99 In contrast to this evidence, both Mr Spalla and Mr Borden said that Mr Rambaldi had said, in effect, that he had settled the proceedings. Mr Spalla maintained that Mr Rambaldi told the meeting that he had "entered into a Deed and it can't be reversed". It is clear that Mr Spalla formed the impression that a final binding settlement had been reached. Mr Borden also recalled that Mr Rambaldi said that he had entered into a "settlement" rather than an "offer".
100 In written submissions, Mr Spalla argued that the account of Mr Borden was to be preferred to that of Mr Rambaldi because Mr Borden took contemporaneous notes of the meeting. The problem with this argument, from Mr Spalla's perspective, is that Mr Borden's notes support Mr Rambaldi's recollection. Mr Borden's handwritten notes, which he says were taken as Mr Rambaldi was speaking, say "offer irrevocable 7 days" (emphasis added). The same note stated "conditional on getting consent of partners w/o 300K fees. Need to get partners to consent". I accept Mr Rambaldi's account of the meeting. In my view, it is clear that Mr Rambaldi used the term "offer" and explained, as best he could in the circumstances, the terms of the Deed.
101 Furthermore, Mr Borden's handwritten notes of what happened at this time show that Mr Rambaldi stated that ILF had given notice of the cessation of Mr Rambaldi's indemnity in seven days' time, and not, as Mr Spalla would have it, cessation forthwith. Mr Borden's note of what Mr Rambaldi said reads, "Clive [Bowman] issued letter putting me on notice that funding protection will expire w/i 7 days".
102 Mr Spalla and Mr Borden, who were not familiar with the Deed, misunderstood Mr Rambaldi's explanation. This is not surprising. The explanation was very brief and took place in an emotionally charged atmosphere. Although Mr Spalla forcefully insists that his recollection is correct, the evidence shows that he was highly agitated during this meeting. Accordingly, I find that his memory of what occurred (at least in relation to the exact words said by Mr Rambaldi) is not reliable.
103 I also infer, from the fact that Mr Spalla's anger was directed at Mr Bowman, that Mr Borden had not previously informed Mr Spalla that ILF was withdrawing Mr Rambaldi's indemnity. I infer from the evidence of Mr Spalla's reaction that Mr Spalla was surprised by that news. Therefore, I accept Mr Spalla's evidence that he had been unaware that the indemnity was being withdrawn until that point.
104 Mr Spalla left the room after his heated discussion with Mr Bowman. Around the same time, Ms Arslan left the room to make copies of the Deed for those present. Mr Rambaldi said to those remaining that he had no choice but to sign the Deed as the indemnity had been withdrawn in circumstances where the respondents had said they would pursue costs against him personally. Following Mr Rambaldi's return, this meeting in the applicants' room lasted only a short time.
105 The parties did not further address the events of the mediation until the following Monday, 2 May 2005. On that morning, Mr Hayes QC, Mr Spalla, Mr Ian Still, Mr Borden and Mr Rambaldi attended a conference in Mr Hayes' chambers. Mr Rambaldi arrived after the other participants. The discussion in Mr Hayes' chambers became heated and ended when Mr Rambaldi, Mr Spalla, Mr Borden and Mr Ian Still left for the coffee shop at Owen Dixon Chambers.
106 In the coffee shop, Mr Rambaldi again attempted to explain the terms of the Deed. He said that the Deed gave Mr Spalla seven days to find another liquidator to take over from him. He reiterated that he had no choice but to execute the Deed. He said that he had a gun pointed to his head in the sense that ILF was withdrawing its indemnity from him and he had limited options with respect to the affairs of the company.
107 Mr Borden said that Mr Rambaldi should have negotiated an agreement with the respondents, if that is what he wanted to do, that did not come into effect for seven days to coincide with the lapse of the indemnity. According to his file note, which was made that day, Mr Borden added that, "[i]f he had not been supplied with an alternative litigation funder in that period or if he had not been replaced with another liquidator, the terms of the settlement could then become binding". Mr Borden suggested that, as the Deed was in operation subject only to Mr Rambaldi's partners not agreeing to it, there was nothing left for another liquidator to litigate. Mr Rambaldi disagreed, saying that his partners would follow his advice and that, if another liquidator was found, then his partners would not ratify the Deed.
