Hewlett Packard Australia Pty Ltd v GE Capital Finance Pty Ltd - [2003] FCAFC 256

FEDERAL COURT OF AUSTRALIA
Hewlett Packard Australia Pty Ltd v GE Capital Finance Pty Ltd
[2003] FCAFC 256
CORRIGENDUM
HEWLETT PACKARD PTY LTD (ACN 004 394 763) v GE CAPITAL FINANCE PTY LTD (ACN 075 554 175) AND ANOR
N 986 of 2003
WHITLAM, BRANSON & ALLSOP JJ
21 NOVEMBER 2003 (Corrigendum 13 January 2004)
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 986 of 2003

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

HEWLETT PACKARD AUSTRALIA PTY LTD
(ACN 004 394 763)
APPELLANT

AND:

GE CAPITAL FINANCE PTY LTD
(ACN 075 554 175)
FIRST RESPONDENT

MARTIN BROWN AND GREGORY HALL AS LIQUIDATORS OF DAISYTEK AUSTRALIA PTY LTD (ACN 075 675 795)
SECOND RESPONDENTS

JUDGES:

WHITLAM, BRANSON & ALLSOP JJ

DATE OF ORDER:

21 NOVEMBER 2003 (Corrigendum 13 January 2004)

WHERE MADE:

SYDNEY

CORRIGENDUM

In line 2 of paragraph 123 of the reasons for judgment “(Lawson, Brightman and Oliver LJJ)” should be “(Lawton, Brightman and Oliver LJJ)”.

I certify that the preceding paragraph is a true copy of the Corrigendum to the Reasons for Judgment of his Honour Justice Allsop
Associate:
Dated: 13 January 2004
FEDERAL COURT OF AUSTRALIA
Hewlett Packard Australia Pty Ltd v GE Capital Finance Pty Ltd
[2003] FCAFC 256
CORPORATIONS LAW – registration of company charges – power of Court to extend period to lodge notice of charge under s 266(4) of Corporations Act – whether an order made after the “critical day” under s 266(8) effective to protect charges – meaning of s 266 –extension granted – whether proper exercise of discretion.
Uniform Companies Acts ss 100, 106
Companies (State) Codes 1981 s 205
Companies Act 1981 (Cth) s 205
Corporations Law 1989 ss 205, 206
Corporations Act 2001 (Cth) Chs 2K, 5B, ss 263, 266
Company Law Advisory Committee to the Standing Committee of Attorneys-General Seventh Interim Report
Abebe v Commonwealth (1999) 197 CLR 510 referred to
Australian Communication Exchange Ltd v Deputy Commissioner of Taxation (2003) 201 ALR 271 referred to
Australasian Memory Pty Ltd v Brien (2000) 200 CLR 270 referred to
Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485 followed
Campbell Finance Pty Ltd v Vivstan Packaging (Aust) Pty Ltd (in liq) [1998] 2 VR 340 discussed and approved
CDJ v VAJ (1998) 197 CLR 172 referred to
Citibank Ltd v Linput Pty Ltd (in liq) (1991) 9 ACLC 1131 referred to
Commonwealth v SCI Operations Pty Ltd (1998) 192 CLR 285 referred to
Commercial Banking Company of Sydney Limited v George Hudson Pty Limited (in liquidation) (1973) 131 CLR 605 discussed
Conway v The Queen (2000) 209 CLR 203 referred to
David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265 referred to
Douglas-Brown as liquidator of De Barros Nominees Pty Ltd (in liq) v Standard Chartered Finance Ltd (1990) 8 ACLC 993 discussed
Eastman v R (2000) 203 CLR 1 referred to
Emanuele v Australian Securities Commission (1997) 188 CLR 114 referred to
Enterprise Colorvideo Productions Pty Ltd v Corporate Affairs Commission [1984] 1 NSWLR 223 referred to
FAI General Insurance Co Ltd v Southern Cross Exploration NL (1988) 165 CLR 268 referred to
Gerlachv Clifton Bricks Pty Ltd (2002) 188 ALR 353 referred to
In re A Limited Company (1928) 28 SR (NSW) 364 referred to
In re Anglo-Oriental Carpet Manufacturing Company [1903] 1 Ch 914 discussed
In re Ashpurton Estates Ltd [1983] 1 Ch 110 discussed
In re Barrow Borough Transport Ltd [1990] 1 Ch 227 discussed
In re Cardiff Workmen’s Cottage Company Ltd [1906] 2 Ch 627 discussed
In re Cinema Art Films Ltd [1930] NZLR 500 discussed
In re Dalgety & Co Ltd [1928] NZLR 731 discussed
In re Ehrmann Brothers Ltd [1906] 2 Ch 697 discussed
In re Flinders Trading Co Pty Ltd (1978) 20 SASR 14 discussed
In re I C Johnson & Co Ltd [1902] 2 Ch 101 discussed
In re Joplin Brewery Company Ltd [1902] 1 Ch 79 discussed
In re Kris Cruisers Ltd [1949] 1 Ch 138 discussed, not followed
In re L H Charles & Co Ltd [1935] WN 15 discussed
In re Mechanisations (Eaglescliffe) Ltd [1966] 1 Ch 20 referred to
In re MIG Trust Ltd [1933] Ch 542 discussed, not followed
In re Patent Bread Machinery Company; Ex parte Valpy and Chaplin (1872) LR 7 Ch App 289 referred to
In re Resinoid & Mica Products Limited (Court of Appeal 3 May 1967) [1983] 1 Ch 132 discussed
In re S Abrahams & Sons [1902] 1 Ch 695 discussed
In re Spiral Globe Ltd [1902] 1 Ch 396 discussed
In re Tingri Tea Company Ltd [1901] WN 165 referred to
J J Leonard Properties Pty Ltd v Leonard (WA) Pty Ltd (No 2) (1987) 13 ACLR 77 discussed
Knight v FP Special AssetsLtd (1992) 174 CLR 178 referred to
Morris v Woodings (1997) 25 ACSR 636 discussed and approved
National Australia Bank Ltd v Davis & Waddell (Vic) Pty Ltd (2003) 44 ACSR 296 referred to
Oshlack v Richmond River Council (1998) 193 CLR 72 referred to
Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1 referred to
PMT Partners Pty Ltd (in liquidation) v Australian National Parks and Wildlife Service (1995) 184 CLR 301 referred to
Re Application of Guardian Securities Ltd [1984] 1 NSWLR 95 discussed
Re Bootle Cold Storage and Ice Co [1901] WN 54 referred to
Re Davleco Equipment Pty Ltd [1974] Qd R 247 discussed
Re Dudley Engineering Pty Limited [1968] 1 NSWR 483 discussed
Re Drum Reconditioners (NSW) Pty Ltd (1992) 10 ACLC 322 referred to
Re Fairline Furniture (Aust) Pty Ltd (in liq) (1988) 12 ACLR 787 discussed
Re Freightlines Northern Territory Pty Ltd (in liq) [2000] 2 Qd R 384 discussed and not followed in part
Re Jack Harris Ltd [1977] 1 NZLR 141 referred to
Re JJT; Ex parte Victoria Legal Aid (1998) 195 CLR 184 referred to
Re Lloyd Anthony Furniture Pty Ltd; Ex parte Walker (1996) 19 ACSR 478 discussed and approved
Rynmarc Pty Ltd v Classic Ergonomic Chairs Pty Ltd (1994) 12 ACLC 1038 discussed
Sanwa Australia Finance Ltd v Ground-Breakers Pty Ltd (in liq) (1990) 2 ACSR 692 discussed; not followed in part
Scarfe Steel Supplies Pty Limited v SMP Pty Ltd (1981) 27 SASR 187 discussed
Telstra Corporation Ltd v Treloar (2000) 102 FCR 595 discussed
The Commercial Banking Company of Sydney Ltd v George Hudson Pty Ltd (In Liquidation) (1973) 131 CLR 605 discussed
The Owners of the Ship “Shin Kobe Maru” v Empire Shipping Company Co Inc (1994) 181 CLR 404 referred to
Vector Capital Ltd v SNS Software Network Systems Pty Ltd (1988) 12 NSWLR 1 disapproved in part
Wilde v Australian Trade Equipment Co Pty Ltd (1981) 145 CLR 590 referred to
Buckley On the Companies Acts (9^th Ed, 1909) p 222
Buckley The Law and Practice Under The Companies Act 1862 to 1882 (4^th Ed, 1883) pp 147-150
Gough Company Charges (2^nd Ed)
Messrs Paterson and Ednie Guide to Companies Bill 1980 Exposure Draft (1980, Butterworths)
HEWLETT PACKARD PTY LTD (ACN 004 394 763) v GE CAPITAL FINANCE PTY LTD (ACN 075 554 175) AND ANOR
N 986 of 2003
WHITLAM, BRANSON & ALLSOP JJ
21 NOVEMBER 2003
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 986 of 2003

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

HEWLETT PACKARD AUSTRALIA PTY LTD
(ACN 004 394 763)
APPELLANT

AND:

GE CAPITAL FINANCE PTY LTD
(ACN 075 554 175)
FIRST RESPONDENT

MARTIN BROWN AND GREGORY HALL AS LIQUIDATORS OF DAISYTEK AUSTRALIA PTY LTD (ACN 075 675 795)
SECOND RESPONDENTS

JUDGES:

WHITLAM, BRANSON & ALLSOP JJ

DATE OF ORDER:

21 NOVEMBER 2003

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1.The appeal be dismissed.
2.The cross-appeal be dismissed.
3.The appellant pay the costs of the respondents to the appeal.
4.The cross-appellant pay the costs of the cross-respondents to the cross-appeal.

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

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 986 of 2003

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

HEWLETT PACKARD AUSTRALIA PTY LTD
(ACN 004 394 763)
APPELLANT

AND:

GE CAPITAL FINANCE PTY LIMITED
(ACN 075 554 175)
FIRST RESPONDENT

MARTIN BROWN AND GREGORY HALL AS LIQUIDATORS OF DAISYTEK AUSTRALIA PTY LTD (ACN 075 675 795)
SECOND RESPONDENTS

JUDGES:

WHITLAM, BRANSON and ALLSOP JJ

DATE:

21 NOVEMBER 2003

PLACE:

