HIS HONOUR: I don't think so. I am going to reserve judgment. I may receive something by 4 o'clock tomorrow in accordance with what has just been said, I may not, and unless you hear to the contrary, I will be giving judgment at 3.30 on Tuesday next, 31 August, 2010."
35 Mr Sanchez's undertaking was communicated in writing in accordance with the process thus laid down. It was received by my Associate on 27 August 2010, before 4pm, with a brief covering note only. Thereafter, however, counsel for the plaintiffs forwarded further submissions of nine pages and sought to tender no fewer than 39 pages of additional documentation. The further submissions and documents were received early yesterday morning, 30 August 2010. The submissions and documents were directed to three matters: first, the question whether the EOI timetable in Mr Sanchez's undertaking was realistically achievable; second, the nature and circumstances of Mr Sanchez's separate relationship with NAB and its perceived impact on NAB's attitude to the Camden facility; and, third, the respective merits (particularly from a GST viewpoint) of a sale of the Argyle Street site by a provisional liquidator or receiver rather than by Camden under the auspices of its directors.
36 By letter sent to my Associate yesterday afternoon, counsel for Mr Sanchez objected to the additional tender. The point was made that, except for one document, the additional material sought to be tendered had nothing to do with Mr Sanchez's undertaking (the only aspect left outstanding at the conclusion of the hearing) and should have been tendered by the plaintiffs in chief. That objection is well taken. The whole of the additional tendered material, with the exception of the document at pages U1 to U3, is rejected on that basis. The plaintiffs cannot tender it except after re-opening. By letter emailed at 5.42pm yesterday, the plaintiffs sought leave to re-open to tender the additional documents. Given the way in which the plaintiffs conducted their case, the very limited aspect of the case left to be dealt with in accordance with the direction set out at paragraph [34] above and the statement made by counsel for the plaintiffs when the direction was made, I do not regard re-opening as appropriate.
37 As to the document at pages U1 to U3 of the 39 pages, counsel for Mr Sanchez objects on a different ground. He accepts that it is relevant to the proffered undertaking. It is an email from JLL to Mr Nikolaidis (not Mrs Nikolaidis), copied to Mr Sanchez, dated 28 August 2010 - two days after the hearing concluded - setting out "an example of a timing schedule for a [sic] Expressions of Interest or Tender Campaign as discussed".
38 The objection to this document is that it is not clear on what basis JLL prepared the "timing schedule" and that Mr Sanchez has not had an opportunity to respond to it. This objection is well taken. It seems obvious that Mr Nikolaidis, a shareholder and non-director of Camden, asked JLL to prepare an EOI timetable - hence the words "as discussed" in the JLL email to him. But one cannot know what was "discussed" or, in particular, the terms of the request Mr Nikolaidis actually made of JLL. In the abstract, JLL could no doubt prepare an EOI timetable to fit virtually any timescale a client wished to achieve and according to any summary description a client might specify: "fast-track", "leisurely", "thorough penetration", "prompt without sacrificing", "to achieve exchange not later than [date]", "to achieve exchange not earlier than [date]", etc. In the absence of evidence of the instruction or request to which JLL was working in preparing the "timing schedule" the plaintiffs seek to tender (and in the absence of any opportunity for Mr Sanchez to explore that matter), the probative value of that document is, particularly in the circumstances in which and at the time at which it was tendered, substantially outweighed by the danger that it might be prejudicial to Mr Sanchez. The document at pages U1 to U3 is therefore rejected.
39 Given the direction of the court set out at paragraph [34] above, the possibility of further submissions by the plaintiffs was confined to submissions relating to any undertaking that Mr Sanchez might offer within the timescale allowed by that direction. The submissions in fact received on the morning of 30 August 2010 went substantially beyond that and are, as to their excess, for that reason rejected. In addition, the rejection of the U1 to U3 document means that there is no evidentiary basis for the remainder of the additional submissions, that is, the part that does relate to Mr Sanchez's undertaking.
40 The result is that the decision on the plaintiffs' application for the appointment of a provisional liquidator falls to be decided on the evidence led at the hearing, supplemented by Mr Sanchez's subsequently tendered undertaking, and by reference to the submissions made at the hearing.
41 The evidence shows that the directors of Camden are agreed on a number of fundamental matters. They agree that the only way of reducing the NAB debt (and attempting to clear it) is to sell the Argyle Street site. They agree that the property should be sold promptly. They agree that the property should not be sacrificed and that a sale should be made at the best price reasonably obtainable, given the time constraints. They agree that Camden cannot survive long financially if, as is clearly indicated, NAB does not extend the facility beyond 30 September 2010. They agree that Camden should in due course be wound up.
42 What do they not agree on? They do not agree the method of sale, with Mrs Nikolaidis preferring an attempt at revival of the earlier offer that has lapsed and Mr Sanchez preferring an open market approach based on expressions of interest. They do not agree on price: Mrs Nikolaidis is willing to accept the price offered by the previous offeror whose interest she hopes to rekindle; while Mr Sanchez wants to try for enough to clear the bank debt and, if no expression of interest emerges at that level, to fall back on negotiation with the highest tenderer.
43 The differences between the directors are by no means great. There is a large core of mutual aspiration clearly directed to the best interests of Camden. There are differences on what are, in the final analysis, matters of detail. If the EOI process is undertaken (and even if it is not) there must be a good chance that the previous offeror will return to the negotiating table. Someone else might emerge. In the end, the market will indicate the proper price.
44 This is not a case of jeopardy calling for intervention by the court by way of the appointment of a provisional liquidator. It is not a case of severe dislocation of decision-making. Rather, the court is asked to take the drastic and intrusive step of appointing a provisional liquidator (and thereby to order what was described by Meagher JA, in Constantinidis v JGL Trading Pty Ltd (1995) 17 ACSR 625, as a judicial remedy of "a wholly extraordinary nature") in circumstances where the directors are agreed in principle, although not in detail, as to the best and most prudent way forward for their company.
45 The court will do the creditors of this company a favour by vacating the field and turning back on to the directors pressure to find the small plot of common ground that eludes them at this point. The extent of their agreement is such that there should be confidence that, under the guidance of JLL (whose advice both are quite willing to receive) and with the distraction of these proceedings put off until a final hearing, the directors can resolve their remaining differences and get on with the urgent job of effecting the most advantageous sale of the Argyle Street site that can be negotiated in the particular circumstances. Refusal by the court to intervene will sharpen the directors' responsibility to proceed, failing which, in a month's time, it can confidently be expected that NAB will resort to its security and take matters out of their hands. In that period of a month, there will not be, on the evidence, any pressing matter concerning the welfare of Camden other than the question of sale of the land.
46 The appropriate exercise of the court's discretion in the circumstances of this case is to decline to accept Mr Sanchez's undertaking but to note that it has been offered (so that Mr Sanchez's willingness in terms of the undertaking is acknowledged but not made binding on him) and also to decline to appoint a provisional liquidator. In that way, the directors will be free to implement any action they decide is appropriate to bring about a prompt resolution of the narrow difference that now divides them on the question of sale of the Argyle Street site.
47 The court therefore:
(a) notes but does not accept the undertaking tendered to the court in written form by the second defendant by his counsel on 27 August 2010 (with the result that the second defendant is under no obligation to honour or perform that undertaking); and
(b) dismisses the plaintiffs' interlocutory application for an order appointing a liquidator of the first defendant provisionally.
48 It will be necessary to deal with costs in due course. The question of the costs of the interlocutory application is in the meantime reserved.
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