The J Aron Corporation and The Goldman Sachs Group Inc v Newmont Yandal Operations Pty Ltd & Ors

LEGISLATION CITED: Corporations Act 2001 Pt.5.3A; ss 439A, 439C & 553(1). Corporations Regulations 2001 Regulations 5.6.23(1) & (2), 5.6.28, 5.6.29 & 5.6.31.

CASES CITED: Selim v. McGrath (2003) 47 ACSR 537

Appellant - The J Aron Corporation and The Goldman Sachs Group Inc First Respondent - Newmont Yandal Operations Pty Ltd Second Respondent - Australian Metals Corporation Pty Ltd (ACN 059 292 376) - Eagle Mining Pty Ltd (ACN 009 207 087) - Great Central Holdings Pty Ltd (ACN 079 773 881) - Great Central Investments Pty Ltd (ACN 079 154 233) - Great Central Mines Pty Ltd (ACN 009 269 130) - Hunter Resources Pty Ltd (ACN 010 267 428) PARTIES: - Matlock Castellano Pty Ltd (ACN 008 921 720) - Matlock Mining Pty Ltd (ACN 009 228 264) - Newmont Wiluna Gold Pty Ltd (ACN 009 751 795) - Newmont Wiluna Metals Pty Ltd (ACN 009 181 908) - Newmont Wiluna Mines Pty Ltd (ACN 009 130 956) - Quotidian No 117 Pty Ltd (ACN 003 374 810) Third Respondent - Newmont Australia Limited Fourth Respondent - Mark Anthony Korda and Mark Francis Xavier Mentha Fifth Respondent - Clynton Court Pty Limited (Subject to a Deed of Company Arrangement)

Mr D.F. Jackson QC & Mr V.R. Gray - Appellant COUNSEL: Mr T.F. Bathurst QC & Mr M.S. Henry - 1-3 Respondents Mr J. Beach QC & Ms V. Whittaker - 4&5 Respondents

Abbott Tout - Appellant SOLICITORS: Arnold Block Liebler - 1-3 Respondents Gadens - 4 & 5 Respondents

LOWER COURT JURISDICTION: Supreme Court - Equity Division

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40320/2005

SPIGELMAN CJ IPP JA BRYSON JA 15 MARCH 2006 THE J. ARON CORPORATION AND THE GOLDMAN SACHS GROUP, INC v. NEWMONT YANDAL OPERATIONS P/L & ORS Judgment 1 SPIGELMAN CJ: I agree with Bryson JA. 2 IPP JA: I agree with Bryson JA. 3 BRYSON JA: The appellants, The J. Aron Corporation and The Goldman Sachs Group, Inc., are two related corporations: I will usually refer to them together as Goldman Sachs. They challenge the effectiveness of a resolution passed on 29 August 2003 at the Second Meeting of Creditors held pursuant to s.439C of the Corporations Act 2001, that Newmont Yandal Operations Pty Ltd and 13 related companies execute Deeds of Company Arrangement. These companies are referred to as the NYOL Group, and they are: (Blue 2/244) Newmont Yandal Operations Pty Ltd Australian Metals Corporation Pty Ltd Clynton Court Pty Ltd Eagle Mining Pty Ltd Great Central Holdings Pty Ltd Great Central Investments Pty Ltd Great Central Mines Pty Ltd Hunter Resources Pty Ltd Matlock Castellano Pty Ltd Matlock Mining Pty Ltd Newmont Wiluna Gold Pty Ltd Newmont Wiluna Metals Pty Ltd Newmont Wiluna Mines Pty Ltd Quotidian No 117 Pty Ltd

4 The NYOL Group companies are respondents in the appeal, and they are related to Newmont Australia Ltd the third respondent. What the NYOL Group companies most significantly have in common is that they are all bound by a Deed of Cross Guarantee dated 18 June 1998 (Blue 3/405) by which, in several ways, each guaranteed the debts of each NYOL Group company. By doing so they became entitled to lodge Consolidated Financial Statements. For the 1999-1999 financial year and later years the NYOL Group prepared consolidated accounts and did not prepare separate statutory accounts for each Group company. Their liabilities under the Deed of Cross Guarantee, and their entitlements under the general law to indemnity from the principal debtor and contribution from co-guarantors for each debt to which the Guarantee extended, imposed on each an array of obligations to each creditor of a Group company for each debt which was unpaid when the Administration began, and an array of obligations to each other Group company. These obligations are all provable debts for the purposes of Pt.5.3A of the Corporations Act; whether as debts or as contingent debts (and the distinction does not need to be resolved for present purposes).

5 When the NYOL Group companies entered into the Deed of Cross Guarantee Newmont Yandal Operations Pty Ltd owned or otherwise effectively controlled all shareholding in all other Group companies. Austin J. gave an account of NYOL Group history and financial arrangements which was not contentious: (Red 58 & 59 [10] - [15]) [10] The structure of the NYOL Group in 1998, when the deed of cross-guarantee was executed, was essentially the same as it was in August 2003. However, in about April 2000, Normandy Mining Ltd acquired all the shares in NYOL, through an intermediary company, Normandy Australia Ltd. Then in about April 2002, Newmont Mining Corporation acquired all the shares in Normandy Australia from Normandy Mining, thereby in effect acquiring the NYOL Group. It renamed Normandy Australia as Newmont Australia.

[11] In around 1998 the NYOL Group entered into some financing arrangements, which should be briefly noted. First, NYOL issued some debt securities referred to as "senior notes" redeemable in April 2008, on which interest was payable to the noteholders in two instalments per year. Secondly, NYOL entered into ISDA Master Agreements for hedging transactions with various counterparties, and made hedge contracts pursuant to those master agreements, for the purpose of reducing the uncertainty and commercial risk associated with fluctuations in gold and currency prices.

[12] At the time when Newmont Mining Corporation acquired the NYOL Group, April 2002, the Group had recorded substantial losses for the preceding two years. The Group's accounts for the financial year ending 30 June 2002, disclosed in a filing to the US Securities & Exchange Commission, showed a loss of A$488.1 million. That filing also disclosed that the NYOL Group's future gold sale obligations under the hedge contracts exceeded expected future production by about 2.4 million ounces at 30 June 2002.

[13] The plaintiffs were counterparties to a master agreement and hedge contracts with NYOL. They gave notice in April 2003 that a "material adverse effect termination event" (as defined in the ISDA master agreement) had occurred, and in May 2003 they advised NYOL that they were terminating the contract and would require payment by it of the outstanding hedge position in full. The plaintiffs determined that the amount of NYOL's indebtedness was US$57.3 million.

[14] In May 2003 a company in the Newmont Mining group called Yandal Bond Company Ltd ("Bondco") offered to acquire the positions of each of the counterparties to hedging contracts and to purchase the senior notes from the noteholders, in each case for 50% of their nominal value. Almost all of the noteholders, and all of the counterparties to hedge contracts other than the plaintiffs, had accepted Bondco's offers. The result was that, by 3 July 2003 (the deadline for acceptance of Bondco's offers) Bondco had become a very substantial creditor of the NYOL Group in substitution for almost all of the external financing creditors other than the plaintiffs.

[15] During the course of negotiations between the plaintiffs and Bondco, each side obtained valuations of the NYOL Group's assets. Newmont Mining obtained a valuation report from Ferrier Hodgson fixing a valuation range of A$150-198 million. The plaintiffs obtained valuations of much higher amounts, in the range A$497-854 million. 6 Goldman Sachs were among the counterparties to the Hedge Contracts. Bondco acquired almost all the Senior Notes, and all the entitlements under the Hedge Contracts except those of Goldman Sachs, at discounts. 7 On 3 July 2003 the directors of each NYOL Group company resolved to place the company in Voluntary Administration, and in each case Mr Mark Korda and Mr Mark Mentha, who are the fourth respondents, were appointed Administrators. They are partners in KordaMentha. Mr Korda and Mr Mentha treated the Group companies as a single commercial and economic entity, and conducted all the Administrations together. Two of the companies were conducting active operations in the mining industry, but the others had ceased active business; several of these had external creditors, but nine of them had no external creditors except for their obligations under the Deed of Cross Guarantee; the nine had various obligations within the NYOL Group under loan accounts and other transactions.

8 Austin J.'s account of events in the Voluntary Administration included: (Red 59-62 [16]-[25]) [16] On 3 July 2003 Mark Korda and Mark Mentha, the third cross-defendants, were appointed administrators of each of the companies in the NYOL Group. Mr Korda gave evidence that he formed the view after investigation that the voluntary administration was precipitated by the dispute between Bondco and the plaintiffs as to the value of the NYOL Group's assets. The administrators commissioned Ernst & Young to provide a valuation.

[17] Based on the history of the Group briefly described above, the administrators decided that for the purposes of conducting the voluntary administration, the Group should be treated as a single commercial and economic entity. They took particular account of the effect of the deed of cross-guarantee and the fact that since 1998 the Group's statutory accounts had been prepared on a consolidated basis. They decided to continue to operate the business of the Group, and Mr Mentha took charge of the business operations while Mr Korda took charge of the conduct of the statutory procedures of the administration and the assessment of creditor claims.

[18] Mr Korda gave evidence that he separated the claims of creditors into five categories. The first category was employees (approximately US$2.9 million). The second was trade creditors (approximately US$20.6 million).

[19] The third category, described by Mr Korda in his evidence as "other third party creditors" included: • the plaintiffs in respect of their claim under the terminated hedge contracts (a claim estimated by the administrators at US$56.5 million); • the holders of senior notes not acquired by Bondco, totalling approximately US$200,000; • the insurers of a company called Brandrill Ltd in respect of a property damage claim against NYOL; and • Mark Creasy, a prospector who had substantial claims arising out of the terms of sale to and occupation by NYOL of a mining tenement contiguous to the NYOL Group's mining activities. [20] The fourth category, described by Mr Korda as "Newmont Subsidiary Creditors", comprised certain Newmont Mining subsidiaries outside the NYOL Group, which claimed to be owed debts by the NYOL Group companies. Some of these claims were in respect of the supply of goods and services, but there was also the claim by Bondco by virtue of its acquisition of the senior notes and the rights of hedge counterparties. These claims totalled approximately US$437.7 million, 85% of the total indebtedness of the NYOL Group. [21] The fifth category was described by Mr Korda as "NYOL Inter-Group Creditors". This category comprised entities in the NYOL Group shown by the Group accounts to be creditors of other NYOL Group companies by virtue of transactions and loan accounts. In addition, according to Mr Korda's evidence, this category included each NYOL Group company in respect of the Inter-Company Guarantee. Mr Korda said he took the view during the administration that the deed of cross-guarantee created what he called a contingent liability of each NYOL Group company to each other NYOL Group company. [22] Shortly after the commencement of the administration, Newmont Mining Corporation's solicitor told Mr Korda that Newmont Mining intended to propose a Deed of Company Arrangement, under which employees and trade creditors of the NYOL Group would receive a distribution of 100 cents in the dollar on their admitted claims, and the third party creditors (by far the largest being the plaintiffs) would receive a distribution of approximately 40 cents in the dollar.

[23] Ernst & Young submitted their final valuation report on 19 August 2003, in which they value the NYOL Group assets at A$234-260 million.

[24] On 20 August 2003 Mr Korda and Mr Mentha finalised their report to creditors for the purposes of s 439A(4) of the Corporations Act ("the Report"). The Report summarised the history of the Group, reported on the administrators' investigation into the financial position and affairs of the Group, set out the terms of the proposal by Newmont Mining for a Deed of Company Arrangement, compared the position of creditors under that proposal with their prospective position in a liquidation, and made recommendations.

[25] Mr Korda gave evidence that at the time he dispatched the Report to creditors he believed that the deed of cross-guarantee was operative, and that consideration of the financial position of the NYOL Group, for the purpose of forming his opinion under s 439A(4)(b), should be undertaken on a Group basis rather than a company-by-company basis. 9 What is spoken of as the Newmont Deed of Company Arrangement is in fact 14 deeds, not one. The Newmont Deed of Company Arrangement as proposed comprised a Principal Deed of Company Arrangement, which was executed on 8 September 2003 by Newmont Australia Ltd and by each of the NYOL group companies. (A copy without all its schedules appears at Blue 2/312 and following). It provided for each of 13 of the NYOL group companies to execute any Secondary Deed of Company Arrangement in a form scheduled to the Principal Deed, and as an example the Secondary Deed of Company Arrangement executed by Newmont Yandal Operations Pty Ltd, again without all its schedules is at Blue 2/369. The remaining company Clynton Court Pty Ltd referred to as Adminco was given functions relating to carrying out the scheme; its position is dealt with in the Principal Deed of Company Arrangement. The Principal Deed and each Secondary Deed contain in cl.3 a condition precedent under which, with immaterial exceptions, its provisions were conditional on the execution of the Principal Deed and each Secondary Deed by each person named as a party. Nothing was effected unless everything was effected. 10 The Administrator's Report of 20 August 2003 opened with an executive summary. The Administrators referred to Deeds of Company Arrangement proposed by Newmont Mining Corporation which (as stated earlier - Austin J para [10]) controls the shareholding in that it owns all shares in Newmont Australia Ltd, in its turn the controller of all shares in NYOL Group companies. The executive summary said: (Blue 1/102) 1.3 Proposed Deed of Company Arrangement

A deed of company arrangement has been proposed by Newmont Mining Corporation ("Newmont DOCA"). Any creditor wishing to view a copy of the Newmont DOCA may do so on the KordaMentha web site or by requesting a copy from our Melbourne office. If the Yandal Group creditors vote for a resolution to execute the Newmont DOCA, a summary of the return for the Yandal Group creditors will be as follows: · employees will have continued employment or receive 100¢ in the dollar for outstanding entitlements; · trade creditors will receive 100¢ in the dollar, to be paid in September 2003; · J. Aron will receive US$22.9m, which may vary under certain circumstances; and · all other creditors (if any) will receive not less than they would have received in a liquidation on the basis that the mine assets sold for US$150million. 1.4 Other Deeds of Company Arrangement

At present we have not received any other deeds of company arrangement. However, we note that at any time prior to the Second Meetings of Creditors, any person can propose a deed of company arrangement for the creditors to consider.

Having regard to the information available to us, we have formed the opinion that it would be in the creditors' interest for the Yandal Group companies to execute the Newmont DOCA.

11 The fact that the debts of all NYOL Group companies, no matter which is the principal debtor in relation to any particular creditor, are supported by Cross Guarantees of all of them is a dominating reality of the administrations, of all the business of the Administrators, of everything in their Report and of the business which could arise at the Second Meeting of Creditors. It is this dominating reality which explains why the companies formed a group, and why the Administrators conducted all the Administrations together as one exercise and reported on the Administrations in one Report; and why they were proceeding to hold the meetings together. 12 Senior Counsel for the appellant referred to passages in the Report which described the Cross Guarantees or otherwise referred to them in terms which I understood to be a complaint that the Cross Guarantees had not been given appropriate emphasis and had not been sufficiently drawn to the attention of creditors. Counsel said that the information was "of a very skimpy kind." The most explicit passage in the Report (Blue 1/107) is the following: On 18 June 1998, each of the companies in the Yandal Group entered into a Deed of Cross Guarantee whereby each company in the Yandal Group guaranteed payment in full the debts of all others, and applied for and was granted by the Australian Securities and Investments Commission the authority to file consolidated group financial reports.

13 In relation to the business in hand, this was a full and clear statement. To my reading the Report makes altogether clear to any reader that there are Cross Guarantees and that the creditors of any Group company are creditors of all. Discussion of affairs proceeds throughout on the basis of this commonality, the financial statements presented represent consolidated positions for the Group, there is no severance or separate treatment of the positions of creditors of particular companies by reference to the assets of particular companies; and any such treatment would be completely inappropriate. The Report is coloured throughout with the assumption that the Cross Guarantees put all creditors of any Group company in the same position, and the Report makes no indication that creditors of any one company may have different interest to creditors generally; nor should it have done so. Senior Counsel for the appellants contended that the effect of the document as a whole was not to give the impression that the persons addressed were creditors of each Group company and were entitled to vote in respect of each. In my opinion the realities of liabilities of all companies under the Cross Guarantee would not have escaped the understanding of a reasonable reader; after all, these realities explained why there was a group, and why all their affairs were being dealt with together. When considering adoption of the Newmont Deed of Company Arrangement, separate discussion, consideration and decision, and separate resolutions relating to each Group company (although that might, with the wisdom of retrospection, now seem prudent) would have been exercises only in form and not in substance, as the terms of the Newmont Proposal meant that unless all the companies adopted the Deed of Company Arrangement, the Deeds would be ineffective.

14 The Administrators had, as previously stated, obtained a valuation of the NYOL Group assets at $234 million to $260 million from Ernst and Young. They said in the Report to the effect that the implied value of the mine assets under the Newmont Mining proposals was $295 million to $305 million, and that this compared favourably with the valuation range in Ernst & Young's report. Goldman Sachs has not accepted this view of the value of the mine assets, and has acted on the basis that the adoption of the Newmont Deed of Company Arrangement would not serve the interests of Goldman Sachs as well as liquidation. 15 As appears from the executive summary, some creditors fare considerably better than Goldman Sachs under the Newmont Deed of Company Arrangement. The claims of employees are entitled to statutory preference and should be regarded as fully protected no matter what course is taken. The position of trade creditors who receive 100 cents in the dollar is considerably better than the position of Goldman Sachs, whose claim greatly exceeds US$22.9 million. The adoption of the Newmont Deed of Company Arrangement had the effect that employees and trade creditors were paid in full, remaining holders of Senior Notes and Goldman Sachs were paid only out of the fund of $US22.9 million and received less than half of their claims, and BondCo and creditors related to or within the NYOL Group were not paid at all: Newmont Australia Ltd provided the funds for this to happen and for the business of NYOL Group to continue under its control. The claims of related creditors, including Bondco, were not discharged. Clynton Court became the Administration Company, and was to receive some NYOL Group assets and some cash from Newmont Australia Ltd, and was to distribute the funds to outside creditors. Clynton Court assumed the burden of such claims as continued to exist and other companies in NYOL Group were freed from their liabilities.

16 Austin J. gave the following account of the notice of the Second Meeting of Creditors: (Red 64 & 65 [29]-[31]) [29] The Report was sent to creditors with a covering circular of the same date. The heading of the circular referred to NYOL Group, identifying them as "the Companies". It said that "the second meetings of creditors" would be held (emphasis supplied), and enclosed the Report "concerning the affairs of the Companies" together with formal notice of the meetings, proxy forms and proof of debt forms.

[30] The Notice of Meeting was headed "Notice of Second Meeting of Creditors of Companies under Administration" (emphasis supplied), the names of the 14 companies in the NYOL Group were set out, which were defined the purposes of the notice as "the Companies". Notice was given of "the second meetings of creditors of the Companies" (emphasis supplied). Under the heading "Agenda", the Notice said: "1. The purpose of the meetings is: (a) to review the report of the Administrators in connection with the business, property, affairs and financial circumstances of the Companies; and (b) for the creditors of each of the Companies to resolve: i. that the Company execute a deed of company arrangement; or ii. that the administration should end; or iii. that the Company be wound up. 2. A resolution will be considered to hold the meetings concurrently." [31] Other agenda items were then set out, relating to the administrators' remuneration and any other business. The Notice of Meeting said: "Creditors wishing to vote at the meetings, who will not be attending in person or are a company, must complete and return a Proxy Form by no later than 4 pm on the last business date prior to the meeting, by post to KordaMentha."

17 Events at the Meeting are recorded in formal minutes headed "Minutes of Second Meetings of Creditors of" (followed by a list of the NYOL Group companies), (Blue 2/245-247) and in a transcript of a sound recording (Blue 1/151-177). Attendance registers were attached to the formal minutes. In any ordinary use of language only one meeting took place. After referring to some formal matters the Minute records: (Blue 2/244) In the absence of any objection from any creditor, the Chairman advised that he intended to hold the fourteen meetings of the Companies in the Yandal Group concurrently and to allow observers to be present at the meetings. The Chairman noted that formal resolutions would be put later in the meeting approving the concurrent holding of the meetings and the attendance of observers. 18 The Minute deals with business relating to proposed Deeds of Company Arrangement in the course of which there were references to two further proposals for Deeds of Company Arrangement received from Mr Mark Creasy, a creditor, and from J. Aron and Company the first of the appellants. Mr Marc Ryckmans, a solicitor who represented Goldman Sachs, said among other things that he believed that the Meeting should be adjourned so that all creditors would have an opportunity to consider these Deeds of Company Arrangement. This passage of the Minute concludes: (Blue 2/245) In response to a question from a creditor as to the structure of the vote to be taken, the Chairman determined that the voting would be by poll in respect of the adjournment and any resolution to accept a DOCA and that those polls would be carried out using the voting slips which were provided to creditors at the meetings.

19 The Minute records: (Blue 2/246) The Chairman then put the following resolution to the meetings:

"That the second meetings of the creditors of the companies in the Yandal Group be adjourned to 22 September 2003 or such further period as the Administrators determine, but not longer than sixty (60) days from this date." The Chairman asked for a proposer for the motion.

PROPOSED: MARC RYCKMANS (representing J. Aron & Company) SECONDED: MARK CREASY (Creditor) A poll was conducted and after a short break, the Chairman announced that the resolution had been lost.

The Chairman advised the meetings that a vote on the DOCAs would occur. The DOCAs would be voted on in turn. Slight amendments were made to the initial proposed wording of the resolution.

The Chairman put the following resolution to the meetings:

"That each of the Yandal Group companies in administration execute the Newmont Deed of Company Arrangement which reflects the proposed Newmont Deed made available on the KordaMentha web site as amended on 29 August 2003 and which was outlined in the Second Creditors' Report dated 20 August 2003 pursuant to section 439A(4)(c) of the Corporations Act and Mark Korda and Mark Mentha be appointed Administrators of the Newmont Deed of Company Arrangement." MOVED: DAVID FALEY, Creditor (Yandal Bond Company) SECONDED: ADAM HISCOCK, Creditor (Hiscock Enterprises Pty Ltd) A poll was conducted and after the results were determined, the Chairman announced that the resolution had been passed.