SYDNEY

REASONS FOR JUDGMENT
WHITLAM J

This appeal concerns the power of the Court under s 266(4) of the Corporations Act 2001 (Cth) (‘the Act’) to extend the period within which a notice in respect of a charge on property of a company is required to be lodged. In Douglas-Brown v Standard Chartered Finance Ltd (1990) 2 ACSR 737 the Full Court of the Supreme Court of Western Australia held that an order extending such period under the predecessor of s 266(4), s 205(3) of the Companies Code, might be made after the commencement of a winding up. Allsop J favours a contrary construction of s 205(3). Branson J agrees with Allsop J that it is likely that s 205(3) was not intended to empower a court, after the commencement of official management or winding up, to extend the period within which a notice in respect of a charge could be lodged. However, my colleagues regard themselves as bound not to depart from the accepted view of the scope of this statutory provision, which was applied by the Western Australian Full Court. I do not feel so constrained because I am convinced that the interpretation placed upon s 205(3) in Douglas-Brown is plainly wrong: Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485 at 492.
The facts of the present case are set out in Allsop J’s reasons, which also contain a masterly analysis of the development of the law relating to the registration of charges. As his Honour there explains, the structure of the legislation in Australia on this topic altered in 1982. In the Uniform Companies Act the requirement to register a charge and its voidness as security against a liquidator were provided for in the same section (s 100), whilst an order extending the time for registration of a charge was dealt with in a freestanding section (s 106) along with orders for rectification of the register of charges. Yet s 100 contained no express reference to the effect of an order made under s 106. On the other hand, the Companies Code provided for lodgment of a notice in respect of the creation of a charge in one section (s 201) and for the circumstances in which a charge was void as security as against a liquidator or official manager in a different section (s 205). The power of the Court to extend the period for lodgment of a notice was also located in s 205, which spelt out in elaborate detail the effect of such an order. Rectification of the register of the charges remained in a freestanding section (s 212). This structure has been maintained in all subsequent manifestations of the Australian companies statute.
This layout neatly accommodated a significant change in the law. Prior to 1982 registration of a charge outside the statutory period was only possible pursuant to a court order. However, under s 203 of the Companies Code, not only could a notice in respect of a charge be lodged after the statutory period, such a charge was registered without any court order being needed. This difference was noticed in Douglas-Brown but, in my respectful opinion, the court in that case misunderstood the operation of what is now s 266(1)(d) of the Act.
Section 266 of the Act relevantly provides:
‘(1)     Where:
(a)an order is made, or a resolution is passed, for the winding up of a company; or
(b)an administrator of a company is appointed under section 436A, 436B or 436C; or
(ba)      a company executes a deed of company arrangement;
a registrable charge on property of the company is void as a security on that property as against the liquidator, the administrator of the company, or the deed's administrator, as the case may be, unless:
(c)a notice in respect of the charge was lodged under section 263 or 264, as the case requires:
(i)        within the relevant period; or
(ii)       at least 6 months before the critical day; or
(d)… ‑ the period within which a notice in respect of the charge (other than a notice under section 268) is required to be lodged, being the period specified in the relevant section or that period as extended by the Court under subsection (4), has not ended at the start of the critical day and the notice is lodged before the end of that period; or
(e)  …
(f)  …
(2)The reference in paragraph (1)(c) to the relevant period is to be construed as a reference to:
(a)in relation to a charge to which subsection 263(1) applies‑the period of 45 days specified in that subsection, or that period as extended by the Court under subsection (4) of this section; or
(b)  …
(c)  …
(3) Where, after there has been a variation in the terms of a registrable charge on property of a company having the effect of increasing the amount of the debt or increasing the liabilities (whether present or prospective) secured by the charge:
(a)an order is made, or a resolution is passed, for the winding up of the company; or
(b)an administrator of a company is appointed under section 436A, 436B or 436C; or
(ba)      a company executes a deed of company arrangement;
the registrable charge is void as a security on that property to the extent that it secures the amount of the increase in that debt or liability unless:
(c)a notice in respect of the variation was lodged under section 268:
(i)within the period of 45 days specified in subsection 268(2) or that period as extended by the Court under subsection (4) of this section; or
(ii)       not later than 6 months before the critical day; or
(d) the period of 45 days specified in subsection 268(2), or that period as extended by the Court under subsection (4) of this section, has not ended at the start of the critical day and the notice is lodged before the end of that period.
(4)The Court, if it is satisfied that the failure to lodge a notice in respect of a charge, or in respect of a variation in the terms of a charge, as required by any provision of this Part:
(a)was accidental or due to inadvertence or some other sufficient cause; or
(b)is not of a nature to prejudice the position of creditors or shareholders;
or that on other grounds it is just and equitable to grant relief, may, on the application of the company or any person interested and on such terms and conditions as seem to the Court just and expedient, by order, extend the period for such further period as is specified in the order.
(5)  ….
(6)Nothing in subsection (1) or (3) operates to affect the title of a person to property purchased for value from a chargee or from a receiver appointed by a chargee in the exercise of powers conferred by the charge or implied by law if that person purchased the property in good faith and without notice of.
(a)the filing of an application for an order for the winding up of the company; or
(b)the passing of a resolution for the voluntary winding up of the company; or
(c)an administrator of the company being appointed under section 436A, 436B or 436C; or
(d)       the company executing a deed of company arrangement.
(7)The onus of proving that a person purchased property in good faith and without notice of any of the matters referred to in paragraphs (6)(a), (b), (c) and (d) is on the person asserting that the property was so purchased.
(8)      In this section:
critical day, in relation to a company, means:
(a)if the company is being wound up‑the day when the winding up began; or
(b)if the company is under administration‑the section 513C day in relation to the administration; or
(c)if the company has executed a deed of company arrangement ‑ the section 513C day in relation to the administration that ended when the deed was executed.’
In Douglas-Brown the Western Australian Full Court upheld an order made on 3 November 1988 extending time in respect of a notice lodged on 23 August 1985 where the winding up of the company had commenced on 15 August 1985. The court acknowledged (at 744) that s 205(1)(d) of the Companies Code could not apply in that case, yet it later said (at 745):
‘In our view, s 205(1)(d), when read with s 205(3), makes it clear that the possibility remains open under the Code, as it did under the Companies Act 1961, that an order may be made after the commencement of the winding up.’
Before considering that statement, it is convenient to note the sequence of events in the present appeal:
22 November 2002     charge created
6 January 2003          last day of statutory period for lodgment of notice
14 March 2003           notice of charge lodged
16 May 2003              administrator appointed (‘the s 513C day’ under the Act)
13 June 2003              order made extending period for lodgment nunc pro tunc
up to and including 14 March 2003.
It will be seen from this chronology that the notice had been lodged before the administrator was appointed and that at that day the statutory period had ended.
The reference to s 205(1)(d) in the Douglas-Brown holding is somewhat puzzling. (There is, for present purposes, no relevant difference between s 205(1)(d) of the Companies Code and s 266(1)(d) of the Act.) Section 266(1)(d) plainly contemplates the possibility of a charge being saved from ineffectiveness as against an administrator where a ‘notice is lodged’ after an order has been made under s 266(4). However, s 266(1)(d) will only apply where the period described in that paragraph ‘has not ended at the start of the critical day’. That period must be ascertainable at that point of time and this means that any order under s 266(4) must already have been made. I do not, with respect, share Allsop J’s view that the language used in the phrase ‘that period as extended by the Court’ in s 266(1)(d) and s 266(2)(a) admits of a possible interpretation that an order under s 266(4) might be sought after the critical day. On the contrary, such language (which is also used in s 266(3) in respect of a notice of variation) seems to me inescapably preterite in the context.
In my opinion, the reasons given by Allsop J for his preferred view of the proper construction of s 266(4) are utterly convincing. No intermediate appellate court has ever considered and rejected such a thoroughly presented and careful analysis. So far as voidness under s 266(1) and s 266(3) is concerned, it is clear that an order made under s 266(4) is prophylactic, not curative. Any terms and conditions upon which such an order is made, such as the so-called ‘usual proviso’, would be directed to that end. The reach of s 266(1) and s 266(3) is reflected in the protection afforded the rights of third parties in s 266(6).
I decline to be influenced by the fact that the provision here under consideration has not been fundamentally altered in subsequent re-enactments of the Australian companies statute. I think, with respect, that there is a good degree of unreality in any suggestion that mere re-enactment necessarily reflects Parliament’s approbation of what might be to company law cognoscenti a generally accepted line of judicial authority. Of course, I do not mean to deny the proper role of legal history in explaining statutory language (see, for example, Conway v The Queen (2000) 209 CLR 203 at 207 et seq.), but, in the construction of a statute, the text must be accorded primacy. Here the grammar and syntax of s 266 show quite clearly when an order may be made under s 266(4).
It follows that, in my opinion, the primary judge lacked the power to make the order extending time in the present case. Accordingly, the appeal should be allowed with costs, the orders in the Court below should be set aside and in lieu thereof the application should be dismissed with no order as to costs, and the cross-appeal should also be dismissed with costs.

I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Whitlam.

Associate:
Dated: 21 November 2003

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 986 of 2003

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

HEWLETT PACKARD AUSTRALIA PTY LTD
(ACN 004 394 763)
APPELLANT

AND:

GE CAPITAL FINANCE PTY LIMITED
(ACN 075 554 175)
FIRST RESPONDENT

MARTIN BROWN AND GREGORY HALL AS LIQUIDATORS OF DAISYTEK AUSTRALIA PTY LTD (ACN 075 675 795)
SECOND RESPONDENTS

JUDGES:

WHITLAM, BRANSON and ALLSOP JJ

DATE:

21 NOVEMBER 2003

PLACE:

SYDNEY

REASONS FOR JUDGMENT
BRANSON J
INTRODUCTION

This is an appeal and cross‑appeal from a judgment of the Court constituted by a single judge (Gyles J).
The first respondent (‘GE’) had applied to the learned primary judge under s 266(4) of the Corporations Act 2001 (Cth) (‘the Corporations Act’) for an order extending the period within which a notice in respect of a registrable charge (‘the Charge’) on property of Daisytek Australia Pty Limited (‘the Company’) was required to be lodged with the Australian Securities and Investments Commission (‘ASIC’). The appellant (‘HPA’), which had been a major supplier to the Company, appeared before Gyles J to oppose the making of the order sought by GE.
By order dated 13 June 2003 his Honour ordered, amongst other things, that:
‘1.The period for the lodging with the Australian Securities and Investments Commission notice of the charge given by Daisytek Australia Pty Limited (ACN 075 554 175) (“Daisytek”) to the Plaintiff on 21 November 2002 (the “Charge”) be extended, nunc pro tunc, to and including 14 March 2003.
2.It is a condition to the operation of Order 1 that the Charge shall only be enforceable against any of the persons referred to in section 266(1) of the Corporations Act 2001 (Cth) at such times and only at such times as the amount owing to the Plaintiff by Daisytek under the Facility Agreement dated 28 October 2002 between the Plaintiff, Daisytek and Daisytek Australia (Queensland) Pty Limited (ACN 075 554 175) exceeds $3.7 million and only in respect of such amount as is in excess of $3.7 million.’
HPA appeals from order 1 and 2 of the orders made by Gyles J on 13 June 2003. The grounds of the appeal, as set out in the notice of appeal, in substance raise two issues. First, it is claimed that his Honour acted on a wrong principle by failing to apply the ‘exceptional circumstances test’ for the extension of the period to lodge a notice in respect of the Charge in circumstances in which the Charge was already void. Secondly, it is claimed that his Honour failed to take into account the important circumstance that, as HPA contends, GE would, by reason of a certain subordination deed, receive 100 cents in the dollar as an unsecured creditor of the Company.
By an amended notice of contention GE has contended that his Honour’s decision should be affirmed on three grounds other than those relied on by his Honour. The first ground is, in effect that his Honour ought to have found that the ‘exceptional circumstances test’ had no application in the circumstances that he was required to consider. The second ground is that his Honour erred in accepting that the Charge was relevantly void. The third ground is that if his Honour failed to apply the ‘exceptional circumstances test’ he was under no obligation to do so.
GE cross‑appeals from order 2 of his Honour’s order seeking to have order 2 set aside and another order of his Honour varied in so far as it refers to order 2.
BACKGROUND FACTS AND APPLICABLE STATUTORY PROVISIONS
I have had the considerable benefit of reading in draft the judgment of Allsop J. I gratefully adopt his Honour’s brief outline of the facts and identification of the relevant current statutory provisions.
CROSS‑APPEAL
In my view, it is convenient to give consideration to the cross‑appeal first.
The notice of cross-appeal asserts, in effect, that, in the absence of proof that any unsecured creditor of the Company would suffer actual prejudice, his Honour erred in taking into account potential prejudice to unsecured creditors of the Company, and in granting relief to GE on a condition intended to alleviate potential prejudice to unsecured creditors.
Nothing in his Honour’s reasons for judgment lends support to the view that, absent the proffered condition, or some other means of protecting the interests of unsecured creditors, his Honour would have exercised the discretion vested in the Court by s 266(4) in favour of granting GE the extension of time that it sought. In my view, it is clear that his Honour was not prepared to grant GE the relief that it sought unconditionally (see [37] below). In the circumstances, the proffered condition was an essential aspect of his Honours evaluation of whether it was ‘just and equitable to grant relief’. If the exercise of his Honour’s discretion was affected by error in the way suggested by GE, it follows that the exercise wholly miscarried and order 1 as well as order 2 would be unsustainable.
GE did not, however, invite this Court to re-exercise the discretion. Nor did it contend that a proper exercise of the discretion could have led to only one result, namely an unconditional extension of time. Incidentally, and for completeness, I note that GE also did not contend that order 2 is not, or is not just, a term or condition of the grant of relief afforded by order 1 within the meaning of s 266(4). By so noting I do not intend to convey a view as to the merit of that contention had it been made. In the circumstances it is not now open to GE to challenge order 2 while seeking to retain the benefit of order 1.
HPA, on the other hand, did not adopt the approach of conceding that the cross-appeal should succeed and embracing the consequence that this Court should re-exercise the discretion. Nor did HPA contend that by instituting the cross-appeal GE had conceded the validity of ground (e) of the notice of appeal which is expressed as follows:
‘his Honour’s discretion to extend time miscarried in all of the circumstances’.
No criticism of the approach adopted by HPA is implicit in the above observations; counsel could not know how this Court would evaluate their respective arguments.
However, being conscious of the caution expressed by McHugh, Gummow, Callinan and Heydon JJ in Australian Communication Exchange Ltd v Deputy Commissioner of Taxation [2003] HCA 55; (2003) 201 ALR 271 at [41] in respect of this Court adopting an approach that neither party has sought, it seems to me that the cross-appeal must simply be dismissed. However, I consider it appropriate to add the following.
It is not open to a party before this Court, as it seems to me, to suggest that potential prejudice to unsecured creditors is an irrelevant consideration in the exercise of the discretion created by s 266(4) in the sense that the Court is implicitly forbidden to take such prejudice into account. See Re Dudley Engineering Pty Limited and Companies Act [1968] 1 NSWR 483 per Street J at 485-486; In Re Flinders Trading Co Pty Ltd (1978) 20 SASR 14 per Bray CJ at 34, Mitchell J at 47-48 and Walters J at 50; Scarfe Steel Supplies Pty Limited v SMP Pty Ltd (1981) 27 SASR 187 per Zelling J; Commercial Banking Company of Sydney Limited v George Hudson Pty Limited (in liquidation) (1973) 131 CLR 605 per Menzies J at 613; Walsh J at 618 and Stephen J at 621; Wilde v Australian Trade Equipment Co Proprietary Limited (1981) 145 CLR 590 per Gibbs J at 595; Stephen, Murphy and Wilson JJ, with whom Aickin J agreed, at 606. If this line of authority is to be disturbed, I consider that it should be by the High Court (see [24] below).
APPEAL
I agree with Allsop J, for the reasons which his Honour gives, that it is likely that neither s 205(3) of the Companies Act 1981 (Cth) and the various State Codes nor s 266 of the Corporations Law was intended to empower a court, after the commencement of official management or winding up, to extend the period within which a notice in respect of a charge could be lodged. However, as his Honour points out, there is now an established line of authority to the contrary effect. Section 266 of the Corporations Act has been enacted against the background provided by that line of authority. Even if it had not, I share his Honour’s view that that line of authority should now only be disturbed by the High Court (Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485 at 492; Telstra Corporation Ltd v Treloar (2000) 102 FCR 595 per Branson and Finkelstein JJ at [27]-[28]; National Australia Bank Ltd v Davis & Waddell (Vic) Pty Ltd [2003] VSC 1; (2003) 44 ASCR 296 per Hansen J at [77]]).
I also agree with Allsop J, for the reasons that his Honour gives, that the submission of GE that ‘the question whether or not the court ought grant an extension under sub-s.266(4) is necessarily anterior to the question of whether the charge is void’ should be rejected. The primary judge rightly approached the exercise of the s 266(4) discretion on the basis that the security was void.
Further, accepting, as I consider this Court must, that an extension of time can be granted after the occurrence of one of the events identified in s 266(1)(a), (b) and (ba), I agree with Allsop J that there is no rule of law that constrains the exercise of the broad discretion conferred on the Court by s 266(4) to cases in which ‘exceptional circumstances’ can be found.
This is not to say that the exercise of the discretion is unguided. First, the exercise of the discretion is guided by the requirement of the subsection that the Court be satisfied that ‘it is just and equitable to grant relief’. The express reference in s 266(4) to the position of creditors and shareholders (s 266(4)(b)) reveals that, in considering whether or not it is just and equitable to grant relief, the Court must have regard to the interests of all those who might be affected by a grant of relief and not just to the interests of the chargee. Secondly, the discretion must be exercised judicially and not arbitrarily or capriciously. While each application for relief must be considered on its own facts, the requirement that the discretion be exercised judicially calls for consistency of approach from case to case. As a consequence any rule of practice or guide to the exercise of the discretion that has evolved over the years should not lightly be disregarded.
One such rule of practice or guide is that an extension of time ‘will almost invariably be refused after the commencement of a winding up and will only be granted in exceptional circumstances’ (see Douglas‑Brown as liquidator of De Barros Nominees Pty Ltd (in liq) v Standard Chartered Finance Ltd (1990) 8 ACLC 993 per Malcolm CJ and Rowland J at 998; see also Campbell Finance Pty Ltd v Vivstan Packaging (Aust) Pty Ltd [1998] 2 VR 340 per Batt J; Morris v Woodings (1997) 25 ACSR 636 per Wheeler J; Re Lloyd Anthony Furniture Pty Ltd; Ex parte Walker (1996) 19 ACSR 478 per Branson J). This rule of practice reflects the fact that the validation of a charge that would otherwise be void against the liquidator will reduce the assets available to satisfy the claims of unsecured creditors. The chargee will thus be assisted by the court at the expense of the unsecured creditors. However, as Allsop J explains, ‘exceptional circumstances’ in the above context are simply circumstances sufficient to justify defeating the rights of unsecured creditors, which they acquired when the liquidation commenced, in the assets the subject of the charge (see In re Anglo-Oriental Carpet Manufacturing Company [1903] 1 Ch 914 at 918). To put the matter another way, ‘exceptional circumstances’ are simply circumstances sufficient to render it just and equitable to grant relief notwithstanding that the grant of relief will defeat rights of unsecured creditors.
The requirement that the Court be satisfied that it is just and equitable to grant relief has, as it seems to me, the following practical consequences. If an application for an extension of time within which to lodge notice of a charge is made where none of the events referred to in s 266(1)(a), (b) or (ba) has occurred, the starting position is that the security is valid but could be rendered void if, in the events that happen, the notice is not lodged within the time frame specified by s 266(1)(c). For this reason, as it seems to me, consideration should ordinarily be given to the financial position of the company. If the financial position of the company is apparently secure, in the sense that the company is solvent and no threat to its solvency can be identified, the Court will readily be satisfied that it is just and equitable to grant relief. The financial position of the company means that a ‘critical day’ is unlikely to arise in the foreseeable future. The chargee would therefore face little risk of losing its security if, without approaching the Court, it were to obtain a fresh charge and lodge it within the relevant period, or alternatively, if it were to lodge a notice in relation to the existing charge outside the relevant period. Consequently the grant of relief would be unlikely to affect any person adversely.
However, if the financial position of the company is insecure, the Court will ordinarily assess the extent of the risk that a grant of relief might adversely affect a person with an interest in the assets of the company in the course of determining whether the Court is satisfied that it is just and equitable to grant relief. If liquidation, or an administration founded on insolvency, seems imminent, the risk that, for example, unsecured creditors could be adversely affected by a grant of relief would be high. Where insolvency is a remote and distant possibility only, that risk would be low.
If an application for an extension of time within which to lodge notice of a charge is made where one of the events referred to in s 266(1)(a), (b) or (ba) has occurred, the starting position is that the security is void. The fact that the legislature has provided for this starting position where one of the events referred to in s 266(1)(a), (b) or (ba) has occurred reflects, as it seems to me, recognition that each of those events requires a person external to the company to take control of the assets of the company. Those assets must be able to be identified by that person with certainty. However, since s 266(1) has no relevant operation in respect of solvent companies, the provision for voidness also reflects, as it seems to me, the critical interest of unsecured creditors in the assets of an insolvent or potentially insolvent company. Any grant of relief under s 266(4) will either immediately impact on the crystallised rights of unsecured creditors in those assets or impact on the administration of the company or of the deed of company arrangement in a way that is likely to be adverse to unsecured creditors. A determination that it is just and equitable to grant relief in such circumstances will require the identification of factors of sufficient significance to outweigh the adverse impact on unsecured creditors of the grant of relief.
I turn to consider whether, as the appellant contends, the primary judge failed to articulate the appropriate test for the exercise of his discretion and, further, failed to apply an appropriate test with the result that the exercise of discretion miscarried.
The primary judge did not explicitly state as a test any test for the exercise of his discretion. He stated, however, that ‘[g]enerally speaking, it is accepted that once winding up intervenes the secured creditor is required to show exceptional circumstances before time will be extended’. His Honour observed that in some cases a more benign view of what might constitute exceptional circumstances had been taken than in other cases.
His Honour noted that an administrator had been appointed to the Company pursuant to Part 5.3A of the Act; that is, that the event identified in s 266(1)(b) had occurred. Moreover, his Honour formed the opinion, which is not challenged, that for all practical purposes, the chance of the Company returning to the control of its directors without liquidation or entry into a deed of company arrangement could be discounted. For this reason his Honour proceeded on the basis that the avoidance of the charge against the administrators was likely to be continued against a liquidator or the administrator of a deed unless the extension of time was granted.
His Honour indicated that, notwithstanding the different statutory regimes and the rather more inflexible approach adopted in the United Kingdom on winding up, he found persuasive the analysis by Millet J in In re Barrow Borough Transport Ltd [1990] Ch 227 particularly at 235. The analysis to which his Honour referred may be presumed to be that contained in the following passage:
‘The administration procedure is an alternative and, while in force, a substitute for liquidation. If the rescue or rehabilitation of the company and its business as a going concern is one of the statutory purposes inserted in the order and it is still capable of achievement, there may be no reason why an extension of time should not be granted. But if that purpose is not included in the order, or if it has already proved incapable of achievement, then in my judgment simple justice requires that no extension of time should be granted. In the absence of a voluntary arrangement or formal scheme of arrangement, when the creditors themselves are in control, liquidation is not merely imminent but inevitable. It is true that there are no accrued rights which have crystallised by the commencement of liquidation vested in the administrator or in the creditors. But the administrator is under a duty, if required by the creditors, to apply to the court for the discharge of the administration order and such consequential orders as the court thinks fit, which would inevitably in the circumstances mean a winding‑up order, and the court could not, in justice to the creditors in the meantime, grant an extension of time on the ground that the creditors’ rights had not yet crystallised by liquidation, when that was because the court by its own order had prevented the creditors from taking the necessary steps to put the company into liquidation. Not only does justice require that no extension of time should be granted in such circumstances, but so do considerations of policy. Administration procedure is an alternative to liquidation, and it would be most unfortunate if the presence of an unregistered charge and the possibility that the creditor might obtain an extension of time to register it should tip the scales against the making of an administration order and in favour of liquidation or embarrass the court when considering whether, in the interests of all the creditors, an administration order should be made or not.’
His Honour’s reference to the above analysis suggests that his Honour considered that the appropriate approach was to treat the application before him as one that could only succeed if it would also have succeeded had a resolution been passed for the winding up of the Company. As is noted above, his Honour acknowledged that, ‘[g]enerally speaking, it is accepted that once winding up intervenes the secured creditor is required to show exceptional circumstances before time will be extended’.
It is clear that the primary judge was concerned that an extension of time had the potential to cause prejudice to unsecured creditors. His Honour’s reasons, when carefully considered, make it clear, in my view, that his Honour was not prepared to grant the appellant unconditional relief. The fact that his Honour did grant the appellant relief on the condition which ultimately found expression in order 2 of his Honour’s order of 13 June 2003 leads to the conclusion that his Honour considered that the effect of the condition would be to so reduce the impact of the grant of relief on the unsecured creditors that any remaining effect on them was outweighed by the circumstances that tended in favour of the grant of relief. The factors identified by his Honour that tended in favour of the grant of relief included that there was no fault on the part of GE and that the security related to current advances which should in significant measure be reflected in current assets.

So understood, in my view, his Honour has not been shown to have applied, as HPA contended, an inappropriately lenient test. It is not necessary to determine on this appeal whether, as GE contended, his Honour applied an inappropriately strict test.
HPA further submitted that Gyles J failed to take into account a material consideration. That consideration was contended to be that, by reason of a subordination deed, GE would be entitled in any liquidation of the Company to lodge proofs of debt such that it would receive 100 cents in the dollar in respect of its debts even if those debts were wholly unsecured. His Honour did not overlook the subordination deed. He referred to it as a complicating factor. He indicated that he was not able in this proceeding to determine whether the deed was affected by the failure to notify the charge. It appears that his Honour for this reason attached no weight to the subordination deed in determining to grant the extension of time sought by GE.
In my view the primary judge was not bound to determine the effect of the subordination deed. His Honour’s view that to do so would involve consideration of commercial as well as legal consideration has not been shown to be incorrect. Consideration of matters of that kind on an application under s 266(4), which should be determined without delay, will rarely be appropriate. Further, as Hansen J observed when considering an application for relief under s 266(4) in National Australia Bank Ltd v Davis & Waddell (Vic) Pty Ltd at [78]:
‘The NAB was entitled to pursue its rights under the several securities in the order, and as and when it chose. It is no answer to the present application for the unsecured creditors of Davis & Waddell to say that the NAB should first establish the likely extent of recovery, let alone exercise its rights, under its other securities and only rely on the debenture for such balance of its debt as appears likely to, or may then, exist. As the security holder, the NAB is entitled to pursue its rights under the debenture according to its terms and as the law may allow. Moreover, in terms of the present application, it was important for the NAB to apply with expedition, and not delay on account of seeking to ascertain the position concerning other securities.’
CONCLUSION
I would dismiss both the appeal and the cross‑appeal. I agree with the orders proposed by Allsop J.

I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Branson .

Associate:
Dated: 21 November 2003

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 986 of 2003

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

HEWLETT PACKARD AUSTRALIA PTY LTD
(ACN 004 394 763)
APPELLANT

AND:

GE CAPITAL FINANCE PTY LIMITED
(ACN 075 554 175)
FIRST RESPONDENT

MARTIN BROWN AND GREGORY HALL AS LIQUIDATORS OF DAISYTEK AUSTRALIA PTY LTD (ACN 075 675 795)
SECOND RESPONDENTS

JUDGES:

WHITLAM, BRANSON & ALLSOP JJ

DATE:

21 NOVEMBER 2003

PLACE:

SYDNEY

REASONS FOR JUDGMENT
ALLSOP J
Background

This is an appeal from an order of a Judge of this Court made pursuant to subs 266(4) of the Corporations Act 2001 (Cth) (the Corporations Act) extending, nunc pro tunc, up to and including 14 March 2003, the period for lodging with the Australian Securities Investment Commission under s 263 of the Corporations Act the notice of a charge given by Daisytek Australia Pty Ltd (the Company) to GE Capital Finance Pty Ltd (GE). The second respondents are the liquidators of the Company. The winding up order in respect of the Company was made after his Honour’s orders.
The order made by the primary judge had a condition attached to its operation to the effect that the charge would only be enforceable against any of the persons referred to in subs 266(1) of the Corporations Act at such times and only at such amounts as the amount owing to GE by the Company under a facility agreement between GE, the Company and a company related to the Company, exceeded $3.7 million and only in respect of such amount as was in excess of $3.7 million.
The appellant, Hewlett Packard Australia Pty Ltd (HPA) was and is an unsecured creditor of the Company. In its notice of appeal, HPA asserted a number of errors of the primary judge. In argument, one further ground of appeal was identified. It was not embodied in an amendment to the notice of appeal. Given my views on this issue (being the first question of construction discussed below) there is perhaps no necessity at this stage for the notice of appeal to be amended. The first respondent, GE, sought to maintain the decision of the primary judge in an amended notice of contention and, also, as cross-appellant, appealed against the attachment of the condition to the primary order extending the period for lodgment of the notification.
A brief outline of the facts
By a facility agreement executed on 28 October 2002, GE provided a revolving credit facility, including a letter of credit sub-facility, to the Company in the amount of $35m, with a sub-limit of $500,000 to the letter of credit facility. The facility was secured by a fixed and floating charge over all the assets of the Company executed, as a deed, on 22 November 2002. GE also took the benefit of a subordination deed executed in late October 2002 whereby the Company, a related Australian company and the Texan parent company agreed, by various provisions, to subordinate the parent’s rights as a creditor against the Company and the related company to the rights of GE.
In circumstances which it is unnecessary to canvas, there was a failure to lodge within the period provided by s 263 of the Corporations Act (45 days) a notice in the prescribed form of the charge granted by the Company. It suffices to say that the failure was caused by innocent inadvertence by those then acting on behalf of the Company.
There was evidence that the facility would not have been given without the charge as security. In the light of the following surrounding circumstances, that can be readily accepted. In late 2002, the Company, which carried on a substantial business of selling computer equipment supplies, required working capital to finance its business. The primary judge said that in November 2002 the Company’s balance sheet showed little in the way of tangible assets apart from stock on hand and little in the way of capital. In November 2002, the GE loan stood at somewhat over $15m and an inter-company borrowing stood at $15m. The assets of the Company providing the tangible security were receivables and stock on hand. The primary judge found that the business was trading vigorously: sales turnover in November 2002 was over $10m, over $12m in December 2002, over $15m in January 2003, over $10m in February 2003 and over $11m in March 2003. Throughout this period the business was running at a revenue loss.
The last date for lodgment of the notice under s 263 was 6 January 2003. On 4 March 2003, the solicitors for GE became aware that the relevant form had not been lodged in respect of the Company. The form was lodged on 14 March 2003. No application to the Court under subs 266(4) was made at this point. On 16 May 2003, Mr Brown was appointed administrator of the Company under Part 5.3A of the Corporations Act by a resolution of directors which stated that:
the Company is insolvent or likely to become insolvent at some future time.
On this day, an officer of GE was told by Mr Brown that “there was a problem with [the GE] charge.” On 22 May 2003, proceedings were commenced under subs 266(4) to extend the time in which to lodge the requisite notice.
The relevant current statutory provisions
Chapter 2K of the Corporations Act deals with charges. Part 2K.2 deals with registration. Subsection 263(1), relevantly, provides as follows:
Where a company creates a charge, the company must ensure that there is lodged, within 45 days after the creation of the charge:
(a) a notice in the prescribed form setting out the following particulars:
[the relevant statutory requirements are then set out]
It is unnecessary to consider the provisions dealing with companies registered under Chapter 5B of the Corporations Act.
Part 2K.3 deals with the order of priorities of competing securities. Generally speaking, the question of priority between such securities is determined by the order of registration.
Section 266 deals with the relationship between certain charges and the liquidator or administrator. It is, relevantly, in the following terms:
(1) Where:
(a)   an order is made, or a resolution is passed, for the winding up of a company; or
(b)   an administrator of a company is appointed under section 436A, 436B or 436C; or
(ba) a company executes a deed of company arrangement;
a registrable charge on property of the company is void as a security on that property as against the liquidator, the administrator of the company, or the deed's administrator, as the case may be, unless:
(c)    a notice in respect of the charge was lodged under section 263 or 264, as the case requires:
(i)within the relevant period; or
(ii)at least 6 months before the critical day; or
(d)   in relation to a charge other than a charge to which subsection 263(3) applies—the period within which a notice in respect of the charge (other than a notice under section 268) is required to be lodged, being the period specified in the relevant section or that period as extended by the Court under subsection (4), has not ended at the start of the critical day and the notice is lodged before the end of that period; or
(e)    in relation to a charge to which subsection 263(3) applies—the period of 45 days after the chargee becomes aware that the registrable body has been registered as a company under Part 5B.1, or registered under Part 5B.2, has not ended at the start of the critical day and the notice is lodged before the end of that period; or
(f)     in relation to a charge to which section 264 applies—the period of 45 days after the chargee becomes aware that the property charged has been acquired by a company has not ended at the start of the critical day and the notice is lodged before the end of that period.
(2) The reference in paragraph (1)(c) to the relevant period is to be construed as a reference to:
(a)   in relation to a charge to which subsection 263(1) applies—the period of 45 days specified in that subsection, or that period as extended by the Court under subsection (4) of this section; or
(b)   in relation to a charge to which subsection 263(3) applies—the period of 45 days after the chargee becomes aware that the registrable body has been registered as a company under Part 5B.1 or registered under Part 5B.2; or
(c)    in relation to a charge to which section 264 applies—the period of 45 days after the chargee becomes aware that the property has been acquired by a company.
…
(4)The Court, if it is satisfied that the failure to lodge a notice in respect of a charge, or in respect of a variation in the terms of a charge, as required by any provision of this Part:
(a)   was accidental or due to inadvertence or some other sufficient cause; or
(b)   is not of a nature to prejudice the position of creditors or shareholders;
or that on other grounds it is just and equitable to grant relief, may, on the application of the company or any person interested and on such terms and conditions as seem to the Court just and expedient, by order, extend the period for such further period as is specified in the order.
…
(8) In this section:
critical day, in relation to a company, means:
(a)   if the company is being wound up—the day when the winding up began; or
(b)   if the company is under administration—the section 513C day in relation to the administration; or
(c)    if the company has executed a deed of company arrangement—the section 513C day in relation to the administration that ended when the deed was executed.
Outline of issues raised by the appeal
The appeal and cross-appeal raise important issues, including questions concerning the proper construction of s 266. The first such issue was not contained in the notice of appeal, but was, after the issue had been adverted to by the Court, taken by the appellant. This issue is whether or not, on the proper construction of s 266, after the occurrence of any of the events in s 266(1)(a), (b) and (ba), s 266(1) and (2) contemplate a court order for an extension of time under s 266(4), other than an order already made before any of the events identified by s 266(1)(a), (b) and (ba) has occurred, and before the critical day identified by s 266(8).
The second issue (also a question of statutory construction) arises only if this Court should proceed on the basis that ss 266(1) and (2) do contemplate a court order for an extension of time even if that order has not yet been made, or indeed even if such proceedings have not yet been begun, before the critical day. This second question is whether, if it cannot be concluded as at the critical day that the circumstances provided for in s 266(1)(c) and (d) are not, or will not be, present, the charge is void on the critical day. Put another way, if there is the possibility of a court extension under s 266(4) affecting the application of s 266(1)(c)(i) (through s 266(2)) or affecting the application of s 266(1)(d) (whether or not proceedings seeking such an order have been commenced) can one say, prior to any such order being made, that the charge is void or not void?
The third issue is the identification of principle to apply in assessing whether to grant an extension of time under subs 266(4) in circumstances where an event contemplated by pars 266(1)(a), (b) and (ba) has occurred.
The fourth issue is whether the primary judge erred in his approach to this question.
The fifth issue is whether this Court should re-exercise the discretion in a different way, if the primary judge did err in the approach he took.
Other questions arise on the cross-appeal and amended notice of contention which are largely subsumed within the above issues and which need not be adverted to at this point.
A summary of my views
In my view, uninstructed by, and putting to one side the significance of, authority on the predecessor provisions to s 266 of the Corporations Act, the better view is that the extension of time granted by the Court contemplated by subs 266(2) (for the purposes of par 266(1)(c)(i)) and by par 266(1)(d), is an extension that has been ordered by the Court prior to the “critical day” and does not include orders of the court which may be made thereafter. So, if, as here, on the day of the appointment of the administrator, no order of the Court extending time had been made, (and, indeed, no proceedings had been commenced which sought such an order), there was no order under subs 266(4) which could thereafter be made that would have any effect for the purposes of subs 266(1) and (2) to prevent the charge being void, because no such future order was contemplated by the terms of subss 266(1) and (2).
The view which I favour is contrary to most (but not all) expressions of judicial views on, or assumptions made about, the operation of the predecessor provisions to s 266 under the Corporations Law 1989 and various State Codes passed in 1981. Whilst this is the view that I favour, I am not prepared to decide the appeal on this basis. The course of past authority, the enactment of legislation after 1981 on the assumption of settled jurisprudence and the obligations of intermediate appellate courts in circumstances such as the present to maintain consistency in the administration of the law are such as to require the appeal to be decided on the basis of the continued availability of an order for extension of time under subs 266(4) that would satisfy par 266(1)(c)(i) (through subs 266(2)) and par 266(1)(d), even after an event of the kind referred to in pars 266(1)(a), (b) and (ba) has occurred and after the critical day has passed.
On the second construction question, in my view, if pars 266(1)(c) and (d) are not satisfied on the critical day, but they might yet be satisfied by a later court order extending time under subs 266(4) and but for this future contingency pars 266(1)(c) and (d) would not be satisfied, the charge is void unless and until the court order extending time is made.
Thus approached, in my view, the correct approach to applications under subs 266(4) in circumstances where one of the events in pars 266(1)(a), (b) and (ba) has occurred is one which recognises this state of the charge until the exercise of any discretion by the court. Further, it is necessary in such circumstances to exercise the discretion recognising the rights, liabilities and statutory schemes created by such events.
On this basis, whilst others may not have exercised the discretion as the primary judge did, I see no error of principle in the approach adopted by him.
The first question of construction: Is an order under subs 266(4) relevant after the critical day?
The statutory context prior to the Companies (State) Codes 1981
By s 43 of The Companies Act 1862 (25 & 26 Vict c 89) every limited company was required to keep a register of all mortgages and charges specifically affecting the property of the company. If due entry was not made, every director, manager or other officer of the company who knowingly or wilfully authorised or permitted the omission incurred a penalty not greater than fifty pounds. In the late nineteenth century in England, there was a conflict of judicial opinion as to whether these provisions rendered an unregistered mortgage or charge void. It was eventually held that the charge was not void: In re Patent Bread Machinery Company;Ex parte Valpy and Chaplin (1872) LR 7 Ch App 289 and other cases cited by Buckley On the Companies Acts (9^th Ed, 1909) p 222 ftnt (a) and Buckley The Law and Practice Under The Companies Act 1862 to 1882 (4^th Ed, 1883) pp 147-150. (Although, in a winding up, as an incident of their fiduciary position, directors were not allowed to set up against general creditors an unregistered charge.)
Section 14 of The Companies Act 1900 (63 & 64 Vict c 48) (the 1900 Act) was introduced to render void unregistered mortgages or charges. By s 14 of the 1900 Act every mortgage or charge contemplated by the section that was created by a company after 1 January 1901 was void against the liquidator and any creditor of the company unless filed with the registrar in the appropriate manner within 21 days after the date of its creation, but without prejudice to any contract or obligation of repayment. The structure and terms of s 14 were as follows:
Every mortgage or charge created by a company after the commencement of this Act and being either –
[There were then set out various types of security.]
shall, so far as any security on the company’s property or undertaking is thereby conferred, be void against the liquidator and any creditor of the company, unless filed with the registrar for registration in manner required by this Act within twenty-one days after the date of its creation, but without prejudice to any contract or obligation for repayment of the money thereby secured.
Section 15 of the 1900 Act provided for curial remedying of omission to register or of otherwise faulty registration, in the following terms:
A judge of the High Court, on being satisfied that the omission to register a mortgage or charge within the time required by this Act, or the omission or misstatement of any particular with respect to any such mortgage or charge, was accidental, or due to inadvertence or to some other sufficient cause, or is not of a nature to prejudice the position of creditors or shareholders of the company, or that on other grounds it is just and equitable to grant relief may, on the application of the company or any person interested, and on such terms and conditions as seem to the judge just and expedient, order that the time for registration be extended, or, as the case may be, that the omission or misstatement be rectified.

