Australian Securities Commission v Aust-Home Investments Ltd

AUSTRALIAN SECURITIES COMMISSION v. AUST-HOME INVESTMENTS LTD and ORS
No. QG3004 of 1990
FED No. 585
Number of pages - 12
Practice and Procedure - Corporations
(1993) 11 ACSR 136, (1993) 116 ALR 523
(1993) 44 FCR 194

COURT

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
Hill J(1)

CATCHWORDS

Practice and Procedure - costs - how costs to be borne where interim receiver appointed and receivership continued by consent but no final order made - matters to be taken into account - reasonableness of applicant in commencing proceedings and reasonableness of respondent in defending - whether Court should consider the merits in determining the issue of costs.

Corporations - appointment of interim receiver - whether interim order made ex parte should provide for costs of receivers to be borne out of the assets in respect of which receivers are appointed - how costs of receivers to be borne when no final order made and application for appointed receiver dismissed.

Corporations Law: ss.1323(3)(1) and 1323(4).

Australian Securities Commission Law: ss.19, 37 and 30.

Crimes Act (Cth) 1914.

Federal Court Rules: O.62, r.3.

The South East Queensland Electricity Board v Australian Telecommunications Commission (unreported, Federal Court, 10 February 1989, Pincus J); applied.

Liddle v Kooralbyn Pty Limited (unreported, Supreme Court of Queensland, 9 October 1987, Ryan J); applied.

R v Gold Coast City Council; Ex parte Raysun Pty Ltd (1971) QWN 13; applied.

JT Stratford and Son Ltd v Lindley (No 2) (1969) 1 WLR 1547; applied.

Lone Star Exploration NL v Corporate Affairs Commission (1988) 6 ACLC 1,108; discussed.

Trade Practices Commission v APM Investments Pty Ltd (No 2) (1983) 74 FLR 276; discussed.

Corporate Affairs Commission v Smithson (1985) 3 ACLC 230; discussed.

HEARING

BRISBANE, 23 August 1993

#DATE 26:8:1993

Counsel and Solicitors for the Applicant: PH Morrison QC and JD McKenna

instructed by B Behan of the Australian Securities Commission

Counsel and Solicitors for the
25th Respondents: RI Hanger QC and S Couper

instructed by Corney, Neuman and Turnour

Counsel and Solicitors
for the Receivers/Managers: D Smith instructed by Halletts

ORDER

THE COURT ORDERS THAT:

(1) The applicant pay or indemnify the 25th respondents for the costs of the receivership of their assets.

(2) Otherwise there be no order as to costs in respect of the 25th respondents.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

HILL J Before the Court are two applications. The first is to determine by whom the cost of proceedings brought by the Australian Securities Commission ("the Commission") against Mr and Mrs Bunt, the 25th respondents, for the appointment of a receiver under s.1323 of the Corporations Law should be borne. The second seeks to vary the orders of Northrop J on 18 March 1992 for the payment of the costs of an interim receiver appointed by his Honour to the assets of Mr and Mrs Bunt, under s.1323(3) of the Corporations Law.

It is necessary to summarise the circumstances in which the two applications have been brought.
On 24 April 1991 the Commission commenced investigation into Aust-Home Investments Ltd ("AHI"), Aust-Home Securities Pty Ltd and QGIS Finance Ltd. Subsequently investigations were commenced into a large number of corporations or individuals thought by the Commission to be concerned in the affairs of AHI or related companies. Two of the persons investigated were Mr and Mrs Bunt. Mr Bunt had been a director of AHI and Aust-Home Properties Fund (No. 1) Pty Ltd. Mrs Bunt had been a director of the latter company only.
The investigation stemmed from what can loosely be described as a negatively geared investment scheme designed to produce substantial taxation deductions for investors. The principal proponent of the scheme, and the person who apparently was its guiding mind, was a Mr Trevor Bell. The details of the scheme are not really relevant. However, the following extract from the judgment of Northrop J, given on 18 March 1992 and taken from an affidavit sworn by Mr Bell, describes the scheme sufficiently for present purposes:

