Lanepoint Enterprises Pty Ltd (Receivers and Managers Appointed) v Australian Securities and Investments Commission

Federal Court of Australia (Full Court)|2010-05-24|Before: Buchanan JJ

The appeal is allowed.
The orders of the primary judge made on 14 May 2009 are set aside.
The application made by the respondent for the winding-up of the appellant is stayed until further order.
There be liberty to the parties to apply to lift the stay on 7 days written notice.
The appellant file and serve its submissions regarding costs by 4:00 pm on 25 June 2010.
The respondent file and serve its submissions regarding costs by 4:00 pm on 23 July 2010.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website.

BETWEEN: LANEPOINT ENTERPRISES PTY LTD (ACN 110 693 251) (RECEIVERS AND MANAGERS APPOINTED)

AND: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

NORTH AND SIOPIS jj: 1 The appellant, Lanepoint Enterprises Pty Ltd (Lanepoint), carried on business as a property development company. The sole shareholder of Lanepoint is Bowesco Pty Ltd (Bowesco), which acts as trustee of the Dyson Family Trust. Both companies are associated companies within a group of companies known as the Westpoint Group of companies. Until his resignation, Mr Norman Carey was a director of each of those companies. Subsequently, Mr Carey's sister, Ms Karen Carey, became the sole director of each of Lanepoint and Bowesco. 2 In 2006, Lanepoint was engaged in carrying out a building and development project comprising the purchase and development of the Regency Motel site on Great Eastern Highway, Rivervale in Western Australia. The redevelopment project contemplated there being three stages. Stage 1A comprised the renovation and subdivision of the Regency Motel property into residential strata title units and sale of the units. Stage 1B comprised the development of an adjoining vacant block of land. Stage 2 was the subdivision and sale of lots comprising the adjoining land at 2, 4 and 6 Armadale Road, Rivervale, Western Australia. The redevelopment work for Stage 1A of the project was undertaken by Westpoint Constructions Pty Ltd, also a company within the Westpoint Group of companies. 3 In order to carry out the redevelopment project, Lanepoint borrowed money from Suncorp-Metway Limited (Suncorp) and Westpoint Management Ltd (Westpoint Management) as the responsible entity for the Westpoint Income Fund (WIF), a managed investment scheme. Each of these loans was secured by a charge over Lanepoint's assets. 4 Westpoint Management was also a company within the Westpoint Group of companies. As the responsible entity for WIF, it raised money from members of the public for the use in relation to projects undertaken by companies in the Westpoint Group of companies. The monies raised by Westpoint Management were loaned to other companies in the Westpoint Group which undertook the various projects. Another of the companies within the Westpoint Group, Westpoint Corporation Pty Ltd, acted as the "central treasury" for the companies within the Group. 5 On 25 October 2005 and 15 November 2005, the respondent, Australian Securities and Investments Commission (ASIC), issued interim stop orders precluding Westpoint Management, as the responsible entity for WIF, from carrying on further fundraising. On 9 February 2006, Mr Simon Read was appointed as a provisional liquidator to Westpoint Management, as the responsible entity for WIF. On 11 April 2006, Mr Read was appointed as a liquidator of that company. 6 By March 2006, the first stage of the Regency Motel redevelopment was almost complete. 7 On 3 March 2006, Suncorp appointed Mr Shaun Robert Fraser and Mr John Patrick Cronin as receivers and managers of Lanepoint pursuant to Suncorp's powers under its charge. 8 On 9 March 2006, Mr Simon Read as the then provisional liquidator of Westpoint Management, appointed Mr Brian Keith McMaster and Mr Martin Madden as receivers and managers of Lanepoint, pursuant to its charge over Lanepoint's property. 9 Following their appointment as receivers and managers of Lanepoint, Mr Fraser and Mr Cronin completed the development of Stage 1A of the project and completed sales of the strata units, comprising that stage of the project. 10 By an application made on 2 June 2006, ASIC applied to wind-up Lanepoint on the grounds of insolvency. 11 ASIC relied upon s 459P of the Corporations Act 2001 (Cth) for its standing to apply to wind-up Lanepoint on the grounds of insolvency. ASIC contended that by reason of the appointment of receivers and managers to Lanepoint, there was, pursuant to s 459C of the Corporations Act, a presumption of insolvency on the part of Lanepoint. 12 Shortly thereafter ASIC also applied to wind-up Bowesco on the grounds of insolvency. The two winding-up applications were heard at the same time. 13 In support of its applications, ASIC relied upon the affidavit evidence of a large number of witnesses. These affidavits were voluminous and the evidence was directed to the winding-up applications made in respect of both companies. 14 Lanepoint and Bowesco also relied upon the affidavits of a number of witnesses. These affidavits also dealt with the affairs of both Lanepoint and Bowesco. A number of the affidavits sworn by Ms Karen Carey, the sole director of Lanepoint and Bowesco at the time of the winding-up applications, were read at the hearing. Ms Carey produced the books of account of Lanepoint and Bowesco. 15 The hearing of the two winding-up applications lasted three days. At the hearing Mr Norman Carey, Ms Karen Carey and Mr Gregory Nairn, a former senior executive of Lanepoint, gave evidence and were cross‑examined. 16 The application for the winding-up of Bowesco was settled before judgment was delivered. 17 At the hearing before the primary judge, Lanepoint contended that it was solvent. It contended that its assets exceeded its liabilities. Lanepoint contended that it had two creditors. These were Westpoint Management as responsible entity for WIF, and a related company, Keyworld Investments Pty Ltd, which was not demanding payment of its debt. As to its taxation liabilities, it contended that there was a credit due to Lanepoint. Lanepoint contended that there was a dispute as to the extent of the indebtedness of Lanepoint to Westpoint Management, but that indebtedness did not exceed $2.3 million, which was the extent of the WIF loan recorded in the books of account of Lanepoint. Lanepoint contended, therefore, that as the assets of Lanepoint were substantially in excess of $2.3 million, Lanepoint was not insolvent. 18 ASIC, however, contended that the extent of the indebtedness of Lanepoint to Westpoint Management was $6.6 million, and not, as Lanepoint alleged, no more than $2.3 million. ASIC contended that the books of account of Lanepoint and Westpoint Management and other companies within the Westpoint Group, recorded the transactions whereby the indebtedness of Lanepoint to Westpoint Management had been reduced from $6.6 million by a total of about $4.2 million. These transactions, contended ASIC, were ineffective or liable to be set aside as against Westpoint Management, with the consequential increase in the indebtedness of Lanepoint by the additional $4.2 million. ASIC contended that those transactions were improper transactions, and so ineffective against Westpoint Management, or were voidable transactions under s 588FE of the Corporations Act, because they were uncommercial transactions under s 588FB and/or unreasonable director related transactions under s 588FDA. 19 The first of the impugned transactions was referred to before the primary judge as the "Kingdream transfer", and the second, as the "$2 million run-around". 20 Before the primary judge, Lanepoint contended that there was a substantial dispute as to the extent of its indebtedness to Westpoint Management, as the responsible entity for WIF, and that the ASIC application to wind-up Lanepoint should be dismissed or stayed.

