Emanuele v Australian Securities Commission
[1995] FCA 1068
•15 DECEMBER 1995
CATCHWORDS
Corporations - appeal - companies under deeds of company arrangement - allegations of material non-disclosure to administrator and creditors - winding up order made on application of Australian Securities Commission - whether order should have been made - whether appropriate to dispense with advertising and other notifications - whether appropriate to declare deeds void without reference back to the creditors - whether orders appointing provisional liquidators to related companies justified on the evidence.
Practice & Procedure - appeal - whether company directors have standing to appeal against order winding up company under deed of company arrangement.
Practice & Procedure - failure to obtain leave to apply to wind up a company - whether application brought without leave a nullity - whether a procedural irregularity - whether order can be made nunc pro tunc granting leave.
Corporations Law, ss 435C, 436A, 444E, 444G, 445D, 445G, 459A, 459P, 465A, 467, 472, 1322
Federal Court of Australia Act 1976, ss 24, 28
Federal Court Rules, O 6 r 8, O 35 r 7(3), O 52 r 14
Matter No. SG64 of 1995
ROCCO EMANUELE AND LINTON EMANUELE v AUSTRALIAN SECURITIES COMMISSION and ADDSTONE PTY LTD (in provisional liquidation (ANC 010 764 977) AND OTHERS
SPENDER, von DOUSSA & HILL JJ
ADELAIDE
15 DECEMBER 1995
IN THE FEDERAL COURT OF AUSTRALIA )
)
SOUTH AUSTRALIA DISTRICT REGISTRY ) No. SG64 of 1995
)
GENERAL DIVISION )
ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN:
ROCCO EMANUELE AND LINTON
EMANUELE
AppellantsAND:
AUSTRALIAN SECURITIES COMMISSION
First RespondentAND:
ADDSTONE PTY LTD (in provisional
liquidation) (ANC 010 764 977)
AND OTHERS
Second RespondentMINUTES OF ORDER
JUDGES MAKING ORDER : SPENDER, von DOUSSA and
HILL JJ.
WHERE MADE : ADELAIDE
DATE OF ORDER : 15 DECEMBER 1995
THE COURT ORDERS THAT:
Objections to competency raised by the notices of motion filed by the Australian Securities Commission directed to the appeal and application for leave to appeal be dismissed.
The order of the primary judge made on 30 August 1995 be amended by adding thereto as paragraph numbered 7 an order that the Australian Securities Commission have leave nunc pro tunc pursuant to s.459P(2) of the Corporations Law to apply to wind up in insolvency the
Group A Companies, and the Companies (as defined in paragraph 4 of the order) 3. The appeal and the application for leave to appeal be dismissed.
The Australian Securities Commission pay the appellants' costs of the notices of motion referred to in paragraph 1 hereof.
The appellants pay the costs of the respondents (including those of the liquidator and provisional liquidator, Peter Ivan Macks) of the appeal and application for leave to appeal.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA )
)
SOUTH AUSTRALIA DISTRICT REGISTRY ) No. SG64 of 1995
)
GENERAL DIVISION )
ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN:
ROCCO EMANUELE AND LINTON
EMANUELE
AppellantsAND:
AUSTRALIAN SECURITIES COMMISSION
First RespondentAND:
ADDSTONE PTY LTD (in provisional
liquidation) (ANC 010 764 977)
AND OTHERS
Second RespondentAND:
THE COMMONWEALTH OF AUSTRALIA
Third Respondent
CORAM: SPENDER, von DOUSSA & HILL JJ
PLACE: ADELAIDE
DATE: 15 DECEMBER 1995
REASONS FOR JUDGMENT
THE COURT:
The Emanuel Group comprised approximately 70 companies. On 30 August 1995 the Court ordered that 16 of those companies, referred to in the order as the Group A Companies, be wound up in insolvency; that a further 38 companies be placed in provisional liquidation being 17 companies referred to in the order as the companies identified in Annexure B to the order (the "Group B Companies") and 21 companies identified in Annexure C to the order (the "Group C
Companies"); and declared pursuant to s.445G(2) of the Corporations Law ("the Law") that any deed of company arrangement entered into by the Group A Companies be void and is so void.
Mr Rocco Emanuele who is a director of all the Group A, Group B and Group C Companies, and Mr Linton Emanuele, who is a director of some of them, seek to appeal against those parts of the order which relate to the winding up of the Group A Companies and against the declaration made pursuant to s.445G(2). They also seek leave to appeal against the orders placing the Group B and Group C Companies into provisional liquidation (these orders being interlocutory not final ones). It is convenient to refer to Mr Rocco Emanuele and Mr Linton Emanuele as "the appellants".
By 30 August there were numerous proceedings on foot in the Court which had been commenced on various dates after 23 March 1995 when 40 of the companies in the Emanuel Group appointed Bruce James Carter ("Mr Carter") administrator pursuant to s.436A of the Law. One action, No.SG 3080 of 1995, had by direction become the principal action within which interested parties brought notices of motion for orders which concerned companies in the Emanuel Group. It was in this action that the orders now under challenge were made.
On 30 August 1995 the matters before the Court for hearing and determination included the following applications or notices of motion:
a)By the Commonwealth of Australia against the Group A Companies seeking orders that deeds of company arrangement entered into by those companies in June or July 1995 be declared void pursuant to s.445G, or terminated pursuant to s.445D, and that the Group A Companies be wound up in insolvency. The interest of the Commonwealth was as creditor in respect of unpaid income tax due and payable by Group A Companies that in aggregate at March 1995 totalled approximately $50 million. Applications by the Commonwealth to wind up companies in Group A in insolvency had been commenced before the companies had entered into the deeds of company arrangement. The Commonwealth at meetings of creditors of the Group A Companies had been outvoted by other persons who were admitted to vote as unsecured creditors. The applications to wind up the companies had been duly notified to the Australian Securities Commission ("the ASC"), served on the companies, and advertised as required by s.465A. But the Commonwealth was prevented by s.444E(2) from proceeding with those applications whilst the deeds of company arrangement remained on foot; hence the need for the Commonwealth first to obtain orders declaring the deeds void, or alternatively terminating them.
b)By Mr Carter, as administrator under deeds of company arrangement entered into by the Group B Companies, seeking orders that the deeds be terminated and the companies be wound up. These applications were brought by Mr Carter pursuant to directions of the Court given on 23 August 1995 based on an affidavit and report by Mr Carter to the effect that he considered that the deeds of company arrangement entered into by each of the Group A and Group B Companies should be terminated and the companies wound up as material information had not been made known to him at the time that he made his reports to creditors for the purposes of the meetings of creditors held under Part 5.3A of the Law. The direction given to the administrator was limited to the Group B Companies as orders to the like effect were already being sought by the Commonwealth for the Group A Companies.
c)By Peter Ivan Macks ("Mr Macks") as liquidator of a number of companies in the Emanuel group, other than Group A, Group B or Group C Companies, seeking orders against 5 of the Group A Companies which were alleged to be indebted to the companies of which he was liquidator to terminate the deeds of company arrangement.
d)By the ASC, which formally intervened in the proceedings on 22 August 1995 (although it had appeared as amicus curiae at earlier hearings), and made an application pursuant to s.459P(1)(f) seeking orders that
the Group A and Group B Companies be wound up in insolvency;
ii)pursuant to s.467(3) the Court dispense with the notice requirements of s.465A in relation to the Group A and Group B Companies;
iii)pursuant to s.445G(2) that the deeds of company arrangement entered into by the Group A and Group B Companies be declared void; and
iv)upon compliance with the notice requirements contained in s.465A, the Group C Companies be wound up in insolvency.
Although the application by the ASC had not been filed until 29 August 1995, at a hearing on 23 August 1995 when the other applications were listed, the ASC had indicated its stand that all the companies under administration should be taken out of administration as soon as possible and wound up in insolvency. As the ASC was not a creditor bound by the deeds of company arrangement s.444E(2) had no application to the ASC, and the Group A and Group B Companies could be wound up on its application without there first being made an order or declaration which had the effect of bringing the administrations to an end.
The full terms of the orders and declaration of the Court made on 30 August 1995 are as follows:
"The Court orders that:-
The companies set out in Annexure A hereto ('the Group A Companies') be wound up in insolvency.
The notice requirements set out in section 465A of the Corporations Law be dispensed with in relation to the Australian Securities Commission's motion dated 29 August 1995 to wind up the Group A Companies.
Mr Peter Ivan Macks be appointed liquidator of the Group A Companies.
The Australian Securities Commission's motion dated 29 August 1995 as orally amended this day to wind up
the companies set out in Annexure B and Annexure C hereto ('the Companies') be set down for further directions on Wednesday 4 October 1995 at 9.00 am for mention only.
Mr Peter Ivan Macks be appointed provisional liquidator of the Companies.
Leave be reserved to any person claiming to be interested including any creditor of any of the Companies to make such application as he, she or it may be advised to vary the appointment of Mr Peter Ivan Macks as provisional liquidator of the Companies upon 48 hours notice to the Australian Securities Commission and Mr Peter Ivan Macks.
AND the Court declares pursuant to section 445G(2) of the Corporations Law that any deed of company arrangement entered into by any of the Group A Companies be void and is so void."
The orders made in paragraphs 1, 2 and 3, preceding as they do the declaration under s.445G(2), were clearly made on the application by the ASC. Moreover, the primary judge was asked by counsel for the Commonwealth and the ASC to make the orders to wind up the Group A Companies on the ASC application so that under s.513C of the Law the winding up is taken to have begun or commenced on the day on which the administration began.
A preliminary point is raised by the ASC that both the notice of appeal and the application for leave to appeal filed by the appellants are incompetent as neither appellant has any relevant standing to complain about the orders. To understand the objection to competency, and also the first ground of appeal that complains that the primary judge erred in not granting an adjournment of the proceedings on 30 August 1995 on the application of the appellants, it is necessary to refer to the course of the proceedings leading up to that date.
The application by the Commonwealth in the principal proceedings had come on for hearing on a number of occasions before 30 August 1995. The first was a directions hearing on 18 May 1995. Then followed hearings on 20, 29 and 30 June 1995, 6 and 13 July 1995 and 8 and 23 August 1995. On each of these occasions counsel for Mr Carter appeared for the Group A and Group B Companies being those 33 companies in the Emanuel Group that had entered into deeds of company arrangement. (In the case of the other 7 companies that had appointed Mr Carter administrator pursuant to s.436A on 23 March 1995 the meetings of creditors had not resolved in favour of the company entering into the proposed deed). On each occasion either Mr Winter, or Dr Baxter, partners in the firm Johnson Winter and Slattery, participated after announcing an appearance on behalf of the 33 companies although at no stage did the firm file an appearance on behalf of those companies or any of them. When the right of the companies to be represented separately from the appearance by the administrator was challenged, Mr Winter said:
"Presumably there is a residual entitlement to the directors to direct the company and instruct me, and I am here in that capacity".
At the hearing on 23 August 1995 the Commonwealth and Mr Macks sought final orders on their substantive applications. After hearing the submissions of counsel for the Commonwealth, Mr Macks, the ASC and Mr Carter, Mr Winter applied to have the hearing adjourned. He informed the Court that some of the affidavit material relied on by the other parties had not been served until late on the preceding day, and an affidavit by Mr Carter deposing to the material non-disclosures of information which he believed had occurred, and to his opinion that the companies should be wound up in insolvency, had not been served until that morning. There was discussion as to the identity of the directors who directed Mr Winter to appear "in a residual capacity" for the companies. Mr Winter said that he appeared for the present appellants, as the only directors of the companies. It was said by other counsel that the identity of the directors was controversial and could include Giuseppe Emanuele and Linda Jane Emanuele, the father and sister respectively of the appellants, who, at least in earlier times, had been directors of some of the companies.
Later in these reasons the serious nature of the allegations made by the parties seeking or supporting orders against the companies are outlined. The allegations, if correct, reflected adversely on the conduct of the members of the boards of the companies. The primary judge granted an adjournment to 30 August 1995. His Honour directed that Mr Winter no longer have any right to appear unless his presence were justified by the existence of an appearance nominating the party for whom he acted or a notice of intervention, and further directed that each notice of motion before the Court and all supporting affidavits be served on Giuseppe Emanuele, Linda Jane Emanuele and the two appellants.
On 30 August 1995 Mr Winter did not seek to appear for the companies, but Mr Finklestein QC and Mr Wilkinson appeared on instructions from Messrs Cowell Clarke for the appellants. Senior Counsel said that on his present instructions both Mr Rocco Emanuele and Mr Linton Emanuele were "contributories of a number of the companies, the subject of the application, and may be creditors of a number of them as well". He went on to submit: "So that without the need to argue the so-called reserved power of directors - as akin to receivership cases - ...certainly in a capacity as creditor and certainly in a capacity as contributory - they have an interest..."
The appellants' counsel argued that as Messrs Cowell Clarke had been instructed by the appellants only on 24 August 1995, and as large volumes of papers that comprise the affidavit material before the Court had not been served until late on the afternoon of Friday 25 August 1995, the appellants' counsel and solicitors had had inadequate time to assimilate the material, to advise the appellants, and to place material before the Court. The primary judge refused the adjournment.
The objection to competency is based on the now admitted fact that the appellants are neither contributories nor creditors of any of the Group A, Group B or Group C Companies. It is contended that the appellants had no standing to appear in the capacities claimed by their counsel before the primary judge on 30 August 1995, and cannot acquire standing in a different capacity to prosecute an appeal.
Before this Court counsel for the appellants argued that they had standing in their capacities as directors of the companies, and as parties directed to be served with the proceedings.
The powers of this Court in respect of appeals are derived from, and confined to, those given it by statute: Fuller v Beach Petroleum NL and Another (1993) 117 ALR 235 at 237. The relevant statutory provision is s.24 of the Federal Court of Australia Act 1976 (Cth). Although s.24(1) does not state in terms that an appeal from a judgment of the Court constituted by a single judge may only be brought by a party to the proceedings giving rise to the judgment, a Full Court of this Court in Sen v The Queen (1991) 30 FCR 173 at 175 considered that s.24(1) should be construed as giving a right of appeal only to such a party. It is to be observed that whilst the Federal Court Rules, O.52, r.14(1) is in terms that reflect such an interpretation, r.14(2) contemplates the addition or removal of persons as a party appellant or respondent to an appeal. A person not a party to the proceedings before the primary judge could be added at the appeal stage where that was necessary to ensure that all matters in dispute in the proceedings may be effectively and completely determined and adjudicated upon: see FCR O.6, r.8(1)(b). In this way a person whose rights against and liabilities to any party to the action in respect of the subject matter of the action will be directly affected by the order of the Court could be added as a party: see Re Trade Practices Commission v Milreis Pty Ltd & Others (1978) 18 ALR 17 at 22-23.
However O.52, r.14(1) contemplates that it will be a party to the proceedings before the primary judge who will institute the appeal. In the present case the appellants as individuals were not named or joined as parties in any of the proceedings before the primary judge for hearing on 30 August 1995.
The appellants now seek to appeal in their capacities as directors of the companies affected by the orders of 30 August 1995. No point is taken that there may be other directors of some of the companies. The objection to competency has been argued on the footing that the appellants either constitute or represent the boards of the companies. The appointment of a liquidator or provisional liquidator terminates the powers and functions of the directors, but it is generally recognised that the board of directors retains a residuary power to oppose the order to wind up the company, and to that end to instruct solicitors and counsel to do so: Palmers Company Law, 25th ed., vol. 3 para.15.301; J O'Donovan "McPherson, The Law of Company Liquidation" 3rd ed., p.171; and In re Union Accident Insurance Co. Ltd [1972] 1 WLR 640. In the usual case the opposition to the winding up order, including opposition by way of appeal, would be conducted in the name of the company. However in the present case the advent of the administrations, and then the deeds of company arrangement, deprived the directors of the Group A and Group B Companies of powers which they would otherwise have had to act in the name of the companies in this residuary capacity.
Upon the commencement of the administration the powers of the directors were suspended pursuant to s.437C(1) which provides that a person (other than the administrator) cannot perform or exercise, and must not purport to perform or exercise, a function or power as an officer of the company, except with the administrator's written approval - save that the board of the company may, by resolution, authorise a deed of company arrangement to be executed by or on behalf of the company: s.444B(3). The administration of the Group A and Group B Companies came to an end when deeds of company arrangement were executed by each of the companies: s.435C(2)(a), but the terms of the deeds then bound officers of the company, including the directors: s.444G. By the terms of the deeds the administrator of the deeds was empowered to bring or defend proceedings in the name and on behalf of each company, including applications for the winding up of the company: see clauses 18.5 and 18.15 in some of the deeds, and clause 18.11 in others. It is implicit in the deeds that the express powers of the administrator are intended to exclude any exercise of those powers by the board of directors.
At the time when the primary judge directed that the
directors be served with the notices of motion and affidavits, and when the appellants instituted the proceedings before this Court, the directors of the companies were on the horns of a dilemma. If the deeds of company arrangement were valid, as they contend, their powers as directors were confined by the terms of the deeds by which they and the companies are bound. The practical way of resolving this dilemma is that which was chosen by the primary judge, namely to direct service on the individual directors so that they could appear and be heard as representing the boards of each of the Group A and Group B Companies.
The dilemma did not and does not exist in the case of the Group C Companies which have not executed deeds of company arrangement. The directors could have instructed solicitors to appear before the primary judge in the name of those companies to oppose the orders sought by the ASC. They did not do so. Furthermore, after the orders of 30 August 1995 were made, they could have instituted applications in the names of the companies for leave to appeal against the appointments of provisional liquidators. In the case of the Group C Companies, the companies themselves are the proper parties. However, the fact that the appellants as directors have sought to exercise the rights of the companies in applying for leave to appeal is a procedural irregularity that could be readily cured by allowing the substitution of the companies as applicant if the applications on their merits
would otherwise succeed.
The judgment which the appellants seek to challenge in respect of the Group A Companies declared the deeds of company arrangement to be void, but that does not remove the dilemma as the appellants seek to argue that the order should not have been made. In the case of the Group B Companies the dilemma also continues. In the circumstances this Court should follow the same practical course as the primary judge, and hold that the appellants have a sufficient interest to prosecute the matters now before the Court as they, in their capacities as the directors, appear to represent the boards of the companies in exercise of the residuary powers which remain with the boards.
The objection to competency should be overruled.
It is convenient to deal next with the Notice of Appeal. The first ground raised by the appellants is that the primary judge erred in failing to grant an adjournment to the appellants on 30 August 1995. The appellants' interest in the proceedings arose out of their positions as directors of the company. Mr Winter (and on occasions Dr Baxter) whilst announcing his appearance at the hearings prior to and on 23 August 1995 as being on behalf of the companies was plainly acting on the instructions of the boards. By the time of the hearing of 23 August 1995 Mr Winter's firm had been served with copies of the material filed by the other parties. Moreover there was evidence before the primary judge that on 23 August 1995 Mr Rocco Emanuele was in Court during the hearing, and was seen to be giving instructions to Mr Winter. Although, for reasons not fully explained either to the primary judge or this Court, the appellants sought to appear in a capacity other than as directors on 30 August 1995, it cannot be maintained on their behalf that they were unaware of the applications and material before the Court prior to the new solicitors, Messrs Cowell Clarke, being served with all the paperwork on 25 August 1995.
The allegations of non-disclosure included very serious allegations, and the information before the Court raised the strong inference that the appellants knew of the facts which should have been, but were not, disclosed to Mr Carter for inclusion in his report to creditors. The omissions of material information are summarised in affidavits of Mr Macks sworn on 22 August 1995, Mr K G Barry affirmed on 21 August 1995, and Mr Carter sworn on 22 August 1995. In outline, the information disclosed to creditors was that the Emanuel group was hopelessly insolvent with liabilities to unsecured creditors (excluding inter company liabilities within the Group) exceeding available assets by more than $113 million. Upon liquidation of the companies in the group the unsecured creditors would recover nothing. The directors were, in effect, destitute, and could not contribute funds to any proposal to creditors. Under an arrangement proposed to the creditors by the companies under administration, moneys to be received under a Deed of Forbearance and Release ("the DOFR") would be distributed in a manner such that all unsecured creditors would receive an equal dividend. The creditors were informed that under the DOFR an amount of about $550,000 would be paid by the major secured creditor of the Emanuel Group, the EFG Group, to support the proposed arrangement.
The anticipated dividend, as advised to creditors by Mr Carter, varied as one meeting of creditors followed another. Initially the unsecured creditors were advised that the likely dividend under the proposed arrangement would be approximately 0.30 cents in the dollar but by a meeting on 6 July 1995 this had reduced to less than 0.20 cents in the dollar. What Mr Carter, and in turn the creditors, had not been informed about included information that pursuant to the DOFR, title to 131 properties owned by companies in the Emanuel Group were to be transferred to the nominees of the EFG Group for a consideration of nearly $48 million; that there had been payments under the DOFR in addition to those disclosed to the creditors including an amount of $322,313 paid to creditors of one of the companies under administration and a further sum of $97,220 to other creditors of the Emanuel Group that appeared to constitute preferences; that there were several deeds of cross guarantee between various companies in the Emanuel Group that would operate in favour of creditors of the companies under administration, or some of them, in the event of those companies going into liquidation so that the creditors could in that event look to the guarantor companies for payment; that prior to the appointment of an administrator to 40 companies in the Group on 23 March 1995, 10 properties in the Emanuel Group had been sold to members of the Emanuele family at approximately $4 million below the cost at which the companies had acquired them; and that on the same day that the EFG Group agreed to pay the moneys disclosed to Mr Carter and to the creditors under the DOFR, the EFG Group under a collateral agreement agreed to pay to a company, Simionato Holdings Pty Ltd, $4.6 million in consideration of the directors of the Emanuel Group providing their assistance to the EFG Group in the realisation of securities held by the EFG Group over former assets of the Emanuel Group. Simionato Holdings Pty Ltd on 15 March 1995 had become trustee of a trust styled the Emanuele Family Trust. The directors of Simionato Holdings Pty Ltd were two nephews of Mr Giuseppe Emanuele, one of whom was employed by the main operating company in the Emanuele Group as an accountant. From the moneys agreed to be paid by the EFG Group under the collateral agreement, $3.3 million had been paid direct to Simionato Holdings Pty Ltd. From these moneys substantial amounts had been paid to solicitors and accountants who had acted for companies in the Emanuel Group. The balance of $1.3 million payable under the collateral agreement had been used to enable the purchase by or at the direction of Simionato Holdings Pty Ltd of three properties used or occupied by members of the Emanuele family from one of the Group A Companies. Further, from the moneys received directly by Simionato Holdings Pty Ltd more than $120,000 had been paid to the former wife of Giuseppe Emanuele in satisfaction of arrangements between her and Giuseppe Emanuele for her maintenance and support, and there had also been a number of other payments to or on behalf of the former wife.
In refusing the adjournment the primary judge said he was satisfied that the directors (that is the appellants) well knew what was going on through the presence of Mr Winter at the various hearings before 30 August 1995. That conclusion is amply borne out by the transcripts of these hearings. His Honour then said:
"In my assessment of the matter it was significant that Mr Finkelstein was not able to say that even his initial instructions were to deny these very serious allegations of material non-disclosure..."
That significance remains. The appellants have had ample opportunity since under paragraph 6 of the orders made on 30 August 1995, and under directions which gave liberty to the appellants to file affidavit evidence before this Court to answer the serious allegations. No answer whatsoever has been given, nor has any material been put to the Court to suggest how the failure to secure an adjournment on 30 August 1995 deprived the appellants of an opportunity to place relevant information before the Court, or caused prejudice to the companies which they represented.
The primary judge had before him a major and complex commercial matter where serious allegations of impropriety had been made and remained unanswered. His Honour rightly considered the matter to be one requiring urgent determination. He had adjourned the matter the preceding week to allow time for those who instructed Mr Winter (in reality the appellants) to consider and answer the material, much of which had been in their hands for some time. This ground of appeal attacks the exercise of a discretion by the primary judge. The appellants do not point to any error in fact or legal principle made by his Honour. In these circumstances the appellants must show that even though no particular error is demonstrated, the exercise of discretion is unreasonable or plainly unjust before an appellate court will interfere (House v The King (1936) 55 CLR 499 at 505). And even then, an appellate court will be slow to interfere unless it is shown that the refusal of the primary judge to grant an adjournment will result in a denial of justice to the appellant, and the adjournment will not result in any injustice to the other party: Sali v SPC Ltd and Anor (1993) 116 ALR 625 at 628. The appellants have failed to show how the adjournment has caused any measure of prejudice, let alone injustice, to them or the companies they represent. Moreover the gravity of the unanswered allegations of material non-disclosure give rise to the serious possibility that delay in appointing liquidators or provisional liquidators to the companies under deeds of company arrangement could prejudice the creditors of those companies. The application for an adjournment was rightly refused. This ground of appeal fails.
The next ground of appeal is that the primary judge erred in dispensing with the notice requirements set out in s.465A in relation to the ASC's motion to wind up the Group A Companies. It is clear that his Honour granted the dispensation as the application to wind up these companies by the Commonwealth had been duly advertised, and no creditor had sought to be heard. Moreover, in the large majority of the companies, there were only three main categories of creditor: the secured creditor EFG Group which from its involvement in events which had occurred since the DOFR must have been aware of the applications to wind up the Group A and Group B Companies, creditors who had voted as a block in favour of the deeds of company arrangement, and the Commonwealth in respect of the tax debts. The Commonwealth by separate proceedings had already challenged the existence of the debts asserted at the creditors' meetings by the creditors who voted as a block, and they too must at least have realised that the deeds of company arrangement were under challenge.
As the application before the Court to wind up the Group A Companies had been duly advertised, and having regard to the serious unanswered allegations before the Court, dispensation with the notice requirements in respect of the ASC application was appropriate. This ground, which was not specifically addressed in oral argument by counsel for the appellants, must fail.
The third ground of appeal is that the ASC failed to obtain leave to make the application to wind up the Group A Companies as required by s.459P(2). Subsection 459P(1) specifies who may apply to the Court for a company to be wound up in insolvency, and the Commission is included in the list. The following subsections of s.459P then provide:
"459P(1)...
(2)An application by any of the following, or by persons including any of the following, may only be made with the leave of the Court:
(a)a person who is a creditor only because of a contingent or prospective debt;
(b)a contributory;
(c)a director;
(d)the Commission.
(3)The Court may give leave if satisfied that there is a prima facie case that the company is insolvent, but not otherwise.
(4)The Court may give leave subject to conditions.
(5)Except as permitted by this section, a person cannot apply for a company to be wound up in insolvency."
The ASC had placed before the Court evidence, in the form of a report from Mr Macks as liquidator of some of the Emanuel Group companies that all the Group A, Group B and Group C Companies were insolvent, for the purpose of establishing the requirement of s.459P(3), but by oversight of all parties that were seeking or supporting the winding up orders, the need to obtain leave under s.459P(2) was overlooked when the Court formulated its orders.
Counsel for the applicant contends that the requirement for leave is not merely procedural, and that leave should not be granted nunc pro tunc. The ASC, supported by the Commonwealth, contends that the requirement is procedural in nature, and that pursuant to the slip rule, FCR O 35 r 7(3), this Court in exercise of the power of a Full Court under s.28(1)(b) of the Federal Court of Australia Act should vary the orders by including a grant of leave. Alternatively the ASC seeks an extension of time to appeal against the orders of 30 August 1995 on the ground that his Honour erred in not expressly granting leave pursuant to s.459P(2) of the Law.
The appellants relied on the following passage from the judgment of Glass JA, with whom Moffitt P and Samuels JA agreed, in National Mutual Fire Insurance Co. Ltd v Commonwealth of Australia [1981] 1 NSWLR 400 at 408:
"The inquiry properly to be made ... concentrates on the terms of the statute in question. By having regard to the nature of the precondition, its place in the legislative scheme and the extent of the failure to observe the requirement, the question is posed as a matter of construction whether there was a legislative intention that such a failure should nullify the act in question.
When the requirement of sub-s (4) is examined from this standpoint, unencumbered by reference to other and different procedural requirements, the question is not difficult to answer. There is no question of strict or substantial compliance. The action is commenced with leave or it is not. If it is commenced without leave, the proceeding is either a complete nullity or else it remains valid irrespective of whether or not leave is subsequently granted or else it continues in a state of suspended validity which will come to an end if leave is not obtained within an unspecified time. I can see nothing to support the attribution of a legislative intention of the two last-mentioned kinds. In my view the legislative intention properly to be garnered from the terms of sub-s (4) and its place in the framework of s 6 is that a failure to obtain the leave of the Court in advance invalidates the action and renders it incapable of being revived by leave retrospectively given. It follows that the order granting leave to the Commonwealth to commence its proceeding against the insurer cannot be supported."
Counsel for the appellants contends that s.459P(2) should be similarly construed. It would follow, so it is said, that where one of the persons specified in s.459P(2) wishes to apply to the Court to wind up a company in insolvency that person must first make a separate application to Court for an order granting leave, then make the winding up application after the precondition of leave has been met.
It is to be observed that in urgent cases, which experience shows are not uncommon, the procedure suggested would be surprisingly cumbersome and time consuming.
An alternative construction is that the requirement for leave is procedural in nature; that an application made to Court without leave first being granted is not a "complete nullity" but is one irregularly issued; and that the irregularity can be cured by a later grant of leave which is to operate retrospectively.
National Mutual Fire Insurance Co. Ltd v Commonwealth of Australia, and also Ceric v C E Heath Underwriting and Insurance (Australia) Pty Ltd (1994) 99 NTR 1 to which counsel referred, dealt with legislation that is clearly distinguishable from s.459P. The requirement in the legislation under consideration in those cases was that "no such action shall be commenced in any court except with the leave of that court", and it was held that a grant of leave was a condition precedent to the cause of action to enforce the charge created by the statutes. In the present case s.459P does not create a cause or right of action. The power of the Court to wind up a company in insolvency arises under s.459A. Section 459P by providing who may apply to Court is essentially procedural in nature. The requirement that certain of the persons who may apply, may only do so with leave gives the Court control over applications by classes of persons who do not control the company. In those situations the intent of the requirement, evidenced by s.459P(3), is to ensure that applications are not presented unless there is reason to suspect that the corporation is insolvent. The requirement provides a control over inappropriate or oppressive proceedings brought where there is no sufficient reason to assert insolvency.
There is nothing in the nature of the requirement for leave, or its place in the legislative scheme, that indicates a legislative intention that a failure to obtain leave before the commencement of an application to wind up a company should nullify the application.
Moreover, the passage in National Mutual Fire Insurance Co. Ltd v Commonwealth of Australia relied on by counsel for the appellants was not followed by the Full Court of the Supreme Court of the Northern Territory in Ceric v C.E. Heath Underwriting and Insurance (Australia) Pty Ltd where Gallop ACJ and Morling AJ at p.9 said:
"The reasoning which led the Court of Appeal in National Mutual to conclude that an order nunc pro tunc could not be made on the facts of that case was that an action commenced without leave was expressed to be a 'complete nullity'. With respect, we are unable to agree with that reasoning. We find it difficult to describe a proceeding commenced in a court which has jurisdiction to entertain the proceeding as a nullity. If the defendant in the National Mutual case had failed to plead that the requisite leave to commence the proceedings had not been obtained by the plaintiff and the matter had proceeded to judgment without the point ever having been taken, we cannot think that the judgment would have been a nullity."
Their Honours at p.9-10 approved the following observation of
Angel J in Smart v Stuart (1992) 83 NTR 1 at 7:
"Although there has been judicial recognition of instances where a defect may render a writ a 'nullity', some care must be taken with this terminology. A document which conforms with the rules of court in form and has been issued and sealed by the court should not later be described as a nullity because of the connotation of an absolute 'void' that this induces: cf Atco Industries (Aust) Pty Ltd v Ancla Maritima SA (1984) 35 SASR 408 at 413, 414, 415 per Walters J, at 416, 417 per Mohr J. That a defect may render the document inoperative - in that it is incapable of amendment and yet unable to operate without the necessary amendment - may be accepted; however, the term 'nullity' is one which, with the statutory and judicial trend favouring substance over form and wide powers of amendment, can be seen to be altogether inappropriate."
In re Testro Bros. Consolidated Ltd [1965] VR 18 at 32-35 Sholl J reviewed authorities that showed a uniform interpretation, extending back over 70 years, of statutory provisions which required leave by a court to proceed against a company in liquidation which permitted the granting of leave nunc pro tunc. The section then under consideration was s.199 of the Companies Act 1961 (Vic) that required the prior leave of the court before a petition for the winding up of a company in respect of which an official manager had been appointed. His Honour concluded, at 35:
"In the result, therefore, I have come to the conclusion...that I ought to apply to the interpretation of s.199 the view which the courts in Australia have
taken hitherto of similar provisions, in relation to winding up, and hold that the present petition can be validated, independently of s.366, by treating the proceedings as if leave had been duly obtained. Such legislation is aimed at preserving the control of the Supreme Court over the administration of a company's affairs, a purpose which is sufficiently achieved by interpreting sections like s.199 rather as conferring a control of a directory character on the Court, than as setting up an absolute bar like a statute of limitations."
A similar conclusion was reached in re Sydney Formworks Pty Ltd (in liq) [1965] NSWR 646. Like the Supreme Court of the Northern Territory, this Court should follow the long line of authority, of which in re Testro Bros. Consolidated Ltd and re Sydney Formworks Ltd (in liq) form part, and hold that the requirement to obtain leave in s.459P(2) does not impose a condition precedent to the jurisdiction of the Court and that a failure to obtain leave can be cured by an order nunc pro tunc.
It would have been open to the primary judge even after the order of 30 August 1995 had been sealed to have amended the order under FCR 0.35, r.7(3): Elyard Corporation Pty Ltd v DDB Needham Sydney Pty Ltd, Full Court of the Federal Court, as yet unreported, judgment 24 November 1995. This Court has the power to make such order as in all the circumstances it thinks fit. The evidentiary material before the Court on 30 August 1995 established a strong prima facie case that the Group A Companies and each of them were insolvent. If the grounds of appeal are otherwise to fail this Court should amend the orders made on 30 August 1995 to include an order that the ASC have leave nunc pro tunc under s.459P(2). It is unnecessary to grant leave to the ASC to file a notice of appeal against the orders of 30 August 1995 to achieve this end, or to resort to s.1322 of the Law.
The final ground of appeal is that the primary judge erred in making a declaration under s.445G that the deeds of company arrangement were void when neither the notice of motion by the ASC nor any material filed by the ASC alleged that there is doubt whether the deeds were entered into in accordance with or complied with Part 5.3A of the Law. Relevantly, s.445G provides:
"445G(1) Where there is doubt, on a specific ground, whether a deed of company arrangement was entered into in accordance with this Part or complies with this Part, the administrator of the deed, a member or creditor of the company, or the Commission, may apply to the Court for an order under this section.
445G(2) On an application, the Court may make an order declaring the deed, or a provision of it, to be void or not to be void, as the case requires, on the ground specified in the application or some other ground.
445G(3) ...
445G(4) ..."
It is the case that neither the ASC notice of motion nor the material filed by it specified any particular ground of doubt of the kind referred to in s.445G(1). The short answer to this ground of appeal raised by the respondents is that whilst the orders winding up the Group A Companies were made on the application of the ASC, being the only applicant moving the Court not bound by s.444E(2), the declaration made under s.445G(2) was made generally on the applications before the Court including the application of the Commonwealth. In the course of submissions to the primary judge Senior Counsel for the Commonwealth said:
"What we would propose...is that you act upon the application of the ASC and make the winding up orders on the 16 companies which have been advertised by the Commonwealth now, and, having done that, you then set aside the deeds...Having done that, then on the applications of the ASC, the Commonwealth, Mr Macks and Mr Carter, make orders declaring void the deeds of company arrangement in respect of those 16 companies..."
The applications of Mr Macks and Mr Carter sought orders terminating the deeds under s.445D rather than declarations under s.445G. The application of the Commonwealth however included a claim for relief under s.445G, and specified grounds for doubting that the deeds had been entered into in accordance with, or complied with, Part 5.3A. These grounds were backed up by evidentiary material filed by the Commonwealth. It is not suggested that the grounds specified, and the evidentiary material, did not justify the making of a declaration under s.445G that the deeds be void.
There is nothing in the transcript of the hearing on 30 August 1995, or in the remarks of the primary judge delivered when he announced the order which the Court proposed to make, to suggest that his Honour did not follow the proposal made that the validity of the deeds be considered on the applications of all the moving parties once the decision was made to wind up the Group A Companies on the application of the ASC. The declaration made under s.444G(2) was regularly and properly made on the application of the Commonwealth, whatever criticism might otherwise be made if it were sought to support it only on the ASC application. For this reason alone the ground of appeal cannot succeed.
It will be noted that under s.445G(2) the Court may make an order declaring a deed void "on the ground specified in the application or some other ground". The Court is not confined to a ground specified in the application. The failure of the moving party to specify a particular ground of doubt in the application to the Court would not render the application invalid; the omission would be essentially of a procedural nature: see s.1322. If other material before the Court (and served on those on whom the application under s.445G was required to be served) clearly set out grounds of doubt so that the failure to include those grounds in the application could not cause prejudice or injustice, it is difficult to envisage why the Court could not proceed to make a declaration under the power in s.445G(2).
As part of his submissions under this ground of appeal, counsel for the appellants contended that the primary judge should not have proceeded to make a final order under s.445G until the Court was satisfied that all creditors were fully informed on all material matters. It was submitted that the appropriate course of action consistent with the purpose of Part 5.3A was to first allow the creditors the opportunity of deciding whether to continue with the deeds in spite of the new material facts and revised opinion of the administrator that were not before them when they earlier voted in favour of the deeds.
The execution of the deeds of company arrangement in accordance with the resolutions of the meetings of creditors of the Group A and Group B Companies brought their administrations to an end: s.435(c)(1)(a). In the event that one or more of the matters is established after the administration has come to an end that enlivens the power of the Court to terminate the deeds under s.445D(1), or gives rise to a doubt of the kind mentioned in s.445G(1), the statutory scheme of Part 5.3A does not envisage that the administration is, or can be, in some way resurrected so that the former administrator may reconsider the opinions and statements on the matters on which he previously reported, or that there should be a further meeting of creditors at which any perceived failure to comply with Part 5.3A can be rectified. Once the deed was executed the roles to be performed under Part 5.3A by the administrator came to an end. The fate of the deed, and of the company, on an application under s.445D or 445G rests with the Court. The powers of the Court under these sections are discretionary, and are to be exercised having regard both to the interests of the creditors as a whole, and in the public interest. An analogy may be drawn between the powers of the Court arising under these sections, and the power of the Court to refuse a stay of a winding up order considered in re Data Homes Pty Ltd [1972] 2 WLR 22 at 26 where Mason JA (as he then was), in whose judgment Holmes and Hardie JJA agreed, said:
"It has been held here and in the Supreme Court of Victoria that, in considering an application under s.243 of the Companies Act, the Court should have regard, not merely to the interests of creditors, but also to the public interest, including the question whether the granting of a stay would be detrimental to commercial morality: Re Denistone Real Estate Pty. Ltd. and the Companies Act [1970] 3 NSWR 327; Re Mascot Home Furnishers Pty. Ltd [1970] VR 593. This principle accords with the principle that has been applied to rescission or annulment of a bankruptcy. Buckley J. expressed it in these terms in Re Telescriptor Syndicate Ltd. [1903] 2 Ch. 174, at pp.180-181: 'Where application is made in bankruptcy to rescind a receiving order or to annul an adjudication, the Court refuses to act upon the mere assent of the creditors in the matter, and considers not only whether what is proposed is for the benefit of the creditors, but also whether it is conducive or detrimental to commercial morality and to the interests of the public at large. The mere consent of the creditors is but an element in the case. In In re Hester (1889) 22 QBD 632, at p.641 some trenchant observations of Fry L.J. will be found on the idle notion that the Court is bound by the consents of the creditors. The Court has to exercise a discretion. It is bound to regard not merely the interests of the creditors. It has a duty with regard to the commercial morality of the country: see In re Hester (1889) 22 QBD 632; In re Flatau [1893] 2 QB 219; In re Taylor [1901] 1 KB 744. I am here asked to exercise an analogous jurisdiction, and I may say that it is in my opinion desirable that so far as possible the Court should not assume a different attitude or act upon a different principle in the winding up of a company and in the bankruptcy of an individual.'
That case provides an illustration of what is meant by the expression 'detrimental to commercial morality'. There had been misconduct in the affairs of the company which required investigation. In the circumstances it would have been detrimental to commercial morality to have stayed the winding up, thereby preventing an investigation from taking place..."
There may be cases where a court would find it appropriate to seek the views of the majority of creditors and to give weight to them, but the present is not such a case. The unanswered allegations of non disclosure and facts said to have been concealed which resulted in the administrator failing to give the creditors a proper report about each company's business, property, affairs and financial circumstances, required the Court to exercise the power in s.445G in a way that resulted in the companies being wound up in insolvency. The primary judge was correct to exercise the power under s.445G as he did, and not to defer making the declaration sought whilst the views of creditors were sought. This was so particularly as the Commonwealth was disputing the entitlement of a group of creditors to vote as unsecured creditors.
The final ground of appeal therefore fails.
It remains to consider the application for leave to appeal which is directed to the order appointing a provisional liquidator to each of the Group B and Group C Companies. The sole point sought to be raised on appeal in relation to the Group B Companies is that the orders were made on the application of the ASC, and the ASC had not obtained a grant of leave to apply to wind them up under s.459P(2). That is the same point raised by the third ground of appeal. As leave under s.459P(2) should now be granted nunc pro tunc, there is no substance to this aspect of the proposed appeal and leave to appeal in respect of the Group B Companies should be refused.
It is somewhat surprising that the appellants should now seek leave to appeal in respect of orders made concerning the Group C Companies as the primary judge was informed by Senior Counsel for the appellants on 30 August 1995 that he did not seek to be heard in respect of the Group C Companies. Notwithstanding that, it is now contended that in addition to the point raised generally about the absence of leave under s.459P(2), a provisional liquidator should not have been appointed to certain of the Group C Companies. Counsel referred to Natwest Australia Bank Ltd v Glen Pacific Pty Ltd (Receiver and Manager Appointed) (1992) 6 ASCR 711 and the cases there discussed as authority for the proposition that a provisional liquidator will not usually be appointed unless the material before the Court shows that a winding up order is likely, and to Re Roadmakers Pty Ltd (1985) 3 ACLC 591 for the proposition that mere insolvency is insufficient to justify the appointment of a provisional liquidator; the applicant must also establish that the assets of the company are in someway in jeopardy.
The Group C Companies fall into four categories. Category one comprises 12 companies indebted to Emanuel Management Pty Ltd ("Emanuel Management"), one of the Group A Companies. Categories two and three comprise 2 and 5 companies respectively that are parties to Deeds of Cross Guarantee with other companies in the Emanuel Group, and category four comprises 2 companies that are alleged to be parties to another Deed of Cross Guarantee with Emanuel Management, although an executed copy of the guarantee has not been located. It is conceded that there is evidence of insolvency of the companies in categories two and three, and leave to appeal is sought only in respect of categories one and four.
The ASC application seeks to have the Group C Companies wound up in insolvency, but it is submitted that the evidence before the primary judge was insufficient to establish the likelihood that the companies would be wound up on that ground. Moreover it is submitted that there was no evidence to establish that the assets of the companies were in some way in jeopardy.
Counsel for the appellants took the Court to the report of Mr Macks filed by the ASC in support of its application. It was submitted that the most recent financial statements available to Mr Macks were consolidated financial statements prepared and filed by Emanuel Management covering the affairs of the Emanuel Group for the year ended 30 June 1993. (The fact that there are not more recent accounts is itself a point of significance). These accounts show that Emanuel Management had a negative net worth of $192,284,000 and that the Group had a negative net worth of $74,591,000. However a note to the consolidated financial statements discloses that each of the category one companies, except Emanuel Constructions Pty Ltd, had a book value of $0, which it is submitted fails to establish a negative worth or insolvency. In the case of Emanuel Constructions Pty Ltd, it is recorded that the company had a net book value of $233,000 and is noted to have made a profit of $28,000 in the year ended 30 June 1993.
These submissions do not do justice to the opinion of Mr Macks, and to the information which he identified as supporting his opinion. Mr Macks in his report referred to inter company indebtedness. He said:
"From my investigations to date I am of the opinion that the group operated in the purchase, development and sale of real estate. As each project was envisaged a new company would be formed. When the property owned by that company was sold the profits made would be transferred to Emanuel Management Pty Limited ('Management') via an inter company loan account and if losses were made, Management would lend the company the balance to pay that company's debts.
Management operated as the groups banker, and, as far as I am aware companies in the group did not operate separate bank accounts but rather relied upon the accounts and banking facilities of Management. The loans to and from Management were I believe not expected to be repaid and accordingly many of the subsidiary companies may well have been dormant for years.
I attach as appendix 'C' an extract from Mr R Emanuele's report as to affairs for Management showing the debtor and creditor balances for other group companies."
Mr Macks concluded in respect of more than 70 companies in the Emanuel Group, including the Group C Companies that:
"I am of the opinion that the above companies controlled by their directors which are parties to cross deeds of indemnity or have debts owing to Management are financially interwoven to such an extent that no one company in the group can be considered in isolation from another and accordingly on the basis of the information referred to in this report all these companies are insolvent."
The appendix "C" to which Mr Macks referred indicates that Mr Rocco Emanuele reported that each of the companies in category one had a liability to Emanuel Management, and a deficiency of a like amount presumably as the company had no assets, ranging from $188,853 to $34,815,844. In the case of Emanuel Constructions the liability and deficiency were reported as $4,044,690. Save for one of the companies that was in voluntary administration, Mr Rocco Emanuele reported that the companies had "No capacity to pay". Moreover, the 1993 consolidated financial statements on which the appellants' argument rests disclose that the accounts for that year for 7 of the 12 companies in category one had been qualified by the auditors on the ground that the accounts had been prepared on a going concern basis, and "the auditors expressed concerns that the company will be able to continue as such without the continued support of the parent and its financiers". The other 4 companies not in voluntary administration had been granted relief from the necessity to prepare accounts under a class order, so no further information about them can be gleaned from the financial statements. The report of Mr Macks, which was not questioned before the primary judge, and the report by Mr Rocco Emanuele concerning the affairs of Emanuel Management established a prima facie case of insolvency in the case of each of the category one companies, and insofar as there was a need to establish a likelihood of a winding up in insolvency, that was established.
The power to appoint a provisional liquidator is found in s.472(2) of the Law. The power is not conditional upon the Court being satisfied that there is a prima facie case that the company is insolvent. The discretion to appoint a provisional liquidator arises once the filing of a winding up application has been made, and is otherwise unconfined by the grant of power. Given the complex interlocking nature of the affairs of the Emanuel Group, and the fact that the main holding company, Emanuel Management, had a negative net worth of $192,284,000, and was already in liquidation (it being one of the Group A Companies), the circumstances would plainly justify the appointment of a provisional liquidator to subsidiary companies in the group, even without evidence of insolvency of each separate company, if there were reason for concern about the preservation of assets remaining in the subsidiary companies not then in liquidation. In the present case there was a clear basis for such a concern deposed to by Mr Barry in his affidavit affirmed on 21 August 1995, and expressed by Mr Macks in his report. That concern arose from the matters about which Mr Carter as administrator and the creditors had not been informed, and in which, as a matter of probability, the appellants, the common directors of all the subject companies, were involved.
In the case of the two Group C Companies comprising the fourth category, there appears to have been no current information before the Court about their assets and liabilities. The only information before the primary judge was that contained in the 1993 consolidated financial statements. However, even though an executed copy of the Deed of Cross Guarantee between them and Emanuel Management has not, so far, been located, there is reason in the evidence to infer that the deed had been executed. In any event, for the reasons advanced in the preceding paragraph, the appointment to each company of a provisional liquidator could in all the circumstances be justified.
The appellants have failed to demonstrate error in the case of the Group C Companies by the primary judge, and leave to appeal from the order concerning those companies should be refused.
For these reasons, the submissions advanced on the appellants' behalf fail. It is unnecessary for the Court to consider the notice of contention filed by the Commonwealth which seeks to uphold the orders under appeal on the grounds appearing in the applications of the Commonwealth in action SG 3080 of 1995, and in 16 other applications in which the Commonwealth seeks orders to the same effect as those made on 30 August 1995.
The appeal and application for leave to appeal will be dismissed.
The appellants should have their costs of the unsuccessful objections to competency on a party and party basis against the ASC. The respondents, including the liquidator and provisional liquidator Mr Macks, should have their costs of the appeal and application for leave to appeal taxed on a party and party basis. The ASC has submitted that costs should be awarded in its favour against the appellants on an indemnity basis "by reason of the appellants deliberately misleading the Court as to standing and their failure to provide any explanation". Although the appellants sought to appear as contributories and creditors before O'Loughlin J, it appears from that part of the transcript set out earlier in these reasons that this may have been done to avoid spending time on arguing the right of the directors to appear. Before this Court the appellants admitted that an error had been made before the primary judge - they were not creditors and contributories - and they have successfully advanced their entitlement to appeal in their capacities as directors. An order for indemnity costs is not appropriate.
I certify that this and the
preceding pages are a true
copy of the Reasons for
Judgment of the CourtAssociate:
Dated:
Counsel for the appellants : Mr N Morcombe QC with
Mr A L Dal Cin
Solicitors for the appellants : Messrs Cowell Clarke
Counsel for the 1st respondent : Mr T A Gray QC with
Mr N D Bampton
Solicitor for the 1st respondent : Australian Securities
Commission
Counsel for the 2nd respondent : Mr R J Whitington
Solicitors for the 2nd respondent : Fisher Jeffries
Counsel for the 3rd respondent : Mr D M J Bennett QC
with Ms S Maharaj
Solicitor for the 3rd respondent : Australian Government
Solicitor
Date of hearing : 16 November 1995
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