Given the results of the poll, the Goldman Sachs DOCA and the Creasy DOCA were not voted on at the request of their respective representatives at the meeting.

Other Resolutions The Chairman put the following resolution to the meetings: "That the creditors of the companies in the Yandal Group reflected in Appendix A of the Report by Administrators to creditors of the Yandal Group of Companies which was distributed to all Yandal Group creditors prior to this meeting and copies of which is available to all parties in the meeting, consent to persons other than creditors of that company being present at their meeting and that the meetings of the companies in the Yandal Group outlined by the Chairman be held concurrently." MOVED: PETER BOWLER, Creditor (Bowler Enterprises Pty Ltd) SECONDED: LIZA CARPENE, Employee The Chairman declared the resolution passed. 20 There was no poll on the resolution about holding the meetings concurrently. The decision to hold 14 meetings concurrently appears from the Chairman's statement early in the Meeting that he intended to hold the 14 meetings concurrently and that a formal resolution would be put later approving the concurrent holding of the meetings, and from the passage late in the Meeting, after the passage of the resolution relating to executing the Newmont Deed of Company Arrangement, of the resolution expressing consent to the meetings' being held concurrently. There is no record of opposition to or dissension from this decision at any stage of the Meeting. That decision extended to all business recorded in the Minutes, including the passage of the resolution that each company execute the Newmont Deed of Company Arrangement. A further resolution relating to administration expenses is also recorded as having been passed. 21 The claims and cross-claims and the issues in proceedings 2407 of 2004 in the Equity Division are complex. Austin J. made orders for separate determination of eight questions, and the present appeal is an appeal from his decision on the first of these questions: (Red 53 [2])

[2] Question 1 is in the following terms: "1. At the second meeting of creditors held on 29 August 2003 under s 439A of the Corporations Act, did the creditors of each of the following NYOL Group companies ('Companies') pass resolutions pursuant to s 439C that each of the Companies execute deeds of company arrangement: Clynton Court Pty Ltd ('Clynton') Quotidian No.117 Pty Ltd Australian Metals Corporation Pty Ltd Great Central Holdings Pty Ltd Great Central Investments Pty Ltd Great Central Mines Pty Ltd Matlock Castellano Pty Ltd Matlock Mining Pty Ltd Newmont Wiluna Metals Pty Ltd?"

His Honour answered this question "Yes" and did not embark on determination of seven further questions.

22 At the time when they went into Voluntary Administration and at the time of the Second Meeting of Creditors these nine companies were no longer operating businesses, and they had no external creditors or liabilities at all except liabilities under the Deed of Cross Guarantee. With one exception, these companies appear, in the listing of their creditors in the first spreadsheet, to have had significant debts to related companies, the exception being Newmont Wiluna Metals Pty Ltd; see (Blue 3/552); apart from debts which with fair certainty are contingent liabilities to other Group companies relating to Cross Guarantees, no debts of Newmont Wiluna Metals Pty Ltd are recorded. For these nine companies, the only creditor or person representing a creditor in attendance at the Meeting on 29 August 2003 was Mr Korda who as Administrator represented each such company as a Cross Guarantee contingent creditor of each other. Before the Meeting Mr Korda caused to be produced an elaborate fabric of proxies by which he as Administrator appointed himself as proxy on behalf of each of those companies. The Attendance Registers for those nine companies do not show any other creditor apart from Mr Korda in attendance. Mr Korda did not cast any votes on behalf of any of those companies. 23 In concept it was possible and in retrospect it might have been prudent for Mr Korda to adopt a procedure in which, with or without first taking a vote on any resolution in general terms to establish a view favourable to adopting the Newmont Deed of Company Arrangement, he successively declared open, one by one, a Second Meeting of Creditors for each of the 14 NYOL Group companies, and put a resolution for the adoption of the Deed of Company Arrangement to creditors in each case. He appears to have proceeded on the view, and conducted affairs on the basis that the resolution which was passed operated as a resolution of the creditors of each and all the NYOL Group companies. 24 I gather into four groups the principal grounds upon which it was contended that the events which did take place did not produce the effect that each company had resolved in favour of executing the relevant Deeds of Company Arrangement: 1. Group companies were not creditors of other Group companies, and were not made so by the Cross Guarantees; 2. Several reasons were referred to in support of contentions that even if there were, formal steps required for them to be eligible to vote had not been taken. These related to Proofs of Debt, Appointment of Proxy Forms, and to just estimates of value; 3. In fact no meeting of the creditors of each company was conducted and the resolution was not passed by the creditors of each company; 4. In relation to the nine companies referred to in question one, no creditor voted at all, as Mr Korda did not cast any of the votes which the proxies on behalf of Group companies authorised him to cast. 25 It was contended that the Notice of Meeting and its references to the Proxy Form and to the Proof of Debt Form were all appropriate to a creditor voting at the Meeting only in respect of the NYOL Group company which was primarily indebted to it; and that the Attendance Registers, Voting Slips and a statement made at the Meeting by Mr Scoullar, an employee of the Administrators' firm, also show that external creditors voted only in respect of their respective principal debtors.

26 In my opinion the persons who are creditors for the purposes of a meeting of creditors in a Voluntary Administration under s.439A of the Corporations Act are the persons who have debts or claims provable in a winding up. Section 553(1) of the Corporations Act provides: 553(1) [Debts admissible to proof] Subject to this Division, in every winding up, all debts payable by, and all claims against, the company (present or future, certain or contingent, ascertained or sounding only in damages), being debts or claims the circumstances giving rise to which occurred before the relevant date, are admissible to proof against the company. 27 In a written submission on appeal on behalf of Goldman Sachs it was contended that external creditors should not have been treated as creditors of each company in the NYOL Group because there were no debts to which the Deed of Cross Guarantee was applicable at any relevant time. The terms of the Deed of Cross Guarantee which create guarantee liability are (BLUE 3/407): 3.1 Each Group Company covenants with the Trustee for the benefit of each Creditor that the Group Company guarantees to each Creditor payment in full of any Debt in accordance with this Deed of Cross Guarantee.

3.2 Each Group Company agrees with the Trustee that this Deed of Cross Guarantee becomes enforceable in respect of the Debt of a Group Company ("the Group Company"): (a) upon the winding up of the Group Company under subsection 459A or paragraph 461(a) or (h) or (j) of the Corporations Law or as a creditors' voluntary winding up under Part 5.5 Division 3 of the Corporations Law; or (b) in any other cases - if six months after a resolution or order for the winding up of the Group Company any Debt of a Creditor of the Group Company has not been paid in full.

3.3 Subject to clause 3.4, the Trustee and each Group Company acknowledge that the Trustee (including the Alternative Trustee) holds the benefit of the covenants and commitments of each Group Company made pursuant to this Deed upon trust for each Creditor. 28 Clause 3.4 relates to an Alternative Trustee and is not presently relevant. 29 Clause 6 .1 is in the following terms: (Blue 3/412) 6.1 As a separate covenant by way of Deed Poll each Group Company agrees with each Creditor that the Group Company will guarantee to each Creditor payment of any Debt due to the Creditor from any other Group Company in accordance with this Deed of Cross Guarantee.

30 None of the events referred to in cl.3.2(a) and (b) has ever occurred so, in accordance with their terms, the agreement between each Group company and the trustee in cl.3.2 of Deed of Cross Guarantee has never become enforceable.

