Debis v Allied Bellambi Collieries

[2000] NSWCA 274

Reported Decision: [2000] 35 ACSR 371

New South Wales

Court of Appeal

CITATION:	Debis v Allied Bellambi Collieries [2000] NSWCA 274
FILE NUMBER(S):	CA 40775/99
HEARING DATE(S):	18 September 2000
JUDGMENT DATE:	11 October 2000
PARTIES :	DEBIS FINANCIAL SERVICES (AUSTRALIA) PTY LIMITED v ALLIED BELLAMBI COLLIERIES PTY LIMITED (Receivers Appointed) SANDWORK PTY LIMITED GREGORY JAMES ROBERTSON
JUDGMENT OF:	Priestley JA at 1; Handley JA at 50; Powell JA at 64

LOWER COURT JURISDICTION :	Supreme Court - Equity Division
LOWER COURT FILE NUMBER(S) :	ED 3669/99
LOWER COURT JUDICIAL OFFICER :	Hamilton J

COUNSEL:	B A J Coles QC/C R C Newlinds (Appellant) R S Angyal (Respondents)
SOLICITORS:	Clayton Utz Sydney (Appellant) Anderson Legal North Sydney (Respondents)
CATCHWORDS:	CORPORATIONS - owner of charged property under voluntary administration - administrator sought to prevent enforcement of charge - whether administrator's proposal valid - no error in Judge's determination that chargee's interests adequately protected by administrator's proposal - Corporations Law Pt 5.3A, s 441D - APPEAL - whether orders final or interlocutory - test is their legal not practical effect
LEGISLATION CITED:	Corporations Law Supreme Court Act 1970 (NSW)
CASES CITED:	Licul v Corney (1976) 180 CLR 213 Carr v Finance Corporation of Australia Ltd (1981) 147 CLR 246 A Hudson Pty Ltd v Legal and General Life of Australia Ltd (1985) 1 NSWLR 701 R v Cheng (1999) 48 NSWLR 616 Hall v The Nominal Defendant (1966) 117 CLR 423 Buttes Gas & Oil Co v Hammer (No 3) [1982] AC 888 R v Home Secretary ex parte Khawaja [1984] 1 AC 74 Parke Davis & Co v Sanofi (No 1) (1982) 149 CLR 147 Southern Cross Exploration NL v Fire and All Risks Insurance Company Ltd [No 3] (1990) 21 NSWLR 200 Australasian Memory Pty Ltd v Brian (2000) 74 ALJR 991 Newmont Pty Ltd v Laverton Nickel NL (No 2) [1981] 1 NSWLR 221 Birkett v James [1978] AC 297
DECISION:	Proceedings dismissed with costs

THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40775/99
ED 3669/99

PRIESTLEY JA
HANDLEY JA
POWELL JA

11 October 2000

DEBIS FINANCIAL SERVICES (AUST) PTY LTD v ALLIED BELLAMBI COLLIERIES PTY LTD & ORS

CORPORATIONS - owner of charged property under voluntary administration - administrator sought to prevent enforcement of charge - whether administrator’s proposal valid - no error in Judge’s determination that chargee’s interests adequately protected by administrator’s proposal - Corporations Law Pt 5.3A, s 441D APPEAL - whether orders final or interlocutory - test is their legal not practical effect
The appellant held a chattel mortgage over a mining machine owned by the respondent company. Following an event of default the appellant appointed receivers to take possession of the machine. Shortly afterwards the respondent went into voluntary administration. The appellant’s demand for delivery of the machine which was underground was not met. The respondent’s administrator proposed a Deed of Company Arrangement which involved the purchase of the machine by a third party which intended to continue the mining operation. The appellant commenced proceedings to enforce its charge and the administrator applied under s 441D of the Corporations Law (the Law) to restrain enforcement. The Judge dismissed the appellant’s claim for orders to facilitate recovery of the machine and made an order under s 441D restraining the exercise of the appellant’s rights under the charge during the administration. The appellant appealed from the Judge’s decision and submitted that his orders were final.
HELD: Refusing leave and dismissing the appeal: (1) The Judge’s determination under s 441D disclosed no error of law. He had not erred in his approach to the section or in the exercise of his discretion. His finding that the appellant’s rights were adequately protected by the administrator’s proposal was open on the evidence. (2) The appeal was incompetent because the orders were interlocutory. The test for an interlocutory judgment or order depends on its legal and not its practical effect. The orders did not finally establish the legal rights of the parties in relation to the charged property as they could have been altered during the administration although it was about to expire.