108 Later that day, Mr Spalla and Mr Rambaldi met with Mr David Lofthouse, who was an accountant and liquidator with some familiarity with Mr Spalla's affairs, to discuss the options available to Mr Spalla including the possibility of finding another liquidator. After this meeting, the parties made enquiries to determine if another registered liquidator would accept the appointment as liquidator of Irlmond in Mr Rambaldi's stead. They were ultimately unable to find anyone willing to take Mr Rambaldi's place.
109 In the late afternoon of 2 May 2005, Mr Rambaldi attended the chambers of Mr Rodney Randall of counsel, to obtain his advice. Mr Randall gave Mr Rambaldi written advice the next day, 3 May 2005, stating, amongst other things that, based on his instructions, he had "no hesitation in endorsing the actions and conduct of the Liquidator" and that it was "open to the partners of Pitcher Partners to ratify the Deed of Settlement".
110 On the same day, 3 May 2005, acting on counsel's advice, Mr Rambaldi sent a facsimile to Mr Spalla informing him that the decision whether or not to ratify the Deed would be made on Friday 6 May 2005. He wrote that, before his firm made that decision, he would give Mr Spalla the opportunity to do one of three things by 4.00 pm on Thursday, 5 May 2005. These things were:
"1. Deposit a minimum amount of no less that $2million into my trust account in accordance with the terms and conditions set out in my letter of 11 February 2005; or
2. Procure the appointment of a substituted Liquidator; or
3. Obtain approval of the Court for the officers of Irlmond to conduct the litigation on its behalf." (Emphasis original)
In re-examination, Mr Spalla said that he "simply wasn't interested in giving [Mr Rambaldi] $2 million for anything". This left the second and third options, both of which were pursued.
111 From 3 May to 6 May 2005, there was an exchange of correspondence between the parties and their lawyers. On 4 May 2005, Still & Co. sent Mr Rambaldi two letters by facsimile. The first letter was said to be written on behalf of David Still and the second, on behalf of all the Spalla Interests. This latter letter demanded that Mr Rambaldi have the Deed cancelled, adding:
"In accordance with the provisions of Clause 14 of the [LFA] I am instructed to advise you that a dispute has arisen between my clients and you in relation to your conduct at a Mediation Conference on Friday 29th April 2005, whereby you have, in my clients' view committed a flagrant breach of the terms of the [LFA] by executing a Deed of Settlement … with the respondents ….
[In default of you cancelling the Deed] our clients require the dispute resolution procedure provided in Clause 14 of the [LFA] to be implemented."
112 At approximately 6.00 pm on 4 May 2005, Mr Rambaldi telephoned Mr Spalla. He advised Mr Spalla that an application would be made to the Supreme Court of Victoria for the appointment of an alternative liquidator or for Irlmond's officers to take control of the conduct of Irlmond's claim. Mr Spalla expressed a preference for the latter of these options.
113 On 5 May 2005, solicitors acting for Mr Rambaldi, Frenkel Partners, replied by facsimile to Still & Co.'s letters of 4 May 2005. After noting that the Spalla Interests had not addressed the options in Mr Rambaldi's letter of 3 May 2005 to Mr Spalla, the letter advised that an application would be made to the Supreme Court to seek the Court's guidance on the conduct of the litigation and that this application was likely to be heard the following morning. Still & Co. replied the same day, also by facsimile, advising that they could not accept service and that Michael Brereton & Co. would be acting for the Spalla Interests.
114 On 5 May 2006, Mr Rambaldi filed an application, pursuant to s 511 of the Corporations Act 2001 (Cth) ("the Act"), in the Supreme Court of Victoria. The application sought an order that the "officers of Irlmond … be authorised to conduct the litigation [namely the primary proceeding and the related appeals] on behalf of the Company". In a supporting affidavit, Mr Rambaldi outlined the background to the application and exhibited various documents including the LFA, memoranda from Mr Hayes QC of 3 and 4 May 2005, and Mr Randall's memorandum of 3 May 2005.
115 The application was heard by Hansen J on 6 May 2005. Mr Randall appeared for Mr Rambaldi. Mr Spalla appeared in person. Mr Randall said that, although Mr Rambaldi had come to Court to put the option of allowing the officers of Irlmond to take over the litigation, "his preference is that the court declines to make the orders". Mr Spalla spoke also. He expressed disapproval of how Mr Rambaldi had acted in signing the Deed and said that he wished to take control of the litigation. At the conclusion of the hearing, his Honour declined to make the orders sought and gave reasons: see Rambaldi v Spalla [2005] VSC 162 ("Rambaldi").
116 Hansen J found that he had insufficient information to form a view on the likelihood of success of Irlmond on appeal or at trial: Rambaldi at [19]. Therefore, he was unable to determine if it was in the best interests of the company to continue with the litigation. He noted that Mr Spalla had not made any "proposal by which the position of the company in relation to the adverse costs orders which are to be released under the settlement could be secured, that is to say if authority was given to Mr Spalla to continue with the proceeding, that the company would be no worse off than it would be in that respect under the settlement": Rambaldi at [20]. Similarly, his Honour noted that he had no "assurance beyond that stated by Mr Spalla, as to how the company's ongoing costs are to be paid": Rambaldi at [20].
117 Later that day (but before 5.00 pm), Mr Rambaldi procured the consent of his partners to the Deed.
118 Before turning to the parties' submissions, I note that Mr Borden properly conceded that he could not recollect the precise words used at the mediation or in pre-mediation conferences and that, in general, his file notes are likely to be more reliable than his present recollection. I accept this and further I accept that Mr Borden's handwritten notes, which were made at the time of the mediation, are even more reliable than his typed notes of the mediation.
119 It will be apparent from the foregoing that, in general, where there is conflict, I have preferred the evidence of Mr Rambaldi, whom I found a credible witness, to the evidence of Mr Spalla and Mr Borden.
120 In relation to the events of the mediation, Mr Spalla contended that I should prefer the evidence of Mr Borden over the evidence of Mr Rambaldi because Mr Borden kept a contemporaneous file note, while Mr Rambaldi did not, and because Mr Rambaldi was a party, while Mr Borden was not. The circumstances from which the litigation arises do not, however, support the proposition that, in contrast to Mr Rambaldi, Mr Borden can be regarded as a neutral third party. Further, as already noted, the typed file note upon which Mr Spalla placed much weight was not made until some time in the week after the mediation, when the controversy between Mr Spalla and Mr Rambaldi was evident. In some respects, as the forgoing account shows, Mr Borden was an unsatisfactory witness.
121 I accept that Mr Spalla gave his evidence honestly, without any intention to mislead the Court. As the foregoing account shows, however, Mr Spalla has been intensely and emotionally involved in this and related proceedings for some time now. Some of the events about which he gave evidence were emotionally-charged so far as he was concerned. On account of this, and his strong commitment to pursuing his grievances in this and related litigation, he has drawn conclusions from what he has seen or thought he heard that have not always proved reliable.
SUBMISSIONS
The Applicant's Submissions
122 Mr Spalla relied on s1321 of the Corporations Act 2001 (Cth) ("the Act") as a basis for his application. That section allows a "person aggrieved by any act ... or decision" of a liquidator to appeal to the Court in respect of the act or decision. The Court can "confirm, reverse or modify the act or decision". Citing Westpac Banking Corporation v Totterdell (1998) 29 ACSR 448 ("Westpac v Totterdell"),Mr Spalla submitted that he had standing to bring an appeal under this section as a creditor of Irlmond, of which he was also the sole director. Mr Spalla also maintained that he had standing as an applicant and the funder in the primary proceeding. He also pointed out that he and his wife were the owners and controllers of Anstella, which in turn held all the issued shares in Irlmond. Mr Spalla identified "the decision of Mr Rambaldi to execute the Deed of Settlement on 29 April 2005 and subsequently seek and obtain the ratification of the Deed by his partners on 6 May 2005" as the subject of the appeal.
123 Under r 14.1(2) of the Federal Court (Corporations) Rules ("the Rules")any appeal under s 1321 of an act, omission or decision of a liquidator must be filed within "21 days after the date of the act, omission or decision appealed against". Mr Spalla argued that his appeal was not out of time because, even though his initial notice of motion did not refer to s 1321 of the Act, this proceeding was initiated within 21 days of the execution of the Deed. In the alternative, Mr Spalla sought an extension of time to bring an appeal under s 1321. He argued that an extension of time was appropriate because his initial notice of motion put Mr Rambaldi and other interested parties on notice of the nature of Mr Spalla's complaints against him.
124 Mr Spalla also sought to rely on s 536 and s 1324 of the Act. As I accept that s 1321 is an appropriate vehicle for Mr Spalla's challenge to the Deed, it is unnecessary to discuss these sections of the Act further.
