Goo v Kim

B. Background 5 The following background facts emerged from the judgment of the primary judge and were not disputed on the appeal. 6 The respondent had agreed to invest money with the appellant's companies, Hoju Jobs Pty Ltd (Hoju Jobs), a company incorporated in Australia and Hoju Jobs Limited (Hoju Korea), a company incorporated in Korea. A deposit of $300,000 made by the respondent to the appellant towards the investment, was secured by G class shares in Hoju Jobs. Ultimately, the balance of the investment did not proceed and the respondent then became contractually entitled to the return of the deposit and contractually required to return the shares in Hoju Jobs to the appellant. The appellant failed to return the deposit, so the respondent then sought specific performance against the appellant in the Supreme Court proceedings. It was common ground before the primary judge that the respondent had provided an executed transfer of the G class shares in Hoju Jobs (Hoju Shares) to the appellant. 7 On 26 March 2021, Williams J delivered her reasons for judgment in the Supreme Court proceedings and directed the parties to prepare short minutes of order to reflect her reasons. 8 On 21 April 2021, Williams J made an order for specific performance of an oral contract entered into between the appellant and the respondent (specific performance order), and orders for pre-judgment interest and costs (together, the Orders): see SC 2. 9 The specific performance order included an order that the appellant pay the respondent the sum of $300,000 within 28 days of the making of the orders. The appellant failed to comply with that order. 10 On 20 May 2021, the respondent caused a bankruptcy notice to be issued against the appellant for $359,798.64, comprising $300,000 for the judgment sum, pre-judgment interest of $58,294.53 for the period from 9 June 2017 to 26 March 2021 and $1,504.11 for post judgment interest (Bankruptcy Notice). 11 On 2 June 2021, the Bankruptcy Notice was served on the appellant. 12 On 12 July 2021, the Supreme Court ordered that a garnishee order be issued against the first defendant in the Supreme Court proceedings, Hoju Jobs, to enforce payment of the judgment debt of $358,294.53 (Garnishee Order). 13 On 22 June 2021, the appellant filed an application to set aside the Bankruptcy Notice. The application was heard by Judge Manousaridis and dismissed. The time to comply with the Bankruptcy Notice was then extended up to 8 October 2021, at which time Mr Goo committed an act of bankruptcy. 14 On 21 October 2021, the respondent filed a creditor's petition.

C. Relevant statutory provisions and principles 15 A failure to comply with a bankruptcy notice for a final judgment or final order, that has not been stayed, constitutes an act of bankruptcy. 16 Section 40(1)(g) of the Bankruptcy Act relevantly provides: (1) A debtor commits an act of bankruptcy in the following cases: … (g) if a creditor who has obtained against the debtor a final judgment or final order, being a judgment or order the execution of which has not been stayed, has served on the debtor in Australia or, by leave of the Court, elsewhere, a bankruptcy notice under this Act and the debtor does not: (i) where the notice was served in Australia--within the time fixed for compliance with the notice; or (ii) where the notice was served elsewhere--within the time specified by the order giving leave to effect the service; comply with the requirements of the notice or satisfy the Court that he or she has a counter-claim, set-off or cross demand equal to or exceeding the amount of the judgment debt or sum payable under the final order, as the case may be, being a counter-claim, set-off or cross demand that he or she could not have set up in the action or proceeding in which the judgment or order was obtained; …. (3) For the purposes of paragraph (1)(g): … (b) a judgment or order that is enforceable as, or in the same manner as, a final judgment obtained in an action shall be deemed to be a final judgment so obtained and the proceedings in which, or in consequence of which, the judgment or order was obtained shall be deemed to be the action in which it was obtained; and … (d) a person who is for the time being entitled to enforce a final judgment or final order for the payment of money shall be deemed to be a creditor who has obtained a final judgment or final order; and 17 The circumstances in which a bankruptcy notice may be issued by an official receiver are specified in s 41 of the Bankruptcy Act which relevantly provides: 41 Bankruptcy notices (1) An Official Receiver may issue a bankruptcy notice on the application of a creditor who has obtained against a debtor: (a) a final judgment or final order that: (i) is of the kind described in paragraph 40(1)(g); and (ii) is for an amount of at least the statutory minimum; or (b) 2 or more final judgments or final orders that: (i) are of the kind described in paragraph 40(1)(g); and (ii) taken together are for an amount of at least the statutory minimum. (2) The notice must be in accordance with the form prescribed by the regulations. … (3) A bankruptcy notice shall not be issued in relation to a debtor: (a) except on the application of a creditor who has obtained against the debtor a final judgment or final order within the meaning of paragraph 40(1)(g) or a person who, by virtue of paragraph 40(3)(d), is to be deemed to be such a creditor; (b) if, at the time of the application for the issue of the bankruptcy notice, execution of a judgment or order to which it relates has been stayed; or… 18 In Penning v Steel Tube Supplies Pty Ltd (1988) 18 FCR 568 at 575-576 (Woodward, Fisher and Spender JJ), the Court stated that: It appears to be settled law both in the United Kingdom and, at least at first instance, in this country, that the words in s 41(3) "execution of the judgment or order to which it relates has been stayed" are not restricted to an order expressly staying a judgment. They have been construed as having a much wider meaning. In certain circumstances execution is deemed to have been stayed if the execution creditor is for some reason not in a position to issue execution upon his judgment.

D. Decision of the primary judge 19 The primary judge addressed the appellant's contention that there had not been an act of bankruptcy to provide a foundation for the making of a Sequestration Order at J [60]-[68]. The primary judge rejected the proposition that given an order for specific performance has been stated to remain in the control of the Court, the specific performance order was not a final judgment or final order that fell within s 40(1)(g) or an order that met the requirements of s 40(1) or s 40(3) of the Bankruptcy Act: at J [64]-[67]. 20 The primary judge was satisfied that the order in paragraph 1(c) of the Orders (Order 1(c)) requiring the appellant to pay the respondent $300,000 within 28 days from the date of the order, was a final order, notwithstanding the "specific performance" preamble to the order. The primary judge stated that this conclusion was supported by the order in paragraph 5 of the Orders (Order 5) that provided for the payment of pre-judgment interest and which was not suggested to be anything other than a final order: at J [66]. 21 The primary judge found that the Bankruptcy Notice complied with the requirements of s 41(2) of the Bankruptcy Act because Order 1(c) fell within s 40(1)(g) and both s 40(3)(b) and s 40(3)(g) of the Bankruptcy Act: at J [66]. 22 The primary judge concluded: 67 The ability of a Court to supervise or revisit a specific performance order and the liberty order as to issues of non-compliance does not make the form of the order in the present case one that was not final. The Court does not accept that a specific performance order for the payment of a specified amount of money as expressed in the terms of the order in this case is not a final judgment or final order for the payment of money. 68 Whilst the Court accepts there is a contempt notice of motion on foot in the Supreme Court referrable to the failure to comply with order 1 (c) there is no stay on foot in respect of that order. The nature and form of the specific performance order as well as the liberty provision does not meant that order 1(c) is not an enforceable order or that order 1 (c) is the subject of any form of stay. The Court finds that there had been no stay of the final order within s40(3) (e) or s 41(3)(c). The Court rejects the respondent's submissions that the petition is defective and rejects the submissions that there has been no act of bankruptcy, rejects the submissions as to there being a form of stay and rejects any submissions that there was no final order. Accordingly, the respondent has not succeeded on the issues (a) and (b) raised above.

E. Grounds of appeal 23 The appellant advanced the following grounds of appeal in the notice of appeal filed on 9 September 2022 (as written): 1. The Court erred in deciding that there was an act of bankruptcy despite the nature and form of the specific performance order from the Supreme Court of New South Wales on 12 April 2021 (NSWSC order). 2. The Court erred in deciding that the NSWSC order met the requirements of s 40 (1) (g), 40(3)(b) or (d), s41 or s43 of the Bankruptcy Act 1966. 3. The Court erred in giving no consideration or, alternatively, insufficient consideration, including par [68] of the Reasons, to the submission of the Respondent, noted at par [57] (sub par 58) of the Reasons, summarised as: "There are circumstances in which there is a "stay of a judgment" when the execution creditor is, for some reason, not in a position to issue execution upon his judgment. As a result of the order for specific performance being under the control of the Court, there was an effective stay of the applicant's rights to issue a Bankruptcy Notice (see s. 41(3)(b) of the Act). As a result, the Bankruptcy notice could not be issued and there was no act of Bankruptcy. If there is no act of Bankruptcy, the Petition should be dismissed." 4. The Court erred in failing to decide that execution of the NSWSC order was deemed to be stayed, as a result of: a. the judgment being an order for specific performance of a contract, b. the contractual rights of the parties being under the control of the court, c. the working out of the order for specific performance being under the court's control and, d. the NSWSC not having made further orders to work out the performance of the contract. 24 There is a considerable degree of overlap and repetition in the grounds of appeal. As the appellant submits in his written submissions, the grounds can be "succinctly summarised" as the Court having fallen into error by not accepting the submission of the appellant quoted in ground 3. That submission raises the following issues for determination: (a) was there an effective stay of any right that the appellant had to request the issue of the Bankruptcy Notice because of the particular form of the specific performance order? (b) was the respondent precluded from taking any steps to enforce the specific performance order by way of execution until further orders were made by the Supreme Court? 25 In addition, the appellant sought to raise in his written submissions, for the first time, a further ground of appeal to the effect that the appellant's entitlement to enforce the specific performance order was subject to the fulfilment of a condition and, therefore, r 39.1(1)(c) of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) required leave to be obtained before any writ of execution was issued.

F.1. Appellant's submissions 26 The appellant submits that the primary judge erred in not finding that there was an effective stay of the judgment. The appellant contends that there was an effective stay of the judgment obtained by the respondent in the Supreme Court proceedings because the specific performance order, including Order 1(c), was an order for specific performance, not damages. 27 The appellant advances the following principal submissions in support of that contention. 28 First, if a creditor is unable to issue immediate execution upon the judgment, then that circumstance means that there is an effective stay of the order and a creditor has no right to issue a bankruptcy notice. 29 Second, as a general principle, once an order for specific performance has been made, the contractual rights of the parties are under the control of the Court, so that the "working out" of the order for specific performance is under the Court's control. 30 Third, where an order for specific performance is not complied with by one party, the other party may either apply to the Court for enforcement of the order, or apply to dissolve the order and ask the Court to put an end to the contract and, thereafter, seek alternative relief such as damages for breach of contract. 31 Fourth, it was not open to the respondent to issue execution, as distinct from seeking to enforce the contract, without first returning to the Supreme Court for orders on the "working out" of the order for specific performance. 32 Fifth, leave is required for any writ of execution to be issued if a person's entitlement under the judgment is subject to fulfilment of a condition: r 39.1(1)(c) of the UCPR. As the order was an order for specific performance of the contract, the respondent had to perform that order and this constituted a condition to be fulfilled by him in order to have the entitlements under the specific performance order. 33 Sixth, given orders for specific performance were subject to the control of the Court, the respondent was unable to issue immediate execution upon the judgment and there was thus an effective stay of the order and no right to request the issue of the Bankruptcy Notice. 34 The appellant submits that by reason of these propositions there was no act of bankruptcy and, therefore, the primary judge had no jurisdiction to make the Sequestration Order.

F.2. Respondent's submissions 35 The respondent advances the following principal submissions. 36 First, the combined effect of s 102, s 103, s 106(1) and s 138(1) of the Civil Procedure Act 2005 (NSW) (CPA) and r 39.1(1)(c) and r 39.34 of the UCPR is that a money judgment (order) may be enforced by the issue of a garnishee order without the leave of the Supreme Court. 37 Second, the argument that "somehow" r 39.1(1)(c) of the UCPR serves to render Orders 1(c) and 5 unenforceable was not put to the primary judge. Had this argument been put, the respondent would have put "the attached evidence (and more) and the above argument would have been raised against it". The appellant should not be permitted to raise this point on appeal when a forensic decision was taken not to do so in the Court below. 38 Third, the order for payment of money by the appellant was not conditional on the performance by the respondent or anyone else of any act or thing. The payment of $300,000 by the appellant to the respondent in Order 1(c) is not dependent upon the respondent's transfer of G Class shares to the appellant. The requirement for payment was distinct and independent of the transfer of shares. 39 Fourth, the "working out" of the order for specific performance in fact occurred on 21 April 2021, the date that Williams J made the orders. 40 Fifth, there was no need for the respondent to bring an application to seek the Supreme Court's leave to terminate the contract and claim damages. When the appellant failed to comply with Orders 1(c) and 5, the respondent enforced the specific performance order for the judgment sum of $300,000 by applying to the Supreme Court for the issue of the Garnishee Order, bringing contempt proceedings and having the official receiver issue the Bankruptcy Notice to the appellant.

G.1. Reasons and orders in the Supreme Court proceedings 41 It is necessary to commence with a consideration of the reasons and the specific performance and ancillary orders made by Williams J in the Supreme Court proceedings. 42 At least in cases of ambiguity, a Court may, in construing orders, have regard to the reasons for which the orders are intended to give effect: see Australian Securities and Investments Commission v M101 Nominees Pty Ltd (in liq) (No 6) [2023] FCA 1276 at [62]-[65] (O'Callaghan J) and the cases cited therein. 43 The Full Court of this Court in Lim v Comcare [2019] FCAFC 104 (McKerracher, Markovic and Snaden JJ) referred, with approval, to the following authorities addressing the construction of orders: 40 There is no doubt that a court charged with construing orders may, to the extent of any ambiguity that attends them, have regard to the reasons to which the orders are intended to give effect: Repatriation Commission v Nation (1995) 57 FCR 25, 33-34 (Beaumont J, with whom Black CJ and Jenkinson J agreed). It is likely the case that it may do so whether the orders are ambiguous or not. In Athens v Randwick City Council (2005) 64 NSWLR 58, Santow JA (with whom Hodgson JA and Tobias JJA agreed) observed (at 78): To pose the question as simply, can ambiguity in court orders be resolved by reference to their external context, obscures the point of what an order sets out to do. The purpose of a court order is, ordinarily, to give effect to a judgment. The judgment is not some kind of penumbral context surrounding the order. Rather the judgment is the source of the order. A court order derives from its originating judgment, as a transfer of land derives from the underlying contract. The order must therefore conform to the judgment, with only such latitude as the judgment allows. Likewise the transfer must conform to the contract. To speak therefore of the originating judgment as providing context for resolving ambiguity understates the primacy of that judgment as a source of the interpretation of the order. 41 This court found to similar effect in Yates Property Corporation Pty Ltd v Boland (1998) 89 FCR 78 (Drummond, Sundberg and Finkelstein JJ). There, Drummond J (with whom Sundberg and Finkelstein JJ agreed), said (at 78-79): It is impermissible, in my view, as well as being quite unrealistic, to attempt to read, that is, to understand an order in isolation from the context of the reasons for it being made. The Full Court of the Supreme Court of Queensland, in Australian Energy Ltd v Lennard Oil NL (No 2) [1988] 2 Qd R 230 held that, in interpreting an order framed in unambiguous language, regard should still be had to the reasons given by the Court for making the order because they form part of a context in which the order was made. Other judges of this court have expressed similar views: Hamersley Iron Pty Ltd v National Competition Council (2008) 247 ALR 385, 399 (Weinberg J); Smith v Comcare (2014) 64 AAR 205, 218 (Robertson J); Bob Jane Corporation Pty Ltd v ACN 149 801 141 Pty Ltd [2016] FCA 1129, [13] (Moshinsky J); Australian Competition and Consumer Commission v ACN 117 372 915 Pty Limited(in liq) (formerly Advanced Medical Institute Pty Limited) [2015] FCA 1441, [53] (Moshinsky J). 44 I am satisfied that in the present case there is sufficient ambiguity in the specific performance order to have regard to her Honour's reasons for judgment. The ambiguity that arises concerns whether the appellant's payment of $300,000 to the respondent, provided for in Order 1(c), is conditional on the provision of an executed transfer of the Hoju Shares, pursuant to Order 1(d). 45 Her Honour concluded in the judgment in the Supreme Court proceedings: 99 Having abandoned his set-off defence, Mr Goo's defence of Mr Kim's claim for specific performance, including the repayment of the $300,000, rested on Mr Goo's contention that their agreement included a term to the effect that any G Class shares issued would be in consideration for his $300,000 payment made on 23 January 2017, with the result that Mr Kim lost the entitlement to a refund of the $300,000 payment when the G Class Shares were issued in June 2017. 100 For the reasons already explained, I accept the submission made on behalf of Mr Kim that the evidence does not support the contention that the parties discussed or agreed at any time that any G Class shares issued to Mr Kim would stand as consideration for his $300,000 payment. 101 For those reasons, I have concluded that the contract entitles Mr Kim to repayment of his $300,000 in circumstances where he failed to invest the KRW 2 billion promised in January 2017 and he forfeited the 50 ordinary shares issued to him on 28 March 2017 by reason of his failure to secure the KRW 3.5 billion investment from a third party. As I have already mentioned, Mr Kim acknowledges that he must relinquish the G Class shares in Hoju Australia on repayment of his $300,000. 102 The submissions made on behalf of Mr Goo implicitly accepted that the order for specific performance should be made in Mr Kim's favour in the event that the contract did not include a term to the effect that the G Class shares would be issued in consideration for Mr Kim's $300,000 payment. 46 Her Honour found at SC [104] that the sum of $300,000 was paid as a deposit for working capital that the respondent had promised to provide for Hoju Korea and the appellant promised that the respondent would receive shares in both Hoju Jobs and Hoju Korea in return for that working capital and the appellant also promised that he personally would refund the $300,000 deposit if the investment did not proceed. 