Hathway v Cavanagh [2002] NSWSC 1113 | Case summary

3140/02 STEPHEN WESLEY HATHWAY V PETER MAURICE CAVANAGH & 7 ORS 3413/02 PETER MAURICE CAVANAGH V BAYSWATER FITNESS OPERATIONS PTY LTD & ANOR 3414/02 PETER MAURICE CAVANAGH V BAYSWATER FITNESS PTY LTD & ANOR JUDGMENT 1 HIS HONOUR: These three proceedings arise out of a dispute between the Cavanagh and the Hathway interests with respect to control of the business of the Bayswater Fitness Centre in Kings Cross. The fittings and leasehold interest are owned by the Bayswater Fitness Trust ("the Trust"), the trustee of which is Bayswater Fitness Pty Ltd ("Fitness"). Bayswater Fitness Operations Pty Ltd ("Operations") is the operating company for the business, which employs the staff, sells gym memberships for the fitness centre and otherwise manages the operations of the centre. 2 In general terms: · in proceeding No 3140 of 2002 Mr Hathway seeks to reverse a series of steps taken by the Cavanagh interests (the first four defendants) with respect to the Trust and the two companies, which have had the result of excluding him from management of the business; · in proceeding No 3413 of 2002 Mr Cavanagh seeks, against Operations and Mr Hathway, final relief by way of an order that Operations be wound up on the just and equitable ground or for insolvency, making serious allegations in the statement of claim of breach of duty and misfeasance by Mr Hathway; · in proceeding No 3414 of 2002 Mr Cavanagh seeks the winding up of Fitness on the same basis. 3 I shall begin by explaining very briefly the disputes between the Cavanagh and Hathway interests. It is not appropriate for me to make any findings on the matters in contest, given the nature of the applications which are before me for determination. It is unnecessary for me to set out the allegations and counter-allegations in any detail. A general description will suffice. 4 The Cavanagh interests were (until the happening of recent events, the effect of which is disputed) substantial minority investors in the business, holding units in the Trust and shares in the companies (although it appears that Mr Cavanagh's share in Operations was held in trust for Fitness as trustee of the Trust). Through conversations with the manager of the gym, Mr Stanton, and information supplied to him by Mr Stanton, Mr Cavanagh came to suspect misfeasance by Mr Hathway and his co-director Mr Ballardie (also a minority unitholder). 5 In summary, Mr Cavanagh's allegations are that · Mr Hathway and Mr Ballardie caused a second cash register, a "cash till", to be maintained until October 1999, into which certain business payments were diverted by the gym's staff on their instructions; · after October 1999 the cash till was not used, but Mr Hathway and Mr Ballardie caused certain business payments to be diverted by instructing the staff to deposit them in a safe rather than in the cash register; · the cash diverted from the business in these ways was used, inter alia, to make unauthorised payments to Mr Hathway and Mr Ballardie for their own use; · the business payments treated in this fashion were payments for casual use of the gym; payments for "ten packs" and "twenty packs" which gave the customer the right to use the gym facilities ten or twenty times; payments for towels and energy drinks; and payments by personal trainers for the opportunity to provide their training services to gym customers in the gym; · the amount of rent received by the Trust from the tanning centre business, which was operated in conjunction with the gym, was substantially less than the amount paid by the tanning centre, the difference being misappropriated by Mr Hathway and Mr Ballardie; · a person called "Noop", who was said to be Mr Ballardie's lover, was overpaid for cleaning services; · without proper authority, Mr Hathway diverted money from the business, by way of equity investment and unsecured loans, to support a business in Thailand called "Silom City Fitness", in which he had an interest; · a total amount in the vicinity of $500,000 was misappropriated from the business in these various ways. 6 These are very serious allegations, and they have not been proven. Mr Hathway and Mr Ballardie have filed affidavits denying various aspects of the allegations. Mr Ballardie also says that Mr Hathway was in control and that his own conduct was the result of following Mr Hathway's instructions. Mr Hathway denies any wrongdoing, claiming that Mr Cavanagh was aware of the way he conducted the business. Mr Hathway says that a cash till was operated for a while, and cash was diverted from the cash register, to reduce business costs and in particular, to minimise rent, part of which was based on turnover, by not disclosing the full business turnover. 7 Mr Hathway's evidence gives rise to the risk that the lessor during the period when turnover was not properly disclosed might seek to recover additional rent, and also the risk that the Australian Taxation Office will investigate with a view to making further tax assessments in respect of undisclosed income. Mr Cavanagh has responded to Mr Hathway's claims by calculating the additional liabilities that the business may have by virtue of unpaid rent and unpaid tax. 8 Mr Cavanagh appears to have developed a strategy for dealing with his concerns about mismanagement of the business. He claims to have negotiated the acquisition of a minority unitholding from the Quinn Family Trust, although there has been no registered transfer of a unitholding interest. The building in which the business is conducted was converted to strata title earlier this year. Through one of his companies, Mr Cavanagh purchased the freehold of the strata unit relating to the business, thereby becoming the lessor. 