In the matter of Norman Nominees Pty Ltd (in liq) & Ors v Zervos Pty Ltd & Ors [2011] QSC 320

Amendment out of time to add new cause of action - Commonwealth statutory cause of action - Commonwealth statutory limitation time - s 588FF(5) Corporations Act 2001 (Cth) - interaction of State procedural rules and Commonwealth statutory limitation time - construction of "a relevant period of limitation" in r 376 - whether s 81 Supreme Court Act 1991 (Qld) is a separate source of power to amend in respect of Commonwealth causes of action - discretion not to allow amendments which would be futile - substantially the same facts

Acts Interpretation Act 1954 (Qld), s 32A, s 32AA

Corporations Act 2001 (Cth), Part 5.7B, s 588 FA, s 588FF, s 588FE

Judiciary Act 1903 (Cth), s 79

Limitation of Actions Act 1974 (Qld)

Supreme Court of Queensland Act 1991 (Qld), s 81

Uniform Civil Procedure Rules (1999) (Qld), r 376

Capital Finance Australia Ltd v Tolcher [2007] FCAFC 185; (2007) 164 FCR 83

Davies v Chicago Boot Co Pty Ltd (No 2) [2007] SASC 12

Draney v Barry [2002] 1 Qd R 145

Gordon v Tolcher [2006] HCA 62

Greig v Stramit Corporation Pty Ltd & Anor [2003] QCA 298

Mann v Sangria Pty Ltd [2001] NSWSC 172

Mar Mina (SA) Pty Ltd v City of Marion [2008] SASC 120

Redland Shire Council v Stradbroke Rutile Pty Ltd (1973-1974) 133 CLR 641, 665

Rodgers v Commissioner of Taxation [1998] FCA 1296; (1998) 88 FCR 61

Trustee of the Property of Geoffrey Mahony and Deborah Mahony & Ors v McElroy & Ors [2003] QCA 208

Thomas v State of Queensland [2001] QCA 336

Wolfe v State of Queensland [2008] QCA 113; [2009] 1 Qd R 97

JW Peden for the first, second and third defendants

PL O'Shea SC with AS Walls for the fourth and fifth defendants

Nicholsons for the first, second and third defendants

[1] DALTON J: This is an application for leave to amend the statement of claim to add claims that the fourth and fifth defendants repay amounts of money to the second plaintiff allegedly received pursuant to transactions which are either uncommercial transactions or unfair preferences within the meaning of Part 5.7B of the Corporations Act 2001 (Cth). The claims sought to be added are pursuant to s 588FF(1) of the Corporations Act. Section 588FF(3) of the Corporations Act provides:

"(3) An application under subsection (1) may only be made:

(a) during the period beginning on the relation-back day and ending:

[2] The relation-back day is agreed to be 17 August 2007. The amendments were first sought to be raised (in a statement of claim filed without leave) on 8 December 2010, outside the period fixed by s 588FF(3)(a)(i).

[3] It is necessary to outline some of the detail of the plaintiffs' case showing how the contentious amendments relate to the existing pleading. The outline is only of those matters necessary for this purpose; it is not a complete outline of the plaintiffs' case in the proceeding. The amendments relate to the disposition of monies after two sales of land: land at Rockhampton and land at Park Ridge.

[4] The plaintiffs plead as follows. There were three loans made by the seventh defendant, John Harris Securities Pty Ltd. Mr Geaney, the fourth defendant, was involved in all borrowings.

(a) The Zervos loan. The first loan was made on 2 December 2004 to the first defendant, Zervos Pty Ltd, in an amount of $940,000. Zervos gave a mortgage. Geaney controlled the fifth defendant, Lake Morpeth Pty Ltd. Through Lake Morpeth, Geaney was a 50 per cent shareholder of Zervos. Geaney was a director of Zervos. Geaney and Lake Morpeth guaranteed repayment of this loan.

(b) The Park Ridge loan. The second loan was made on 1 February 2005. Together, Norman Nominees Pty Ltd, the second plaintiff, and Harris Securities bought two lots of land (Lots 4 and 11) at Park Ridge. Norman borrowed the purchase price of its share - $1.44 million - from Harris Securities. Norman gave Harris Securities a mortgage to secure repayment. Geaney guaranteed repayment. Geaney was the sole director and shareholder of Norman.

