Serious question to be tried
77 The fourth criterion - that there is a serious question to be tried - requires a consideration of the evidence.
78 This requirement may be equated with that which applies on an application for an interlocutory injunction: Swansson 42 ACSR at [25] per Palmer J; Goozee 42 ACSR at [32]-[32] per Barrett J; Ehsman v Nutectime International Pty Ltd (2006) 58 ACSR 705 at [59] per Austin J.
79 The High Court of Australia recently revisited the question of applications for interlocutory injunctions in Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57 (see especially at [19] per Gleeson CJ and Crennan J, and at [65]-[72] per Gummow and Hayne JJ). Justices Gummow and Hayne at [65] stated:
The relevant principles in Australia are those explained in Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618. This Court (Kitto, Taylor, Menzies and Owen JJ) said that on such applications the court addresses itself to two main inquiries and continued [at 622-623]:
"The first is whether the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief … The second inquiry is … whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the defendant would suffer if an injunction were granted."
By using the phrase "prima facie case", their Honours did not mean that the plaintiff must show that is more probable than not that at trial the plaintiff will succeed; it is sufficient that the plaintiff show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial. (Emphasis added).
80 There is no requirement for the Court to make factual determinations about contested issues, as stated in Ehsman v Nutectime 58 ACSR 705 at [6]:
In particular, under s 237(2)(d), the court does not make factual determinations concerning the case that the plaintiff seeks leave to assert on behalf of the company, but only considers whether there is a serious question to be tried. The limited nature of that question will often enable the court to avoid making determinations on contested questions of fact.
81 Three further matters must be observed. First, the application must be supported by evidence. I do not accept, with respect, that an "indication of the evidence" without actual evidence is sufficient (cf Re Varsity Queensland Ltd (2006) 60 ACSR 366 at [10] per Mullins J).
82 Secondly, the respondents have chosen not to rely upon any evidence as to the merits of the application. Whilst I may draw certain inferences from the failure of the respondents to provide evidence, the applicants must nevertheless satisfy each of the criteria on the balance of probabilities. The failure of the respondents to provide evidence cannot fill gaps in any necessary evidence of the applicants. However, where certain inferences are open, and the respondents have not led any evidence to rebut such inferences, I may be more confident that the inference should be made.
83 Thirdly, as I have said, I am proceeding on the basis that the applicants have available potential claims against the Receivers under ss 180 and 420A of the Act and on the basis of an equitable duty in favour of the Company. I accept that the equitable duty is as set out in Deangrove Pty Ltd v Buckby (2006) 56 ACSR 630 at [44] where Branson J said:
… the general law duties of a receiver when exercising a power of sale are analogous to those of a mortgagee (see, for example, Expo International Pty Ltd v Chant [1979] 2 NSWLR 820). As I observed in Gomez v State Bank of NSW Ltd [2001] FCA 1059 at [10], that duty is a duty to act in good faith, without wilfully or recklessly sacrificing the interests of the mortgagor. The principle underlying the duty is that of 'unconscionability' (Hawkesbury Valley Developments Pty Ltd v Custom Credit Corporation Ltd (1995) NSW Conv R 55-731 per McLelland CJ in Eq.).
84 Equating mortgagees' equitable obligations to those which apply to a receiver, the equitable principle was described in Ultimate Property Group Pty Ltd v Lord (2004) 60 NSWLR 646 at [38] per Young CJ as follows:
The duty is a duty to act conscionably towards the mortgagor and persons under the mortgagor. The duty is not to be considered in some mechanical way, but the whole of the mortgagee's conduct with respect to the sale is to be considered. The mortgagee may, up to a point, act solely in its own interests, but it must also act conscionably towards the mortgagor and those claiming under the mortgagor.
85 Chief Justice Young considered other authorities which explained that the content of the duty included the duty to deal fairly with the interests of the mortgagor, which in turn involves an obligation to refrain from acting in wilful or reckless disregard of those interests (at [45]). Furthermore, to establish breach of the duty, a borrower will need to establish a mortgagee so failed "to take reasonable steps to obtain a proper price for the properties that it was guilty of unconscionable conduct" (at [47]).
86 It may be that s 420A of the Act imposes a higher standard of duty on receivers (see O'Donovan J, Company Receivers and Administrators (Lawbook Company) at [11.50]), but I need not investigate whether this is so. Nor do I need, for the purposes of disposing of the application, to deal with the precise requirements of s 180, other than to say that it is necessary for the applicants to show the standard of conduct expected in the circumstances, and the relevant breach of that standard.
87 The question then is to determine the facts so far as necessary to form a view as to whether there is a serious question to be tried in relation to these potential causes of action.
88 I find for the purposes only of this application that the following chronology of events is shown to have occurred in respect of the actions of the Receivers and in respect of their potential liability. I have made these findings without regard to the evidence ultimately objected to which I have not otherwise ruled upon during the course of the hearing. To the extent that objections were made originally to the affidavits of Edward John Maitland, where matters the subject of these objections have been otherwise introduced into evidence, I have relied upon such evidence. In relation to the agency issue raised against the Bank, to which I specifically refer later, I have assumed all the evidence relied upon by the applicants is admissible.
· The Company's annual report released in April 1999 stated that its total assets were valued at $73.32 million. This annual report was audited by PricewaterhouseCoopers.
· On 6 January 2001, the Company held a public meeting to discuss its future. It was stated in the presence of a representative of the Bank that the Bank "would not accept any offer in relation to [the Company] from any party other than Bundaberg Sugar Limited".
· On 18 January 2001, the Receivers were appointed.
· By 31 January 2001, Tully Sugar Limited ('Tully') had put together a consortium of interested parties including Ergon Energy, Theiss Constructions and North Queensland Electric Authority ('NQEA').
· On 1 February 2001, Mr Dennis (the first-named first respondent) told Mr Camilleri representing Tully that the Bank would be supportive of a proposal by Tully to reduce the amount owing to the Bank to a manageable level. They discussed the fact that the sale of the Warrami Land could possibly eliminate the total debt owing to the Bank.
· On 7 February 2001, KPMG provided to Tully a preliminary report on a due diligence investigation. The value of the total assets of the Company was recorded at $80.3 million, as at 31 December 2000.
· On 9 February 2001, Tully informed the Receivers by letter of Tully's desire to pursue a majority acquisition of the Company, and an offer was made to put $10.75 million in escrow for 6 to 8 weeks. Government entities expressed support, in order to have $4 to $5 million set aside for repairs to the mill and contingencies.
· Also on 9 February 2001, Tully informed the Receivers by letter that they were interested in purchasing the Company's sugar industry-related shares separately, including the STL shares.
· On 12 February 2001, there was a meeting between Mr Camilleri, and the Receivers at which Mr Dennis advised Tully to proceed with its proposal but did not give a deadline. Tully thereafter inspected the Company's factory and continued with due diligence.
· On 16 February 2001, STL reported to shareholders the net tangible asset backing was $1.06 per share, and the earnings per share were $0.013 per share.
· On 19 February 2001, Tully wrote to the Receivers regarding previous inspection of the factory and due diligence. Tully reiterated that it was interested in purchasing all the Company's assets or purchasing the STL shares separately.
· On 20 February 2001, the Receivers advised Tully that their equity proposal "would be sufficient to take [the Company] out of receivership".
· On 21 February 2001, at about 9.45 am, Tully told Mr Dennis that a proposal was to be presented to the Receivers and travel arrangements had been made. Mr Dennis said he would arrange a suitable time and venue (after a scheduled telephone conference with the Bank at 10.30 am).
· On 21 February 2001, at about 10.30 am, the telephone conference between the Receivers and the Bank occurred.
· On the same day, a contract for sale of all the Company's assets (save the Warrami Land) was entered into with Bundaberg for $15.1 million.
· At about 4.00 pm on the same day, Mr Shannon representing Tully called Mr Dennis but was told he was unavailable.
· At about 5.00 pm on that day, Tully first became aware that "a highly conditional contract had been signed…with [Bundaberg]". The Receivers advised "not to bother with any travel arrangements".
· On 2 April 2001 the Receivers filed a report with ASIC. In that report there was no indication that the Receivers carried out valuations of the assets sold or advertised the sale.
· On 21 August 2006, the Company executed transfer of part of the mill land. Consideration was recorded as $14,599,993.
89 Whilst there was no evidence as to whether the Receivers sought valuations of the land or assets, the applicants asked me to draw the inference that this did not occur. Furthermore, the applicants submitted that there was no public tender issued in relation to the sale of the Company's assets, nor was there public advertising. The applicants pointed to the fact that there were only 33 days between when the Receivers were appointed on 18 January 2001 and when the Contract was entered into on 21 February 2001 and the entire assets (save the Warrami Land) were sold. The applicants also pointed to the report filed by the Receivers with ASIC on 2 April 2001 in which no mention was made of any valuation or tender process. I accept that the Receivers did not seek or receive any valuations of the land or assets nor were involved in any public tender process or advertising prior to the contract being entered into on 21 February 2001.
90 The applicants also submitted that the Receivers were in fact obliged to continue the sale process and bring in additional potential bidders in order to achieve the best possible price. Further, the applicants, in rebutting the Receivers' claim, submitted that the sale was not required as a matter of urgency so as to repair the mill for the crushing season in June/July as Tully (as a potential bidder) had plans and funding outlined in their proposal to deal with that. The applicants also submitted that, contrary to the Receivers' submission, there was an obligation to deal with Tully as a potential bidder, and it ought to have been brought into the competitive bidding process.
91 In addition to the evidence set out above, there was a substantial amount of evidence and submission on behalf of the applicants directed to showing that the sale of the Company's milling assets was at a substantial undervalue. I do not propose to rehearse that evidence, most of which was either objected to by the respondents or said to be of no relevance or probative value. I have already come to the conclusion that there is sufficient evidence to demonstrate some sale at undervalue, namely the sale of the Company's shares for the consideration of $500,007. Of course, sale at an undervalue does not show that (relevantly) there has been a breach of ss 180 or 420A of the Act or an equitable duty, although a sale at a substantial undervalue may be some evidence of such a breach. However, I have come to the conclusion that the applicants have demonstrated that there is a serious question to be tried against the Receivers in relation to each of the potentially available claims I have referred to without the need to consider any further evidence sought to be relied upon as to the extent of the undervalue of the sale.
92 One matter to consider is whether there was another potential purchaser in the market with which the Receivers did not effectively engage and of which they were aware. Without recourse to evidence of subjective statements of opinion or intent by individual board members of Tully, it can be readily demonstrated by the correspondence that there was a potential buyer or interested party in the market of which the Receivers were aware. I do not proceed on the basis that there was any absolute obligation on the part of the Receivers to engage in discussions with other potential purchasers, but the evidence is relevant to whether there is a serious question to be tried in that the Receivers failed to take reasonable steps to obtain a reasonable price.
93 As mentioned above, on 9 February 2001, Tully wrote to the Receivers, updating them on the progress of the proposed offer. The proposal was conditional on financial assistance from government. The letter stated that "such assistance is essential in order to find working capital in the order of $4 to $5 million to prepare the mill to crush and cover contingencies, as there is no other ready source of the funds for these purposes". Further, it was indicated that time was not available for the protracted changes necessary for Tully to acquire control of the Company, notwithstanding that the cash could be available. The proposal provided that $10.75 million be held in escrow for the 6 to 8 weeks required to obtain the control of the Company and to seek the working capital from government.
94 The Receivers submitted that this letter indicated a highly conditional proposal of Tully to acquire a 50% interest in the shares of the Company. The Receivers also pointed to the fact that the proposal was highly dependent upon a number of factors including external funding and support from the government to assist with working capital requirements.
95 As already mentioned, on 9 February 2001, Tully wrote to the Receivers explaining their interest in negotiating the acquisition of the sugar industry-related shares. The letter stated relevantly that Tully was not aware that Bundaberg's offer for the Company's assets included these shares, and it was stated "in the event that you are not able to grant the time for our proposal to succeed or there is no compromise possible, we stand ready to negotiate acquisition of these terminal company shares". The Receivers submitted that this did not constitute an offer.
96 On 22 February 2001, the Receivers wrote to Tully in response to its letter complaining of not being involved in the negotiations of the foreshadowed proposal. The response provided relevantly the ongoing communication with Tully leading up to the proposal, as follows:
We have had a number of discussions and communications with [Tully] since our appointment to [the Company] on 18 January 2001.
We have always advised you that we stood ready to assist in the advancement of your proposal and we have on a timely basis provided information to you and your advisors as requested.
More so, we have always stressed that it was critical your proposal offer clarity in respect of matters including legal structure, funding and commitments thereto and working capital adequacy.
In all of our communications we have stressed the necessity for [Tully] to formalise and advance the proposal urgently. Your written communications to us acknowledge this fact.
97 The Receivers went on to refer to the proposal letter of Tully dated 9 February 2001 that they received which was conditional on funding from government and time extensions, and observed:
On 19 February, I received a letter by facsimile from [Tully] advising that due diligence was proceeding and that the "process was expected to be concluded (trusting that there are no issues raised that will require further investigation) by 5.00 pm 20 February."
On 21 February, I received a telephone call from Mr Shannon [Tully's Company secretary] who advised, inter alia:
(i) The [Tully] Board met last evening and resolved to proceed with a proposal to inject equity to [the Company]. Mr Shannon indicated the Board … were not unanimous in their resolution.
(ii) [Tully] had "imminent" access to funding of some $11.8 million from NQEA, Thiess Pty Ltd and Ergon Energy which funds were to be loaned to [Tully] for the purpose of [Tully] acquiring equity in [the Company] and reducing [the Company's] debt to [the Bank].
In this regard, Mr Shannon made the following points:
(a) Of the $11.8M, [Tully] would prefer to pay $10.5M approximately to [the Bank] and retain certain funds for working capital.
(b) Ergon needed convincing on "security for their funding from [Tully]". Mr Shannon made the point Ergon was negotiating to take security over [Tully's] assets ahead of [Tully's] existing lenders and this was likely to be unsatisfactory to [Tully].
98 The Receivers submitted that it was to be taken that Tully had not worked out its funding arrangements at this point. The letter went on:
(iii) [Tully] still needed to establish how "to take control of [the Company's] Board" and advice was being sought from Flower & Hart, Solicitors on this and other issues.
(iv) [Tully] had access to a "special" working capital facility of $1.8M but its proposal would require an additional working capital facility of $2M which it would likely seek from the [the Bank].
(v) [Tully] would need to meet with the Receivers to further discuss its proposal and it was likely such meeting would be sought for "Thursday or Friday".
99 I was invited to conclude that the position as at 21 February 2001 was that Tully had not been in a position to put forward an offer. I accept this. Tully was apparently interested, but only subject to conditions and without any confirmation of funding. The Receivers could be under no certainty that the offer would proceed and on what terms.
100 However, the fact remains that the Receivers proceeded to sale in a very short period of time and without seeking any valuation or competitive tender, without advertising and whilst aware of at least some interest from Tully. It is significant that the contract of sale entered into with Bundaberg was itself subject to many conditions, and no obvious reason for the haste to enter into the Contract is apparent. The Receivers did not provide any evidence on this matter. Undoubtedly, the proposals by Tully did not correspond with those of Bundaberg, but this in itself does not mean more time and effort could not have been given to the Tully proposal. It could not be contended that Tully was not genuine in its interest, having regard to its interest in the factory and in pursuing due diligence. Prior to the sale being entered into, there seems to have been no opportunity given to Tully to come up with another proposal. Whilst one can only speculate as to whether Tully would have changed their proposal more in line with that acceptable to the Receivers, this opportunity was lost by the haste and methodology adopted by the Receivers.
101 It is important, at this point, to again emphasise the context in which I am assessing the evidence. I am not to treat the application as a trial of the substantive issues. I need only be satisfied that there is a serious question to be tried in the way described by Gummow and Hayne JJ in O'Neill (2006) 227 CLR at [65]. I must look at the matter having regard to the whole of the evidence before me, and assess the conduct of the Receivers.
102 Whilst it may be said that generally receivers should obtain two independent valuations prior to sale, or sell assets at a public auction, with a private sale as a last resort (see O'Donovan J, Company Receivers and Administrators (Lawbook Company) at [10.2370]), this is not a rule of law. Nor is it a rule of law that receivers should attempt to bring competing bidders into competition (but see Forsyth v Blundell (1973) 129 CLR 477 at 508-509 and Florgale Uniforms Pty Ltd v Orders (2004) 11 VR 54 at [410]-[438] especially at [418]-[419]). However, they are matters of common sense in normal circumstances, and no satisfactory explanation has been offered for such a course not being followed in the circumstances.
103 I should say that in its submissions, the Receivers did seek to justify the haste taken in the following way:
As has already been observed, the evidence reveals that [the Company's] circumstances at the time of the First Respondents' appointment were difficult:
(i) [the Company's] trading position had deteriorated to the point where it was suffering operating losses of millions of dollars every year.
(ii) The mill owned by [the Company] was in need of urgent, and very expensive, repairs if it were to be available for the forthcoming season.
(iii) In this respect, an amount in the millions of dollars was required to prepare the mill and cover contingencies in the short term.
(iv) The circumstances thus suggested the need for an urgent sale so that very large losses could be stemmed, very large expenditure could be avoided, and a purchaser might be in a position to undertake the necessary repairs in time to participate in the fruits of the forthcoming season.
104 However, no evidence by the Receivers has been led as to this being the reason for their methodology and haste. There is evidence (which I accept) that Tully would have been in a position to assist with the Company's problems, and the evidence suggests that there was several months available to carry out the maintenance work on the mill, and that the consortium referred to by Tully was in a position to carry out this work and had costed such requirements into its proposal to be put to the Receivers.
105 On the basis of the facts I have found, and in view of the fact that the Receivers have not provided evidence to explain the sequence of events leading up to the sale to justify their methodology and haste, I am of the view that there is a serious question to be tried in relation to the Receivers in respect of each of the potentially available claims I have referred to above. Looking at the whole of the Receivers' conduct in the circumstances in which it occurred there is a serious question to be tried as to the Receivers failing to take reasonable steps in obtaining a proper price and looking after the interests of the Company, and in this way acting unconscionably. For the purposes of this application I need go no further.
106 I mention one further matter in relation to this aspect. It may well be that if there was some evidence that the Bank directed, instructed or otherwise interfered with the Receivers, and the Receivers acted accordingly, this would assist the case against the Receivers. If the Receivers merely followed the direction of the Bank, this would be some indication of the Receivers failure to carry out their duties. It will be apparent from my reasons in respect of the allegations against the Bank that no such basis exists for supporting the case against the Receivers. However, for the reasons indicated, such evidence is not necessary for my granting leave to proceed in respect of the Receivers.
107 In relation to the Bank, the applicants submitted that the Bank:
…will be liable for the conduct of the Receivers if the Receivers were in fact its agents. If [the Bank] directed or interfered with the Receivers' activities, they will be the agents of [the Bank] (see American Express International Banking Corporation v Hurley [1985] 3 All ER 564 at 568(f) and 571(g); Florgale at [496]).
The present case goes "beyond mere consultation or the communication of preferences" by [the Bank] but demonstrates that [the Bank] was "heavily involved in the performance of the Receivers' duties" (see State Bank of New South Wales Ltd v Chia (2000) 50 NSWLR 587 at [885-886]).
108 The Receivers were appointed by the Bank pursuant to the terms of the security documents. Each of the security documents expressly provided that the Receivers were the agents of the Company and the Company was solely responsible for anything done or not done by the Receivers. The deed of appointment contained an express provision to similar effect.
109 The effect of rendering the Receivers the agents of the Company is to "relieve the mortgagee from the liabilities which the law casts upon a mortgagee going into possession and to place upon the mortgagor the liability for the acts and defaults of the receiver" (see State Bank of New South Wales Ltd v Chia (2000) 50 NSWLR 587 at [868] per Einstein J and the cases referred to).
110 A mortgagee has no power to direct a receiver in the performance of the receiver's task: Medforth v Blake [2000] Ch 86 at 94-95; Chia 50 NSWLR at [881]. Nevertheless, communication between the receiver and the mortgagee is entirely proper. As was stated by Einstein J in Chia 50 NSWLR at [881] (citations omitted):
But there is no doubt that the law allows, and even requires, interaction between a receiver and his or her appointors. The receiver occupies a fiduciary relationship with his or her appointors, one aspect of which is the duty of the receiver to keep his or her appointors informed about the progress of the receivership.
111 I accept that if a mortgagee directs the exercise of the powers of a receiver, or interferes with his or her conduct in the realisation of assets, then the usual consequences of the agency relationship between the receiver and mortgagor may be displaced: Florgale 11 VR at [496]; Chia 50 NSWLR at [881]-[886]; American Express International Banking Corporation v Hurley (1985) 3 All ER 564 at 568 and 571.
112 However, more than mere consultation or the communication of preferences by the mortgagee would be required: Chia 50 NSWLR at [885].
113 The applicants relied upon the following main matters to support their contention that the Bank was heavily involved in the performance of the Receivers' duties:
· The Bank had expressed a preference for a sale to Bundaberg on 6 January 2001.
· On 30 January 2001, Mr Ray Pridmore, Global Credit Manager of the Melbourne branch of the Bank, spoke to members of Tully stating "[the Bank]can't allow the [Bundaberg] offer to lapse. [Mr Pridmore] will attempt to negotiate an extended period." At that time, no final offer had been received by the Bank from Bundaberg (through the Receivers).
· Clause 18 of the Contract, which provided for the Bank to elect to complete the Contract or exercise the power of sale as mortgagee could only have been inserted on the Bank's instruction. The applicants submitted that if the Receivers were simply acting as agents for the Company, there would be no need for them to add such a clause.
· On the morning of 21 February 2001, Tully spoke to the Receivers and wanted to arrange a meeting. The Receivers said they could not arrange a time without first conferring with the Bank at 10.30 am.
· Mr Dennis wrote to Tully on 22 February 2001 and said "the position of our negotiations with [Tully] was duly considered in a telephone conference with [the Bank] on 21 February having regard to the interest of [the Bank] and the other stakeholders and in the context of the information available to me".
114 The applicants submitted that the Receivers were not merely consulting with the Bank but were taking instructions from it regarding negotiations with Tully. The applicants submitted that it was the Bank who considered the proposal of Tully at the telephone conference with the Receivers, which would have been unnecessary unless it was instructing the Receivers about them. The failure of the Receivers to communicate with Tully and bring them into competition with Bundaberg after a telephone conference with the Bank could only have occurred after instructions were taken from the Bank as to the manner in which the Receivers were to proceed. The applicants also submitted that the entirety of the communication between the Receivers and the Bankis within the Bank'sand the Receivers' knowledge. As they have chosen not to go into evidence, the Court is entitled to more confidently draw an inference in favour of the applicants in the absence of evidence from the Bankand the Receivers.
115 Further, the applicants submitted that the evidence relied upon must be looked at as a whole and cumulatively, and supports the inference that the Bank instructed the Receivers in regard to the sale rather then merely communicating with them about the same.
116 Assuming all the evidence relied upon by the applicants against the Bank on the issue of agency is admissible, in my view it does not establish that there is a serious question to be tried against the Bank in support of a case of agency. I do not consider there is any evidence, which either directly indicates or from which I could properly infer, that the Bank has directed, instructed or interfered with the Receivers' activities.
117 For the Bank to state a preference for a sale to Bundaberg, prior to the appointment of Receivers, is to do just that - it does not indicate anything in the nature of an instruction or direction. In any event, the evidence seems to be that this preference was only stated in the presence of a representative of the Bank, which I am presumably asked to infer was adopted by the Bank. This in my view I cannot do without more evidence before me.
118 Similarly, the indication that the Bank did not want Bundaberg's offer to lapse, where no final offer had been received, would be a natural reaction when one wants to have a sale. The Bank would want to keep the negotiations open to obtain the best deal. I do not, and cannot, properly draw the inference that the statements of Mr Pridmore (of the Bank) on 6 and 30 January 2001 suggest the Bank intended or did exercise control over the Receivers, or that the Bank had the power to prevent the Bundaberg offer from lapsing or that negotiations were being held directly between the Bank and Bundaberg.
119 As to the inclusion of cl 18 in the Contract, accepting that it was inserted at the suggestion of and for the benefit of the Bank, its inclusion does not suggest that the Bank directed, interfered with, or instructed, the Receivers in relation to the decision to enter into the sale. It may have been a matter that the Bank wanted in the terms of sale, but this does not support the claim made by the applicants against the Bank in this proceeding relating to its involvement with the Receivers prior to the sale.
120 As to the conversation of 21 February 2001 and the letter of 22 February 2001, the evidence merely indicates that there was a discussion on 21 February 2001 between the Receivers and the Bank, and as a stakeholder it was being consulted. It does not show, as the applicants contended, that the Receivers could not arrange a time without first conferring with the Bank. It does not indicate that the Bank was being other than just consulted. The evidence was simply that the Receivers were going into a conference with the Bank, that it would get back to Tully to arrange a time after that conference, and that the Bank was consulted about the sale.
121 Further, the failure of the Receivers to communicate with Tully and bring them into competition with Bundaberg after a conference with the Bank does not lead to the conclusion that this only occurred upon the instruction of the Bank.
122 Even assuming, which is probable, that discussions took place between the Bank and the Receivers regarding the Tully proposal, this would be expected and does not suggest any form of agency of the type alleged by the applicants. Even if there were many conversations over a short period of time, no inference could be drawn as sought by the applicants. The timing of the conversations does not take the matter any further.
123 Admittedly the entirety of the communications between the Receivers and the Bank is within their knowledge, and they have not provided any evidence. However, to my mind there is simply no evidence on this point to which they need to respond. Even treating the effect of the evidence as cumulative does not, in my view, call for a response.
124 For the above reasons, I have come to the view that there is not a serious question to be tried against the Bank on the issue of agency, and therefore no basis to grant leave in favour of the applicants against the Bank.