ORDERS

(1) Leave to appeal refused

(2) Appeal dismissed with costs.

THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40775/99
ED 3669/99

PRIESTLEY JA
HANDLEY JA
POWELL JA

11 October 2000

DEBIS FINANCIAL SERVICES (AUST) PTY LTD v ALLIED BELLAMBI COLLIERIES PTY LTD & ORS

1    PRIESTLEY JA:

Introduction .
These proceedings seek to raise a question in this court about the application of Pt 5.3A of the Corporations Law (the Act). Part 5.3A was inserted in the Act in 1992, with effect from 23 June 1993. The Part, which comprises ss 435A to 451D, gives the court powers, during the administration of a company, to control, inter alia, the exercise of powers by a chargee of property of the company in relation to the charged property, which powers the chargee, but for Pt 5.3A, would be entitled to exercise in accordance with the terms of the charge.

2    The proceedings were brought to this court by Debis Financial Services (Australia) Pty Ltd, (Debis), which was a chargee of property of Allied Bellambi Collieries Pty Ltd, (Bellambi), seeking to appeal against decisions by Hamilton J on 10 September 1999 concerning the charged property by which (a) he dismissed proceedings by Debis seeking the court’s leave to enforce its charge by court proceedings and (b) he made an order restricting Debis’s exercise of rights under its charge. On later days Hamilton J made further orders in the same proceedings concerning different property leased by Debis to Bellambi, and concerning the costs of the proceedings. 3    Preliminary questions in this court are whether Debis needs leave to appeal, and if so, whether it should be granted. I will leave these questions to be dealt with after I have described the substance of the proceedings and the arguments. 4    Summary of facts.

The charge upon which Debis relied was effected by an Equipment Finance and Security Agreement which Debis made with Bellambi bearing date 15 June 1988 (the mortgage). Q Mining Systems Pty Ltd was a guarantor of the mortgage. The machinery charged by the mortgage was a machine called a Continuous Miner (the CM). Debis was also the lessor to Bellambi of three Un-a-Haulers.

5    On 30 June 1999 an administrator was appointed to Q Mining Systems Pty Ltd. This was an event of default under the mortgage. In consequence, Debis on 9 July 1999 appointed two receivers with respect to the CM. In the events that happened, of the two receivers Mr A. Macintosh was the one who undertook the conduct of the receivership. 6    The CM was used underground in the Bellambi West Colliery operated by Bellambi. There was evidence before Hamilton J about how long it would take and how much it would cost to bring it to the surface if Debis took possession of it. The experts gave different estimates, which Hamilton J did not need to resolve. As to time, it seems that on a conservative estimate, to remove the CM from the colliery would take at least a week. The cost estimates varied between $150,000 and $220,000. The amount owing on it to Debis was in the order of $1,025,000. Mining would have to be suspended during the period when the CM was being removed. This could cause loss to the operator of the mine, which at worst could be loss of daily revenue of $280,000. The Un-a-Haulers were also underground but apparently their removal from the mine would not cause the same practical problems as would removal of the CM. 7    Although Bellambi was the operator of the Bellambi West Colliery, Sandwork Pty Limited (Sandwork), a related company, was the holder of the mining lease. 8    On 28 July 1999 Mr G. Robertson was appointed voluntary administrator of both Bellambi and Sandwork. 9    On the same day Debis requested Bellambi and Mr Robertson to deliver up the CM by 4 pm on 3 August 1999. This was not done. Negotiations between the parties took place, but no agreement was reached. Mr Robertson took steps towards the making of a Deed of Company Arrangement (DCA). This DCA involved the purchase of Bellambi’s assets by a third party, which would continue the mining operation and which would wish to use the CM. The DCA was to be voted on by Bellambi’s creditors at a meeting on 24 August 1999. 10    Before then there were discussions between Mr Macintosh and the proposed purchaser of the mining operation about the purchase of the CM for one million dollars. Mr Robertson understood agreement in principle had been reached. Mr Macintosh thought not. He said some matters he thought important had not been decided. Nevertheless it was clear that the intending purchaser wanted to buy the CM for $1,000,000 and the receivers were prepared for it to be sold at that price, provided certain other matters could be agreed. 11    The creditors’ meeting went ahead on 24 August 1999. The creditors resolved that the company execute the DCA. This meant that it had to be executed within twenty-one days from 24 August unless on application made within the twenty-one days the court allowed a further period (s 444B(2). There was no evidence that any such application was ever contemplated. In the absence of any further period being allowed, s 444D(2) would have the effect (except in circumstances not applicable here) that upon execution, the secured creditor could deal with its security (unless the purchaser had made an agreement to buy it of which Debis approved) in any way permitted by the mortgage. If the DCA were not executed within the permitted time, then the company would, because of that fact, go into voluntary liquidation (s 446A) on 14 September, and, again, the secured creditor could exercise any of its rights under the mortgage. 12    Meanwhile, on 23 August 1999, the day before the creditors’ meeting, Debis had filed a summons in the Equity Division naming Bellambi and Sandwork as the first and second defendants. The summons asked for leave to proceed against the defendants pursuant to s 440D of the Act, and for an order that Debis have unfettered access to the CM and the Un-a-Haulers for purposes of repossession and removal. (Section 440D prevented a chargee beginning a proceeding in court against a company during administration except with the administrator’s consent (which was here withheld) or the leave of the court.) 13    (It may be useful to mention here that s 440B which provided that during the administration of a company a person could not enforce a charge on property of the company except with the administrator’s written consent or the leave of the court, had no application to the present case. This was because, where enforcement of a charge had begun before administration, which it was common ground was the position here, s 441B provided:

