Wealthsure Pty Limited v Selig

Solicitor for the First Respondents: Radbone & Associates

Counsel for the Second Respondent: The Second Respondent did not appear

Counsel for the Third Respondent: The Third Respondent did not appear

Counsel for the Fourth Respondent: The Fourth Respondent did not appear

Counsel for the Fifth Respondent: The Fifth Respondent did not appear

Solicitor for the Sixth Mills Oakley Lawyers Respondent Counsel for the Seventh Respondent: The Seventh Respondent did not appear Counsel for the Eighth The Eighth Respondent did not appear Respondent

Counsel for the Ninth Respondent: The Ninth Respondent did not appear

Counsel for the Tenth Respondent: The Tenth Respondent did not appear

Counsel for the Eleventh Respondent: The Eleventh Respondent did not appear

Counsel for the Twelfth Respondent: The Twelfth Respondent did not appear

IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION SAD 97 of 2013

BETWEEN: WEALTHSURE PTY LIMITED ABN 93 097 405 108

NORTON CAPITAL PTY LIMITED (IN LIQUIDATION) ACN 086 207 169

JUDGE: BESANKO J DATE OF ORDER: 24 JUNE 2013 WHERE MADE: ADELAIDE

1. The parties be heard as to the terms of the orders to be made. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION SAD 97 of 2013

BETWEEN: WEALTHSURE PTY LIMITED ABN 93 097 405 108

NORTON CAPITAL PTY LIMITED (IN LIQUIDATION) ACN 086 207 169

JUDGE: BESANKO J DATE: 24 JUNE 2013 PLACE: ADELAIDE

Introduction 1 In proceeding number SAD 11 of 2010 Ronald Selig and Janna Selig were the plaintiffs and Wealthsure Pty Ltd ("Wealthsure") and David Bertram were the first and second defendants. There were eleven other defendants. The plaintiffs' application proceeded to trial before a judge of this Court and on 18 April 2013 the judge made various orders. One of the orders which his Honour made was that the plaintiffs have judgment against the first, second, fifth and sixth defendants in the sum of $1,760,512. By Notice of Appeal dated 9 May 2013 the first and second defendants have appealed against that order and other orders. I will refer to the parties in accordance with their status at trial, except where it is convenient to refer to them by name. 2 On 30 May 2013 the first and second defendants issued an interlocutory application in the appeal seeking, relevantly, the following orders: 1. An order nunc pro tunc giving leave to the appellants to pursue the appeal against Mr Spencer (a bankrupt), Ms Perovich (a bankrupt), Neovest Limited (In Liquidation) and Norton Capital Pty Limited (In Liquidation) limited to the prosecution of the appeal up to and including the entry of judgment on the appeal; 2. A stay pursuant to Rule 36.08 (2) of Orders 2, 8, 11 and 14 of the Orders made by this Honourable Court on 18 April 2013 as against the first and second defendants (being the appellants) until such time as the appeal by the appellants filed on 9 May 2013 ('the Appeal') is heard and determined; 3. An order pursuant to s 459G and 459J of the Corporations Act 2001 (Cth) that the statutory demand served by the plaintiffs/first respondents ('Mr & Mrs Selig') on the first defendant/first appellant ('WealthSure') dated 13 May 2013 and posted by ordinary post on or about the date be set aside, on the basis of the stay sought by WealthSure, and, or, that time for compliance with the statutory demand be extended pursuant to s 459F pending the hearing and determination of the Appeal. Consequential orders, including dispensation, to the extent necessary, in relation to compliance with the Corporations Rules, for bringing an application under s 459G of the Corporations Act. 4. An order that the Appeal by the first and second appellants be expedited to be heard at the earliest time convenient to this Honourable Court during the August 2013 sittings of the Full Court; 3 The interlocutory application came on for hearing before me on 6 June 2013. The first and second defendants appeared as did the plaintiffs. The solicitors acting for the ninth to thirteenth defendants inclusive had indicated in writing before the hearing that they did not propose to appear or be represented at the hearing. The fourth defendant on her own behalf, and allegedly on behalf of the third and sixth defendants, also advised the Court in writing before the hearing that those defendants did not intend to appear or be represented at the hearing. These defendants have lodged a cross-appeal in which they challenge orders made against them in favour of the plaintiffs. The fifth defendant, Mark Richard Norton, and the eighth defendant, Norton Capital Pty Limited (in liquidation), did not appear at or take part in the trial. The eighth defendant is a company in liquidation. The seventh defendant, Neovest Limited (in liquidation) ("Neovest"), did not appear or take part in the trial. On 5 June 2013, solicitors acting on behalf of Neovest and the liquidator of the company sought leave to appear by telephone at the hearing on 6 June 2013. I refused their application for leave to appear by telephone. The solicitors acting for Neovest and the liquidator sent written submissions to the Court dated 4 June 2013 and those submissions addressed the question of leave to proceed against the company in liquidation. In short, the liquidator of Neovest submitted that the order sought in paragraph 1 of the interlocutory application should not be made because there was no justification for disturbing the statutory regime in respect of proving debts against a company which is in the process of being wound up. 4 On 6 June 2013 I adjourned the hearing of the first and second defendants' interlocutory application to 13 June 2013 for reasons which it is not necessary to relate. 5 I heard the first and second defendants' interlocutory application on 13 June 2013. Counsel appeared for the first defendant and he told me that the second defendant had filed for bankruptcy and that a bankruptcy trustee had apparently been appointed. He told me that, in those circumstances, he did not have instructions to appear for the second defendant. At that point then the interlocutory application was pursued only by the first defendant which for convenience, I will refer to as Wealthsure. Counsel appeared for the plaintiffs, and Neovest was represented. Neovest sought to be heard only in relation to the order sought in paragraph 1 of the interlocutory application. 6 The argument before me on 13 June 2013 centred on Wealthsure's application for a stay of certain orders pursuant to r 36.08(2) of the Federal Court Rules 2011. The orders which Wealthsure sought to have stayed were as follows: 2. The plaintiffs have judgment against the first, second, fifth and sixth defendants in the sum of $1,76,512. … 8. The first and second defendants pay the plaintiffs' costs of the plaintiffs' proceeding against the first and second defendants. … 11. The plaintiffs and the first and second defendants pay the ninth to thirteenth defendants' costs. … 14. The first and second defendants pay the third to eighth defendants' costs (if any) in relation to the first and second defendants' claims against those defendants. 7 As far as orders 11 and 14 are concerned, they were made because Wealthsure and Mr Bertram made claims against the third to eighth defendants which were refused and dismissed. They also made a claim against the ninth to thirteenth defendants which was dismissed. As far as order 8 is concerned, the plaintiffs have made an application to the trial judge that their costs be assessed on an indemnity basis. His Honour heard that application on 4 June 2013 and has reserved his decision. 8 The proceeding before the trial judge was a complex one and his Honour's reasons for judgment are 250 pages: Selig v Wealthsure Pty Ltd [2013] FCA 348.

The Application for a Stay 9 The relevant principles with respect to an application for a stay are not in doubt. I made reference to some of the principles in my recent decision in Barker v Commonwealth Bank of Australia [2012] FCA 1076.

The grounds of appeal 10 The Court must first be satisfied that the grounds of appeal are arguable. In Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685 ("Alexander v Cambridge Credit") the New South Wales Court of Appeal said (at 695): This consideration is protective of the position of a judgment creditor where it may be plain that an appeal, which does not require leave, has been lodged without any real prospect of success and simply in the hope of gaining a respite against immediate execution upon the judgment. 11 The Court of Appeal also said a court considering an application for a stay will not generally speculate about the appellant's prospects of success. 12 In Citrus Queensland Pty Ltd (ACN 110 855 359) v Sunstate Orchards Pty Ltd (ACN 095 659 733) [2008] FCA 1867 Greenwood J said that the assessment of the prospects of success of an appeal by reference to such a test reflected a low threshold of arguability (at [40]). His Honour referred to the following observation by French J (as his Honour then was) in Sevenhill Holdings Pty Ltd v Musovic [1992] FCA 372: In saying so, I accept that the very findings which underpin [it] are under challenge in an appeal which is not frivolous, that is to say, an appeal which has an arguable prospect of success. 13 The original Notice of Appeal has been overtaken by a Supplementary Notice of Appeal (Federal Court Rules 2011 Rule 36.10). The submissions on the application for a stay were made by reference to this document. 14 The Supplementary Notice of Appeal contains 21 grounds of appeal and they appear under six headings. The last two headings (grounds 15 - 21) are not relevant on the present application. They relate to Wealthsure's claims against the other defendants to the proceeding and even if those grounds succeed, that will not affect Wealthsure's liability to the plaintiffs. 15 The first four grounds of appeal appear under the heading "Failure to prove loss". In essence, Wealthsure alleges that the trial judge erred because he proceeded on the basis that the plaintiffs' case was a "no transaction" case when, at best for the plaintiffs, it was an "alternative transaction" case. There was no evidence of an alternative transaction. In addition, Wealthsure alleges that the trial judge erred in finding that the plaintiffs' investment in Neovest was worthless. 16 Grounds five to eight appear under the heading "Apportionment", and it is fair to say that these grounds, together with grounds 9, 10 and 11, were at the forefront of Wealthsure's submissions on the application for a stay. They relate to apportionment as against other wrongdoers and alleged contributory negligence on the part of the plaintiffs. 17 I will not outline the various arguments. They concern the proper construction of the proportionate liability provisions in Division 2A of Part 7.10 of the Corporations Act 2001 (Cth) and preceding provisions including ss 1041H and 1041I, and the proportionate liability provisions in Subdivision GA in Division 2 of Part 2 of the Australian Securities and Investments Commission Act 2001 (Cth) and preceding provisions. The arguments are dealt with at length in the trial judge's reasons at [995] - [1102]. His Honour reached the conclusion that only those claims under s 1041H of the Corporations Act that involve conduct by concurrent wrongdoers were apportionable. Before me submissions were made as to the effect of the "carve-out" in s 1041H(3) and that no doubt will be a matter agitated on the appeal. The matters are clearly arguable and in fact his Honour noted at one point in his reasons (at [1080]) that the weight of authority favoured the arguments of Wealthsure and Mr Bertram. 18 The next step in Wealthsure's argument is to allege that if its proportionate liability argument succeeds then, as a matter of fact, its liability should be limited to a proportion of the loss or damage of 10 - 12.5%. The trial judge considered the appropriate apportionment in case he was wrong in his construction of the proportionate liability provisions. For reasons he identified (at [1103] - [1130]) he said that had he been required to do so he would have apportioned liability between the defendants, apart from the ninth to thirteenth defendants, as to 60% to the first and second defendants (Wealthsure and Mr Bertram), as to 25% to the fifth and eighth defendants, and as to 15% to the third, fourth and sixth defendants (at [1131]). I note that there are no grounds identifying a particular error by the trial judge in his approach to the proper apportionment of liability. 19 Wealthsure also alleges that the trial judge erred in concluding that only the plaintiffs' claims in tort and contract and for a contravention of s 1041H should be reduced by 15% for contributory negligence. Wealthsure alleges that the trial judge erred, "in not finding that all claims for loss and damage by the plaintiffs against the defendants comprised 'a single apportionable claim' and all claims should be reduced by an amount up to 50% on such basis given the extent to which the plaintiffs had contributed to their own loss". 20 Grounds 9, 10 and 11 appear under the heading "Damages". The trial judge assessed the plaintiffs' damages at $1,014,680. Wealthsure alleges that of this figure the primary loss was the alleged loss of the plaintiffs' investment in Neovest of $450,000. It alleges that the balance of the award for damages was for consequential losses. I do not pause to consider whether that is a correct analysis of the trial judge's approach. The trial judge awarded compound interest at $745,832. In short, the effect of grounds 9, 10 and 11 is to allege that the trial judge erred in awarding consequential losses and that he erred in his assessment of the interest properly to be awarded to the plaintiffs. As to the question of interest, Wealthsure alleges that the trial judge erred in his assessment of the period in respect of which interest should be paid. 21 Grounds 12, 13 and 14 appear under the heading "Factual findings". They were not addressed in any detail during the submissions on the application for a stay. It is difficult to know what to make of them. Some of the challenges put forward seem to relate to earlier grounds of appeal. In the case of others it is not at all clear what Wealthsure alleges is the consequence of overturning the relevant finding. However, I would make the point that there appears to be no direct challenge to the principal conclusions of the trial judge at [848] - [966] about Wealthsure's breaches of duty and contraventions. In Wealthsure's written submissions the suggestion seemed to be that the challenge to the various factual findings related to the earlier grounds of appeal. 22 There are arguable grounds of appeal. It is not for me to take each ground of appeal and attempt any precise forecast as to its prospects of success. Nevertheless, it is to be noted that the focus of Wealthsure's submissions, and indeed of the grounds of appeal themselves, was on causation or proof of loss or damage, proportionate liability and contributory negligence and the quantum of loss and damage, including the award for what Wealthsure identifies as consequential losses. In its submissions Wealthsure referred to two written offers under the Rules of Court (Rule 25) and letters made by it to the plaintiffs, the first on 27 January 2012 and the second on 23 March 2012. These offers were said to be Rules of Court offers and Calderbank offers (Calderbank v Calderbank [1975] 3 All ER 333) and it was submitted by Wealthsure that even if on appeal it was only successful in having the award of damages reduced, if the reduction brought the award below the offers, then Wealthsure would have an entitlement to costs as against the plaintiffs. Wealthsure put before me a schedule prepared by its solicitors which set out potential outcomes of the appeal. The assumptions in the schedule relate to the following issues raised in the Supplementary Notice of Appeal: proof of loss by the plaintiffs, apportionment as between the defendants, consequential loss and contributory negligence. Those issues appear to be the key issues and the schedule is prepared on the assumption that if Wealthsure is entitled to an order for costs as a result of the Rules of Court offers or the Calderbank letters then those costs can be offset against any order for damages and costs obtained by the plaintiffs. I record the fact that the costs of Wealthsure and the plaintiffs to this point are substantial.

Other relevant matters 23 As I said in Barker v Commonwealth Bank of Australia at [21], the prima facie position is that the respondent to an application for a stay is entitled to enforce his judgment. However, as Alexander v Cambridge Credit and Powerflex Services Pty Ltd v Data Access Corporation (1996) 67 FCR 65 make clear, it is not necessary for an applicant for a stay to demonstrate that there are "special" circumstances before a stay will be granted. One circumstance which is accorded substantial weight in favour of a stay is where an appeal will be rendered nugatory if a stay is not granted: Federal Commissioner of Taxation v Myer Emporium Ltd (1986) 160 CLR 220 at 222 - 223 per Dawson J; Alexander v Cambridge Credit at 695; TCN Channel 9 Pty Ltd v Antoniadis (No 2) (1999) 48 NSWLR 381. It might be said that the absence of a stay may render an appeal nugatory because the appellant is unable to pursue the appeal or because the appellant, even if successful, will not be able to recover monies paid over in the absence of a stay. 24 The weight of authority is to the effect that the fact that an appellant may go into liquidation is not ordinarily a reason of itself to grant a stay: Cook's Construction Proprietary Limited v Stork Food Systems Australasia Pty Ltd [2008] QCA 322 at [16] - [17] per Keane JA (as his Honour then was); Citrus Queensland Pty Ltd (ACN 110 855 359) v Sunstate Orchards Pty Ltd (ACN 095 659 733) at [41] per Greenwood J. I will outline Wealthsure's financial state later in these reasons. The point to be made at this stage is that the fact that Wealthsure may go into liquidation if a stay is not granted is not the decisive consideration. As was noted in the cases to which I have referred, substantive rights can be pursued by a liquidator. 25 On the other hand, it is a significant matter if it is established that, absent a stay, monies paid by an appellant to a respondent will be, or are likely to be, irrecoverable in the event that the appeal is successful in whole or in part. I think that is established on the evidence in this case. 26 Mr Patrick John Coyle, lawyer, swore two affidavits in support of Wealthsure's interlocutory application. In his first affidavit (at paragraphs [24] to [35]), Mr Coyle outlines various circumstances bearing upon the plaintiffs' financial circumstances. I do not need to set out the details. The plaintiffs have not asserted that they do not have substantial liabilities and, in fact, in an affidavit of their solicitor, Mr John Douglas Radbone, there is a statement that the plaintiffs are prejudiced by any delay "as they continue to deal with creditors on a regular basis and do not believe that they can hold off creditors indefinitely". In addition, I note that the trial judge found that the plaintiffs have no earning capacity by personal exertion (at [308]). 27 I find that if a stay is not granted and the judgment monies are paid by Wealthsure to the plaintiffs and are later required to be repaid, there is no reasonable probability of the monies being repaid or substantially repaid. 28 It is also necessary to consider Wealthsure's financial position and the prejudice the plaintiffs may suffer if a stay is granted. In this respect, an affidavit of the chief executive officer of Wealthsure, Mr David John Newman, which was put before me is relevant. 29 Mr Newman described Wealthsure as a national, independently owned dealer and advisor group which commenced operations in June 2001. He states that Wealthsure employs 13 full or permanent part time staff. In addition, it has a network of approximately 230 authorised financial planners and about 22 authorised credit representatives in Western Australia, New South Wales, Queensland, Victoria, Australian Capital Territory, South Australia and Tasmania. Mr Newman states that in recent times Wealthsure has faced a large number of claims from clients of Wealthsure's services. He states that Wealthsure has and continues to work with those clients and regulatory authorities to deal with the claims in an orderly manner. Mr Newman states that he has been assisting Wealthsure in discussions with the Australian Securities and Investments Commission ("ASIC") about the structure and systems it has in place for its advisor network. Mr Newman states that there are a number of "challenges" to Wealthsure's business. A new business model is being introduced. He states that since his involvement with Wealthsure the company has terminated approximately 90 authorised representatives. Those terminations will result in a loss of annualised earnings to the company. Mr Newman states that since 1 July 2012 Wealthsure has paid about $679,059 in claims and legal fees of about $172,868. Mr Newman states that Wealthsure has a commitment to make additional payments from its own funds to several claimants in the next two months totalling $130,000. The payments to claimants to which he referred have been made by Wealthsure directly because the company has not been fully indemnified for all its claims by its insurers. Mr Newman also refers to the need for Wealthsure to apply capital and operating expenditure in the form of new systems and resources in order to deal with concerns of ASIC. 30 Mr Newman expresses the view that Wealthsure is a profitable business and is a going concern and he annexes to his affidavit unaudited management accounts of Wealthsure comprising a profit and loss statement and a balance sheet between July 2012 and May 2013 and as at 31 May 2013 respectively. Mr Newman expresses the view that his best estimate of the average monthly income over expenditure of Wealthsure "going forward" will be in the order of $100,000. This does not take into account additional costs that may be required as the organisation continues negotiations with ASIC for any additional unforeseen client claims. It excludes payments that may need to be made to the plaintiffs and any legal costs Wealthsure may incur to prosecute its appeal. 31 Mr Newman produces the "Creditors' Statutory Demand for Payment of Debt" dated 13 May 2013 issued by the plaintiffs and received by Wealthsure on 16 May 2013. That is the subject matter of the third order in Wealthsure's interlocutory application 32 Mr Newman states that he has been advised by his lawyers that the costs of running the appeal will be significant, "although no informed and detailed estimate of those costs has yet been undertaken". 33 Mr Newman states that Wealthsure is insured by QBE Insurance (Australia) Ltd ("QBE"). The insurance cover extends to the claim by the plaintiffs. The insurance cover is limited to $3 million for any one claim inclusive of costs and expenses. Mr Newman states he has been informed by Wealthsure's lawyers that as at May 2013 the costs and expenses were $1.35 million. Therefore, as at May 2013 the balance available under the insurance policy is in the order of $1.65 million. Mr Newman makes the point that if its appeal is unsuccessful, Wealthsure will have to meet part of the judgment from its own funds and will have to meet any order for costs in favour of the plaintiffs from its own funds. If the amount of the insurance was paid over now then Wealthsure would be required to pay the costs of the appeal from its own funds. Mr Newman makes the point that even with the benefit of its insurance, Wealthsure could not meet the judgment sum and meet any award of costs in the short term. He makes the following statements in his affidavit: 39. Further, on the basis of the matters I have set out, if a stay is not granted, and the statutory demand is not set aside or alternatively the time for compliance with it extended, there is a real risk that WealthSure will be wound up on the basis of the deemed insolvency (arising, I am informed, under a specific provision of the Corporations Act 2001) which may lead to WealthSure being unable, or its liquidator being unwilling to prosecute the appeal. 40. WealthSure wishes to obtain a stay of the Judgment and orders in relation to the statutory demand to avoid that consequence and to protect the benefit that it presently has of the appeal. 34 Ms Amanda Louise Brady, lawyer, produced on behalf of Wealthsure the insurance policy with QBE. Wealthsure submitted that QBE was not liable under the policy unless and until loss, damage or liability was "proved" and that in the circumstances of this case that meant by the judgment of the last appeal court. Counsel for Wealthsure referred to The Law of Liability Insurance (Second Edition) by the Honourable Mr D Derrington QC and Mr R Ashton, LexisNexis Australia 2005, at paragraph 8-266; Girard v Commercial Standard Insce Co (1944) 152 P 2d 509 at 513 and Alexander v Cambridge Credit Corporation Ltd at 700 - 702. Wealthsure may or may not be correct in asserting that proposition, but I do not think the determination of the point is decisive of the present application. Furthermore, although reference was made by the plaintiffs to s 562 of the Corporations Act, that section operates after a company has gone into liquidation. 35 The plaintiffs submit that Wealthsure's financial situation is parlous and that if a stay is granted there will be further diminution of the insurance monies by reason of Wealthsure's appeal costs. There is force in that submission. The plaintiffs also submit that Wealthsure's insurance was inadequate and that that is a matter to be taken into account. There was debate before me about when the insurance policy was engaged and the relevant insurance requirements in the Corporations Act and Corporations Regulations 2001 (Cth) at that time. I do not need to address these matters because I do not think whether Wealthsure had adequate insurance cover is relevant to the question of a stay. On the present application I can only deal with the position as it is. 36 I think the appeal will be or might well be rendered nugatory if the judgment monies are paid to the plaintiffs. That is a strong reason to order a stay at least insofar as payment of those monies to the plaintiffs is concerned. However, the same consideration does not apply to the payment of the monies into Court. The plaintiffs face their own risks if a stay is granted. Wealthsure's appeal costs will come out of the insurance monies. The likely amount of these costs is unknown, although it is said that they are likely to be substantial. It is not clear to me why some estimate of the costs cannot be given. Furthermore, nothing certain is known of the arrangements between Wealthsure and QBE. The plaintiffs are at risk as to these matters and as to any deterioration of Wealthsure's financial position between now and the determination of the appeal. It is difficult to know what to conclude about Mr Newman's evidence. Wealthsure has and is undergoing significant changes and its financial position is not strong. Absent the insurance it could not pay any substantial part of the judgment monies. However, I think I am entitled to take into account the insurance in ordering a payment into Court because there can be no doubt of QBE's direct financial interest in the outcome of the appeal. Even if I am wrong to take into account the insurance, I would still order payment into Court because I have to balance competing considerations and I think that the plaintiffs are entitled to some protection. 37 In all the circumstances I will only order a stay if the sum of $500,000 is paid into Court. As I understand it, arrangements can be made for it to be paid into an account which will bear interest, and that is a matter for Wealthsure to address (see, for example, Rule 2.42). Alternatively, an appropriate bank guarantee for $525,000 may provide similar protection. If a stay is granted, I would also make an order that the appeal be expedited. Neither of the beneficiaries of orders 11 and 14 of the trial judge sought to be heard on a stay of these orders. I am disposed to stay those orders.

Other orders 38 As to paragraph 3 of Wealthsure's interlocutory application, the fate of that application follows the fate of Wealthsure's stay application. 39 As to paragraph 1 of Wealthsure's interlocutory application, i.e., leave to pursue the appeal against the second, third, seventh and eighth defendants, I note that the trial judge said (at [76]): The third and fourth defendants are bankrupt. The seventh and eighth defendants are in liquidation. On 8 December 2010, leave was given, pursuant to s 58 (3) of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act), for proceedings to be commenced and continued against the third and fourth defendants up to the date of entry of the judgment. On the same day, leave was given for proceedings to be commenced and continued against the seventh defendant, Norton Capital, pursuant to s 500(2) of the Corporations Act up to the date of entry of the judgment. Again, on the same day, leave was given for proceedings to be commenced and continued against the eighth defendant, Neovest, pursuant to s 471B of the Corporations Act up to the date of judgment. 40 I think an order in terms of paragraph 1 of the interlocutory application should be made. Nothing said by Mr Cliff, who appeared on behalf of Neovest and its liquidator, or the written submissions persuaded me to the contrary.

Conclusion 41 I will hear the parties as to the terms of the orders to be made. I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko.