.[6] As Lush, J. put it in Commercial Banking Co of Sydney Ltd v Colonial Financiers of Australia Pty Ltd[7] a payment in involves an appropriation by the defendant of part of its property and the setting aside of that part specifically to answer the plaintiff's claim if that claim is made good. Such an arrangement has been described as the giving of a charge on property in favour of the plaintiff.

23 It has also been held that similar principles apply to a disputed sum deposited with solicitors as stake holders to abide the determination of the dispute by arbitration. In Shirlaw v Malouf[8], Cohen, J. reasoned that, because the money was to be dealt with in exactly the same way as would an amount paid into court under an order, which is to say that it could not be withdrawn or repaid to a party unless there were a finding in favour of that party, the payment was a conditional security which the stakeholders were bound to hold and pay in accordance with the award. The parties had by their agreement fashioned their own rules to achieve the same effect as a payment in.

24 So too here it seems to me that Equus and the firm did by the agreement of 30 June 2003 fashion their own rules to achieve the same effect as a payment into court. They agreed that the fund would be kept separate and apart to abide the proceeding and paid out in accordance with the judgement of the court. In my view it makes no difference that the fund may have been under the control of the firm rather than independent stakeholders, for the firm was just as much bound as any stakeholder to deal with the fund in accordance with the agreement and the determination of the court as would be any third party stakeholder. Had it not done so, injunction would surely have gone to restrain disobedience and to compel compliance.

25 So to say is not necessarily to conclude that the agreement of 30 June 2003 amounted to an hypothecation of the fund. It is enough to confer security in the broad relevant sense that the agreement was one to set aside a fund to satisfy an identified, albeit unquantified, obligation. In point of principle, there is no reason why equity may not be invoked in the auxiliary jurisdiction in aid of the legal rights to which such an arrangement gives rise.

26 It was submitted on behalf of Equus that the agreement of 30 June 2003 was in terms no more than an agreement to keep the fund intact until the hearing and determination at first instance, and that the absence of any express reference to the possibility of appeal should be taken as implying that the parties did not intend the fund to be maintained until the hearing and determination of any appeal. There is, I think, some force in that submission. The drafting of the agreement is certainly open to that interpretation. On the other hand, there is force in the submission made on behalf of the firm that the contrary construction is plainly arguable, and that, subject to the balance of convenience, that is enough for the purposes of the sort of interlocutory relief which is sought.

The basis for injunction

27 As matters stand, therefore, which is to say that so long as the fund is kept intact, the firm arguably has the benefit of a security in the sense to which I have referred and to which it can resort if successful in its cross-appeal. If, however, the fund is paid out to Equus, the firm will be left unsecured and, as the evidence before us appears at the moment, perhaps unable to enforce execution in the event of success in the cross-appeal. Strictly speaking, of course, that is not the same thing as saying that the payment out of the fund would necessarily render nugatory the cross-appeal. If the firm were successful in the cross-appeal, it would, as senior counsel for Equus submitted, still have rights to claim, and ultimately to prove, as an unsecured creditor. But, as I say, on the probabilities as they appear from the evidence before us at the moment, there is no certainty or on the material necessarily even any significant probability that those rights would prove to be of value. In the particular circumstances of this case, I am persuaded that that is a legitimate basis on which to grant the injunction that is sought.

28 In effect, as it seems to me, the firm's position is analogous to that of a secured lender which has advanced funds on the security of a mortgage but failed at first instance in proceedings to enforce the mortgage. In such a case it cannot always be said that a discharge of the mortgage pending appeal will render the appeal nugatory, since the mortgagee retains the benefit of the covenant to pay in the event that it is successful in the appeal. But, in the scheme of things, the covenant to pay may prove worthless, and so, therefore, a stay or discharge pending appeal will ordinarily be granted. In effect, it is recognised that deprivation of security is so fundamental as of itself to be sufficient to warrant the grant of stay. So, too, as I see it in this case, the fundamental difference between the position of the firm with the benefit of the security of the fund and its position without the security of the fund is, in effect, a sufficient basis to warrant the grant of injunction.

29 Finally, it is to be noted that it is not suggested that the retention of the fund pending the hearing and determination of the cross-appeal would result in significant hardship for Equus. Indeed to the contrary, the submissions made on

behalf of Equus are to the effect that it has adequate capital and cash available to carry on with confidence.

Conclusion

30 Subject therefore to the firm by its counsel giving the usual undertaking as to damages, I would be prepared to make orders enjoining the parties until the hearing and determination of the appeal or further order from charging, disposing or otherwise dealing with the moneys standing in the joint names in the Macquarie account.

32 As to the form of orders, submissions were made earlier today by counsel for Equus that the cross-appeal gives rise to a matter of general importance concerning the correct construction of the Legal Practice Act 1986 and the corresponding provisions of the Legal Profession Act 2005, and that it would therefore be appropriate to order expedition of the cross-appeal. Counsel said, however, or at least I took him to accept, that it would be unrealistic or at least impractical to endeavour to separate the cross-appeal from the appeal.

33 At the same time, leading counsel for Equus observed that Equus' appeal is against only part of the orders of the judge below for, so long as the declaration that the Deed of Costs was void, it was unnecessary to dispute other findings made by the judge in favour of the firm. Now, however, that WF&W has cross-appealed against the declaration, Equus wishes to appeal, as it were contingently, as against those other findings so that if it were held at the final hearing of the cross-appeal that the deed was not void, or that some form of remuneration was otherwise recoverable, it would be open to Equus further to prosecute its claim.