THE DECISION OF THE PRIMARY JUDGE 21 The main controversy at the hearing before the primary judge centred around the extent of Lanepoint's liability to WIF. 22 By the time that the matter came to be heard, it was common ground that Lanepoint had assets amounting to $5,729,837. The primary judge said that by reason of the amount in dispute in relation to the WIF debt, the determination of the extent of the WIF liability could, depending on the outcome, be decisive of the question of insolvency. Thus, if as ASIC contended, the extent of the WIF debt was $6.6 million, and not no more than $2.3 million, as Lanepoint contended, the determination of that liability would be conclusive of the question of whether Lanepoint was insolvent. 23 The primary judge rejected Lanepoint's contention that he should dismiss or stay the ASIC winding-up application on the grounds that there was a substantial dispute as to the extent of the WIF debt. The primary judge observed at [27]-[28] of his reasons: Accordingly, Lanepoint submits that there is a genuine dispute as to the amount of its indebtedness to WIF. In an appropriate case the Court may exercise its discretion to determine such a dispute rather than to stay the winding-up application to await the curial resolution of the dispute: Ocean City Ltd v Southern Oceanic Hotels Pty Ltd (1993) 10 ACSR 483 at 486-487. A great deal of evidence was adduced in this respect including detailed cross examination of, amongst others, Mr Carey, Ms Karen Carey and Mr Gregory Nairn, a former senior Lanepoint executive. No suggestion was made that there was other relevant evidence available going to the resolution of this question. If such an alleged dispute is raised and can be resolved during such an application then in my opinion it ought to be. It would only add to the costs of the parties as well as to the public to put it off. 24 The primary judge found that Lanepoint was insolvent on the basis that Lanepoint was indebted to Westpoint Management in the sum of at least $6.6 million. This conclusion was based upon the primary judge's earlier findings that the transactions known as the "Kingdream transfer" and the "$2 million run-around" were improper transactions and ineffective as against Westpoint Management, or alternatively, liable to be set aside as voidable transactions under s 588FE of the Corporations Act. 25 The "Kingdream transfer" was a transaction which occurred in 2006, whereby loans which had been recorded in the books of account of Lanepoint and Westpoint Management as loans by Westpoint Management to Lanepoint were altered so as to record them as loans made by Westpoint Management to Kingdream Pty Ltd. This had the effect of reflecting a $2 million diminution in Lanepoint's indebtedness to Westpoint Management in respect of the WIF debt. Mr Nairn wrote to the trustee of WIF advising that the draw-downs of 19, 20 and 25 October 2005 were incorrectly recorded and should have been disclosed as draw‑downs by Kingdream as the funds belonged to a project being operated by Kingdream Pty Ltd in Melbourne and they had been incorrectly debited to Lanepoint's Regency Motel development. The WIF loan accounts to Lanepoint and Kingdream were, accordingly, altered to disclose repayment by Lanepoint to WIF of $2 million and an increase in the borrowings from Kingdream from WIF in the same amount. 26 The "$2 million run-around" comprised two sets of round robin exercises of $1 million each which occurred in January 2006. Bowesco paid $2 million to WIF which then paid the money to Goldtag Pty Ltd as trustee for the Cinema City Property Trust. Goldtag then later paid the money back to Bowesco. 27 The round robin exercises gave rise to the following entries in the books of account of the Westpoint related companies. 28 Bowesco paid $0.7 million to Lanepoint and $1.3 million to Westpoint Corporation which then paid $2 million to Lanepoint, which then paid $2 million to WIF. WIF advanced $2 million to Goldtag which then paid the money to Westpoint Corporation, Westpoint Corporation then repaid Bowesco $1.3 million and $700,000 on behalf of the Centreways Refurbishment Syndicate Trust. 29 The net effect of the "$2 million run-around" was to reflect a payment by Lanepoint of $2 million of its outstanding debt to WIF and the making by WIF of a $2 million loan to Goldtag. At that time, the Cinema City development had hardly begun, whereas Stage 1A of the Lanepoint development was well advanced, with the consequence that the effect of the "$2 million run-around" was to reduce the ability of WIF to recover the investment. 30 At [70] of his judgment, the primary judge said: I find that the Kingdream transfer and the $2m run-around were improper transactions put in effect to conceal the true position that Lanepoint was indebted to WIF in approximately $6.6m and to render it unlikely that WIF could recover those funds. I accept the submission of ASIC that they were ineffective transactions. 31 The primary judge then went on to find that the "Kingdream transfer" and the "$2 million run-around" transactions were liable to be set aside as uncommercial transactions within the meaning of s 588FB(1) of the Corporations Act. The primary judge found at [79] and [80] of his judgment: …the transactions are insolvent transactions within the meaning of s 588FC of the Act and liable to be set aside at the instance of the liquidator of Westpoint Management. Accordingly, the Kingdream transfer and the $2m run-around may not be relied upon by Lanepoint as reducing Lanepoint's obligations to Westpoint Management and the WIF to the level asserted. 32 The primary judge concluded at [86] of his judgment: I find for the above reasons that Lanepoint is indebted to Westpoint Management as the responsible entity for WIF in the amount of not less than $6.6m. 33 The primary judge made orders for the winding-up of Lanepoint and for the appointment of liquidators to Lanepoint.