9 Towards the end of May 2002, Mr Cavanagh and an accountant colleague, Mr Michael Lane, had heated discussions with Mr Hathway and Mr Ballardie. Mr Cavanagh claims that Mr Ballardie then sold his unitholding to the Cavanagh interests, although once again there has been no registered transfer of units. If Mr Cavanagh has beneficially acquired the unit holdings of the Quinn Family Trust and of Mr Ballardie, he controls more than 50% of the units in the Trust. 10 Mr Cavanagh urgently implemented a series of steps in late May and early June 2002, which according to his account, have removed Mr Hathway and Mr Ballardie as directors of the companies and have appointed Mr Lane and Mr Cavanagh to the boards. Mr Hathway claims that these various steps, involving meetings of boards, members and unitholders, were invalid because constitutional requirements (including requirements for adequate notice to be given to all relevant parties) were not met, and because Mr Cavanagh did not validly control the Quinn and Ballardie unitholdings having regard to certain pre-emption rights in the trust deed. Mr Hathway's challenge to the validity of Mr Cavanagh's actions is a central part of proceeding No 3140 of 2002. 11 The proceedings came before McClellan J, who made interlocutory orders and delivered reasons for judgment on 25 June and 2 July 2002. The applications considered by his Honour were applications by the Cavanagh interests for the appointment of a provisional liquidator to the two companies and a receiver and manager to the Trust. His Honour at first declined to grant that relief, because it appeared to him that, although the relationship between the Cavanagh and Hathway interests had broken down and Mr Hathway had been excluded from his position as managing director, there was an independent accountant who would be able to conduct the business more effectively than any insolvency practitioner appointed by the Court, if the parties were prepared to support him. However, after the accountant declined to continue in that role and the premises were broken into and computerised financial records stolen, his Honour decided that there was no feasible option but to make the orders sought. Mr John Vouris was appointed provisional liquidator of the two companies and receiver and manager of the Trust on 2 July, subject to orders making it unnecessary for him to advertise his appointment. 12 Mr Vouris has conducted the business from that time up to the present. He has produced four reports, which he describes as reports to shareholders. 13 In his first report, dated 2 August 2002, Mr Vouris gave a provisional view of the financial position of the two companies. He had obtained a valuation of the furniture and fittings of the business. He calculated that there may have been a deficiency of the net assets in the order of about $65,000 in each case, depending upon the value of certain assets, although he noted that there were substantial cash reserves. He valued the loan to Silom City Fitness at zero because of doubts about its recoverability. He treated a large inter-company loan from Operations to the Trust as a liability for the full amount on the part of Fitness as trustee of the Trust, but as an asset of unknown value on the part of Operations. He noted the allegations of misappropriation and the proceedings between the Cavanagh and Hathway interests, and endeavoured to make some preliminary calculations of cash deficiency to compare the allegations of the two camps. By way of recommendations, he said that there were three workable solutions, namely that the shareholders resolve their differences so that he could retire from his offices; that he should sell the business as provisional liquidator and distribute the proceeds; and that he should appoint a voluntary administrator who would entertain proposals for a deed of company arrangement. He summarised what he saw as the advantages and disadvantages of each course. 14 In his second report, dated 22 August 2002, Mr Vouris reviewed responses that he had received to his first report from the Cavanagh interests and Hathway interests and others. He concluded that it was unlikely that the parties would resolve their differences and consent to the appointment of a voluntary administrator, and recommended that the business should not be returned to its previous management. He proposed that he would apply to the Court to extend his powers as provisional liquidator to include a general power of sale, and also seek an order that the companies be wound up. 15 Mr Vouris wrote his third report on 23 October 2002, after an article had appeared in the Sydney Morning Herald on 5 October 2002, which had disclosed the dispute and Mr Cavanagh's allegations about the cash till and the misappropriation. Mr Vouris said that the staff of the gym had received many inquiries by worried customers. He expressed concern that the article may have caused Straits Properties (Bayswater) Pty Ltd, the landlord at the relevant time, and the Australian Taxation Office to become interested, and that they may make claims. He referred to estimates by Mr Cavanagh that the business could be liable for substantial amounts to these potential claimants. He expressed the opinion, on the basis of his inquiries to that time, that the cash drawings alleged to have been misappropriated were in the range $129,483 to $217,820. He also noted that Mr Hathway had claimed $300,000 since the time of his previous report, in respect of termination of a management contract. Reviewing the financial position of the business on a group basis and taking into account all these matters, he concluded that there was a net deficiency of $335,362, even allowing for a valuation of goodwill that had been prepared by a partner in his firm, although there were still significant cash reserves. He said he would approach the Court for an order referring the disputes to mediation, or an order extending the powers of a provisional liquidator to include a general power of sale, or an order that the companies be wound up. 16 Mr Vouris duly made the applications foreshadowed in his third report. On 28 October 2002 I dealt with the first part of his applications, by making orders for compulsory mediation under s 110K of the Supreme Court Act 1970 (NSW). A mediation was conducted by Mr Robert Angyal of counsel, but it was unsuccessful. 