RE MIRABELA NICKEL LTD (receivers and managers appointed) (in liq); EX PARTE MADDEN [2018] WASC 335 (5 November 2018)

1. A number of affidavits were read. The receivers primarily relied on the affidavits of one of the receivers, Richard Tucker. Mr Tucker's affidavits were sworn 2 August, 31 August (two affidavits were sworn 31 August, the second formerly being a 'confidential' affidavit), 28 September and 24 October 2018. The receivers also relied on the affidavit of Christopher Laird sworn 19 October 2018 and Rebecca Hanrahan sworn 7 August 2018. Ms Hanrahan's affidavit simply establishes that a number of parties were given notice of the application. Mr Laird is one of the receivers' staff members.
2. MSI primarily relied on affidavits of its director, Walter Milbourne, sworn 14 September and 16 October 2018. Otherwise MSI relied on affidavits sworn by two of its solicitors, Amanda Skoien and Stephen Russell. Ms Skoien's affidavit attached various searches. Mr Russell's affidavit attached an originating motion dated 23 October 2018 in respect of a proposed writ that MSI seeks leave of the court to issue and serve overseas. The proposed writ names as defendants, among others, the receivers, MBN and MBI.
3. It is likely, given the proposed writ, that there will be further litigation between the receivers, the companies in receivership and MSI.
4. In now recounting the background facts I do not intend to make - or to be seen as making - any factual findings as to the material issues which inform the wider substantive dispute between the receivers, the companies in receivership and MSI. It would be inappropriate to do so given the nature of the application before me. It would be doubly so as there are a number of issues that involve factual matters where there are conflicting accounts on affidavit and the deponents have not been crossexamined. Nor, as I understood their submissions, did either the receivers or MSI invite me to make such factual findings. To the contrary, senior counsel for the receivers and senior counsel for MSI reminded me that I ought not adjudicate on MSI's claims.
5. There are a number of background facts that are uncontroversial. I will refer to them before turning to the matters that inform the substantive dispute. In addressing the matters that inform the substantial dispute it is appropriate that I do no more than note the parties' respective contentions and some documentary materials. Those statements should not be taken to be factual findings. The events from 1 December 2017 are largely established from the documentary materials.

1. MBN and MBI are Australian incorporated companies. Together they hold 100% of the 'quotas' (the equivalent of shares) in a Brazilian company, Mineração de Brasil Ltda (MMB). MMB owes large amounts to MBN and MBI. The quotas in and loans owed by MMB are the principal assets of MBN and MBI and were described in Mr Tucker's first affidavit as the 'Mirabela assets'.
2. The key asset of MMB is a nickel mine located in Brazil known as the 'Santa Rita Mine'. The mine has been in care and maintenance since February 2015.
3. MBN and MBI granted security in the form of an Amended General Security Deed (GSD) to AET Structured Finance Services Pty Ltd (AET), as security trustee, in 2013 (attachment 'RST6'). The GSD was security for convertible notes issued pursuant to an indenture which has been amended and restated from time to time. Additional entities are party to the indenture in capacities as Brazilian collateral agent and trustee (paying agent, transfer agent and conversion agent).
4. There was no direct evidence as to the amount secured by the GSD in favour of the secured noteholders. I infer, however, that it is an amount greater than the US$59.5 million held by the receivers. I note in that regard that the information memorandum of July 2017 (attachment 'RST12') refers to 'Senior Convertible Secured Notes' having been issued in an amount of $115 million[1] - it being those notes that are secured by the GSD as the first-ranking charge over the assets of MBN.
5. Voluntary administrators were appointed to MBN and MBI on 24 September 2015. Subsequently, on 13 June 2016, the creditors of MBN and MBI resolved that the companies be wound up. The companies remain in a creditors' voluntary liquidation.
6. On 28 October 2015, acting pursuant to the GSD, AET appointed the receivers as joint and several receivers and managers of all of MBN's and MBI's present and after-acquired property (attachment 'RST3').
7. Mr Tucker gives uncontradicted evidence that between 28 October 2015 and March 2017 the receivers did not receive any satisfactory offers for the Mirabela assets. In or about July 2017 the receivers recommenced a sale process. Copies of information memoranda as to the proposed sale are included in the papers before me.
8. In circumstances which are presently irrelevant, Mr Milbourne had earlier been introduced to the receivers. MSI was engaged to provide consultancy services to MMB.
9. Mr Tucker's second affidavit goes into substantial detail as to the nature of the sale process undertaken by the receivers in 2017. It is unnecessary to refer to those details. It suffices to note that Mr Milbourne contacted the receivers to ask whether it was acceptable that he submit a proposal. The receivers gave Mr Milbourne qualified authorisation to do so. Thereafter an offer was received. The terms of that offer do not need to be outlined. It need only be mentioned that the offer led to further negotiations and the contract with MSI to which I now turn.

1. The receivers and MSI entered into an Asset Sale Agreement (MSI ASA). The parties to the MSI ASA also included MBN, MBI and MMB. A copy of the MSI ASA is included in the papers as attachment 'RST14'. The space provided for the parties to insert a date into the MSI ASA is blank.
2. The date on which the parties entered into the MSI ASA is a matter on which the parties are in dispute. Consistent with my earlier observations I will not attempt to resolve that dispute. The receivers' position is that the MSI ASA was entered into on 1 November 2017.[2] MSI's position is that the MSI ASA was entered into on 10 November 2017.[3] As will be seen, the date has some importance to the dispute between the parties as to whether the MSI ASA has been validly terminated.
3. The MSI ASA provided for a sale of the Mirabela assets by MBN and MBI as sellers for a purchase consideration of US$50 million. A deposit of US$100,000 was payable.
4. Clause 2.1 of the MSI ASA provided for various conditions precedent. They operated unless waived by MSI in its absolute discretion. The conditions precedent included by cl 2.1(f):

execution of binding finance agreements by the Buyer [MSI] for an amount equal to the Consideration [US$50 million] and satisfaction of all conditions precedent under the finance agreement other than obtaining the Consent and Completion occurring under this agreement.

1. Each party was to use all reasonable endeavours to ensure that each condition precedent was satisfied as soon as practicable after the date of the agreement and, in any event, before the 'End Date' (being, in the absence of further written agreement, 90 days after the date of the agreement) (cl 2.2).
2. A termination right was provided by cl 2.5 of the MSI ASA. Relevantly, as to the finance condition in cl 2.1(f), two conditions applied before a party was entitled to terminate by notice to the other parties. First, the party had to have complied with its reasonable endeavours obligations under cl 2.2. Second, cl 2.5(a) provided that the right arose if the condition precedent in cl 2.1(f) had not been satisfied by the date which is '14 days after the date of the exchange of signed copies of' the agreement.
3. The deposit was repayable if the MSI ASA was terminated under cl 2.5 (cl 3(d)).
4. Consonant with the parties' dispute as to the date of entry into the MSI ASA, there is a dispute as to the 'date of exchange' of signed copies of the agreement. Again, it is inappropriate to descend into the evidence and seek to resolve the difference between the parties' evidence and the appropriate legal conclusion on the proper construction of the MSI ASA.[4] There is a dispute as to whether the date of exchange is 1 November 2017 (the receivers' position) or 10 November 2017 (MSI's position).
5. The receivers were not the 'Sellers' under the MSI ASA; MBN and MBI were the 'Sellers'. The receivers were parties to the MSI ASA so as to obtain the benefit of cl 9 of the agreement. Clause 9 of the MSI ASA provided certain exclusions and acknowledgements including a 'no liability' clause in relation to the receivers. In particular:
   • MSI acknowledged that it was not contracting with the receivers personally except in relation to cl 9 (cl 9.1(a)(i)).
   • MSI acknowledged and agreed that the receivers did not incur any personal liability to MSI under the agreement (cl 9.1(a)(ii)).
   • MSI released the receivers 'personally' from all claims arising out of or in connection with or flowing from or related to the agreement (cl 9.1(b)(i)). MSI also provided a corresponding covenant not to sue the receivers personally (cl 9.1(b)(ii)).
6. Putting the matter neutrally, and making no finding as to the merits either way, on 9 November 2017 the dispute as to the date of exchange of signed copies of the MSI ASA manifested itself.
7. It appears to be common ground that the US$100,000 deposit under the MSI ASA was paid on 10 November 2017.
8. Mr Tucker gives evidence as to various dealings between himself and Mr Milbourne over the period 14 to 18 November 2017.[5] This includes alleged discussions and correspondence as to the finance condition. There is a conflict in the evidence concerning what occurred in a 14 November 2017 telephone conversation. Mr Tucker says he refused to agree to give 24 hours' notice before proceeding to terminate the MSI ASA for nonsatisfaction of the finance condition precedent.[6] Mr Milbourne says that there was such an assurance and that he, on behalf of MSI, relied on it.[7]
9. I cannot resolve that difference in the affidavit evidence. There is, however, a relevant documentary record which was not in dispute.
10. Mr Milbourne sent Mr Tucker an email on 14 November 2017. This stated, in part:

Finally, given the intensity with which I am dedicating to this financing, I will rely on your commitment that while you intend to reserve your rights under the ASA, you will give me adequate prior notice prior to terminating the ASA. I will continue to work in an expeditious way to conclude finance, and to achieve financial close within the next month.

1. Mr Tucker replied later that day 'commenting' by reference to Mr Milbourne's email. As to the statement in the preceding paragraph, the response email stated:

We said we would issue the reservation of rights tomorrow and that the [MSI ASA] does not require us to give notice on termination. That being said, we would not issue a letter without calling you first to advise of the termination (if it eventuated).

1. Mr Milbourne then sent a further email informing Mr Tucker that he, Mr Milbourne, required at least 24 hours before termination (if that eventuated). It was said that if that was not acceptable they needed to 'find a fair middle ground'.
2. A notice styled as a 'Notice of Failure of Condition Precedent' in relation to non-satisfaction of the finance condition was issued to MSI on 15 November 2017 (attachment 'RST56').
3. The papers then refer to text messages exchanged between Mr Tucker and Mr Milbourne on 18 November 2017 (attachment 'RST60'). These followed a draft deed circulated on 17 November 2017 (attachment 'RST59'). Among other things, Mr Milbourne stated by text message:

The deed seems a bit overkill. I'm happy to send email confirmation I accept that the period to provide binding finance concludes on Wed. That's what you are asking for right? It doesn't need a multiparty deed when I can make that acknowledgement by email. It will be enforceable. I am away from the printer and scanner today so email would be best.

1. Mr Tucker sent Mr Milbourne an email on 18 November 2017 (attachment 'RST61'). Among other things, this asserted that the date to satisfy the finance condition precedent was 15 November 2017. It was then said that the 'Seller' had agreed to reserve its position and, subject to certain confirmations by MSI, would not take any steps to terminate prior to 5.00 pm WST on 22 November 2017 (which was a Wednesday).
2. Later on 18 November 2017 Mr Milbourne responded with:

Further to your email, and as agreed by phone last night, I accept close of business Wednesday as the deadline for the condition precedent to confirm binding finance documentation.

1. There is a dispute as to the legal effect of the dealings. Mr Milbourne, for MSI, says that as a matter of law MSI disputes the receivers' contention that 22 November 2017 became the date for satisfaction of the finance condition precedent.[8] The receivers contend that the finance condition had to be satisfied by 5.00 pm WST on 22 November 2017. I apprehend that there will also, in due course, be a dispute as to the legal consequences of the 18 November 2017 exchange for what was said orally (as to which there is a dispute) and by email on 14 November 2017. The merit of the parties' respective positions on those two matters must be finally determined elsewhere.
2. There is no dispute that, very late in the night on Wednesday, 22 November 2017, the receivers issued a notice of termination in relation to the MSI ASA (attachment 'RST63') relying on nonsatisfaction of the finance condition. The notice was sent on behalf of MBN and MBI to the other parties to the MSI ASA.
3. Mr Milbourne, for MSI, confirms receipt of the notice of termination.[9] Mr Milbourne says, however, that Mr Tucker did not call or contact him (Mr Milbourne) to give notice of the intended termination.[10] Mr Milbourne says that, had Mr Tucker done so, he (Mr Milbourne) would have waived the finance condition in cl 2.1(f) of the MSI ASA.[11] Mr Milbourne also says that he did not otherwise waive the condition because of what had occurred on 14 November 2017.[12]
4. The veracity of that evidence must be tested elsewhere.
5. On 23 November 2017 MSI participated in arrangements for return of the deposit under the MSI ASA by providing bank account details for the refund (attachment 'RST64').
6. On 24 November 2017 Mr Milbourne, for MSI, sent an email disputing the effectiveness of the termination (attachment 'RST65'). It was said that the termination was not in accordance with cl 2.5 of the MSI ASA. Specifically, it was alleged that MBN and MBI had not complied with the reasonable endeavours obligation under cl 2.2. The receivers took the position that the termination stood (attachment 'RST65'). Thereafter, over 24 and 25 November 2017, it remained MSI's position that the contract was not validly terminated (attachments 'RST65', 'RST66' and 'RST67').
7. Solicitors for MSI then corresponded with the receivers and the receivers' solicitors. The earliest such letter is dated 1 December 2017 (attachment 'RST17'). Among other things, it was said that MSI had rejected the attempt to terminate the MSI ASA. It was asserted that there had been 'repudiatory conduct' which MSI waived. Notice was given that MSI had given instructions to commence proceedings for specific performance of the MSI ASA.
8. Thereafter, further correspondence ensued between the solicitors for MSI and the solicitors for the receivers. Little is achieved by recounting that correspondence. All that needs to be said is that the parties are in dispute: the receivers contend that the MSI ASA was validly terminated on 22 November 2017; MSI contends that the MSI ASA remains on foot, that it is entitled to specific performance, and that it therefore is the equitable owner of, or has an equitable interest in, the Mirabela assets.

1. Subsequent to 22 November 2017 the receivers caused MBN and MBI, as 'Sellers', to enter into a new contract to sell the Mirabela assets. Mr Tucker describes this as the 'Appian Agreement' (attachment 'RST68'). The 'Buyers' under the Appian Agreement are Brazil Mining BV, Brazil Holding BV and ANR BR Investment BV. Ms Skoien's affidavit establishes that those entities are incorporated in the Netherlands and have ANRH Cooperative UA as sole shareholder. Mr Tucker describes the Buyers as being nominees of Appian Capital Advisory LLP (Appian).
2. The Appian Agreement is also undated. Mr Tucker gives unchallenged evidence, which I accept, that the parties exchanged executed copies of the Appian Agreement on 27 November 2017.[13]
3. Mr Milbourne was aware in 2017 that Appian had expressed interest in acquiring the Mirabela assets.[14] After 22 November 2017 he became aware another party had made an offer to purchase the Mirabela assets which had been accepted.[15] Mr Milbourne assumed that the other party was Appian.[16] Later, in midMarch 2018, Mr Milbourne obtained confirmation that entities associated with Appian had entered into a contract to purchase the Mirabela assets.[17]
4. On 30 June 2018 MSI's solicitors wrote to Appian (attachment 'RST24'). The letter referred to an apprehension on the part of MSI that Appian intended to proceed with an acquisition of the Mirabela assets. MSI, by its solicitors, asserted that: (1) it had agreed to purchase the Mirabela assets; (2) due to its status as purchaser it held a continuing equitable ownership interest in the Mirabela assets; (3) the receivers, and MBN and MBI as Sellers, could not sell the Mirabela assets and could not pass good title to any person other than MSI; and (4) Appian was not entitled to complete any agreement to acquire any interest in the Mirabela assets.
5. The letter otherwise made various reservations of alleged rights against Appian and foreshadowed that MSI intended to shortly commence proceedings against the receivers and MBN, MBI and MMB.
6. MSI, by its solicitors, also asserted its contention that it is the equitable owner of, or alternatively the holder of an equitable interest in, the Mirabela assets to AET by a letter dated 3 July 2018 (attachment 'RST25'). MSI demanded that AET provide undertakings that would have prevented the completion of any sale transaction.
7. Predictably, the correspondence sent by MSI's solicitors generated more lawyers' letters on behalf of the receivers, AET and MSI. No undertakings were provided. The receivers' solicitors' correspondence reiterated the receivers' position that the MSI ASA had been validly terminated (attachments 'RST26', 'RST27' and 'RST29').
8. In correspondence dated 30 July 2018 the solicitors for the receivers informed the solicitors for MSI that the Appian Agreement had completed (attachment 'RST29'). Mr Tucker refers to receipt of some US$59.79 million on 27 July 2018;[18] later that is corrected to refer to 30 July 2018.[19] Since late August 2018, after making various payments, the receivers have been holding over US$59.5 million as the proceeds of sale of the Mirabela assets.[20] There were certain postcompletion cash adjustments.[21] Mr Laird's evidence is that this was attended to in midOctober 2018 and there is no other obligation for the receivers to discharge under the Appian Agreement.[22]
9. Mr Milbourne's first affidavit suggests an unwillingness to accept that the Appian Agreement has completed.[23] But, in its initial written submissions, MSI effectively accepts the fact of completion. It is acknowledged that the receivers have already entered into the Appian Agreement and that 'performance under that contract has substantially occurred'. Later, there is reference to the receivers' 'entry into and performance' of the Appian Agreement.[24]
10. Given the nature of the application I will refrain from making a finding as to whether there has been completion under the Appian Agreement. There is, prima facie, an admission to this effect in MSI's submissions. However, I cannot be confident that the question will not be agitated in subsequent proceedings involving MSI, the receivers and the companies, MBN and MBI. For present purposes it is enough if I find, as I do, that the receivers presently hold in excess of $US59.5 million being the proceeds of the sale of the Mirabela assets under the Appian Agreement. That much is plainly established by the evidence and is not challenged by MSI.

1. I have referred to correspondence on behalf of MSI in which it threatens proceedings against the receivers, the companies in receivership and others. Mr Milbourne confirms that MSI intends to issue proceedings.[25] His first affidavit attaches a draft statement of claim as to the threatened proceedings (attachment 'WRM11'), noting that the pleading is yet to be settled by counsel.
2. On 23 October 2018, in action CIV 2847 of 2018, MSI applied for leave of this court to issue a writ to be served overseas. That ex parte application is set down for hearing on 8 November 2018. A draft of the proposed writ is included in the papers as attachment 'SCR6'. It names as proposed defendants MBN, MBI, the receivers, MMB, AET, the Brazilian collateral agent and the Buyers under the Appian Agreement.
3. The proposed writ seeks the following relief:
   1. A declaration that a certain contract in writing ("the ASA" [the MSI ASA]) made by the plaintiff and the first to fourth defendants (as named parties) on 10 November 2017 for the sale of certain assets ("the Assets" [the Mirabela assets]) remains on foot;
   2. A declaration that the rights of the seventh defendants [Appian the Buyers] under an agreement In (sic) writing ("the Appian Contract") made between the first to fourth and seventh defendants on or about 27 November 2017 for the sale and purchase of the Assets are inferior to those of the plaintiff under the ASA;
   3. An injunction restraining the defendants from carrying the Appian Contract to completion;
   4. Such orders as may be necessary for the transfer or assignment of the Assets to enable specific performance of the ASA;
   5. An order for specific performance of the ASA;
   6. Damages, including exemplary damages in addition to specific performance;
   7. In the alternative to the relief claimed in paragraphs 1 to 5 hereof, damages, including exemplary damages, for breach of the ASA;
   8. Further and in the alternative, as against the third defendants [the receivers], damages, including exemplary damages for procuring or inducing breach of contract on the part of the first, second and fourth defendants;
   9. Such further or other relief that the Court considers appropriate, including such directions, injunctions or orders as may be necessary for the working out of the decree of specific performance;
   10. Interest on damages pursuant to s 32 of the Supreme Court Act 1933 (sic);
   11. Costs on the basis that the plaintiff has a complete indemnity for all of its legal costs of and incidental to this proceeding.
4. Insofar as MSI intends to claim specific performance of the MSI ASA, it is plain that MSI contends that it holds an equitable interest in the Mirabela assets. MSI pleads as much in the draft statement of claim (par 60). Otherwise, MSI pleads that:

(1) the termination of the MSI ASA was wrongful (pars 43 56);

(2) MSI has elected to keep the MSI ASA on foot (par 57) but the Sellers and the receivers refuse to perform the MSI ASA, having since sold the Mirabela assets (par 58);

(3) MSI was and is ready, willing and able to perform its obligations under the MSI ASA (par 59);

(4) the Appian Buyers had notice of MSI's entitlements as purchaser and its equitable interest in the Mirabela assets (par 60); and

(5) MSI's interest in the Mirabela assets as purchaser is superior to that of the Appian Buyers and the MSI ASA should be specifically enforced (par 61).

1. There are other pleas involving noteholders (pars 62 66). As to the receivers, it is alleged that they procured and induced the alleged breaches of the MSI ASA (pars 67 69). There is an allegation as to loss and damage (pars 70 72) and pleas seeking exemplary damages (pars 73 74). To the extent that the alleged loss of damage is quantified, should the court decline specific performance, MSI alleges losses exceeding US$74 million to US$148 million (par 72(b)) on the basis that the Mirabela assets had a value of between approximately US$124 million and US$198 million.
2. In its initial written submissions MSI stated that there was, as yet, no proprietary claim to the sale proceeds of the Mirabela assets as held by the receivers.[26] Before the hearing I informed MSI, through chambers, that I wished to be informed as to whether MSI claimed any proprietary or other interest in the proceeds of sale held by the receivers; and, if so, why. Senior counsel for MSI addressed this in his oral submissions.[27]
3. Senior counsel commenced by saying that it was a 'difficult question'.[28] Counsel then posited a scenario where MSI did not obtain specific performance because there had been the intervention of an innocent third party for value. If the court did not provide the remedy sought it was then said that:

A court ..., exercising conscience in that situation, might impose a constructive trust over the proceeds of the asset in which MSI formerly had an equitable interest.[29]

1. It was acknowledged, however, that there would need to be some adjustments so far as it was said that the equitable interest had effectively been converted into a money form. Senior counsel put it in terms of having to offset against the proceeds the obligation to pay the US$50 million purchase consideration under the MSI ASA. Essentially, then, it was a proprietary claim as to the balance of the proceeds.[30]
2. Two things arise from that exchange. First, MSI has not disclaimed an intention to advance a proprietary claim in relation to the $US59.5 million held by the receivers from the proceeds of sale of the Mirabela. Second, MSI considers that there might be such a claim - to be advanced in the alternative - but perhaps not as to the whole of the proceeds.
3. I make no finding as to whether the proprietary claim as posited is reasonably arguable. For the purpose of the receivers' application under s 424 of the Act it is enough to record the findings I make in the preceding paragraph, ie that MSI makes the claim.

The material issues in the wider dispute between the receivers and MSI

1. Having addressed the nature of the claim made in MSI's proposed proceedings, it is convenient to briefly outline the substantive issues that are likely to arise in the threatened litigation. Most ought to be evident from the earlier discussion of the background facts, the parties' evidence and the proposed writ and statement of claim.
2. On MSI's case there are three main issues:[31]

(1) Was the termination of the MSI ASA invalid? Here there are sub-issues as to:

(a) When did the parties exchange signed copies of the MSI ASA? (The receivers say 1 November 2017; MSI says 10 November 2017.)

(b) What was the date by which the condition precedent as to finance had to be satisfied? (The receivers say by 5.00 pm on 22 November 2017; MSI says it had until 24 November 2017.)

(c) Were MBN and MBI precluded from terminating the MSI ASA under cl 2.5 because they had not complied with their obligation to use reasonable endeavours to ensure satisfaction of the finance condition precedent in accordance with cl 2.2? (MSI says yes; the receivers say no.)

(d) Were MBN and MBI estopped from terminating under cl 2.5 due to the communications between Mr Tucker and Mr Milbourne on 14 November 2017? (MSI says yes; the receivers say no.)

(2) Did MSI affirm the termination as claimed by the Sellers; for example, by retaining the deposit as refunded? (The receivers say yes; MSI says no.)

(3) Is MSI entitled to specific performance of the MSI ASA? (MSI says yes; the receivers say no. As to this, Mr Tucker provides evidence with a view to contending that MSI never had unconditional finance and was unable to complete the transaction.[32] The receivers' materials also raise the issue of delay.)

1. I expect, although it was not mentioned before me, that to the extent MSI's proposed proceedings advance a damages claim against the receivers there will also be an issue as to the meaning and effect of cl 9.1 of the MSI ASA. That is all the more so where MSI's claim for loss and damage is, in part, apparently advanced as a claim based on alleged breach of contract by the receivers (attachment 'WRM11', par 70).
2. It has been necessary to identify the likely material issues in the wider dispute between the receivers and MSI. They form a relevant part of the context in which I am asked to make directions under s 424. It would, however, be inappropriate to finally adjudicate on any of those issues.

1. The form of the directions sought by the receivers has altered over time as matters developed. At all times, however, three substantive directions have been sought.
2. Originally, the first direction as sought was that the receivers were justified in entering into the Appian Agreement and were justified in performing their obligations under the Appian Agreement. By the time of the hearing the receivers considered that they no longer had any obligations to perform under the Appian Agreement. Accordingly, the direction was then confined to a direction that the receivers were justified in entering into the Appian Agreement. After the hearing this was recast to a direction that:

Subject to any contrary findings in the MSI proceeding, the Receivers are directed that they may act on the agreement described in paragraph 18 of the affidavit of Richard Scott Tucker sworn 2 August 2018 (Appian Agreement) as though the Receivers had entered into the Appian Agreement after receiving a direction that the Receivers were justified in doing so.

1. A key issue at the hearing was whether s 424 empowered the court to make a direction of a retrospective nature. The amended direction as sought by the minute filed on 26 October 2018 sought to recast the form of the proposed direction in a prospective form.
2. The second direction sought concerned the proceeds of the sale of the Mirabela assets as held by the receivers. The receivers sought a direction that they are justified in distributing the proceeds to AET as an amount payable pursuant to the GSD. Before the hearing this was amended such that the direction was sought in those terms unless, within seven days, MSI obtained an interlocutory injunction restraining the receivers from so distributing the proceeds. I was concerned about the form of a direction in those terms; it might be seen as being coercive.[33] After the hearing, the receivers proposed a direction in these terms:

Subject to the Receivers giving no less than 7 days' written notice to MSI of their intention to distribute, despite the MSI proceeding, the Receivers are justified in distributing to AET Structured Finance Services Pty Ltd (AET) amounts payable under the Amended General Security Deed dated 24 December 2013 as amended on 16 June 2014 between MBN and MBI (each as a Grantor) and AET (as Secured Party), perfected by registration on the Australian Personal Property Securities Register with registration number 201312240086006.

1. The third direction concerned the dispute with MSI. Originally, because it was unclear whether MSI would commence proceedings, a direction was sought in terms that the receivers were justified in defending MSI's claims or alternatively commencing defensive declaratory proceedings. Another variation of the relief sought was propounded in a 19 October 2018 amendment. After the hearing, given MSI's application for leave to issue a writ made 23 October 2018, the receivers proposed a direction in these terms:

The Receivers are justified in defending the proceedings to be commenced by Mining Standards International Pty Ltd (MSI) by the writ attached as Annexure SCR-6 to the affidavit of Stephen Charles Russell sworn 24 October 2018 (the MSI proceeding).

1. In broad terms the issues for determination are:

(1) Insofar as proposed direction 1 seeks a direction that the receivers may act on the Appian Agreement as though it had been entered into after a direction that the receivers were justified in entering into the Appian Agreement:

(a) Does s 424 empower the court to make a direction by way of advice concerning the past conduct of the receivers, ie advice of a retrospective nature?

(b) If yes, as a matter of discretion should that power be exercised in the circumstances of the present case?

(c) Were the receivers justified in entering into the Appian Agreement? (In substance this is not solely directed to the receivers, but also to whether the receivers were justified in causing MBN and MBI to enter into the Appian Agreement.)

(2) Are the receivers justified in distributing the proceeds of the sale of the Mirabela assets pursuant to the Appian Agreement to AET as an amount payable pursuant to the GSD?

(3) Are the receivers justified in defending the proposed proceedings as foreshadowed by MSI? (In substance this also encompasses whether the receivers are justified in causing MBN and MBI to defend the proposed proceedings.)

1. The receivers do not seek directions that they were and are justified at large. The directions were sought in the context of the various claims advanced by MSI. The form issues as to the unconfined terms of the proposed directions may be ignored for the present.
2. MSI did not seek leave to be heard on the third proposed direction.[34] MSI said that it had 'no interest' in the third proposed direction.[35] Mr Milbourne confirmed that MSI did not contend that the receivers would not be justified in defending MSI's proposed proceedings.[36] At the hearing senior counsel for MSI accepted that there was a contest between the parties and that was as far as the merits of the substantive dispute between the receivers (for MBN and MBI) and MSI needed to be taken.[37] It was accepted that MSI was not in a position where it would be able to obtain summary dismissal of a defence to MSI's claim.[38]
3. However, MSI opposed the first and second proposed directions.
4. MSI raised seven matters in its initial written submissions. First, that the directions were misconceived and lacked utility. Second, that the directions required the court to adjudicate on the merits of an adversarial dispute involving the receivers, MSI and other parties. Third, that the directions required determination of substantial disputed matters as to the MSI claim in circumstances where the court did not have before it all relevant evidence and parties. Fourth, that the directions were as to matters of commercial propriety. Fifth, that the directions were in respect of retrospective conduct of the receivers. Sixth, that the scope and reach of the directions was ambiguous. Seventh, that the receivers had failed to adduce evidence of a reasoned decision by the receivers so as to justify directions from the court.
5. A number of these contentions, in the way in which they were advanced in the written submissions, raised matters of form rather than substance.[39] By contrast, at the hearing senior counsel for MSI focussed on substance rather than form. Senior counsel was correct to do so. I intend to approach the proposed directions sought as a matter of substance and then, if satisfied that some direction ought be made, address the appropriate form of the direction.
6. MSI's contentions were also informed, in part, by the circumstance that MSI's written submissions were filed at a time when the receivers still sought a direction that they would be justified in performing their obligations under the Appian Agreement.[40] To that extent the contentions fell away insofar as the receivers no longer sought a direction that they were justified in performing any remaining obligations under the Appian Agreement.

Applicable principles on application for directions under s 424

1. Section 424 of the Corporations Act 2001 (Cth) provides:

(1) A controller of property of a corporation may apply to the Court for directions in relation to any matter arising in connection with the performance or exercise of any of the controller's functions and powers as controller.

(2) In the case of a receiver of property of a corporation, subsection (1) applies only if the receiver was appointed under a power contained in an instrument. (emphasis added)

1. As is suggested by s 424(2), a privately appointed receiver or receiver and manager of property of a company is a 'controller'.[41] Accordingly, the receivers have standing to apply under s 424(1).
2. The purpose of s 424 is to provide a procedure for a controller to obtain guidance from the court in the conduct of his or her controllership and thereby obtain protection against a claim for breach of duty or an allegation that he or she has acted improperly or unreasonably.[42] Subject to the controller making full and fair disclosure of the material facts the order sanctions a proposed course of conduct.[43]
3. Section 424's power to make directions is intended to facilitate the work of a controller;[44] it should be interpreted liberally.[45]
4. The historical provenance and operation of s 424 were recently considered in detail by Colvin J in Re Sandalwood Properties Ltd; Ex parte Preston.[46] His Honour observed, in terms with which I agree and adopt, that:

(1) s 424 has some similarity to applications by trustees for judicial advice and as a result that case law may be considered when considering applications under s 424;[47] but

(2) care should be taken in doing so for two reasons: first, the language in s 424 is different and must be given effect to according to its terms; second, the power should not be considered to be subject to implied limitations not found in the express words.[48]

1. Justice Colvin traversed the different statutory language that has been used in different jurisdictions as to the power to give directions to trustees[49] and in the context of voluntary winding up and voluntary administration.[50] Between moving from trustees to external administrators Colvin J examined some of the leading cases and, in particular, the Macedonian Orthodox Community Church[51] case.[52] Separately, his Honour considered the origins of s 424.[53]
2. The following principles emerge from Re Sandalwood Properties Ltd; Ex parte Preston as to the nature and scope of available directions under s 424:

(1) The directions that may be provided are a form of personal guidance or advice; they articulate the approach the controller is justified in taking having regard to the known circumstances and relevant legal principles.[54]

(2) The power is to give 'directions' in relation to the matters identified in s 424(1).[55] The relevant matters are described in broad and general terms, especially given the words 'in connection with'. So too the words 'in relation to' are of 'the widest import'. Thus the permissible subject matter of a direction will include the actions of the controller but is not confined to such actions.[56] It will include where:

...the controller has to consider the appropriate action to take in undertaking functions or exercising powers and a third party is claiming that a right, interest or entitlement of the third party must be acknowledged or respected in exercising those functions or powers ...[57]

(3) The circumstance that the controller is a privately appointed receiver and manager is not relevant to the question whether to make directions.[58] That said, receivers should not be unduly nervous and come to court where advice is not needed.[59]

(4) There must be an issue calling for the exercise of legal judgment, ie a legal issue of substance or procedure or an issue of power, propriety or reasonableness. It must be more than a business or commercial decision. However, the fact that a legal question may have significant commercial consequences does not make the giving of directions inappropriate. The court does not give advice as to how the controller should act but rather whether there is legal justification to so act.[60]

(5) Once the jurisdictional requirement is satisfied the court has a discretion whether to provide advice of the kind contemplated by the statutory provision.[61]

(6) The making of directions is not an adjudication.[62] It will not be determinative of parties' rights.[63] The court is not determining the rights of persons[64] and has no power to provide directions that would have that consequence.[65]

(7) The fact that directions are sought in the context of an adversarial dispute does not mean that it is inappropriate to provide directions.[66] There is a need to consider the nature of any underlying dispute.[67] Nevertheless, the existence of such a dispute, and the circumstance that the subject matter for advice is an issue in adversarial proceedings, may be relevant to whether the court is willing to give directions and in what terms.[68]

(8) A direction is given in the context of the circumstances presented to the court at the time it is made; it will not extend to materially different circumstances that arise in the future.[69] The form in which a direction is expressed should be consistent with it being provided by way of judicial advice.[70]

1. A direction under s 424 does not bind third parties in relation to substantive issues.[71] That is even the case where the third party is joined as a defendant[72] (remembering, however, that MSI was merely given leave to appear and was never joined as a defendant). The non-binding nature of a direction under s 424 is consistent with the accepted position that the making of the direction is not an adjudication and is not determinative of rights.

Disposition: Direction as to defence of proposed MSI proceedings

1. Senior counsel for the receivers approached the three directions in the opposite order to that as listed in the amended originating process. It is convenient to address the three proposed directions by considering first the direction in which MSI expressed no interest and then addressing the remaining two directions in turn. Accordingly, I will commence by considering whether it is appropriate to direct that the receivers are justified in defending the foreshadowed proceedings to be commenced by MSI.
2. In Blatchford v Laine[73] I considered the principles that apply when a trustee seeks a direction to the effect that it would be justified in defending litigation. Those principles are equally applicable to the receivers' application for directions under s 424.[74] Accordingly, without re-stating them, I will adopt and apply the principles that I outlined in Blatchford v Laine.
3. The key question is whether, on the material available, it would be proper for the receivers to defend the proceedings.
4. The receivers have obtained legal advice from a pre-eminent commercial litigation lawyer who is a partner in a global law firm with an office in Perth. (That solicitor is at a different firm to the firm acting for the receivers in this application.) Initial advice was obtained in July 2018.[75] An addendum, taking into account the additional materials filed by MSI in these proceedings (those materials including MSI's draft statement of claim), was obtained before the hearing.[76] The receivers were willing to make that advice available to me using the procedure I outlined in Blatchford v Laine.[77] I considered, however, that this was one of those cases - perhaps rare[78] - where it was not necessary for the opinions to be provided so as to be in a proper position to give the judicial advice as sought.[79]
5. It is, however, material that the receivers have obtained the advice and that it has been obtained from a well-respected and highly competent source. I can be, and am, satisfied that the receivers have taken reasonable steps to form their own opinion on whether the litigation is properly defensible.[80]
6. I have not been provided with any information as to the likely costs that will be involved in the proposed litigation (although I was informed that the costs would be paid from the sale proceeds). Perhaps the information as to likely costs is addressed in the legal advice. Ordinarily the likely costs - own, adverse and irrecoverable - are relevant considerations, as is proportionality.[81] In the circumstances of this application I am not concerned about the absence of information as to likely costs. The claim MSI has foreshadowed would exhaust the funds held by the receivers for the companies in receivership. In those circumstances the likely costs to be incurred in defence of the MSI claim are a necessary expense.
7. This is not to say that what occurs in relation to costs is irrelevant. In meeting their duties as officers of the companies in receivership it will be necessary for the receivers to closely scrutinise the costs that are incurred. The observations of Finkelstein J in Re Stockford Ltd[82] remain apposite.
8. The question then is whether the receivers' prospects of defending MSI's proposed proceedings are sufficient to justify the defence of the proposed proceedings.
9. The receivers' written submissions addressed this topic.[83] I do not consider it necessary or appropriate to canvass all the matters developed by counsel for the receivers in contending that the receivers have reasonable prospects of success. Nor is it necessary or appropriate to do so at length given the summary and preliminary nature of the inquiry that is undertaken in considering such a proposed direction and where, in due course, if MSI's threatened proceedings are pursured the issues will later be finally determined after a full hearing and crossexamination. It is enough that I am satisfied that there are reasonable prospects in the sense I explained in Blatchford v Laine, ie the receivers have a real, rational and logical prospect of succeeding in a defence of MSI's proposed proceedings.
10. It is neither irrational nor fanciful nor absurd to envisage a defence succeeding. Plainly, on the evidence as previously referred to, the receivers can present an arguable case that there was an agreement that the time for satisfaction of the finance condition precedent was 5.00 pm WST on 22 November 2017. A defence based on affirmation and challenging an entitlement to specific performance is also properly arguable. MSI will need to answer the receivers' contention that MSI has delayed in commencing proceedings and will also need to establish that it was and is ready, willing and able to complete. As to the claim made against the receivers for damages, a defence based on cl 9.1 of the MSI ASA is properly arguable.
11. In being satisfied that the receivers have reasonable prospects of successfully defending MSI's claim I also take into account the concession made by senior counsel for MSI. That concession was properly made. MSI, by senior counsel, accepts that there is a contest between the parties and that MSI would not obtain summary dismissal of a defence. Such a concession, on the part of MSI, is confirmation of the conclusion that the receivers' defence has a real, rational and logical prospect of succeeding.
12. Sometimes it will be necessary to come to a more considered view as to the range within which the prospects of success fall. In the present case I do not consider it necessary or appropriate to examine more closely the strength of the receivers' prospects of success. The outcome of MSI's claim will be of profound importance to the receiverships. MSI's damages claim is more than the sale proceeds. What suffices for reasonable prospects such that the court will be satisfied that the proposed defence will be for the benefit of the receiverships and otherwise prudent to pursue is informed by the gravity of the consequences should MSI's proposed proceedings succeed.
13. I am satisfied that it would be proper for the receivers to defend MSI's proposed proceedings and that they would be justified in doing so. I will make a direction accordingly. As to form, the proposed direction is generally satisfactory. It should, however, be expanded to clarify that the direction encompasses not only the receivers' actions in defending the proceedings but also in causing MBN and MBI to defend the proceedings.

Disposition: Direction as to entry into Appian transaction

1. At the hearing the then proposed direction sought as to entry into the Appian Agreement was in these terms:

The Receivers were justified in entering into the contract described in paragraph 18 of the affidavit of Richard Scott Tucker sworn 2 August 2018 in support of the application (Appian Transaction). (emphasis added)

1. There was considerable debate between the parties as to whether s 424 empowered the court to give directions that were retrospective in effect. MSI contended that there could be no retrospective approval or validation; it was said that the directions which the court was empowered to give are naturally prospective only.[84]
2. Senior counsel for the receivers contended that a retrospective direction was within power under s 424.[85]
3. Senior counsel for the receivers reminded me of the wellestablished principle that it is inappropriate to read provisions conferring jurisdiction or granting powers to a court by making implications or imposing limitations which are not found in the express words.[86] It was submitted that no temporal limitation was to be found in s 424, ie there was nothing in the text to deny an exercise of the power with retrospective effect. The broad and wide import of the power together with its beneficial role in facilitating the work of controllers, as has always been recognised, was emphasised. It was contended that if there was a limitation in s 424 which restricted the directions provided by way of judicial guidance only to those having a prospective operation then there would be a considerable reduction in the scope of protection that could be afforded by s 424.
4. It was acknowledged that there were a number of authorities, primarily in the winding up context, where courts had declined to make directions with retrospective effect or approval.[87] Senior counsel suggested that these were overly concerned with addressing the particular condition precedent in the agreement before the court and proceeded without sufficient attention to the terms of the relevant statutory provision. It was said that there was no in-principle or doctrinal basis to apply the terms of a condition precedent as the touchstone to grant or refuse relief.
5. Senior counsel for the receivers also drew my attention to cases where - despite agreements having been entered into in the past - directions were made to the effect that the external administrator may act on an existing agreement 'as though' it had been approved by the court before entry.[88]
6. Senior counsel for MSI made a number of points in support of the contention that s 424 did not empower the court to give a direction validating past conduct.
7. First, focusing on the text of the statutory provision, senior counsel argued that the concept of 'directions' was naturally forward looking. Second, reference was made to the authorities where courts had declined to make directions with retrospective effect or approval. As to those, McLelland J in Re Murphy & Allen; Re BPTC Ltd (in liq) did state, by way of obiter, that:

...the court could not properly make an order that an applicant is or would be justified in entering into a specified contract if that contract had already been entered into ...[89]

1. Third, senior counsel observed that none of the cases that the receivers relied on dealt with s 424. Moreover, most of them arose in a context where the direction was sought to support a nunc pro tunc approval order under s 477(2B). Fourth, it was said that such directions would subvert and transform the purpose of s 424. The purpose of s 424 is to protect or exonerate a controller if he or she acted in accordance with advice obtained as to a proposed course of action. It was said that the rationale of the section was absent where the protection was obtained in respect of past acts for which the controller had neither sought nor received judicial advice. Fifth, it was said that the suggested extension would be to broaden the power to enable the court to provide declaratory relief by ratifying the validity of past acts. Finally, it was suggested that construing s 424 as permitting, by direction, the approval or validation of past acts would 'open up the floodgates'.[90]
2. At the hearing there was also debate as to the form of the various directions. I made orders permitting the receivers to file final proposed terms for the directions as sought. Orders were also made for supplementary submissions which were limited to submissions addressing the form of the final proposed directions.
3. Although the order permitting supplementary submissions was confined to addressing the form of the amended directions sought, MSI took the opportunity to restate the substantive arguments it had made at the hearing. MSI did so both as to the direction on entry into the Appian Agreement and the direction on the distribution of the sale proceeds. Strictly these further submissions went beyond the grant of leave. However, as in the main they simply provided a convenient summary of what senior counsel for MSI had previously said orally, I have had regard to those supplementary submissions.
4. The receivers' posthearing minute sought a quite different form of direction as to their entry into the Appian Agreement. The terms of the recast direction are reproduced in par 72 above. Essentially there are two matters to note:
   • First, the recast direction has a carve-out so as to accommodate any contrary findings in MSI's proposed proceedings. I understand this to follow the approach of Le Miere J in Korda v Silkchime Pty Ltd.[91]
   • Second, undoubtedly inspired by the decisions I was taken to by senior counsel for the receivers employing a similar direction, the direction was proposed to the effect that the receivers may act on the Appian Agreement 'as though' it had been entered into after receiving a direction that the receivers were justified in doing so.
5. As to the second matter, there is a significant difference between those earlier cases and the present case. The earlier cases all make the 'as though' direction in circumstances where there had been a failure on the part of a liquidator to obtain necessary approval under s 477(2B) of the Corporations Act 2001 (Cth) before entry into an agreement. In all but Re Read the order was made as an adjunct to orders for nunc pro tunc approval under s 477(2B). In Re Read French J (as his Honour then was) still made an order for approval, but did so on a more general basis.
6. In Re Bell Group Ltd; Ex parte Woodings Allanson J refused to make a direction with retrospective effect that a liquidator 'was' acting properly and justifiably in entering into a settlement deed.[92] His Honour viewed the function of directions as being essentially concerned with future action.[93] However, in granting s 477(2B) approval to enter into the agreement nunc pro tunc his Honour made an 'as though' direction (expressed in terms of 'as if' the settlement deed had been entered into with prior agreement of the court).[94]
7. An 'as though' or 'as if' direction is prospective in nature. It provides protection for future acts. Those acts may be performed on the basis that the prior agreement was entered into with requisite approvals - thus obviating a concern as to implementing or performing an agreement in circumstances of potential invalidity.
8. In my opinion it is no longer necessary to determine the debate between the parties as to whether s 424 empowers the court to give directions that are retrospective in effect. The question has fallen away as the receivers now seek the prospective 'as though' direction. I have considered whether, out of deference to the careful and considered arguments put by senior counsel for both the receivers and MSI, I should nevertheless offer a view as to whether s 424 empowers the court to give directions that were retrospective in effect. I have determined that it is better that I do not. Any such view would be obiter only. It is best the point remains open to be determined on its merits when and if it is necessary to do so.
9. I turn then to consider the recast proposed direction as to the Appian Agreement.
10. Senior counsel for MSI contended that a direction as to entry into the Appian Agreement ought not be made. It was suggested that any such direction would necessarily involve an element of adjudication: the court would need to be satisfied that the MSI ASA was validly terminated before endorsing entry into the Appian Agreement. This, it was suggested, demonstrated the lack of utility in the proposed direction: all that was permitted was judicial advice, not a determination that would purportedly bind MSI without trial. It was submitted that a direction was not an appropriate means to obtain a summary adjudication, so as to validate past action, and thereby obtain apparent ex post facto immunity.
11. I do not accept those contentions. It is the case that a direction under s 424 is not by way of adjudication; it cannot bind. That is all the more so where the direction is sought in the context of a wider substantive dispute. But the recast proposed direction does not, in my view, fall foul of these limits. The receivers have clarified that the proposed direction only takes effect 'subject to any contrary findings' in MSI's proposed proceedings.
12. Nor, contrary to MSI's written submissions, is the proposed direction a mere commercial or business decision. Acting on the Appian Agreement in the context of the MSI ASA and MSI's threatened proceedings calls for the exercise of a legal judgment - there are issues of legal substance, propriety and reasonableness.
13. I am, however, unconvinced as to the utility of the proposed direction for another reason.
14. As recast the proposed direction is that the receivers 'may act' on the Appian Agreement as though the receivers had entered into the agreement after receiving a direction that they were justified in so doing. That formulation has been crafted to avoid the question of retrospectivity. It provides nothing by way of adjudication as to the legal efficacy of entry into the Appian Agreement. All the more so it does not speak to whether there was a valid termination of the MSI Agreement. The proposed direction as recast does not purport to validate past action and cannot be seen as seeking to obtain an after the event court sanction or protection for entry into the Appian Agreement.
15. The potential utility of a direction in the form of the recast proposed direction is to sanction a proposed course of action. What such action would be sanctioned? The proposed sanctioned action is that of acting on the Appian Agreement - the proposed direction is that the receivers 'may act' on the Appian Agreement.
16. That exposes the lack of utility of the proposed direction as to the Appian Agreement. Mr Laird's evidence is that, to the best of his knowledge, there are no obligations for the receivers to discharge under the Appian Agreement.[95] That is the position adopted in the receivers' submissions in reply. There it is said that on 17 October 2017 the receivers discharged all their obligations under the Appian transaction.[96] This was the reason given for no longer seeking that the receivers are justified in performing any remaining actions under the Appian Agreement.[97] At the hearing senior counsel for the receivers also confirmed that it was the receivers' position that the Appian transaction had completed.[98]
17. Accordingly, on the receivers' case, there is nothing to be done by way of acting on the Appian Agreement.
18. The 'as though' or 'as if' type direction cases relied on by senior counsel for the receivers occurred in a context where further steps were anticipated. For example, in Re Bell Group Ltd; Ex parte Woodings the direction was sought in circumstances where the liquidator was to perform and cause the companies in liquidation to perform a settlement deed. That is not this case. The receivers have presented their application on the basis that nothing remains to be performed.
19. The court will not give directions that have no practical effect. The proposed direction suffers from that defect given the receivers' acceptance that there are no further obligations to perform under the Appian Agreement. In the exercise of discretion I will not make a direction of the type sought; it is thus unnecessary to consider the matters raised by the receivers in support of the making of the direction.
20. Senior counsel for the receivers contended that there was utility for other reasons. Mention was made that, as professional persons, the receivers required insurance from time to time.[99] I do not consider this to be utility of a relevant kind. The power under s 424 is to give directions as to matters in connection with the performance or exercise of functions or powers as controller. Directions under s 424 ought to facilitate the work of a controller qua controller rather than his or her professional indemnity insurance concerns.
21. There is another possible issue. In the cases I have been referred to the 'as though' or 'as if' direction was made in a context of an after the event approval of the relevant agreement. The direction supported the approval. That is not contemplated by the receivers' proposed direction. My conclusion that the proposed direction lacks utility in any event means that the absence of this feature, and its consequence for the direction as sought, need not be considered.

Disposition: Direction as to distribution of proceeds of Appian transaction

1. The proposed direction as to distribution of the sale proceeds to AET pursuant to the GSD does not suffer from the same vice of lack of utility. The receivers seek, subject to the court's direction, to distribute the sale proceeds to AET. In that regard I do not accept MSI's submission that the receivers have not formulated and presented a reasoned decision as to what they wish to do.[100] A fair reading of Mr Tucker's affidavits as a whole demonstrates the contrary.[101] The position is confirmed by the receivers' submissions.[102]
2. The receivers are holding a substantial amount of money which they are obliged to pay out to AET before concluding the receiverships. I accept that in the ordinary course - ie without the claims made by MSI - it is likely that the receivers would have already made distribution to AET under the GSD. As will be seen, one of the primary duties of a receiver is to apply the proceeds of realisation of the security to the debt of the security holder.
3. In those circumstances it is entirely understandable that the receivers say they do not wish to be criticised for not acting expeditiously to realise assets.[103] It is equally understandable, however, that the receivers seek guidance as to whether they are justified in distributing the sale proceeds to AET under the security in circumstances where they are aware of the MSI claim.[104]
4. I have already mentioned that at the hearing MSI, through senior counsel, asserted that it had a possible proprietary interest in the proceeds of sale of the Mirabela assets as held by the receivers. Based on that I asked senior counsel for MSI whether MSI would ever accept that the funds could be remitted to AET. Senior counsel for MSI responded:

No. No. Your Honour is correct about that. We would say if we're entitled to specific performance then these funds shouldn't be remitted.[105]

1. I observed that there was then a group of people, the secured noteholders, who were saying: 'remit to me' (through AET as security trustee). However, there was also another person, MSI, saying: 'Hold the money so I can have it...'. Senior counsel for MSI accepted that was the position.[106]
2. Prima facie those facts bespoke utility.[107] The proposed direction was sought in circumstances where in proposing to distribute the sale proceeds in accordance with their usual duties the receivers faced threats by an interested party, MSI, who took a contrary view as to what the receivers ought to do.[108] MSI has evinced a real and practical threat that the receivers might later be challenged if they simply remit the Mirabela assets sale proceeds to AET without regard to MSI's claims.[109] In short, there is a considerable degree of risk that attends the proposed course of action that might adversely affect the proper conduct of the receiverships.
3. When I suggested to senior counsel for MSI that the fact MSI objected to the distribution meant the proposed direction had utility, counsel sought to deflect the point by observing that the receivers should have sought directions at an earlier stage - before realising the assets.[110] In MSI's supplementary submissions it is also suggested that the receivers might have sought declaratory relief as to the validity of the termination of the MSI ASA.[111] These matters raise a different issue. The circumstance that the receivers might have sought directions or a declaration as to a different question, at an earlier time, does not mean that that the present proposed direction is without utility. To the contrary, the competition between the position of the secured noteholders and that of MSI means that the utility of the proposed direction is manifest.
4. Nor do I accept senior counsel for MSI's criticism that evidence from the secured convertible noteholders amounts to no more than a recent attempt to concoct an issue.[112] Mr Laird's affidavit attaches correspondence on behalf of the noteholders evidencing a desire to receive a distribution as soon as possible.[113] That is unsurprising given that the receiverships commenced in 2015. I accept that the secured noteholders' concerns are genuine, not a concoction, and the receivers are justified in regarding those concerns as genuine.
5. The matters that demonstrate that the proposed direction has utility also establish that there is a question for legal judgment rather than a mere commercial or business decision. The usual duty of the receivers to apply the proceeds of sale of the Mirabela assets to the secured debt under the GSD's security must be considered in the context of MSI's claims. There is an issue of legal substance, propriety and reasonableness not dissimilar to the issues said to support a direction as to what a receiver should do in dealing with goods in his or her custody[114] or when a receiver is uncertain as to the correct application of funds that he or she holds in the receivership.[115]
6. In that way this case meets the description provided by Colvin J in Re Sandalwood Properties Ltd; Ex parte Preston as one to which s 424 applies (see the passage reproduced in par 89(2) above). The receivers have to consider the appropriate action to take in distributing the sale proceeds of the Mirabela assets; and MSI is claiming that its interests or entitlements must be acknowledged or respected in so exercising the receivers' functions and powers.
7. MSI also contended that in making the proposed direction the court would have to make some adjudication - at least as to the strength of MSI's claim - and that by, in substance, sanctioning the disbursement of the funds the court would be aiding the defence of MSI's claim.[116] It was said that the court should not do so where the receivers had taken the commercial risk of terminating the MSI ASA and entering into the Appian Agreement.[117]
8. I do not accept the submission that by embarking on the course of conduct in terminating the MSI ASA and entering into the Appian Agreement the receivers charted their course and ought to be precluded from directions under s 424. In some cases that might be a discretionary factor to refuse to exercise the power. But it must be acknowledged that the power under s 424 is facultative, intended to benefit privately appointed receivers, and available to provide certainty. Irrespective of the origins of the substantive dispute between the receivers and MSI, the power under s 424 permits the receivers to seek a direction as to whether there is legal justification in now proceeding as proposed given the circumstances - including the claims and views of MSI.
9. MSI has not established that there is any disentitling conduct on the part of the receivers which would warrant the court, in the exercise of its discretion, to decline to exercise the power granted by s 424 to provide guidance or advice.
10. Nor, in my opinion, is there merit in the contention that the proposed direction requires the court to adjudicate on the substantive dispute or the contentious facts that inform that dispute (or the rights of others). These reasons demonstrate that it has not been necessary to make any purported adjudication or determination as to the parties' respective rights - or the rights of others not before the court.
11. I acknowledge, however, that there is considerable force in MSI's contention that the proposed direction might be seen as the court lending its aid to MBN's and MBI's likely defence to MSI's claim for specific performance - or at least assisting in bringing about the occurrence of a discretionary factor which might defeat the claim for specific performance. Senior counsel for MSI explained the point this way. It was suggested that a relevant factor in the eventual determination of MSI's claim will be whether the Appian Agreement could be set aside and the Appian Buyers restored to their original position. Senior counsel contended, by reference to various provisions in the Appian Agreement, that this would require a refund of the purchase consideration. It was said that this would be defeated were the court to sanction the disbursement of the money to the eventual benefit of overseas secured noteholders.[118]
12. Senior counsel pointed out that, unlike Re Sandalwood Properties Ltd; Ex parte Preston, this ought to be seen as a case where the direction will result in the receivers taking steps that will be difficult to unwind:[119] the sale proceeds will be disbursed.[120]
13. The contention falls to be assessed as part of a more general enquiry as to whether, in the exercise of discretion, a direction should be made. It is relevant that the proposed directions are sought in the context of a wider substantive dispute that is likely to ripen into inter partes litigation. That does not mean that directions cannot be given. Re Sandalwood Properties Ltd; Ex parte Preston provides an example of directions being provided in that very context. But the possible impact of the proposed direction on future adversarial proceedings between the parties cannot be ignored.
14. I, like Colvin J, consider it would be relevant if the directions were sought to secure a strategic advantage in the substantive dispute - or, for example, to coerce MSI to take proceedings.[121] That would be all the more so if the obtaining of such an advantage was the sole or predominant purpose of seeking the directions.[122] MSI did not make that contention.[123] There was no basis for it in the evidence. Mr Tucker's uncontradicted evidence, which I accept, is that he sought the guidance and advice of the court having regard to the interests of Appian, AET, MSI and the receivers' interest in completing the receiverships.[124] In accepting that evidence, I reject any contention that the receivers seek, by the proposed direction, to coerce MSI into bringing an interlocutory proceeding. That there might be some collateral or incidental benefit is not a sufficient reason in the present circumstances to decline to provide the receivers with the personal guidance and advice that they seek.
15. Nor am I satisfied that it is correct to characterise the proposed direction in its recast terms as coercive.[125]
16. As reframed the proposed direction seeks guidance that the receivers are legally justified in distributing the sale proceeds - notwithstanding MSI's claims - provided that the receivers first give MSI notice of their intention to do so. It will be open to MSI to take such action as it considers fit once such notice is given. The receivers will have provided MSI with an opportunity to vindicate its claimed interest and entitlement. But the receivers are not requiring MSI to act. MSI's course of action is a matter for it entirely.
17. All the more so the court's direction will not be coercive. The direction does not speak to MSI in any way; it will not require or coerce MSI into taking any action. The court's direction will do no more than sanction the receivers' proposed course of action, as to the sale proceeds, given the receivers' obvious concern as to their duties to AET in the context of the conflicting threatened claim by MSI.
18. To the extent that Colvin J had regard to whether, as a result of the proposed direction, the receivers might take steps that could not be unwound, the case before me is different from Re Sandalwood Properties Ltd; Ex parte Preston. However, this is just one of the matters to be taken into account. It is also relevant, in my view, that properly understood it is not the court's direction that will bring about this consequence. Rather, the concern expressed by MSI will only arise if - following the giving of notice by the receivers - MSI does not take steps to seek to vindicate its putative interests and entitlements. The making of the proposed direction will in no way prevent MSI taking such steps as it may consider appropriate in inter partes proceedings to restrain the distribution of the sale proceeds of the Mirabela assets.
19. I am satisfied that I should provide the receivers with a direction under s 424 in respect of whether they are justified in distributing the sale proceeds to AET and, if so, the terms on which that should occur. I consider it is appropriate to do so because of, and not despite, MSI's claims and threatened proceedings. In addition to the matters already mentioned (including that the proposed direction will not constitute an adjudication or view on the merits of the competing positions) there are six reasons for this conclusion.
20. First, as mentioned, there is a question involving a legal judgment on which the receivers have a legitimate interest in obtaining certainty. Second, the utility of the proposed direction is manifest. That is all the more so given the size of MSI's threatened claim. The invidious position that the receivers find themselves in should be clarified. Third, MSI has not yet commenced proceedings based upon its claim despite having said from 1 December 2017 that it intends to institute proceedings. Fourth, although it has been open for MSI to seek injunctive relief, it has not done so. Fifth, the direction proposed will not prevent MSI from taking proceedings, and seeking any necessary injunctive relief, in pursuit of its position. MSI will not be inhibited from taking steps as it might be advised to seek to vindicate its claimed entitlement. Sixth, the receivers and the companies in receivership have an arguable defence to MSI's claims - a matter accepted by MSI itself through its senior counsel.
21. What, then, are the receivers justified in doing in the circumstances they are confronted with? In considering that question I should commence by identifying some of the duties that the receivers must fulfil.
22. The following propositions identify the relevant duties:

(1) The paramount duty of a receiver is to the security holder of the security interest in respect of which he or she was appointed.[126]

(2) The principal duty of a receiver is to get in the assets of the company and apply the proceeds in discharge of the debt due to the security holder.[127] Liquidating the secured creditor's debt is a matter of 'primary concern'.[128] A receiver's primary duty in exercising his or her powers is to try and bring about a situation in which the secured debt is repaid.[129]

(3) A receiver is under no duty to protect the interests of the unsecured creditors to the prejudice of the security holder.[130]

(4) However, in a manner akin to a liquidator in a winding up,[131] a receiver also has an obligation to communicate properly and effectively with persons making claims in the receivership.

1. In applying those principles to the situation confronting the receivers, the first and most obvious point is that they are holding over US$59.5 million from the proceeds of sale of the Mirabela assets. In the ordinary case, absent any claim such as that threatened by MSI, those funds should be distributed to AET as the security holder as soon as practicable. The receivers should pay down the secured debt. The receivers may of course hold back an appropriate amount to enable them to complete all outstanding matters in the receiverships.
2. It is expected, however, that an officer in the position of the receivers will not seek to fulfil his or her paramount duty to the security holder in a way that would unreasonably frustrate or inhibit the prosecution of a bona fide claim by a third party. Bona fide claims of third parties in relation to receivership assets ought not be stifled - and in that regard a receiver must be astute to communicate with third parties so as to allow them a reasonable opportunity to ventilate bona fide claims as to assets in the receivership. What is required by way of a reasonable opportunity, and when one ought to be given, will depend on the circumstances of the case.
3. Once the receiver affords the third party a reasonable opportunity to take proceedings to assert and vindicate its claimed interest or entitlement, there ought to be no proper basis on which to assert default by the receiver when he or she acts - as a receiver must - to satisfy his or her primary duty by distributing the receivership assets pursuant to the security.
4. It would be incompatible with the receiver's paramount duty to hold off making the distribution to the secured creditor on the off chance that the third party might, at some point, commence proceedings. The receiver owes no duty to the third party to defer making the distribution. Conversely, there is a duty to apply the proceeds in discharge of the debt due to the security holder.
5. The receivers are aware of MSI's claim and threatened proceedings. It is, I consider, a bona fide claim. (In making that finding I clarify that, consistent with my general approach throughout these reasons, I make no observation as to the overall merits of the claim.) As explained by senior counsel for MSI, a necessary corollary of MSI's claim is that it potentially includes a proprietary claim as to the sale proceeds held by the receivers. In assessing their proposed course of action the receivers must take into account two things apart from the claim. First, their primary duty to distribute the funds pursuant to the GSD. Second, the fact that, despite the passage of some 11 months since the claim was first articulated, it is yet to be commenced.
6. The receivers must, in my opinion, give MSI notice that they intend to distribute the Mirabela assets sale proceeds to AET pursuant to the security under the GSD. MSI must be provided with a reasonable opportunity to take proceedings to assert and vindicate its claimed interest or entitlement.
7. Once that is done, however, the receivers are justified in complying with their principal duty. In the absence of MSI taking proceedings and obtaining some interlocutory order preventing the receivers from doing so, the receivers are justified in applying the funds they hold in discharge of the debt due to the security holder. The receivers will be acting properly and justifiably in proceeding in this manner.
8. I will make a direction to that effect.
9. As to the form of the direction, minor amendment is desirable to clarify that the guidance and advice is given in the context of MSI's claims and the threatened proceedings. Moreover, I consider that notice of the intended disbursement should be provided not only to MSI but also to the Appian Buyers. Mr Tucker's first affidavit acknowledged their interest.[132] I also consider seven days' notice to be unreasonably short. I consider 21 days would be a reasonable period; that would be ample time for MSI to commence any proceedings and apply for and obtain any injunctive relief to which it may be entitled.
10. It should be selfevident that the direction made will speak only to the presently prevailing circumstances. One of those prevailing circumstances is that there is no curial restraint that prevents the receivers distributing the sale proceeds of the Mirabela assets. In substance the direction will no longer operate, and will not provide any protection in the sense of sanctioning a course of action, if there is a material change in circumstances. Without limiting the foregoing, the direction will not sanction the receivers distributing the sale proceeds of the Mirabela assets in the face of injunctive relief prohibiting such an application of the funds.

1. Subject to hearing from counsel as to the precise form of the orders I will order that:

(1) The plaintiffs in their capacities as receivers and managers (Receivers) of Mirabela Nickel Ltd (in liq) (receivers and managers appointed) (MBN) and Mirabela Investments Pty Ltd (in liq) (receivers and managers appointed) (MBI) are justified in defending the proceedings, and causing MBN and MBI to defend the proceedings, to be commenced by Mining Standards International Pty Ltd (MSI) by the writ attached as attachment 'SCR6' to the affidavit of Stephen Charles Russell sworn 24 October 2018 (the MSI proceeding).

(2) Subject to the Receivers giving no less than 21 days' written notice to MSI, Brazil Mining BV, Brazil Holding BV and ANR BR Investment BV of their intention to distribute, despite the MSI proceeding and MSI's claims against MBN, MBI and the Receivers, the Receivers are justified in distributing to AET Structured Finance Services Pty Ltd (AET) amounts payable under the Amended General Security Deed dated 24 December 2013 as amended on 16 June 2014 between MBN and MBI (each as a Grantor) and AET (as Secured Party), perfected by registration on the Australian Personal Property Securities Register with registration number 201312240086006.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

RESEARCH ASSOCIATE TO THE HONOURABLE JUSTICE VAUGHAN

[1] Affidavit of Richard Scott Tucker sworn 3 August 2018 page 466.

[2] Affidavit of Richard Scott Tucker sworn 3 August 2018 par 16.

[3] Affidavit of Walter Robertson Milbourne Jnr sworn 14 September 2018 par 5. I note Mr Milbourne inadvertently refers to 10 November 2018.

[4] Cf First Affidavit of Richard Scott Tucker sworn 31 August 2018 pars 43 - 50 and Affidavit of Walter Robertson Milbourne Jnr sworn 14 September 2018 par 5.

[5] First Affidavit of Richard Scott Tucker sworn 31 August 2018 pars 57 72.

[6] First Affidavit of Richard Scott Tucker sworn 31 August 2018 pars 5, 60(b).

[7] Affidavit of Walter Robertson Milbourne Jnr sworn 14 September 2018 pars 42, 44 46. In particular, see par 44(f).

[8] Affidavit of Walter Robertson Milbourne Jnr sworn 14 September 2018 par 48.

[9] Affidavit of Walter Robertson Milbourne Jnr sworn 14 September 2018 par 7.

[10] Affidavit of Walter Robertson Milbourne Jnr sworn 14 September 2018 par 47.

[11] Affidavit of Walter Robertson Milbourne Jnr sworn 14 September 2018 par 44(b).

[12] Affidavit of Walter Robertson Milbourne Jnr sworn 14 September 2018 pars 44(b), (e) (f), 45 46.

[13] Second Affidavit of Richard Scott Tucker sworn 31 August 2018 par 4.

[14] Affidavit of Walter Robertson Milbourne Jnr sworn 14 September 2018 pars 21 22.

[15] Affidavit of Walter Robertson Milbourne Jnr sworn 14 September 2018 pars 23 24.

[16] Affidavit of Walter Robertson Milbourne Jnr sworn 14 September 2018 par 27.

[17] Affidavit of Walter Robertson Milbourne Jnr sworn 14 September 2018 pars 20(b), 25 29.

[18] Affidavit of Richard Scott Tucker sworn 3 August 2018 par 22.

[19] Second Affidavit of Richard Scott Tucker sworn 31 August 2018 par 13.

[20] Second Affidavit of Richard Scott Tucker sworn 31 August 2018 pars 13 17.

[21] Second Affidavit of Richard Scott Tucker sworn 31 August 2018 par 19.

[22] Affidavit of Christopher John Laird sworn 19 October 2018 pars 6 9.

[23] Affidavit of Walter Robertson Milbourne Jnr sworn 14 September 2018 pars 30 32.

[24] MSI's Submissions dated 16 October 2018 par 23. I acknowledge that MSI's submissions later 'raise the prospect' that completion has not taken place as asserted (par 45(b)(vii)) and refer to its 'purported or partial completion' (par 46). See also ts 58 59, 63. But this is in the context of a proposed direction which is no longer sought as to performance of the obligations under the Appian Agreement. In any case, MSI's acceptance at par 23 that there has been performance or substantial performance under the Appian Agreement is unequivocal.

[25] Affidavit of Walter Robertson Milbourne Jnr sworn 14 September 2018 pars 39 40.

[26] MSI's Submissions dated 16 October 2018 par 62(c).

[32] Affidavit of Richard Scott Tucker sworn 28 September 2018 par 4, attachments 'RST-78' 'RST81'.

[35] MSI's Submissions dated 16 October 2018 par 2.

[36] Affidavit of Walter Robertson Milbourne Jnr sworn 14 September 2018 pars 11 12.

[39] See eg MSI's Submissions dated 16 October 2018 pars 19 - 22, 45.

[40] See eg MSI's Submissions dated 16 October 2018 pars 19 - 22, 45 46.

[41] Corporations Act 2001 (Cth) s 9 (par (a) of the definition).

[42] Korda v Silkchime Pty Ltd [2010] WASC 155; (2010) 243 FLR 269 [33].

[43] Re GB Nathan & Co Pty Ltd (in liq) (1991) 24 NSWLR 674, 679 680; Re Anglican Insurance Ltd [2008] NSWSC 41; (2008) 26 ACLC 147 [38] [39]; Handberg v MIG Property Services Pty Ltd [2010] VSC 336; (2010) 79 ACSR 373 [7]; Saraceni v Jones [2012] WASCA 69; (2012) 42 WAR 518 [159].

[44] Re Odessa Promotions Pty Ltd (in liq); Pescod v Harrison [1979] ACLC 32,103, 32,106.

[45] Re Odessa Promotions Pty Ltd (in liq); Pescod v Harrison (32,106); Deputy Commissioner of Taxation v Best & Less (Wollongong) Pty Ltd [1992] FCA 140; (1992) 7 ACSR 245, 247.

[46] Re Sandalwood Properties Ltd; Ex parte Preston [2018] FCA 547.

[47] Re Sandalwood Properties Ltd; Ex parte Preston [38].

[48] Re Sandalwood Properties Ltd; Ex parte Preston [31], [39] - [40].

[49] Re Sandalwood Properties Ltd; Ex parte Preston [24] - [30].

[50] Re Sandalwood Properties Ltd; Ex parte Preston [44] - [46].

[51] Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar The Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand [2008] HCA 42; (2008) 237 CLR 66.

[52] Re Sandalwood Properties Ltd; Ex parte Preston [31] - [37].

[53] Re Sandalwood Properties Ltd; Ex parte Preston [60] - [65].

[54] Re Sandalwood Properties Ltd; Ex parte Preston [47], [108].

[55] Re Sandalwood Properties Ltd; Ex parte Preston [22].

[56] Re Sandalwood Properties Ltd; Ex parte Preston [42].

[57] Re Sandalwood Properties Ltd; Ex parte Preston [43].

[58] Re Sandalwood Properties Ltd; Ex parte Preston [58], [65] - [67].

[59] Re Sandalwood Properties Ltd; Ex parte Preston [67].

[60] Re Sandalwood Properties Ltd; Ex parte Preston [51] - [54], [67].

[61] Re Sandalwood Properties Ltd; Ex parte Preston [35].

[62] Re Sandalwood Properties Ltd; Ex parte Preston [47], [70].

[63] Re Sandalwood Properties Ltd; Ex parte Preston [36].

[64] Re Sandalwood Properties Ltd; Ex parte Preston [40].

[65] Re Sandalwood Properties Ltd; Ex parte Preston [43].

[66] Re Sandalwood Properties Ltd; Ex parte Preston [72] - [74].

[67] Re Sandalwood Properties Ltd; Ex parte Preston [34].

[68] Re Sandalwood Properties Ltd; Ex parte Preston [37], [72].

[69] Re Sandalwood Properties Ltd; Ex parte Preston [109].

[70] Re Sandalwood Properties Ltd; Ex parte Preston [105].

[72] White v Huxtable; Re Lake Federation Pty Ltd [2006] FCA 559; (2006) 232 ALR 388 [21].

[73] Blatchford v Laine [2018] WASC 207 [54] [68], [123] [127].

[74] Re Sandalwood Properties Ltd; Ex parte Preston [38].

[75] First Affidavit of Richard Scott Tucker sworn 31 August 2018 par 86.

[76] Affidavit of Richard Scott Tucker sworn 24 October 2018 pars 4 5.

[77] Blatchford v Laine [65], [68].

[78] See Re Application of NSW Trustee & Guardian [2014] NSWSC 423 [3].

[79] Cf Blatchford v Laine [66] - [67].

[80] See Blatchford v Laine [63] - [64].

[82] Re Stockford Ltd [2004] FCA 1682; (2004) 140 FCR 424 [51].

[83] Receivers' Submissions dated 28 September 2018 pars 40 - 47.

[86] ts 34; Owners of the Ship 'Shin Kobe Maru' v Empire Shipping Company Inc [1994] HCA 54; (1994) 181 CLR 404, 421. (A passage referred to by the plurality in the Macedonian Orthodox Community Church case (at [55]).)

[87] See eg Re Murphy & Allen; Re BPTC Ltd (in liq) (1996) 19 ACSR 569, 570; Re Bell Group Ltd; Ex parte Woodings [2013] WASC 409; (2013) 97 ACSR 117 [42] - [43]; Re One.Tel Ltd [2014] NSWSC 457; (2014) 99 ACSR 247 [57], [60] [61]; Lewis and Templeton v LG Electronics Australia Pty Ltd (No 2) [2016] VSC 63; (2016) 48 VR 450 [81] - [86].

[88] Re Read; Australian Securities & Investments Commission v Forrestview Nominees Pty Ltd [2007] FCA 1985; (2007) 164 FCR 237 [4], [40] [41], [48] ('Re Read'); Re Hardy Bros (Earthmoving) Pty Ltd; Chamberlain v RG & H Investments Pty Ltd (No 2) [2009] FCA 1531; (2009) 76 ACSR 415 [24]; Re Vickers; York Street Mezzanine Pty Ltd (in liq) [2011] FCA 1028; (2011) 283 ALR 271 [27], [38].

[89] Re Murphy & Allen; Re BPTC Ltd (in liq) (570).

[91] Korda v Silkchime Pty Ltd [64], [93] - [94].

[92] Re Bell Group Ltd; Ex parte Woodings [43].

[93] Re Bell Group Ltd; Ex parte Woodings [43].

[94] Re Bell Group Ltd; Ex parte Woodings [35].

[95] Affidavit of Christopher John Laird sworn 19 October 2018 par 9.

[96] Receivers' Submissions dated 19 October 2018 par 2.

[97] Receivers' Submissions dated 19 October 2018 pars 2, 16, 22, 45.

[99] ts 38. See also Receivers' Supplementary Submissions dated 1 November 2018 par 9.

[100] MSI's Submissions dated 16 October 2018 pars 47 48.

[101] See eg Affidavit of Richard Scott Tucker sworn 3 August 2018 par 29; First Affidavit of Richard Scott Tucker sworn 31 August 2018 par 87.

[102] Receivers' Submissions dated 28 September 2018 pars 48, 50; Receivers' Submissions dated 19 October 2018 par 3.

[103] Receivers' Submissions dated 28 September 2018 par 50.

[104] Receivers' Submissions dated 28 September 2018 par 48.

[107] Cf MSI's Submissions dated 30 October 2018 par 2(f).

[108] Re Addstone Pty Ltd (in liq) (1997) 25 ACSR 357, 362 363, 373; Re Ansett Australia Ltd (No 3) [2002] FCA 90; (2002) 115 FCR 409 [57], [59] [60], [65] [66].

[109] Cf Kirk; Re Primebroker Securities Ltd (in liq) [2011] FCA 86 [26].

[111] MSI's Submissions dated 30 October 2018 par 2(d).

[113] Affidavit of Christopher John Laird sworn 19 October 2018 attachments 'CJL3' 'CJL6'.

[114] Re Arcabi Pty Ltd (in liq); Ex parte Theobald [2014] WASC 310; (2014) 288 FLR 236 [108].

[115] Langdon; Re Forge Group Ltd (in liq) [2017] FCA 170; (2017) 118 ACSR 434 [6].

[116] MSI's Submissions dated 30 October 2018 pars 2(a), (b), (c).

[117] ts 61 - 63; MSI's Submissions dated 30 October 2018 par 2(d).

[118] ts 61 - 62. See also MSI's Submissions dated 30 October 2018 par 2(b).

[119] Cf Re Sandalwood Properties Ltd; Ex parte Preston [76].

[120] ts 61; MSI's Submissions dated 30 October 2018 par 2(b).

[121] Cf MSI's Submissions dated 30 October 2018 par 2(e).

[122] Re Sandalwood Properties Ltd; Ex parte Preston [71].

[123] It was suggested that the direction sought to coerce MSI into bringing interlocutory proceedings. See MSI's Submissions dated 30 October 2018 par 2(e). But there was no submission that this was the sole or predominant purpose of the direction as sought.

[124] Affidavit of Richard Scott Tucker sworn 3 August 2018 par 29.

[125] Cf MSI's Submissions dated 30 October 2018 pars 2(e), (f).

[126] Downsview Nominees Ltd v First City Corporation Ltd [1993] 2 WLR 86; [1993] AC 295, 313; Gomba Holdings (UK) Ltd v Homan [1986] 1 WLR 1301, 1305; Australian Securities and Investments Commission v Lanepoint Enterprises Pty Ltd [2006] FCA 1493; (2006) 64 ATR 524 [39]. (There was a successful appeal against the latter decision. However, the Full Court expressed no doubt as to the observation that it is plain that a receiver's 'primary duty' is to the mortgagee. Indeed, as shown in the next footnote, that statement is consistent with the Full Court's discussion on appeal.)

[127] Re Lanepoint Enterprises Pty Ltd; Fraser v Australian Securities and Investments Commission [2007] FCAFC 85; (2007) 159 FCR 424 [36]. See also Visbord v Federal Commissioner of Taxation [1943] HCA 4; (1943) 68 CLR 354, 387; Nom De Plume Nominees Pty Ltd v Fingal Developments Pty Ltd [2016] VSCA 159; (2016) 337 ALR 303 [141].

[128] Rewards Land Pty Ltd v Jones [2010] WASC 233 [43].

[129] Silven Properties Ltd v Royal Bank of Scotland Plc [2003] EWCA CIV 1409; [2004] 1 WLR 997 [27] - [28].

[130] Re Northern Developments (Holdings) Ltd (1978) 128 NLJ 86, 87; Lathia v Dronsfield Bros Ltd [1987] BCLC 321, 324.

[131] Australian Securities and Investments Commission v Dunner [2013] FCA 872; (2013) 303 ALR 98 [142].

[132] Affidavit of Richard Scott Tucker sworn 3 August 2018 pars 27, 29.