LANEPOINT'S APPEAL 34 Lanepoint relied on six grounds of appeal. However, in light of the conclusions to which we have come it is only necessary to refer to ground 4 of the appeal. 35 The primary ground of appeal relied on by Lanepoint was ground 4, namely, that in light of the dispute as to the extent of the WIF debt, the primary judge erred in the exercise of his discretion by not staying or dismissing ASIC's application.

did the primary judge err in not staying or dismissing asic's winding-up application? 36 Lanepoint contended that the nature of the controversy as to the extent of the WIF debt gave rise to issues which meant that the winding-up application at the instance of ASIC, was an inappropriate vehicle for the determination of the question of whether Lanepoint was insolvent. 37 It was well-established prior to the reform of the corporations legislation which took place following the Corporate Law Reform Act 1992 (Cth), that ordinarily a company would not be wound-up on the basis of a disputed debt. 38 The first question here is the extent to which this principle is applicable since the reforms introduced into the corporations legislation in Australia pursuant to the 1992 Corporate Law Reform Act. 39 As early as 1868, Malins VC in the case of Re the Imperial Silver Quarries Company Limited [1868] 16 WR 1220 at 1221, observed: It is against the principles of this court to wind up a company either: (1) upon a disputed debt, or (2) if it is clear that on the debt being established it will be paid. But as to the first point, the dispute must be one in which the Court feels that there is substance, so that it cannot be decided on an interlocutory application. 40 In the case of Fortuna Holdings Pty Ltd v The Deputy Commissioner of Taxation (Cth) [1978] VR 83 (Fortuna Holdings), McGarvie J stated that the court had jurisdiction to restrain the presentation of a winding-up petition in order to prevent an abuse of process. There were, said McGarvie J, two branches to this principle. At 93-94, McGarvie J observed: The first branch applies to cases where the petitioner is incapable of success as a matter of law or through absence of supporting evidence. Where the petitioner is not entitled to present a petition or where the ground alleged is not a ground which can found a winding up order, the petition is incapable of success as a matter of law. If there is no sufficient evidence to establish an otherwise sufficient ground, the petition is incapable of success for that reason. Thus the first branch applies where the proposed petition cannot succeed. The second branch applies to cases where there is a more suitable alternative means of resolving the dispute involved in a disputed claim against the company. They are not necessarily cases in which, as a matter of law or through absence of evidence, there is an inherent incapacity of success. They may be cases where the petitioner is entitled to present the petition, the ground is sufficient in law and there is evidence to support the ground. They are cases, though, where, due to the availability of the more suitable alternative remedy, the Court hearing the petition would in the circumstances, in the exercise of its discretion, decline to make a winding up order, at least while the circumstances remain as they are at the time of the application for an injunction. Thus the second branch applies where, because of the availability of a suitable alternative procedure, the petition is unlikely to succeed in the circumstances existing at the time. 41 It was also recognised that one of the bases on which a court held that it was an abuse of process for a petitioner to petition for the winding-up of a company on the basis of a disputed debt, was that the petitioner would not be able to establish its status as a creditor in respect of a debt which was in dispute. 42 In the case of Re Jeff Reid Pty Ltd and the Companies Act (1980) 5 ACLR 28 (Re Jeff Reid), the petitioner had leased a piece of heavy earthmoving equipment to the respondent company. The petitioner brought a petition for the winding-up of the respondent company relying upon a debt arising under the lease. The company contended that it had cross-claims against the petitioner. One of the cross-claims was that the petitioner had participated in a breach of a fiduciary duty owed by a third party, International Harvester Credit Corporation of Australia Ltd (IHCC), to the company. McLelland J found that the nature of the dispute between the petitioner and the company did not impugn the petitioner's status as a creditor and, therefore, its standing to bring the petition. However, McLelland J, nevertheless, exercised his discretion to stay the petition to wind-up. At 32, McLelland J observed: Having regard to my conclusions as to the substantial grounds of certain of the claims of the respondent against the petitioner to which may be added claims by the respondent against IHCC, the question whether the respondent is unable to pay its debts cannot in my view be satisfactorily determined while those claims remain unresolved. The present proceedings are an inappropriate vehicle for their resolution. Consequently the petition should be either dismissed or stayed pending the determination of the claims in question. I think that the latter is the better course in all the circumstances of the present case. I have in mind particularly:- (a) that there is not satisfactory evidence that the claims now raised by the respondent were communicated to the petitioner (or for that matter to IHCC) expect [sic] in the vaguest way at any time before the presentation of the petition; (b) that no proceedings have yet been instituted by the respondent to establish its claims against the petitioner or IHCC; and (c) that the respondent does not carry on any business and it is unlikely that any person would suffer prejudice from the petition's not being finally disposed of. 43 In the case of L & D Audio Acoustics Pty Ltd v Pioneer Electronic Australia Pty Ltd (1982) 7 ACLR 180 at 183, McLelland J said: Proceedings by a person as creditor for the winding up of a company on the ground that it is unable to pay its debts will ordinarily be held to be an abuse of process:

(1) if the winding up proceedings are bound to fail eg if it is clear that the applicant will not be able to prove that he is a creditor within the meaning of s 363(1)(b) of the Code, or will not be able to prove that the company is unable to pay its debts within the meaning of s 364(1)(e); (2) if the application is made for some improper purpose eg if the applicant is seeking to use the winding up proceedings to coerce a company into paying an alleged debt without affording the company a reasonable opportunity to ascertain or have it established that the debt is properly payable; or (3) if issues will arise in the winding up proceedings of a kind inappropriate for determination in such proceedings eg a substantial contest as to the existence or enforceability of a debt relied on by the applicant, which should properly be resolved in separate proceedings brought for that purpose. 44 The reforms to the corporations legislation effected by the 1992 Corporate Law Reform Act, introduced a process for the setting aside of a statutory demand on the basis of the existence of a genuine dispute. Section 459C of the Corporations Act affords a creditor the status to commence a winding-up application in circumstances where a company has not set aside a statutory demand. Thus, in those circumstances it could not be said that there was any question as to whether the creditor lacked the status to bring a winding-up application. The same is true in relation to ASIC's status to bring a winding-up application under s 459P, subject to it obtaining the leave of the Court. 45 In the case of Australian Beverage Distributors Pty Ltd v Evans & Tate Premium Wines Pty Ltd (2007) 69 NSWLR 374 (Australian Beverage), the New South Wales Court of Appeal considered whether the longstanding principles in respect of the abuse of the winding-up process continued to apply to winding-up proceedings under the Corporations Act, notwithstanding the legislative changes enacted to companies legislation pursuant to the 1992 Corporate Law Reform Act. 46 In Australian Beverage, Beazley JA (with whom Hodgson and Santow JJA agreed) drew a distinction between the concept of an abuse of process referred to in the case of Williams v Spautz (1992) 174 CLR 509, where a party commences a proceeding for an improper purpose; and the concept of abuse of the winding-up process. Beazley JA accepted that the concept of abuse of the winding-up process was well-established in the law. Beazley JA cited with approval the Fortuna Holdings decision. Beazley JA observed at 387, at [56]-[57] as follows: The statutory demand procedure under the earlier versions of the companies legislation was very different from that which applies under the Corporations Act (Cth), and many of the cases of abuse of process in the winding-up context arose in circumstances where there had been a failure to pay pursuant to a statutory demand. Nonetheless, the Evans & Tate companies submit that there will be circumstances where the Court considers it appropriate to grant an injunction or to grant a temporary stay of proceedings until the entire question of indebtedness of the companies has been determined and that in such circumstances, the principles stated in the earlier authorities still apply. I agree that those principles still apply. The court retains a discretion to make an order in the circumstances discussed by McGarvie J in Fortuna Holdings under the "second branch" or upon the basis referred to by McLelland J in Re Jeff Reid Pty Ltd and the Companies Act in a case where an application for winding-up has been brought in circumstances where the statutory demand procedure was not relied upon. The reference by Brownie J in Pacific Communication Rentals to Williams v Spautz was not intended to indicate that the principles stated by the High Court were those that applied. Rather, he was saying that Williams v Spautz is authority that the Court has an inherent jurisdiction to prevent an abuse of process. The circumstances in which he found abuse of process clearly indicate that he was applying the long standing principles that govern the Court's exercise of discretion when dealing with a winding-up application. 47 In the case of Grant Thornton Services (NSW) Pty Ltd v St George Wholesale Distributors Pty Ltd (No 2) [2009] FCA 557 (Grant Thornton), Perram J found that the established principles regarding the abuse of the winding-up process continued to apply even in cases where the statutory demand by a creditor had not been complied with and no challenge could be made to the creditor's status to bring the application to wind-up the company. In that case, leave had been given under s 459S(1) of the Corporations Act on the basis that the debt the subject of the unmet statutory demand, was disputed. 48 Perram J heard evidence and the witnesses were cross-examined. At the end of the evidence, Perram J declined the invitation to decide the question of whether the disputed debt was actually due. Perram J, whilst acknowledging that there may be occasions when it was appropriate to determine the dispute within the winding-up application, observed as follows at [30]: Where a court determining winding up proceedings is asked to ascertain whether a particular debt exists, it is important that that question be determined correctly and not as a result of tactical manoeuvres between the parties. 49 Further, contrary to ASIC's contention, the abuse of winding-up process principles apply even in circumstances where there is a presumption of insolvency by reason of s 459C of the Corporations Act. In the case of Radiancy (Sales) Pty Limited v Bimat Pty Limited (2007) 25 ACLC 1216 at 1220, at [21] (Radiancy), White J observed: The effect of failing to comply with the statutory demand is to create a presumption of insolvency (s 459C(2)(a)). However, the grant of leave under s 459S does not result in the statutory demand being set aside. Nor does it allow an application to be made out of time for the setting aside of the demand. The presumption of insolvency is not displaced by the grant of leave under s 459S (Braams Group Pty Ltd v Miric (2002) 171 FLR 449 at 455-456 [36]; (2002) 44 ACSR 124 at 130 [36]). 50 White J declined to determine the disputed debt within the winding-up application. One of the grounds that White J relied upon was that it was an inappropriate vehicle within which to determine the dispute. Perram J in Grant Thornton adopted the approach of White J in Radiancy. 51 As has been recognised in these cases, it is in the discretion of the court whether a disputed debt is determined within the framework of the winding-up application. The exercise of the discretion must, of course, be informed by the relevant considerations. 52 A relevant consideration in the exercise of the discretion is whether the dispute in question is one which can be finally determined within the framework of the winding-up application. In this regard it would be a relevant consideration that all the parties whose interests would be affected by the result of the determination, are also parties to the winding‑up application. 53 In rejecting Lanepoint's contention that the winding-up application should be stayed or dismissed, the primary judge referred to the case of Ocean City Ltd (rec and mgr apptd) v Southern Oceanic Hotels Pty Ltd (1993) 10 ACSR 483 (Ocean City). In Ocean City, French J (as his Honour then was) observed at 486: In Re QBS Pty Ltd [1967] Qd R 218 at 225, Gibbs J left open the possibility that the judge in winding up proceedings might, in an appropriate case, determine the merits of a disputed debt: It seems to me that in every case it becomes necessary for the court to exercise its discretion as to how far it will allow the question whether or not the dispute is bona fide to be explored. In some cases it may be very easy to decide this question on the petition and affidavits in reply. In other cases however it may be difficult to determine whether or not the dispute is bona fide without determining the merits of the dispute itself. In some such cases convenience may require that the court decide the question whether or not a debt exists, but in other such cases it may appear better to allow that question to be determined in other proceedings before the petition for winding up is heard. I must say, with respect, that I find that approach more attractive and consistent with modern notions of seeking the most economic and efficient use of judicial time than a more rigid approach which would mandate in every case of disputed debt the splitting off of the dispute however easily determined and the stay or dismissal of winding up proceedings pending its determination. It was the approach also adopted by Needham J in Offshore Oil NL v Acron Pacific Ltd (1984) 2 ACLC 8, where his Honour said: Although the defendant submitted that these proceedings should be dismissed, as there exists a bona fide dispute between the parties as to the liability of the defendant, and the proceedings to resolve that dispute have already been commenced, it seems to me that, the only issue between the parties in these proceedings being the proper construction of the deed of 25 November 1982, so far as it regulates the relationship between the plaintiff and the defendant, the question at issue can be resolved as easily in these proceedings as in those commenced by the defendant. The defendant has conceded that the only defence it has to offer against the claim of the plaintiff to wind it up is the assertion it makes as to the proper construction of the deed. 54 These observations were made by French J in the context of a case where both parties to the disputed debt were the parties to the winding-up application. That was also the position in relation to the parties to the dispute in the case of Offshore Oil NL v Acron Pacific Ltd (1984) 2 ACLC 8, referred to by French J in his observations. It should also be noted that the observations of French J in Ocean City were not made in the context of French J having decided that it was appropriate to determine the dispute between the parties in the context of the winding-up application. French J observed (at [487]) that whether the case was one that could "accommodate an inquiry beyond the question of the existence of a bona fide dispute on substantial grounds" would depend upon the evidence which was yet to be led by the respondent. 