17 In his first and third reports, Mr Vouris expressed concern that the process of provisional liquidation and receivership would eventually make the companies and the business insolvent, assuming they were not already insolvent. In his third report he said that the weekly cost of his involvement was approximately $3000 and that he intended to render an account for $60,050.50 (exclusive of GST) for the period from 2 July to 13 September 2002. He observed that ultimately, the cost of his administration and legal expenses would drain the operation of all of its cash reserves. 18 In his fourth report dated 8 November 2002, Mr Vouris noted the failure of the mediation, and expressed the view that there were grounds for orders to be made forthwith for the winding up of the companies. He noted that a difficulty in the sale of the business would be that the current landlord (a company associated with Mr Cavanagh) had indicated that it was unlikely to provide a lease to any incoming purchaser. He reiterated his concern that the costs of administration were depleting the cash reserves of the business and making the companies and the business insolvent. 19 In these circumstances I have been asked to consider, urgently, the following applications: · by Mr Vouris, either for orders expanding his powers as provisional liquidator to enable him to sell the business, or for orders for the immediate winding up of the companies on the just and equitable ground or for insolvency; · by Mr Hathway, that I should make orders under Part 31 of the Supreme Court Rules having the effect that his allegations about the invalidity of the steps taken by Mr Cavanagh to remove him and Mr Ballardie from their positions would be determined as separate questions; · by Mr Hathway, that Mr Vouris be removed from his positions as provisional liquidator and receiver and manager, with the result that the companies and the business would be returned to the control of the Hathway interests. 20 I have considered these various applications in a single hearing, with the consent of the parties. I have made orders having the effect that for the purposes of the hearing and determination of the applications, they be heard together and the evidence given in respect of each proceeding be evidence in the other proceedings. I have made these orders because, although the various applications before me are legally distinct, they relate to a single commercial issue, namely what should be done in the immediate future to protect the assets of the business while advancing the resolution of the dispute. 21 The proper resolution of some aspects of the applications is clear to me, while other aspects are more difficult. I shall deal with the clear matters first. 22 I have decided that I should not make immediate orders for the winding up of the companies. I could not do so without making findings as to the grounds for winding up, substantially on a final basis. My decision would substantially determine proceedings Nos 3413 and 3414 of 2002, where winding up is the principal relief sought. 23 The grounds advanced for winding up orders are the just and equitable ground and insolvency. The just and equitable ground raises, inter alia, questions about the exclusion of the Hathway interests from management of the companies and the business, and allegations of misfeasance. The insolvency ground raises, inter alia, questions about the existence and recoverability of the loan to Silom City Fitness, and the existence of any liability to Mr Hathway. Both grounds therefore raise matters in dispute between the parties. While I may possibly be able to reach a conclusion as to winding up without having to resolve disputed questions of fact, it would be necessary for me to make an assessment of the effect of the disputes about these issues upon the business and its prospects. 24 The hearing before me has been an interlocutory hearing in which all affidavits were read without objection and no oral evidence was given, except upon the subject of the manner in which Mr Vouris would conduct the sale process. The evidence on the disputed matters was not tested by cross-examination. In my opinion it would be inappropriate to make winding up orders in these circumstances, if there is an alternative available. 25 Although Mr Vouris signified, in his fourth report, that he would prefer winding up orders rather than the expansion of his powers as provisional liquidator, his counsel put the matter differently at the hearing. The reason given by Mr Vouris in his report for his preference for winding up orders related to whether the landlord would offer the purchaser a new lease. Perusal of the lease, which is in evidence, shows that the term of the lease expires in October 2003, but the lessee has two consecutive options for renewal for five years each. Clause 6.1 of the lease prohibits the assignment of the lessee's interest, but that is qualified by clause 6.2, which says that the lessee is not in breach of clause 6.1 if various conditions are satisfied. 26 Some of the conditions raise matters of fact, such as whether the lessee is in default and whether there has been a recent assignment. Others raise questions of mixed fact and the exercise of discretion by the lessor, such as whether the lessee has proven to the satisfaction of the lessor that the incoming tenant is a respectable, responsible and solvent person, and whether the incoming tenant (if a company) has provided a bank guarantee and guarantees as required by the lessor in a form acceptable to it. The assignment is not expressed to be subject to any general power of the lessee to refuse consent, so that if the conditions of clause 6.2 are satisfied, the lessee is entitled to assign and the lessor cannot object to the assignment. 27 As far as I can see, the provisions of the lease about assignment are not such as to make it impossible or even impracticable for Mr Vouris to sell the business with the existing lease. In addition to the normal methods of dealing with the assignment of a lease by vendor disclosure and in the sale contract, it would be appropriate, in my view, for the Court to grant liberty to the parties to bring before the Court any dispute about the assignment of the lease to a purchaser proposed by Mr Vouris, if I make orders permitting him to proceed to sale. It follows, in my view, that the possibility of resistance by the Cavanagh interests to making the lease available to a purchaser of the business is not a valid ground for opting for immediate winding up rather than the expansion of the provisional liquidator's powers. 28 Two considerations were advanced by counsel for Mr Vouris at the hearing, in favour of expansion of the provisional liquidator's powers rather than immediate winding up orders. First, he drew attention to Mr Cavanagh's undertakings given to the Court on 2 July 2002, to the effect that he and the lessor which he controlled would not, without the prior leave of the Court, rely upon the appointment of a provisional liquidator to Fitness as an event of default under clause 10.1(f) of the lease, which may otherwise have permitted him to do so. If, however, I were to make an immediate winding up order and appoint a liquidator to Fitness, clause 10.1 would be triggered in the absence of any further undertaking. Consequently, the making of a winding up order of Fitness may well extinguish the lease. Secondly, counsel for Mr Vouris noted that Mr Cavanagh had given the usual undertaking as to damages in order to procure the appointment of a provisional liquidator, and that his undertaking would remain in place during the sale process if the provisional liquidator's powers were expanded to permit sale, but it would not be available in the event of a winding up. 29 I am persuaded that · an expansion of the provisional liquidator's powers to permit the sale of the business is a viable alternative to immediate winding up orders; · it would be inappropriate to make winding up orders in the present interlocutory circumstances; and · the reasons advanced by counsel for Mr Vouris are good reasons for opting for an expansion of the provisional liquidator's powers rather than immediate winding up, and there are no good reasons for preferring the latter to the former. 30 The more difficult issue for me to decide is whether to expand the provisional liquidator's powers to permit sale of the business, or to make orders under Part 31 for the expedited determination of issues going to the validity of exclusion of the Hathway interests from control of the business. 31 Counsel for Mr Hathway conceded that it would not be appropriate to make an order upon his second application (the application to remove Mr Vouris from office so as to return the companies and the business to the Hathway interests) until the question of validity of the steps taken by Mr Cavanagh to remove his clients from control was first resolved. Mr Hathway's second application is therefore conditional on his first succeeding in the Part 31 application. 32 Mr Hathway contends that the questions of validity of the steps taken to remove him and Mr Ballardie should be determined first, for several reasons. He says that if their purported exclusion from the business were invalid and ineffective, and they were to be permitted to resume control, they could deliver better value to the unitholders by resuming their operation and development of the business than would be available if the business were sold for its present value, affected by several months in the hands of Mr Vouris. He makes no criticism of Mr Vouris' discharge of his responsibilities, but says that the value of such a business inevitably declines if it is placed in the hands of an external administrator. Mr Hathway submits that the Court's decision should be driven by the interests of the unitholders as a whole, and he emphasises that there are other unitholders than the Cavanagh and Hathway interests. 33 On the other hand, he says, if the Court prefers to permit the business to be sold by the provisional liquidator, the opportunity for him to realise its full value will be lost forever. That would be unjust to him and to the unitholders generally, if his attack on the validity of the steps taken to remove him and Mr Ballardie from management succeeds. He says that the Court should not be reluctant to restore him and Mr Ballardie to control of the business, even though serious allegations of misfeasance have been made against them, because he would give appropriate undertakings to the Court in order to avoid the risk that circumstances might arise in future in which similar allegations could be made. 34 Counsel for Mr Hathway submitted that the facts involved in the Part 31 determination would not be in dispute. He would be able to run his client's Part 31 application very largely on the basis of the facts contained in Mr Cavanagh's affidavit evidence, which he would tender if it were not read. He offered to provide a list immediately of the evidence upon which he would rely. He said that if the case was carefully managed by the Court and the parties were required to provide written submissions, the hearing of the determination of the separate questions under Part 31 would only be a one or two hour hearing. The balance of convenience would therefore favour my making orders now for expedited determination of separate questions under Part 31, and deferring consideration of the sale of the business or its return to the Hathway interests until after the Part 31 questions had been answered. The submission assumes, I think, that either I or some other judge would be available to take a one or two hour hearing of the separate questions very soon. I am prepared to proceed on the basis that this assumption is correct. 35 There are many cases in which courts have warned about the dangers of using the Part 31 procedure. For example, in ABB Engineering Constructions Pty Ltd v Freight Rail Corporation [1999] NSWSC 1037 Rolfe J said (at paragraph 4): "Whilst such applications were reasonably frequent in the Commercial Division and the Commercial List in the past, they have become less so because, I am sure, of the Court's reluctance to accede to them, a reluctance stemming from the view that the making of such an order usually results in litigation becoming more and more time-consuming, costly and inefficient. My experience has been that the ordering of separate questions is only appropriate and only has a beneficial effect, when there is a discrete question, which will be determinative of the litigation, and the parties agree what judgment will follow from the answering of that question." 36 In the case before his Honour, it was contended that liability should be heard and determined separately from and in advance of damages. In declining to make the order for determination of separate questions, Rolfe J took into account the following considerations: (1) there were witnesses likely to give evidence going both to liability and to damages, and their evidence on one issue could impact on the acceptability of their evidence on the other; (2) the judge dealing with liability might well be disqualified from dealing with damages if he or she were to make findings as to the credit of any witness at the liability hearing who would also be a witness at the damages hearing; (3) if an order under Part 31 were made and the plaintiff were to fail on the issue of liability, there would be a likelihood of appeal, and if the appeal were to be successful, the issue of damages would have to be addressed, probably by another judge; once the issue of damages had been decided, there would be the prospect of another appeal, and perhaps yet another trial for the determination of the question of damages. Apart from possible appeals by leave to the High Court, there would thus be four potential hearings, and that would be an inefficient use of time and resources; (4) in the absence of an assessment by the parties of their respective claims and counter-claims as to damages, there could be no meaningful consideration by them of the financial stake that was in issue between them, and consequently the prospects of commercial settlement would be inhibited. 37 This is not a case where the application is for determination of the question of liability separately from damages. But the position is generally analogous. Mr Hathway seeks an order for the determination of certain questions of validity separately from other questions, including questions of compensation. Each of the four difficulties identified by Rolfe J is present here. 38 There are, additionally, two specific difficulties presented by the Part 31 application in this case. 39 First, determination of the separate questions would raise matters of fact that are in dispute. I cannot accept the assurance by counsel for Mr Hathway that there would be no significant contested issues of fact. Counsel for Mr Cavanagh informed the Court that it would take him some time to decide what evidence to adduce at the hearing for the determination of separate questions, but he anticipated that there would be disputed evidence, particularly because the questions of validity raised by Mr Hathway would turn not only upon who were validly the directors of the companies, but also upon the identity of the people entitled to appoint and remove directors. That would raise considerations as to the entitlement of certain persons to become unitholders, bearing in mind that Mr Cavanagh claimed to have acquired the Quinn Family Trust and Ballardie interests and thereby to have achieved control over more than 50% of the issued units. Factual disputes would be raised, in counsel's view, by these matters. He submitted, plausibly, that there would be no point deciding a series of technical questions about the convening and conduct of various meetings without addressing the real issue of control of the business through unitholdings. 40 I am therefore confronted by quite different assessments, on the part of counsel for Messrs Hathway and Cavanagh, as to whether the hearing and determination of the separate questions proposed by Mr Hathway would require the Court to resolve substantial disputes as to the facts. Having examined, in particular, the affidavits by Mr Cavanagh, Mr Hathway and Mr Ballardie going to questions of validity of the process by which Mr Hathway and Mr Ballardie were excluded from control, I have formed the view that the assessment by counsel for Mr Cavanagh is more likely to be accurate than the more optimistic assessment by counsel for Mr Hathway. But I probably do not need to go so far. At the very least, I cannot be confident that the hearing and determination of the separate questions proposed by Mr Hathway would proceed wholly or largely on the basis of uncontested facts. That means that there would be a real prospect of the Part 31 hearing lasting for much more than two hours. It also means that the Part 31 procedure, which is unsuitable for the determination of wide-ranging and contested factual matters, is not a suitable process here. 41 My second ground for declining the application for orders under Part 31 is that a separate determination of the questions proposed by Mr Hathway will not lead to finalisation of the proceedings, and there is a real prospect that it will not achieve any other real benefit. This is not the kind of case envisaged by Rolfe J's observations, where it is accepted by the parties that determination of the separate questions will bring the whole dispute to an end. If Mr Hathway were to be unsuccessful with respect to the separate questions, Mr Cavanagh's proceedings for the winding up of the companies on the basis of allegations of misfeasance would remain to be determined. If Mr Hathway were to succeed with respect to the separate questions, there would still be a contested issue to be determined, namely whether the Court should remove Mr Vouris and return the business and the companies to the Hathway interests. Counsel for Mr Cavanagh made plain that his client would resist any such order, on the grounds that Mr Hathway and Mr Ballardie should not be entrusted with management of the companies and the business when there are serious allegations of misfeasance against them; and for the same reason, they should not be trusted to manage the business consistently with any undertakings they might give to the Court. 42 I have not decided that Mr Hathway and Mr Ballardie are unworthy of the Court's trust. What is clear, however, is that there is a strong prospect of further substantial contention as to whether Mr Hathway and Mr Ballardie should be put back in control of the business and the companies, even if they win on the separate questions. 43 I have therefore decided not to make orders for the determination of separate questions, as sought by Mr Hathway. That being so, the only way that I could give Mr Hathway the opportunity to have the questions of validity resolved would be to make orders for the expedited determination of proceeding No 3140 of 2002. It seems to me likely that the final hearing of that proceeding would be a hearing for several days. During the course of argument an estimate of three days was put forward. In my opinion the final hearing would be at least as long as that. Experience suggests that the case would not be ready for hearing before the Court's summer vacation, which begins on 21 December 2002. In all probability, the hearing would not take place any earlier than February 2003, and it could be considerably later depending upon the availability of judges in the new year. In the meantime, according to the evidence of Mr Vouris, which I accept, the cash reserves of the business would continue to be run down and the likelihood of it becoming insolvent (if it is not already insolvent) would be very substantially increased. There would be a real risk that, if Mr Hathway were unsuccessful in the final hearing, there would be no business of any value left to be sold after the case was finally determined. 44 The exigencies of the situation require, therefore, that I should opt for the course of authorising the provisional liquidator to sell the business, rather than the course advocated by Mr Hathway. There is a risk that this outcome may prove to be less fair to him than immediate determination of his claims about the validity of the process, assuming that his claims were to be successful and he were to defeat the allegations of misfeasance. But I have to balance that risk of unfairness against the unfairness that would be produced if I were to allow the determination of his claims to take its course, when the evidence persuades me that to do so will in all probability be to destroy whatever value is left in the business. It is better to realise such value as there is in the business now, and leave the parties to argue over money and compensation under a more leisurely timetable. 45 For these reasons, I made orders earlier today conferring on Mr Vouris as provisional liquidator of the companies and as receiver and manager of the Trust, the power to sell the business by tender. Evidence was given on behalf of Mr Vouris as to the intended sale process. Nothing that was proposed seemed to me to be inappropriate, although there will be many other decisions to make in the implementation. The tender process will close on 17 December 2002. The matter will come back to the Court for mention at 9:30 am on 19 December 2002. Mr Vouris will not make any binding or operative decision to sell, that would take effect before the matter comes back before the Court. There will be liberty to apply to me on 12 hours notice, should any difficulty arise during the sale process. **********

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Hathway v Cavanagh

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