“ 441B (1) This section applies if, before the beginning of the administration of a company, a chargee, receiver or other person:
(a) ...
or
(e) exercised any other power in relation to such property;
for the purpose of enforcing a charge on that property.
(2) Nothing in section 437C or 440B prevents the chargee ... from enforcing the charge ... ”)

14 After Debis filed its summons, the administrator filed a notice of motion (of which he had given notice some time before) seeking an order under s 441D that Debis and the receivers not have access to the CM while Bellambi and Sandwork were under administration. 15 Section 441D was as follows:

“ Court may limit powers of chargee, etc in relation to charged property
441D(1) This section applies if:
(a) for the purpose of enforcing a charge on property of a company, the chargee, or a receiver or other person, does an act of a kind referred to in a paragraph of subsection 441B(1); and
(b) the company is under administration when the chargee, receiver or other person does the act, or the company later begins to be under administration;
.....
441D(2) On application by the administrator, the Court may order the chargee, receiver or other person not to perform specified functions, or exercise specified powers, except as permitted by the order.
441D(3) The Court may only make an order if satisfied that what the administrator proposes to do during the administration will adequately protect the chargee’s interests.
441D(4) An order may only be made, and only has effect, during the administration.
441D(5) An order has effect despite sections 441B and 441C. ”

16 The proceedings came on for hearing before Hamilton J on 1 September 1999. He dealt first with the claims concerning the CM. In regard to this, he had to decide Debis’s claim for orders to facilitate its recovery and the opposing claim by the administrator for orders under s 441D(2) having the effect of preventing its recovery during the continuation of the administration. 17 Hamilton J delivered judgment about the CM on 10 September 1999. 18 Hamilton J’s reasons.

In his reasons Hamilton J stated the salient facts of the matter and the parties’ opposing arguments as follows:
“ The machine is presently some 14 kilometres down the coal mine, not vertically, of course, but some 14 kilometres of underground tunnels must be traversed to bring it to the surface. It is a large machine. There will be difficulties in getting it out. There has been a roof fall in a relevant passage in recent times, although this has been repaired. There may be regulations under the coal mining legislation which must be complied with for the machine to be removed, although there is controversy as to just what regulatory regime applies at the moment and what is involved in obtaining any necessary consents. It is quite clear that removing the machine will be a costly operation, but there is also considerable controversy as to the cost estimates, which are in evidence. They range between about $50,000 and more than $200,000. As may be expected, under the mortgage the mortgagee is entitled to charge to the mortgagor any costs it incurs in recovering the machine.
... It is ... common ground that that duration is short. A DCA has been propounded by resolution of a creditors’ meeting and under the provisions of the Law mentioned above the only open alternatives are that next week the administration will expire when that DCA is executed, or will terminate when the DCA is not executed within the requisite time.
... Clearly what the administrator is proposing to do at the moment is to carry into effect, if he can, the proposed DCA. That document is, in general terms, in fairly standard form for a DCA. A feature of it is that it proposes the execution simultaneously with the DCA of a Business Sale and Purchase Agreement (“the sale agreement”) under which the colliery operation will be sold to Allied Coal Pty Limited (“the purchaser”). In other words, if the sale agreement is not executed the DCA will not be executed. The sale agreement contemplates either that the machine may be purchased along with the colliery, or may not be purchased along with the colliery; the former obviously can occur only if the amount owing to the plaintiff is paid out and the machine is discharged of the plaintiff’s rights.
There is evidence available that it is the present intention that the sale agreement and, therefore, the DCA will be entered into only if the purchase of the machine is effected and, therefore, the plaintiff is paid out. Whilst I have no doubt of the veracity of the relevant deponent, intentions can, of course, change in quite short time, particularly in hard commercial negotiations. If the sale takes place including the machine the plaintiff’s problems will be at an end, for it will have been paid out. If the sale does not go ahead, and it is said that the intention is that it should not without the sale of the machine, the machine will still be in the depths of the colliery, but it will still be owned by the first defendant and subject, as now, to all the plaintiff’s rights, and this will have occurred inside the next week; on the evidence, there is hardly likely to be any prejudice to the plaintiff in so short a time. The situation which is said to be at present unlikely, but on the evidence certainly is possible, is that the DCA and the sale agreement may be entered into, but on the basis that the machine is not sold with the other assets of the colliery. In that situation, the plaintiff says that it could then face an additional difficulty which does not exist at present. That is that, whilst its rights as against the first defendant and over the machine itself would be unaffected, there may be mining operations conducted in the colliery by a new owner, which may object to their being disturbed or disrupted by the removal of the machine blocking for some time access to the colliery. ”

19 The matter raised by Debis and recorded by Hamilton J in the last three sentences of the foregoing passage caused him some concern. At a practical level it was probably, in my opinion, the strongest argument Debis had in support of the position it was adopting in the proceedings. Before dealing with it, Hamilton J discussed what was required of the court in determining an application under s 441D(2). 20 First, he said, he had to be satisfied that what the administrator proposed to do would adequately protect the chargee’s interests. Second, he had to exercise discretion in deciding whether or not to make an order. In exercising this discretion, in his view, he had to take into account the policy of the Act in relation to administration, that is, the policy of Pt 5.3A. In discussing what this policy might be, Hamilton J referred to the cases decided on other sections in Pt 5.3A and to the explanatory memorandum that accompanied the Bill which in 1992 became the statute which inserted Pt 5.3A in the Act. 21 Hamilton J then came back to the question of what the court needed to consider in deciding whether it was satisfied for purposes of s 441D(3). He noted that the focus of the subsection was on what the administrator proposed to do during the administration and then on whether the proposed course adequately protected the chargee’s interests. In his view

“ the protection as to which the court is required to be satisfied is not protection which is absolute or perfect in all circumstances, but protection which is adequate or suitable considering the circumstances which actually prevail. ”

22    At this stage Hamilton J returned to the matter which earlier (par 19) I said was probably Debis’s strongest point in favour of the position it was taking in the proceedings. He noted that during the hearing he had raised with counsel for the administrator that he saw this matter as being an inadequacy of what the administrator was then proposing, at least from the point of view of the protection of Debis’s interests. He also noted that the administrator’s response had been to offer an undertaking in the following terms:

“ The administrator of the First Defendant undertakes not to sign any Sale of Business Agreement unless it includes a clause substantially in the form of the following:
6.3 If any assets used by the Vendor in the Business and situate as at the Transfer Date upon the Premises are subject to a charge the Purchaser assents to the Vendor or the chargee of such asset removing such asset from the Premises upon giving reasonable prior notice to the Purchaser and at such time that causes as little disruption as reasonably possible to the operation of the Business by the Purchaser and subject to any applicable statutory requirements, provided that the chargee:
(a) pays all costs directly related to the removal (which for the avoidance of doubt specifically excludes any loss of production costs); and
(b) pays to the Purchaser any costs reasonably incurred by the Purchaser in complying with any statutory requirements relating to the removal. ”

23    For Debis it was argued that the undertaking was deficient because of the requirement in par (b) that the chargee pay the purchaser’s costs of removal etc. Hamilton J’s response to this was as follows:

“... as I have already said, the terms of s 441D(3) are not absolute. The real situation at the moment is that as the first defendant is insolvent, even though it is its primary liability to pay the costs of removal, that is not likely to be honoured in the first instance by the company or by its administrator with his duties to the general body of creditors. As a matter of reality, if the plaintiff wishes to recover the machine, all it can do is to incur itself the costs of removal and debit them to the account of the first defendant, that debit becoming one of the unsecured debts of the first defendant. It should also be noted specifically that the undertaking offered provides for the payment of the bulk of the costs; in the circumstances, the bulk of the costs involved are those covered in (a). It would seem that, on the evidence, I could not come to the conclusion that there would be any large amount payable to the purchaser under (b) and it does not seem to me to be unreasonable that the plaintiff should be required to pay that payment if the purchaser has to pay to comply with statutory requirements in relation to the removal. This additional undertaking being proffered, it seems to me, in any event, in the light of the circumstances which I have outlined, that it is a fairly remote possibility that the plaintiff will face any additional difficulty or significantly greater cost in recovering the machine next week after the administration ends, as compared with the situation this week, if in fact the administration ends in circumstances necessitating further action on the plaintiff’s part. Even in that event, the possibility of disadvantage is largely removed by the new clause 6.3, which will bind the purchaser, though the mechanism provided by the undertaking, to permit the removal of the machine even if that causes some disruption to the operation of the colliery and without compensation for the disruption. In those circumstances I have formed the view that what is proposed by the administrator for him to do during the administration will adequately protect the chargee’s interests within the meaning of s 441D(3) in the circumstances which prevail. ”

24 Hamilton J then dealt with the exercise of discretion under s 441D(2). The factors which he explicitly took into consideration in exercising discretion were:

- the shortness of the remaining duration of the administration;
- the adequacy of the protection he had described;
- the general policy of the Act to permit companies to be returned to viability or disposed of as going concerns for the best return to creditors and contributories;
- the fact, agreed between the parties, that the value of the CM on the open market was considerably less than its value in the colliery on a going concern basis;
- the costs of removal;
- the special provision made in Pt 5.3A for secured creditors who had commenced enforcement action before the administration began.

25 In the result Hamilton J granted the administrator the relief he had sought, subject to the undertaking offered by him. Hamilton J also formalised the situation concerning parties by granting leave to join Mr Robertson as a defendant. This had the effect of putting the notice of motion in order because s 441D(2) seemed to require that any application under that section must be by the administrator. He stood the question of costs over to a date to be fixed. 26 Hamilton J’s decisions.

As already mentioned, Hamilton J made his orders about the CM on 10 September 1999. It is against these orders that Debis primarily wishes to appeal.

27    On 13 September 1999, Hamilton J gave judgment in regard to the three Un-a-Haulers. The administrator obtained favourable orders in regard to them also. Neither the receivers nor Debis sought to appeal against these orders. 28    On 16 September 1999 Hamilton J gave judgment on the costs of the proceedings. In general terms his decision was that Debis should pay the defendants’ costs (see par 11 of his reasons). In the course of his reasons he recorded that Debis had pressed its application in regard to the Un-a-Haulers to hearing on the last day of the administrations. 29    The fate of the CM and of the mortgage.

Hamilton J also recorded in his reasons of 16 September 1999 that on that last day of the administrations, the DCA and its attendant sale agreement were executed, and that by that time agreement had been reached with Debis about what was to happen about the CM. (Payments were to be made to Debis by the purchaser, and the mortgage was to be discharged in about two weeks time.)

30    Notice of Appeal.

Debis filed a notice of appeal against Hamilton J’s orders concerning the CM and the costs of the proceedings. No question was raised about his orders concerning the Un-a-Haulers. No application for leave to appeal was filed.

31    Proceedings in this court.

The leave question . Section 101(2)(e) of the Supreme Court Act requires that leave to appeal must be obtained from the Court of Appeal before an appeal can be brought against an interlocutory order or judgment in proceedings in the court. At the commencement of the oral hearing in this court, when the question was raised with counsel for Debis whether leave was necessary before an appeal could go ahead, counsel submitted that it was not, because the orders made by Hamilton J concerning the CM were final.

32    Whether or not that submission is correct is governed in this court by the rule established in two High Court decisions: Licul v Corney (1976) 180 CLR 213 and Carr v Finance Corporation of Australia Ltd (1981) 147 CLR 246. That rule has been applied in New South Wales, sometimes reluctantly, but of necessity consistently: see for example A. Hudson Pty Ltd v Legal and General Life of Australia Ltd (1985) 1 NSWLR 701, and most recently, in the reported decisions, R v Cheng (1999) 48 NSWLR 616. In Cheng Spigelman CJ succinctly stated the rule as being that “the relevant test of an interlocutory judgment is on legal effect rather than practicality” (at 618). 33 In my opinion when the orders which may be made under the relevant sections in Pt 5.3A are considered in light of the foregoing rule, it is clear that the orders made by Hamilton J concerning the CM did not finally establish the legal rights of the parties in regard to the CM. As a matter of legality, it was in my opinion possible for either Debis or the administrator, during the currency of the administration, to make further applications in regard to the CM which could have resulted in an alteration of the orders already made by Hamilton J. Whether any such application may have succeeded would have depended on the facts as they stood at the time when it was made. As a matter of practicality it may be there was little likelihood of any material alteration in the facts in the relatively short period the administration had yet to run, at the time of Hamilton J’s orders. However, Licul and Carr make it clear that this is not the test. As a matter of law, the orders were not, in my opinion, final ones. 34    Therefore, leave was necessary before Debis could pursue its appeal. The court however postponed coming to a final conclusion on this point until it had heard full argument on the substance of the appeal which Debis wished to bring. 35    As I am of opinion that leave should be refused, and as, further, I am in general agreement with the reasons of Hamilton J for reaching the decision which he did, I will deal only briefly with Debis’s appeal arguments. 36    Debis’s submissions considered. Debis’s submissions were a repetition of what had been put to Hamilton J, to the effect that upon analysis of the proposal contemplated by the administrator, it was not one within the meaning of subs 3 of s 441D and alternatively, if it was a relevant proposal, it nevertheless was not one which would adequately protect Debis’s interests. 37 To the extent that I understood the first branch of the submission, it seemed to require greater precision to be given to the words “what the administrator proposes to do” in s 441D(3) than Hamilton J had given. Something in the nature of a complete, fixed, all embracing written proposal seems to have been envisaged. 38 To my mind this approach is much more technical than the words in question justify. They do not seem to me to require any gloss or interpretation at all. The administrator must tell the court what he or she is proposing to do. The protection the subsection gives to the chargee’s interests is given, and amply given, by the other words of the subsection. 39 The court, after considering whatever it is the administrator is proposing to do, must be “satisfied that [it] will adequately protect the chargee’s interests”. Only if it is satisfied of this can the court take the next step of considering whether it will make an order under s 441D(2). I therefore do not accept the first branch of Debis’s submission. 40 The substantial matter Hamilton J had to consider under s 441D(3) was whether he was, after hearing all the evidence about what the administrator was proposing to do, satisfied that it would adequately protect the chargee’s interest. On this, the second branch of the submission, attention was again focussed on what I have earlier called Debis’s strongest point. 41 I agree with the way Hamilton J handled this point. The undertaking, the giving of which Hamilton J made a condition of his order, went a long way towards meeting the difficulties which Debis was asserting might arise. On the facts as they stood when Hamilton J made his orders on 10 September 1999, his assessment was that it was most unlikely that any such difficulties would in fact arise. On the facts then before him it was well open to him to conclude that it was overwhelmingly in the interest of Debis and the proposed purchaser, that the purchaser acquire the CM in its position in the mine and that the possibility of the DCA and attendant sale agreement going ahead without an arrangement about its acquisition was remote. 42 In those circumstances it was in my opinion properly open to Hamilton J to conclude that to restrict the chargee’s rights in regard to the CM for three days, and so to assist the possibility of the DCA and purchase agreement being executed, left the chargee’s interests adequately protected. 43 In my opinion the prospects of Debis succeeding in an appeal, if given leave to bring it, are very low. If the appeal were for me to decide, the prospects would be nil. 44 Still, my predictions are fallible, and my opinion might not of itself be a sufficient ground for refusing leave. However, a further consideration, which has arisen since Hamilton J’s decision and is therefore not one that can be taken into account in considering the correctness of his decision, but which is nevertheless highly relevant to the question of leave, leads me to the firm view that in this case leave should not be granted. 45 This consideration arises from the fact, mentioned by Hamilton J in his costs decision of 16 September 1999, that Debis had made an arrangement with the purchaser of the colliery business, which involved discharge of the mortgage. (This court was told by counsel for Debis that the receivers had in fact exercised their power to sell the CM to the incoming purchaser for one million dollars.) That being so, the only utility of allowing an appeal to go forward would be to decide a question that is now an academic one, apart from the bearing the decision of it might have upon the costs orders made by Hamilton J. 46 For Debis it was contended that answers to the questions it sought to raise on appeal would be of general practical use in commercial and company law. I do not think so. Even if the appeal were to go forward, it would not be necessary for the court to embark on any greater exegesis of the statutory provisions in question here than was undertaken by Hamilton J. The particular statutory words do not in my opinion, in this case at least, require translation into other words in an attempt to make their meaning clearer or in an attempt to give any greater guidance to interested people than the words themselves give. 47 If cases come up in which interpretation of the words does become necessary, it is much more sensible to leave that interpretation to those appropriate cases, than to embark on it in this case when it is unnecessary. 48 Costs.

