PETER WALKER AND GREGORY MOLONEY IN THEIR CAPACITY AS THE LIQUIDATORS OF A.B.C. LEARNING CENTRES LIMITED (IN LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED) (NOW KNOWN AS ZYX LEARNING CENTRES LIMITED) AND THE COMPANIES LISTED IN SCHEDULE 1 AND A.B.C. LEARNING CENTRES LIMITED (IN LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED) (NOW KNOWN AS ZYX LEARNING CENTRES LIMITED) AND THE COMPANIES LISTED IN SCHEDULE 1 v COMMONWEALTH BANK OF AUSTRALIA AND THE OTHERS LISTED IN THE SCHEDULE

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1257 of 2009 IN THE MATTER OF A.B.C. LEARNING CENTRES LIMITED (IN LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED) ACN 079 736 664 (NOW KNOWN AS ZYX LEARNING CENTRES LIMITED) AND OF THE COMPANIES LISTED IN SCHEDULE 1

BETWEEN: PETER WALKER AND GREGORY MOLONEY IN THEIR CAPACITY AS THE LIQUIDATORS OF A.B.C. LEARNING CENTRES LIMITED (IN LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED)(NOW KNOWN AS ZYX LEARNING CENTRES LIMITED) AND THE COMPANIES LISTED IN SCHEDULE 1

First Plaintiffs/Applicants on the First Interlocutory Process/Respondents on the Second Interlocutory Process

AND: COMMONWEALTH BANK OF AUSTRALIA AND THE OTHERS LISTED IN THE SCHEDULE

JUDGE: COWDROY J DATE: 2 MARCH 2012 PLACE: SYDNEY

REASONS FOR JUDGMENT 1 On 3 February 2012 the Court delivered its judgment in respect of two interlocutory processes: see ABC Learning Centres Limited, in the matter of ABC Learning Centres Limited; application by Walker (No. 11) [2012] FCA 40. 2 Order 7 made on 3 February 2012 in respect of the second interlocutory process provided: Within 21 days, the parties formulate a precise form of order to accord with the findings of the Court concerning the documents to be produced under Paragraph 2 of Schedule 2 to orders made on 8 July 2011. ('the 8 July 2011 orders') 3 The parties have been unable to formulate a form of order as directed by the Court and accordingly the Court's assistance has been sought upon a re-listing of these proceedings. Two issues arise for consideration as discussed hereunder.

(a) Document Production 4 The Applicants on the First Interlocutory Process ('the liquidators') submit that in respect of the production of manuals, policies and other records by the Applicants on the Second Interlocutory Process ('the banks'), the order for discovery to be made should not be restricted to the banks' documents which relate only to ABC Learning. Rather, the liquidators submit that the banks are required to produce documents which were used by them for determining credit ratings in the period from 1 December 2007 to 31 July 2008 used in respect of any borrower in a similar circumstance to ABC Learning. 5 The liquidators seek such documents to assist in their consideration whether banks, in the provision of finance to ABC Learning, applied their policies consistently in relation to other borrowers. It is claimed that such investigation is necessary to determine whether the transaction could be said to be an 'uncommercial transaction' pursuant to s 588FE(2B)(a)(i) of the Corporations Act 2001 (Cth) ('the Act'); or whether the transaction constituted an 'unfair preference' within s 588FE(2B)(a)(ii) of the Act; or was otherwise an unfair preference within the meaning of s 588FC of the Act. It is submitted that such a decision can only be made by comparing the banks' dealings with other borrowers. Accordingly, the liquidators seek production of documents by the banks in accordance with Exhibit J. 6 The basis for the liquidators' interpretation is [119] of the judgment which provides: The Court has considered the provisions of Exhibit J but finds that such provisions are still too broad, since the categories of documents required to be produced are not limited to those which relate to ABC Learning. If Paragraph 2 of Schedule 2 of the July 2011 Orders is redrafted in the precise form of Exhibit J, the Court finds that the production of such documents is not ambiguous and is not oppressive. [Emphasis added] 7 Although it may appear that [119] is inconsistent, there is in fact no inconsistency. Paragraph 2 of Schedule 2 of the 8 July 2011 orders required production of the following documents: All documents in the period 1 September 2007 to 31 July 2008 (inclusive) evidencing or recording the standard or internal policies or procedures relating to credit ratings or risk ratings of You pursuant to or by which You reviewed, assessed, considered and/or determined: (a) An application or request for credit by ABC or for the amendment or variation of the terms of any credit previously provided to ABC; (b) A credit rating or risk rating assigned to or in respect of ABC; and/or (c) A probability, chance or likelihood of default rating or marker assigned to or in respect of ABC. 8 The Court regarded paragraph 2 of Schedule 2 of the 8 July 2011 orders to lack precision and considered that the form, i.e. the format, of Exhibit J was more specific and removed any possibility of doubt upon the banks' obligation to produce documents. For this reason the Court envisaged that the content of paragraph 2 Schedule 2 be redrafted in the format or template of Exhibit J, but essentially seeking production of the documents referred to in paragraph 2 of Schedule 2. It was not intended that the requirement to discover the banks' manuals and other documents should extend to the documents other than those pertaining to a consideration by the banks of the credit rating for ABC Learning. The Court considered, as stated in the first sentence of [119], that the provisions of Exhibit J, insofar as they extended such discovery to the banks' borrowers generally were 'still too broad', because the documents to be produced under that exhibit would not be limited to those relating to ABC Learning. 9 Although the Court is mindful that the liquidators seek discovery of such documents to enable comparison to be made of the banks' dealings with other borrowers, the Court reiterates its decision, as expressed in the judgment of 3 February 2012, that the scope of discovery only extends to documents relating to the affairs of the company under consideration, namely ABC Learning, and any collateral purpose is beyond the purview of discovery. For this reason, the template of Exhibit J as a substitute for paragraph 2 of Schedule 2 of the 8 July 2011 orders corresponds to the Court's decision expressed at [119] of the judgment. The proposed order prepared by the banks is the version which reflects the Court's intention. The Court will make such order, subject to further order.

(b) Access 10 The second issue arises in respect of the question of access to documents. The liquidators seek an order that access be granted to IMF (Australia) Ltd ('IMF') not only in respect of the documents produced under the 8 July 2011 orders but to all manuals and policy documents including documents to be produced arising from the Court's decision delivered on 3 February 2012. 11 In support of this submission the liquidators rely upon order 4 made on 3 February 2012 in respect of the liquidators' amended interlocutory process filed on 10 October 2011 ('the liquidators' application'), which provides as follows: The liquidators are justified, upon terms as to confidentiality in the terms of Schedule 3 attached to the First Interlocutory Process, in providing to IMF (Australia) Ltd copies of documents that have been or are produced to the Court or provided to the liquidators or to their solicitors or counsel in relation to the public examinations in these proceedings. [Emphasis added] 12 Paragraph 4 of the liquidators' application sought access to 'documents that have been or are produced to the Court or provided to the liquidators or to their solicitors or counsel in relation to the public examinations in these proceedings' [Emphasis added]. The inclusion of the words 'or are produced' in such application implied that documents remained to be produced under the existing order for production. Otherwise such words are otiose. 13 The Court was unaware whether all such documents had been produced under the existing orders for production or whether some remain to be produced. It was for this reason that the words 'or to be produced' were included to conform to the intent of the order sought in paragraph 4 of the liquidators' application. 14 Prior to the hearing of the liquidators' application the issue of access to the banks' discovered documents was the subject of considerable correspondence between the parties. It culminated in an agreement between the parties as reflected in a letter of the liquidators' solicitors to the banks' solicitors dated 25 November 2011. Consistent with such agreement, the liquidators acknowledged in their submissions to the Court that access to the banks' manuals documentation and other such records would be limited at this stage to lawyers for the liquidators, the liquidator and employees of their office and an independent expert. There was no suggestion that this category of documents would be made available to IMF. Further, the confidentiality arrangement made between the parties and contained in the orders made by consent by Registrar Wall on 24 August 20111 provided that documents produced by the banks would not be shown to IMF unless otherwise ordered. 15 Under the orders for discovery contained in the Court's decision of 3 February 2012 it was not intended that access be provided to IMF in respect of the banks' manuals and other document without further order as such access was not sought and would have been contrary to the liquidators' submissions. 16 In view of the above it is unnecessary to make any further order for access. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Cowdroy.