125 Mr Spalla conceded that, where an appeal under s 1321 of the Act is against a liquidator's discretionary decision or a decision involving business judgment, the Court would not reverse the liquidator's decision unless it was satisfied that the liquidator acted unreasonably or in bad faith: see Re Jay-O-Bees Pty Ltd (In Liquidation); Rosseau Pty Ltd (In Liquidation) v Jay-O-Bees Pty Ltd (In Liquidation) (2004) 50 ACSR 565 ("Jay-O-Bees") at 575 per Campbell J. Mr Spalla submitted that there were many grounds for concluding that Mr Rambaldi acted in bad faith by executing the Deed. As he raised so many grounds, Mr Spalla's submissions were somewhat diffuse. In what follows, I attempt to outline his main arguments.
126 Perhaps foremost among Mr Spalla's arguments is his claim that Mr Rambaldi acted in breach of the LFA. Additionally, he argues that, by his conduct, Mr Rambaldi breached his obligations under the Act, including under s 180. In particular, in breach of the LFA, Mr Spalla alleges that Mr Rambaldi breached clauses 9.1, 9.3, 14 and 21 of the LFA. Under clause 9.1, HWL were to "conduct the Proceeding on behalf of the Liquidator and the Spalla Interests". In Mr Spalla's view, Mr Rambaldi breached clause 9.1 by negotiating the terms of the Deed without consulting his solicitors.
127 Under clause 9.3, the Liquidator was not permitted to instruct the solicitors to settle the "proceedings as a whole" or to "settle, amend, vary, abandon or discontinue any claim made or the relief sought by the Spalla Interests" without consent of the Spalla Interests. Mr Spalla argued that the words "any claim made" included the claim made on behalf of and in the name of Irlmond.
128 Further, Mr Spalla argued that Mr Rambaldi breached clause 9.3 by settling the "Spalla Interest claim" (as defined in the LFA). In support of this contention, Mr Spalla argued that the "Spalla Interest claim" and the "Irlmond claim", as defined in the LFA, are indivisible. He said that, in essence, there was only "one claim" in the primary proceeding. If these claims are indivisible then, according to Mr Spalla, Mr Rambaldi could not settle the Irlmond claim without Mr Spalla's consent.
129 The LFA defined "Spalla Interests claim" as "the claim(s) being prosecuted in the Proceeding by the Spalla Interests as referred to in Clause B of this Agreement." Mr Spalla noted that clause B states that the Spalla Interests "have prosecuted the Proceeding" by, among other things, filing an amended statement of claim naming APS and Irlmond as the fifth and sixth applicants. In Mr Spalla's view, this shows that the Spalla Interests should be taken to be 'prosecuting' those claims brought by Irlmond.
130 Mr Spalla also emphasised that the primary proceeding was commenced solely by the Spalla Interests and that Irlmond joined the proceeding later. In Mr Spalla's view, this showed that Irlmond's claims in the proceeding were also claims prosecuted by the Spalla Interests.
131 Mr Spalla submitted that Mr Rambaldi also breached the LFA by refusing to participate in mediation. As already noted, on 4 May 2005, solicitors acting for Mr Spalla and Mr Still wrote to Mr Rambaldi advising him that their clients believed that a dispute had arisen under the LFA and they required "the dispute resolution procedure provided in Clause 14 of the Agreement to be implemented". Mr Spalla claims that, pursuant to clauses 9.3 and 14, Mr Rambaldi was required to submit to mediation upon receiving such a notice. In support of this contention, Mr Spalla referred to an e-mail sent by Mr Bowman to Mr Vasudevan on 12 May 2003, which, amongst other things, asked whether the amendment to Clause 9.3, which was effected following the hearing before Finkelstein J on 8 May 2006, "nevertheless mean that any dispute in relation to settlement can be dealt with under the procedure in new Clause 14.1" and an e-mail sent by Mr Vasudevan to Mr Borden on the same morning, in which Mr Vasudevan said, amongst other things, that he agreed with ILF's suggestion that "there should be a dispute resolution procedure in place with Clause 9.3" and that "[t]he new Clause 14 should apply".