55 Another relevant consideration would be whether there were any statutory, procedural or evidentiary obstacles which would preclude the court from being able to determine the dispute in question. 56 A further consideration would be whether, even if all the necessary parties were parties to the winding-up application, the principles of natural justice and fairness would be met by determining the dispute within the framework of the winding-up application. 57 Another consideration would be whether the company sought to be wound-up is trading and whether anyone would suffer prejudice by the application not being finally disposed of (Re Jeff Reid at 32). 58 An additional consideration would be whether the dispute could be resolved more efficiently within the ambit of the winding-up application. 59 The exercise of the discretion is also to be informed by the legislative policy manifest by the reforms introduced by the Corporate Law Reform Act to the effect that where a disputed debt is relied upon as being demonstrative of insolvency, that dispute should be resolved outside of the winding-up process. It is to be observed, parenthetically, that French J made no reference to these reforms in his observations in Ocean City. The relevant reforms took effect on 23 June 1993, which post‑dated the Ocean City judgment. 60 It is, of course, not possible to state exhaustively the considerations that would be relevant to the exercise of the discretion, because each case would depend on its own circumstances. 61 Lanepoint contended the issues raised by ASIC which were inherent to a determination as to whether Lanepoint was insolvent, were of a kind which were inappropriate to be determined in a winding-up proceeding. It was contended that, in declining to stay or dismiss ASIC's winding-up application, the primary judge's discretion miscarried. 62 In our view, this ground of Lanepoint's appeal should be upheld. 63 The determination by the primary judge that Lanepoint was insolvent was based on his Honour's finding that the debt owed by Lanepoint to Westpoint Management as responsible entity for WIF was at least $6.6 million. This finding was in turn based on the primary judge's finding that the impugned transactions recorded in the accounts of Lanepoint, Westpoint Management and other related companies within the Westpoint Group were "ineffective" as against Westpoint Management or liable to be set aside at the instance of a liquidator. 64 ASIC's impugning of the transactions comprising the "Kingdream transfer" and the "$2 million run-around" was founded on two alternative bases, namely, that they were improper transactions which were ineffective against Westpoint Management, and that they were liable to be set aside as voidable transactions under Div 2 of Pt 5.7B of the Corporations Act. 65 First, in our respectful view, the primary judge did not appear to give consideration to the question of whether all the parties necessary for the final determination of the issues raised by ASIC's contentions, and the consequential effect upon the solvency of Lanepoint, were before the Court. The impugning of the transactions comprising the "Kingdream transfers" had the propensity to affect the interests of Westpoint Management and Kingdream in addition to those of Lanepoint. The impugning of the "$2 million run-around" had the propensity to affect the interests of Westpoint Management, Westpoint Corporation, Goldtag Pty Ltd and Bowesco, in addition to those of Lanepoint. Other than Lanepoint, none of these companies are parties to ASIC's winding-up application of Lanepoint. 66 Further, although the basis on which the characterisation of impugned transactions as "improper transactions" gave rise to them being ineffective in law as against Westpoint Management, is not entirely clear, it is implicit in ASIC's contentions to that effect, that one or more of the directors or officers of the companies involved in the impugned transactions, acted in breach of duty or fraudulently in authorising or giving effect to the transactions. Also, the claims that the impugned transactions were voidable transactions under Div 2 of Pt 5.7B of the Corporations Act raised issues relating to the conduct and knowledge of the directors or officers of Westpoint Management and the other related companies within the Westpoint Group. 67 Although, Mr Carey and Mr Nairn gave evidence and were cross-examined, no directors or officers of any of the companies involved in the impugned transactions were parties to ASIC's winding-up application of Lanepoint. 68 The fact that no director or officer of any of the Westpoint companies was a party to this proceeding is also significant for another reason. It is usual that a party to a proceeding who alleges that another party to a proceeding has engaged in a breach of duty or fraud would be required to plead in advance of the hearing the facts and matters relied on for the claim and to set out the legal foundation of the claim. The other party would be entitled to plead in response and to engage his or her own legal representation to defend himself or herself at the hearing of the allegations. The ASIC winding-up proceeding lacked these procedural elements and, to that extent, its suitability as the vehicle within which to consider the issues arising from ASIC's contentions in respect of the impugned transactions, was undermined. 69 Secondly, in our respectful view, the primary judge did not have regard to the utility of considering ASIC's contention that the impugned transactions were voidable transactions under Div 2 of Pt 5.7B of the Corporations Act in the context of the winding-up application, in light of the statutory condition that a claim under s 588FF can only be made at the instance of a liquidator. 70 Section 588FF of the Corporations Act empowers a court to make one or more of the orders specified in s 588FF(1), in respect of a transaction which a court is satisfied is voidable because of s 588FE. However, s 588FF provides that the court may make those orders only upon the application of a liquidator. Accordingly, whether the impugned transactions are liable to be set aside or not, depends entirely upon whether or not the liquidator of Westpoint Management exercises the rights under s 588FF. Further, s 588FF(1)(a)-(j) provides for a range of remedies. This means that it is not axiomatic that a court when seized with an application brought by the liquidator, and satisfied that the impugned transaction is a voidable transaction, would make the orders adjusting the impugned transactions by requiring that Lanepoint pay Westpoint Management $4.2 million as opposed to some other form of relief available. In any event, the liability of Lanepoint to Westpoint Management in respect of that sum would only arise upon a court properly seized of an application by a qualified liquidator making an order to that effect. This circumstance calls into question the primary judge's finding that by reason of the impugned transactions being liable to be set aside under s 588FF, they may not be relied upon as reducing Lanepoint's obligations to Westpoint Management as the responsible entity of WIF (see [32] above). 71 As mentioned, in our respectful view, the primary judge erred in the exercise of his discretion by failing to have regard to the utility of considering ASIC's contentions in the context of an ASIC winding-up application, as opposed to staying or dismissing the winding‑up application to permit a proceeding seeking relief under s 588FF, to be brought by a liquidator of Westpoint Management. 72 It is to be observed in the case of In Re QBS Pty Ltd [1967] Qd R 218, Gibbs J (as his Honour then was) declined to determine a preference claim made by a liquidator of the petitioning creditor, being a company in liquidation, against the respondent company within the framework of the winding-up petition. This was the case, even though the company in liquidation was the petitioning creditor. 73 Thirdly, in our respectful view, the primary judge did not appear to take into account in deciding not to stay or dismiss the winding-up application, that Lanepoint was not trading and was also under the control of receivers and managers, and not its director. In our respectful view, this reduced the prejudice that could be suffered, by third parties, by staying or dismissing the winding-up application pending the determination of the dispute within the ambit of a more forensically appropriate framework. 74 In our respectful view, for the foregoing reasons, the primary judge's discretion miscarried and as we have observed, Lanepoint's appeal should be allowed. 75 It is open to this Court to re-exercise the discretion. For the reasons given above, in our view, ASIC's application should be stayed pending the determination of proceedings brought by the liquidator of Westpoint Management to determine the extent of the WIF liability. Greater weight should be placed on the matters referred to above than the costs savings that might occur by seeking to deal with the dispute within the winding-up application. 76 Further, had Westpoint Management in June 2006, issued a statutory demand for $6.6 million to Lanepoint founded on ASIC's contentions, Lanepoint would undoubtedly have succeeded in setting aside the statutory demand under s 459G of the Corporations Act. The consequence would have been that the extent of the WIF debt would have been established by a process outside of the winding-up process. It would be incongruous if that consequence could be subverted by a third party bringing a winding-up application in respect of which the extent of the WIF debt was determinative of the question of solvency.