34 All things considered, it seems to us that it would not be practical to separate the hearing of the issues the subject of the cross-appeal from the issues the subject of the appeal, nor, therefore, is it likely that a great deal of expedition will be able to be accorded to the hearing of the proceedings. The best estimate given is that it may take in the order of three to four days to complete the hearing of the appeal and the cross-appeal, and of course there are other urgent matters which can be disposed of more quickly than that.

35 In the circumstances, the orders of the Court will be, subject to anything further which counsel may wish to say about them, as follows:

1. Subject to the respondent by its counsel giving the usual undertaking as to damages, the parties are restrained until the hearing and determination of the appeal and cross-appeal or further order from charging, disposing or otherwise dealing with the moneys standing in the joint names of the appellant and respondent in account No. 240567230 with Macquarie Bank Ltd.

2. The cross-appellant's application for leave to appeal against the interlocutory orders of Byrne, J. be adjourned until the date of hearing of the appeal and cross-appeal against the final orders of his Honour.

3. The parties shall thereafter comply with O. 64 and the applicable practice statements as if leave to appeal had been granted.

4. The appeal and cross-appeal shall be heard with such expedition as can be afforded them by the Registrar.

5. Any application by the appellant for leave to amend its notice of appeal shall be filed and served on or before 4.00 p.m. on 14 June 2006.

6. The costs of this application shall be reserved.

36 Mr Moshinsky, is there anything you wish to say about that form of orders?

MR MOSHINSKY:

37 I was wondering if your Honour might clarify order No.3.

NETTLE, J.A.:

38 That is to say that you shall by 14 June file and serve a draft notice of appeal with respect to the interlocutory matters? Is it embraced in - - -

MR MOSHINSKY:

39 It is actually in there already as grounds 1 and 2 of the notice of appeal.

NETTLE, J.A.:

40 Then subject to anything Mr Beaumont may say, that can be struck out.

(Discussion ensued.)

NETTLE, J.A.:

41 We shall add an order that any application by the appellant for leave to amend its notice of appeal shall be filed and served on or before 4 p.m. on 14 June 2006.

(Discussion ensued re costs.)

42 Counsel for Equus makes application for costs of the application for injunction and relies in support of his submission upon what is said in paragraph 64.25.50 of Williams Civil Procedure Victoria and in Merry v Nickalls[9] and Cooper v Cooper[10]. As he submits, those cases stand as authority for the proposition that the costs of an application for a stay of execution pending appeal should not ordinarily be reserved but should be paid by the applicant.

43 It is to be noted, however, that a different decision was reached in Burdick v

Garrick[11], which, to my way of thinking, is significant, for it is that case which stands generally as authority for the proposition that where a fund is set aside to be held separate and apart for satisfaction of an identified obligation, a charge is thereby constituted.[12]

44 Counsel for WF&W submits that there should be no order other than that costs of the application be costs in the cross-appeal and relies in support of that contention upon the form of his application, which is one for interlocutory injunction as opposed to stay. Counsel for Equus replies that it hardly lies in the mouth of WF&W to say as much when they have so much relied upon identity as between application for stay and injunction of the kind which they sought and have been awarded.

45 I must say that I have always found it an odd result that the costs of an application for stay of execution pending appeal should be awarded against the applicant, at least before it is determined that the applicant was wrong in its contention that it was entitled to succeed on appeal. But for authority, I should have thought that it was a cost properly incurred in prosecuting an appeal which, if successful, should be borne by the unsuccessful respondent. I am to some extent enforced in that conclusion by the observations in Burdick v Garrick and the general practice that the costs of application for interlocutory injunction should either be costs in the proceeding or reserved. Given, however, the uncertainty of the matter, it seems to me that Equus should have its opportunity at the end of the day at least to argue about the matter. I am disposed, therefore, to order that the costs of the application be reserved to be determined by the court that hears the cross-appeal.

47 In the result, the costs of the application will be reserved.

MR MOSHINSKY:

48 I should formally give the undertaking on behalf of the firm that was referred to in the orders. I have instructions to give that undertaking.

NETTLE, J.A.:

49 Thank you, Mr Moshinsky; so noted.

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[1] Wilson v Church (No. 2) (1879) 12 Ch. D. 454 at 458; Williams v Minister for the Environment and Heritage (2003) 199 A.L.R. 352 at 356-9.

[2] Other than a disclosing entity or a proprietary company which is controlled by a foreign company, in certain circumstances.

[3] Corporations Act, s. 292, unless it is requested to do so by shareholders holding 5% or more of the voting shares in the company or by ASIC: ss. 293 and 294.

[4] ss. 292-294.

[5] Cf. Harmer v Federal Commissioner of Taxation [1991] HCA 51; (1991) 173 C.L.R. 264 at 272-3.

[6] In Re Gordon; Ex Parte Navalchand [1897] 2 QB 516; W A Sherratt Ltd v John Bromley (Church Stretton) Ltd [1985] 1 QB 1038 at 1056-7;

[7] [1972] VicRp 80; [1972] VR 702 at 706-7; see also Shirlaw (Now Rodgers) v Malouf (1989) 97 F.L.R. 382; 7 A.C.L.C. 1043; Pilmer HIH Casualty & General Insurance Ltd (No 2) [2004] SASC 389; (2004) 90 S.A.S.R. 465 at [62] et seq.

[8] (1989) 97 F.L.R. 382; 7 A.C.L.C. 1043 at 1049.

[9] (1873) LR8ChApp 205.

[10] (1876) 2 Ch.D. 492.

[11] (1870) LR5ChApp 453.

[12] Cohen v Cohen [1929] HCA 15; (1929) 42 C.L.R. 91 at 101.