"A finance company was sponsored, to lend to the members, moneys to purchase shares in a public entity; borrower required to pay interest 12 months in advance, most electing to do so on 30 June. This public entity, in turn, would invest in private companies, acquiring assets or conducting business. The public entity would share in results, proportionate to its input. Investments would include shares in the finance company, to provide its equity to borrow bank or institutional funds. The return to shareholders would be greatly enhanced by the profit made on borrowed funds, and the equity participation in the finance company was an attractive high-yield investment, to the benefit of investors, even if also being a borrower of the company. The earnings on shares purchased, derived from the overall investments participated in, was calculated to be not less than 50 per cent of the interest on the loan in the first year, increasing steadily beyond this point. And on the basis of this projection, a budget facility was established to assist members wishing to pay yearly interest, assisted by investment income and initial tax savings."

By March 1992, the Commission had examined some 18 persons pursuant to s.19 of the Australian Securities Commission Law. It had seized documents either under s.37 of that Law or under warrants under the Crimes Act (Commonwealth) 1914. It had attempted to have books produced for inspection to it under s.30 of the Australian Securities Commission Law.
Mr Behan, a solicitor with the legal division of the Queensland regional office of the Commission, was in charge of a great deal of the investigation. He formed the view, in at least March 1992, that there were no genuine loan moneys being lent to investors, so that in turn there could be no genuine investment by taxpayers in income-producing investments and, a fortiori, no deduction available to them for income tax purposes. According to Mr Behan, despite notices having been given, minimal books and returns had been produced to the Commission. He found it impossible, he said, to understand the interrelationships of the parties to the arrangements, or indeed to determine who controlled which company. It was Mr Behan's view that Mr Bell was the mastermind behind the scheme and that persons examined, including Mr and Mrs Bunt, either did not know or denied knowledge of the workings of the scheme. Mr Behan deposed to a belief that various offences might have been committed under the Corporation Law as well as breaches of fiduciary and common law duties.
On 16 March 1992 the Commission applied to the Court for orders under s.1323 of the Corporation Law that, inter alia, receivers be appointed to the assets of various corporations and individuals, including Mr and Mrs Bunt. Interlocutory relief in the form of an interim order under s.1323(3) was also sought. There were 37 named respondents to that application, although it seems that some of the respondents were, in fact, groups of individuals so that the total number of respondents was closer to 50.
Section 1323, sub-secs.(1), (3) and (4), are, so far as presently relevant, in the following terms:

"1323(1) Where:

(a) an investigation is being carried out under the ASC Law or this Law in relation to an act or omission by a person, being an act or omission that constitutes or may constitute a contravention of this Law;

(b) a prosecution has been begun against a person for a contravention of this Law; or

(c) a civil proceeding has been begun against a person under this Law; and the Court considers it necessary or desirable to do so for the purpose of protecting the interests of a person (in this section called an 'aggrieved person') to whom the person referred to in paragraph (a), (b) or (c), as the case may be, (in this section called the 'relevant person'), is liable, or may be or become liable, to pay money, whether in respect of a debt, by way of damages or compensation or otherwise, or to account for securities, futures contracts or other property, the Court may, on application by the Commission or by an aggrieved person, make one or more of the following orders: ...

(h) an order appointing:...

(ii) if the relevant person is a body corporate - a receiver or receiver and manager, having such powers as the Court orders, of the property or of part of the property of that person; ...

1323(3) Where an application is made to the Court for an order under subsection (1), the Court may, if in the opinion of the Court it is desirable to do so, before considering the application, grant an interim order, being an order of the kind applied for that is expressed to have effect pending the determination of the application.

1323(4) On an application under subsection (1), the Court shall not require the applicant or any other person, as a condition of granting an interim order under subsection (3), to give an undertaking as to damages."