132 Mr Spalla claimed that these purported breaches of the LFA showed that Mr Rambaldi acted in bad faith. Especially, so he argued, because Mr Rambaldi knowingly breached the LFA. Mr Spalla claimed that Mr Rambaldi was familiar with the LFA and his obligations under that agreement. He also emphasised that he had reminded Mr Rambaldi of his obligations under the LFA immediately before Mr Rambaldi left the applicants' room at the mediation centre to negotiate the Deed with the Deloitte parties and St George parties. Further, according to Mr Spalla, Mr Rambaldi told Mr Spalla that he would not settle the proceeding without consulting with him. Mr Spalla argued that, in these circumstances, any breach of the LFA was deliberate and strong evidence of bad faith.
133 Mr Spalla also contended that there was a "secret variation" of the LFA by Mr Bowman and Mr Rambaldi. Clause 21 of the LFA provided that any amendment or variation of the LFA was not valid unless it was in writing and signed by all the parties to the agreement. In Mr Spalla's view, Mr Bowman breached this provision at the meeting of 21 January 2005 when he varied the agreement so that ILF was only indemnifying Mr Rambaldi to enable settlement of the proceeding. Mr Spalla claimed that this "variation" of the agreement was kept secret by Mr Rambaldi who did not inform Mr Borden that Mr Bowman's "desired outcome" was a walk-away settlement. Mr Spalla claimed that this "secret variation occurred in the context of Mr Bowman threatening by letter dated 17 January, 2005 not to honour the indemnity for any adverse costs orders incurred to date".
134 Mr Spalla submitted that Mr Rambaldi behaved dishonestly on 29 April 2005. In particular, Mr Spalla claimed that Mr Rambaldi deceived him, Mr Borden and Ms Arslan by not informing them, when he returned after the lunch break, of the fact that his indemnity was to be withdrawn and that he would attempt to procure a walk-away offer. Mr Spalla argued that Mr Rambaldi was obligated to inform the other applicants and their joint solicitors of what had occurred and of his intentions. By not informing them, so Mr Spalla submitted, Mr Rambaldi gave them a false impression of what was occurring during the afternoon's negotiations.
135 Mr Spalla claimed that Mr Rambaldi acted dishonestly by not honouring his promise to consult with Mr Spalla before settling Irlmond's claims. Central to this submission is Mr Spalla's contention that Mr Rambaldi settled Irlmond's claims on 29 April 2005 when he signed the Deed. In Mr Spalla's view, the Deed was not an offer of settlement from the respondents to Irlmond. Rather, Mr Spalla claims that the plain language of the Deed shows that it was a final settlement.
136 Further, Mr Spalla argued that the Court should draw an inference against Mr Rambaldi on the ground that Mr Rambaldi failed to call other witnesses (such as Messrs Beck and Wallace-Smith) who were present when the terms of Deed were negotiated. Mr Spalla argued that the Court should infer that, had such witnesses been called, their evidence would not have supported Mr Rambaldi's contention that the Deed was entered into on the understanding that it was an offer of settlement. Mr Spalla also contended that the Court should infer that, had Mr Bowman been called, his evidence would not have assisted Mr Rambaldi's contention that he was not part of the settlement discussions. I have dealt with this latter submission above.
137 Mr Spalla submitted that Mr Rambaldi could not delegate his statutory power to settle the proceeding in the best interests of the company. Mr Spalla argued that this means that the Deed's condition precedent (which made the Deed's operation conditional on the consent of Mr Rambaldi's partners) could not be seen as a delegation to the firm of Mr Rambaldi's power to settle the proceedings. Mr Spalla concluded that, by signing the Deed, Mr Rambaldi "has settled the proceeding and has merely left the issue of his partners [sic] consent as a condition that must be fulfilled before the deed can take effect."
138 As further evidence of Mr Rambaldi's purported dishonesty, Mr Spalla noted that Mr Rambaldi told the Deloitte parties, falsely, that he required the consent of his partners to write-off fees. Mr Spalla claimed that, in light of these purported acts of dishonesty, the Court should prefer his and Mr Borden's evidence over that of Mr Rambaldi.
139 Mr Spalla argued that, after the Deed had been signed, Mr Rambaldi did not make a good faith effort to assist him in procuring another liquidator or to have the conduct of Irlmond's claim transferred to him as a director. Mr Spalla said that the s 511 application before the Supreme Court was a "sham" because Mr Rambaldi did not provide the Court with information as to the merits of Irlmond's claims and did not support the application. Further, Mr Spalla submitted that, even if he had been authorised to conduct the litigation or a new liquidator had been found, Mr Rambaldi's partners would have considered whether to ratify the Deed based on "their view of prospects of fee recovery and exposure of the firm and Mr Rambaldi to adverse costs orders" rather than on their view of the best interests of Irlmond's creditors. Thus, according to Mr Spalla, there was no reason to think that the litigation would have continued even if he had complied with one of the three options outlined in Mr Rambaldi's letter of 3 May 2005.
