RE BELL GROUP NV (IN LIQ); EX PARTE TROIKA HOLDING BV [2009] WASC 309 (29 October 2009)

3 The Liquidator also applied for certain other orders ancillary to the orders under s 477(2B). The ancillary orders sought were for the abridgement of time for the hearing of the application; that the public be excluded from the hearing; that the Liquidator's affidavit including its attachments, as well as the supporting written outline of argument and the transcript of the hearing, be placed in a sealed envelope marked confidential and not be available for inspection except so far as the court orders; and that disclosure or publication of, or any report of, the hearing or the contents of those documents be prohibited. These ancillary orders, which I also made, give rise to some difficulties in relation to the present reasons. I will return to those difficulties at the end of these reasons.

4 The Liquidator also sought ancillary orders that the costs of the application be costs in the winding up of BGNV and be allowed to be paid out of the assets of that company.

5 The minute of orders set out both the orders sought under the Act s 477(2B) and the ancillary orders.

6 I can shortly describe my reasons for making the ancillary orders for abridgement of time and costs. It seemed to me that it was appropriate, in view of the due date for the lodgement of the grounds for the crossappeal in the Appeal Proceedings to which I return, for the Liquidator to seek orders that would permit him to move promptly to make possible his participation in the Appeal Proceedings as he proposed.

7 I took this view in light of the significance in material terms of success or settlement of the crossappeal, for which the Liquidator had advice that only BGNV had standing or clear standing to commence, and given that there appeared to me to be no reason why the application might not be heard at any time after the filing of the application.

8 In the remainder of these reasons I consider first the orders for exclusion of the public, for confidentiality and for non-publication. I then deal with the ex parte character of the present application, before dealing with the orders under the Act s 477(2B).

Orders for exclusion of the public, confidentiality and nonpublication

9 Orders of these kinds have previously been made, at the instance of another of the respondents to the Appeal Proceedings seeking directions in relation to the conduct of his appeal: see Re The Bell Group Ltd (in liq); Ex parte Woodings [2009] WASC 235 [16] (Hasluck J). However, it was not suggested to me that the outcome in Re Bell Group; Ex parte Woodings determined whether or not these orders should be made for the present application.

10 The relevant principles for determining whether or not to make these orders are the following.

11 There is a strong and clear public interest in open justice and proceedings before the courts should take place in open court. This interest will prevail absent exceptional circumstances. See TK v Australian Red Cross Society (1989) 1 WAR 335, 336 337 (Malcolm CJ); Re Bromfield; Ex parte West Australian Newspapers Ltd (1991) 6 WAR 153; Re The Bell Group Ltd (in liq) (ACN 008 666 993); Ex parte West Australian Newspapers Ltd [2000] WASC 94 [7] (Templeman J); Southern Cross Pipelines Australia Pty Ltd v Michael [2002] WASC 171 [14] and [16] (E M Heenan J); and Re Robins SM; Ex parte West Australian Newspapers Ltd [1999] WASCA 16; (1999) 20 WAR 511.

12 Particular principles for a case like the present one were stated in Re HIH Insurance Ltd; Ex parte McGrath [2005] NSWSC 731 [10] [13] (Barrett J), referring among other authorities to Scott v Scott [1913] AC 417:

In the present case, I see two other public interests as competing with the public interest in the open justice. The first is the public interest in the due and beneficial administration of the estates of insolvent companies under the Corporations Act by liquidators appointed by and answerable to the court, that administration being for the benefit of creditors. The public interest in the due administration of the insolvent estates of the HIH companies is particularly pronounced where there are many thousands of creditors from all walks of life. The liquidators are officers of the court and are entitled to have the court appropriately facilitate such actions as they may properly take in the interests of creditors and in the furtherance of the public interest to which I have just referred.

The second competing public interest arises from the fact that the agreements in respect of which application is made under s 477(2B) are agreements concerned with the pursuit of litigation. All the actions in contemplation are actions in this court. There is a clear public interest in the due administration of justice in that litigation. The liquidators who propose to pursue it for the benefit of creditors should, as a general matter, have an expectation that they will be able to do so free from distortions of a kind that would not arise if the litigation were pursued by an ordinary litigant in the ordinary way. Unlike ordinary litigants who pursue litigation in the ordinary way, liquidators in the position of the present applicants are required to come to the court to seek approval if and when it becomes appropriate for them to enter into contracts not to be performed within the space of three months. Were it not for that requirement and for the supervision of the Court in that respect, the liquidators would, like other litigants, merely go ahead and enter into the agreements to which the confidentiality concerns relate.

The administration of justice is, in my view, very likely to be prejudiced in two ways by availability to the potential defendants of (and any public airing of) the information concerning the liquidators' proceedings that will inevitably be divulged by the adducing of evidence and the making of submissions on the hearing of the [s 477(2B)] applications. There is a likelihood of a real and negative impact upon the due and orderly conduct of the proposed proceedings themselves, in that the defendants in them will have access to information that, in the ordinary course, a plaintiff is entitled to keep confidential in the plaintiff's own interests. Any such access would produce an undue distorting effect in relation to the due conduct of those proceedings themselves. There is also a likelihood of a real and negative impact upon the due conduct of the several windings up by the court in the interests of the creditors of the respective companies. Although there have been changes in the legislative landscape since the decision of Marks J in Re Timberland Ltd; Commissioner for Corporate Affairs v Harvey [1980] VicRp 64; [1980] VR 669, I think it is still generally true to say, as his Honour there said, that '[t]he winding up is by the court which for the purpose the liquidator is'. In saying this, I do not mean to imply that a liquidator in a court ordered winding up enjoys some privileged position, as compared with any other litigant; merely that the fact that a winding up is a winding up by the court means that it in its own right [is] an aspect of the process of the administration of justice.

In the particular circumstances of the present s 477(2B) applications, I am satisfied that the two aspects of the public interest which compete with the public interest in the maintenance of open justice should be regarded as outweighing that latter interest. The special circumstances of the liquidators and the statutory functions they perform, coupled with the need for them to come to court on this occasion to seek leave in a way that an ordinary litigant does not have to seek, sets the case apart in such a way that justice will best be served by an examination of the matters the liquidators are bound to raise with the court in an atmosphere where they can lay them before the court fully and frankly and without any apprehension that the interests they are bound to serve will thereby be prejudiced. Applying the terminology used by Viscount Haldane LC in Scott ..., I am of the opinion that the paramount object of securing that justice is done in both the proceedings instituted by the liquidators' filing of statements of claim and the respective windings up will really be rendered doubtful of attainment if an order under s 80 is not made.

See also Re Bell Group; Ex parte West Australian Newspapers [10] [13] (Templeman J).

13 In my view, those principles apply to the present application. The application concerns the planning for and conduct of the Appeal Proceedings, matters which go both to the due administration of the insolvent estate of BGNV and to the due administration of justice in the Appeal Proceedings. In my view, this application warranted the orders for exclusion of the public, confidentiality and nonpublication that were sought.

14 The matter of whether or not proceedings like the present application under the Act s 477(2B) should be continued on an ex parte basis was addressed in Re Bell Group; Ex parte Woodings [58] as follows, referring to Re Newtronics Pty Ltd; Ex parte Stewart [2007] FCA 1375, on the nature of the power of approval under that provision - I return to that nature below:

It follows from these precepts that, in my view, as indicated by the reasoning in Brown v DML Resources Pty Ltd (in liq) (No 7) [2002] NSWSC 162, it is not necessary for notice of the present ex parte application to be given to the defendant banks or other actual or prospective creditors, with a view to affording them an opportunity to be heard, because the directions and orders applied for do not purport to determine the matters in issue. The effect of the directions procedure is to protect the liquidator against any possible allegations of breach of duty: McPherson: The Law of Company Liquidation (4th ed) at 352 to 355.

15 It will become apparent below that a person claiming to be a creditor of BGNV had earlier indicated a strong interest in being heard on an application like the present one, under certain conditions at least. As I will explain, those conditions did not obtain for the present application. However, assuming that that person's interest might have extended to the present application, the principles I have described indicate to me that it is not necessary to allow for the joinder of such a person. In particular, as I will explain, the terms of the Funding Agreement indicate why any such allowance need not be made.

