KEITH WILLIAM SKINNER v JEOGLA PTY LTD & ORS

LOWER COURT JURISDICTION : Supreme Court - Equity Division LOWER COURT ED 50219/98 FILE NUMBER(S) : LOWER COURT Einstein J JUDICIAL OFFICER :

COUNSEL : B Coles QC / R Webb (Appellant) D Officer QC / J Stephenson (Second and Third Respondents) SOLICITORS : (D R Hilliard) Tress Cocks & Maddox (Appellant) Pro bono (Second and Third Respondents) CATCHWORDS : CORPORATIONS LAW - company in liquidation - appeal by receiver - leave to proceed refused - Corporations Law s471B, s420A - Supreme Court Act 1970, s101(2)(c) Corporations Law Companies Act 1862 (UK) LEGISLATION CITED : Companies Act 1955 (NZ) Receiverships Act 1993 (NZ) Companies Code 1981 Supreme Court Act 1970 Acton Engineering Pty Ltd v Campbell (1991) 31 FCR 1 Australian Securities Commission v Marlborough Gold Mines Limited (1993) 177 CLR 485 BPM Pty Ltd v HPM Pty Ltd (1996) 14 ACLC 857 Humber & Co. v John Griffiths Cycle Company (1901) 85 LT 141 CASES CITED: In re International Pulp and Paper Company (1876) 3 Ch D 594 Pasdale Pty Ltd v Concrete Constructions (1995) 59 FCR 446 Simoon Pty Ltd v Renbay Systems Pty Ltd (1995) 13 ACLC 1,792 Spencer v The Commonwealth (1907) 5 CLR 418 Vagrand Pty Ltd (In liquidation) v Fielding (1993) 41 FCR 550 DECISION : Leave to proceed with the appeal refused; Proceedings dismissed; The Appellant to pay the Respondents' costs incurred after 31 October 2000.

THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

CA 40517/99 ED 50219/98 SPIGELMAN CJ POWELL JA IPP AJA

This was an appeal from a judgment of Einstein J. His Honour found that the Appellant receiver had failed to take all reasonable care to sell the Respondent mortgagor's property for not less than its market value. A breach of s420A(1)(a) of the Corporations Law was established. The receiver had been appointed by the mortgagee bank which was a party to the proceedings at first instance, but not on appeal. Einstein J made orders in the form of short minutes agreed by the parties which adjusted the accounts between the bank and the receiver and ordered the receiver to pay the costs of both defendants in the proceedings at first instance. There was no other order against the receiver. Subsequent to the proceedings at first instance, and before the appeal was heard, the Court made a winding up order against the corporate Respondents. The Appellant conceded that leave to proceed with the appeal under s471B of the Corporations Law was necessary and sought that leave. The Appellant also sought leave, if such leave was necessary, under s101(2)(c) of the Supreme Court Act 1970.

Held Section 471B Corporations Law per Spigelman CJ, Powell JA and Ipp AJA agreeing 1 It was reasonably arguable that the construction of s420A of the Corporations Law adopted by Einstein J was in error. Vagrand Pty Ltd (In liquidation) v Fielding (1993) 41 FCR 550 referred to. Leave to proceed with the appeal pursuant to s471B should be refused by reason, particularly, by reason of the additional costs that would be incurred by adjourning the proceedings to join the bank and because a successful appeal would require that the proceedings be remitted for further consideration.

per Powell JA, Spigelman CJ and Ipp AJA not deciding 2 It was doubtful whether leave was required under s471B. Humber & Co. v John Griffiths Cycle Company (1901) 85 LT 141 and BPM Pty Ltd v HPM Pty Ltd (1996) 14 ACLC 857 referred to.

Section 101 Supreme Court Act 1970 per Powell JA, Spigelman CJ and Ipp AJA not deciding 3 Leave was required under s101(2)(c) of the Supreme Court Act and should be refused.

Orders 1 Leave to proceed with the appeal refused. 2 Proceedings dismissed. 3 The Appellant to pay the Respondents' costs incurred after 31 October 2000. THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

CA 40517/99 ED 50219/98 SPIGELMAN CJ POWELL JA IPP AJA

JUDGMENT 1 SPIGELMAN CJ: This is an appeal from the judgment of Justice Einstein in the Commercial List of the Equity Division given on 11 June 1999. In his reasons, his Honour left open the form of the orders he should make and invited the parties to bring in Short Minutes of Order and, if appropriate, to address further submissions on certain matters, including the form of the orders and the appropriate order as to costs. The parties agreed on a form of orders, which his Honour made on 16 July 1999. 2 The Appellant was the Second Defendant in the proceedings before Einstein J. The First Defendant was the Australia and New Zealand Banking Group Limited ("the bank"). The bank was the mortgagee under certain registered mortgages over cattle and land on which cattle operations were conducted. Defaults under the bank securities led the bank to appoint the Appellant as receiver and manager of all of the assets and undertakings of the corporate Plaintiffs, including properties and cattle. There were two stations known as Hernani and Jeogla, the latter consisting of two properties conducted as a single enterprise. 3 At first instance, the Plaintiffs challenged the receiver's conduct in selling the property known as Hernani and the cattle thereon, as well as selling the two properties comprising the Jeogla Station and the cattle thereon. During the course of the trial before Einstein J, the claim with respect to the Hernani property was abandoned. His Honour's judgment deals separately with the Hernani cattle, the Jeogla property and the Jeogla cattle. 4 The reasoning of Einstein J turned on the application of s420A(1) of the Corporations Law which provides: "420A(1) In exercising a power of sale in respect of a property of a corporation, a controller must take all reasonable care to sell the property for: (a) if, when it is sold, it has a market value - not less than that market value; or (b) otherwise - the best price that is reasonably obtainable, having regard to the circumstances existing when the property is sold." 5 The only "controller", within the terms of this section, was the Appellant in his capacity as receiver. No doubt as a practical matter, possibly by way of the usual kind of indemnity which a mortgagee gives to a receiver, the commercial consequences of a default on the part of the receiver would rebound to the disadvantage of the bank. Nevertheless, in law the statutory duty with which his Honour was concerned in his judgment was a duty imposed upon the receiver. None of the contractual arrangements and dealings between the bank and the receiver were before the Court. 6 Before his Honour, it was common ground that s420A was an appropriate basis for the Plaintiffs' claim for an award of damages. In written submissions filed in this Court, the Appellant indicated a wish to agitate, for the first time, an issue as to whether or not s420A could lead to an award for damages. No doubt, before his Honour, the parties had in mind the provisions of s1324(10) of the Corporations Law. It is not, however, necessary to reach a concluded opinion on the substance of the issue, or on the ability of the Appellant to raise the issue for the first time on appeal. 7 Einstein J found that the Jeogla property had not been sold in contravention of the duty imposed by s420A. However, with respect to both sets of cattle, his Honour found a breach of that duty. In each case, his Honour held that the applicable provision was s420A(1)(a), on the basis that the Jeogla property and the cattle had "a market value" and, in the case of the two groups of cattle, that the receiver had failed to take reasonable care to sell the cattle for "not less than that market value". His Honour did not consider the situation if s420A(1)(b) applied, ie his Honour did not determine whether or not the receiver failed to take reasonable care to sell the cattle for "the best price that is reasonably obtainable, having regard to the circumstances existing" when the cattle was sold. On the construction of s420A adopted by his Honour, it was not necessary to determine this issue. 8 The Respondents to the appeal, are Mr Richard Wright and his wife, Mrs Barbara Wright, together with two companies, Jeogla Pty Limited and Bald Hills Pty Limited. The two corporate Plaintiffs/Respondents owned the two properties which together comprised Jeogla Station. Jeogla Pty Limited conducted the cattle operations on Jeogla Station. At the trial, other corporations associated with Mr and Mrs Wright were Plaintiffs. They conducted operations on other properties. 9 The judgment appealed was concerned with property, with which these two corporate Plaintiffs/Respondents were associated, either in their own right or as trustee for the Wright Family Trust. Mr Wright was a director of the companies. He and Mrs Wright were beneficiaries of the Trust. It is not, however, entirely clear why they were joined as Plaintiffs. Counsel appearing for the Appellant acknowledged in his submissions that there was no point in proceeding with this appeal against the individual Respondents alone. Such relief as the Appellant could and did seek was available only against the corporate Respondents. 10 On 31 October 2000, after the institution of these proceedings, the Court made a winding up order against the Respondent Jeogla Pty Limited. Furthermore, on a date not shown on the materials before the Court, it appears from the submissions of the Appellant, that Bald Hills Pty Limited was also ordered to be wound up. 11 When the hearing of the appeal commenced, the Appellant made an application to the Court for leave to proceed against the companies in liquidation pursuant to the provisions of s471B of the Corporations Law which provides: "471B While a company is being wound up in insolvency or by the Court, … a person cannot begin or proceed with: (a) a proceeding in a court against the company or in relation to the property of the company; … except with the leave of the Court and in accordance with such terms (if any) as the Court imposes." 12 The Appellant accepted that the conduct of an appeal fell within the meaning of the words "proceed with a proceeding", within the meaning of this section. 13 The Appellant did not rely on the case law which suggests that there are circumstances when an appeal against a decision in favour of a company in liquidation may proceed without leave pursuant to s471B. (See Humber & Co. v John Griffiths Cycle Company (1901) 85 LT 141; BPM Pty Ltd v HPM Pty Ltd (1996) 14 ACLC 857). 14 In Humber a preliminary objection to the appeal was taken on the basis of s87 of the Companies Act 1862 (UK) which provided that "no suit action or proceedings shall be proceeded with or commenced against the company except with the leave of the Court …". This formulation was adopted in Australia (see s371(2) of the Companies Code 1981 and s471(2) of the Corporations Law 1991) until the 1992 amendments to the Corporations Law inserted s471B which extended the scope of the protection by the addition of the words "or in relation to property of the company" and "enforcement process in relation to such property".

15 It appears from the sole report of the case that three of the four law lords allowed the appeal without reference to the preliminary point. Only one, Lord Davey, gave reasons for rejecting the submission. His Lordship noted that the company was registered in Ireland, that the order was made by the High Court in Ireland and that the submission was that leave was required of the Court in Ireland. He concluded: "It was the respondents who themselves proceeded with the action after the winding up order, by prosecuting their appeal in the Court of Appeal, and when once an action by the company itself has been proceeded with, there is no necessity for the defendants in the action to obtain leave for any defensive proceeding on their part. The liquidator was either party or privy to the proceedings in the Court of Appeal, and the respondents, having been successful in that appeal, cannot now object to the appellants defending themselves against the consequences of the judgment by the ordinary means of an appeal to this House."

16 This reasoning is redolent of the language of waiver, rather than that of statutory interpretation. Nevertheless it states that where proceedings have been pursued by a company after it has been ordered to be wound up, other parties may take "defensive proceedings" without leave. It is not clear what is meant by "defensive proceedings", but it encompasses prosecuting an appeal. 17 There are two points of distinction in the present case. First, the company was not in liquidation at the time of the proceedings below. Secondly, and more significantly, it appears from the judgment of Lord Davey that the House of Lords could not grant leave to appeal. The submission made, which his Lordship appeared to accept, was that only the court which had made the winding up order could grant leave. (The practice under the 1862 Act is set out by Jessell MR in In re International Pulp and Paper Company (1876) 3 Ch D 594 at 598-9). Where there are such jurisdictional limits on the statutory power, it is understandable that the word "proceedings" would be read down so as not to encompass an appeal. No such reason exists under the Corporations Law scheme in Australia. (See Acton Engineering Pty Ltd v Campbell (1991) 31 FCR 1). 18 In BPM the Full Court of the Supreme Court of Western Australia rejected a submission that leave was required to appeal a decision refusing to order security for costs against a plaintiff corporation that had gone into liquidation after the first instance decision. Anderson J, with whom Kennedy and Ipp JJ agreed, adopted the terminology of Lord Davey in Humber and described the application for security as a "defensive" measure. (See at 860). His Honour also characterised the application as procedural, when he said at 859: "In my opinion, an application for security for costs is not a proceeding against the company within the meaning of s471B. We were not referred to any authority directly in point but in my view the section is concerned with proceedings initiated against the company, not with procedural applications by defendants in an action initiated by the company. If it was intended that the section should operate to cut down the defensive procedural measures that would otherwise be available to a defendant in an action brought by the company, thereby reducing the defendant's normal rights in the litigation whilst leaving the company's rights intact, much clearer language would have been used in the legislation." 19 The significance of the procedural character of an application for security for costs was also emphasised in obiter remarks by Finn J in Pasdale Pty Ltd v Concrete Constructions (1995) 59 FCR 446 at 448, where his Honour was concerned with s440D(1), the equivalent provision with the respect to proceedings against companies in administration. (See also Simoon Pty Ltd v Renbay Systems Pty Ltd (1995) 13 ACLC 1,792 at 1,794 per Santow J). 20 Both Humber and BPM are distinguishable from the instant case. Nevertheless, Humber and arguably BPM by its acceptance of the reasoning in Humber, may stand for a more general proposition. It is sometimes referred to as authority for the proposition that lodging an appeal does not require leave. (See Keay McPherson: The Law of Company Liquidation (4th ed pp246, 249). This issue was not raised in argument before the Court. By reason of the Appellant accepting that he needs leave, it is not necessary to express a final view on the issue. 21 The Court raised with counsel for the Appellant the prospect that the Appellant may also require leave pursuant to s101(2) of the Supreme Court Act 1970, by reason of the form of the orders which were actually made by Einstein J and which I will hereafter set out. Counsel sought leave under that sub-section, if the Appellant needed leave, which counsel did not concede. That sub-section relevantly provides: "101(2) An appeal shall not lie to the Court of Appeal except by leave of the Court of Appeal, from: … (c) a judgment given or order made in proceedings in the Court … as to costs only which are in the discretion of the Court." 22 Although his Honour made findings on the basis of s420A of the Corporations Law against the Appellant in his capacity as receiver, no order in fact was made against the receiver, other than an order for costs. 23 Einstein J concluded his reasons with the following: "481 The plaintiffs pursued both the Bank and the receiver in the proceedings. No separate submissions were advanced with respect to the question of the Bank's liability as opposed to that of the receiver. It seems to me appropriate to allow both parties with the benefit of these reasons, to address such submissions as they may seek to address on the question of whether judgment is to be entered only against the receiver or ought extend to include the Bank and if so, as to the precise suggested basis for the latter course. As necessary, a supplementary judgment may require to be delivered dealing with questions relating to the Bank. 482 The proceedings will be stood over to permit the parties to bring in Short Minutes of Order and to address further submissions on the matters reserved for such submissions and in relation to costs. …" 24 Nothing in the materials before the Court suggests that any further submissions were made to his Honour. It appears that the parties agreed between themselves upon the practical commercial implications of what his Honour had held and formulated orders in terms of those practical implications, rather than in terms of the pleadings and the judgment. 25 The submissions before his Honour, which his Honour accepted, included calculations as to the deficiency in the amounts received upon the sale of the two herds of cattle. The deficiency with respect to the cattle located at the Hernani Station was $160,201.00. The deficiency with respect to the cattle located at the Jeogla Station was $905,448.20. 26 The orders upon which the parties agreed, and which his Honour made on 16 July 1999, referred to the First Plaintiff, ie Jeogla Pty Limited, the First Defendant, ie the ANZ Bank and the Second Defendant, ie the Appellant receiver, were as follows: "1. The account between the First Plaintiff as Mortgagor and the First Defendant as Mortgagee be calculated upon the basis that the First Defendant be deemed to have received the following sums: (i) $160,201.00 on 16 June 1998; and (ii) $905,448.20 on 23 November 1998 2. The Second Defendant pay the Plaintiffs' costs of the proceedings pursued by the Plaintiffs' against both Defendants. 3. No Order as to the First Defendant's costs of the proceedings." 27 The form of the order was more in the nature of terms of settlement approved by the Court, rather than orders flowing from the causes of action actually pleaded and upon which judgment had been delivered. Specifically, there was no order in the form of a computation of damages against the Appellant, pursuant to the combined operation of s420A(2) and s1324(10), or any other basis for damages. The only order against the Appellant was the order as to costs. As counsel who appeared for the Appellant conceded during the course of argument on the leave application, the form of the order actually made would have been appropriate in an action for accounts on the basis of wilful neglect and default on the part of the mortgagee bank. These were not the proceedings before his Honour. 28 The order as to costs was that the receiver would pay the cost of the successful Plaintiffs, but no order for costs would be made against the bank. This also appears to be an outcome of some course of negotiation. There was no suggestion at any stage that his Honour exercised any discretion with respect to the determination of who should pay the costs. His Honour accepted the outcome of the negotiation and implemented it as requested by orders. 29 Pursuant to s101(1)(a) of the Supreme Court Act, an appeal to this Court lies from "a judgment or order" of the Court in a Division. The only order against the Appellant is an order as to costs. I am inclined to the view that this is a case of an appeal "as to costs only", within the meaning of s101(2)(c) of the Supreme Court Act. However, the case can be determined on the basis of the Appellant's concession that leave was required under s471B of the Corporations Law. 30 The evidence before the Court included a statement by the liquidator of Jeogla that he is without funds in his administration and accordingly does not intend to instruct a solicitor to appear in these proceedings. He also indicated that he did not object to the Appellant receiving leave pursuant to s471B to pursue the appeal. The letter by the solicitor for the Appellant to the liquidator enclosed a copy of the Appellant's submissions in these proceedings, which indicated that the Appellant sought to set aside Order 2 in the proceedings below, namely the costs order in favour of Jeogla. 31 The Court would not exercise the discretion in 471B of the Corporations Law in order to permit a person to proceed with proceedings which are not reasonably arguable. As the Full Court of the Federal Court said with respect to the predecessor of s471B in s371(2) of the Companies Code, the courts: "… have required to be affirmatively satisfied that the claim has a solid foundation and gives rise to a serious dispute" ( Vagrand Pty Ltd ( In liquidation ) v Fielding (1993) 41 FCR 550 at 556). 32 In the submissions filed for this appeal, the Appellant gave primary weight to a submission that the two paragraphs of s420A(1) are true alternatives, in the sense that para (b) articulates a duty which will generally be applicable and para (a) articulates an alternative duty which will have application in some circumstances. 33 I would not regard this construction as reasonably arguable. The use of the word "otherwise" as the introductory word of s420A(1)(b) indicates that the two paragraphs are intended to be both exhaustive and mutually exclusive. 34 The Appellant also argued, however, that the construction of "market value" means an "established" market price. His Honour appeared to apply a test of whether or not a market value was ascertainable, in accordance with the classic statement of valuation principle in Spencer v The Commonwealth (1907) 5 CLR 418. The effect of this construction is that para (b) will have very little, if any, work to do. It may be that it would be limited to the case of property which in fact has only a single buyer, for example, a right of way to land-locked real property. Nothing in the legislative history would suggest that para (a) was intended to have so dominant, if not exclusive, a role. 35 The origins of the sections are to be found in the Harmer Report which made recommendations for the introduction of a duty in terms only of what is now para (b) (Australian Law Reform Commission, General Insolvency Inquiry, Report No. 45 Vol. 1 1988 para 236, second bullet point). After a process of extensive consultation and deliberation, in March 1992 a Public Exposure Draft and Explanatory Paper was issued for draft legislation implementing, inter alia, the recommendations of the Harmer Report. That Bill and explanatory material maintained the position that the proposal was for the implementation only of what is now para (b). (See Corporate Law Reform Bill 1992 - Public Exposure Draft and Explanatory Paper, CCH, 1992 para 585). The explanatory material indicated that the formulation was based on a New Zealand provision (then s345 of the Companies Act 1955 (New Zealand) now s19 of the Receiverships Act 1993 (New Zealand)). After the circulation of the Exposure Draft, further consultations occurred (see Hansard, House of Representatives, 3 November 1992, p2402). The formulation of what is now (a) of sub-section 420A(1) was introduced in the final Bill, but with no explanation in the Second Reading Speech or the final Explanatory Memorandum, as to why the recommendation had been changed. 36 Einstein J does not indicate that his research has discovered any aspect of the consultation process which might have led to the addition of para (a). Nor was any such material or explanation proffered in the written submissions filed in these proceedings. In the events that have happened, the Court has not found it necessary to pursue the question. 37 Suffice it to say that this legislative history is not such as to give support to a construction of the sub-section that would give overwhelmingly dominant practical application to para (a). The central difficulty in the construction of s420A(1) is that it is premised on the basis that there is a category of property that is in fact "sold" but which has no "market value". This incongruity is enough to indicate that a very particular concept of "market value" is being employed. 38 The construction favoured by Einstein J was to the effect that the words "market value" meant that a value was, in effect, ascertainable. Two alternative constructions suggest themselves as reasonably arguable. First, that "market value" means a definite value. Secondly, that "market value" means a readily determinable value. 39 By "definite value" I mean a value that is clearly and obviously established as a market price. By way of example, a small parcel of shares in a company listed on the Stock Exchange has a definite market value which can be ascertained at any point of time simply by looking up a document. Shares in a company which is not listed do not have a definite value in this sense. 40 By the alternative of "determinable value" I mean to refer to property for which the number and nature of comparable sales, and the closeness of the degree of comparability, is such that at any point of time a market value can be readily determined. This is in contrast with property which has so unique a quality that comparisons cannot readily be made, or is so scarce that sales are rare. 41 It is not necessary to choose between these alternatives for present purposes. It is sufficient to indicate that the alternative constructions are reasonably arguable. Each is capable of having a relevant application in the present case. 42 The "definitive value" construction would mean that his Honour erred in assessing the case only on the basis of s420(1)(a). Similarly, a case could be made that the quality of the cattle on Jeogla Station, with over a century of careful genetic breeding, was sufficiently unique that they did not have a "market value" on a "determinable value" test. This question would of course require a factual inquiry that has not, in terms, been undertaken. 43 There are three particular elements relevant to the exercise of the discretion under s471B of the Corporations Law and which, in my opinion, lead to the conclusion that the discretion should be exercised against the Appellant. These elements are:

(i) The necessity to adjourn the appeal in order to join the ANZ Bank, either as an Appellant or as a Respondent.

(ii) The probability that if the Appellant succeeds it would lead to an order for a remittal to a judge at first instance to make the judgment for which paragraph 420A(1)(b) calls.

(iii) The fact that counsel for the Appellant could not point to any practical utility, if the appeal were to succeed, other than the reversal of the order for costs. 44 The ANZ Bank as mortgagee and Jeogla as mortgagor, were the only parties affected by Order 1. However, the ANZ Bank was not an Appellant. Nor did the Appellant receiver join it as a Respondent. It was not a party to the appeal at all. The Court could not allow an appeal which varied Order 1 in the absence of the bank. 45 Counsel for the Appellant invited the Court to vary Order 2, which did affect the Appellant, on the basis that Order 1 should not have been made, but without disturbing Order 1. Alternatively, he asked that leave be granted on terms that the bank can be joined. If the latter course had been accepted, then the Court would of necessity have adjourned the proceedings to see what, if any, submissions the bank wished to make, either with respect to itself supporting the appeal with respect to Order 1, or with respect to the Appellant's application to vacate Order 2. 46 In the absence of an order setting aside Order 1, the proceedings would be left in the position in which the Respondent company, now in liquidation, would have an order indicating success in the proceedings against the Bank, but without any attendant order as to costs in its favour. This is an undesirable conclusion. The Bank was, in my opinion, a necessary party to this appeal. 47 If the Appellant were to succeed in its contention that his Honour erred in applying s420A(1)(a), then the issue would become whether the receiver performed the duty which s420A(1)(b) imposes. There was a substantial body of evidence - deficiencies in the advertising process and assessment of the value of cattle recognised as a breeding herd on the basis of their market value for slaughter - that indicates that the duty was not performed. Einstein J did not address this matter in terms, although his findings strongly suggest that his Honour would have found a breach of (b) as well. 48 An issue such as what price would have been "reasonably obtainable" in the context of all of the "circumstances" would normally be remitted to a court of first instance, to review the whole of the evidence and to make the judgment for which the statutory formulation calls. It is not appropriate to make such a judgment for the first time on appeal. Although, if the appeal had proceeded, full submissions on this issue of remitter would no doubt have been made, the written submissions do not suggest any real possibility that this Court would be prepared to determine the issue and not remit. Furthermore, nothing in the reasons of Einstein J suggests that the Appellant would have any reasonable prospects of success upon remitter. 49 The Court was informed that the liquidator of Jeogla, a beneficiary of the costs order, had no funds to prosecute this appeal. There is no reason to believe that the position would be any different on remitter. It is possible that the Bank may be prepared to fund such proceedings, if the position is as appears on the face of the orders, i.e. that it has avoided any liability for the costs. However, the most probable prospect is that on remitter there will be no further hearing and the issue will be determined by default. 50 The Court was not provided with any detailed information as to the degree of the bank's shortfall on its securities. The Court was informed that the bank was pursuing Mr and Mrs Wright and had issued bankruptcy notices against them. Presumably, there was some form of guarantee of the companies' indebtedness or some other basis upon which the personal Respondents were indebted to the bank. Nothing in the materials before the Court suggested that there would be any practical consequences from setting aside the victory in the sum of something in the excess of $1 million which the Plaintiffs, at first instance, had obtained by reason of his Honour's orders. 51 Indeed, counsel for the Appellant expressly accepted the proposition that he could not point to any practical result in terms of the payment of money, by anybody. There was no evidence before the Court suggesting that the bank would receive any more if the appeal were allowed. Counsel identified the only practical consequence to be the costs order against the Appellant. Reliance was also placed on the wish of the Appellant to remove an adverse finding with respect to the competence of his conduct. 52 In all of the circumstances - particularly the additional costs which will be incurred by the adjournment to join the Bank and upon any remitter - the Appellant's interest in setting aside the costs order is not such as to justify leave to proceed. 53 The orders of the Court I propose are:

1 Leave to proceed with the appeal is refused. 2 Proceedings dismissed. 3 The Appellant to pay the Respondents' costs incurred after 31 October 2000. 54 POWELL JA: I have read in draft the Judgment which has been prepared by Spigelman CJ. Although, in the absence of any, let alone any detailed, argument on the matter, it is unnecessary to express a concluded view on the question whether, in a case such as this, the provisions of s.471B of the Corporations Law require leave to be given before an appeal might proceed, the legislative and curial history of provisions such as s.471B incline me to the view that, in a case such as this, no leave is required. Further, this being a case involving uniform national legislation, it is highly desirable that there be conformity of decision throughout Australia (Australian Securities Commission v. Marlborough Gold Mines Limited (1993) 177 CLR 485), it following that, unless convinced - as I am not - that the decision of the Full Court of the Supreme Court of Western Australia in BPM Pty. Ltd. v. HPM Pty. Ltd is plainly wrong, the object of uniformity would indicate that this Court should conform to the interpretation of s.471B by the Full Court of the Supreme Court of Western Australia. 55 However, as the Appellant has sought leave to proceed with the appeal, I would, for the reasons given by the Chief Justice, refuse that leave. 56 Even if the correct view be that the provisions of s.471B do not require leave to proceed with the appeal, leave to appeal would, in my opinion, still be required by the provisions of s.101(2)(c) of the Supreme Court Act 1970. Order 1 made by Einstein J did not deprive the Appellant of any right, or impose any duty upon him; that order affected only the rights and obligations inter se of the Respondent Jeogla Pty. Limited and the Bank. The Appellant thus had no locus whatsoever to challenge that order, which order, together with Order 2 was made with the agreement of the legal advisers who appeared for both the Bank and the Appellant. The only order which the Appellant had locus to challenge was Order 2 and, given that that order, as was the case with Order 1, was made with the agreement of the legal advisers who acted for both Bank and the Appellant, I would refuse leave to appeal. 57 IPP AJA: Section 471B of the Corporations Law provides: "471B. While a company is being wound up in insolvency or by the Court, …. a person cannot begin or proceed with: (a) a proceeding in a Court against the company or in relation to the property of the company;

…. except with leave with of the Court and in accordance with such terms (if any) as the Court imposes". 58 Counsel for the appellant accepted that, in order to bring the appeal, the appellant required the leave of the Court in terms of the section. He also accepted that the appeal was a "proceeding" within the meaning of s 471B(a). He said "we are proceeding with a proceeding in Court against the company in liquidation". Counsel for the respondent, in turn, argued the matter on the basis that leave under s 471B was required. In substance, there was no further discussion about the question of leave. In the circumstances, it being common cause, in effect, that leave under the section was required, the Court can properly deal with the matter on the basis of the concession made on the appellant's part and in my view, there having been no argument on the issue, should do so. 59 I would merely note that it is readily arguable that the concession was correctly made on the basis that the present case is distinguishable from BPM Pty Ltd v HPM Pty Ltd. There are a number of possible grounds of distinction. I shall mention two. Firstly, it is readily arguable that the appellant's appeal is a "proceeding" within the meaning of s 471B(a), whereas the application for security for costs considered in BPM Pty Ltd v HPM Pty Ltd was not. Secondly, the application for security for costs in BPM Pty Ltd v HPM Pty Ltd was regarded as a "defensive proceeding" and it is open to argument that the present appeal cannot be so categorised. 60 These matters were not raised by counsel before us and, in mentioning the possible arguments that arise, I express no opinion as to their respective merits. I draw attention to them merely to explain why I consider that it is preferable not to express any concluded view as to whether, on a proper construction of s 471B, leave was required in the present case. As mentioned, I consider that - by reason of the concession made by counsel - the Court should proceed on the basis that it was necessary for the appellant to obtain leave under the section. 61 In my opinion, leave should be refused for the reasons expressed by Spigelman CJ.

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