140 In support of a claim that Mr Rambaldi acted unreasonably and in bad faith, Mr Spalla argued that the Deed settled a good and valuable claim and provided no benefit to Irlmond's creditors at all. In Mr Spalla's view, the Deed only benefited Mr Rambaldi. Mr Spalla noted that Mr Rambaldi had endorsed Irlmond's claims in the primary proceeding on many occasions. Mr Spalla submitted that, as late as the morning of the mediation, Mr Rambaldi had said that Irlmond had a good claim. Further, Mr Spalla emphasised that Irlmond's claim (as set out in the third further amended statement of claim) was based on a report by Banks Group Services that estimated Irlmond's current and long-term assets on the date of appointment of receivers (12 February 1999) to be over $10 million. Mr Spalla said that it had been the view of the applicants, including Mr Rambaldi, that Irlmond was entitled to millions of dollars from the respondents in the primary proceeding. He noted that Mr Rambaldi had received advice from HWL and Mr Hayes QC supporting this view. Mr Spalla argued that, as Irlmond had no assets other than its prospects of success in the primary proceeding, the creditors of Irlmond got nothing from the terms of settlement outlined in the Deed. In his view, this showed that Mr Rambaldi was only concerned with his own interests when he signed the Deed.
141 Mr Spalla submitted that Mr Rambaldi signed the Deed under the influence of improper pressure applied by the Deloitte parties and Mr Bowman. Mr Spalla noted that the Deloitte parties repeatedly told Mr Rambaldi that they would seek costs from him personally. Mr Spalla said that it was wrong for them to do this when Mr Rambaldi was not a party to the proceeding and had acted with good faith on legal advice. Mr Spalla claimed that that the Deed should be set aside because this illegitimate economic pressure caused Mr Rambaldi to sign the Deed under duress.
142 Further, Mr Spalla suggested that the Deloitte parties and the St George parties induced Mr Rambaldi to breach the LFA. He said that the Deloitte parties had seen a copy of a redacted version of the LFA and thus knew about the LFA when they negotiated the Deed with Mr Rambaldi. He claimed that the Deloitte parties and the St George parties knew that their dealings with Mr Rambaldi were inconsistent with Mr Rambaldi's duties under the LFA. Therefore, in Mr Spalla's view, they were guilty of intentional interference with contract.
143 Mr Spalla also argued that Mr Rambaldi breached s 477(2A) of the Act by compromising a debt for an amount over $20,000 without approval of the Court, or of the committee of inspection or creditors in general meeting. This submission was based on a misunderstanding as to what constitutes a "debt" under the relevant section: see Re Luxtrend Pty Ltd (In Liquidation) (1996) 135 FLR 170 at 171-172; [1997] 2 Qd R 86 at 87-89 per Moynihan J; Farrow Finance Co Ltd (In Liquidation) v ANZ Executors and Trustees Company Ltd (1996) 136 FLR 154 at 179-180; [1998] 1 VR 50 at 74 per Hansen J; and Re Tietyens Investments Pty Ltd (Receivers and Managers Appointed) (In Liquidation) (1999) 31 ACSR 1 at 20-22 per Weinberg J. It is unnecessary to discuss it further.
144 Finally, Mr Spalla claimed that when the dispute between ILF and Mr Rambaldi emerged in January 2005 there were numerous options available to Mr Rambaldi. In particular, Mr Spalla claimed that, rather than sign the Deed, the liquidator should have resigned and allowed the creditors to appoint a new liquidator pursuant to s 499 of the Act. Alternatively, in Mr Spalla's submission, Mr Rambaldi could have applied to the Court for his removal upon his personal indemnification ending on 6 May 2005.
The Liquidator's Submissions
145 Although Mr Rambaldi asked the Court to prefer his evidence to that of Mr Spalla in so far as their evidence conflicted, he did not ask the Court to make a negative credibility finding with respect to Mr Spalla. Rather, Mr Rambaldi relied on the principles referred to by McLelland CJ in Watson v Foxman (2000) 49 NSWLR 315 at 319: