Bell Coal v UB Minerals

[1999] NSWSC 301

CITATION:	Bell Coal v UB Minerals [1999] NSWSC 301 revised - 31/08/99
CURRENT JURISDICTION:	Commercial
FILE NUMBER(S):	50009/1999
HEARING DATE(S):	29/03/99
JUDGMENT DATE:	7 April 1999
PARTIES :	Bell Coal Pty Limited - Plaintiff UB Minerals Inc (In Liquidation) - First Defendant Mr R.A.F. England - Second Defendant
JUDGMENT OF:	Rolfe J

COUNSEL :	Mr T.F. Bathurst QC/Mr T.G.R. Parker - Plaintiff Mr R.J. Whitington QC - Defendants
SOLICITORS:	Blake Dawson Waldron - Plaintiff Fisher Jeffries - Defendants
CATCHWORDS:
DECISION:	Plaintiff refused leave to proceed under s.471B of the Corporations Law with these proceedings on the ground that all matters in issue can be determined in other proceedings:; Capita Financial Group Limited v Rothwells Limited (No 2) 1987) 7 ACLC 634; Vamgramd Pty Limited (in liquidation) v Fielding & Ors (1993) 10 ACSR 373; Ogilvie-Grant v East (1983) 7 ACLC 667 referred to.

22

I N D E X



Page

Introduction 1

Some Matters Apparently Not In Issue 7

The Present Case 15

The Exercise Of Discretion 18

Two Sets Of Proceedings 19

The Position Of The Liquidator 20

Costs 21

Orders 22

THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMERCIAL LIST

ROLFE J

WEDNESDAY, 7 APRIL 1999

50009/1999 - BELL COAL PTY LIMITED v UB MINERALS INC (IN LIQUIDATION) & ANOR

JUDGMENT

HIS HONOUR:

Introduction

1 By a Summons issued on 28 January 1999 the plaintiff, Bell Coal Pty Limited, “Bell Coal”, for which Mr T.F. Bathurst of Queen’s Counsel and Mr T.G.R. Parker of Counsel appeared, sued the first defendant, UB Minerals Inc (In Liquidation), (“UBN”), and Mr R.A.F. England, who was appointed as its liquidator on 29 February 1996. Mr R.J. Whitington of Queen’s Counsel appeared on behalf of the defendants. I shall refer to these proceedings as “the New South Wales proceedings”.
2 By that Summons Bell Coal sought declarations that the purported avoidance by Mr England, on his own behalf and on behalf of UBN, of a certain guarantee is invalid and of no effect; that Bell Coal is not indebted to UBN in the sum of US$1,554,590 as claimed by Mr England; and that an agreement referred to as the Set-Off Agreement is not, and never has been, of any legal effect or, alternatively, has, in the circumstances which have happened, been avoided by Bell Coal. Bell Coal also sought judgment against UBN in the sum of US$4,866,725.48 together with interest; a declaration that as from 3 December 1992 UBN holds the proceeds of the US Tax Refund on trust for it; and orders that there be an inquiry into what moneys and other assets have, since 3 December 1992, been held by UBN and/or Mr England representing the proceeds of that Refund. To the extent that such moneys or other assets are still held by them an order is sought that they be transferred to Bell Coal, and, to the extent that such moneys and other assets are not now held by them, that they pay to Bell Coal equitable compensation together with interest pursuant to equitable principles or alternatively s.94 of the Supreme Court Act .
3 In the portion of the Summons dealing with the nature of the dispute it is pleaded that it arises out of an agreement entered into on 20 September 1989 between Bell Coal and a company in the Bond Group, BBH Bond Brewing BV, (“BBH”), whereby Bell Coal sold to BBH one of its wholly owned subsidiaries, a company incorporated in Louisiana and called UB Minerals Inc, (“UBL”). It is pleaded that UBN, which was also known as UB Minerals Inc but which had been incorporated in Nevada, is a wholly owned subsidiary of UBL and by an agreement dated 25 September 1989 guaranteed the obligations of BBH under the sale agreement.
4 It is pleaded that the sale price was to be adjusted for any tax refunds. Subsequently there was a tax refund of US$4.87m from the US Inland Revenue authorities and a tax assessment of A$1.98m from the Australian Tax authorities and, in 1992, the Set-Off Agreement was entered into between Bell Coal and UBN’s administration in consequence of which the plaintiff was paid US$1.55m from the US Tax Refund and UBN retained the balance and agreed to meet the Australian Tax assessment. It is asserted that UBN had not at the time of the Set-Off Agreement, and has not subsequently, been adjudged liable to pay the Australian assessment, and is now engaged in litigation with the Australian Taxation Office “in which it seeks to escape liability for the assessment”.
5 On 2 December 1998 the solicitors for Mr England wrote to Bell Coal stating that they acted for the liquidator of UBN and:-
“The Liquidator hereby avoids:-
1. The agreement made on 3 December 1992 between Australian Consolidated Investments Limited and/or Bell Coal Pty Limited and the Scheme Administrators of Bond Corporation Holdings Limited whereby Australian Consolidated Investments Limited and/or Bell Coal Pty Limited received the sum of US$1,554,590 from UBN.

2. The agreement dated 25 September 1989 between UBN and Bell Coal Pty Limited whereby UBN guaranteed to Bell Coal Pty Limited the payment of all obligations of BBH Bond Brewing BV (‘BBHBV’) to Bell Coal Pty Limited pursuant to a share sale agreement dated 20 September 1989 between Bell Coal Pty Limited and BBHBV and granted a security interest in all of its assets in favour of Bell Coal Pty Limited.

This notice is served pursuant to Section 130(2) of the Companies Code and/or Section 206(2) of the Corporations Law, Section 451 of the Companies Code and/or Section 565 of the Corporations Law and Section 205 of the Companies Code and/or Section 226 of the Corporations Law.”

Those sections deal with the wrongful furnishing of financial assistance for the purchase of shares in a company, preferences and charges.
6 Unbeknown to Bell Coal, UBN and Mr England commenced proceedings, as plaintiffs, in the Supreme Court of South Australia against Australian Consolidated Investments Limited, (“ACIL”), which, prior to 12 December 1990, was named Bell Resources Limited, and Bell Coal by a Writ and Statement of Claim issued on 2 December 1998, (“the South Australian proceedings”). The institution of these proceedings was not disclosed to Bell Coal or ACIL until about 2 February 1999 and after Bell Coal’s Summons had been served.
7 By the Statement of Claim in the South Australian proceedings the plaintiffs sought compensation by way of damages or other relief pursuant to s.130(5) of the Companies Code and/or ss.206(5) or 260D(2) and 1317HD of the Corporations Law ; a declaration that the Bell Coal indemnity and the Bell Coal settlement are void or, in the alternative, voidable pursuant to s.451 of the Companies Code and/or s.565 of the Corporations Law , s.205 of the Companies Code and/or s.266 of the Corporations Law or otherwise; a declaration that ACIL and/or Bell Coal are liable as constructive trustees to account to the first plaintiff for the loss suffered by the first plaintiff and compound interest thereon; a declaration that the first plaintiff has or is entitled to a proprietary interest in the assets of ACIL and/or Bell Coal to the extent of the value of the first plaintiff’s loss and compound interest thereon; a declaration that ACIL and/or Bell Coal are liable to compensate the first plaintiff by way of equitable damages for the amount of the loss suffered by the first plaintiff and compound interest thereon; damages; restitution; equitable compensation or an account of profit; damages for loss of use of money; interest including compound interest; and costs.
8 It was not in issue that both sets of proceedings arose out of the same factual matrix, gave rise to substantially the same issues, and, conveniently, should be heard together with the evidence in one being treated as evidence in the other.
9 It was not in issue that the Summons issued in the New South Wales proceedings was served on the defendants on 29 January 1999, it being responsive to the purported avoidance by the liquidator. Nor was it in issue that at that time Bell Coal was not aware that the South Australian proceedings had been instituted. The Summons in the New South Wales proceedings was issued without leave having been granted pursuant to s.471B of the Corporations Law and, when it was served on 28 January 1999, the solicitors for Bell Coal asked Mr England to advise whether he would consent to such leave being granted. His solicitors replied on 11 February 1999 stating, in relation to this matter:-
“We are instructed that our client does not consent to leave being granted to your client to proceed against UBN, a company in liquidation.
We trust you have been provided with a copy of the Summons and Statement of Claim served on your clients Bell Coal and Australian Consolidated Investments Limited in the Supreme Court of South Australia action number 1609 of 1998.
We consider that the matter raised by your client’s claim would be more appropriately pursued (to the extent they are capable of being pursued) by way of proof of debt in the winding up of UBN or by defence and counter-claim in Supreme Court action number 1609 of 1998, given the similarity and the subject matter of the two proceedings. For these reasons and others, we do not consider this to be an appropriate matter for leave to be granted.
Despite the above, should your client nevertheless wish to commence the above action against our client, an action for leave to proceed will need to be pursued. This will be vigorously opposed and full recovery of costs sought.”
10 On 15 February 1999 the solicitors for Bell Coal responded stating, inter alia:-
“With respect, not to consent to leave being granted to proceed against the company in liquidation is an untenable position when the company in liquidation has brought mirror image proceedings against our client.”
11 There was further disputatious correspondence about whether leave to proceed should be granted and, by a Notice of Motion filed on 24 February 1999, Bell Coal sought an order that it be granted leave to proceed “with this action against the first defendant”.
12 It is that Notice of Motion which came before me for determination on 29 March 1999.
Some Matters Apparently Not In Issue
13 Mr Whitington conceded that if I was minded to grant leave to proceed I could do so nunc pro tunc , and that there was no need for Bell Coal to amend its Notice of Motion to seek an order in those precise terms.
14 He submitted that Bell Coal should also have sought leave to proceed against Mr England as relief was sought against him in his personal capacity, but that if I considered that was correct and, contrary to his submissions, that leave to proceed should be granted as against Mr England, there was no requirement for the Notice of Motion to be amended to seek that relief.
15 Whilst I received submissions from both parties as to the efficacy of the pleadings, which in the South Australian proceedings include a Defence and a Reply, it was agreed that I was not being asked to rule on the pleadings. There was no issue that the Summons in the New South Wales proceedings disclosed a prima facie case for relief. The submission was that leave should not be granted as that case could be determined in the South Australian proceedings.
16 Also a number of observations were made as to whether the Supreme Court of South Australia or this Court is the more appropriate and convenient forum in which the proceedings should be heard. However, and notwithstanding that UBN and Mr England have filed a Notice of Motion in the New South Wales proceedings seeking an order that in the event of leave being granted to Bell Coal to proceed with this action that it be permanently stayed or, in the alternative, be transferred to the Supreme Court of South Australia pursuant to the Jurisdiction of Courts (Cross-Vesting) Act 1987, I was expressly asked not to decide those points at this stage. I was asked to confine my consideration to the question of leave, which I shall do.
17 A basic submission of Mr Whitington was that all the matters raised by Bell Coal could be decided in the South Australian proceedings, which had been regularly instituted without the necessity for the grant of any leave, and that, accordingly, it was inappropriate to grant leave to proceed in the New South Wales proceedings as that would give rise to parallel proceedings in two Courts. It was not seriously in issue that in all probability all the matters in issue in the proceedings could be determined in the South Australian proceedings, although a question arose as to the attitude of the liquidator if Bell Coal and/or ACIL sought to bring a counter-claim in the South Australian proceedings for the substantive relief sought in the New South Wales proceedings. Mr Whitington took instructions on this and stated that without prejudice to his clients’ position in relation to the application before me, they would not oppose a grant of leave if one was sought for Bell Coal to institute a counter-claim that the 1992 Set-Off Agreement was a nullity or otherwise ought to be set aside, and further for an order for the payment by his clients of the difference between the United States’ refund of tax of about US$4.8m and the amount already received of about US$1.5m. This did not cover the grant of leave in relation to a trust issue raised by Bell Coal.
18 In this context he said that the words “without prejudice” were used to maintain the opposition to the present application, and that Mr England had given the instructions referred to in the last paragraph as a matter of expediency, because the defence has “pushed the matter so far that it is only a short step to seek positive relief”. Mr Whitington submitted that that concession is a factor against, rather than in favour of, the grant of leave to proceed in the New South Wales proceedings, on the basis that all matters in issue will be determined in the one set of proceedings.
19 The next matter which did not seem to be greatly in issue was that if I granted leave to Bell Coal to proceed with the New South Wales proceedings there would be on foot two sets of proceedings raising essentially the same issues, and that the sensible course for the resolution of those proceedings would be, if they were in the one Court, to make an order to the effect that they be heard together and that evidence in the one be evidence in the other. I say “to the effect” because it will obviously be a matter for the Judge administering the proceedings to determine how best they should go forward. Inherent in what I have just said, bearing in mind that the proceedings are in two different Courts, was an acceptance that if I grant leave to proceed with the New South Wales proceedings an application will be made in those proceedings by Mr Whitington’s client to cross-vest them to the Supreme Court of South Australia, and an application will be made by Bell Coal and ACIL in the South Australian proceedings to cross-vest them to this Court.
20 It happens, from time to time, that “parallel” proceedings are instituted in two States, thus giving rise to the need to consider a cross-vesting application or cross-vesting applications, and whether the Court should, of its own motion, cross-vest proceedings. In my experience one Court usually holds its hand until a determination by the other Court of such an application and, depending upon the decision, orders may be made by consent linking both sets of proceedings in the one State: Kevin Barrington & 71 Others v Centre Mildura Plaza Pty Limited & Ors (Rolfe J - 4 March 1999 - unreported).
21 However, as I made clear in Kevin Barrington , the refusal to cross-vest the proceedings from New South Wales does not compel, in my view, the Court of another State to agree that the proceedings in that State should be transferred to New South Wales. Each Court must, in the view I take, deal with these matters as it sees fit, although in proceedings such as the present it appears highly desirable that they be heard in the one Court at the same time. Counsel did not suggest to the contrary.
22 I wish to make it clear that if I do grant leave to proceed, I am not to be taken as expressing, albeit impliedly, any view as to the fate of a cross-vesting application to this Court to transfer the New South Wales proceedings to the Supreme Court of South Australia, or any view that the South Australian proceedings should be cross-vested to this Court. Such applications, if brought and pursued, will be determined on their merits. I have expressly been requested to determine the sole point as to whether Bell Coal should have leave to proceed.
23 None-the-less, the reality of the situation is that Bell Coal wishes to have the proceedings heard in this Court, whilst UBN and Mr England wish to have them heard in the Supreme Court of South Australia. Whilst I do not wish to be unduly critical of the parties, it seems, particularly in circumstances where a major protagonist is in liquidation, unfortunate that not inconsiderable costs have been expended on an application for leave to proceed when, as I understand it, the real issue is in which Court the proceedings should go forward. Presumably the view has been taken by Bell Coal that it must have proceedings validly on foot in this Court as a launching pad for any application to cross-vest the South Australian proceedings; whereas the view has been taken by UBN and Mr England that if there are no proceedings validly on foot in New South Wales the basis for an application to cross-vest the South Australian proceedings to this Court is limited. It was conceded by Mr Whitington that the absence of proceedings in this Court would not preclude Bell Coal and ACIL making an application to the Supreme Court of South Australia to cross-vest the South Australian proceedings to this Court, but, as I would understand it, the view is taken that Bell Coal’s and ACIL’s grounds would be somewhat weakened by the absence of effective and valid New South Wales proceedings. Therefore, to a not inconsiderable extent, the present application is a tactical manoeuvre in aid of determining which Court should hear the proceedings, Mr Whitington’s clients accepting, as the concession I have set forth makes clear, that they cannot prevent Bell Coal from ventilating the matters it wishes to litigate, either by way of defence or counter claim, in the South Australian proceedings.
24 A further matter, which was not in issue, was that this is not a case in which Bell Coal should have pursued its rights by lodging a Proof of Debt, rather than resorting to litigation. Initially Mr Whitington submitted that the short issue was that Mr England should not be vexed with unnecessary proceedings. In this context he referred to authorities such as Capita Financial Group Limited v Rothwells Limited (No 2) (1989) 7 ACLC 634. His submission, however, was not that Bell Coal should have sought to establish its rights by lodging a Proof of Debt, but rather that it could achieve all that it seeks and all that is appropriate in the South Australian proceedings. In this respect he relied upon the decision of the Full Court of the Federal Court in Vagramd Pty Limited (In Liquidation) v Fielding & Ors (1993) 10 ACSR 373, which set out the basic principles pursuant to which the largely unfettered discretion of the Court to grant leave should be exercised and, at p.377, their Honours said:-
“The reason for imposing a requirement of leave, in the case of litigation against companies in liquidation, was explained a century ago by Manning J of the New South Wales Supreme Court, in Thomson v Mulgoa Irrigation Co Limited (1893) 4 BC (NSW) 33:
‘All that s.140 means is that a company in liquidation is not to be harassed and its assets wasted by unnecessary litigation, and the leave of the Court is therefore required as a safeguard. Before any action can be brought or continued against a company, the Court must investigate the intended litigation.’
Manning J did not suggest that it was necessary to prove all the elements of the applicant’s claim.”
25 Their Honours also cited from the judgment of McPherson J in Ogilvie-Grant v East (1983) 7 ACLR 669. At pp.671-2 his Honour said:-
“The precise purpose and function of provisions similar to s.230(3) have seldom been explained. From time to time the suggestion has been made that the prohibition exists in order to effectuate the statutory policy of ensuring that corporate assets are distributed rateably among all creditors so that none of them will gain an advantage over others: see e.g. Re Sydney Formworks Pty Limited … But in Australia at least it is not often that the institution of proceedings or even the recovery of judgment operates to confer a priority or advantage on a litigating creditor. A more convincing explanation is that, without the relevant restriction, a company in liquidation would be subjected to a multiplicity of actions which would be both expensive and time consuming as well in some cases as unnecessary. This explanation has been accepted in a number of Canadian cases and appears also to have been adopted by Street J in Re A.J. Benjamin Limited .
…
The question whether a claimant should be permitted to proceed by action, or should be required to submit his proof of debt and, if dissatisfied, appeal to a Judge, is therefore reduced largely to one of choosing between alternative forms of procedure. The effect of s.230(3) is to require the claimant to adopt the course of lodging a proof of debt unless he can demonstrate that there is some good reason why a departure from that procedure is justified in the case of the particular claim in dispute. This is really all that is meant in this context by expressions such as ‘convenience’ and ‘balance of convenience’ that appear in judgments on the matter … It, of course, follows that it is quite impossible to state in an exhaustive manner all the circumstances in which leave to proceed may be appropriate, but in the past they have been seen to include factors such as the amount and seriousness of the claim, the degree of complexity of the legal and factual issues involved, and the stage to which the proceedings, if already commenced, may have progressed.”
26 Mr Whitington’s initial submission also included an assertion that there was no need for a counter-claim as all matters could be determined on the Defence filed in the South Australian proceedings. After this submission was explored in a little more detail with the consequence that it became clear that Bell Coal could not seek all the substantive relief it propounded without a counter-claim, Mr Whitington undertook to obtain instructions from Mr England as to his attitude to the granting of leave if it was sought in the South Australian proceedings in relation to a counter-claim. I have recorded the result of those instructions.
The Present Case
27 Bell Coal’s proceedings were directly responsive to Mr England’s purported avoidance as set forth in the letter of 2 December 1998. In addition to taking that approach Mr England had obviously instructed his solicitors to institute the South Australian proceedings but, as I have said, the institution of those proceedings was not disclosed to Bell Coal or its solicitors until about 2 February 1999. There was, of course, no obligation on Mr England or his solicitors to make any such disclosure, although in the context it may seem, at least prima facie, a little strange that it was not done. However, one consequence of their not having done so was that Bell Coal brought the New South Wales proceedings, in which it crafted the relief it sought on specific bases. As has been said, and so much could not have been and was not in issue, the relief sought in both sets of proceedings arises out of the same matrix of facts and will depend upon substantially similar factual and legal issues. In these circumstances Mr Bathurst submitted that it does not lie in the mouth of Mr England to complain that he is being vexed by proceedings when he has taken the view that it is necessary for him to bring proceedings for relief, and when he has conceded the entitlement of the defendants to his proceedings not only to defend them, but also to bring forward a counter claim. Mr England’s submission was that as all issues could be determined in one set of proceedings, it was inappropriate to require him to be contesting another set of proceedings raising the same issues.
28 In these circumstances Mr Bathurst submitted that Bell Coal was entitled to have the New South Wales proceedings go forward in the way in which it wished to plead them, and that there could be no criticism of Bell Coal’s instituting the proceedings, which it did, so he submitted, in a timely manner after Mr England’s purported avoidance and without notice of the South Australian proceedings having been instituted.
29 Mr Bathurst also submitted that the concession made by Mr Whitington in relation to Mr England’s not opposing a grant of leave did not extend to the trust case, which Bell Coal wished to raise, and that this may be a matter which might cause Bell Coal difficulties if leave was sought to counter-claim in the South Australian proceedings. I am not certain why it would lead to any difficulties if consent was given to leave being granted in the South Australian proceedings on other issues. It seems to me that if leave is granted on certain issues, the Court would grant leave on others relevant to those issues, unless it was satisfied that there was no prima facie case.
30 Mr Whitington also submitted that judgment in the South Australian proceedings would be determinative of all issues between the parties and therefore constitute either a res judicata or an issue estoppel, subject only to the possibility that Bell Coal, if successful, would have to lodge a Proof of Debt to enforce the judgment. Mr Bathurst submitted that unless the issues were formulated in the precise way in which Bell Coal wished to do, there could be difficulties in determining the extent to which there was a res judicata or issue estoppel. He referred to the divergent views which had been expressed on this point, on the facts of particular cases, many of which cases were gathered in Macquarie Bank Limited v National Mutual Life Association of Australia Limited & Ors (1996) 40 NSWLR 543. In that case, of course, it will be remembered that on this point there was a division in the Court of Appeal. The lengthy judgment of Clarke JA, in which Priestley JA agreed, points out the areas for dispute, as does the dissenting judgment of Powell JA.
31 Mr Whitington also submitted that it was inappropriate to allow the New South Wales proceedings to go forward because they are predicated on a result in the proceedings between Mr England and the Australian Taxation Office and, until that has been resolved, at least certain of the issues raised in the New South Wales proceedings cannot be determined finally. However, it was not in issue that there were other matters which are now susceptible of decision and, if that dispute is not resolved at the time of the hearing of the proceedings, in whichever Court that may happen, it will be necessary for the Court to seek to mould relief having regard to that fact.
The Exercise Of Discretion
32 In the way in which the matter was argued the essential issue is whether I should grant leave, and therefore allow Bell Coal’s proceedings to go forward on the pleadings it has structured, or whether I should refuse to do so and thereby require Bell Coal to litigate the matter on which it seeks a decision via its Defence and a Counter-Claim. Obviously those pleadings will be formulated by the legal representatives for Bell Coal, so that there can be no suggestion that Bell Coal will be precluded from putting its case in the way it wishes. I am sure that is legal advisers will be astute to ensure that all proper issues are raised. Much, if not, all of the force is taken out of the submission that leave will be needed to bring a Counter-Claim by Mr England’s concession in relation to it. As I have said it is somewhat difficult to conceive of a situation in which leave would be granted to pursue some, but not other, relief in the South Australian proceedings, unless the view was taken in that Court that Bell Coal had not established a prima facie right to that relief.
33 I do not overlook that Bell Coal regularly instituted the New South Wales proceedings without notice that the South Australian proceedings had been commenced and in a timely fashion after being advised of Mr England’s purported avoidance. Whilst its proceedings were not commenced first, in point of time, they were the first proceedings notified between the parties. Whilst the New South Wales proceedings raise a prima facie case, which will have to be litigated, and, in my view, Bell Coal is entitled to have it litigated on the way in which it wishes to plead the case, I do not see how it will be deprived of that advantage by litigating such issues in the South Australian proceedings. When the matter is viewed in this light it becomes apparent that the New South Wales proceedings become additional proceedings, which, on the view I take, are not necessary for the resolution of all matters between the parties. In those circumstances, consistently with the authorities to which I have referred, Mr England is confronted with proceedings which, in my opinion, are not necessary. Thus it can be said that the New South Wales proceedings are “unnecessary proceedings”, and that Bell Coal has not established that the balance of convenience requires the grant of leave. For these reasons I consider this the appropriate characterisation of the proceedings and the situation, and, accordingly, I have come to the view that the proper exercise of discretion demands that leave not be granted.
Two Sets Of Proceedings
34 Mr Whitington also submitted that as a matter of discretion I should not grant leave because the South Australian proceedings are well advanced, as he put it, and, accordingly, when coupled with his submission that all matters can be determined in those proceedings, it is not appropriate that leave be granted. The South Australian proceedings have reached the stage where a Defence and a Reply have been filed, although it is tolerably clear that all the pleadings will require some further particularisation. I do not regard those proceedings, which have only been on foot as between the parties, in the sense of Bell Coal’s having knowledge of them, since late January 1999, as realistically very much more advanced than the present proceedings. I do not consider that this matter would have been sufficient to exercise the discretion to not grant leave. However, taken in conjunction with my primary view it adds some weight to it.
The Position Of The Liquidator
35 Mr Bathurst submitted that s.471B does not, in terms, require a party to obtain leave to proceed against a liquidator. That is so. Mr Whitington submitted that there was authority for the proposition that leave should be granted to proceed against a liquidator. Because of the conclusion to which I have come in relation to Bell Coal’s application it is not necessary for me to pursue this matter, although I believe that if I had granted leave to proceed against UBN, I would also have granted that leave against Mr England.

Costs
35 The parties did not specifically address me as to costs, although in the correspondence emanating from the solicitors for UBN and Mr England it was made clear that they would be seeking costs in the event of the application for leave not succeeding. I am prepared to assume that if Bell Coal had been the successful party it would have sought an order for costs. In my opinion, there are several matters which are very relevant to an award of costs on this Notice of Motion. I accept that normally the successful party is entitled to costs. Those matters are, firstly, the failure to advise of the institution of the South Australian proceedings. Had Bell Coal been so advised it may have litigated through them, rather than commence the New South Wales proceedings; and, secondly, and in my opinion more importantly, the failure by Mr England to make any concession in relation to leave to proceed by way of a Counter-Claim until the hearing of the Notice of Motion was well advanced. This concession enables the view to be taken that all matters in issue can be litigated in the one set of proceedings or, put another way, removes an impediment to that occurring. This is the essential reason why Bell Coal has failed, but the position was stated too late, in my opinion, by Mr England.
36 In all the circumstances my prima facie view is that UBN and Mr England are not entitled to their costs of this Notice of Motion, and that the proper order is that all parties should pay their own costs. However, as this question was not argued I shall reserve leave to the parties to make submissions if they wish. If the parties are prepared to accept my prima facie view a joint memorandum stating that should be furnished to my Associate and I shall make the order in Chambers.
Orders
(1) I order that the plaintiff’s Notice of Motion for leave to proceed be dismissed.
(2) I reserve for further argument, if need be, the question of costs.
(3) I order that the exhibits be returned.
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Last Modified: 06/30/2000