31 It was contended that the concluding words "in accordance with this Deed of Cross Guarantee" in cl.6.1 incorporate the provisions of cl.3.2 in the operation of cl.6.1 and defer enforceability of the covenant in cl.6.1 until enforceability arises under cl.3.2. In my opinion cl.3 and cl.6 create entirely separate obligations, in the case of cl.3 by way of a covenant with the trustee for the benefit of each creditor and in the case of cl.6 by a covenant by deed poll with each creditor, and the mechanisms in cl.3 relating to the covenant with the trustee including the agreement with the trustee in cl.3.2 have no part in the operation of cl.6.1. The two clauses are also different in their operation in that cl.3 is a present covenant while cl.6 is a covenant to take effect in the future, presumably when a creditor demands a guarantee. Clause 6 is contingent in its own way in that it is a promise about future action enforceability of which is deferred until there is a requirement for action, but cl.3.2 plays no part in its operation. The contingency in cl.6.1 is not remote or distant.

32 Obligations under the Deed of Cross Guarantee fall within the extensions to present or future and to certain or contingent debts or claims, and in view of the size of the outstanding claims against Group companies, and in particular the claims of Goldman Sachs, the contingency of winding up Group companies was not remote or distant; see Selim v. McGrath (2003) 47 ACSR 537 at 555 [68] (Barrett J). In my opinion it was appropriate for the Administrators to treat all creditors of each NYOL Group company as creditors of each other NYOL Group company, having regard to the Deed of Cross Guarantee. I would not uphold the first group of contentions. 33 I turn to the second group of contentions. The manner in which the Meeting was conducted and the resolution relating to the Deed of Company Arrangement was dealt with had the effect that, if the resolution relates to each NYOL Group company, creditors of any company who voted were treated as voting in relation to every company; including companies which had no creditors other than contingent creditors under the Deed of Cross Guarantee. Senior Counsel for Goldman Sachs contended that Such of the external creditors as voted by proxy had lodged proxy forms which referred only to the debtor principally indebted to them, and had not lodged proxy forms on the footing that they were creditors of other companies having regard to the Cross Guarantee; and hence were not eligible to vote on a resolution relating to any other company; if they had voted or had been so treated the calculation of votes in support of Deed of Company Arrangements was erroneous. 34 There are formal requirements for entitlement to vote under Regulation 5.6.23 of the Corporations Regulations 2001, relevantly .23(1) and .23(2): 5.6.23(1) A person is not entitled to vote as a creditor at a meeting of creditors unless: (a) his or her debt or claim has been admitted wholly or in part by the liquidator or administrator of a company under administration or of a Deed of Company Arrangement; or (b) he or she has lodged, with the chairperson of the meeting or with the person named in the notice convening the meeting as the person who may receive particulars of the debt or claim: (i) those particulars; or (ii) if required - a formal proof of the debt or claim. (2) A creditor must not vote in respect of: (a) an unliquidated debt; or (b) a contingent debt; or (c) an unliquidated or a contingent claim; or (d) a debt the value of which is not established; unless a just estimate of its value has been made. 35 Austin J. found that Mr Korda required a proof of debt to be lodged for the purposes of voting at any meeting (Red 83 [93]): [93] There is evidence that in the present case, the administrators required formal proofs of debt to be lodged for the purposes of voting at the meeting. There are statements requiring proofs of debt both in the Report and in the accompanying circular, which I have set out above. The documents sent to creditors included a form of formal proof of debt, Form 535. Creditors responded by completing the form and identifying the NYOL Group company that was, to use the language of Mr Korda, the "principal" debtor. There is no evidence that any external creditor of an NYOL Group company lodged a proof of debt identifying each other Group company as a debtor by virtue of the deed of cross-guarantee.

36 It was contended that since a proof was required, lodgement of particulars could not entitle a creditor to vote. It was contended that Austin J. was in error in finding that the provision of a proof relating to a creditor's principal debt together with Mr Korda's knowledge of the Cross Guarantee constituted lodgement of particulars of claims arising under a guarantee, which could entitle the external creditor to vote in respect of a claim under a guarantee. 37 The requirement for formal proofs of debts is referred to in a passage in the Administrators' Report para 13.2 (Blue 1/138). The passage also refers to proxies and is as follows: We advise that the Second Meetings of Creditors will be held at the Hyatt Regency Perth, 99 Adelaide Terrace, Perth, Western Australia on 29 August 2003 at 11.00am. Formal notice of the meeting accompanies this Report. Registration for the meeting will commence at 10.00am.

A Form 532 - Appointment of Proxy also accompanies this report. If you intend to appoint another person to act on your behalf at the meeting, or you are a corporate creditor, you are required to complete and return the Proxy form appointing your representative to KordaMentha (WA), PO Box Y3185, Perth WA 6832 or by facsimile (08) 9221 6977 no later than 4:00pm Thursday, 28 August 2003.

If you are representing a company, please ensure that your proxy is executed pursuant to Section 127 of the Corporations Act or your representative is appointed pursuant to Section 250A of the Corporations Act, otherwise you will not be entitled to vote at the meeting.

Creditors are required to have lodged proofs of debt no later than 4:00pm on Thursday, 28 August 2003, failing which they may be excluded from voting at the meeting. A Form 535, Formal Proof of Debt or Claim accompanies this Report. Proofs of Debt may be sent to KordaMentha (WA), PO Box Y3185, Perth, WA 6832 or faxed to (08) 9221 6977.

Those creditors who have already lodged a Proof of Debt are not required to lodge a further proof (unless they wish to amend their claim).

38 These requirements are also referred to in similar terms in the Circular to Creditors and Suppliers which accompanied the Report and the Notice of Meeting. The Notice of Meeting does not further refer to the requirement for proof of debt but again says "Creditors wishing to vote at the meetings, who will not be attending in person or are a company, must complete and return a Proxy Form … A form of proxy is attached." Proof of Debt forms and Appointment of Proxy forms were circulated with these documents. The Proof of Debt form (Blue 1/149) follows generally Form 535 in Schedule 2 to the Corporations Regulations, with the heading Newmont Yandal Operations Pty Ltd Group of Companies (Administrators Appointed) (See attached schedule for full list of companies)

There are some modifications but in substance the information required by Form 535 is required. The passage relating to the proof of debt opens: (Blue 1/149) To: The Administrators of ………………………………………… ( insert relevant Company name )

1. This is to state that the company was on 3 July 2003, and still is, justly and truly indebted: … 39 On a fair reading, the requirement for proofs of debt made in the Report and in the Circular to creditors and suppliers is not a requirement that each creditor lodge 14 proofs of debt, one for each Group company. The references to the Proof of Debt in the Circular are in the singular; the creditors to whom the Circular is addressed are told "... The enclosed Proof of Debt form must be completed and returned ...". When the Report, the Circular and the enclosed form are taken together (and even if the form of Proof of Debt circulated is taken on its own) the requirement made by the Administrators indicates in a clear way that the creditor is to complete the Proof of Debt form, and to insert the name of the relevant company, meaning the company which is the creditor's principal debtor, for the purpose of a meeting or meetings relating to all the Group companies, failing which, in the terms of the Report, the creditor "... may be excluded from voting at the meeting." Nothing indicates, even in an indirect way, that more than one proof of debt form is required, or that the creditor will or may be limited to voting only in respect of the company whose name is inserted as the relevant company name. No reasonable reader could understand that he might be disqualified from taking a full part in the business of the Second Meeting of Creditors or from voting in any business relating to any other companies which had guaranteed his debt if he did not complete 14 different formal proofs of debt. In the factual context, the requirement for lodgement of a proof of debt was not only a requirement that one proof of debt be lodged, but also an indication that one proof of debt would be treated as sufficient.

40 Senior Counsel contended that proxy holders had no authority to vote except in respect of the particular company named in their form of Appointment of Proxy. This contention requires consideration of the meaning a completed Appointment of Proxy form had in its factual context. The form of proxy follows generally but not exactly Form 532 in Schedule 2 to the Corporations Regulations. It bears the heading "APPOINTMENT OF PROXY" under which appears:- …. (Administrators Appointed) Insert the Company name you are a creditor/employee (please circle) of

After a space for the name and other particulars of the creditor the form says in Box B: B. Appointment of a Proxy (please complete) I/We, a creditor of the Company appoint [and there are spaces for indicating the Chairman or other proxy]

as my/our proxy, or in his/her absence …, to vote at the second meeting of creditors to be held on 29 August 2003 …. 41 As stated earlier, the whole subject of the Administration including the Second Meeting of Creditors related to the affairs of all NYOL Group of companies together. The references in the documents circulated by the Administrators to appointment of proxies continue this treatment. The statements in the Circular relating to the accompanying form of Appointment of Proxy and to the requirement to complete and return the form did not indicate that there was any need for a creditor to complete more than one form, or to complete 14 of them, or to give the names of 14 companies in one form. In the circumstances the absence of such an indication was as good as an assurance that more than one appointment was not required. On a fair reading, the Report states that one proxy form is required. The Circular also refers, in very similar terms, to the requirement to complete and return the enclosed proxy form. The Notice of Second Meeting uses similar language. The Appointment of Proxy form in the passages which I have set out above confers an undifferentiated authority to vote at the Second Meeting of Creditors. The Second Meeting of Creditors referred to the Appointment of Proxy is, when the form is taken with the accompanying documents, to be identified as the Meeting and all meetings which the accompanying documents notified were to take place. The Report and the accompanying documents deal with the companies and their affairs generally; it would be a bizarre departure to suppose that the Appointment of Proxy form had a meaning limited only to authorisation to vote with respect to one of those companies, when the accompanying documents are not so limited. If the Appointment of Proxy were read literally and in isolation, it would be an available reading that it conferred authority only to vote at a Second Meeting of Creditors of the company named at the head of the form. However the meaning of the reference to the Second Meeting of Creditors and the identification of the Meeting referred to in the document are matters on which the factual context must be looked to in order to identify the subject matter; and that context leaves no room for any doubt. No external creditor lodged more than one proof of debt, or identified companies other than its principal debtor in its form of Appointment of Proxy. Mr Korda's conduct in causing an elaborate array of proxies (on which he did not cast votes) to be prepared and lodged does not show what was indicated to or required of creditors. 42 It was submitted to the effect that there was a need, arising from the Regulations, and perhaps from other sources, for a form of Appointment of Proxy for each of the 14 companies. The requirement of Regulation 5.6.31 that a person convening a meeting should send a form of proxy with each notice of the Meeting was complied with by sending one form with each notice. The forms of Appointment of Proxy completed by creditors in the manner called for, both according to their terms and in the context of the manner in which they were called for and used, fulfilled the requirements of Regulations 5.6.28 and 5.6.29 in respect of each and all the companies. 43 I turn to the third group of contentions. In the Report, the Circular and the Notice of Second Meeting references to the proposed meetings are at most places in the plural, but not with entire consistency. The Notice of Second Meeting has a prominent heading in the singular, and references in the body of the Notice are thereafter in the plural. The terms in which the purpose of the Meeting was stated do favour the view that consideration would relate to each company separately, but they do not do so conclusively. The Agenda includes: "2. A resolution will be considered to hold the meetings concurrently." The terms of the Notice of Meeting should be read as a whole, including Agenda item 2. The events at the Meeting, and importantly the terms of the resolution proposed and voted on, clearly dealt with all the companies together. To my mind it is unremarkable that many documents can be found including proxy forms, proofs of debt, attendance sheets and spreadsheets recording voting which contain references to the position of each creditor as creditor of a particular identified company only. There was convenience in compiling records by reference to the principal debt and the principal debtor of each creditor, and there was no convenience and no particular purpose to be observed in magnifying each record so as to refer exhaustively to the consequences of the Cross Guarantees, which were an overarching reality under which the relevant events happened. In any event I am unable to see an attendance register as an indication of the intentions of the persons who cast votes. 44 The business recorded at the Meeting is shown as having taken place on the basis that all business relating to all companies was being dealt with together. The statements made by persons present at the Meeting as recorded do not at any point differentiate the position of one company from that of any other. A motion for adjournment of the Meeting, with the object of enabling fuller consideration of the Deeds of Company Arrangement, was proposed by the solicitor who represented Goldman Sachs and by Mr Creasy, and this motion was moved, phrased, discussed and voted on in general terms on the basis that one resolution would effect an adjournment of all Second Meetings of Creditors. There was no indication at any point that any person present objected to the manner in which business was conducted. There is no indication that any person questioned the entitlement of anyone in attendance to participate in all the business irrespective of whether the person was or represented a creditor of one company only and not of all. There is no indication of any objection to or debate on the terms of the forms of Proof of Debt, or of the Appointments of Proxies, and no indication of any suggestion that there was any deficiency with respect to general participation in the Meeting and voting being treated as appropriate. The transcript of events of the Meeting bears out these conclusions. 45 The terms of the resolution to execute the Newmont Deed of Company Arrangement make it clear that the resolution related to execution by each one of the NYOL Group companies of the Deed or Deeds relevant to it. All meetings of creditors were conflated into one meeting and all resolutions for execution of Deeds of Company Arrangement were conflated into one resolution; the terms of the resolution make this clear and cannot be allocated to any one Group company in particular. I see no room for misunderstanding the resolution, either from the point of view of a person such as myself reading the resolution after it was passed, or from the point of view of a creditor in attendance at the Meeting who considered and interpreted the events which were taking place there on a reasonable basis. While I see no basis upon which the terms of the resolution themselves could be misunderstood, there were circumstances of the Meeting which enhanced the basis for understanding the resolution. 46 In my opinion an objective view of the events shows that all persons present at the Meeting understood and behaved on the basis that it was appropriate to consider all business, including the resolutions for execution of the Newmont Deed Of Company Arrangement, together, and that this was appropriate and effectual. In these respects the events at the Meeting fulfilled expectations which would reasonably have been created by the terms of the Notice of the Second Meeting including Agenda item 2. It also fulfilled the indications in the Report and the Circular about the business to be considered at the Meeting. Overshadowing all other considerations is the web of liabilities under the Deed of Cross Guarantee, which for all purposes relevant to the Meeting placed all creditors in the same relationship of creditor and debtor with all companies; and the conditionality of the proposed Newmont Deed of Company Arrangement on the adoption of all of them. These considerations meant that separate treatment of business relating to each company could serve only formal purposes. 47 Senior Counsel for the appellants said to the effect that it could not be disputed that persons who were present at the Meeting of the 14 companies at which a vote was taken at the same time in relation to each of the 14 companies could indicate that they voted in respect of one particular company and their vote should be dealt with as a vote in respect of that particular company; and so for whichever particular company they indicated they were voting (t.13-13). Counsel contended that it was a question of fact what they were indicating about their intention. 48 The learned Trial Judge identified indications favouring the view that external creditors voted only in respect of their principal debtors: (Red 91 [117]). These indications are: [117] The indications favouring the view that the external creditors voted only in respect of their principal debtors are as follows: (P1) the Notice of Meeting identified, as a purpose of the meetings, "for the creditors of each of the Companies to resolve that the Company execute a deed of company arrangement…"; (P2) the enclosed proxy form required the creditor to identify "the Company name you are a creditor of"; (P3) the enclosed form of proof of debt made provision for the creditors to insert the "relevant Company name"; (P4) the attendance register for the meeting was divided into 14 parts, each headed by the name of an NYOL Group company, and the creditor signed as a creditor of only the principal debtor; (P5) the voting slip provided for voters to identify "the Company name you are a creditor of", and that was the instrument upon which they expressed their votes; (P6) Mr Scoullar's statement at the meeting drew the attention of those present to the top right corner of the voting slip where they would see "the name for whom you are voting"; (P7) neither Mr Korda nor anyone else told those present at the meeting that their votes would be taken to be votes in respect of all 14 companies, although it was made clear that there were 14 concurrent meetings; (P8) in his e-mail dated 2 September 2003 Mr Zohar, a KordaMentha partner who was present at the meeting, expressed concern at the voting procedure, and it was obviously not evident to him that the external creditors had voted in respect of all 14 companies.

