Re Gunns Plantations Limited (In Liquidation) (Receivers & Managers Appointed) [2014] VSC 239 (21 May 2014)

1 Prior to being placed into receivership and voluntary administration, the Gunns Group carried on one of Australia's largest integrated hardwood and softwood forest products businesses, including managed investment schemes operated by Gunns Plantations Limited (GPL). GPL is a wholly owned subsidiary of Gunns Limited, and was the Responsible Entity for 18 forestry schemes. Nine such schemes were formerly operated by Great Southern Managers Australia Limited (Great Southern Schemes) and nine had been established by GPL (Gunns Woodlot Schemes).

2 GPL had replaced Great Southern Managers Australia as Responsible Entity on 31 December 2009 for the schemes established in each of the years 1998 to 2005, and was appointed Responsible Entity for the 2006 scheme on 5 January 2010. GPL established Gunns Woodlot Schemes in the years 2000 to 2006, and 2008 and 2009.

3 The timber products business involved the manufacture and supply of value added hardwood and softwood products. The forest products business involved the management of natural forests and plantations for fibre production and conservation. Gunns Group also undertook road construction and maintenance, timber harvesting and haulage, and pulpwood processing and marketing.

4 GPL conducted some of the Great Southern Schemes on land owned by Trust Company (Australia) Limited and a number of smaller landowners, mostly private individuals and companies. Those smaller landowners are referred to as the Great Southern third party landowners. GPL had established and conducted Gunns Woodlot Schemes on land held by the trustees of two Australian Forestry Plantation Trusts, as well as on land owned by a large number of smaller landowners, referred to as the Gunns third party landowners.

5 The trustee of Australian Forestry Plantation Trust (No 1) is Australian Executors Trustees Limited. Wesley Vale Engineering Pty Ltd (in liquidation) (receivers and managers appointed) is trustee of AFP Trust (No 2). Gunns Limited holds 30 per cent of the units in the AFP Trust No 1 and 100 per cent of the units in AFP Trust No 2.

6 Land owned by the AFP Trusts was utilised in the 2003, 2006, 2008 and 2009 Gunns Woodlot Schemes. That land comprised only around 10 per cent of the total land utilised by GPL in such schemes. The AFP Trust land was leased to Gunns Limited, who subleased to GPL, as Responsible Entity. In that capacity, GPL made the land available to growers under Forestry Right Deeds.

7 On 25 September 2012, Daniel Matthew Bryant, Ian Menzies Carson and Craig David Crosbie were appointed voluntary administrators of the Gunns Group, which included Gunns Limited, GPL, Wesley Vale Engineering, Associated Forest Holdings Pty Ltd and numerous other entities.

8 At the same time as administrators were appointed to the Gunns Group, the Australia and New Zealand Banking Group Limited appointed Mark Korda and Brian Webster as receivers and managers of its charged assets, including property held by GPL, other than as Responsible Entity for each managed investment scheme. The administrators were appointed liquidators on 5 March 2013.

9 On 28 September 2012, Shaun Robert Fraser and Peter McKenzie Anderson were appointed as receivers and managers of the AFP Trust property.

10 On 1 November 2013, the liquidators of GPL applied to the court under s 511 of the Corporations Act 2001 (Cth) for declarations, directions and orders in relation to the sale of trees situated on land on which managed investment schemes were conducted by GPL.

11 Under a contract of sale dated 25 October 2013, between GPL and Trust Company, GPL sold to Trust Company the trees situated on scheme land owned by Trust Company. The sale of the trees was confined to Great Southern Schemes. That transaction was approved by the court on 17 December 2013, including a direction approving termination of grower rights. The liquidators had also sought approval to allocate the proceeds between schemes on a basis propounded by them. Their preferred allocation methodology may, on one view, have had the effect of providing an advantage to the liquidators and receivers in the recovery of costs and expenses. The inherent conflict had not been satisfactorily explained to growers.

12 The liquidators' application for approval had the support of the receivers of GPL, but was opposed in part by the liquidators of Great Southern Plantation Holdings Pty Ltd, which was a grower in each of the Great Southern Schemes. The extent of its holdings ranged from around 13 to 27 per cent of scheme land. Other growers were not represented.

13 The absence of broad grower representation, and the unexplained conflict of interest and duty, made it unsatisfactory to allocate proceeds of sale between schemes at that time. The liquidators and receivers contended that without approval of their preferred allocation, the whole transaction may not proceed. Notwithstanding that risk, no orders were made allocating proceeds between schemes. Instead, the sale was approved on condition that the liquidators retained the proceeds upon trust for the growers, to be allocated by further order of the court, upon proper notice given to all growers.

14 The Trust Company transaction was completed, and the liquidators now retain the proceeds awaiting further orders of the court. Directions have been made to facilitate participation by the growers at a hearing to determine the appropriate allocation of funds.

15 The remaining applications by the liquidators, initiated on 1 November 2013, are as follows:

(1) Applications arising under paragraphs 4 to 7 inclusive of the Interlocutory Process, for approval to procure GPL to exercise its powers under the Constitutions of the 2003, 2006, 2008 and 2009 Gunns Woodlot Schemes, and terminate grower rights to the extent necessary to allow completion of two contracts of sale, both dated 25 February 2014. The land sold under the contracts was used by GPL to conduct the schemes. The trees are to be sold with the land.

(2) Applications arising under paragraphs 8 and 9 of the Interlocutory Process, for approval to negotiate and reach agreement with third party landowners, on whose land trees were grown under Great Southern Schemes, to resolve claims for outstanding rent and continuing lease obligations, and for the sale of the trees on the land, and for that purpose, to authorise the termination of grower rights in relation to the trees.

(3) Applications under paragraphs 10 and 11 of the Interlocutory Process, for approval to negotiate and reach agreement with third party landowners on whose land trees were grown under the Gunns Woodlot Schemes, to resolve claims for outstanding rent and continuing lease obligations, and for the sale of the trees on the land, and for that purpose, to authorise the termination of grower rights in relation to the trees.

(4) Applications arising under paragraphs 12 to 18 in relation to the liquidators' costs and expenses.

AFP Trust and related Gunns third party landowner transactions

16 The evidence before the court on the remaining applications is contained in 15 affidavits of Daniel Mathew Bryant,[1] a liquidator of GPL; two affidavits of a receiver of GPL, Peter McKenzie Anderson;[2] affidavits of Megan Grose, Jane Chalmers Sheridan and Kimberley Chantelle Mackay,[3] of the liquidator's solicitors; an affidavit of Andrew John Saker,[4] a liquidator of Great Southern Plantations Holdings; and four affidavits of Daniel James Mackay,[5] a solicitor with the firm Mills Oakley Lawyers, solicitors for Gunns Growers Pty Ltd.

17 Affidavits in support of the liquidators' claim for costs, expenses and remuneration were sworn and filed by Craig David Crosbie[6] in addition to the 12th affidavit of Daniel Mathew Bryant affirmed on 20 December 2013.

18 At the commencement of the hearing, on 11 March 2014, Gunns Growers were represented by solicitors, and senior and junior counsel. Gunns Growers purported to represent more than 100 investors in the Gunns Woodlot Schemes, who collectively held approximately 10 per cent of woodlots in the 2002 to 2006 and 2008 schemes. The holdings by those represented was greater in the 2002 and 2003 schemes. Growers in the Great Southern Schemes, to which these applications relate, were not separately represented. Great Southern Plantation Holdings had been represented at the hearing on 16 December 2013, in respect of its interest in trees on the land sold to Trust Company.

19 Growers were notified from time to time by the liquidators of relevant events in the liquidation, and more particularly of upcoming court proceedings. The liquidators prepared Grower Updates, which were emailed to growers and published on a web site maintained by the liquidators. Court documents, excluding confidential exhibits, were also published on the web site, usually within 24 hours of filing, and served on a wide range of interested parties, depending on the issue to which the material related. I am satisfied that reasonable efforts were made to give notice of the remaining applications to all relevant parties. I am also satisfied that the content of the notice to growers was adequate to inform them of the issues for determination.

20 Gunns Growers, who initially opposed the AFP Trust applications, had three main objections. The first objection was that the application was premature, because there was no sale agreement. That was true at the time the application was initiated, but contracts of sale have now been executed. The second objection was also based on the absence of any sale agreement and information about the terms. Gunns Growers had complained that there was no satisfactory way to assess the value to them of the terms of an Implementation Deed, dated 25 October 2013. The deed was made between the receivers of the land, the liquidators, and the receivers of the Gunns Group, including GPL. Under the deed, the sum of $500,000 was to be made available to growers as compensation for their trees. Alternatively, 10 per cent of the sale price was to be set aside as a fund to provide compensation, although the receivers retained the right to contend that the growers had no interest at all in the trees. There were other conditions that might affect the value of those provisions. The sale contracts have now been executed and much of the uncertainty has gone. The final objection of Gunns Growers related to the liquidators' costs. That, too, has been resolved, because the liquidators have agreed that they will not withdraw their costs without court approval.

21 Between December 2013, and the initial hearing of these applications on 11 March 2014, the liquidators provided additional information and explanation to the growers, which appears to have satisfied their concerns. The liquidators also agreed to pay the costs of Gunns Growers.

22 Counsel for Gunns Growers candidly advised the court that their client could not see a better way of resolving the issues concerning grower entitlement to the trees. Gunns Growers acknowledged that the approval of the sale contracts necessitated the extinguishment of their rights, and accepted that the arrangements for which the liquidators sought approval were the only practical opportunity they had to derive some benefit from the trees. Having made their position clear, counsel for Gunns Growers asked to be excused from further attendance, although its solicitor remained in court, and intervened from time to time, when issues arose that concerned his client.

23 On 17 October 2012, lease default notices were issued to Gunns Limited in respect of the leases from AFP Trusts to Gunns Limited. On 28 November 2012, termination notices were served, and on 31 January 2013, the administrators of Gunns Limited gave notice pursuant to s 443B(3) of the Corporations Act that they did not intend to exercise any rights in respect of the leased land.

24 On 4 February 2013, the AFP Trust receivers sought the permission of the administrators to retake possession of the AFP Trust land. On 6 February 2013, the administrators consented, but reserving all growers' rights in respect of the land.

25 As at the date of the administrators' appointment (25 September 2012), Gunns Limited owed approximately $1.5 million in rent to the AFP Trusts scheme land subleased to GPL. Rent was accruing at approximately $512,000 per month.

26 In early April 2013, the liquidators commenced discussions with the AFP Trust receivers regarding the sale of the land and associated trees. The receivers had proposed a regime under which they would conduct a sale, with sole discretion regarding the terms, but they required the ability to convey clear title to the trees, unencumbered by any grower interests. Such a condition required the liquidators' cooperation. To that end, the receivers negotiated with the liquidators on an amount to be set aside as compensation for the growers, to be paid into court pending a determination of entitlements.

27 The negotiations were suspended while two proceedings in this court were heard and determined. The first proceeding was brought by the receivers on 31 May 2013, challenging the validity of an Explanatory Memorandum employed in a restructure proposal by Macquarie Forestry Services Pty Ltd, to replace GPL as Responsible Entity. The second proceeding, commenced on 26 June 2013, involved claims by certain third party landowners who had leased land to GPL, and who would be affected by the proposed restructure. The proposed restructure did not proceed.

28 On 31 May 2013, orders were made in this court enabling GPL to amend scheme Constitutions to empower it to terminate grower rights. The liquidators bound themselves not to exercise such powers without first seeking court approval.

29 During the course of the negotiations the AFP Trust receivers maintained the position that, following termination of the AFP Trust leases, growers had no interest in the trees on the land. The liquidators, on the other hand, reserved the growers' rights in respect of the trees. Eventually, the receivers proposed a compromise, which included a payment in respect of the trees. That compromise was recorded in the Implementation Deed. The Implementation Deed, dated 25 October 2013, was made between the liquidators, the receivers of the AFP Trusts, and the receivers of Gunns Limited, Gunns Plantations and Associated Forest Holdings Pty Ltd.

30 Under that agreement, the AFP Trust receivers would conduct a sale of AFP Trust land and associated trees. The Gunns Group receivers agreed to surrender the AFP Trust leases that were not associated with managed investment schemes and any rights in relation to the trees on that land. The liquidators agreed to surrender the schemerelated AFP Trust leases and the subleases to GPL and, subject to court approval, extinguish growers' rights in relation to trees on AFP Trust scheme land. The liquidators' cooperation was to be achieved through the payment.

31 The deed provided that once a sale contract was entered into, the liquidators would seek court approval to exercise the power of termination. One material difference between the alternative compensation proposals for growers was that the sum of $500,000 would be quarantined from further challenge, whereas under the alternative proposal (10 per cent of sale price) the growers might receive nothing, if the receivers' challenge was successful.

32 When this application was commenced, the liquidators sought approval of a proposed transaction under the Implementation Deed, in the absence of a contract or contracts of sale of the AFP Trust land. That was one of the grounds on which the grower group objected to approval. On 25 February 2014, the receivers executed and exchanged contracts for the sale of the land. They seek confidentiality orders in relation to the contracts, although a redacted copy has been made available to the Gunns Growers. The provisions of the contracts generally reflect the terms of the Implementation Deed.

33 The solicitors for the AFP Trust receivers have advised that, based on the purchase price payable under the sale contracts, the beneficial unitholders under the trusts, which include Gunns Limited, will not receive any distribution.

34 The liquidators expressed the opinion that the sale on terms reflecting the Implementation Agreement was in the best interest of the growers. They expressed a clear preference for the arrangement under which the growers would benefit from the quarantined sum of $500,000, rather than the 10 per cent of the sale price. The alternative (10 per cent) proposal left the growers exposed to a challenge by the receivers to their entitlement to anything at all. In order for the sale to proceed, the liquidators are required to exercise their power to terminate all grower rights in respect of each scheme.

35 In deciding whether to approve that proposal, or the alternative scheme under which 10 per cent of the sale price would be set aside, the court must make some assessment of the growers' prospects of achieving something more and their risk of losing everything.

36 The subleases from Gunns Limited to GPL vested ownership of all trees on the land in GPL during the term the lease. However, they were silent as to ownership of unharvested trees following termination or expiry of the lease. There were no provisions dealing with the rights of growers or GPL to harvest trees within a reasonable period following termination or expiry.

37 The Forestry Right Deeds provided that upon termination, all right, title and interest in the trees and carbon rights would be deemed to be assigned and transferred to GPL. Thus, subject to the implication of a term extending the rights of growers or GPL to harvest trees following termination, or the possibility of a court granting relief against forfeiture, upon termination of the leases any interests that growers had in the trees ultimately vested in the landowner.

38 The growers and liquidators accepted that there were substantial impediments to a successful application for relief against forfeiture, including the fact that each grower's interest forms part only of land subleased go GPL.[7] There are other more practical impediments, such as the unpaid rent, future lease obligations, and obligation to perform various covenants. The court was informed that no grower or other lessee had given notice of an intention to claim relief against forfeiture.

39 Ordinarily, a memorandum of advice would be produced to the court in which counsel made an independent assessment of the growers' prospects. The liquidators tendered, as a confidential exhibit, a letter of advice from their solicitors. The advice was brief. The liquidators wish to maintain confidentiality. To do so is unhelpful, as it prevents the court from adequately expressing reasons. It is difficult to envisage any real prejudice to future negotiations or dealings by exposing the advice, although the liquidators may have some sensitivity about its exposure in the context of continuing negotiations with third party landowners. It is also surprising that the liquidators would not wish to publish the advice upon which they have obviously relied to make commercial judgments that affect so many growers. Nevertheless, the advice will remain confidential, but not indefinitely.

40 In any event, the liquidators and receivers were invited to make further submissions on the question of grower rights, and did so. At a subsequent hearing, the liquidators argued that, while the grower rights might be categorised as a profit à prendre, the termination of leases for nonpayment of rent may have the effect of terminating all rights to trees. They submitted, however, that the right to seek relief against forfeiture was a valuable right. That is no doubt true. The liquidators also contended that it would be open to growers, on the question of apportionment, to demonstrate, if they were able to do so, that some trees or plantations were worth more than others. Such an enquiry would, of course, invite a consideration of scheme or plantation viability in the absence of a cooperative management arrangement provided by a Responsible Entity, coupled with the burden of unpaid rent.

41 The receivers of the AFP Trusts filed a helpful submission in which they contended that growers' rights had been extinguished and were valueless. They submitted that the value to growers of the right to seek relief against forfeiture was illusory. Moreover, they pointed out that no grower or lessee had indicated any intention to make such a claim.

42 As for any continuing right to the trees, the receivers advanced the wellreasoned argument that all such rights had ceased to exist. They contended that the right of Gunns Limited to harvest trees expired on termination of the head lease, and that the sublease to GPL only granted a right to the trees for the term of the lease. They contended that a similar limitation was to be found in the grower Forestry Right Deeds, which terminated automatically on termination of the lease to GPL. Any residual rights in the trees would revert to GPL, and thus to the landowner. Alternatively, the receivers argued, insofar as GPL might be found to have some reversionary interest in the trees, the liquidators had acted reasonably in dealing with that interest on behalf of the growers.

43 The receivers also addressed the possibility that a term might have been implied into the grower leases preserving a right to harvest the trees upon termination of one or more of the leases. While it is not necessary to decide the question of grower rights and their value, the elaboration by the liquidators and receivers of their respective positions was of great assistance on the question of whether the liquidators had acted reasonably and appropriately by entering into the Implementation Agreements and subsequent contracts of sale, coupled with the proposed termination of grower rights under each relevant constitution in order to facilitate completion of the contracts.

44 The liquidators also relied upon a report prepared by URS Australia Pty Ltd, in which an independent assessment of the value of the trees was undertaken. The authors of the report arrived at a net present value for each plantation, which the liquidators have taken into account. A copy of that report has been made available to the court. The liquidators wish to maintain the confidentiality of the URS assessments of net present value. In my view it is not unreasonable to maintain the confidentiality of that data, during the negotiation phase.

45 The vast majority of the trees on the land are immature and not ready for harvesting. The possible introduction of a new Responsible Entity, as a basis for a restructure of the schemes, was exhausted following earlier proceedings in this court. There is no new Responsible Entity. The outstanding liability for rent and other obligations, coupled with the lack of viability of most of the plantations, made that option unrealistic.

46 I am satisfied that the liquidators' decision to accept the offer from the receivers of $500,000 to be allocated to growers and applied to liquidators' costs, is not unreasonable or inappropriate. That commercial decision necessitates termination of grower rights.

47 The analysis undertaken by the liquidators supports their proposed course as the most practical in all the circumstances. There is nothing evident, save for the conflict of interest, that might be regarded as inappropriate. It is a separate question, however, as to whether it is appropriate, in all the circumstances, to give the proposed directions under s 511 of the Corporations Act. Ordinarily, a court would be reluctant to exercise jurisdiction under s 511 of the Corporations Act to, in effect, authorise continuing or future negotiations by liquidators. The court is asked to approve the exercise of a power to terminate grower rights, before the value of the consideration offered by any purchaser to remove the potential encumbrance is known. Thus, the question arose in connection with the third party landowner negotiations whether a court should entertain the application under s 511 of the Corporations Act 2001. Approval of a transaction, such as the AFP Trust land sale, is now conventional.[8] The preconditions for the directions sought by the liquidators in relation to the AFP Trust property transactions have been satisfied.

48 Section 511 of the Corporations Act provides:

(1) The liquidator, or any contributory or creditor, may apply to the Court:

(a) to determine any question arising in the winding up of a company; or

(b) to exercise all or any of the powers that the Court might exercise if the company were being wound up by the Court.

...

(2) The Court, if satisfied that the determination of the question or the exercise of power will be just and beneficial, may accede wholly or partially to any such application on such terms and conditions as it thinks fit or may make such other order on the application as it thinks just.

By giving directions under s 511, the court is providing the liquidator with protection against claims that he or she acted inappropriately or unreasonably by entering into or performing the agreement.[9]

49 It is not the function of the court to review the commerciality of the decisions made by the liquidators, or to substitute its own commercial judgment.[10] The court's role is supervisory, to consider whether there may be some legal impediment to what is proposed, or whether there may be some impropriety or other good reason which might indicate that the liquidators may be acting inappropriately or unreasonably if they were to permit the land and assets to be sold, unencumbered, because they terminated grower rights.[11] The court will not exercise the power to give a direction merely to validate the making of a business or commercial decision. There must be some aspect to the decision that justifies the application. But in the present case, there is the additional feature that a condition for settlement is the termination of grower rights by GPL.

50 The liquidators have entered into a small number of contracts with third party landowners, but seek approval generally to negotiate with each of them and to be in a position to agree to terminate grower rights in order to reach agreement. The proposed negotiations relate to Great Southern Schemes and Gunns Woodlot Schemes.

51 In relation to Great Southern Schemes, there are 68 leases, which comprises approximately 12 per cent of the land used in those schemes. In relation to Gunns Woodlot Schemes, there are 378 leases, which comprises approximately 25 per cent of the land used in those schemes. The liquidators have been corresponding with third party landowners about options available to them regarding unpaid rent and the trees on their land. The course of the negotiations has been explained to growers in Grower Updates. Given the number of landowners involved, the responses, and the net present values attributed to the various plantations, the liquidators are concerned that to delay an application for approval until each contract is signed would be impractical, and involve unnecessary expense and delay in the liquidation of the schemes.

52 The position of the growers is at risk because of the termination or threatened termination of the leases. Only the landowners are in a position to make a meaningful offer to acquire the trees. There is no party willing to assume the position of Responsible Entity for the relevant schemes. The trees could not be managed or maintained without a Responsible Entity, or some other form of collective management. GPL is insolvent and unable to maintain the trees on the third party land. In the absence of maintenance, the trees are a wasting asset.

53 As at the date of the hearing, the liquidators have received 1,283 default notices and 97 termination notices from third party owners, whose land was used in Gunns Woodlot Schemes. There is approximately $11.5 million in outstanding rent. For third party land used for Great Southern Schemes, the liquidators have received 125 default notices and 90 termination notices.

54 By letter dated 21 May 2013, the liquidators invited the Gunns third party landowners to nominate a preferred option. Option 1 involved the acquisition of the trees from GPL. The liquidators acknowledged that the purchase price for the trees would take into account any outstanding rent and contain a release for past and future rent. Option 2 proposed a new lease with a possible incoming purchaser. The possible purchaser was the party acquiring other Gunns forestry assets. Landowners were advised that a new tenant would be unlikely to pay any back rent due under the existing lease agreement. Option 3 was a combined sale of land and trees. The liquidators offered to conduct the sale process. Option 4 involved a share farming agreement. Once again, the liquidators offered to facilitate negotiations. Option 5 was termination of the lease. The liquidators noted that the landowner leases were generally silent as to who owned the trees on termination. They expressed the opinion that growers may retain some interest in the trees or otherwise have a right to claim for relief against forfeiture.

55 The Tasmanian Farmers & Graziers Association (TFGA) wrote to the landowners on 17 May 2013, in response to the options put forward by the liquidators. Among other things, the landowners were advised:

There are strong arguments that you are entitled to terminate the forestry rights (if you have not already done so) and that upon termination of the forestry rights ownership of the trees in the plantations on your land reverts to you as the landowner. This means that you would be able to deal with the trees as you wish without regard to the interests of the liquidators or the grower investors.

56 The TFGA expressed the view that termination of the forestry rights may be the best option available to the landowners in the current circumstances. It refused to endorse any of the other options.

57 One objective of the liquidators is to minimise the claims by third party landowners as creditors of GPL. They believe this may be achieved by exchanging a release for the termination of grower rights, and some payment for the trees. The standard agreement to be employed by the liquidators in the negotiations with third party landowners, includes a provision in which the landowners release GPL from any liability for rent. Insofar as the liquidators are able to achieve landowner agreement to such a release, that will protect scheme assets.

58 In relation to the Great Southern third party landowner negotiations, there were initially five options, similar to those put to the Gunns third party landowners. With the sale to the Trust Company, approved on 17 December 2013, the options available to the Great Southern third party landowners diminished to only two in some cases, and three in others.

59 The liquidators have received mixed responses, and have only entered into purchase agreements with five third party landowners. The negotiations with Gunns third party landowners did not progress as quickly as negotiations with the Great Southern third party landowners, because of the proceedings in which the liquidators challenged the Explanatory Memorandum prepared by Macquarie.[12] The liquidators claim that landowners are under financial stress, frustrated by the delays and uncertainty, and that the land requires maintenance.

60 In dealing with the third party landowners, the liquidators have properly identified a conflict between their duty to the landowners as creditors of GPL, and duty to the growers, whose trees are on the third party land. They have recommended to the third party landowners that they seek independent advice.

61 The analysis undertaken by the liquidators, in which they compare the assessment of net present value of the trees on the land against outstanding rent, provides a useful tool with which to make a commercial decision about the value of any offer received from a landowner. The liquidators compared, for each relevant lease of land for the purpose of Gunns Woodlot Schemes and Great Southern Schemes, the net present value, outstanding rental as at the date of their appointment as administrators (25 September 2012), the liability for rent up to 31 December 2012, and the liability for rent calculated to 7 March 2014.[13] The net present values have been calculated by URS. The vast majority were negative. As at the date of the hearing, only 12 Gunns third party landowners had made an offer to acquire trees.

62 A number of contracts had been signed by Great Southern third party landowners, and a number of leases had been terminated. A few landowners had entered into a new lease with the purchase of Gunns forestry assets, and a few offers were under consideration. Where leases have been terminated by landowners, the valuations were mostly positive before taking into account the unpaid rent liability.

63 The authorities, to which I have been directed, suggest that the court's jurisdiction under s 511 extends to making general directions of the kind sought in relation to the third party landowner negotiations.[14] While it is plain that a court will be more reluctant to grant a wide general order than a particular one, the orders proposed by the liquidators in the present case are anchored in identifiable and particular subject matter. Each landowner has been identified, the trees valued, the outstanding rental obligation is known, and the issues surrounding the entitlement of the growers exposed. In my view, these characteristics provide sufficient particularity to justify the exercise of the power.

64 As to whether the exercise of the power will be just and beneficial, the question is whether it will be of advantage in the liquidation.[15] In my opinion, the circumstances in which approval is now sought to negotiate and reach agreement with the third party landholders are unique. The position in which the liquidators find themselves must be put in context. In relation to the AFP Trust negotiations, the liquidators had only limited scope to negotiate. They did not control the substantive asset, the land on which the trees were located. They negotiated with the receivers, who were contending that growers had no claim to the trees, and were not entitled to any allocation of value. While the liquidators have more control over the scope of the negotiations with third party landowners, they appear to maintain the same position as the receivers. The landowners remain exposed, of course, to the risk that an application for relief against forfeiture might be made and succeed.

65 There is no evidence of growers approaching the landowners to reestablish lease arrangements, individually or collectively. Having regard to the response of some landowners to the options proposed by the liquidators, it is possible that some landowners might have been receptive to an offer from growers to renegotiate a lease. But the unpaid rent, and the impracticality of maintaining plantations without a new Responsible Entity, militates against such arrangements. Nevertheless, the liquidators rightly pursue some consideration for the certainty they offer the landowners. Because termination by the landowners may result in claims in the liquidation of the schemes, at the expense of the growers, the proposed negotiations can only benefit growers.

66 The particular circumstances of this case, including the magnitude of the liquidators' task, the risk to growers and third party landowners, and the impracticality of waiting until all contracts are signed before seeking court approval of termination, justifies the liquidators' application at this time and the exercise of the jurisdiction under s 511 of the Corporations Act. The liquidators must deal with a variety of arrangements that might be necessary to resolve every claim and counterclaim for rent. Some landowners will enter into new leases, some have terminated, some have acquired trees, and others are yet to make an offer.

67 There is also the conflict between the liquidators' duty to the growers, and the landowners as creditors. While the conflict has been disclosed, and the landowners advised to seek independent advice, the liquidators are, in my view, justified on that basis alone in approaching the court under s 511 of the Corporations Act to, in effect, allow them to proceed with their difficult task in the face of the conflict.

68 The unique facts of the present case justify the exercise of the jurisdiction under s 511 to facilitate the negotiations by the liquidators to finalise the relationships between GPL and the third party landowners, while attempting to obtain some benefit for the growers. It is in the best interests of the liquidation and, in my view, the best interests of growers that these matters be finalised, and finalised promptly.

69 Following the hearing, the liquidators sought an opportunity to file some additional affidavit material and make further submissions. They informed the court that following the first hearing, nine Forestry Right Deeds made between prior owners of the land, now owned by the AFP Trusts, and GPL had been brought to their attention. The agreements were inconsistent with the leases granted by the AFP Trusts to Gunns, who in turn subleased the land to GPL. The liquidators and receivers contended that all relevant parties had conducted themselves on the basis that the previous agreements had been terminated. For example, no fees or rental had been paid since the grant of the new leases.

70 While the status of the earlier agreements was not fully litigated, in my opinion it is not unreasonable or inappropriate for the liquidators to facilitate the completion of the sale contracts, notwithstanding the existence of the earlier Forestry Right Deeds.

71 The liquidators seek approval of their costs, expenses and remuneration for the period 5 March to 30 November 2013 for work in connection with the nine Great Southern Schemes and the nine Gunns Woodlot Schemes. The claim relates to particular cost categories, allocated to particular schemes. They claim the costs, expenses and remuneration have been reasonably incurred in caring for, protecting and preserving the assets, or in the realisation of property of these schemes, including the trees. The liquidators claim to be entitled to:

(a) An indemnity for costs, expenses and remuneration in relation to the Great Southern Schemes in the sum of $3,151,497.01 and for the Gunns Woodlot Schemes in the sum of $3,314,054.34, to be apportioned as between the schemes in specified amounts.

(b) An equitable lien over the scheme property, whether present or future, in accordance with the principles in Re Universal Distributing Co Ltd (in liq)[16] and/or the 'salvage principle' to secure their indemnity.

72 The liquidators seek approval subject to an objection procedure that requires notice to be given to Great Southern Plantation Holdings Pty Ltd, the receivers of GPL, ASIC, the Committee of Inspection and the Grower Committee.

73 In relation to the Great Southern Schemes, similar orders have already been made. On 19 December 2012, Robson J endorsed the liquidators' performance of various functions, as administrators, in caring for, protecting, preserving and where necessary realising scheme property, on the basis that, if their expenditure and remuneration was reasonable, they would be entitled to an indemnity and lien.[17] On 9 September 2013, Ferguson J directed that the liquidators were justified in claiming the costs, expenses and remuneration for defined categories and in specified amounts allocated between the various schemes for the period of their administration which ended when they were appointed as liquidators. The liquidators seek similar orders in relation to the period of their work as liquidators up to 30 November 2013.

74 The claims presently made by the liquidators do not include amounts payable out of a Maintenance Reserve Fund, established through maintenance reserve guarantees by GPL in favour of each of the 1999 to 2003 Great Southern Schemes. Ferguson J held that guarantees existed for the purpose of ensuring maintenance expenses were paid by the Responsible Entity from its own funds.[18]

75 The liquidators also seek a direction authorising the payment out of the proceeds of sale of trees, under the contracts of sale and any third party landowner agreements, of any unpaid costs approved by Ferguson J on 9 September 2013, scheme related costs for the period of the liquidation up to 30 November 2013 and, in relation to the Great Southern Schemes, the 'Receivers Lien and Indemnity' as defined in the sixth Bryant affidavit.[19] The Receivers Lien and Indemnity claim was approved by a declaration of this court in Thackray v Gunns Plantations Ltd.[20] There was an assignment of the lien to GPL in September 2011. As at 1 November 2013, the amount outstanding under the lien was $5,617,000. The liquidators also sought an item described as the 'RE Fee'. The nature and amount of the fee was not explained.

76 The complexity of a liquidation of managed investment schemes, in conjunction with a receivership of assets, cannot be underestimated. There were 18 forestry schemes, spread across all six states. There were approximately 226,000 hectares of land under management. There were thousands of individual growers. Scheme documentation is complex. Management and administration structures were complex. There is ambiguity surrounding the structures, documentation and grower rights.

77 The plaintiffs' claim for an indemnity, secured by an equitable lien, for their expenditure and remuneration, depends upon the liquidators, and where relevant the receivers, establishing that the costs, expenses and remuneration were incurred exclusively in the care, preservation and realisation of the property and assets of the schemes, and where multiple schemes are involved, the particular claims are referrable to a particular scheme.[21]

78 As to whether the amounts claimed are reasonable, the principles summarised by the Court of Appeal of Western Australia in Conlan v Adams[22] have been adopted by this court.[23] Those principles are as follows:

(a) A summary procedure is involved, not unlike that applicable to the taxation of solicitors' costs, which is not necessarily subject to all the rules that would apply in an action;

(b) The initial task of the Court is to consider whether the liquidator has made out a prima facie case on the evidence before the Court that the remuneration claimed is fair and reasonable. The Court must make that assessment "bringing an independent mind to bear on the relevant issues" even though at that point there is no objector.

(c) There is no absolute rule regarding the amount of detail required to support a remuneration claim. But the evidence relied on should be sufficient to enable potential objectors to review the amounts claimed and ascertain whether there are matters to which objection should be taken. If there is inadequate evidence supporting the claim, no order should be made.

(d) If the liquidator establishes a prima facie case, the Court should allow for an objection procedure to enable objections to be made;

(e) If there are objectors to the claim or any part, the Court should then establish the validity of those objections.

79 The claims made by the liquidators are very substantial. Ordinarily, the court would expect detailed evidence of the work that was done and the expenses claimed in order to assess reasonableness. Testing of remuneration against an appropriate benchmark would ordinarily be required if the court is to be satisfied that there is no overcharging.[24] In Thackray, Davies J said:

The Court is looking for evidence of overcharging. Excessive charging may be indicated if there is a lack of proportionality between the cost of the work done relative to the value of the services provided. But there is no universal approach applicable in all circumstances by which the "reasonableness" of remuneration claimed or expenses incurred should be measured. The size, importance and complexity of the tasks performed are all factors to be taken into account. What is needed is sufficient information for the Court and any objector to have a clear view about what was done so that an assessment can be made about the reasonableness of the claim. [25]

80 The plaintiffs have filed evidence of their expenditure and remuneration, but asked to be relieved of the obligation to produce the supporting business documents, such as invoices, payment records and other vouchers that might ordinarily support such a claim. Section 50 of the Evidence Act 2008 provides:

(1) The court may, on the application of a party, direct that the party may adduce evidence of the contents of 2 or more documents in question in the form of a summary if the court is satisfied that it would not otherwise be possible conveniently to examine the evidence because of the volume or complexity of the documents in question.

(2) The court may only make such a direction if the party seeking to adduce the evidence in the form of a summary has -

(a) served on each other party a copy of the summary that discloses the name and address of the person who prepared the summary; and

(b) given each other party a reasonable opportunity to examine or copy the documents in question.

(3) The opinion rule does not apply to evidence adduced in accordance with a direction under this section.

81 During the period of liquidation, up to 30 November 2013, the liquidators undertook the following activities:

(a) On 15 October 2012, during the period of administration, the plaintiffs commenced a campaign seeking expressions of interest for the role of responsible entity to replace GPL in respect of the forestry schemes. The campaign continued into the period of liquidation and concluded on 5 April 2013. A number of proposals were submitted. One such proposal was submitted by Macquarie Forestry Services for an alternate Responsible Entity. The campaign involved extensive discussions, negotiations and meetings with Macquarie, review and consideration of its proposal, and updating growers about the campaign and the proposal.

(b) On 29 April 2013, Macquarie gave notice of members' meetings to be held in respect of six of the 2002 to 2008 Gunns Woodlot Schemes for a proposed restructure. The notices, and accompanying explanatory memoranda, generated litigation. A trial was held before Robson J on 1 July 2013, and his Honour delivered reasons on 16 July 2013. There was a subsequent hearing on 5 August 2013, and Robson J delivered reasons and made orders on 20 August 2013.

(c) The liquidators brought an application for directions that they were justified in amending the constitutions of the forestry schemes to provide a power of sale to extinguish grower interests. The application came before Robson J, and his Honour made the relevant directions on 31 May 2013.

(d) The liquidators undertook a sale campaign in relation to the Great Southern Schemes.

(e) The liquidators have participated in the sale campaign of the Gunns Tasmanian Forestry Estate, which includes Gunns Woodlot Schemes assets, as well as nonscheme assets.

(f) The liquidators negotiated and entered into an Implementation Deed with the AFP Trust receivers. The liquidators also negotiated, and continue to negotiate with third party landowners in respect of scheme land used in the Gunns Woodlot Schemes and the Great Southern Schemes.

(g) Throughout the period of liquidation, maintenance and protection services for the scheme plantations has been outsourced to Gunns Forest Products Pty Ltd (GFP), controlled by the receivers, under service agreements dated 22 November 2012.

82 The liquidators have divided their expense and claims for remuneration into the following categories:

(a) Maintenance of plantations used in the schemes. For that purpose, the liquidators entered into the service agreements. Maintenance was required in order to comply with statutory obligations and for fire prevention, and to comply with GPL's contractual obligations under head leases to protect grower rights. Maintenance was also required under insurance policies.

(b) Proposed restructure, which concluded with the failed bid by Macquarie, and the sale process undertaken by the receivers.

(d) Establishment of the infrastructure employed to communicate with growers and the Grower Committee established by them during the period of administration. The first such meeting was held on 10 October 2012. The three main groups represented on the Grower Committee were Gunns Growers; Save My Trees (representing the Great Southern Schemes); and Save My Tiwi Trees (representing specific plantations within the Great Southern Schemes). Meetings were usually held weekly.

(e) The liquidators established infrastructure to manage employees in the Gunns Group, who were retained during the period of administration and liquidation. The costs associated with those employees were paid by the liquidators.

83 The liquidators contended that the foregoing activities, and associated costs, gave rise to a Universal Distributing indemnity and lien.

84 In support of their application to rely on secondary evidence under s 50 of the Evidence Act, the liquidators served court documents in relation to their application for costs, expenses and remuneration, on ASIC, the receivers, the Grower Committee, the Committee of Inspection, the liquidators of Great Southern Plantations Holdings and Gunns Growers. The material served on these parties included a spreadsheet containing a summary of schemerelated costs.[26] The spreadsheet was prepared by a member of the staff of PPB Advisory, the liquidators' accounting firm.

85 Mr Bryant deposed that the spreadsheet had been prepared having regard to timesheets, internal accounting records and invoices received from external suppliers. The source documents used to create the spreadsheet have been maintained and were made available for inspection on reasonable notice. Time records were maintained in which staff recorded their time against specific codes which distinguished between schemerelated and nonschemerelated tasks, and specified the particular scheme involved and the nature of the task. Mr Bryant described the process of allocation of schemerelated costs between what he described as General Scheme Costs, the Expression of Interest campaign costs (EOI Costs) and Sale Costs.

86 The total claim for schemerelated costs, expenses and remuneration is set out below:

87 General Scheme Costs were costs relating to work performed for one or more particular schemes which were apportioned according to the following methodologies:

(a) Method 1 - Where the costs relate to more than one scheme, the costs are apportioned to schemes and growers according to the number of hectares under management.

(b) Method 2 - Where the work undertaken related to the schemes generally, but was not referable to any one or group of schemes, such costs were equally apportioned across all of the schemes, and allocated to growers according to the number of hectares that each grower's interest relates to.

88 The type of costs apportioned under Method 1 included:

(a) time costs associated with Macquarie's proposal to become Responsible Entity;

(b) liaising with landlords and negotiating various standstill arrangements;

(c) maintenance costs, related to the service agreements and general maintenance costs;

(d) managing ongoing thinning and harvesting of plantations; and

89 Up until 4 May 2013, the type of costs that were allocated under Method 2 generally fell into one of the following five categories:

(a) Tasks in respect of the leases, which included:

(i) analysing leases, liabilities, defaults and expiries;

(iii) considering options available for landowners;

(v) negotiating and drafting standstill agreements and other related correspondence;

(vi) corresponding with and updating landowners; and

(b) Tasks specifically in respect of the growers, which included:

(i) preparing and attending grower committee meetings;

(ii) preparing and attending committee of inspection meetings which committee is represented by growers;

(iii) tasks required following the second meeting of creditors attended by growers;

(iv) responding to grower enquiries and maintaining an enquiry log;

(v) preparing notifications to growers and updating frequently asked question notices; and

(vi) liaising with growers and advisors regarding requests to transfer holdings.

(c) Tasks in respect of the management and maintenance of the schemes, which included:

(i) preparing and maintaining a purchase order register and cash flow budget;

(ii) liaising with GPL staff regarding managing plantations;

(v) liaising with authorities and managing fire maintenance and threats to plantations;

(vi) negotiating and managing service agreements with the receivers;

(vii) considering and approving ongoing maintenance to plantations;

(xi) preparing summaries for cost applications; and

(d) Legal liaison, investigations and class action tasks, including:

(i) investigating the custodian accounts held by GPL;

(ii) liaising with solicitors representing class action applicants;

(iii) regular teleconference updates with ASIC; and

(i) liaising with insurance brokers and coordinating appropriate insurance cover for growers;

(ii) liaising with growers regarding insurance coverage;

(iv) establishing grower specific bank accounts and reconciling same;

(vi) considering and complying with scheme reporting requirements; and

(vii) preparing for and attending strategy meeting where schemerelated issues were discussed, maintaining files of same.

90 After 4 May 2013, General Scheme Costs incurred, previously allocated under Method 2, were allocated under Method 1. That is because they related specifically to either the Great Southern Schemes or the Gunns Woodlot Schemes. For the few tasks that related to all schemes, time was split between the schemes.

91 There were occasions when some tasks related to scheme and nonscheme matters. In that event, in respect of time costs and disbursements, the following split was made:

(a) 94.14 per cent of the total cost was applied to the schemes; and

(b) 5.86 per cent of the total cost was applied to the general liquidation, that is, nonschemerelated matters.

(a) calculated the time spent during the liquidation to 30 November 2013 on tasks which were solely scheme-related tasks;

(b) calculated the time spent during that period on tasks which were solely nonschemerelated tasks;

(c) determined what percentage of the total time was made up of solely schemerelated tasks, being 94.14 per cent, and on solely nonschemerelated tasks, being 5.86 per cent; and

(f) applied the percentages to allocate remuneration and disbursements.

93 The expressions of interest campaign costs were calculated up to 5 April 2013, when the campaign concluded. The costs were split between what were described as the 'Schemes of Interest', being schemes in which Macquarie had expressed an interest in replacing GPL as Responsible Entity.

94 The sale costs incurred in relation to the sale of the various scheme assets involved a significant proportion of the liquidators' time, although no application for those costs has been made at this stage. Such a claim will be made at the time court approval is sought for the allocation of proceeds and their distribution.

95 By far the largest component of the claim is remuneration. In relation to the Great Southern Schemes, the liquidators' time costs were $1,170,318.44 and for the Gunns Woodlot Schemes, $1,229,836.69. A summary of the time costs is set out in a spreadsheet which has been served on the interested parties. The actual timesheets are available for inspection. Once again, the liquidators' remuneration claim excludes sale costs.

96 Disbursements claimed by the liquidators were in the sum of $56,389.57 in respect of the Great Southern Schemes, and $50,056.93 in relation to the Gunns Woodlot Schemes. Those disbursements related to photocopying and printing, postage, travel, advertising, conference calls, facsimiles and other costs such as ASIC fees relating to the amendments made to scheme Constitutions. The evidence explained the need for each category of expense. A summary of the disbursements is contained in the spreadsheet.[27] The underlying data and other information, such as invoices and accounting records, was made available for inspection.

97 The liquidators claim to have incurred legal costs of $672,088.62 in relation to the Great Southern Schemes, and $670,383.74 in relation to the Gunns Woodlot Schemes. Mr Bryant said that their solicitors maintained separate files in relation to each scheme and that staff members recorded their time in relation to particular schemes, as well as separate files in relation to insurance, lease analysis, the extension of convening periods during the administration period, the power of sale application and communication with growers.

98 Separate files were also maintained by the solicitors in relation to the expressions of interest campaign, class actions and for work undertaken on behalf of GPL, differentiating between general liquidation nonschemerelated costs and general scheme costs. The solicitors divided their costs into three categories: general liquidation nonschemerelated tasks; general schemerelated costs; and expression of interest costs. They have produced a spreadsheet summarising these costs.[28] Mr Bryant was informed that the spreadsheet was prepared having regard to invoices raised by the solicitors which were made available for inspection. The solicitors also maintained a separate file for work undertaken in relation to ASIC.

99 The liquidators claim third party costs in the sum of $1,252,700.38 in relation to Great Southern Schemes, and $1,363,776.97 in relation to Gunns Woodlot Schemes. These were costs arising out service agreements, general maintenance and other such costs. Mr Bryant gave the background to the service agreements, which involved a monthly fee and general maintenance costs. The liquidators prepared and served a spreadsheet which summarises the costs.[29]

100 Not all of the costs set out in the spreadsheet and claimed by the liquidators have been paid as at the date of Mr Bryant's 12th affidavit,[30] although they had been incurred. Thus, it is possible that some slight variation may occur between what is presently claimed and the amount actually paid. For example, under the service agreements, as at 30 November 2013, the total accrued liability was $1,999,445, although only $740,000 had been paid.

101 The third party costs were allocated between the schemes by reference to one or other of the methodologies mentioned above, and sometimes by reference to more than one methodology. In relation to the costs of the expression of interest campaign, which predated liquidation, those costs are allocated under what was described as Method 3, which involved splitting the cost amongst the schemes for work done up to 5 April 2013, and thereafter on a per hectare basis across all schemes. The allocation process, by reference to Method 1, Method 2 and Method 3, is set out in full in Mr Bryant's 12th affidavit.

102 Having considered the evidence of Mr Bryant and Mr Crosbie, and in particular the affidavits of Mr Crosbie sworn 21 May 2013 and Mr Bryant sworn 20 December 2013, I am satisfied that the expenses incurred and work performed for which remuneration is claimed, is properly characterised as relating exclusively to the care, preservation or realisation of the assets of the schemes, or the administration of the schemes. I am also satisfied that the work was necessary and that the liquidators were acting reasonably in incurring the expenses and performing the work.

103 Because of the volume and complexity of the source documents from which the spreadsheet summaries have been prepared, I am of the opinion that it would not be convenient for the court, or in the interest of the parties, that the liquidators be required to produce all of the original documents for the purpose of this application. I am satisfied that proper records have been maintained by the liquidators and their solicitors which constitute or record source data. While there will always be room for argument, particularly about the allocation of time or costs to particular schemes, the basis upon which the allocations have been made by the liquidators is, in my view, reasonable in all the circumstances.

104 Interested parties were afforded reasonable opportunity to inspect underlying data and vouchers prior to the application. Accordingly, I will grant the liquidators' application under s 50 of the Evidence Act, permitting them to adduce the evidence in support of their claims in the summary form they have advanced.

105 Noone appeared on the application to contend that the work undertaken by the liquidators, or the expenses incurred by them, did not relate exclusively to the care, preservation or realisation of the assets of the schemes, or administration of the schemes; or that the work was unnecessary; or that the claims were not supported by a sufficient explanation. It was not contended that the plaintiffs had failed to exercise commercial judgment in relation to the work they had undertaken, or when incurring the claimed expenditure, or that the claims were disproportionate to the services provided, or that the allocation methods adopted by the liquidators were unfair or unreasonable.

106 The scale of fees charged by the liquidators has remained constant throughout the liquidation. A schedule of the rates was attached to the notice of the first meeting of creditors. Mr Crosbie deposed that the rates were comparable to other large national corporate restructuring and insolvency firms. His evidence has not been challenged. The legal costs have been charged by a reputable legal firm experienced in insolvency work. The chargeout rates are set out in the second affidavit of Craig David Crosbie.[31] The fees are reasonable and proper. A detailed analysis of the staff member hours, work and allocation was prepared by the solicitors.[32] That was in addition to a schedule[33] setting out the allocation of costs between files or matters. Once again, the allocation of costs as between schemes or scheme and nonscheme business might be debated, involving subjective assessment by a staff member or partner, but no complaint has been made on this application about the rates, fees, or allocation. Accordingly, I am satisfied that the charges that have been made and the expenses incurred are, in all the circumstances, reasonable and proportionate to the services undertaken and that the allocation of those expenses and remuneration is fair and reasonable.

107 Gunns Growers have sought an order that will ensure payment in full of its counsel's fees. The court has been asked to certify counsel's fees under Item 19 of Appendix A to Chapter 1, Supreme Court (General Civil Procedure) Rules 2005, Scale of Costs. The agreed rate for Senior Counsel was $9,900 per day and $990 per hour, and for Junior Counsel $3,300 per day and $330 per hour. Those amounts include GST. The affidavit in support of the application did not set out any special grounds on which the fee for Senior Counsel should exceed the amount of $7,928 per day, or $793 per hour, prescribed in the Scale of Costs applicable in the Supreme Court from 1 January 2014.

108 Junior Counsel's fee falls well within the prescribed fees. Junior Counsel was admitted to practice in 2001 and signed the roll of counsel in 2007. Having regard to his seniority and the complexity of the case, I would allow the agreed fees for Junior Counsel.

109 Senior Counsel was admitted to practice in 1977, signed the roll of counsel in 1978, and was appointed one of Her Majesty's Counsel in 1993. He is highly regarded at the Victorian Bar with substantial experience in commercial litigation.

110 The issues raised on this application were complex and of great importance to the Grower Group. Counsel demonstrated a measured and competent approach to the issues and sound judgement, avoiding any unnecessary escalation of costs.

111 Having regard to his seniority, his recognised standing as an experienced senior commercial silk, and the complexity of the issues, I would allow the agreed fee for Senior Counsel as both reasonable and appropriate.

[1] Affidavit affirmed 26 April 2013, 30 April 2013, 27 May 2013, 30 May 2013, 5 August 2013, 1 November 2013; two affidavits affirmed 22 November 2013, 6, 13, 17 and 20 December 2013; two affidavits affirmed 11 March 2014, and 12 March 2014. The principal affidavits are those affirmed on and after 1 November 2013.

[2] Affidavits sworn 28 November 2013 and 27 February 2014.

[3] Affidavits sworn 30 May 2013 and 3 February 2014.

[5] Affidavits sworn 11 and 13 December 2013, and 5 February and 12 March 2014.

[6] Affidavits sworn 21 May 2013, 6 June 2013, 13 August 2013 and 21 August 2013.

[7] Chatham Empire Theatre (1955) Ltd v Ultrans Ltd [1961] 1 WLR 817; see also Re Gunns Plantations Ltd (No 1) [2012] VSC 655 at para 95.

[8] Re Timbercorp Securities Ltd (in liquidation) (No 3) [2009] VSC 510; Re Timbercorp Securities Ltd (in liquidation) [2009] VSC 590; Re Timbercorp Securities Ltd (No 4) [2009] VSC 530; Re Timbercorp Securities Ltd [2010] VSC 50; Re Timbercorp Securities Ltd [2011] VSC 24; Re Timbercorp Securities Ltd [2011] VSC 83; Re Wilmott Forests Ltd (No 2) [2012] VSC 125.

[9] Re Ansett v Mentha [2001] FCA 1439; (2001) 39 ACSR 355, 370; Re Timbercorp Securities Ltd [2009] VSC 590 at para 2; Re Gunns Plantations Limited (No 1) [2012] VSC 655 at para 159.

[10] Re Timbercorp Securities Ltd [2009] VSC 590 at para 4; Re Ansett v Mentha [2001] FCA 1439; (2001) 39 ACSR 355, 371; Re Timbercorp Securities Ltd [2011] VSC 24 at para 3; Re Timbercorp Securities Ltd (No 4) [2009] VSC 530 at paras 30 to 31; Re Timbercorp Securities Ltd [2011] VSC 83 at para 32.

[11] Re Timbercorp Securities Ltd [2009] VSC 590 at para 4; Re Spedley Securities Ltd (1992) ACSR 83, 85-6; Corporate Affairs Commission v ASC Timber Pty Ltd (1998) 29 ACSR 109, 118.

[12] [2013] VSC 365: The court held that with the appointment of a new responsible entity to a scheme, outstanding liabilities for past rent, and future ongoing liability, would transfer to the new responsible entity. Unpaid rent due to landowners was a scheme debt, payable out of the realisation of scheme property. The decision had the effect of further eroding any opportunity the growers might have to recover value from the trees.

[13] Confidential Exhibits DNB 138 and 139.

[14] Re GA Listing and Maintenance Pty Ltd (1994) 15 ACSR 308; Re Britannia Permanent Benefit Building Society (1890) WN (Eng) 170.

[15] Dean Willox v Soluble Solution Hydroponics (1997) 42 NSWLR 209, 212; Re Wilmott Forests Ltd (No 2) [2012] VSC 125 at para 55.

[16] [1933] HCA 2; (1933) 48 CLR 171.

[17] Re Gunns Plantations Limited (No 1) [2012] VSC 655.

[18] [2013] VSC 595, [36].

[20] [2011] VSC 380; [2011] VSC 417.

[21] Thackray v Gunns Plantations Limited [2011] VSC 380, [38]-[42].

[22] [2008] WASCA 61, [28].

[23] Thackray [60], citation omitted.

[25] Thackray [64], citation omitted.