Since leave to appeal should in my opinion be refused, it follows that I am of the further view that leave would be necessary before any question could be raised about Hamilton J’s costs orders. I see no reason for granting such leave. Hamilton J’s reasons clearly state why he made the costs orders which he did. I do not see in them any ground for thinking that he made any error of the kind which must be shown before this court will grant leave to appeal against costs orders. Again, I do not think an appeal, if permitted, would succeed.

49    Conclusion.

The proceedings in this court, should, for the foregoing reasons, in my opinion, be dismissed with costs.

50 HANDLEY JA: I agree with Priestley JA but will add some additional reasons for concluding that the substantive orders of Hamilton J were interlocutory and not final. 51 Chapter 5 of the Corporations Law deals with external administration. Part 5.3A provides for the administration of a company’s affairs with a view to executing a deed of company arrangement. Division 6 of this Part deals with the protection of a company’s property during administration, and Division 7 deals with the rights of a chargee, owner or lessor. 52 Section 440D (1) in Division 6 provides that during the administration of a company a proceeding in court against the company, or in relation to any of its property, cannot be commenced or proceeded with except with the written consent of the administrator or the leave of the court. 53 The appellant’s proceedings, commenced by summons on 23 August 1999, were not commenced with the written consent of the administrator and the leave of the court was therefore required. An order granting or refusing leave to commence proceedings is interlocutory. See Hall v The Nominal Defendant (1966) 117 CLR 423. A refusal of leave is not final because leave can be granted on a further application. See Buttes Gas & Oil Co v Hammer (No 3) [1982] AC 888, 922, and R v Home Secretary ex parte Khawaja [1984] 1 AC 74, 79. The grant of leave is not final because it can be revoked. See Parke Davis & Co v Sanofi (No 1) (1982) 149 CLR 147. 54 On 10 September when Hamilton J refused to make orders in favour of the appellant he did not in terms refuse leave, but that was the effect of his decision. The appellant had little prospect, in practice, of obtaining leave on a renewed application as the administration was due to end on 13 September in any event. Nevertheless, as Priestley JA has indicated, the status of an order as interlocutory or final depends on its legal and not on its practical effect. See Southern Cross Exploration NL v Fire and All Risks Insurance Company Ltd [No 3] (1990) 21 NSWLR 200, 216-7. The test accepted by the High Court was that propounded by Windeyer J in Hall v Nominal Defendant (1966) 117 CLR 423 at 442-5. According to his Honour the question to ask is (at 443) “does [the order] finally determine the rights of the parties in a principal cause pending between them”, whether (at 444) “it results in a final determination of that action”, or (at 445) “is the effect of the order [to establish] finally or otherwise the rights of the disputant parties - does it put an end to an existing dispute or existing action?”. It is evident that the orders of Hamilton J on 10 September refusing the appellant relief did not finally determine the rights of the parties in a principal cause pending between them. At that stage the appellant’s summons was not even dismissed. 55 Section 441D (2), which is in Division 7, provides that on the application of the administrator the court may order a chargee or receiver not to perform specified functions or exercise specified powers except as permitted by the order. Section 441H (1), which is also in Division 7, applies if an owner or lessor of property used or occupied by or in the possession of a company seeks to take possession of that property. Section 441H (2) enables the court, on the application of the administrator, to order such a person not to perform specified functions or exercise specified powers in relation to the property except as permitted by the order. 56 It is not clear whether the appellant, which held a chattel mortgage over the continuous miner, was a chargee within s 441D (the appeal was argued on this basis), or an owner or lessor of property within s 441H, but nothing turns on the distinction in this case because the powers conferred by the two sections are in substance identical. 57 The company filed a notice of motion on 30 August seeking relief under s 441 H. The administrator was subsequently added as an applicant to the notice of motion and as a defendant to the appellant’s summons. In his reasons Hamilton J referred to s 441 D and made an order pursuant to that section that the appellant and its receiver not have access to the continuous miner while the company was under administration. Nothing turns on his reference to s 441 D rather than s 441 H. 58 An order under either ss 441D or 441H is in substance interlocutory because it operates as an injunction during the relatively short duration of the administration (s 441D (4), s 441H (4)), and does not finally determine the rights of the parties in respect of the security or property. In the language of Windeyer J in Hall v Nominal Defendant, the notice of motion was not “a principal cause”, and any order under these sections is interlocutory because it is subject to review in the light of changing circumstances. 59 Division 13 of Part 5.3A, which confers additional powers on the court, would also authorise orders which discharged or varied existing orders under ss 440D, 441D or 441H. Section 447B (2) enables the court, on the application of a creditor, to make such orders as it thinks necessary to protect the creditor’s interests while the company is under administration. Section 447E (1) provides that where the court is satisfied that an administrator has managed, or is managing, the company’s business, property or affairs in a way that is prejudicial to the interests of some or all of the company’s creditors, or has done an act or made an omission, or proposes to do an act or make an omission, that is or would be prejudicial to such interests, the court may make such order as it thinks just. In Australasian Memory Pty Ltd v Brian (2000) 74 ALJR 991 the High Court gave a generous construction to s 447A in Division 13 and the decision supports an equally generous approach to ss 447B and 447E. Even if the orders under s 440D and s 441D or s 441H were not otherwise interlocutory, the availability of the powers under ss 447 B and 447E to vary or discharge those orders would make them so. 60 On 16 September, after the administration had terminated, Hamilton J dismissed the appellant’s summons pursuant to SCR Pt 40 r 8(1) so that the appellant was not prevented from bringing fresh proceedings or claiming the same relief in fresh proceedings. Part 40 r 8(1) does not apply to an order for the dismissal of proceedings after a trial on the merits. See Newmont Pty Ltd v Laverton Nickel NL (No 2) [1981] 1 NSWLR 221. The dismissal therefore did not finally determine the rights of the parties and was necessarily an interlocutory order. See also Birkett v James [1978] AC 297, 317 which establishes that an order dismissing an action for want of prosecution, which does not prevent a plaintiff from commencing fresh proceedings within time, is interlocutory. 61 The only other order made by the Judge on 16 September was an order for costs but an appeal from this order requires leave under s 101(2) (c) of the Supreme Court Act. 62    Each of the orders made by Hamilton J which the appellant sought to challenge in this appeal therefore was either interlocutory or otherwise attracted a requirement for leave. 63    I agree with the orders proposed by Priestley JA. 64    POWELL JA: I agree with Priestley JA.

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