(c) The Rockhampton loan. The third loan was made on 31 March 2005. Norman and a company, Rosedayl Pty Ltd, borrowed $3.6 million from Harris Securities, repayable on 30 March 2007. Geaney and Lake Morpeth guaranteed repayment of the loan. Land at Rockhampton, owned by Norman, was given as mortgage security.

[5] In April 2006 Norman and Rosedayl varied the Rockhampton loan agreement so that the loan became repayable immediately. It was not repaid. Harris Securities sold the Rockhampton land as mortgagee and on 31 October 2006 received an amount of $7.7 million for it. From that amount Harris Securities retained: (a) an amount of $1.119 million as if the Zervos loan had been repaid; (b) an amount of $1.6 million as if the Park Ridge loan had been repaid, and $4.044 million as repayment of the Rockhampton loan.

[6] Arising out of these facts the plaintiffs claim as follows: 1) Harris Securities failed to account to Norman in respect of the amount of $1.119 million; 2) the payment of $1.119 million to Harris Securities on account of the Zervos loan entitled Norman to be subrogated to the rights of Harris Securities with respect to the Zervos mortgage; 3) the retention of $1.119 million by Harris Securities should be characterised as a loan from Norman to Zervos which Zervos has failed to repay to Norman; 4) the retention of $1.119 million by Harris Securities as repayment of the Zervos loan is voidable as an uncommercial transaction of Norman within the meaning of Part 5.7B of the Corporations Act, on the basis that the payment benefited Zervos to the detriment of Norman so that the transaction was unreasonable; was made at a time when Norman was insolvent, and within two years of the relation-back day.

[7] The first amendment sought to be made is to add an allegation that, from the proceeds of sale of the Rockhampton land, an amount of $57,273 was paid to Lake Morpeth at the direction of Geaney in circumstances where Norman was not indebted to Lake Morpeth and Norman received no consideration for the payment. The claim sought to be added is that this payment to Lake Morpeth was an uncommercial transaction of Norman within the meaning of Part 5.7B of the Corporations Act which was to the detriment of Norman and unreasonable. It is said to have been made at a time when Norman was insolvent and within two years of the relation-back day, so that it is voidable within s 588FE of the Corporations Act. Alternatively, the payment is said to amount to an unfair preference on the basis that it is a transaction of Norman by which Lake Morpeth received a greater benefit than it would upon proof in a winding up, at a time when Norman was insolvent and within four years of the relation-back day. Again, the consequence is claimed to be that the transaction is voidable within s 588FE of the Corporations Act.

[8] It is pleaded that on 31 October 2006 Norman sold its interest in Lots 4 and 11 at Park Ridge to Zervos for an amount of $1.323 million. On that date, Norman, as vendor, directed Zervos to pay Lake Morpeth an amount of $462,726 from the purchase price, as well as an amount of $600,000 to a law firm, in circumstances where neither Lake Morpeth nor the law firm was a creditor of Norman, and where neither provided consideration for the payment received.

[9] It has always been pleaded that the payment of $462,726 was an uncommercial transaction because Norman derived no benefit, and suffered a detriment from it, such that it was unreasonable, and because Norman was insolvent when it was made, on a date within a period two years prior to the relation-back day. It is now sought to add a pleading that, in the alternative, this payment to Lake Morpeth was an unfair preference, on the basis that it was a transaction from which Lake Morpeth benefited to a greater extent than if it were to prove in the winding up; was made when Norman was insolvent, and within a four year period prior to the relation-back day.

[10] Further, it is now sought to be pleaded that in April 2007 a separate direction was given by Norman to Zervos to pay Geaney $50,000 from the monies due from Zervos to Norman on behalf of the sale of Norman's share of the Park Ridge land, in circumstances where Norman was not indebted to Geaney and Geaney gave no consideration for the payment. The payment is said to be an uncommercial transaction of Norman within the meaning of Part 5.7B of the Corporations Act because there was no benefit to Norman from the payment, but a detriment, so that the payment was unreasonable; made at a time when Norman was insolvent, and within a period two years prior to the relation-back day. Alternatively this payment is said to be an unfair preference because it is a transaction of Norman within the meaning of Part 5.7B of the Corporations Act from which Geaney received more than he would had he proved in Norman's winding up; was made at a time when Norman was insolvent, and within the period of six months prior to the relation-back day.

[11] Each of the three proposed amendments to the statement of claim is to plead facts in support of an application by the liquidator for an order pursuant to s 588FF. Each pleads a separate statutory cause of action which has not been brought within the limitation period prescribed by s 588FF(3)(a)(i).[1] It has been accepted that after the institution of a Commonwealth proceeding in a State court, its procedural regulation is governed by State law which is picked up by s 79 of the Judiciary Act 1902 (Cth).[2] Further, it is accepted that State law as to amendment to add a cause of action after the expiry of a limitation period imposed by Federal legislation is picked up by s 79 of the Judiciary Act.[3]

[12] The relevant UCPR rule is r 376 which provides:

(1) This rule applies in relation to an application, in a proceeding, for leave to make an amendment mentioned in this rule if a relevant period of limitation, current at the date the proceeding was started, has ended.

(4) The court may give leave to make an amendment to include a new cause of action only if -

(b) the new cause of action arises out of the same facts or substantially the same facts as a cause of action for which relief has already been claimed in the proceeding by the party applying for leave to make the amendment."

[13] The proposed amendment as to the payment of $57,273 can, at an elevated level of abstraction, be said to arise from the distribution of sale proceeds from the Rockhampton land, as do the failure to account claim, subrogation claim, failure to repay a loan claim, and uncommercial transaction claim in relation to the $1.119 million. However, in truth, the claim in relation to the amount of $57,273 is factually quite distinct from all of these claims. It is a claim in relation to the payment of a different amount of money than the claims in relation to the $1.119 million. It is a claim in relation to a payment to Lake Morpeth, which is not otherwise alleged to be a recipient of proceeds wrongfully paid from the Rockhampton land sale proceeds. It is alleged to have been made by a separate direction to any alleged direction or arrangement in relation to the amount of $1.119 million. It is not a cause of action which arises out of the same facts or substantially the same facts as any other cause of action already pleaded by the plaintiffs, within the meaning of the cases.[4]

[14] The same can be said for the proposed amendment in relation to the amount of $50,000 paid to Geaney in April 2007. Again, the only similarity with facts already pleaded is that the wrongful payment is alleged to have come from sale proceeds of Lots 4 and 11 at Park Ridge. The direction to pay the amount of $50,000 is alleged to have occurred at a time well removed from the alleged wrongful payments of $462,726 and $600,000. The payment is alleged to have been received by Geaney, who is not alleged to have received the other wrongful payments made from these sale proceeds. It is, in truth, a quite different transaction which is sought to be impugned, not one which arises out of the same facts or substantially the same facts as any cause of action pleaded within time.

Section 81 Supreme Court of Queensland Act 1991

[15] Because these two proposed causes of action do not arise from the same facts or substantially the same facts as one already pleaded, I am not empowered to give leave to make the amendments pursuant to r 376(4). The submission was made on behalf of the applicant liquidator that an alternative source of power was to be found in s 81 of the Supreme Court of Queensland Act 1991 (Qld) which provides:

(1) This section applies to an amendment of a claim, anything written on a claim, pleadings, an application or another document in a proceeding.

(2) The court may order an amendment to be made, or grant leave to a party to make an amendment, even though -

(a) the amendment will include or substitute a cause of action or add a new party; or

(b) the cause of action included or substituted arose after the proceeding was started; or

(c) a relevant period of limitation, current when the proceeding was started, has ended.

(3) Despite subsection (2), the rules of court may limit the circumstances in which amendments may be made.

(4) This section applies despite the Limitation of Actions Act 1974."

[16] Subsection (3) was inserted into s 81 as a result of the Court of Appeal decision in Draney v Barry. In that case it was held that s 81, prior to amendment, created an independent source of power to amend after expiry of a limitation period. It was not limited, as r 376(4) is limited, by a requirement that the new cause of action was to arise out of substantially the same facts as an existing cause of action. The addition of subsection (3) was designed to effect a position where r 376(4) was the only source of the Court's power to give leave to amend to add a new cause of action after the expiry of the limitation time.[5]

[17] The applicant's argument was based upon the words "a relevant period of limitation" in r 376(1). It was said that this phrase ought to be construed as having the same meaning as "limitation period" in the dictionary schedule to the rules. "Limitation period" is defined as meaning, "a limitation period under the Limitation of Actions Act 1974". If that were the meaning of the phrase in r 376(1), the rule would not apply to an application to amend to add a cause of action after the period of limitation fixed by s 588FF(3) of the Corporations Act had expired. Section 81, a wider power, would apply.

[18] There are different textual indications in r 376. The heading, which is to be read as part of the provision, uses the defined term from the dictionary schedule.[6] The words of r 376(1) do not use the term defined in the dictionary schedule, but a different, wider, phrase. Section 32 of the Acts Interpretation Act 1954 (Qld) provides, "If an Act defines a word or expression, other parts of speech and grammatical forms of the word or expression have corresponding meanings." Section 32 does not, in its terms, apply here where what is used is a similar, but different, phrase to the one defined. The predecessor of s 32 was discussed in Redland Shire Council v Stradbroke Rutile Pty Ltd.[7] Stephen J took the view that where the relevant section of the Acts Interpretation Act was inapplicable, the meaning of a defined word was not to be applied to words in some way related to the defined words, but not themselves defined. His view was followed in Mar Mina (SA) Pty Ltd v City of Marion.[8] However, in the Stradbroke Rutile case Menzies J took the opposite view of the predecessor to s 32 of the Acts Interpretation Act. I am inclined to the view expressed by Stephen J. I think it must be accepted that r 376(1) uses different, and wider, words to those in the dictionary schedule, and that these should prevail over those used in the heading which is, of course, only a short form indication as to the subject matter of the rule.

[19] The term, "a relevant period of limitation" is nowhere used in the UCPR except in r 376(1). In contrast the term "limitation period" is used in rr 24(6), 69(2), 74(5) and 387(3). Rules 24(6), 74(5) and 387(3) all deal with the time from which an amendment takes effect once made in circumstances outside a time limit. Rule 69(2) on the other hand is, like r 376, concerned with the power of the Court to allow amendment out of time.

[20] Rule 69(1) gives the Court the power to include or substitute a person as a party. This power is qualified by r 69(2):

"However, the court must not include or substitute a party after the end of the limitation period unless one of the following applies -

[21] It seems to me that the argument the applicant wishes to run in this matter, as to the application of s 81 of the Supreme Court of Queensland Act 1991, would succeed if the rule concerned were r 69. The restriction contained in r 69(2) is expressly confined to matters where the Limitation of Actions Act applies. Thus, under r 69(1) and s 81 of the Supreme Court of Queensland Act 1991, a power to add or substitute a party exists which is not restricted by r 69(2) in cases where a limitation period imposed by a statute other than the Limitation of Actions Act applies. This is a strong argument in the applicant's favour because it is desirable that there is consistency between the operation of rules 69 and 376.

[22] On the other hand, looking to the purpose of r 376(4), it is sensible to accord a sufficiently wide interpretation to the phrase, "a relevant period of limitation" that it applies to limitation periods found in Commonwealth legislation, and indeed in Queensland legislation other than the Limitation of Actions Act. There is no reason why different principles ought to apply in relation to limitation periods found in legislation other than the Limitation of Actions Act. To the contrary, it is sensible to have a consistent approach to all amendments which seek to add causes outside a limitation period, whatever the statutory source of the limitation. In the end, this, together with the words actually used in r 376(4), persuade me that it applies to the current application.

[23] I add that the policy reasons behind the limitation at s 588FF(3) - minimising the period in which the liquidation of a company might disrupt a creditor's affairs[9] - would disincline me to allow the amendments proposed even if the matter were not governed by r 376(4), in circumstances where the amendments are made very late and are based on quite different facts from those already pleaded in the proceeding. Further, as discussed below, there is an additional reason - futility - not to grant leave to amend to add the claims that the amounts of $50,000 and $57,273 were unfair preferences.

[24] Many of the matters relied upon to show that the payment of $462,726 was an uncommercial transaction are the same as those which are relied upon to show that it was an unfair preference. The making of the payment; the date of its being made; the allegation that at the time it was made Norman was insolvent, and the factual matters going to show that the payment was a transaction within the meaning of Part 5.7B of the Corporations Act, are the same in each case. It is proposed to be pleaded in support of the unfair preference claim that Lake Morpeth was a related entity of Norman within the meaning of s 588FE(4) of the Corporations Act. This is not pleaded in relation to the uncommercial transaction case. However, no new facts are pleaded in support of this allegation and, given what is pleaded as to Geaney's directorship of Norman and his ability to control his wife as director of Lake Morpeth, it appears that no new facts are necessary to be pleaded in support of that allegation having regard to the definition of "related entity" and "director" in the Corporations Act.

[25] The only substantial difference between the pleading of uncommercial transaction and unfair preference in relation to this payment is that in relation to the uncommercial transaction allegations it is pleaded that:

"109. In the premises of the preceding 3 paragraphs and paragraphs 14 to 29B, 31 to 33, 34A, 38A to 39, 43, 45 to 54, 56 to 57, 59 to 65, 66A to 77, 78G to 78P and 111 herein it may be expected that a reasonable person in the circumstances of Norman would not have entered into the Lots 4 and 11 Lake Morpeth payment transaction."

[26] Whereas, in relation to the unfair preference allegations it is pleaded that:

"114C. As a result of the Lots 4 and 11 Lake Morpeth payment transaction, Lake Morpeth has received from Norman in respect of the amount owed to it by Norman immediately prior to the relevant transaction more than it would:

(a) have received from Norman if the Lots 4 and 11 Lake Morpeth payment transaction were set aside and it was to have proved in a winding up of Norman as at the date of the Lots 4 and 11 Lake Morpeth payment transaction;

(b) receive from Norman if the Lots 4 and 11 Lake Morpeth payment transaction were set aside and it was to prove in the winding up of Norman.

The plaintiffs are unable to provide further particulars pending disclosure."

[27] Two of the most salient facts pleaded in the paragraphs referenced in paragraph 109 of the statement of claim are those in paragraphs 72A and 74A: that at the time of the direction to pay $462,726 Norman was not indebted to Lake Morpeth, "in the amount paid or at all", and that Norman received no consideration for the payment. There are very few facts pleaded at paragraph 114C, however it is distinctly pleaded that the $462,726 payment was received by Norman, "in respect of the amount owed to it by Norman immediately prior to the relevant transaction." The most natural construction of this is that it pleads a fact which contradicts paragraphs 72A and 74A of the statement of claim without being truly in the alternative as required by r 154(1). A less natural construction is that the pleading is picking up the concept that Norman owed Lake Morpeth nothing at the time of the $462,726 payment. It is impossible to tell because the pleading makes such little reference to the material facts relied upon. At best for the liquidator, taking what I have called the less natural construction of the pleading, it could be said that the unfair preference claim arises from substantially the same facts as the uncommercial transaction claim. That is, it could be said that the unfair preference claim is simply a different legal characterisation of the same facts pleaded in support of causes of action pleaded within time. I would not be prepared to act on that basis in determining this application - the fact that the proposed claim arises from substantially the same facts as pleaded in support of other causes of action should be clearly apparent to me in the application and, as discussed, it is not.

[28] In any case, leave ought not to be given, for, pursuant to r 376(4)(a), discretionary matters as to the appropriateness of the amendment are to be considered. It was submitted on behalf of the fourth and fifth defendants that the amendments are sought to be made very late, four years after the liquidators were appointed. The pleading was rightly criticised as lacking particularity and doing little more than pleading legal conclusions, rather than factual constituents of causes of action. This was said to be particularly significant when there have been 12 days of public examination by the liquidator. In respect of both these criticisms, the plaintiffs say that the state of the second plaintiff's books left much to be desired, as has assistance rendered to the liquidator by the defendants.

[29] One of the criticisms made of the proposed pleading of the $462,726 payment as an unfair preference seems to me to be decisive. Section 588FA(1) of the Corporations Act provides that:

"A transaction is an unfair preference given by a company to a creditor of the company if, and only if:

(a) the company and the creditor are parties to the transaction (even if someone else is also a party); and

(b) the transaction results in the creditor receiving from the company, in respect of an unsecured debt that the company owes to the creditor, more than the creditor would receive from the company in respect of that debt if the transaction was set aside and a new creditor were to prove for the debt in a winding up of the company.

[30] The defendants say that there is no pleading of a debtor creditor relationship between Norman and Lake Morpeth, and that this is an essential element of the cause of action for an unfair preference having regard to the requirements of s 588FA(1). It seems to me that both these propositions are correct.[10] Here, to the contrary of the requirements of s 588FA(1), it is pleaded that Lake Morpeth gave no consideration for the payment and Norman was not indebted to Lake Morpeth in the amount of $462,726, or at all (see paragraphs 72A and 74A of the statement of claim). As noted, this is contradicted by the proposed plea at paragraph 114C which is unsupported by any material facts. It seems to me that on the basis of the facts pleaded by the plaintiffs, an unfair preference claim is not available to the liquidator in respect of this amount. The proposed pleading in terms of paragraph 114C (extracted above) is, as the defendants submit, a pleading in terms of legal concept rather than in respect of facts relied upon, and is unparticularised. It would be futile to give leave to plead a claim which, on the plaintiffs' case as pleaded, could not succeed; contradicts other pleas without being properly pleaded as an alternative, and is unparticularised to the extent this one is - see r 376(4)(a). I am not prepared to give leave to plead the proposed claim in relation to the amount of $462,726. I add that the same reasoning, based on similar, if not identical paragraphs in the pleading, applies in relation to the proposed claims that the payments of $50,000 and $57,273 were unfair preferences.[11]

[31] The plaintiffs have pleaded in accordance with the proposed amendments since December 2010 without leave. The appropriate order is that paragraphs 105A-105R, 114A-114I and 142-158 of the sixth further amended statement of claim be struck out.

[32] As it is unopposed, I give the plaintiffs leave to amend their originating application in terms of the amended document annexed to the amended application filed with leave on 8 August 2011 save that no leave is given to amend in terms of paragraphs 6A, 7 as to the words, "and in the alternative 114I", and 23B of that amended originating application. The costs of the amended application filed with leave on 8 August 2011 should follow the event so that the plaintiffs should pay the fourth and fifth defendants' costs of and incidental to that application on a standard basis to be agreed or assessed.

[33] Court document 92 is an amended application filed on behalf of the fourth and fifth defendants. It sought various paragraphs of the statement of claim be struck out pursuant to r 171 and declarations that leave was necessary in relation to the proposed amendments dealt with above. Before the hearing of this application the paragraphs which the fourth and fifth defendants sought to strike out were removed from the pleading, and it was conceded by the plaintiffs that leave was necessary for the amendments dealt with above. In the circumstances, there are no substantive orders to be made on the fourth and fifth defendants' application. As the fourth and fifth defendants have been substantially successful in the relief on that application they ought to have their costs of it. I order that the plaintiffs pay the costs of the fourth and fifth defendants of and incidental to the application which was originally court document 66 and is, in its amended form, court document 92.

[1] Cf Wolfe v State of Queensland [2008] QCA 113; [2009] 1 Qd R 97, [17].

[2] Davies v Chicago Boot Co Pty Ltd (No 2) [2007] SASC 12 following Gordon v Tolcher [2006] HCA 62. See also Greig v Stramit Corporation Pty Ltd [2003] QCA 298, [51], [75], [76], [83]. See also in the Federal Court Rodgers v Commissioner of Taxation [1998] FCA 1296; (1998) 88 FCR 61.

[4] Draney v Barry [2002] 1 Qd R 145; [57]; Thomas v State of Queensland [2001] QCA 336, [19]; Wolfe v State of Queensland, above, [1]-[18].

[5] Trustee of the Property of Geoffrey Mahony and Deborah Mahony & Ors v McElroy & Ors [2003] QCA 208 [14].

[6] By ss 8 and 14 of the Statutory Instruments Act 1992 (Qld), the Acts Interpretation Act 1954 (Qld) applies to the UCPR, with certain exceptions which are not relevant here. By s 14(2)(a) of the Acts Interpretation Act, the headings to each rule of the UCPR are part of the UCPR and by s 35C of that Act, the headings form part of the provision.

[7] (1973-1974) 133 CLR 637, 665.

[8] [2008] SASC 120, [22].

[9] Davies v Chicago Boot Co Pty Ltd (above) [48].

[10] Mann v Sangria Pty Ltd [2001] NSWSC 172 [29], [31]-[33]; Capital Finance Australia Ltd v Tolcher [2007] FCAFC 185; (2007) 164 FCR 83 [122].

[11] Paragraphs 66A and 66B are the equivalent pleas to paragraphs 72A and 74A in relation to the amount of $57,273 and paragraphs 72A and 74A apply to the amount of $50,000.