16 I turn now to the order sought under the Act s 477(2B).

Order for approval under the Act s 477(2B)

17 I deal first with my jurisdiction to make the orders sought.

(2B) Except with the approval of the Court, of the committee of inspection or of a resolution of the creditors, a liquidator of a company must not enter into an agreement on the company's behalf (for example, but without limitation, a lease or a charge) if:

(a) without limiting paragraph (b), the term of the agreement may end; or

(b) obligations of a party to the agreement may, according to the terms of the agreement, be discharged by performance;

more than 3 months after the agreement is entered into, even if the term may end, or the obligations may be discharged, within those 3 months.

19 In my view, this requires me to determine that BGNV is a company to which the provision applies, that the applicant is its liquidator, and that the Funding Agreement is an agreement that provides for obligations of a party to it which may be discharged by performance more than three months after the agreement is entered into.

20 I take the following matters from the Liquidator's affidavit.

21 BGNV is a registered foreign company incorporated in the Netherlands Antilles in 1985. On 23 January 1997 the court of first instance of the Netherlands Antilles, Curaçao, found that BGNV was bankrupt and appointed three curatoren (trustees in bankruptcy) to BGNV. The curatoren have the conduct of the principal liquidation of BGNV in the Netherlands Antilles. On 26 March 1997 this court ordered that BGNV be wound up as an insolvent pt 5.7 body pursuant to the Corporations Law and appointed the Liquidator as ancillary liquidator of BGNV in Australia.

22 I am satisfied on these matters that BGNV is a company to which the Act s 477(2B) applies, and that the applicant is its liquidator.

23 I turn now to the third matter, whether or not the Funding Agreement is an agreement that provides for obligations of a party to it which may be discharged by performance more than three months after the agreement is entered into.

24 The Liquidator and BGNV were plaintiffs in the Proceedings. The defendants in the Proceedings are the appellants in the Appeal Proceedings and have named the Liquidator and BGNV, among others, as respondents. The Liquidator and BGNV have crossappealed in the Appeal Proceedings.

25 Under the Funding Agreement the Financier is required to provide funds to cover the Liquidator's and BGNV's costs associated with the Appeal Proceedings. The Funding Agreement states that it is intended to set out the rights and obligations of the parties until the settlement or determination of the Appeal Proceedings, and the parties have no right to terminate the agreement before the occurrence of those events, save that the Liquidator may terminate if the Financier fails to pay the substantial deposit required under the agreement. The Funding Agreement further states that it and the obligations under it are conditional on the Liquidator obtaining directions or orders of this court that it is appropriate for the Liquidator to enter into and be bound by the Funding Agreement.

26 Given the complexity and duration of the Proceedings reflected in the reasons in Bell Group [No 9] and the magnitude of the amounts provided for in the judgment orders following Bell Group [No 10] and at stake in the Appeal Proceedings, I am satisfied that the Funding Agreement may be discharged more than three months after it is entered into.

27 I turn now to consider whether or not the court should give its approval under the Act s 477(2B), beginning with the principles applicable to such a consideration.

The applicable principles under the Act s 477(2B)

28 The principles appear to be well settled. They include the following, which are of particular relevance to me.

29 The character of the court's task, as described in Re Bell Group; Ex parte Woodings [57], [58] (Hasluck J), is as follows:

The principles applicable to an application under s 477(2B) were reviewed by Gordon J in Re Newtronics ... The role of the court is to grant or deny approval to the liquidator's proposal. Its role is not to develop some alternative proposal which might seem preferable. Further, the task of the court is not to reconsider all of the issues which have been weighed up by the liquidator but simply to review the liquidator's proposal, paying due regard to his or her commercial judgment and knowledge of all of the circumstances of the liquidation, satisfying itself that there is no error of law or ground for suspecting bad faith or impropriety, and weighing up whether there is any good reason to intervene in terms of the expeditious and beneficial administration of the winding up.

It was said further in that case that the court's approval is not an endorsement of the proposed agreement but is merely a permission of the liquidator to exercise his or [sic] own commercial judgment in the matter.

30 See also Re ACN 076 673 875 Ltd [2002] NSWSC 578; (2002) 42 ACSR 296 [16], [17] (Austin J), referring to Re Spedley Securities Ltd (in liq) (1992) 9 ACSR 83, 85 - 86 (Giles J) (in a different context) and Re Imobridge Pty Ltd (in liq) (No 2) [1999] QSC 342; [2000] 2 Qd R 280 [21] [23] (Fryberg J).

31 There have been a number of authorities which have considered whether or not under the Act s 477(2B) the court should approve a liquidator entering into an agreement to fund litigation or litigationrelated activity. See Re Addstone Pty Ltd (in liq) (1998) 83 FCR 583; Re Imobridge; Re ACN 076 673 875; and BL & GY International Co Ltd v Hypec Electronics Pty Ltd (in liq) [2008] NSWSC 856. From these a number of factors relevant to that consideration may be identified, factors which are neither determinative nor exhaustive. They were addressed before me by counsel for the applicant. Those factors are the following.

1. '[T]he nature and complexity of the cause of action', and the closely related factor of 'the risks involved in the claim': Re ACN 076 673 875 [28], referring to Re Addstone (594).
2. The 'liquidator's prospects of success in litigation': Re ACN 076 673 875 [18] and Re Imobridge [25].
3. '[T]he amount of costs likely to be incurred in the conduct of the action and the extent to which the financier is to contribute to those costs': Re ACN 076 673 875 [28], referring to Re Addstone (594).
4. '[T]he extent to which the financier is to contribute towards the costs of the defendant in the event that the action is not successful, or towards any order for security for costs by the Court before which the action is to be heard': Re ACN 076 673 875 [28], referring to Re Addstone (594).
5. The circumstances surrounding the making of the agreement, particularly the choice of financier as one able to meet its obligations under the agreement: Re Imobridge [44], [47].
6. '[T]he level of the financier's "premium"': Re ACN 076 673 875 [28], referring to Re Addstone (594).
7. '[T]he extent to which the liquidator has canvassed other funding options': Re ACN 076 673 875 [28], referring to Re Addstone (594).
8. '[T]he liquidator's consultations with the creditors of the company': Re ACN 076 673 875 [28], referring to Re Addstone (594).
9. The 'interests of creditors': Re ACN 076 673 875 [22], quoting Re Imobridge [39], where Fryberg J referred to 'some chance of a benefit for the unsecured creditors without any detriment to them'.
10. The 'possible oppression' to another party in the proceedings: ACN 076 673 875 [25], referring to Re Imobridge [43].
11. The extent to which the liquidator retains real control over the proceedings being funded: Re Imobridge [46] and BL & GY International [49].

32 I turn now to consider the application of these factors to the present case.

The nature and complexity of the matter and the risks in pursuing the claim

33 Consideration of these factors requires a description of the Proceedings. I take this description principally from the Liquidator's affidavit.

34 The plaintiffs in the Proceedings were principally various companies in the Bell Group as well as liquidators of those companies. The defendants were various Australian and overseas banks (the Banks).

35 In the Proceedings the plaintiffs alleged that transactions entered into in 1990, by which the Banks took security over almost all the plaintiffs' assets, were void on a number of bases.

36 In the Proceedings BGNV and the Liquidator were respectively the sixth and twelfth plaintiffs. They principally sought to set aside a deed known as the BGNV Subordination Deed (the Deed). The Deed was entered into on 31 July 1990 by BGNV; the principal plaintiffs in the Proceedings, The Bell Group Ltd (TBGL) and one of its subsidiaries, Bell Group Finance Ltd (BGF); and one of the Banks, Westpac Banking Corporation (Westpac). The indebtedness the Deed purported to subordinate was that of TBGL and BGF to BGNV in respect of certain proceeds of bond issues by BGNV in the Eurobond market in the 1980s. BGNV had onlent those proceeds to TBGL and BGF in the 1980s. On the Banks' case, the Deed's effect also included that if any dividends were paid to BGNV in the liquidation of TGBL and BGF, then BGNV must hold those funds on trust for the benefit of the Banks. A further issue in the Proceedings was whether or not the indebtedness of TGBL and BGF was in any event subordinated on a number of other bases.

37 By the terms of the judgment orders in the Proceedings, substantial amounts (in the order of $1.5 billion) are to be paid to various plaintiffs, including BGF and other subsidiaries of TBGL. However, BGNV did not seek monetary relief in the Proceedings, and therefore is not directly entitled to any amount.

38 At the same time, the case of BGNV and the Liquidator was not successful. By the judgment orders, the Deed was declared to be valid and effectual as between BGNV and Westpac; and the loans made by BGNV to TBGL and BGF were declared to be contractually subordinated. However, by those orders the Deed was rescinded ab initio as against TBGL and BGF.

39 On 7 May 2009 the Banks commenced the Appeal Proceedings by lodging a notice of appeal in which they joined all the plaintiffs in the Proceedings. On 18 May 2009, on behalf of BGNV and himself, the Liquidator lodged a notice of intention to take part in the appeal and a crossappeal against the orders as to the subordination of TBGL's and BGF's indebtedness to BGNV. On 21 May 2009 the remaining respondents lodged a notice of intention to take part in that appeal and crossappeal.

40 The grounds of the crossappeal were required to be lodged soon after the hearing of this application, by 2 October 2009.

41 It is evident that if the appeal is not allowed there will be substantial sums available for distribution to the creditors of BGF and TBGL. If the crossappeal is allowed there is the possibility of payments by those two companies to BGNV in respect of their indebtedness. The proceeds of those payments would be available, after the relevant deductions, for distribution to BGNV's creditors. The liquidators of BGF and of TBGL have admitted the proofs of debt of BGNV, of about $394 million and $69 million respectively.

42 The percentage share of BGNV of any dividends from BGF and TBGL is not apparent to me. Nor do I have evidence as to the amount of the relevant deductions to be applied to assets otherwise available for distribution by the liquidator. However, I have evidence from which I am able to infer that there would be significant assets available for distribution. That evidence is that the Financier is a substantial holder of bonds issued by BGNV and has been a major funder of the Proceedings through BGNV, paying in excess of $23 million; the Liquidator holds no funds on behalf of BGNV; and there is no provision for a financier's premium as I will explain below.

43 On my analysis just described, the Liquidator has then a strong interest in the outcomes of the Appeal Proceedings. There is evidence that without external funding the Liquidator and BGNV will be unable to participate or to be separately represented in the Appeal Proceedings.

44 In the Proceedings the Liquidator and BGNV were not separately represented. However, the Funding Agreement contemplates separate representation of both in the Appeal Proceedings. In relation to separate representation, the Liquidator has obtained the written advice of senior counsel and other counsel retained by the firm of solicitors that has been advising BGNV and the Liquidator independently of the other plaintiffs for many years. That written advice, which is attached to the Liquidator's affidavit, is that separate representation is possible, and only BGNV has standing or clear standing to crossappeal in respect of the judgment orders relating to the subordination of TBGL's and BGF's indebtedness to BGNV.

45 On this basis I have evidence that the Liquidator could reasonably form the view that it would be appropriate to participate in the Appeal Proceedings in the way the Funding Agreement makes possible.

46 As to the risks to the Liquidator and BGNV in pursuing the appeal and the crossappeal as proposed under the Funding Agreement, I leave aside the prospects of success in that pursuit and the ability of the Financier to meet its obligations under the Funding Agreement. Those matters are dealt with separately below.

47 The risks here relevant in my view go to the prolongation of the liquidation of BGNV until the conclusion of the Appeal Proceedings, and the application of substantial energies by the Liquidator in that pursuit.

48 Neither risk in my view counts against the granting of the approval sought, for the following reasons. The prolongation of the liquidation to await the outcome of the Appeal Proceedings appears, on the evidence I have, likely to be of considerable duration. That is a matter of significance for my purposes: Corporate Affairs Commission v ASC Timber Pty Ltd (1998) 29 ACSR 109, 117 (Austin J). However, the nature of the Appeal Proceedings and their significance to the Liquidator, as I have described them, indicate that that prolongation would be appropriate and in the interests of the creditors in BGNV's liquidation. Similarly, the nature and significance of the Appeal Proceedings are such that the Liquidator could properly decide to devote substantial energies to them.

49 The present factors in my view count towards the approval sought under the Act s 477(2B).

The prospects of success in the Appeal Proceedings

50 The significance of this factor is described in Re Imobridge [25] (Fryberg J) as follows:

Good prospects of success would favour granting approval of the contract, while poor prospects, although not necessarily fatal to the application, would mitigate against it. The applicant's prospects in the action are in my view relevant to at least three matters: the applicant's good faith; the possible oppression of the respondent; and the possible waste of court resources. (footnote omitted)

51 In the present case the Liquidator has received written advice, from the senior counsel and counsel and the solicitors I have previously referred to, that BGNV and the liquidator have good prospects of success on the appeal including the cross-appeal. At the hearing before me, counsel offered to provide me with a copy of the written advice. I declined the offer, in view of the evidence I had as to the source and form of that advice. Both counsel have been involved in the Proceedings since September 2008 and December 2007 respectively, and the solicitors have been involved in them for 'many years' (the Liquidator's affidavit [32]). The advice is in writing. Where I have such information, it seems to me that I am not called on to examine the terms of the advice. See Re Imobridge [25].

52 It seems to me that this factor counts in favour of the approval sought under the Act s 477(2B).

The amount of costs likely to be incurred in the conduct of the action and the extent to which the Financier is to contribute to those costs

53 The Liquidator has received advice from the solicitors referred to earlier as to the likely maximum amount required for the conduct of the Appeal Proceedings, including BGNV's costs of responding to the Banks' appeal and pursuing its crossappeal, and BGNV's potential liability to provide security for costs and for any adverse costs order. The estimated maximum amount has been put substantially below the sum already paid by the Financier in the Proceedings. The solicitors' advice is that, of that maximum amount, the potential liability for security for costs and for any adverse costs order is unlikely to exceed half.

54 Under the Funding Agreement the Financier is required to pay all the Liquidator's costs and fees including legal costs and disbursements incurred in and for the purposes of the Appeal Proceedings, together with all amounts due as goods and services taxes or other similar taxes, excises or levies; to indemnify the Liquidator against all provision of security for costs required by BGNV pursuant to an order of the court or by agreement; and to indemnify the Liquidator generally in relation to the Appeal Proceedings including indemnification against all adverse costs orders.

55 In my view the Funding Agreement requires the Financier to contribute substantially all the costs of the Liquidator in the conduct of the Appeal Proceedings. This factor counts in favour of the approval sought under Act s 477(2B).

The extent to which the Financier is to contribute towards costs in the event that the action is not successful, or towards any order for security for costs by the court before which the action is to be heard

56 I have already described the extent of the Financier's liability in that respect. I note that no order for security for costs has been sought by the Banks thus far in the Appeal Proceedings.

The circumstances surrounding the making of the agreement, particularly the choice of financier as one able to meet its obligations

57 The Liquidator's affidavit describes the requirements which the Liquidator required any funding proposal for the Appeal Proceedings to address. Those requirements were made known to the liquidator of other companies in the Bell Group and (it appears) through him to the Insurance Commission of Western Australia (ICWA), which on the evidence before me had provided substantial funding for BGNV's conduct of the Proceedings. I deal with the matter of making those requirements known to ICWA under the heading of 'The canvassing of other options', below.

58 The Liquidator's requirements were to ensure there was adequate security in place to fund the Appeal Proceedings through to their conclusion, and to ensure that the Liquidator maintained appropriate control over the conduct of the Appeal Proceedings. I deal with the matter of control of the proceedings below.

59 I take the present factor to be concerned with the actions taken by the Liquidator in agreeing to the terms of the Funding Agreement, and the choice of the Financier.

60 As to the terms of the Funding Agreement, it seems to me that the Liquidator's requirements were appropriately stipulated for, and are met by the Funding Agreement. I have already referred to its terms precluding termination until settlement or termination of the Appeal Proceedings, save for the Liquidator's right to terminate if the Financier fails to pay the substantial deposit required by the Funding Agreement, the first payment of which is due within 14 days of all parties signing the Funding Agreement and the second and final payment of which is due within 120 days of that date. I note that the deposit is in the amount of onehalf of the estimated likely maximum amount required for legal costs of the conduct of the Appeal Proceedings. I note below the provisions of the Funding Agreement as to the Liquidator's control of the conduct of the Appeal Proceedings on his own behalf and that of BGNV.

61 As to the choice of the Financier, it seems to me that the choice made was of a party who the Liquidator had reason to believe could meet its obligations under the Funding Agreement. The Financier is a substantial creditor of BGNV, had previously provided an amount to fund the Proceedings in what on the evidence before me is a larger amount than the estimated likely maximum amount required for legal costs of the Appeal Proceedings, and is required to provide the deposit referred to.

62 In my view, the present factor counts in favour of the approval sought under the Act s 477(2B).

63 In fact, the Funding Agreement makes no provision for a financier's premium. If the Liquidator or BGNV receives any monies as a result of the Appeal Proceedings, they are obliged to repay the Financier only the amounts for the Liquidator's fees and costs of the Appeal Proceedings together with statutory charges, duties or taxes which have not otherwise been repaid to the Financier.

64 There is no indication of any other beneficial interest of the Financier in the prosecution of the Appeal Proceedings, such as an interest in the firm of solicitors that are to be retained for the purpose: compare Imobridge [46], where there was such an interest.

65 There is nothing on this account that might count against the approval sought under the Act s 477(2B).

66 I have already referred to the evidence that the Liquidator had made known his requirements for a funding proposal to the liquidator of other companies in the Bell Group and (it appears) through him to ICWA, another substantial provider of funding to BGNV in its conduct of the Proceedings. On the evidence before me, in the form of ensuing correspondence, from the other liquidator and from ICWA, beginning a month after the Liquidator made his requirements known, the Liquidator had reason to believe its requirements were not acceptable to the ICWA.

67 In those circumstances, I consider that, at the least, the present factor does not count against the approval sought under the Act s 477(2B).

The Liquidator's consultations with the creditors of the company

68 On the evidence, on 25 November 1998, the Liquidator advertised in Western Australia for any person claiming to be a creditor of BGNV to lodge a proof of debt. No proofs have been received.

69 However, there is evidence that ICWA is a creditor of BGNV in a number of respects, including as a bondholder in one of BGNV's bond issues, and that the Financier is also such a bondholder. The relative size of their claims, and those of any other creditors of BGNV from outside this State or whose claims arose after the advertisement in 1998, is not apparent to me.

70 However, I consider that I have evidence that the Liquidator has made known his intention to seek a funding agreement for the Appeal Proceedings at least to those persons claiming to be creditors of BGNV who have taken an active interest in the Proceedings. The Liquidator's consultations with the interested creditors is, on Re Addstone (594), capable of addressing the matters raised by the present factor, which does not require the Liquidator to obtain the approval of creditors.

71 I have noted that ICWA indicated, in the correspondence put before me, a concern that a funding arrangement that met the Liquidator's requirements might conduce to the Liquidator and BGNV breaching obligations of cooperation, in relation to the Proceedings, under an agreement to which they and the ICWA were parties. As I will indicate under the next heading below, that concern is not engaged by the terms of the Funding Agreement.

72 In my view the present factor favours the granting of the approval sought under the Act s 477(2B).

73 I have already referred to the potential significance, to the creditors of BGNV, of the Appeal Proceedings, including the crossappeal by the Liquidator and BGNV. It is not apparent to me that there is any detriment to the creditors of BGNV from the Liquidator's and BGNV's participation in the Appeal Proceedings, which is to be made possible by the Funding Agreement: see, on the relevance of that detriment, Re ACN 076 673 875 [22] above.

74 In respect of detriment, I consider that it is only detriment to the creditors in their capacity as creditors of BGNV that is of relevance to me. This is capable of including the possibility that the Funding Agreement might conduce to a breach of an agreement between a creditor and BGNV which might give rise to an additional claim against BGNV. In that regard, I note again the concern of ICWA referred to under the previous heading.

75 However, there does not seem to me to be any reason to consider that a significant risk of detriment arises here. I note for this purpose the provisions in the Funding Agreement relating to the Liquidator's control of his own and BGNV's conduct of the Appeal Proceedings. Those provisions are the following.

76 The Funding Agreement provides that the Financier agrees that the Liquidator on his own behalf or on behalf of BGNV, is under no duty to continue the Appeal Proceedings other than in fulfilment of his legal and statutory duties. Further the Financier agrees that the Liquidator has 'complete control over the conduct of the Appeal Proceedings' and may conduct them 'as he considers appropriate', such control to be 'consistent with his legal and statutory duties', with 'nothing in this agreement' to constitute 'any surrender of independence on the part of the Liquidator including but not limited to the right to ... compromise or discontinue the Appeal Proceedings' and 'retain and terminate the retainer of any legal or other professional adviser, expert or agent'.

77 I further note that ICWA had indicated to the Liquidator as part of the correspondence to which I referred earlier that ICWA had 'an interest in any application for directions such as that foreshadowed in the final paragraph' of an earlier letter from the Liquidator, to the liquidator of other companies in the Bell Group. In the same correspondence, ICWA requested notice of any such application and service of the relevant papers. These are apparent references to an application for 'court directions' if the Liquidator's requirements 'cannot be accommodated in a funding proposal from you' and 'alternative funding' cannot be obtained 'on terms in the best interests of BGNV'. In my view, the present is not such an application for directions.

78 However, if the interest of ICWA is more widely understood, to include any application for approval of a funding agreement including the Funding Agreement, then it appears to me there is no right to the notice (and presumably the opportunity to be heard) that it sought. There is no significant risk of detriment to ICWA, from the nature of the grant of approval to the Liquidator under the Act s 477(2B) to enter into the Funding Agreement, to ground such a right, particularly in view of the control provisions of the Funding Agreement that I have previously considered.

79 In my view, the present factor counts in favour of the making of the order sought under the Act s 477(2B).

Possible oppression to another party in the proceedings

80 It is not apparent to me that any question arises in this case in respect of this factor. It has been invoked where there has been delay by a liquidator, or where the liquidator has not paid the costs of another party in a previous application, or where the proceedings to be funded will lead the defendant in those proceedings to sue a respondent to the application who is in financial difficulty. See Re ACN 076 673 875 [25]. As in that case, I do not consider any of those kinds of prejudice to be present here.

81 In my view, the present factor does not count against the making of the order sought under the Act s 477(2B).

The extent to which the liquidator retains real control over the proceedings being funded

82 I have already referred to the provisions of the Funding Agreement to do with the Liquidator's control of his own and BGNV's conduct of the Appeal Proceedings. I have no reason to believe that these do not constitute real control over the proceedings being funded. In particular, there is no reason to consider that those who have so far been retained to give him legal advice in those proceedings are not independent of the Financier. Compare the position in that respect in Re Imobridge [46].

83 In my view, the present factor favours the granting of the approval sought under the Act s 477(2B).

Conclusion on approval sought under the Act s 477(2B)

84 The factors I have considered, in my view, all either count in favour of granting the approval under the Act s 477(2B) sought or do not count against such grant. Nor is there any other factor which appears to me to count against approval.

85 In sum, I have concluded, on that consideration, that the Liquidator's proposal, paying due regard to his commercial judgment and knowledge of all the circumstances of the liquidation, involves no error of law or ground for suspecting bad faith or impropriety.

86 In addition, I have weighed up whether there is any good reason to intervene in terms of the expeditious and beneficial administration of the winding up, and have concluded there is none.

87 It is for those reasons I made orders in the terms I did.

The matter of the references to confidential documents in these reasons

88 I note that throughout these reasons I have found it necessary to refer to the content of confidential documents. I will hear from the applicant as to the implications of those references for the publication of these reasons.

89 I will also hear from the applicant as to the publication of the orders I have made.