Plaintiff v Defendant

On the proper construction of the Trust Deed for First Ranking Debenture Stock dated 12 December 1994 (as amended from time to time) (Trust Deed) between Banksia Securities Ltd (formerly North Central Securities Limited) and Trust Company (Nominees) Limited ABN 14 000 154 441 (formerly Permanent Nominees (Aust) Ltd), does cl 18.04 thereof permit payment to the Trustee for additional remuneration as provided for in cl 18.02 of the Trust Deed in priority to the payments set out in cl 16.01(e) and (f) of the Trust Deed?

2 The Plaintiff, Banksia Securities Limited (Receivers and Managers Appointed) (in Liquidation) ("the Company"), contends that the answer to the Preliminary Question is "No". In these proceedings, submissions were made on behalf of the Company by the liquidators of the Company ("the Liquidators").[1]

3 On the other hand, the Defendant, The Trust Company (Nominees) Limited ("Trust Co" or "the Trustee"), contends that the answer to the Preliminary Question is "Yes".

4 The Receivers and Managers of the Company (Messrs Anthony Gregory McGrath, Joseph David Hayes, Matthew Wayne Caddy and Robert Michael Kirman) ("the Receivers") were represented at the hearing of the Preliminary Question but made no submissions.

5 The Preliminary Question arises in proceedings between the Company and Trust Co in which the Company seeks a variety of relief which includes, in the Further Amended Statement of Claim (filed in accordance with orders made on 18 May 2016) ("the FASC"), a prayer for:[2]

A declaration that on its proper construction, the Banksia Trust Deed does not permit payment to the Trustee of any additional remuneration pursuant to cl 18.02 of the Banksia Trust Deed in priority to the payments referred to in cl 16.01(e) and (f) of the Banksia Trust Deed.

The reference to the Banksia Trust Deed is a reference to the Trust Deed as described in the Preliminary Question.

6 The pleadings in support of the prayer for this particular declaratory relief are contained in paras 20 to 25 of the FASC. In the context of these pleadings, it is pleaded that on 24 June 2014 the Court made orders winding up the Company in insolvency and appointed liquidators for the Company;[3] that on 18 September 2015 Trust Co made a demand for payment of additional remuneration under cl 18.02 of the Trust Deed;[4] and that Trust Co wrongly contends that it is entitled to payment of the additional remuneration under cl 18.02 in priority to payments referred to in cll 16.01(e) and (f) of the Trust Deed.[5] In respect of this position, the Company places particular reliance on its construction of cll 16.01, 18.02 and 18.04 of the Trust Deed.

7 In its Defence to Further Amended Statement of Claim, Trust Co admits the pleadings in the FASC with respect to the liquidation of the Company and its demand for additional remuneration, together with the specific provisions of the Trust Deed on which the Company relies. It does, however, deny that its contention as to the proper construction of the provisions of the Trust Deed is wrong. Trust Co does not plead any other provisions of the Trust Deed said to be relevant to the allegations raised by the Company in these pleadings.

8 On 25 October 2012, Receivers and Managers of the Company were appointed. Nearly two years later, on 24 June 2014, the Court made orders winding up the Company in insolvency and appointing John Ross Lindholm and Peter Damian McCluskey as joint and several liquidators of the Company.

9 The Company, prior to its receivership, issued debenture stock to investors pursuant to the terms of the Trust Deed.

10 By an application dated 17 December 2015 in proceeding number S ECI 2015 000465 ("the s 424 Proceeding"), the Receivers sought directions under s 424 of the Corporations Act 2001 (Cth) that they are justified in causing the Company to pay additional remuneration to Trust Co under the Trust Deed.

11 In an affidavit sworn by Mr Anthony Zita, solicitor, on 24 February 2016 in the s 424 Proceeding it is deposed that Mr Zita's client Mr Laurence John Bolitho, being a plaintiff in the class action in proceeding number S CI 2012 07185 against inter alia the Company and Trust Co ("the Class Action"), opposed the Receivers' application and Mr Bolitho sought to be appointed as contradictor in the s 424 Proceeding.[6]

12 An affidavit was sworn by Mr Douglas Arthur Crow on 25 February 2016 in the s 424 Proceeding in which Mr Crow also applied to be a contradictor to the Receivers' application. Mr Crow deposed that as one of the Company's debenture holders he was appointed a member of the committee of debenture holders of the Company formed by the Receivers on 11 March 2013 and was subsequently also appointed a member of the Committee of Inspection formed by the Liquidators on about 23 December 2015.

13 At the directions hearing in the s 424 Proceeding on 26 and 29 February 2016 counsel for Mr Crow submitted that the procedure for seeking directions under s 424 of the Corporations Act 2001 (Cth) was not the appropriate way for the Court to determine whether the additional remuneration of $3,960,163 for additional duties and responsibilities performed by Trust Co from 25 October 2012 to February 2014 ought be paid by the Company to Trust Co pursuant to cl 18.02 of the Trust Deed.[7]

14 Consequently, orders were made by the Court on 29 February 2016 in the s 424 Proceeding which inter alia provided for the appointment of Mr Bolitho and Mr Crow as contradictors and granted leave to Trust Co to be heard pursuant to r 2.13 of the Supreme Court (Corporations) Rules 2013. The issue of the form and constitution of the s 424 Proceeding (including any overlap with other proceedings) was set down for hearing on 12 May 2016.

15 Written submissions were filed on 24 March 2016 on behalf of Mr Crow and Mr Bolitho. The Liquidators made no submissions in respect of the points raised by each of the contradictors opposing the Receivers' application, but raised a different point which is that, in the Liquidators' submission, cl 16.01 of the Trust Deed does not permit payment to Trust Co of additional remuneration under cl 18.02 unless and until all amounts owing to note holders (including interest) are paid in full.

16 In light of these submissions and further submissions which were made by the Liquidators, the Receivers, Mr Bolitho and Mr Crow at the hearing on 12 May 2016, the Court accepted the utility of addressing the Preliminary Question and in a proceeding in which its determination would - unlike the position in the s 424 Proceeding - bind all relevant parties in the range of proceedings which are referred to collectively as the Banksia proceedings.[8]

17 The following provisions of the Trust Deed are significant (in some instances, critically, and in other instances, contextually):[9]

1. In this Deed the following expressions, shall, unless otherwise specified or unless the subject or the context otherwise indicates, have the following meanings:

...

"Debentureholder" means each of the several persons for the time being entered as the holders of the Debenture Stock in the relevant Register or where a Debenture is issued payable to bearer the lawful holder of that Debenture Certificate for the time being and Debentureholders means all of them;

...

"Enforcement Date" means a date on which the Trustee serves a notice pursuant to Clause 12.01 on the Company;

...

"Moneys Hereby Secured" means the Principal Moneys and interest payable on the Issued Debenture Stock, Security Stock and any other moneys payable to or at the direction of the Trustee or any Stockholder under or pursuant to this Deed or the terms of issue of any of the Debenture Stock;

...

"Mortgaged Property" means the whole of the undertaking property and assets of the Company and the Guarantors (if any) mortgaged or charged by or pursuant to this Deed and includes any part thereof;

...

"Principal Moneys" means in relation to Issued Debenture Stock the principal moneys (excluding any premium) for the time being owing in respect of the Issued Debenture Stock;

...

ACKNOWLEDGMENT OF DEBT

1. The Company hereby acknowledges its indebtedness to the Trustee in respect of the Moneys Hereby Secured.

1. The Debentureholders are deemed to be the beneficial owners of the Issued Debenture Stock held by them respectively.

...

COVENANTS AND AGREEMENTS

...

Company to pay Principal and Interest

6.05 Subject to Clause 6.06, the Company covenants with the Trustee that:

(a) as and when the Stock is to be redeemed or paid off in accordance with the relevant terms of issue, the Company will pay to the Trustee the amount of principal to be so redeemed or paid off and will comply with its obligations in relation to that Debenture Stock in such manner as the Trustee may request; and

(b) that the Company will until all the Stock shall have been redeemed or paid off pay to the Trustee interest thereon at the rate (if any) fixed by and in accordance with the terms of issue of the Stock.

Dealings with Debentureholders

6.06 Notwithstanding anything to the contrary herein contained the Company shall, unless and until the Trustee requests the Company to make payments or otherwise redeem Stock in accordance with Clause 6.05, make all payments of principal, premium (if any) and interest (if any) to or redeem in favour of, the Debentureholders. Such payment or redemption shall be in satisfaction pro tanto of the Company's obligation under Clause 6.05 PROVIDED ALWAYS that if by the terms of issue of any Debenture Stock the first payment of interest thereon is payable only to the person to whom such Stock was issued (whether or not such person is the registered holder of such Interest at the relevant date) then payment of interest to such person shall operate in satisfaction of the Company's obligations in regard to such payment of interest under Clause 6.05 and this Clause 6.06.

...

CREATION, REGISTRATION & STAMPING OF CHARGES

Floating Charge

10.01 The Company as beneficial owner hereby by way of first floating charge charges in favour of the Trustee as trustee for the Debentureholders the undertaking of the Company and all its real and personal property and assets and rights whatsoever and wheresoever both present and future including its uncalled and called but unpaid capital for the time being with the payment of the moneys hereby secured.

...

EVENTS OF ENFORCEMENT AND DEFAULT

Events

12.01 Upon the occurrence of any of the following events, that is to say:

(a) if the Company fails to pay principal in respect of any Stock within 7 days after the same becomes due and payable;

...

(d) if:

(i) either:

(aa) a Controller is appointed;

(bb) any encumbrancee takes possession of; or

(cc) any encumbrance enforces his encumbrancee against,

the Mortgaged Property; or

...

TRUSTEE'S POWER TO CARRY ON COMPANY'S BUSINESS AND TO SELL

Trustee's Powers on Default

14.01 After an Enforcement Date the Trustee may at its discretion without appointing a Controller:

(a) enter upon or take possession of the Mortgaged Property and if the Trustee thinks fit carry on a Group Member's business with all the power of an absolute owner including the power to:

...

(vii) have and give effect to the powers which a Controller would have at law including the Law; and

...

(c) borrow at any time without security or on the security of the Mortgaged Property (and so that any encumbrance given by the Trustee pursuant to this Clause 14.01(c) may rank in priority to any of the Charges) any monies which may be required for:

...

(iii) advancing monies to a Controller for the carrying on of the business of any Group Member;

(iv) carrying into effect all or any of the purposes of this Deed;

(v) defraying or making good any costs, charges, losses or expenses incurred by the Trustee in relation to this Deed,

...

CONTROLLERS AND ENFORCEMENT GENERALLY

Appointment Scope

15.01 After an Enforcement Date the Trustee may by writing appoint or remove a Controller of the Mortgaged Property or several Controllers of several parts of the Mortgaged Property and in the case of the removal, retirement or death of any such Controller may appoint another in his place. In addition to and not in substitution for the rights and powers conferred upon Controllers and mortgagees by law (including the Law) in any place where any part of the Mortgaged Property may be situated the following provisions shall (to the full extent permitted by law) have effect:

(a) the appointment of a Controller may be made either before or after the Trustee enters into or takes possession of the Mortgaged Property;

(b) the Controller may be invested by the Trustee with such of the powers, authorities and discretions as are conferred upon the Trustee by this Deed which could be exercised by a Controller as the Trustee may think expedient;

(c) unless specifically restricted by the Trustee the Controller may exercise as Controller all the powers, discretions and authorities vested in the Trustee by this Deed (including Clauses 14 and 17) and all the powers, discretions and authorities exercisable by a Controller pursuant to the Law;

(d) the Controller shall in the exercise of his powers, authorities and discretions comply with any directions given by the Trustee;

(e) the Trustee may from time to time determine the remuneration of the Controller on or any basis and direct payment of the same out of the Mortgaged Property;

(f) the Trustee may (without being bound to do so) at any time require the Controller to give security for the due performance of his duties as Controller and may fix the nature and the amount of such security;

(g) unless directed otherwise by the Trustee all monies received by the Controller shall be paid to and held by the Trustee on account of the Monies Hereby Secured and applied or held as directed in Clause 16;

(h) the Trustee may pay any monies comprised in the Mortgaged Property to the Controller to be applied for the purposes of this Deed and the Trustee may from time to time determine what funds the Controller may keep in hand for such purposes; and

(i) the Controller shall be the agent of the relevant Group Member which shall be solely responsible for his acts and defaults and (subject to Clause 15.01(e)) for his remuneration.

...

APPLICATION OF MONIES RECEIVED BY TRUSTEE

Monies out of Mortgaged Property

16.01 All monies received by the Trustee from:

(a) a Controller appointed by the Trustee; or

(b) any sale, management of business or otherwise from or out of the Mortgaged Property (except money received by the Trustee and required for managing the business of a Group Member),

shall be applied after the payment of prior encumbrances (if any) and after the setting aside of any monies to which the Trustee is not entitled by virtue of the Charges;

(c) first in payment of all costs, charges and expenses properly incurred by the Trustee in the exercise of any powers contained in this Deed or otherwise in the execution of the trusts of this Deed and any interest payable thereon;

(d) secondly in payment of that part of any fee due and payable pursuant to Clause 18.01;

(e) thirdly in payment pari passu of all principal and premium (if any) monies owing in respect of the Debenture Stock (other than Security Stock) and in payment (subject to Clause 5.08(f)(i) of all amounts (other than interest) owing in respect of Security Stock;

(f) fourthly in payment of all interest owing or accrued in respect of the Debenture Stock whether such interest has or has not then become payable;

(g) fifthly in payment of the remainder of any due and payable fee pursuant to Clause 18.01; and

(h) thereafter the monies (including the part thereof (if any) set aside as aforesaid) shall be applied in accordance with Clause 16.02.

PROVIDED ALWAYS that if the Trustee is of the opinion that sufficient funds to pay principal and premium (if any) monies owing in respect of Debenture Stock will be available, interest in respect thereof may be paid before such principal and premium (if any) monies have been repaid.

Other Monies

16.02 All monies received by the Trustee otherwise than from or out of the Mortgaged Property shall be applied;

(a) first in payment of the amounts specified in Clause 16.01(a);

(b) secondly in payment of any due and payable fee pursuant to Clause 18;

(c) thirdly in payment pari passu of all principal and premium monies owing in respect of the Stock; and

(d) fourthly in payment of all interest owing or accrued in respect of Stock whether such interest has or has not then become payable,

in each case, to the extent to which they have not been paid pursuant to Clause 16.01 and thereafter the monies shall be held in trust for the Company PROVIDED ALWAYS that if the Trustee is of the opinion that sufficient funds to pay principal and premium (if any) monies owing in respect of Stock will be available, interest in respect thereof may be paid before such principal and premium (if any) monies have been paid.

...

TRUSTEE'S POWERS, RIGHTS AND RESPONSIBILITIES

...

Indemnity for Trustee, Controller etc

17.05 Without prejudice to any right of indemnity given to trustees by any applicable law, the Trustee and every Controller, attorney, manager, agent or other person appointed by it pursuant to this Deed shall be entitled to be indemnified out of the Mortgaged Property and by the Company and each Guarantor in respect of all liabilities and expenses incurred by them in the execution or purported execution of the trusts or powers constituted or conferred by this Deed and against all actions, proceedings, costs, claims and demands in respect of any matter or thing done or omitted or in any way relating to this Deed other than a claim arising out of their negligence or wilful neglect or default and the Trustee may retain and pay out of any monies in its hands arising therefrom (in priority to any claim by any Debentureholder) all sums necessary to effectuate and satisfy such indemnity.

...

TRUSTEE'S FEES AND EXPENSES

Basic Fee

18.01 The Company shall pay to the Trustee by way of remuneration for its services as Trustee an annual fee payable half-yearly not later that [sic] the last day of January and July in each year on the amount of Issued Stock as at 30th June and 31st December in each year PROVIDED THAT the fees payable by the Company at the date of this Deed and until otherwise amended shall be in accordance with the fees letter issued by the Trustee to the Company dated 8th November, 1994 and PROVIDED FURTHER that the fee payable in respect of every half-yearly period shall be deemed to accrue from day to day and PROVIDED FURTHER that the scale for the time being in force for the calculation of the fee payable under this Paragraph may be reviewed:

(i) not earlier than the 30th day of June, 1999 and thereafter at intervals of not less than five (5) years from the date on which the written notice requesting the last review was given by the Trustee or the Company; or

(ii) at any time by agreement between the Trustee and the Company;

and if in consequence of any such review the Trustee and the Company agree in writing to vary such scale THEN the scale as so varied shall be the basis for the calculation of such fee and such fee as so calculated shall accrue from the date agreed upon in writing by the Trustee and the Company PROVIDED FURTHER that if in consequence of any such review no agreement is reached between the Trustee and the Company then the scale which was the subject of such review shall continue in force until varied by agreement in consequence of a subsequent review hereunder;

(c) such additional and other remuneration as may from time to time be mutually agreed by the Company and the Trustee.

Fee after Enforcement

18.02 The Company after an Enforcement Date will also pay on demand such additional remuneration as shall be commensurate with any additional duties and responsibilities performed or undertaken by the Trustee in consequence of enforcing this Deed as shall from time to time be agreed between the Company (or any Controller or liquidator thereof) and the Trustee and in the absence of agreement such additional remuneration shall be the amount (if any) by which commission calculated in accordance with the scale of commission for the time being lawfully chargeable by trustee companies in Victoria on any corpus sum actually received by the Trustee would exceed the amount of the recurrent fee payable pursuant to Clause 18.01 in respect of the half-yearly or other agreed period in which sums (if any) are received by the Trustee PROVIDED HOWEVER that where any sum to which this Clause 18.02 would apply if it were paid to the Trustee is paid direct to Debentureholders and not to the Trustee such sum shall be deemed to be received by the Trustee for the purposes of this Clause 18.02.

Disbursements of Trustee

18.03 Without limiting the generality of the other provisions of this Deed the Company covenants that it will pay to the Trustee on demand all costs, charges and expenses whatsoever (including solicitor and client as well as party and party costs) necessarily incurred by or on behalf of the Trustee and any stamp duty, financial impost, tax or other duty or tax whatsoever which may be payable from time to time:

(a) in connection with the preparation, execution, registration, stamping and administration of this Deed or of any prospectus inviting subscription for Stock pursuant to this Deed;

(b) in connection with any breach in the observance or performance by any Group Member of any of the covenants, obligations, conditions and provisions of this Deed notwithstanding that such breach may also constitute a breach or contravention of or non-compliance with any law, whether statutory or otherwise;

(c) in connection with preparations for the convening and holding of any meeting of Debentureholders and the carrying out of any directions or resolutions of Debentureholders;

(d) in connection with any amendment or proposed amendment of this Deed or any question relating to the construction of this Deed; and

(e) in connection with any costs necessarily incurred by the Trustee in carrying out its duties and obligations under this Deed.

Priority of Fees and Disbursements

18.04 IT IS HEREBY COVENANTED DECLARED AND ACKNOWLEDGED BY THE COMPANY that all remuneration, fees, payments, costs, charges and expenses referred to in this Clause 18 shall be part of the Monies Hereby Secured and shall remain payable until the trusts hereof shall be finally wound up and whether or not a Controller shall have been appointed or the trusts hereof be in the course of administration by or under the order of any court AND IT IS HEREBY FURTHER DECLARED AND ACKNOWLEDGED that the Trustee may retain and pay to itself in priority to any claim by any Debentureholders all such remuneration, fees, payments, costs, and charges and expenses out of any monies for the time being in its hands upon the trusts of this Deed or in the hands of any Controller appointed by the Trustee pursuant to this Deed.

18 The parties are not at odds with respect to the principles of construction to be applied to determine the proper construction of the provisions of the Trust Deed necessary to answer the Preliminary Question. Rather, the distance between them arises with respect to the application of these principles to the relevant provisions of the Trust Deed.

19 Some important principles were referred to by the parties which, in the present context, it is helpful to repeat.

20 First is the importance of the language of the Trust Deed. Thus, Kirby P, in Hyde & Skin Trading Pty Ltd v Oceanic Meat Traders Ltd, said:[10]

[I]t is the fundamental rule, that a court should give the words of a written agreement the natural meaning that they bear. Subject to that rule, in giving meaning to the words of an agreement between commercial parties, courts will endeavour to avoid a construction which makes commercial nonsense or is shown to be commercially inconvenient. This is because courts will infer that commercial parties would not themselves normally agree in such a way.

21 Secondly, in Electricity Generation Corp v Woodside Energy Ltd, French CJ, Hayne, Crennan and Kiefel JJ also emphasised the need to avoid what might be described generally as "commercial absurdity" in the following passage:[11]

As Arden LJ observed in Re Gold Key Ltd, unless a contrary intention is indicated, a court is entitled to approach the task of giving a commercial contract a businesslike interpretation on the assumption "that the parties ... intended to produce a commercial result".[12] A commercial contract is to be construed so as to avoid it "making commercial nonsense or working commercial inconvenience."[13]

22 Thirdly, and more generally, the courts will strive to avoid absurdity or inconsistency.[14] In this respect, the courts accommodate the extent of potential difficulties of this kind in complex documents. Thus, Collins SCJ observed in Re Sigma Finance Corp:[15]

In complex documents ... there are bound to be ambiguities, infelicities and inconsistencies. An over-literal interpretation of one provision without regard to the whole may distort or frustrate the commercial purpose. This is one of those too frequent cases where a document has been subjected to the type of textual analysis more appropriate to the interpretation of tax legislation which has been the subject of detailed scrutiny at all committee stages than to an instrument securing commercial obligations.

23 In applying these principles or approaches, it is axiomatic that the document must be read as a whole with a view to harmonising inconsistencies.[16] It also follows that in so doing, general provisions should give way to, and thus accommodate, specific provisions dealing with the subject matter within the scope of the general provision.[17] This conforms with the well-known principle expressed by Hoffman LJ (as his Lordship then was) in William Sindall Plc v Cambridgeshire County Council:[18]

[W]ords capable of bearing a very wide meaning may have to be given a narrow construction to reconcile them with other parts of the document. This rule is particularly apposite if the effect of general words would otherwise be to nullify what the parties appear to have contemplated as an important element in the transaction.

24 Moreover, it is trite law that the rules for the construction of contracts also apply to trust deeds.[19] It is submitted that the well-known rule applies "that a deed ought to be read as a whole, in order to ascertain the true meaning of its several clauses; and that the words of each clause should be so interpreted as to bring them into harmony with the other provisions of the deed, if that interpretation does no violence to the meaning of which they are naturally susceptible."[20]

25 It also follows that an aspect of reading the document as a whole is that, unless there are clear contradictions in language or subject matter, the same words or expressions should be given the same meaning throughout the document.[21]

26 The principles applying to the interpretation of commercial agreements and agreements, including trust deeds and similar instruments, have been discussed with reference to authority. In light of that discussion, I now turn to the proper construction of the relevant provisions of the Trust Deed, particularly the provisions of cll 16 and 18. The proper construction of these provisions, together with a number of relevantly related provisions of the Trust Deed is necessary for the purpose of providing an answer to the Preliminary Question.

27 Clause 16.01 sets out the regime for payment of moneys from moneys which are received by Trust Co from a Controller appointed by Trust Co or from any sale of the Mortgaged Property as a result of any sale, management of business or otherwise out of that property in order of priority by means of "waterfall" provisions.

28 Clause 16.01(c) provides first for the payment of "all costs, charges and expenses properly incurred by the Trustee" in the exercise of any powers under the Trust Deed or otherwise in the execution of the trusts of the Deed and any interest payable thereon. The second matter for payment is provided for in cl 16.01(d) and is the payment of the basic remuneration fee to Trust Co as provided for in cl 18.01. The logic thus far is reasonably clear - namely, as the first priority, payment of costs, charges and expenses in respect of the exercise of powers and execution of the trusts by Trust Co and then, as a reasonable corollary of that, payment to Trust Co of its basic remuneration fee.

29 The next level of payments, levels three and four, are payments to the debenture stockholders of any principal and premium (if any) moneys owing and then, having satisfied those obligations and made those payments, fourthly, in payment of all interest owing or accrued in respect of the debenture stock, whether or not the interest has or has not then become payable. This is the effect of cll 16.01(e) and (f).

30 The fifth level in the priority "waterfall" is payment of any "remainder" of any fee due to Trust Co and payable pursuant to cl 18.01. This is, of course, the base remuneration, the Basic Fee, payable to Trust Co and, consequently, it might be wondered why there would be any "remainder". In my view, as submitted by the Liquidators, the explanation lies in the reality that the carrying out of the payment regime - particularly when there may be ongoing matters with respect to the exercise of trust powers and the operation of the trust as contemplated in cl 16.01(c) - may occur over a period of time, which would mean that there may be fractions or "remainders" of the annual fee payable to Trust Co under cl 18.01. In any event, that is not a matter critical for present purposes.

31 The "remainder" provision of cl 16.01(h) is, however, important, as it is the sixth level of the "waterfall", and provides that the remainder of moneys the subject of the cl 16.01 "waterfall" are to be applied in accordance with cl 16.02. The effect of this provision is, in my opinion, to effectively extend the cl 16.01 "waterfall" by adding further levels in order to deal with moneys received by the Trustee under cl 16.01 where all these moneys have not been paid out in the preceding five levels of the "waterfall". In terms of the drafting and structure of the Trust Deed, these provisions, in effect, incorporate the provisions of cl 16.02 by reference into cl 16.01.

32 The manner in which cl 16.01(h) operates is, in my opinion, important to keep in mind, because cl 16.02 does also have an independent operation with respect to all moneys received by the Trustee otherwise than from or out of the Mortgaged Property - in other words, moneys other than those the subject of and caught by cl 16.01(b) - from any sale, management of business or otherwise from or out of the Mortgaged Property. This would not, however, seem to be the position with respect to moneys received by Trust Co from a Controller appointed by Trust Co to the extent that any of these moneys do not satisfy the description of having been "received by the Trustee otherwise than from or out of the Mortgaged Property".[22] Presumably, the reality is that if a Controller is appointed by Trust Co, any moneys received by the Controller are almost certainly going to be moneys within the description of moneys "from or out of the Mortgaged Property"; hence cll 16.01 and 16.02 would have a separate primary operation in most, if not all, situations.

33 Once the cl 16.01 "waterfall" is extended to the levels provided by cl 16.02, the first matter addressed is, again, all costs, charges and expenses incurred by Trust Co with respect to the exercise of powers in the execution of the trusts under the Trust Deed - by reference to the amounts specified in cl 16.01(c). It should be observed that the Trust Deed actually refers to cl 16.01(a) in cl 16.02(a), but it is common ground that this is clearly a mistake and that the reference in cl 16.02(a) should be to cl 16.01(c). In my view, this is clearly the position, as is evident on the face of the Trust Deed provisions.

34 The second further level in the "waterfall" is, in accordance with cl 16.02(b), payment of any due and payable fee pursuant to cl 18 of the Trust Deed. It is important to note that the reference in cl 16.02(b) is to cl 18, and not to any parts of that clause - such as the provisions for payment of the Basic Fee to Trust Co which is the subject of cl 18.01.

35 The third and fourth levels of the "waterfall" as extended by cl 16.02 are, respectively, payment of principal and premium moneys owing in respect of debenture stock and payment of all interest owing or accrued in respect of debenture stock, whether such interest has or has not then become payable. Again, there is, in my view, a clear logic in these provisions - namely, payment of expenses with respect to the exercise of powers and execution of the trusts under the Trust Deed and then payment of Trust Co's fees - and in this final distribution regime adopted from cl 16.02, all the then outstanding fees (the Basic Fee and otherwise) and disbursements of the trustee - Trust Co - as provided for in cl 18.

36 There are provisos to both cll 16.01 and 16.02 which enable Trust Co to vary the payment priority scheme with respect to principal, any premium and interest. These provisions are not, however, relevant in the present context.

37 Returning to cl 16.01(g), which provides for the payment of the "remainder" of any Basic Fee payable to Trust Co under cl 18.01, there is a further dimension to this provision which is highlighted by the Liquidators in their submissions:[23]

1. The fact that cl 16.01(d) refers to payment "of that part of any fee due and payable" under cl 18.01 and then cl 16.01(g) provides for payment "of the remainder of any due and payable fee pursuant to Clause 18.01" may seem at first blush to be an anomaly. However, it is submitted that the use of the word "remainder" in the latter reference makes clear that cl 16.01(g) provides for any further basic fee that may progressively become due to Trust Co, after the initial distribution, depending on the timing of any enforcement of the Charges under the Trust Deed.
2. The liquidators also refer to the fact that the repeated reference to cl 18.01 in cl 16.01 and the provision for payment of the "remainder" of any basic fee due to the Trustee is reflected in other trust deeds to which Trust Co is a party.[24] This supports the contention that the repeated reference to cl 18.01 in cl 16.01 is not a mistake or error.
3. In any event, any superficial difficulty that may be considered to be created with the repeated reference to cl 18.01 in cl 16.01 may be corrected in order to avoid absurdity or inconsistency.[25]
4. Nonetheless, on any reading cl 16.01 does not permit a construction that would prefer payment pursuant to cl 18.02 before payment of principal and interest to debenture holders.

38 As I have already indicated, I accept the logic of cl 16.01(g) in relation to the possibility of there being a "remainder" of the Trust Co Basic Fee. I also accept the further point made in these submissions that the reference to cl 18.01 in cl 16.01 is not a mistake - both on an historical basis by reference to other similar trust deeds insofar as that may be relevant and permissible, but, more significantly in my view, having regard to the structure of both cll 16.01 and 16.02. More particularly, as it seems reasonable to assume that if there is a "surplus" after the operation of the cl 16.01 "waterfall", then the additional levels of the "waterfall" are designed to see all moneys received by Trust Co paid out and, consequently, any further fees to which Trust Co may be entitled under cl 18 - apart from under cl 18.01 - should also be addressed and not merely the Basic Fee under cl 18.01.

39 In the course of its oral submissions, Trust Co appeared to be suggesting that the provisions of cl 16.01(g) would enable the Trustee, Trust Co, to direct, or redirect, moneys in accordance with cl 18 - which would, presumably, enable it to fund payments of additional remuneration under cl 18.02. It would also follow, as I understand the argument, that the provisions of cl 18.04 would prevail, the moneys having been taken out of the operation of the "waterfall" provisions of cll 16.01 and 16.02 (the latter assuming an "extension" of the "waterfall"). I do, however, reject this argument. As the Liquidators contend, this construction would render the "waterfall" provisions otiose. Additionally, there is no basis to read the reference in cl 16.01(g) to cl 18.01 - only - as anything but a specific reference to this particular provision, and not the whole of cl 18. As indicated in these reasons, I am of the opinion that the provisions of cll 16.01 and 16.02 are carefully and deliberately drawn and so having regard to the provisions of cll 16.01(g) and 16.02(b) which refer, respectively to cl 18.01 and cl 18, the actual provisions - the language of cl 16.01(g) - must be given effect. Thus, the Trust Co argument fails, particularly as cl 16.01(g) would not, if its language is given effect provide a means of directing moneys for the purposes of the whole of cl 18.

40 Having regard to the principle of construction that regard should be had to the whole of the terms of a written instrument - including a trust deed - it is important to have regard to the provisions of cl 17.05, which provide a right of indemnity to Trust Co to the extent of those provisions. Of particular relevance, in my view, is the use of the word "claim" in cl 17.05, having regard to the use of the word "claim" in the proviso to cl 18.04. The use of the word in the latter context is the subject of reasons which follow, but at this point I direct attention to cl 17.05.

41 Under the provisions of cl 17.05, Trust Co is entitled to be indemnified out of the Mortgaged Property, as defined in cl 1, and also by the Company and each Guarantor in respect of all liabilities and expenses incurred in the execution or purported execution of the trusts or powers constituted or conferred by the Trust Deed. This indemnity applies not only to Trust Co, but also to every Controller, attorney, manager, agent or other person appointed by Trust Co.

42 The indemnity is, as might be expected, broader than one extending to what might be described, in general terms, as liabilities and expenses incurred with respect to the operation of the Trust to an indemnity "against all actions, proceedings, costs, claims and demands in respect of any matter or thing done or omitted in any way relating to this Deed other than a claim arising out of their negligence or wilful neglect or default and the Trustee may retain and pay out of any monies in its hands arising therefrom (in priority to any claim by any Debentureholder) all sums necessary to effectuate and satisfy such indemnity."[26]

43 It will be seen that this additional aspect of the indemnity refers to claims twice - using the words "claims" and "claim" in the primary and excepting provisions, respectively. Clearly though, in context, the word "claim" - in its singular or plural - is referring to a broad range of claims in the context of civil litigation. Although I am of the view that this is clear enough in the primary provisions contained in this additional aspect of the indemnity, it is, in my view, made abundantly clear in the excepting provisions with respect to a "claim" which is one "arising out of their negligence or wilful neglect or default". Moreover, if the generality and broad scope of the meaning of "claims" or "claim" in the context of these provisions was not clear enough for the reasons indicated, this is reinforced when one has regard to the scope of the indemnity, which extends not only to the Trustee, Trust Co, but to every Controller and the other classes of persons specified. The broad scope of "claims" is also unsurprising, given the context - namely, a broad-reaching indemnity provision designed to protect Trust Co and others, as indicated.

44 The particular significance of the operation of cl 18.04 in the present context is that it is a provision directed to "all remuneration, fees, payments, costs, charges and expenses referred to in this Clause 18".[27] This includes not only the Basic Fee provided for in cl 18.01, but also the fee payable to Trust Co after an "Enforcement Date" for "such additional remuneration as shall be commensurate with any additional duties and responsibilities performed or undertaken by the Trustee in consequence of enforcing this Deed" under the provisions of cl 18.02.[28]

45 The Liquidators submit that it would be perverse and to the detriment of the Debentureholders to construe cl 18.04 as overriding the "waterfall" provisions of cl 16.01 in the absence of express words to that effect. Thus, it is said that in circumstances where the Company has had a Controller appointed by Trust Co and is now in liquidation, the "waterfall" for priority of payments as provided for in cl 16.01 of the Trust Deed is integral to the payment of any moneys that have been recovered by the Receivers or which will be recovered by the Liquidators. Furthermore, the Liquidators contend that the import of the Trust Deed in this respect ought to be upheld; citing in aid of this position the decision of the Court of Appeal in MLW Technology Pty Ltd v May.[29] Moreover, it is submitted that this approach conforms with the principle expressed by Hoffman LJ in William Sindall Plc v Cambridgeshire County Council to which reference has been made.[30]

46 Returning to the provisions of cl 18.04, it should be observed, first, that cl 18.04 does not provide for immediate payment of the remuneration, fees and other moneys to which it is directed, but rather provides that they "shall be part of the Monies Hereby Secured and shall remain payable until the trusts hereof shall be finally wound up". This applies whether or not a Controller has been appointed or the trusts are in the course of administration by or under an order of any court. In the present circumstances, a Controller has been appointed and the provisions of cl 16.01 enlivened but, in my view, this does not affect the interpretation of cl 18.04 as it must be ascribed a meaning in the context of the provisions of the Trust Deed as it stands, unaffected by circumstances which it may or may not encounter - such as the appointment of a Controller or otherwise.

47 The second critical aspect of cl 18.04 is the "further" concluding provision:

AND IT IS HEREBY FURTHER DECLARED AND ACKNOWLEDGED that the Trustee may retain and pay to itself in priority to any claim by any Debentureholders all such remuneration, fees, payments, costs, and charges and expenses out of any monies for the time being in its hands upon the trusts of this Deed or in the hands of any Controller appointed by the Trustee pursuant to this Deed.

These important "further" provisions of cl 18.04 provide a strong indication that this provision is intended to operate as and to be construed as a provision of general application because it applies to "any monies for the time being in [Trust Co's] hands upon the trusts of this Deed or in the hands of any Controller appointed by [Trust Co]". Thus, it follows that its provisions apply to moneys coming into the hands of Trust Co as Trustee under the Trust Deed from any source - moneys to which cl 16.01 applies, moneys to which 16.02 applies and moneys out of the Mortgaged Property to which the provisions of cl 17.05 apply, for example. It follows from the principles of construction to which reference has been made that the general provisions of cl 18.04 must be construed to reconcile their operation with the more specific provisions of cl 16.01.[31] The particularity of the provisions of cl 16.01 have already been discussed, especially, in my view, the careful drafting with respect to references to cl 18 - with a specific reference to cl 18.01 in cl 16.01(g) and a reference to cl 18 as a whole in cl 16.02(b).[32] Consequently, it follows that cl 18.04, as a general provision, should not be construed as overriding the carefully drawn "waterfall" provisions of cl 16.01 in the absence of any clear words or indications that cl 18.04 operates in this way.

48 Moreover, this position is reinforced, in my view, by the phrase "in priority to any claim by any Debentureholders" in cl 18.04, which must be understood having regard to the use of the general words, "any claim", as distinct from a more specific reference in cl 16.01 to "payment" of moneys specifically received from the Mortgaged Property - in the circumstances of cl 16.01(a) or (b) - which are circumscribed by the "waterfall" provisions. Clearly, the word "claim" is capable of having a much wider meaning than merely being a reference to an entitlement to "principal" and "interest". Thus, it follows, in my opinion, that the natural reading of these provisions is that those that refer specifically to "principal" and "interest" apply to those items, and the general reference to "claims" applies to claims other than claims for principal and interest. An alternative interpretation would have the effect of negating the "waterfall" provisions of cl 16.01, particularly cll 16.01(e) and (f).

49 Moreover, the generality of the word "claim" is, on the basis that similar terms in the same document should be given similar meanings unless there is an express or implicit indication to the contrary,[33] reinforced by the provisions of cl 17.05, which provides an indemnity to Trust Co and others as provided for in that clause.[34] The word "claim" is not qualified in cl 18.04 in the same way as it is qualified by the excepting provisions of cl 17.05, but, given the context in which it appears in both these provisions, that qualification is not surprising in an indemnity provision. Its lack of qualification in the concluding provisions of cl 18.04 serves to emphasise both the generality of the provisions of cl 18.04 and also, in my view, the primacy of the specific "waterfall" provisions of cl 16.01 - and its provisions which pick up the extended "waterfall" in cl 16.02, which are directed to the payment out of all moneys according to the prescribed priorities. In this respect, it should not be forgotten that cl 16.02 has complementary spheres of operation in terms of its primary operation - though, as discussed, additional "waterfall" provisions of cl 16.02 may be "picked up" and incorporated by reference as a result of the operation of cl 16.01(h).[35]

50 Moreover, the reference to "any monies" in the concluding provisions of cl 18.04 is, in my view, easily reconciled with the provision for distribution of "other monies" in cl 16.02, not being monies "out of the Mortgaged Property", which is specific to cl 16.01. Additionally, as has been observed, cl 16.02 specifically refers to cl 18 in its entirety.

51 The point was made by Trust Co that the parties to a claim for the purposes of cl 17.05 and a claim by any Debentureholders for the purposes of the concluding provisions of cl 18.04 would be against different parties - the Trustee, Trust Co, in the former case, and the Company in the latter case. However, even assuming that the operation of the indemnity provisions of cl 17.05 would preclude the possibility of a claim against Trust Co under cl 18.04 - a matter which it is not necessary to decide - this does not, in my view, in any way affect or qualify the preceding analysis of these provisions - in which the focus is on "claims" not parties. Neither do the provisions of cl 23.01, which provide for the entitlement of each Debentureholder to sue the Company "in respect of any default in the redemption or payment of principal, premium (if any) or interest monies on any Stock held". The Debentureholder's rights in this respect, as the primary party suing, may be circumscribed where the Trustee has determined or become bound to enforce the Charge, has determined or become bound to enforce the rights of Debentureholders or waived the default at the request or direction of the Debentureholder. Unlike cl 18.04, these provisions focus on parties rather than "claims". Moreover, as submitted by the Liquidators, the provisions of cl 23.01 clearly address the pre-enforcement, business as usual, circumstances of the Trust. Post enforcement, only the Trustee, Trust Co, can make a claim against the Company for payment of the Debentureholders, their principal, any premium and interest. As discussed in these reasons, this follows from the provisions of the Trust Deed to which reference has been made - and, particularly, the "waterfall" provisions of cll 16.01 and 16.02.

52 Trust Co, on the other hand, also submits that the provisions of cl 17.05 support the interpretation of cl 18.04 for which it contends:[36]

1. Further, the submission that the words "any claim by any Debentureholders" should be construed in that way can be assessed having regard to cl 17.05 where the same wording appears. Clause 17.05 provides for the trustee's indemnity out of the Mortgaged Property in respect of, inter alia, all actions, proceedings and claims in respect of any matter in any way relating to the Trust Deed. The priority afforded to such indemnity is not dealt with in cl 16.01. In order to address this, cl 17.05 provides:

[T]he Trustee may retain and pay out of any monies in its hands arising therefrom (in priority to any claim by any Debentureholder) all sums necessary to effectuate and satisfy such indemnity.

1. In the same way as cl 18.04 provides expressly for the priority to be afforded to all remuneration (including remuneration under cl 18.02), cl 17.05 makes it clear that - as would be expected - the indemnity has priority. Trust Co's construction of cl 18.04 is consistent with and supported by cl 17.05.

53 I do, however, reject these submissions. In my view, cl 17.05 is clearly a general provision and, in the same way as cl 18.04 is a general provision which does not expressly or impliedly seek to transcend the particular provisions of cl 16.01, the indemnity provisions of cl 17.05 must also be read subject to those particular provisions. Moreover, I reject Trust Co's contention that it is possible to reconcile any inconsistency between cl 16.01 and cl 18.04 (and also cl 17.05) by reading those provisions together, with cl 18.04 (and also cl 17.05) qualifying cl 16.01. For the preceding reasons, I am of the opinion that the carefully drawn regime of cl 16.01 - whether or not it also picks up the additional "waterfall" of cl 16.02 - could not be read with cl 18.04 (or, indeed, cl 17.05) qualifying the operation of its particular provisions without negating their operation. Neither is it possible, as Trust Co appeared to suggest, to reconcile these provisions on the basis that the provisions operate in different circumstances - cl 16.01 when all is "going well" and cl 18.02 when default has occurred. Both sets of provisions apply in circumstances of default. Clause 16.01 provides for circumstances after a Controller has been appointed and cl 18.02 after an "Enforcement Date".

54 Trust Co also contends that the construction of cl 18.04 advanced by the Liquidators is at odds with the plain and natural meaning of the words used in cl 18.04, which harks back to the principle of construction which requires the Court to give the words of a written agreement the natural meaning that they bear.[37] This requirement is, however, subject to the need to avoid a construction which produces what might be described as a "commercial absurdity".[38] In relation to "commercial absurdity", Trust Co submits:[39]

1. The construction contended for by the Liquidators would have the result that where, after an Enforcement Date, a trustee undertook further work, including work resulting in significant funds being recovered, if the debenture issuer is insolvent and therefore unable to discharge all principal and interest due to debenture holders, the trustee will not be able to recover any amount for this additional work. Of course, the circumstances in which an Enforcement Date is likely to arise[40] are those in which there is a real prospect that not all principal and interest due to debenture holders will be recovered.
2. The Liquidators' construction would, in commercial terms, require a trustee of an insolvent debenture issuer to forego any entitlement to remuneration for additional duties undertaken by it as a result of an enforcement event arising. ...
3. The absurdity of the Liquidators' construction of cl 18.04 is amplified when regard is had to the flip-side scenario of a solvent debenture issuer: the Liquidators' construction would give rise to the situation where in the case of a solvent debenture issuer the trustee would also in practice not receive the additional remuneration provided for by cl 18.02. This result would arise because in a situation where the debenture-issuer is solvent and it carries on business following an Enforcement Date, all monies will not be returned at one time to debenture holders, and therefore payment of all principal monies owing in respect of debenture stock will not be made.

Trust Co then provides a series of hypothetical examples which are said to illustrate the point made in these submissions.[41] These hypothetical examples do not, in my view, establish the point, even were the language of the relevant provisions of the Trust Deed so ambiguous or uncertain as to lend greater weight than might otherwise have been the case to "commercial absurdity" arguments. In my view, there is no basis for the "commercial absurdity" argument. The provisions of the Trust Deed give great scope to the Trustee, Trust Co, to decide how it should ensure that the trusts are carried out - whether by a receiver, a controller or by it as the Trustee, for example. Thus, Trust Co is in a position to decide whether it will perform work itself after an Enforcement Date and seek additional remuneration under cl 18.02 and contend with issues with respect to the payment priorities regime under cl 18.04 or, for example, appoint a Controller whose remuneration and expenses clearly have priority under the cll 16.01 and 16.02 "waterfall" provisions. Consequently, Trust Co is well able to protect its commercial position as the Trustee and at the same time discharge its obligations as a trustee.

55 For the preceding reasons, I do, however, reject these submissions that the construction argued for by the Liquidators, operating as I have indicated, would lead to a commercial absurdity. In my view, the fundamental difficulty with the "commercial absurdity" argument advanced by Trust Co - though I reject the proposition that such an absurdity does arise - is that it fails to have regard to the generality of the provisions of cl 18.04 (and, as discussed, also cl 17.05). The reference to "any claim by any Debentureholders" the subject of the concluding provisions of cl 18.04 is unconstrained in its description of any such claim - and, particularly, not subject to any of the exceptions of the type referred to in cl 17.05. Reconciling these general provisions with the particular provisions of cl 16.01 - and whether or not "extended" by application of cl 16.02 as a result of the operation of cl 16.01(g) - means that claims or entitlements the subject of those particular provisions effectively circumscribe the general words in the concluding provisions of cl 18.04. Consequently, these provisions are consistent and the absurdities argued for by Trust Co do not arise.

56 Finally, any suggestion - as appears to be advanced by Trust Co - that the Trustee could utilize the provisions of cll 22.01 and 22.02 to amend the provisions of the Trust Deed to override the "waterfall" provisions of cll 16.01 and 16.02 must be rejected. In any event, the process of amendment requires, among other things, concurrence with the Company with respect to the proposed amendment and the provision of a copy of the proposal together with an explanation to the Debentureholders.[42] Moreover, the Trustee must, with respect to the proposed amendment, be of the opinion that it is "not prejudicial to the interests of the Debentureholders". When insufficient funds make the priorities provisions of cll 16.01, 16.02 and 18.04 relevant it is more than difficult to conclude that this opinion could reasonably be held by the Trustee. Consequently, reference to these provisions does not advance the position of Trust Co.

57 For the preceding reasons, the answer to the Preliminary Question is "No".

58 The parties are to bring in orders to give effect to these reasons. I otherwise reserve the question of costs and will hear the parties further in relation to that issue.

[2] Further Amended Statement of Claim (17 May 2016) [AA].

[3] Further Amended Statement of Claim (17 May 2016) [21].

[4] Further Amended Statement of Claim (17 May 2016) [22].

[5] Further Amended Statement of Claim (17 May 2016) [25].

[6] Affidavit of Anthony Zita (24 February 2016) [9].

[7] The application in the s 424 Proceeding also sought direction from the Court for payment by the Company to Trust Co of a further sum for the additional duties and responsibilities performed by Trust Co from February 2014 to completion of the enforcement of the Trust Deed in a sum to be determined by the Receivers (or for such other sum as the Court considered appropriate).

[8] These proceedings include the Class Action and proceeding number S CI 2015 05875.

[9] See also the provisions of cl 22 with respect to the amendment of the Trust Deed.

[10] (1990) 20 NSWLR 310 at 313-4.

[11] [2014] HCA 7; (2014) 251 CLR 640 at 657 [35]. See also Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 at 179-83 [40]-[48]; Zhu v Treasurer (NSW) [2004] HCA 56; (2004) 218 CLR 530 at 559 [82]; Richmond v Moore Stephens Adelaide Pty Ltd [2015] SASCFC 147, [92]-[98].

[12] [2009] EWCA Civ 636, [28].

[13] Zhu v Treasurer (NSW) [2004] HCA 56; (2004) 218 CLR 530 at 559 [82]. See also Gollin & Co Ltd v Karenlee Nominees Pty Ltd [1983] HCA 38; (1983) 153 CLR 455 at 464.

[14] Fitzgerald v Masters [1956] HCA 53; (1956) 95 CLR 420 at 426-7; Energy World Corp Ltd v Maurice Hayes & Associates Pty Ltd [2007] FCAFC 34; (2007) 239 ALR 457 at 460 [10]-[11]; Saxby Soft Drinks Pty Ltd v George Saxby Beverages Pty Ltd [2009] NSWSC 1486; (2009) 14 BPR 27,213, [10].

[15] [2009] UKSC 2; [2010] 1 All ER 571 at 589 [35] (citations omitted).

[16] Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99 at 109; Schreuders v Grandiflora Nominees Pty Ltd [2016] VSCA 93, [21].

[17] The principle based on common sense is that "the drafter will have intended the general provisions to give way should they be applicable to the same subject matter as is dealt with specifically": Charben Haulage Pty Ltd v Environmental & Earth Sciences Pty Ltd [2004] FCA 403, [171]. See Eureka Operations Pty Ltd v Viva Energy Australia Ltd [2015] VSC 648, [80] (Croft J); Margetson v Glynn [1892] 1 QB 337 at 344 (Fry LJ). See also Lord Justice Kim Lewison and David Hughes, The Interpretation of Contracts in Australia (Thomson Reuters, 2011) 431-5 [9.08].

[18] [1993] EWCA Civ 14; [1994] 1 WLR 1016 at 1024. See also Re Media, Entertainment & Arts Alliance; ex parte Hoyts Corp Pty Ltd (No 1) [1993] HCA 40; (1993) 178 CLR 379 at 386-7 (Mason CJ, Brennan, Dawson, Toohey, Gaudron and McHugh JJ).

[19] Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253 at 286-7 [102], [105]-[107] (Heydon and Crennan JJ).

[20] Chamber Colliery Co Ltd v Twyerould [1915] 1 Ch 268 at 272 (Lord Watson). See also Nick Kritharas Holdings Pty Ltd (in liq) v Gatsios Holdings Pty Ltd [2001] NSWSC 343; (2001) 38 ACSR 57 at 69 [18] (Hamilton J).

[21] Lord Justice Kim Lewison and David Hughes, The Interpretation of Contracts in Australia (Thomson Reuters, 2011) 283-91 [7.02].

[23] The Liquidators' Outline of Submissions on the Construction of Clauses 16.01, 18.02 and 18.04 (5 May 2016) [8]-[11].

[24] See the trust deeds exhibited to the Affidavit of David Newman sworn 5 May 2016.

[25] Fitzgerald v Masters [1956] HCA 53; (1956) 95 CLR 420 at 426-7; Energy World Corp Ltd v Maurice Hayes & Associates Pty Ltd [2007] FCAFC 34; (2007) 239 ALR 457 at 460 [10]-[11]; Saxby Soft Drinks Pty Ltd v George Saxby Beverages Pty Ltd [2009] NSWSC 1486; (2009) 14 BPR 27,213, [10].

[26] Trust Deed, cl 17.05; which is set out in full above at [17].

[27] Trust Deed, cl 18.04; which is set out in full above at [17].

[28] Clause 18.02; which is set out in full above at [17].

[29] [2005] VSCA 29, [78] (Winneke P, Buchanan JA and Gillard AJA).

[30] [1993] EWCA Civ 14; [1994] 1 WLR 1016 at 1024. See above [23].

[31] See especially the authorities to which reference has been made at [23]-[24].

[36] Trust Co's Outline of Submissions on the Preliminary Question to be Heard on 6 June 2016 (2 June 2016) [12]-[13] (emphasis in original).

[39] Trust Co's Outline of Submissions on the Preliminary Question to be Heard on 6 June 2016 (2 June 2016) [20]-[22] (emphasis in original).

[40] "Enforcement Date" means a date on which the Trustee serves a notice pursuant to cl 12.01 on the Company. Cl 12.01 provides for a relevant notice to be served in circumstances including: (a) Banksia failing to pay principal on debenture stock; (b) Banksia failing to pay interest due on debenture stock; (c) an order being made for the winding up of Banksia; (d) if circumstances exist which would oblige a court to presume that Banksia is insolvent; and (e) if the directors of Banksia request the Trustee to appoint a Controller over its property.

[41] Trust Co's Outline of Submissions on the Preliminary Question to be Heard on 6 June 2016 (2 June 2016) [23]-[25].