application to amend the grounds of appeal 77 During the hearing of the appeal, Lanepoint applied for leave to amend its grounds of appeal to include a ground that the primary judge ought to have disqualified himself on the grounds of apprehended bias. 78 This application arose in the following circumstances. After the conclusion of the hearing before the primary judge, and shortly before the primary judge handed down his judgment, Lanepoint brought an application that the primary judge disqualify himself on the grounds of apprehended bias. Lanepoint relied on three prior associations affecting the primary judge and Mr Carey and his associated companies, as giving rise to the apprehension of bias. The primary judge refused to disqualify himself (Australian Securities and Investments Commission v Lanepoint Enterprises Pty Ltd [2009] FCA 258). The amended grounds of appeal referred to the three associations that were considered by the primary judge in that judgment, and then added a further association between the primary judge and Mr Norman Carey which, contended Lanepoint, added weight to its contention that these associations, when considered cumulatively, gave rise to an apprehension of bias on the part of the primary judge. 79 Lanepoint also sought leave to lead further evidence in support of the proposed new ground of appeal. The proposed new evidence was to the effect that Mr Norman Carey had recently found for the first time evidence which showed that the primary judge had whilst practising as a Queen's Counsel in 2006, accepted a brief to act on behalf of a company, Rold Corporation. This company was engaged in hostile litigation against the interests of Mr Carey and intended to rely on evidence which impugned Mr Carey's credit. 80 This circumstance, contended Lanepoint, when considered in light of the three prior associations, gave rise to an apprehension of bias on the part of the primary judge. The bias, said Lanepoint, was further manifest by the content of the reasons delivered by the primary judge on ASIC's winding-up application. 81 The application to amend the grounds of appeal is dismissed because the proposed new ground of appeal does not disclose a reasonable prospect of success. 82 The evidence which Lanepoint would seek to lead discloses only that there were preliminary discussions between Rold Corporation's solicitors and the primary judge whilst he was in practice as a Queen's Counsel. A file note of the instructing solicitor reveals that the facts of the case were briefly outlined to the primary judge (as Queen's Counsel) during the course of a telephone call, and the primary judge made a very preliminary comment in relation to the future conduct of the matter and agreed to accept the brief. No brief was actually delivered. 83 In our view, this evidence, whether viewed alone or in the context of the other three associations dealt with by the primary judge, in response to Lanepoint's previous application in respect of apprehended bias, is incapable of giving rise to an apprehension of bias in the mind of a reasonable and properly informed observer. Nor does Lanepoint's contention that the nature of the primary judge's reasons, when viewed in the context of all four associations, revealed prejudgment by the primary judge, assist Lanepoint. This contention lacks substance and amounts to no more than an assertion.

asic'S notice of contention 84 We also observe that ASIC relied upon a notice of contention. However, none of the grounds in the notice of contention overcome the miscarriage of the primary judge's discretion in relation to determining whether the winding-up application should be stayed or dismissed. In particular, the observation by ASIC in its notice of contention that Lanepoint has failed to commence proceedings relating to the WIF liability overlooks the fact that s 588FF of the Corporations Act requires that proceedings under that section are to be brought by the liquidator of the company seeking the relief available under that section. 85 Accordingly, Lanepoint's appeal succeeds and the orders made by the primary judge are set aside. I certify that the preceding eighty‑five (85) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices North and Siopis.

GENERAL DIVISION WAD 92 of 2009

BETWEEN: LANEPOINT ENTERPRISES PTY LTD (ACN 110 693 251) (RECEIVERS AND MANAGERS APPOINTED)

AND: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

BUCHANAN J: 86 Lanepoint Enterprises Pty Ltd ("Lanepoint") is a company within the Westpoint Group of Companies ("the group"). It is a direct subsidiary of Bowesco Pty Ltd ("Bowesco") another company within the group. One company within the group, Westpoint Corporation Pty Ltd ("Westpoint Corporation"), acted as a central treasurer for companies within the group and operated a single accounting system to record transactions between the companies within the group, and externally. 87 Westpoint Management Pty Ltd ("Westpoint Management"), another company within the group, raised money from the public as responsible entity for a managed investment scheme known as the Westpoint Income Fund ("WIF"). Money raised for WIF was made available as loan funds to finance property development projects undertaken by companies within the group, including Lanepoint. 88 Lanepoint redeveloped a site previously used for the Regency Motel on Great Eastern Highway at Rivervale, Western Australia, into a group of strata titled residential units. The initial work was undertaken by Westpoint Constructions Pty Ltd, another company in the group. The project was substantially financed by loans from Suncorp Metway Limited ("Suncorp") and WIF. The loans were paid to Westpoint Corporation's bank account and allocated within the books of Westpoint Corporation. They were secured by floating charges given by Lanepoint. 89 The primary judge found that in late 2005 Westpoint Corporation was, to the knowledge of Mr Norman Carey (who was then a director of each of Lanepoint, Westpoint Corporation and Westpoint Management) in serious financial difficulties. Lanepoint defaulted on the loans from Suncorp and WIF. Suncorp appointed receivers and managers to Lanepoint, under the terms of the floating charge, on 3 March 2006. Meanwhile, a provisional liquidator was appointed to Westpoint Management on 9 February 2006. The provisional liquidator appointed receivers and managers to Lanepoint on 9 March 2006. 90 The appointment of receivers and managers to Lanepoint on 3 March and 9 March 2006 triggered a presumption of insolvency in the event that an application was made for Lanepoint to be wound up within three months after their appointment (s 459C(2)(c) of the Corporations Act 2001 (Cth) ("the Act"). The respondent ("ASIC") made such an application on 2 June 2006. 91 The receivers and managers appointed by Suncorp took possession of the project, completed the redevelopment and proceeded to sell the strata lots. The debt to Suncorp was repaid. At the time of the trial those receivers and managers were awaiting a clearance from income tax obligations and a release from anticipated litigation before returning any surplus funds to Westpoint Management as responsible entity for the next secured creditor, WIF. 92 The receivers and managers appointed by the provisional liquidator of Westpoint Management had, at the time of the trial, possession of the unsold property and had not at that stage recovered the secured debt. It was the amount of the debt to WIF which assumed primary importance in the proceedings at first instance. 93 The position in which the receivers and managers of Lanepoint appointed by the provisional liquidator of Westpoint Management found themselves was that there appeared to be available assets of $5,729,837. 94 Shortly before January 2006 the books of Westpoint Corporation showed that Lanepoint's debt to WIF was $6,607,978. In January 2006 transactions were recorded in the books by the Group Financial Controller (Mr Nairn) which had the effect, amongst other effects, of reducing the recorded debt owed by Lanepoint to WIF to $2,266,557 (a reduction of $4,341,422). There were two sets of entries in the various accounts which combined to explain most of the suggested reduction in Lanepoint's indebtedness to WIF. 95 Most of the first set of adjustments were asserted in evidence by Mr Carey and Mr Nairn to have resulted from conclusions by Mr Nairn that loan draw downs made against WIF on 19, 20 and 25 October 2005 were incorrectly recorded as draw downs by Lanepoint and should have been recorded as draw downs by another company, Kingdream Pty Ltd, even though the notices of loan draw down each identified, in the heading of the notice, both Lanepoint and the project being undertaken by Lanepoint. The draw downs were for the amounts of $700,000, $500,000 and $800,000 respectively. Each notice had been signed by Mr Carey and Mr Nairn. The "corrections" made by Mr Nairn in January 2006 purportedly reduced Lanepoint's indebtedness to WIF by $2,000,000. The primary judge took the view that the corrections were unreliable. 96 The second adjustment was accomplished by a round robin of payments. These payments were described in the judgment under appeal (at [59]-[60]) as follows: 59 In January 2006 Bowesco paid $2m cash to WIF, who paid the cash to Goldtag Pty Ltd, trustee of the Cinema City Property Trust which paid it back to Bowesco. 60 These payments were not recorded that way in the Westpoint Group accounts. They showed that Bowesco paid $0.7m to Lanepoint and $1.3m to Westpoint Corporation which paid that amount to Lanepoint which then paid $2m to WIF. WIF's records disclose a $2m loan to Goldtag which amount it then paid to Westpoint Corporation which repaid Bowesco the $1.3m Westpoint Corporation had loaned and paid Bowesco a further $0.7m on behalf of the Centreways Refurbishment Syndicate Trust. This was described in the proceeding as the "$2m run-around" transaction. 97 The effect was to reduce Lanepoint's apparent debt to WIF by a further $2m. Again, the primary judge concluded that the recorded transactions masked the true position and did not reflect Lanepoint's actual indebtedness to WIF. 98 At the trial, ASIC challenged the transactions and submitted that the primary judge should find that they were ineffectual to reduce Lanepoint's debt to WIF. Evidence was given for Lanepoint by Mr Carey, Ms Karen Carey (Mr Carey's sister and the sole director of Lanepoint from 12 April 2006) and Mr Nairn. The primary judge did not accept the effect of their evidence that the books, as corrected and incorporating the round robin payments, correctly stated Lanepoint's indebtedness to WIF. 99 The proposition at the heart of Lanepoint's case at the trial, and on the appeal, was that there was a "genuine dispute" about the amount of the debt to WIF and that, as the liquidator of Westpoint Management was not a party to the proceedings, it was inappropriate to resolve that issue in winding-up proceedings commenced by ASIC. The primary judge decided that, as Lanepoint had called as much evidence as it wished, it was better to resolve the issue than to put it off. It would seem that he had little difficulty concluding that the transactions recorded in the books in January 2006 concealed the true position about the debt owed by Lanepoint to WIF. 100 A related argument for Lanepoint was that the liquidator might also, in due course, decide to accept some lesser amount as a pragmatic commercial settlement of the debt which would leave Lanepoint solvent. In his report to creditors of Westpoint Management dated 4 July 2008 the liquidator referred to the following: According to WIF's records, the book value of WIF's loan to Lanepoint at the date of my appointment was approximately $2.3 million. However, a number of questionable transactions during December 2005 and January 2006 had the effect of reducing the loan balance from $6.4 million to $2.3 million: + In December 2005, approximately $2.34 million of the Lanepoint debt to WIF was transferred to the Kingdream debt to WIF, to correct purported earlier errors in drawdown requests; + A "payment" of $2 million was receipted against the Lanepoint loan in January 2006, which was immediately on-lent to Goldtag. If these transactions are deemed invalid and are reversed, the Lanepoint loan will increase to more than $6 million as at January 2006. In addition, penalty interest has been accruing on this loan subsequently, which could increase the debt to over $7 million. I have prepared evidence in support of WIF's claim and requested legal advice on the merits of the claim. The preliminary verbal legal advice I have received indicates that WIF has a reasonably strong case to argue that the debt was over $6 million as at January 2006. Mr Norm Carey argues that the debt owed by Lanepoint to WIF is only $2.3 million. Regardless of the true value of the Lanepoint debt, I estimate that the realisable value of Lanepoint's assets to meet the debt is in the range of only $3.4 million to $4.7 million, of which I have recovered $780,000 to date. 101 The liquidator thereafter proposed in his report that creditors approve an agreement whereby Lanepoint made available to WIF all of its currently held assets less an agreed settlement sum of up to $200,000 subject to Mr Carey, Lanepoint and its directors providing a number of releases and discharges. The recommendation was approved by creditors but was not productive of any final settlement for reasons which included the fact that Mr Carey declined to provide the necessary releases and discharges. 102 There is a widely observed approach that a winding up order will not be made on a debt which is bona fide in dispute, provided that the dispute is based on some substantial grounds (see e.g. Ace Contractors and Staff Pty Ltd v Westgarth Development Pty Ltd [1999] FCA 728 ("Ace Contractors") at [49]-[50]) although the principle is normally applied to applications for winding up by a purported creditor. There is no doubt that it was open to the primary judge, in accordance with this approach, to exercise a discretion not to order the winding up of Lanepoint and to allow the liquidator to bring an application, if he wished, to have the transactions declared void (s 588FF(1)(h) of the Act). The primary judge also had an express statutory power to dismiss the application by ASIC, with or without costs, even if there were grounds to order that Lanepoint be wound up (s 467(1)(a) of the Act). It would have been open to him to do so to leave matters in the hands of the liquidator. 103 On the other hand, Lanepoint was, for the purposes of the proceedings, presumed to be insolvent. It bore the onus of proving solvency. The presumption in s 459C(2) operated "except so far as the contrary is proved" (s 459C(3) of the Act). Lanepoint was only solvent if it was able to pay all its debts as and when they became due and payable, otherwise it was insolvent (s 95A of the Act). Upon the default which saw the appointment to Lanepoint of receivers and managers by the provisional liquidator of Westpoint Management on 9 March 2006, the whole of the debt due to WIF became due and payable. It was not then paid. It was not able to be paid by the time of the report to creditors of Westpoint Management on 4 July 2008. It had not been paid by the time of the trial. This factual circumstance emphasised the practical (and not merely theoretical) burden which lay upon Lanepoint. 104 There were other debts as well which were owing at the time of the trial; an assessed taxation liability of $1,208,797.31 and admitted further inter-company loans of $495,000. 105 The primary judge took the view that Lanepoint had not discharged its obligation to show that it was solvent. In my view, no error has been shown in that conclusion. The highest that Lanepoint's case can be put on the appeal is to complain that the primary judge did not exercise his discretion to dismiss the application even though Lanepoint had not proven that it was solvent. In my view, it has not been demonstrated that the exercise of the primary judge's discretion miscarried in that respect. 106 Lanepoint mounted a substantial evidentiary case directed to the proposition that the entries in the books of Westpoint Corporation reflected the true position. That case, and the evidence upon which it was based, were not accepted by the primary judge. Even though it was open to him to decline, nevertheless, to proceed further on ASIC's application, or to dismiss it, he was not obliged to do so. Nor was he, in my view, obliged to do so in response to Lanepoint's assertion that it disputed Westpoint Management liquidator's report about Lanepoint's indebtedness to WIF or because the matters upon which Lanepoint relied appeared in the books of Westpoint Corporation. 107 For some purposes the books of a company are prima facie evidence of the truth of matters purportedly recorded in those books but that applies as between the contributories of the company (s 542(1) of the Act). Authority in this Court, and other courts, suggests that a less than conclusive status may apply to accounts which are not supported by the "fullest and best" evidence of financial position (see the authorities summarised in Ace Contractors at [44] and Expile Pty Ltd v Jabb's Excavations Pty Ltd (2003) 21 ACLC 684, Expile Pty Ltd v Jabb's Excavations Pty Ltd (No 2) (2003) 45 ACSR 711, Equity Australia Corp Pty Ltd v Falgat Constructions Pty Ltd (2005) 54 ACSR 813). 108 The primary judge was entitled to reject Lanepoint's case after a consideration of all the evidence. Having done so there was no barrier arising from statute, authority or principle which stood to prevent him acting upon the circumstance that Lanepoint was presumed insolvent and had not demonstrated the contrary. Subject to the next issue to be mentioned, that conclusion is sufficient to justify dismissal of the appeal. 109 Shortly before the appeal was to be heard a notice of motion was filed seeking to amend the grounds of appeal to raise various allegations of a denial of procedural fairness by the primary judge. In my view those contentions have no substance and I would dismiss the notice of motion and refuse leave to rely upon such matters. 110 Briefly, the reasons why I would do so are as follows. Three of the four circumstances which were said to combine together to sustain a reasonable apprehension of bias were dealt with by the primary judge in an interlocutory judgment made necessary because Lanepoint belatedly asked him to disqualify himself as judgment was about to be delivered. He concluded that Lanepoint had waived any right to rely upon the matters it sought to raise and that, in any event, they provided no foundation for the application which it made (Australian Securities and Investment Commission v Lanepoint Enterprises Pty Ltd[2009] FCA 258). I can see no error in the way in which the primary judge dealt with the contentions which were there raised. 111 The notice of motion which was advanced to the Court for the purpose of the appeal sought to rely again upon those three matters and a fourth. The fourth was without substance also. It concerned an allegation by Mr Carey that the primary judge may have become privy to some view held by Mr Carey's brother which was uncomplimentary to Mr Carey and his business practices. The suggestion depended upon a series of suppositions which were neither logically connected nor supported by any objective material. Although I would treat Mr Carey's affidavit, which was filed in support of the notice of motion, as one which might be read by Lanepoint in support of its notice of motion, I would not grant leave to rely upon it for the purpose of the appeal. 112 The arguments advanced in support of the notice of motion and, if leave to amend was granted, in support of the proposed additional grounds of appeal, did not adhere very closely to the matters raised by the notice of motion itself or by Mr Carey's affidavit, although that may simply reflect the lack of substance in those documents. Rather, counsel for Lanepoint sought to refocus the suggestion of reasonable apprehension of bias onto the terms of the judgment under appeal, submitting that the primary judge's preparedness to make findings and reach conclusions about the amount of the debt to WIF exhibited a preparedness to act contrary to the interests of the appellant rather than impartially. In my view, the submission lacked any form of support from the terms of the judgment or from the course of the proceedings. Although counsel did his best with it in the circumstances, the argument about apprehended bias was unattractive and unconvincing. I would dismiss the motion and deny leave to amend the notice of appeal. Had the amendment been allowed I would have concluded that it provided no basis for the appeal to succeed. 113 For the reasons previously stated I would dismiss the appeal with costs. I certify that the preceding twenty‑eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan.

Corporations Act 2001(Cth)ss 95A, 459C, 459G, 459P, 459S(1), 467(1), 542(1), 588FB, 588FDA, 588FE, 588FF

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