49 The Trial Judge then set out (Red 92-93 [118]) 14 matters which he regarded as indications favouring the view that the external creditors voted in respect of each of the 14 concurrent meetings. Mr Korda's conduct and his understandings appear as elements in several of those indications. In my view the matter can be put more simply by saying that, upon the terms and meaning of the resolution and on an objective view of what was indicated by the behaviour of those casting votes, they cast their votes in respect of each of the companies to which the terms of the resolution referred. 50 Austin J. was of the view that (Red 97 [128]) "Evidence of the subjective belief and understanding of creditors in filling out and lodging their voting slips seems to be relevant to my decision. The only evidence of subjective intention is the evidence given by Mr Ryckmans on behalf of [Goldman Sachs]." The Trial Judge reviewed the evidence of Mr Ryckmans in which he said to the effect that it was his belief on 29 August 2003 that he was attending 14 concurrent meetings, and that he was attending as proxy only the Meeting of NYOL. After careful review Austin J. found (Red 100 [135]): [135] It seems to me, taking into account all of these matters, that Mr Ryckmans' evidence that at the time of the meeting, he understood that he was voting only in the meeting of NYOL, was, on the balance of probabilities, a reconstruction made after he read Mr Korda's affidavit of 8 September 2003 rather than an accurate recollection of his understanding at the time of the meeting. 51 In my opinion the conduct of persons at the Meeting and the effect of their conduct is to be understood on an objective view of their conduct, and not according to their subjective narrations of their understanding and intentions. On that basis Mr Ryckmans, and every other person who cast the vote, should be understood as having intended to cast a vote upon the resolution according to its terms, and its terms showed that it related to all the companies. 52 Senior Counsel for the appellants contended that employees, who were fully protected by their priority entitlements, might well have decided to vote for the company which was primarily obligated to them to execute the Deed, while being indifferent, and not voting in respect of other companies. In my view that would be an irrational position to hold, because of the interdependence of the proposed Deeds, and it is very improbable that any employee acted on such a view. There is no room for a view that any creditor had a positive interest in casting different votes in relation to different companies. 53 The voting slips used when polls were taken are illustrated by one of the documents in Exhibit A3 as follows: (Blue 3/613) Voting Slip Resolution No: 1

Insert the company name you are a creditor of Newmont Yandal Operations P/L (refer to handout for full listing of companies)

FOR / ABSTAIN / AGAINST (Please Circle) 54 The transcript of the Meeting records (Blue 1/169) a statement by Mr Scoullar which occurred during the course of discussion on the motion for adjournment. Mr Scoullar was a staff member of KordaMentha, and he had been introduced to the Meeting at an earlier stage when Mr Mentha said: (Blue 1/154) "Our financial evaluation team managed by David Scoullar who is here today has basically managed the finance team and dealt with the parties that are putting forward deeds of company arrangement at today's meeting …". There are also references to KordaMentha's staff tallying the votes and it seems that Mr Scoullar took part in this. He is recorded as saying: (Blue 1/169) MR SCOULLAR: Excuse me, just while Mark is conversing, just as a procedural issue, if you could have a look at your voting slip you will see that the name for whom you are voting appears in the top right corner of the first voting slip. Can you ensure that before you rip off the first voting slip that you ensure you put the name for whom you are voting on subsequent slips as well. Thank you - as well as the details for the amount, etcetera, in the blank sections of the form. 55 Senior Counsel's observation on this was (t.27-29): … What they were being told was that they put the name for whom they're voting in the top right hand corner, that's what was said. Now that's what people did. And … the proposition that the voting was to be in relation to companies other than the one, after what Mr Scoullar said, does seem a little odd, … . 56 Mr Scoullar's statement was made in relation to voting on the adjournment motion, and it is in my view simply impossible that anyone could have supposed, on the basis of what Mr Scoullar said, or of the form of voting slip to which he referred, that he was to vote only in relation to an adjournment in respect of the company named in the voting slip; there was either to be an adjournment of the Meeting or there was not, and no one could rationally have thought otherwise. It is not in my mind a practical possibility that Mr Scoullar's statement may have led anyone, later in the Meeting on a poll on another resolution, to think that the vote he cast would relate only to one company. That would not be in accordance with the terms of the resolution, or with what many other circumstances indicated; and on a fair understanding it would not be in accordance with what Mr Scoullar had said before the earlier poll either. It is not possible, in terms of reasonable behaviour, that a person who knew of the Deed of Cross Guarantee would feel that the voting slip required him to write the names of all 14 companies on a voting slip if his vote on the resolution was to support entry into the Deed of Company Arrangement by all 14 companies. KordaMentha's staff including Mr Scoullar had a need to keep track of who was voting and who was entitled to vote, and to do that by reference to principal creditors and principal debtors; this must have been obvious to all at the Meeting and could do nothing to cancel out understanding of the obligations under the Cross Guarantees, interests of creditors in each company arising under them, and of the terms of the resolution. 57 Mr Oren Zohar is a partner in KordaMentha. He was present at the Meeting and took part in the audit of the voting which Mr Korda said, at the Meeting, would take place. While doing this he sent an e-mail message on Tuesday 2 September 2003 to Ms Leanne Chesser, who took part in the same task. Copies of the e-mail were directed to other persons including Mr Korda, who accepted in evidence that, in accordance with his practice, he would have read it. Mr Zohar referred to Mr Korda as Chairman having abstained from casting votes, and the effect this produced in relation to several subsidiary companies in that Group that did not have external trade creditors; Mr Zohar commented "… no creditor would be taken to have voted for or against the respective resolutions if these companies are looked at on a stand-alone basis." Mr Zohar went on to say: (Blue 3/611) Can you please call me tomorrow morning to discuss this Leanne. At the meeting Mark stated "Where the chairman has been specifically required to vote in a certain way, I'll vote that way. To the extent it is open we will abstain." I believe Mark was refering to proxies from external trade creditors - if you/Mark/Nick Stretch feel that votes ought to have been cast in each of the individual subsidiary companies where there were no trade creditors, then one could argue that this was Mark's intent and I will need to adjust the voting schedule accordingly. 58 The adjustment of which Mr Zohar spoke was not made: at no stage at or after the Meeting were votes counted on the basis that Mr Korda ought to have cast votes for any resolution under proxies for other companies in relation to companies which had no trade creditors. In cross-examination Mr Korda confirmed (Black 52Y-53B) that he did not cast any votes in the respect of subsidiary companies which had no external creditors, for which he had voting rights under proxies. There is no indication in the findings or in evidence that Mr Korda did cast such votes, or that any action was taken on the basis that he did. The remaining passages of Mr Zohar's message show that Mr Zohar had concerns about consequences of Mr Korda's not having cast any such votes, and about the possibility that it might be suggested that no vote had been cast in such companies. There is however no indication that Mr Zohar's concern led to any attribution of a vote to Mr Korda which did not conform with actual events at the Meeting. Mr Zohar's e-mail message is consistent with the view that Mr Zohar did not understand, or did not fully understand the basis on which Mr Korda had acted at the Meeting in the respect that Mr Korda treated all votes cast on each resolution in the same way without regard to which company was the principal debtor of the person casting a vote. It was Mr Zohar's concern to consider possible technicalities on which he might be caught out, and it was not his concern to record events at the Meeting in his e-mail message. In my opinion Mr Zohar's message has no importance for the resolution of issues in the litigation.

59 Austin J. addressed the question whether there had in fact been a just estimate of the value of claims of creditors based on the Cross Guarantee, which were contingent claims, and did so on the assumption that if any contingent claim could not be quantified by a just estimate, the contingent creditor should not have been permitted to vote. Upon the question whether Mr Korda in fact made estimates of the values of external creditors' claims under the Deed of Cross Guarantee before voting took place at the Meeting, Austin J. found that Mr Korda had done so. The finding was based on express evidence by Mr Korda that he did so, and that he valued these claims at their full amounts. Austin J. dealt with and rejected the contention that Mr Korda's decision to admit NYOL Group companies to vote in respect of their indemnity entitlements against other NYOL Group companies only for the nominal amount of $1 showed that no effort or inquiry, however summary in nature, had in fact been made by Mr Korda to estimate the external creditors' claims. In Austin J.'s finding it was not implausible that Mr Korda had reached these conclusions; in my opinion there is, as his Honour found, nothing implausible about Mr Korda's account of his reasoning and no real anomaly. 60 On appeal it was contended that two issues arose: (a) whether Austin J. was correct in finding that Mr Korda made a just estimate in assessing the contingent debts of external creditors at the full amount of those debts; (b) whether Mr Korda in reality had made an estimate as contemplated by the Regulation.

61 Submissions on the first issue were based on an interpretation of the Deed of Cross Guarantee which I have found to be wrong; that is, the submission was based on the view that cl.6.1 takes effect only in accordance with provisions of cl.3.1 which have not been fulfilled. In my opinion this is not a correct reading of the Deed of Cross Guarantee. 62 On the second issue the appellants referred to a number of circumstances which were said to show that it was an error to accept Mr Korda's evidence that he had in fact made an estimate. The Trial Judge's finding was based on acceptation of Mr Korda's evidence about his thought processes. It is true as contended that Mr Korda did not establish in a precise way what had taken place, did not show the date of making the estimate, did not sit down with his staff to do so, had no working papers or supporting documents and did not explain the reasoning by which he estimated the creditors' contingent claims at the full amount of the claim as admitted.

63 In my opinion the factual case supporting Mr Korda's evidence that he had made estimates was very strong; his behaviour in conducting the Meeting could not be understood unless he had done so. While other conclusions may be available, an estimate attributing the whole amount of the contingent claim to the contingent liability of each indemnifying company is a reasonably available view and I see no difficulty in accepting that Mr Korda made it. It is simply the true position that, if the contingencies to which cl.6.1 were subject were fulfilled, each guarantee company would be liable to each external creditor for the whole amount. No error has been shown in Austin J.'s decision with respect to the just estimate. 64 In my opinion the Trial Judge's findings correctly disposed of the third group of contentions. 65 Senior Counsel for Goldman Sachs said to the effect that there was a question as to what people casting votes in fact voted for, and that the decision to hold meetings concurrently did not mean that a person casting a vote on the resolution for the Newmont Deed did so in relation to each of the companies. 66 In my opinion this question is answered completely by addressing the terms of the resolution itself, as those terms state clearly that the resolution related to each, and also to all, of the NYOL Group companies. If there were any room for doubt, the answer is reinforced by the need for a decision for each company to execute the Deed if any decision were to be effective; the interdependence of the Deeds in Newmont's proposal meant that support for the resolution in the case of one company could achieve nothing in the absence of support in the case of all others. 67 It was contended that for the nine companies in Question 1 no-one voted in support of the resolution. This observation was supported by reference to the first spreadsheet, produced in evidence by Mr Korda, which records votes cast at the Meeting. Counsel contended that the votes which were cast were only cast in relation to particular companies. In the first spreadsheet the creditors named in relation to each company are the members of the NYOL Group, for which Mr Korda held proxies but cast no vote. External creditors are named in the first spreadsheet only at the entry relating to the company which is their principal debtor. These entries in the first schedule do not record the positions of external creditors as creditors of each company having regard to the Cross Guarantees. The spreadsheet establishes only that, in respect of these companies, there was no external creditor with a claim otherwise than under the Cross Guarantee. The first spreadsheet does not bear out counsel's observation. The Attendance Register and the spreadsheet cannot and do not indicate the understandings or the intentions of creditors with respect to what they were doing when voting for the resolution. 68 For all the companies the persons entitled to vote and the values of their votes were the same. In these circumstances, and given the terms of the resolution, I do not regard it as rational to attribute to any of them an intention that the vote cast should relate only to the affairs of one particular company. The terms of the resolution upon which the vote was cast do not admit of casting votes distributively in relation to particular or identifiable companies. Senior Counsel for Goldman Sachs attempted to illustrate situations in which a creditor might take different positions upon the business of the Meeting in relation to different companies, but was unable to produce any credible illustrations. At the highest, his illustrations suggested that there might be employees or other creditors who favoured the adoption of the resolution for some companies, but were indifferent as to others. Attributing rationality to the voter, I am unable to see how this would move a voter who wished the Newmont Deed of Company Arrangement to be adopted for one company not to vote in support of its adoption for all companies.

69 The Trial Judge did no more than attribute rationality to creditors in concluding (Red 94 [120]) "Significantly for present purposes, it was a single resolution purporting in its terms to apply to each of the NYOL Group companies. When, therefore, external creditors who had identified themselves in proofs of debt, proxy forms and voting slips by reference to their principal debtor, voted on a resolution in those terms, they voted on a proposition applicable to all of the 14 companies, concurrent meeting by concurrent meeting." In my opinion the learned Trial Judge did not err in his disposition of these issues. The dispositions which I have stated in my own language do not, in my understanding, differ in substance from those made by the Trial Judge. 70 Senior Counsel for Newmont Yandal Operations Pty Ltd and related companies contended that if the votes cast by proxy holders were confined to a vote in respect of the company identified by each creditor on its Proxy Form, the resolution would still have been carried in relation to each company because six creditors who were present in person voted in favour of the resolution (and their votes could not give rise to any question about the meaning of proxies); and that the votes of the creditors who voted in person would have carried the resolution in relation to each company. This is not the basis on which the Meeting was conducted or the result of the voting was determined at the Meeting or in the subsequent audit, nor is it the basis on which the Trial Judge acted. I feel that this contention may well be correct, but I do not base my decision on it. 71 In my opinion the Court of Appeal should dismiss the appeal with costs.

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