The application came on for hearing before Northrop J on 17 March 1992. Initially the respondents appear to have been largely unrepresented although some, at least, had legal representation by the second day of the hearing. Northrop J announced that he would treat the case as an ex parte application for the interim orders sought, but that he would allow submissions and, if possible, evidence from any respondent desiring to make submissions or lead evidence. No evidence was in fact read for Mr and Mrs Bunt, nor were submissions made by them.
The application and supporting affidavits were voluminous. There were 12 affidavits with exhibits. The principal affidavit, that of Mr Behan, was 202 pages in length with 198 exhibits. Mr and Mrs Bunt were served with these documents at, they say, about 5.30pm on 17 March 1992. Having regard to the fact that there were two days of hearing, both of which they attended, it is clear that that service must have been on 16 March 1992 as judgment was given by Northrop J on 18 March 1992. That discrepancy is not of any significance. What is important is that none of the respondents would have had much time to obtain legal representation. Indeed Mr and Mrs Bunt say that it had been impossible for them to be represented on the first two days. They sat through the proceedings and, one might suspect, understood little of what happened.
Ultimately Northrop J delivered ex tempore reasons for judgment and made orders under s.1323(3) of the Corporations Law appointing receivers, inter alia, to the property of Mr and Mrs Bunt. In his judgment his Honour said:

"But there is ample evidence to support the view, which I form, of a tentative nature, that although the scheme might have sounded all right, there were grave defects in the way it was carried out. The worst aspect of it was that the companies concerned, which were as I said before, under the control of Mr Bell, whether for practical purposes, even though he was not a director, under s.60 of the Law he is to be treated as a director, was that there were no proper accounts kept of what was received and what was done. There were changing of the persons who were said to be directors of the companies; the changing in the registration, as it were, as to who would be the owners of the various assets of the companies and the companies themselves kept changing. You have this continuing changing of the relationship between the companies. It is impossible, at this stage, to work out just what the true position is.

In all the circumstances, I have formed the view that this is a case where it is desirable that there should be interim orders made under s.1323(3) and s.1324(4) of the Companies Law, in the form of the broad outline sought in the application to maintain the existing position to enable the Commission to continue its inquiries and to protect the interests of the aggrieved persons."

The orders made by his Honour were expressed to continue until 4.00pm on 1 April 1992 or further order. They directed that the receivers so appointed, Mr East and Mr Wilde, Brisbane accountants, be entitled to receive remuneration on a time basis in accordance with the scale of charges issued by the Insolvency Practitioners Association of Australia. His Honour also directed that their remuneration "be paid from the assets of the Respondents".
On 1 April 1992 the matter came before Cooper J. On this occasion Mr and Mrs Bunt were represented. One might suspect that there was some confusion on that day, having regard to the large number of respondents, some unrepresented but many represented by different legal practitioners. Cooper J was justifiably concerned that there be a trial on the merits at the earliest date. His Honour encouraged the representatives of the various parties to have discussions on a timetable and to see if interim relief could be sorted out with a quick timetable that would protect the interests of all the parties and ensure a trial at an early date. Mr and Mrs Bunt on this and the next day were represented by counsel. Negotiations between counsel led ultimately to the making of a consent order by Cooper J. These negotiations resulted in Mr and Mrs Bunt being permitted to deal with most of their assets, save a property described as "Lot 4, Burton Lane, Samford"; they could sell their house and buy another less expensive house but had to deposit any surplus moneys into a trust account on behalf of the Commission not to be dealt with until further order.
By 19 March 1993 Cooper J was able to write that the Commission had completed its investigations into the Aust-Home Group, subject to receiving a report from the receivers and managers as to their investigation. On that date his Honour gave judgment in an application by Berona Investments Pty Ltd and Berona Holdings Pty Ltd, two of the respondents in the main proceedings, for injunctions restraining the sale by the receivers of certain property over which they had been appointed. His Honour directed the receivers not to sell the properties and listed the proceedings again on 23 April 1993 for directions as to whether the property of other respondents should be released from the operations of the orders of Northrop J.
On 23 April 1993 orders were made discharging the receivership from the assets of all respondents, that discharge being without prejudice to the receivers' lien over assets to meet the remuneration of the receivers and liabilities incurred by them. The question of the costs of the application was reserved, so far as Mr and Mrs Bunts are concerned, for subsequent argument on 23 August 1993. His Honour also directed the receivers to file accounts of the remuneration claimed by them in relation to the various respondents. That has been done and all relevant parties accept the amount of those accounts as being reasonable.
It is said from the bar table that at the hearing on 23 April 1993, Cooper J was advised that the Commission's investigation into potential civil actions had been completed and that the appointment of receivers was no longer necessary. By implication, further investigation into criminal aspects of the arrangements within the Aust-Home Group might have still been continuing, but if this were so those investigations could not, as such, necessitate the continuance of the receiverships.
Costs of interlocutory proceedings are dealt with generally in O.62 r.3 of the Federal Court Rules. The rules, however, lay down no criteria to determine how costs should be awarded. No more can, or should, I think be said than that ultimately costs in interlocutory proceedings, like costs in the main proceedings, lie in the discretion of the Court, which discretion must be exercised judicially.
For Mr and Mrs Bunt it is submitted that the application of the Commission for the appointment of a receiver under s.1323 has now been dismissed and the receivers have been discharged from all obligations but without a trial on the merits. That there has been no trial on the merits and the receivers have been discharged may be accepted. That the application of the Commission in respect of Mr and Mrs Bunt has been dismissed is, while correct, but a matter of form. It is not as if there were a contest between the parties as to whether the Commission should be permitted to withdraw its application, as against having it dismissed. All that is significant is that the order of the Court brought the proceedings to an end.
This apart, it is submitted that the Commission has chosen not to prosecute its claim and to have its claim dismissed. Colourfully, it is submitted for Mr and Mrs Bunt that the Commission has lost and that Mr and Mrs Bunt have won, so that Mr and Mrs Bunt are entitled to costs on the dismissal of the action. It is said, somewhat inaccurately, that the Commission has simply given up. The fact that the interim order was made by Northrop J and continued by consent was said to be irrelevant save that it demonstrated that there had been no real adjudication on the merits. Particularly, it was submitted, the Commission was not to be treated as a litigant in a privileged position regarding costs, but that cost orders could appropriately be made against the Commission where the Commission had been unsuccessful and the present was such a case.
For the Commission it was argued that the Court, in determining costs, should consider whether the Commission had acted reasonably in commencing the proceedings and whether the respondents to the proceedings (in this case Mr and Mrs Bunts) had acted reasonably in resisting them, taking into account the strength of the Commission's case. Reference was made to the decision of Pincus J in The South East Queensland Electricity Board v Australian Telecommunications Commission (unreported, 10 February 1989) as indicative of the matters to be considered by the Court. Reasonableness could, it was submitted, be inferred from the fact that Northrop J had in fact made an interim order under s.1323(3). The Commission was, it was said, acting in the performance of a public duty to protect aggrieved persons and it was said when acting in such a role the Commission should not be required to pay costs. Finally, the submissions for the Commission sought to draw support from s.1323(4) of the Corporations Law, which prevents an undertaking for damages being required as a condition of the grant of an interim order, as somehow recognising that the Commission should not be required to pay costs. This last argument involves a non sequitur and need not be considered further.
At the outset of the proceedings before me, counsel for both parties "formally" read a large number of affidavits, including some with exhibits, which were before Northrop J at the time his Honour made the original orders appointing receivers. In reading these affidavits, both counsel were at pains to emphasise to me that there was no need for me to actually read them. Indeed counsel for Mr and Mrs Bunt made no reference at all to the large volume of evidence tendered on their behalf and quite scant reference only was made by counsel for the Commission who pressed upon me what was said to be a summary of evidence before Northrop J which was based upon affidavit material, not all of which had been read in evidence before me.

Presumably I was to be turned loose on this large volume of material without guidance and should deal with it as best I could. I find this course forensically indefensible.
The relevance of this material must, however, be considered. I should say that both parties recoiled from submitting that I should, in the guise of determining how costs should be borne as between the parties, actually decide the merits of the original application. It should be noted that no witness was cross-examined and that a trial on the merits would undoubtedly have required me to form some view as to the credit of Mr and Mrs Bunt. It can not, I think, be accepted that because Cooper J directed that affidavit evidence be adduced on the question of costs, his Honour contemplated that that evidence would involve contesting the merits of the initial application.
In the SEQEB case, proceedings had been instituted under the Administrative Decisions (Judicial Review) Act 1977 challenging the refusal of the applicant's request that it be authorised to maintain an existing telephone system. Ultimately those proceedings were settled but for the question of costs. Both parties in the case contended that the Court should not attempt to predict the likely outcome of the litigation, a contention which appears to have been accepted by his Honour. Pincus J was of the view that the Court could dispose of the question of costs at the request of the parties without requiring a trial to determine who would have won, although his Honour did observe that:

"...in some cases where the result of litigation has become academic, the Court may not be able rationally to decide the issue of costs without attempting some such prediction."

The matters ultimately taken into account by his Honour were the reasonableness of the applicant in commencing the proceedings and the reasonableness of the respondent in defending them. However, his Honour also considered the strength of the applicant's case, expressing the view that the applicant had: "a fairly strong case - one more promising than that of the respondent." The reasonableness of commencing the proceedings (and defending them) were matters also regarded as relevant in Liddle v Kooralbyn Pty Limited (unreported, Supreme Court of Queensland, 9 October 1987 per Ryan J).
In R v Gold Coast City Council; Ex parte Raysun Pty Ltd (1971) QWN 13 an order nisi had been granted to show cause why a writ of mandamus should not issue to compel a council to determine an application before it. After the order nisi had been obtained the council considered the application and granted it. The full court held that it was not necessary to determine the merits of the matter as a condition precedent to an order for costs. It was, however, relevant that the prosecutor had reasonable grounds for complaint and in the circumstances the prosecutor was granted costs to the time the council granted the application.
Reference may also be made to the decision of Master White in Austcorp Finance and Leasing Pty Ltd v Thomas, (unreported, Supreme Court of Queensland, 23 August 1991) and the decision of the Court of Appeal in J.T. Stratford and Son Ltd v Lindley (No. 2) (1969) 1 WLR 1547.
Stratford was a case where an interlocutory injunction had been granted. The interlocutory proceedings were, however, fought through until the House of Lords. Thereafter the proceedings went to sleep and never came to trial. Ultimately the defendants applied to dismiss the proceedings for want of prosecution. The plaintiff countermanded with an application to discontinue the proceedings. Ultimately it was held that the plaintiff should be given leave to discontinue. As Lord Denning MR put it (at 1553):

"Nobody has lost. Nobody has won... Neither side wanted to go on. But neither side wanted to pay the costs of the other side."

Speaking rhetorically his Lordship continued (at 1553):

"So what is to be done? Is this case to go on simply about costs? I think not."

His Lordship declined to consider the merits of the dispute. Rather, he affirmed the exercise of discretion below that each side should pay its own costs. Winn LJ and Cross LJ also were of opinion that the assessment of a theoretical prospect of success was impractical and that the merits should not be gone into. Both were of the view that there should be no order as to costs.
These cases seem to me to support the following propositions being made.

(1) Where neither party desires to proceed with litigation the Court should be ready to facilitate the conclusion of the proceedings by making a cost order: Stratford and the SEQEB case.

(2) It will rarely, if ever, be appropriate, where there has been no trial on the merits, for a Court determining how the costs of the proceeding should be borne to endeavour to determine for itself the case on the merits or, as it might be put, to determine the outcome of a hypothetical trial: Stratford (supra). This will particularly be the case where a trial on the merits would involve complex factual matters where credit could be an issue.

(3) In determining the question of costs it would be appropriate, however, for the Court to determine whether the applicant acted reasonably in commencing the proceedings and whether the respondent acted reasonably in defending them (SEQEB (supra)).

(4) In a particular case it might be appropriate for the Court in its discretion to consider the conduct of a respondent prior to the commencement of the proceedings where such conduct may have precipitated the litigation: cf Sunday Times Newspaper Company Ltd v McIntosh (1933) 33 SR NSW 371.

(5) Where the proceedings terminate after interlocutory relief has been granted, the Court may take into account the fact that that interlocutory relief has been granted: cf Re Asiatic Electric Co Pty Ltd (In Liq.) and the Companies Act (1973) 1 NSWLR 603 at 606, a case which, however, depended upon the specific wording of the statute under consideration.

Where interlocutory relief has been granted, that fact carries no implication as to the ultimate merits of the case but does ordinarily suggest that the Court granting interlocutory relief has accepted or found that there is an arguable issue to be tried between the parties and that the balance of convenience favours the grant of that relief. Nothing that is said in Lone Star Exploration NL v Corporate Affairs Commission (1988) 6 ACLC 1,108 at 1,114 requires the conclusion that it is unnecessary for there to be shown to be an arguable case before there is appointed an interim receiver. The statutory test in s.1323(3) is that it be desirable that an interim receiver be appointed. It is hard to imagine that it could ever be desirable for an interim receiver to be appointed, with the attendant potential damage to a person whose property is seized, unless there was an arguable case for the grant of a final order.
In the present case it has not been submitted that the application for the appointment of a receiver was brought unreasonably by the Commission. It was brought after a lengthy investigation and in circumstances where, on one view of the matter, unsatisfactory answers had been given by Mr and Mrs Bunt in an examination conducted of them. The evidence available to the Commission and as put before Northrop J was such that his Honour formed the view that it was desirable that an interim receiver be appointed, inter alia, of the assets of Mr and Mrs Bunt.
Next, it is not insignificant that the initial appointment of a receiver was continued by consent. This does not mean, as was submitted by counsel for the Commission, that Mr and Mrs Bunt accepted the strength of the Commission's case. There are many reasons why parties consent to interlocutory orders being continued, not the least of which is the potential difficulty of raising finance to meet the costs of a court case. Thereafter, to use the language of Denning MR in Stratford, the matter went to sleep. No doubt it suited the Commission not to continue the litigation to final hearing as it was pursuing its investigations into the Aust-Home Group. It must, I think, be said, that the Commission appears not to have understood the underlying nature of the appointment of a receiver under s.1323(3). In particular it is clear, as is emphasised by Cooper J in his Honour's judgment of 19 March 1993, that the interim appointment of a receiver should only remain in force for a limited period. In fact, for whatever reason, the orders remained in force for in excess of 12 months.
However, the present is not a case, as is so colourfully put by counsel for Mr and Mrs Bunt, where Mr and Mrs Bunt have won and the Commission have lost. It is a case where the need for interim protection, or for that matter the need for the final appointment of a receiver, is no longer there. But it does not follow from this that it was unreasonable for the proceedings to have been initially commenced, or for that matter that costs should follow automatically the dismissal of the application, if that is the course taken.
Cases such as Computer Machinery Co Ltd v Drescher (1983) 3 All ER 153, cited by counsel for Mr and Mrs Bunt, have, in a case such as the present, no application. Nor do I obtain any assistance from the decision of Woodward J in Trade Practices Commission v APM Investments Pty Ltd (No. 2) (1983) 74 FLR 276. That was a case where the litigation had been made irrelevant because the takeover sought to be proscribed, under s.50 of the Trade Practices Act 1976, could not proceed as the vendor of the shares had decided not to sell them. The Commission sought leave to discontinue but as a condition offered to pay the costs of APM Investments Pty Ltd. Woodward J expressed no view on the question whether it was appropriate that the Commission pay those costs. That was simply not a matter in issue.
I accept the submissions of counsel for Mr and Mrs Bunt that in determining the question of costs no real weight should be given to the fact that the Commission stands in some position different from an ordinary litigant. If the Commission commences proceedings and loses, there is no reason why, in an appropriate case, a cost order should not be made against the Commission: cf Alford v Commissioner for Corporate Affairs (Qld) (1984) 9 ACLR 183 at 185-6, 187.
Having regard to my view that it was reasonable both for the Commission to commence the proceedings and for the respondents to defend them, that there has been no determination of the merits, that there is nothing in the evidence which ultimately displays behaviour of Mr and Mrs Bunt which should prejudice the exercise of discretion for costs, the fact that the order for interlocutory relief was continued by consent and that the parties acquiesced in the matter ultimately not being litigated for a considerable time, I am of the view that the appropriate order is that each side bear its own costs. In my view the costs should fall as they fall and accordingly I would make no order as to the costs of the proceedings.
The question of the receiver's costs is a more difficult one. Despite the fact that no notice was given in accordance with directions made by Cooper J, at the hearing before me counsel for Mr and Mrs Bunt sought leave to move that the orders as to the costs of the receivers made by Northrop J be varied so as to provide that the costs of the receiver should be borne by the Commission. That application was, of course, opposed by the Commission. I indicated that I would give leave for the application to be made but grant an adjournment of the application until 25 August 1993 to enable the Commission to make submissions. Subsequently I adjourned the application by consent to 26 August 1993.
Counsel for the Commission submits that I have no jurisdiction to vary the orders of Northrop J because they have been taken out and not appealed from. Accordingly they stand as valid and binding: Ex parte Williams (1934) 51 CLR 545; In re St Nazaire Co (1879) 12 Ch D 88; and cf Gamser v Nominal Defendant (1976) 136 CLR 145 at 147 (per Gibbs CJ) and at 154 (per Aiken J).
There are, of course, exceptions to the common law position and this is recognised by O.35 r.7(2) of the Federal Court Rules. One of these is the so called "slip rule" which permits the Court to correct an error or omission in the judgment in an appropriate case, or where an amendment is made so as to carry out the Court's meaning or to make the language of the order plain. No case has been made out here for the application of such a rule.
However, it is clear that Northrop J made no order as to how the receiver's costs were to be borne as between the parties. Where an interim receiver is appointed it is common for the order to reserve that issue for the final hearing. Thus in the matter of Southern Cross Airlines Holdings Limited. McKenzie J of the Supreme Court of Queensland ordered on 31 March 1993, inter alia, that:

"...the Receiver's remuneration... be paid from the assets of Douglas Edward Reid in priority to all other debts, as between the applicant and the respondents such costs be reserved."

In the present case his Honour did not specifically reserve the costs but clearly made no order dealing with the question. In those circumstances it remains open to me to determine how the costs of the receiver should be borne between the parties as part of the general question of how the costs of the application are to be dealt with.
Counsel for the Commission points to the fact that Mr and Mrs Bunt were represented when the consent order was made and that Mr and Mrs Bunt consented to the continuance of the orders of Northrop J, containing as they did the provision that the receiver's costs should be paid out of the assets. Once, however, it is appreciated that Northrop J had not dealt in his Honour's orders with the question of how the receiver's costs should be borne as between the Commission, on the one hand, and and Mr and Mrs Bunt, on the other, the fact of that consent ceases to be of great significance.
It seems clear to me, with respect to Northrop J, that the order that the costs of the receivers be borne out of the assets of the respondents Mr and Mrs Best, made as it was virtually ex parte, should not have been made. It would seldom, if ever, in my view, be appropriate when an ex parte order is made appointing an interim receiver under s.1323(3) to provide that the costs of the receivership be paid out of the assets of the person whose property has been seized but who has had no chance to put his case. At least on an interim basis the costs of the receiver should be reserved, the Court requiring perhaps an undertaking by the Commission that, at least initially, the Commission will bear those costs. In so saying, I am in complete agreement with what is said by Waddell J in Corporate Affairs Commission v Smithson (1985) 3 ACLC 230 at 237 where his Honour said:

"The remedy of appointing a receiver under sec. 573 may have severe effects on a defendant. The Court is precluded, by subsec. (2) from requiring the Commission to give any undertaking as to damages as a condition of granting an interim order before considering the application pursuant to subsec. (1). This appears to indicate that an order made after considering the application is not to be regarded as an interim order and that, as a consequence, the Court is not entitled to require the Commission to give any undertaking as to damages as a condition of appointing a receiver after considering the application. If this is so, and an order for the appointment of a receiver in respect of the property of a relevant person is made, as security for claims for which ultimately he may be held not liable, the relevant person will have suffered unjustifiable damage for which he will have no right to compensation from the Commission or from anyone else. If a receiver is appointed on terms which permit him to take his remuneration out of the assets received by him, the unjustified damage caused to the relevant person would be so much greater. It should not be thought that in every case the property of a relevant person may be taken over by a receiver and his financial affairs investigated in order to provide security for claims against him, which may or may not succeed, on the basis that in any event the relevant person will have to pay the receiver's remuneration. It may well be that in a particular case, in order to avoid such a consequence, no order should be made permitting the receiver to take his remuneration out of the assets received, thus leaving it to the Commissioner to be responsible for such remuneration pending a determination of the liability of the relevant person.

However, in the present case the order has been made by Northrop J and can not be varied. But it still remains, as I have indicated, for me to determine as between the parties how the costs of the receivers should be borne as part of the overall costs and outgoings of the litigation.
I have earlier in this judgment expressed the view that the legal costs as between the parties should be borne by each of them. I do, however, think that the Commission should bear the costs of the receiver and thus indemnify Mr and Mrs Bunt in respect of those costs. In so saying I am influenced by the fact that there has been no investigation into the merits and that ordinarily the costs of the receiver should be the responsibility of the Commission, pending a determination of the question as between the parties who should bear those costs. The consent order does not seem to me to alter the position.
It may well be that the Commission might have scrutinised more strictly the work which the receivers did, had it been aware that it was at risk for the costs of the receivers. But all that means is that the Commission gave no thought to the question whether Northrop J had determined that whatever the outcome the receiver's costs should be borne out of the assets of the respondents, who had had no opportunity to be heard. It can hardly be thought rationally that this was what his Honour ordered.
For the future the Commission should, in my view, where the application is ex parte, draw the attention of the judge hearing the application for appointment of an interim receiver to the question of how the costs of the receiver are both to be paid initially and to be thereafter borne as between the parties. In my view, the ordinary order should require the Commission to be responsible for payment at the outset, leaving the ultimate responsibility as between the Commission and the person whose assets are to be seized, to be dealt with at a later time. If the occasion be appropriate to order that at first instance the receiver's costs should be paid out of the assets (and the receiver would, in any event, have a lien over those assets for his proper costs) the Court should specifically reserve the question of how the costs are to be borne as between the parties for determination at a later time. In so saying, I leave open the question whether there could ever be an appropriate case for the costs to be paid out of the assets seized where the order is made ex parte.
I would accordingly order the Commission to pay, or indemnify Mr and Mrs Bunt for, the costs of the receivers but otherwise that there be no order as to costs in respect of the 25th respondents.

[1993] FCA 585

26 AUGUST 1993