Solar Shop Australia Pty Ltd (Receivers & Managers Appointed) (in liq) v Steele, in the matter of Solar Shop Australia Pty Ltd

The Allegations made in Mr Steele's Cross-Claim against Mr Ferraretto 10 Mr Steele alleges that Mr Ferraretto was a director of Solar Shop from 29 June 2001 to 21 July 2010 and was at all material times an employee of Solar Shop. He alleges that Mr Ferraretto jointly with Mrs Tania Ferraretto as trustee of the A & T Ferraretto Family Trust were the majority shareholders of Solar Shop at all material times up to 20 October 2010. Mr Steele pleads certain allegations made against him by Solar Shop in its Statement of Claim. I do not need to summarise those allegations. He then pleads the following: 7. If, which is denied; 7.1 Solar Shop contravened section 259A and 259D of the Act in the manner referred to in paragraph 5 above; and 7.2 Mr Steele was involved in such contraventions and thereby contravened sections 259F, 256D(3) and 260D of the Act in the manner referred to in paragraph 5 above; then 7.3 Mr Ferraretto was also involved in such contraventions by reason that he: 7.3.1 aided, abetted, counselled or procured the contraventions; 7.3.2 further, or in the alternative, induced the contraventions; 7.3.3 further, or in the alternative, were directly or indirectly knowingly concerned in, or a party to the contraventions. Particulars 7.3.3.1 Mr Steele refers to paragraphs 8 and 9 below. I will not set out paragraphs 8 and 9 of Mr Steele's cross-claim. The following is a summary of the allegations made against Mr Ferraretto in those paragraphs. On 29 June 2010, Mr Ferraretto informed Mr Steele of his interest in selling the shares in Solar Shop held by the Ferraretto Trust and proposed a transaction which included a proposal whereby he might resign as a director of Solar Shop. Mr Ferraretto was involved in negotiations with Solar Shop, and by letter dated 21 July 2010 and, as joint trustee of the Ferraretto Trust, he agreed in principle to a transaction. Mr Ferraretto negotiated the terms of the Share Buy-Back Agreement and the Thornton Share Purchase Agreement between 29 June 2010 and 5 August 2010 on behalf of the Ferraretto Trust. He executed the Share Buy-Back Agreement and the Thornton Share Purchase Agreement on or about 5 August 2010 as trustee of the Ferraretto Trust. Mr Steele alleges that Mr Ferraretto knew, or alternatively ought to have known, certain matters in relation to the Share Buy-Back Agreement and, in particular, that it meant that Solar Shop would have to enter into a new Facility Agreement with Westpac to finance the purchase of the shares held in the Ferraretto Trust. Mr Steele alleges that Mr Ferraretto knew certain matters in relation to the Thornton Loan Agreement. He alleges that on 12 October 2010 and, as trustee of the Ferraretto Trust, Mr Ferraretto voted in favour of the shareholders' resolution to approve the financial assistance to Mr Thornton. Mr Steele alleges that Mr Ferraretto facilitated the completion of the Share Buy-Back Agreement and the completion of the Thornton Share Purchase Agreement. 11 Mr Steele alleges that if he knew or ought to have known certain matters pleaded in the Statement of Claim as at 5 August 2010, then Mr Ferraretto also knew or ought to have known of those matters by 5 August 2010 by reason of his position as a director of Solar Shop until 21 July 2010 and there being no material change in Solar Shop's financial circumstances between that date and 5 August 2010. I will not set out the details of those matters other than to say that they relate in one way or another to Solar Shop's financial circumstances. Mr Steele alleges that but for Mr Ferraretto's conduct, Solar Shop would not have entered into, or completed, the Share Buy-Back Agreement or the Thornton Loan Agreement and the company would not have entered into the Facility Agreement with Westpac. 12 Mr Steele's claim for contribution against Mr Ferraretto is as follows: 11. In the circumstances, Mr Steele is entitled to an equitable contribution to his liability for Solar Shop's Losses and Mr Ferraretto must contribute rateably to Mr Steele's liability to pay compensation to Solar Shop in such amount and manner as the Court considers just and equitable. 12. Further, or alternatively, if, which is denied, Mr Steele is liable to compensate Solar Shop for Solar Shop's Losses by reason of the alleged contraventions of the Act: 12.1. his liability is a liability in damages arising under statute within the meaning of section 4 of the Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 (SA) (the Law Reform Act); 12.2. as particularised above, Mr Ferraretto is liable in damages for the same harm within the meaning of section 6 of the Law Reform Act; and 12.3. Mr Steele may recover contribution from Mr Ferraretto under Section 6 of the Law Reform Act in an amount that is fair and equitable having regard to the extent of his responsibility for the harm and that of Mr Ferraretto. 13 Mr Steele's claims for relief against Mr Ferraretto are, relevantly, as follows: 1. Contribution in equity towards Mr Steele's liability to Solar Shop (if any). 2. Alternatively, contribution under the Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 (SA) towards Mr Steel's liability towards Solar Shop (if any). 14 Mr Ferraretto submits that the facts alleged against him by Mr Steele do not engage the doctrine of equitable contribution. He submits that the relevant provisions of the Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 (SA) (CNAL Act) are inconsistent with the relevant provisions of the Corporations Act and are inoperative to the extent of the inconsistency. Because of this allegation, Mr Ferraretto has served notices under s 78B of the Judiciary Act 1903 (Cth). None of the Attorneys-General sought to intervene in the proceeding.

The Alleged Inconsistency between the Provisions of the Corporations Act and the Provisions of the CNAL Act 31 Mr Ferraretto describes the nature of the Constitutional matter in his Notice of a Constitutional Matter under s 78B of the Judiciary Act as follows: (1) Inconsistency within the meaning of s 109 of the Constitution between: 1.1 Sections 4 and 6 of the Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 (SA) (the CNAL Act); and 1.2 the particular regime created by Chapter 2J combined with Chapter 9, Parts 9.4B, 9.5 and 9.6 of the Corporations Act 2001 (Cth) (the Act). 32 I have already set out ss 4 and 6 of the CNAL Act. 33 As far as the Corporations Act is concerned, the following sections appear in Chapter 2J. Section 259A of the Corporations Act prohibits a company from acquiring shares in itself except in certain circumstances which are identified in the section. Section 259F(2) provides that any person who is involved in a company's contravention of s 259A or s 259B(1) contravenes the subsection. Section 259F(2) is a civil penalty provision. Section 256B(1) provides that a company may reduce its share capital in a way that is not otherwise authorised by law if the reduction has certain characteristics. Section 256D(1) provides that a company must not make the reduction unless it complies with s 256B(1). Section 256D(3) provides that any person who is involved in a company's contravention of s 256D(1) contravenes the subsection. Section 256D(3) is a civil penalty provision. Section 260A provides that a company may financially assist a person to acquire shares in the company only if the financial assistance has certain characteristics. Section 260D(2) provides that any person who is involved in a company's contravention of s 260A contravenes the subsection. Section 260D(2) is a civil penalty provision. These sections appear in Chapter 2J of the Corporations Act. 34 Section 1317E(1) which appears in Chapter 9, Part 9.4B of the Corporations Act provides that if a Court is satisfied that a person has contravened a civil penalty provision, then it must make a declaration of contravention. Section 1317G makes provision for pecuniary penalty orders in relation to a contravention of a civil penalty provision. Section 1317H gives the Court the power to compensate a corporation for damage suffered by the corporation in relation to the contravention of a civil penalty provision. It is sufficient to set out subsection (1): (1) A Court may order a person to compensate a corporation or registered scheme for damage suffered by the corporation or scheme if: (a) the person has contravened a corporation/scheme civil penalty provision in relation to the corporation or scheme; and (b) the damage resulted from the contravention. The order must specify the amount of the compensation. Note: An order may be made under this subsection whether or not a declaration of contravention has been made under section 1317E. 35 Section 1317J deals with standing to apply for (among other orders) a compensation order. Only the Australian Securities and Investments Commission (ASIC) and the corporation have standing to apply for such an order. 36 The Court has the power to relieve a person wholly or partly of a liability to which the person would otherwise be subject, or that might otherwise be imposed on the person, because of the contravention. Section 1317S provides as follows: (1) In this section: eligible proceedings: (a) means proceedings for a contravention of a civil penalty provision (including proceedings under section 588M, 588W, 961M, 1317GA, 1317H, 1317HA or 1317HB); and (b) does not include proceedings for an offence (except so far as the proceedings relate to the question whether the court should make an order under section 588K, 1317H, 1317HA or 1317HB). (2) If: (a) eligible proceedings are brought against a person; and (b) in the proceedings it appears to the court that the person has, or may have, contravened a civil penalty provision but that: (i) the person has acted honestly; and (ii) having regard to all the circumstances of the case (including, where applicable, those connected with the person's appointment as an officer, or employment as an employee, of a corporation or of a Part 5.7 body), the person ought fairly to be excused for the contravention; the court may relieve the person either wholly or partly from a liability to which the person would otherwise be subject, or that might otherwise be imposed on the person, because of the contravention. (3) In determining under subsection (2) whether a person ought fairly to be excused for a contravention of section 588G, the matters to which regard is to be had include, but are not limited to: (a) any action the person took with a view to appointing an administrator of the company or Part 5.7 body; and (b) when that action was taken; and (c) the results of that action. (4) If a person thinks that eligible proceedings will or may be begun against them, they may apply to the Court for relief. (5) On an application under subsection (4), the Court may grant relief under subsection (2) as if the eligible proceedings had been begun in the Court. (6) For the purposes of subsection (2) as applying for the purposes of a case tried by a judge with a jury: (a) a reference in that subsection to the court is a reference to the judge; and (b) the relief that may be granted includes withdrawing the case in whole or in part from the jury and directing judgment to be entered for the defendant on such terms as to costs as the judge thinks appropriate. (7) Nothing in this section limits, or is limited by, section 1318. 37 Section 1318, which appears in Chapter 9, Part 9.5 of the Corporations Act, gives the Court power to grant relief to certain persons in civil proceedings if they ought fairly to be excused for negligence, default or breach. It is not necessary for me to set out the terms of that section. 38 Finally, in terms of the Corporations Act, I should mention s 5E which provides that the Corporations Act is not intended to exclude or limit the concurrent operation of any law of a State or Territory. The section does not apply where there is direct inconsistency (s 5E(4)). 39 Mr Ferraretto submits that the relevant provisions of the Corporations Act cover the field in a case such as the present and there is no room for the operation of ss 4 and 6 of the CNAL Act. He submits that the claim for contribution under that Act cannot succeed. 40 The tests for inconsistency are well established and it is sufficient for me to refer to Jemena Asset Management (3) Pty Ltd and Others v Coinvest Limited (2011) 244 CLR 508 in which the High Court said (at [39]-[40]): Applicable principles have been reiterated in the joint reasons of the whole Court in Dickson v The Queen: "The statement of principle respecting s 109 of the Constitution which had been made by Dixon J in Victoria v The Commonwealth [('the Kakariki Case')] was taken up in the joint reasons of the whole Court in Telstra Corporation Ltd v Worthing as follows: 'In Victoria v The Commonwealth, Dixon J stated two propositions which are presently material. The first was: "When a State law, if valid, would alter, impair or detract from the operation of a law of the Commonwealth Parliament, then to that extent it is invalid." The second, which followed immediately in the same passage, was: "Moreover, if it appears from the terms, the nature or the subject matter of a Federal enactment that it was intended as a complete statement of the law governing a particular matter or set of rights and duties, then for a State law to regulate or apply to the same matter or relation is regarded as a detraction from the full operation of the Commonwealth law and so as inconsistent." …' The first proposition is often associated with the description 'direct inconsistency', and the second with the expressions 'covering the field' and 'indirect inconsistency'." The expression "cover the field" means "cover the subject matter", which was the description used and explained by Dixon J in Ex parte McLean. From the outset the aspect of inconsistency associated with the expression "covering the field" has not been free from criticism. There can be little doubt that indirect inconsistency involves "more subtle … contrariety" than any "textual" or "direct collision" between the provisions of a Commonwealth law and a State law. (Citations omitted.) 41 The matters which Mr Ferraretto relied on to establish inconsistency within s 109 of the Constitution are as follows. 42 First, Mr Ferraretto submitted that claims for compensation under s 1317H of the Corporations Act for contraventions of civil penalty provisions are subject to a well-defined scheme which has the following key features: (1) The only parties who can bring proceedings under s 1317H for a compensation order are ASIC and the company (s 1317J(1) and (2)). ASIC has the general administration of the Corporations Act (s 5B) and, at least in the usual case, would be liable for costs where it brought an action which is unsuccessful. A company considering whether to bring an action under s 1317H is likely to be in liquidation and the liquidator will have extensive powers available to him or her to gather information to assist the liquidator in deciding whether to bring proceedings (for example, examinations and document production under ss 596A, 596B and 597). Like ASIC, a liquidator can be expected to consider carefully the costs implications of an unsuccessful claim under s 1317H. (2) The Corporations Act specifically addresses the circumstances in which a defendant to a claim under s 1317H may be relieved of liability in whole or in part. That is by the exercise of the power in s 1317S and by reference to the grounds specified therein. It seemed to be common ground between the parties that, although the power could be invoked by a person in the position of Mr Steele, it could not be invoked by a respondent to a cross-claim such as Mr Ferraretto. The Corporations Act does not provide a right of contribution whereby a defendant to an action under s 1317H is able to share the burden of liability. Mr Ferraretto submitted that the difficulties of allowing a right of contribution are illustrated by the facts of this case. The liquidators have decided not to pursue him and yet he is brought into the action by a cross-claim in circumstances where, unlike the cross-claimant, he is unable to seek the benefit of s 1317S. 43 Secondly, Mr Ferraretto submitted that it would be inconsistent with the scheme of the Corporations Act to allow a contribution claim where, as in this case, the claims against the party seeking contribution consist of apportionable and non-apportionable claims. The apportionable claims were said to be the common law claim for breach of director's duties and the misleading and deceptive conduct claims (see s 1041L and following) and the non-apportionable claims are those made under Chapter 2J. It was submitted that a person in the position of Mr Steele could take advantage of apportionment, whereas a person in the position of Mr Ferraretto, could not. 44 Thirdly, Mr Ferraretto submitted that to allow a right of contribution by Mr Steele could lead to incongruous or unintended results. The example Mr Ferraretto gave was an action by ASIC for a compensation under s 1317H of the Corporations Act coupled with an application for disqualification order. In such a case, ASIC could not obtain orders for discovery (Rich and Another v Australian Securities and Investments Commission (2004) 220 CLR 129), but assuming a right of contribution, a cross-claimant could obtain discovery against a cross-respondent. This showed, Mr Ferraretto submitted, that the potential for the impairment of Commonwealth law was too great. 45 The High Court delivered its decision in Rizeq v The State of Western Australia [2017] HCA 23 (Rizeq) after submissions had been made in this matter. Mr Steele made supplementary submissions in which he submitted that s 109 of the Constitution was irrelevant and the real question was whether s 6 of the CNAL Act was picked up by s 79 of the Judiciary Act. 46 Mr Steele submitted that there are State laws which are not capable of operating on federal courts or courts exercising federal jurisdiction. The CNAL Act is such a law just as the Law Reform Act 1995 (Q) considered in Austral Pacific Group Limited (in liquidation) v Airservices Australia (2000) 203 CLR 136 (Austral Pacific) was such a law. In Rizeq, Bell, Gageler, Keane, Nettle and Gordon JJ said that neither s 6 nor s 7 of the Law Reform Act was capable of applying in federal jurisdiction as State law, but both were within the field of operation of s 79 of the Judiciary Act. Their Honours said (at[ 99]-[100]): Austral Pacific Group Ltd (In liq) v Airservices Australia was an appeal to the High Court from a decision of the Court of Appeal of the Supreme Court of Queensland. The Court of Appeal had held that a manufacturer of equipment who had been sued for damages in negligence and under the Trade Practices Act 1974 (Cth) in the District Court of Queensland was precluded by the operation of s 44(1) of the Safety, Rehabilitation and Compensation Act 1988 (Cth) from having any right to claim contribution under ss 6 and 7 of the Law Reform Act 1995 (Q) from Airservices Australia, a body established under the Air Services Act 1995 (Cth), which was the successor to the assets and liabilities of the plaintiff's employer, the Civil Aviation Authority established under the Civil Aviation Act 1988 (Cth). The High Court dismissed the appeal, unanimously affirming the decision of the Court of Appeal. Noting that the contrary had not been argued, Gleeson CJ, Gummow and Hayne JJ stated that it was to be assumed that the District Court had been exercising federal jurisdiction conferred on it by s 39(2) of the Judiciary Act on the basis that the claim against the manufacturer was a matter arising under the Trade Practices Act within s 76(ii) of the Constitution and on the further basis that Airservices Australia answered the description of "the Commonwealth" so as to bring the matter, as a result of the manufacturer's claim for contribution against Airservices Australia, also within s 75(iii) of the Constitution . Again noting that the contrary had not been argued, their Honours stated that it was to be assumed that s 79 of the Judiciary Act operated to apply ss 6 and 7 of the Law Reform Act in the exercise of the District Court's federal jurisdiction unless a law of the Commonwealth "otherwise provided". Section 44(1) of the Safety, Rehabilitation and Compensation Act was held to be such a law. The right of a tortfeasor to recover contribution from another tortfeasor under s 6 of the Law Reform Act is a right to such amount of contribution as a court might find to be "just and equitable" in the exercise of the power conferred on the court by s 7 of the Law Reform Act. The s 6 right is inseparable from the s 7 power. Neither is therefore capable of applying in federal jurisdiction as State law. Both are within the field of operation of s 79 of the Judiciary Act. (Citations omitted.) 47 Chief Justice Kiefel made similar points when her Honour said (at [22] and [28]): Section 79 has been held to apply to laws which provide that contribution may be sought by a tortfeasor which has been held liable from another tortfeasor. And it has been applied to statutes of limitations provisions. State laws of this kind are also to be understood by reference to the purpose of s 79 rather than whether they are substantive laws because they affect rights. They may be understood as laws which define the circumstances in which a proceeding may, or may not, be brought in a court and which permit a court to determine that matter. Without s 79 they could not apply to courts exercising federal jurisdiction. … The reasons why s 79 operated upon the State laws in three of the cases referred to by the appellant are explicable by reference to the purpose of s 79. They were laws directed to State courts and their powers. Austral Pacific Group Ltd (In liq) v Airservices Australia concerned provisions relating to proceedings for contribution as between tortfeasors and the exercise of the power conferred on the court to determine the amount of contribution. Such provisions may be understood as directed to courts, as discussed above, and are therefore laws to which s 79 refers. Similarly, in Parker v The Commonwealth, the State law which Windeyer J identified as picked up by s 79 made provision for the assessment, by the court, of damages. In R v Oregan; Ex parte Oregan, Webb J said that the laws referred to in s 79 include substantive laws, such as those dealing with the custody of infants. However, the provision which his Honour identified as applicable was one which directed the court making an order with respect to custody to consider the interests of the child as paramount. These cases have nothing to say about an offence provision such as s 6(1)(a) of the MDA. (Citations omitted.) 48 Mr Steele next submitted that ss 4 and 6 of the CNAL Act are picked up by s 79 of the Judiciary Act unless the relevant provisions of the Corporations Act otherwise provide. The test for determining that issue was stated by Gleeson CJ, Gummow and Hayne JJ in Austral Pacific at [17]: … The question is whether the operation of the Compensation Act would so reduce the ambit of the Contribution Act that the provisions of the Compensation Act are irreconcilable with the other law. If so, the Compensation Act "otherwise provides" within the meaning of section 79 of the Judiciary Act. GPAO shows that the question is not answered by application of the doctrine identified, in the decisions construing s 109 of the Constitution, with the phrase "covering the field". In Austral Pacific, Gleeson CJ, Gummow and Hayne JJ held that the Commonwealth law did not otherwise provide with s 79 of the Judiciary Act. Their Honours said (at [28]): However, the Compensation Act is silent respecting the rights and obligations inter se of a Commonwealth authority or other party identified in s 44 and a third party where what is at stake is not the ultimate incidence of compensation payments, but the distribution between the tortfeasors of the burden of the common law liabilities in damages to the employee. This is consistent with a legislative intention to leave such matters for the operation of State or Territorial legislation "picked up" by s 79. Part IV does not "otherwise provide" in the sense required to render s 79 inapplicable. In my opinion, these submissions are correct. There is further support for them (if further support be needed) in Bialkower v Acohs Pty Ltd and Others (1998) 83 FCR 1(Bialkower v Acohs) at 12 and Dartberg v Wealthcare at [21]-[22] per Middleton J. 49 Adapted to the circumstances of this case, the question is whether the operation of the Corporations Act, and Part 9.4B in particular, would so reduce the operation of s 6 of the CNAL Act that the provisions of the Corporations Act are irreconcilable with the other law. 50 In my opinion, it is reasonably arguable that the answer to that question is no and that is sufficient to deal with this application. I could decide the point, but I am not disposed to do so because the point is a complex one and there are other points of law involved in the application such as whether the CNAL Act applies to Mr Ferraretto's cross-claim. I refer to the earlier discussion of this point. 51 The Corporations Act does not address the issue of contribution. The nomination of the particular parties who may bring an action under s 1317H of the Corporations Act is not necessarily inconsistent with one of the defendants in an existing action seeking contribution. Nor does the ability of a defendant to seek relief from liability mean that the Corporations Act otherwise provides. A defendant may claim relief from liability under s 1317S of the Corporations Act and in the alternative, contribution against a third party. If his or her claim under s 1317S succeeds, then the claim for contribution falls away. If it does not succeed, then the claim for contribution proceeds. 52 There is authority of the Supreme Court of New South Wales to the effect that in the case of multiple defendants to an application for compensation under s 1317H of the Corporations Act, it is open to the Court not to make a compensation order against a defendant whilst at the same time not exonerating him or her. It is not open to the Court to award different amounts of compensation reflecting the responsibility as between defendants. That is the function of contribution proceedings (Re HIH Insurance Ltd (in prov liq) and HIH Casualty and General Insurance Ltd (in prov liq); Australian Securities and Investments Commission v Adler [2002] NSWSC 483; (2002) 42 ACSR 80 (ASIC v Adler) at [116]-[124] per Santow J). There is authority in which the Court, relying on a State Act dealing with contribution, has ordered contribution in relation to an award of compensation under s 1317H of the Corporations Act, although the point now in issue was not argued (Digital Cinema Network Pty Ltd v Omnilab Media Pty Limited (No 2) [2011] FCA 509 (Digital Cinema Network v Omnilab) at [226]-[227] per Gordon J). 53 Mr Ferraretto relied heavily on the decision in Australian Securities and Investments Commission v Loiterton & Ors [2004] NSWSC 897; (2004) 50 ACSR 693 in which Bergin J (as her Honour then was) decided that in appropriate circumstances, an award of part of the compensation for damage suffered by a corporation could be made under s 1317H. Her Honour discussed the extent (if at all) such an approach would in effect be apportioning liability. Her Honour said (at [110]-[112]): On the basis that Santow J's approach in Adler is correct, I am not satisfied that an inability to apportion the liability for compensation, is an impediment to making an order for payment of part of the amount claimed. The Court has a discretion whether to make an order for compensation and if it decides to make such an order, it has a discretion as to the amount that is ordered to be paid. It has been submitted that because the other defendants are bankrupt and the plaintiff has not sought leave to proceed against them for an order for compensation, it would be "unjust" to order the total amount of compensation to be paid by Sapier simply because he is the only defendant who is not bankrupt. This submission has some force. Proportionate liability is of course a reality in certain circumstances in relation to loss caused by misleading and deceptive conduct: (Corporate Law Economic Reform Program (Audit Reform and Corporate Disclosure) Act 2004; see also Associate Professor Barbara McDonald's paper Proportionate Liability: Practical Implications of the Reforms, Sydney University, 8 September 2004, Commercial Law Seminar Series) but the capacity to apportion liability in this case is not a matter necessary for decision, particularly having regard to the Court's discretion in relation to the amount to be awarded. It seems to me that once it is recognised that the Court has a discretion in relation to the amount of compensation to be paid it is not limited to the choices of awarding "all or nothing". It may appear that the Court is apportioning liability when it orders only part of the amount of compensation claimed to be paid by a particular defendant, however it is not apportioning liability, it is making an award on the basis that the damage or loss resulted from contravening conduct and taking into account the relevant circumstances in deciding whether the defendant may be excused from paying the whole of the amount claimed. I am satisfied that notwithstanding his facilitative role, the loss or damage suffered by the company occurred as a result of the approvals and payments of the April and December dividends and Sapier was a party to that conduct in the manner described. In exercising my discretion I am taking into account the matters that would probably be taken into account if proportionate liability were being considered. These include the nature of the role played by Sapier and his far less significant role than JBL and Hall generally in the affairs of Clifford and CCL and particularly in relation to the limited knowledge that he had about the other false profits from which the dividends were paid. These are matters that persuade me that that the defendant should not have to pay the whole amount claimed. I am satisfied that in all the circumstances of this case as outlined in the liability judgment and above, a just and equitable amount of compensation to be paid by Sapier is $120,000. If I am wrong in the approach that I have taken to the Court's capacity to award only a proportion of the amount claimed and the choices are really to award all or nothing, then I would have refused to award any compensation to be paid by Sapier having regard to the matters I have outlined above in relation to Sapier's contravening conduct. 54 The point which Mr Ferraretto makes is that if the approach in ASIC v Loiterton is correct, then there is no room for contribution legislation. 55 The extent to which the approach in ASIC v Loiterton is consistent with Middleton J's reasoning in Dartberg v Wealthcare Financial (at [33]) may well be the subject of further debate. It seems to me that reference to these authorities illustrates the complexities in this area and that the arguments raised by Mr Steele are at least reasonably arguable. Contribution orders under State legislation were made in Digital Cinema Network v Omnilab (although the question of power was not argued), assumed as open in ASIC v Adler and applied in Bialkower v Acohs (albeit in the context of a claim for damages under s 82 of the Trade Practices Act 1974 (Cth) for a contravention of s 52). The point is reasonably arguable. 56 I do not consider that there is anything in Mr Ferraretto's other points which suggest that Mr Steele's contentions are not reasonably arguable. The fact that the claims against Mr Steele by Solar Shop are both apportionable and non-apportionable is a complicating circumstance, but there is nothing inherent in that circumstance that means that the Corporations Act reduces the ambit of the CNAL Act. The same can be said of Mr Ferraretto's example concerning discovery where a disqualification order is sought. 57 I would add that had the issue been analysed under s 109 of the Constitution, the same conclusion would follow. It is certainly reasonably arguable that s 6 of the CNAL Act can apply without any suggestion of inconsistency. Nothing I have said is contrary to the decision of Middleton J in Dartberg v Wealthcare. Mr Steele accepts that the apportionable liability provisions in the CNAL Act (s 8) would not be picked up in the case of an application under s 1317H of the Corporations Act, but that is not the issue in this case.

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