47 Her Honour ultimately concluded at [105]: In light of that finding, the terms of the order for specific performance proposed by Mr Kim and set out at [25] above are not appropriate. It seems to me that the specific performance order that will appropriately give effect to these reasons for judgment is as follows: Order that the contract between the plaintiff and the third defendant referred to at [80] of the judgment of the Court in Re Hoju Jobs Pty [2021] NSWSC 302 be specifically performed by: (a) the plaintiff executing within 14 days of the date of this order all instruments reasonably required by the third defendant to give effect to the transfer of the plaintiff's G class shares in the first defendant to the third defendant or any nominee of the third defendant notified to the plaintiff in writing; (b) the third defendant paying to the plaintiff the sum of $300,000 within 14 days of the date of this order; and (c) the plaintiff delivering to the third defendant the executed instruments referred to in (a) above simultaneously with the third defendant making the payment referred to in (b) above. 48 The references to the plaintiff and the third defendant are references to the respondent and the appellant, respectively, in this appeal. The references to the first defendant are to Hoju Jobs. 49 Her Honour then invited the parties to make submissions as to the precise form of the orders to reflect her reasons for judgment: at SC [106]. The order for specific performance and other ancillary orders made by Williams J on 21 April 2021 were in the following terms (Supreme Court orders): (1) Order that the contract between the plaintiff and the third defendant referred to at [80] of the judgment of the Court in Re Hoju Jobs Pty Ltd [2021] NSWSC 302 be specifically performed in the following manner: (a) Within 14 days from the date of these orders, the third defendant is to provide all instruments it reasonably requires the plaintiff to execute to give effect to the transfer of the third defendant's G class shares in the first defendant to the third defendant or any nominee of the third defendant notified to the plaintiff in writing. (b) If the third defendant does not comply with order 1(a), the plaintiff may execute the instruments annexed and marked "A" to these short minutes. (c) The third defendant is to pay the plaintiff the sum of $300,000 within 28 days from the date of this order. (d) The plaintiff is to deliver to the third defendant documents executed in accordance with order 1(a), or 1(b), within 28 days from the date of this order. (2) The proceedings against the First and Third Defendants are otherwise dismissed. (3) Subject to order (4) below, order that each of the plaintiff, the first defendant and third defendant pay their own costs of these proceedings. (4) Order (3) above does not affect the costs orders made in these proceedings on 4 June 2018 and 9 December 2020. (5) The third defendant is to pay interest to the plaintiff on the sum in order 1(c) above from the 9th June 2017 to 26 March 2021 in accordance with s 100 of the Civil Procedure Act 2005 and Practice Note SC Gen 16 - Supreme Court - pre-judgment interest rates, in the amount of $58,294.53. (6) Liberty to apply to the parties on 5 days' notice to address any issues of non-compliance with order 1. 50 The three material differences between the orders proposed in her Honour's reasons and the final form of the orders were, (a) the addition of an order requiring the appellant to submit to the respondent "all instruments" it reasonably required to effect the transfer of the shares, (b) an order providing for the execution of a transfer in a form attached to short minutes in the event the appellant failed to comply with transfer documentation, and (c) an order for pre-judgment interest. 51 In addition, there were the following drafting changes to the specific performance order: (a) the opening words of the specific performance order were changed from "be specifically performed by" to the more prescriptive words "be specifically performed in the following manner"; (b) the reference to the payment and the provision of the executed share transfer occurring simultaneously was removed and replaced with the requirement that both events had to take place within 28 days of the making of the orders; and (c) the semi-colons after the first two sub-paragraphs and the conjunction "and" between the last two sub-paragraphs was removed and instead each sub-paragraph ended in a full stop. 52 On balance, I do not consider that these amendments could be said to evidence any material alteration to the findings that her Honour had proposed at SC [106] to reflect her reasons. The removal of the reference to a "simultaneous" exchange, the semi-colons and the conjunction were offset by the insertion of "in the following manner" in the opening words of the specific performance order and the addition of a requirement for the appellant to provide "all instruments" it reasonably required the plaintiff to execute to give effect to the transfer of the shares. The preface, "in the following manner", textually has the effect of making clear that the order for specific performance requires each of the matters to be performed and thereby, necessarily makes them interdependent. That interdependence does not require them to be done "simultaneously" but a selective performance of one of those provisions would not carry with it an ability to enforce that provision, without a further "working out" by the Court.

G.2. The order for specific performance 53 For present purposes, Orders 1 and 5 of the Supreme Court orders, are the relevant orders. 54 Contrary to the finding of the primary judge and the submissions advanced by the respondent on appeal, I am not persuaded that Order 1(c) imposes a payment obligation on the appellant that was unconditional and not dependent on the respondent providing an executed transfer of the Hoju Shares to the appellant. 55 The structure and text of Order 1 makes plain that the specific performance order comprises the following three interdependent steps: (a) the provision by the appellant to the respondent, within 14 days of the making of the Supreme Court orders, of all instruments necessary to effect a transfer to the appellant of the Hoju Shares: see Order 1(a); (b) the delivery by the respondent to the appellant, within 28 days of the making of the Supreme Court orders, executed versions of the documents provided pursuant to Order 1(a), or if the appellant failed to comply with Order 1(a), executed copies of the documents annexed and marked A to the short minutes: see Order 1(d); and (c) the payment by the appellant to the respondent, within 28 days of the making of the Supreme Court orders, of the sum of $300,000: see Order 1(c). 56 The first step necessarily precedes the second and third steps. The delivery of the executed transfers of the Hoju Shares and the payment of $300,000 are not expressly stated to be dependent on each other taking place. I am satisfied, however, that both are integral and interrelated components of a single order for specific performance. The preamble in Order 1 provides that the contract between the appellant and the respondent be "performed in the following manner". The "following manner" necessarily encompasses each of the steps identified in the sub-paragraphs to Order 1. The use of sub-paragraphs, rather than a single paragraph, reinforces that each sub-paragraph is a component of a single order for specific performance. 57 It is also significant that the second and third steps are both stated to take place within 28 days. It is consistent with the proposition that they are to take place at the same time. Equally, the proposition that that the two steps are interdependent is supported by the mutual contractual obligations imposed on the parties, namely, in the event the funding arrangements do not proceed, the deposit is to be returned to the respondent and the Hoju Shares taken as security are to be transferred back to the appellant. 58 Again, contrary to the submissions advanced by the respondent, I do not accept that the order for the payment of interest in the period from 9 June 2017 to 26 March 2021, on the sum of $300,000, is an order that supports the proposition that the payment obligation in Order 1(c) is not conditional on the obligation in Order 1(d) to deliver an executed transfer of the Hoju Shares to the appellant. Nor, do I accept that it was a payment obligation that could be enforced independently of the payment obligation in Order 1(c). The payment of what is described as interest on a sum of money to be paid pursuant to an order of the Court at "pre-judgment interest rates" must necessarily travel with and be dependent upon the enforceability of the "judgment", in this case, the payment obligation in Order 1(c). It would make little sense to permit the enforcement of a pre-judgment interest obligation on a judgment that could not be enforced. It would impermissibly elevate form over substance. The interest obligation could just as easily have been added to Order 1(c) with the preface "together with interest from", followed by the date period, the references to Practice Note SC GEN 16 and the amount of the interest. 59 For these reasons, I accept that: (a) the "working out" of the order for specific performance was under the control of the Supreme Court; (b) the "working out" was addressed in Order 1; and (c) the payment of the $300,000 pursuant to Order 1(c) was conditional on the receipt of the executed transfers of the Hoju Shares pursuant to Order 1(d). 60 I also accept, as a general proposition, that once a successful election has been made to seek an order for specific performance, the contractual rights of the parties are under the control of the Court, so that what might be described as any necessary "working out" of the order for specific performance is under the Court's control: see Sunbird Plaza Proprietary Limited v Maloney (1988) 166 CLR 245; [1988] HCA 11 at 259-260 (Mason CJ); Despot v Registrar General of New South Wales [2016] NSWCA 5 at [113]-[116] (Gleeson JA, Leeming JA and Sackville AJA agreeing). 61 These findings, however, do not ultimately assist the appellant.

G.3. Enforceability of the specific performance order 62 It was common ground before me that Order 1(d) had been complied with prior to the issue of the Bankruptcy Notice. Hence, at the time the Bankruptcy Notice was issued, the payment obligation in Order 1(c) was no longer conditional on any compliance with Order 1(d). Nor, was it necessary for the Court to undertake any further "working out" of the order for specific performance. Both steps 1 and 2 identified above had been satisfied, leaving only the now unconditional payment obligation in step 3 to be enforced. The payment obligation, as in fact occurred, could now be enforced by the issue of garnishee orders, contempt proceedings and a request to the official receiver to issue a bankruptcy notice to the appellant. These were actions taken to enforce the payment obligation not to "work out" the order for specific performance. 63 In advancing his arguments concerning election and the control of the Court, the appellant sought to place particular reliance on the following statements of the Court of Appeal of the Supreme Court of New South Wales in Despot: 113 It has been said that if a party fails to comply with the order for specific performance, the other party may choose to proceed to enforcement of the order for specific performance, or instead of doing that, can elect to ask the Court to set aside the order for specific performance and put an end to the contract: Austins of East Ham Ltd v Macey [1941] Ch 388 at 341. The later reference to the court putting an end to the contract is now more accurately understood as a step taken by the party to the contract, the role of the court being limited to vacating the order for specific performance: see Sunbird Plaza at 260. 114 Importantly, an order vacating the order for specific performance does not follow as of course where one party is in default. It is a matter for the exercise of the Court's discretion whether, in all the circumstances, to discharge the order for specific performance would be unjust to the other party: Facey v Rawsthorne at 577 (Knox CJ), 579 (Isaacs J), 588-589 (Higgins J); Buckman v Rose at 9559 (McLelland J); JAG Investment at 606; Johnson v Agnew [1980] AC 367 at 399F (Lord Wilberforce). 115 Lord Wilberforce explained the basis of this election in Johnson v Agnew at 394B-C as follows: …if the order for specific performance is not complied with by the purchaser, the vendor may either apply to the court for enforcement of the order, or may apply to the court to dissolve the order and ask the court to put an end to the contract. This proposition is as stated in Austins of East Ham Ltd v Macey [1941] Ch 338 (and see Singh (Sudagar) v Nazeer [1979] Ch 474, 480, per Megarry V-C.) and is in my opinion undoubted law, both on principle and authority. It follows, indeed, automatically from the facts that the contract remains in force after the order for specific performance and that the purchaser has committed a breach of it of a repudiatory character which he has not remedied, or as Megarry V-C. puts it [1979] Ch 474, 480, 790, that he is refusing to complete. 116 This passage of Lord Wilberforce's speech in Johnson v Agnew was approved by the High Court in Sunbird Plaza at 264. 117 In Tang Man Sit v Capacious Investments Ltd at 521-522, Lord Nicholls explained why the finality of some orders is qualified by the principles of election, such as when an order for specific performance fails to be realised: In the ordinary course the decision made when judgment is entered is made once and for all. That is the normal rule. The order is a final order, and the interests of the parties and the public interest alike dictate that there should be finality. The principle, however, is not rigid and unbending. Like all procedural principles, the established principles regarding election between alternative remedies are not fixed and unyielding rules. These principles are the means to an end, not the end in themselves. They are no more than practical applications of a general and overriding principle governing the conduct of legal proceedings, namely, that proceedings should be conducted in a manner which strikes a fair and reasonable balance between the interests of the parties, having proper regard also to the wider public interest in the conduct of court proceedings. Thus in Johnson v Agnew [1980] AC 367 the House of Lords held that when specific performance fails to be realised, an order for specific performance may subsequently be discharged and an inquiry as to damages ordered. Lord Wilberforce observed, at p 398: "Election, though the subject of much learning and refinement, is in the end a doctrine based on simple considerations of common sense and equity." 118 It can be seen that the election described in Johnson v Agnew and Sunbird Plaza is an election which arises after an order for specific performance has been made but is not complied with. Contrary to Mr Despot's contentions, when an order for specific performance is not complied with, the election to be made by a vendor (to apply to the court to either enforce the order, or to vacate the order) does not depend upon that party first having established an entitlement to be restored as registered proprietor. The election depends on establishing that the order for specific performance has failed to be realised. 64 The statements in Despot, relied upon by the appellant, are directed at a situation in which a party fails to comply with an order for specific performance. They confirm that the other party may elect to apply to the Court to enforce the order for specific performance or obtain an order from the Court to set aside the order for specific performance and put an end to the contract. The role of the Court in the second scenario is limited to making an order vacating the order for specific performance. 65 A requirement to "apply to the Court to enforce an order" does not carry with it any necessary implication that the order is conditional or not able to be immediately executed. Rather, to the contrary, an application to the Court to enforce an order for non-compliance or threatened non-compliance, would carry with it the necessary premise that such an order is not conditional or incapable of being immediately executed. 66 The non-complying party in an order for specific performance may typically be a purchaser who fails to provide the purchase price for property to be acquired, or a vendor who fails to provide a registerable transfer of the property to be acquired by the purchaser. In those circumstances, the other party may need to seek the assistance of the Court in "working out" the order for specific performance by seeking remedial orders to address a default by the non-complying party before it can be enforced. 67 The present case has no such difficulty. The appellant accepted that the respondent had provided an executed transfer for the Hoju Shares pursuant to Order 1(d). No further "working out" of the specific performance order was required. 68 I do not accept the appellant's submission that the leave of the Court would be required before the respondent took any steps to enforce the specific performance order. The appellant accepted the condition in Order 1(d) had in fact been satisfied at the time the Bankruptcy Notice was issued. Moreover, the appellant was not able to point to any authority in support of the proposition that leave would have to be obtained where a condition in a specific performance order had been satisfied. 69 In no sense, therefore, was the specific performance order, including Order 1(b), stayed at the time that the Bankruptcy Notice was issued. By reason of the fact that no further "working out" of the specific performance order was required, the payment obligation in Order 1(c) was immediately enforceable. Hence for the purposes of s 40(1)(g) of the Bankruptcy Act: (a) Orders 1(c) and 5 are deemed to be a final judgment: s 40(3)(b); and (b) the respondent, as a person entitled to enforce a final judgment or final order, is deemed to be a creditor who has obtained a final judgment or order: s 40(3)(d). 70 Further, by reason of s 41(3)(a), the respondent was entitled to request the issue of the Bankruptcy Notice as the respondent was by s 40(3)(d), deemed a creditor who had obtained a final judgment or order against the appellant, as a debtor. The failure of the appellant to comply with the Bankruptcy Notice, therefore, gave rise to the act of bankruptcy that was relied upon to make the Sequestration Order.

G.4. Requirement for leave pursuant to r 39.1 of the UCPR 71 It is first necessary to address the application by the appellant for leave to rely on the contention, not advanced before the primary judge, that r 39.1(1)(c) of the UCPR requires leave to be obtained before any writ of execution is issued. The application is opposed by the respondent. The appellant submits that it is a purely legal argument and cannot give rise to any prejudice to the respondent because the appellant admits that the relevant condition to the exercise of Order 1(c) for which it contends, namely compliance with Order 1(d), was satisfied at the time the Bankruptcy Notice was issued. 72 It is undesirable for contentions not advanced below to be raised for the first time on appeal, but, on balance, I am satisfied that there is no substantive prejudice to the respondent given the appellant's admission and the respondent has been given a reasonable opportunity to address the contention in both his written and oral submissions. 73 In any event, I am satisfied that the appellant's contention that r 39.1(1)(c) of the UCPR precludes enforcement of Orders 1(c) and 5 without the leave of the Court must be rejected. 74 Section 103 of the CPA provides: 103 Enforcement of judgments generally Subject to this Part, the procedure for enforcing a judgment or order of the court is to be as prescribed by rules of court. 75 The reference to "Part" is a reference to Pt 8, which comprises provisions, inclusive, from s 102 to s 138 of the CPA. 76 Section 106(1) of the CPA provides: 106 Judgments for payment of money (cf Act No 9 1973, section 109; Act No 8 1901, sections 4 and 5) (1) A judgment debt may be enforced by means of any one or more of the following- (a) a writ for the levy of property, (b) a garnishee order, (c) in the case of a judgment of the Supreme Court or the District Court, a charging order. 77 Section 138(1) of the CPA provides: 138 Other methods of enforcing judgments (1) Nothing in this Part limits the manner in which a judgment or order of the court may be enforced apart from this Act. 78 A writ of execution is defined in s 102 of the CPA to mean "a writ of delivery, writ for the levy of property or writ of possession". 79 Rule 39.1(1)(c) of the UCPR provides: 39.1 Circumstances in which issue of writ requires leave (cf SCR Part 44, rule 2) (1) A writ of execution may not be issued in the following circumstances except by leave of the court - … (c) if a person's entitlement under the judgment is subject to fulfilment of a condition, 80 Rule 39.34 of the UCPR provides: 39.34 Application for garnishee order (1) An application for a garnishee order in respect of a judgment is to be made by way of notice of motion. (2) Unless the court orders otherwise, a notice of motion under this rule-- (a) may be dealt with in the absence of the parties, and (b) need not be served on the judgment debtor. (3) The application must indicate the extent (if any) to which the judgment debt has been satisfied under any writ of execution, garnishee order or charging order issued by the court. 81 The Dictionary for the UCPR provides that the meaning of "writ of execution", as defined in the CPA, is incorporated by reference into the UCPR. 82 Hence, it is readily apparent that Orders 1(c) and 5 are judgment debts that can be enforced by a garnishee order without any leave of the Court. Rule 39.1(1)(c) of the UCPR is concerned only with a writ of execution. The definition of a writ of execution in s 102 of the CPA does not extend to the issue of a bankruptcy notice or the making of a sequestration order. 83 Further, s 138(1) of the CPA makes plain that nothing in Pt 8 of the CPA limits the manner in which a judgment or order of the Court may be enforced independently of the CPA.

H. Disposition 84 The notice of appeal is to be dismissed and the appellant is to pay the respondent's costs. I certify that the preceding eighty-four (84) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Halley.