Sections 14 and 15 of the 1900 Act were re-enacted in 1908 in ss 93 and 96 of The Companies (Consolidation) Act 1908 (8 Edw vii c 69) (the 1908 Act) in similar terms. Section 93 was, relevantly, in the following terms:
Every mortgage or charge created after the first day of July nineteen hundred and eight by a company registered in England or Ireland and being either –
[A somewhat expanded list of securities was then set out.]
shall, so far as any security on the company’s property or undertaking is thereby conferred, be void against the liquidator and any creditor of the company, unless the prescribed particulars of the mortgage or charge, together with the instrument (if any) by which the mortgage or charge is created or evidence are delivered to or received by the registrar of companies for registration in manner required by this Act within twenty-one days after the date of its creation, but without prejudice to any contract or obligation for repayment of the money thereby secured, and when a mortgage or charge becomes void under this section the money secured thereby shall immediately become payable:
provided that:–
[Various provisos were set out which are not relevant.]
Section 96 of the 1908 Act was, in substance, identical to s 15 of the 1900 Act.
The structure of the two provisions was that the first section (s 14 of the 1900 Act and s 93 of the 1908 Act) made the charge void as a security “against the liquidator and any creditor of the company” unless the charge was registered within a defined period. There was no reference within this first section to the power of the Court under the second section (s 15 of the 1900 Act and s 96 of the 1908 Act) to extend the time for registration. The first section rendered the charge void as a security. The second section, with no temporal limitation as to when the application could be brought, gave power to extend the time and so, after the event, overcome the voiding effect of the first section.
Sections 79 and 85 of the The Companies Act 1929 (19 & 20 Geo 5 c 23) (the 1929 Act) re-enacted ss 14 and 15 of the 1900 Act and ss 93 and 96 of the 1908 Act. It should be noted that s 79 of the 1929 Act commenced with the introductory phrase, “Subject to the provisions of this Part of this Act …”. Section 85 was in “this Part” (that is, Part iii), and, so, s 79 was expressly subject to s 85.
Section 95 and 101 of The Companies Act 1948 (11 & 12 Geo 6, c 38) (the 1948 Act) re-enacted in substantially similar terms these provisions.
Part xii of the Companies Act 1985 (UK) dealing with registration of charges retained the general structure that had existed in the United Kingdom throughout the twentieth century. Sections 395 and 404 were, relevantly, in the following terms:
395(1)Subject to the provisions of this chapter, a charge created by a company registered in England and Wales and being a charge to which this section applies is, so far as any security on the company’s property or undertaking is conferred by the charge, void against the liquidator or administrator and any creditor of the company, unless the prescribed particulars of the charge together with the instrument (if any) by which the charge is created or evidence, are delivered to or received by the registrar of companies for registration in the manner required by this Chapter within 21 days after the date of the charge’s creation.
…
404(1)The following applies if the court is satisfied that the omission to register a charge within the time required by this Chapter or that the omission or mis-statement of any particular with respect to any such charge or in a memorandum of satisfaction was accidental or due to inadvertence or to some other sufficient cause, or is not of a nature to prejudice the position of creditors or shareholders of the company, or that on the other grounds it is just and equitable to grant relief.
404(2)The court may, on the application of the company or a person interested, and on such terms and conditions as seem to the court just and expedient, order that the time for registration shall be extended or, as the case may be, that the omission or misstatement shall be rectified.
In 1989, radical changes were made in the United Kingdom by the Companies Act 1989. Curial extension of time was done away with entirely. Provision was made for late delivery of particulars. The intervention of winding up or administration was fatal if the relevant provisions had not been complied with up to that point: see ss 399 and 400 of the Companies Act 1985 inserted by s 95 of the Companies Act 1989, and see also Gough Company Charges (2^nd Ed) p 804.
In Australia, the structure provided for by ss 14 and 15 of the 1900 Act and ss 93 and 96 of the 1908 Act became the model for Australian State legislation such as ss 3 and 7 of the Companies (Registration of Securities) Act 1918 (NSW) which amended the Companies Act 1899 (NSW) and ss 185 and 190 of the Companies Act 1936 (NSW) ss 2(2), 2(3), 3 and 9 of the Companies Act Amendment Act 1909 (Qld) No 13, ss 5 and 8 of the Companies (Mortgages, Charges and Debentures) Act (SA) 1924, ss 101 and 105 of the Companies Act 1920 (TAS), ss 101 and 104 of the Companies Act 1910 (Vic) No 2293 (See also ss 101 and 104 of the Companies Act 1928 (Vic), ss 99, 100, 106 and 109 of the Companies Act 1934 (SA), ss 84, 85, 88 and 92 of the Companies Act 1931 (Qld), ss 101 and 105 of the Companies Act 1920 (Tas) and other State companies legislation of the 1930s. For example, ss 185 and 190 of the Companies Act 1936 (NSW) were, relevantly, in the following terms:
185.(1) Every charge created after the commencement of this Act by a company and being either –
[There were then set out various charges.]
shall, so far as any security on the company’s property or undertaking is thereby conferred, be void against the liquidator and any creditor of the company unless the instrument (if any) by which the charge is created or evidenced, or a copy thereof accompanied by an affidavit verifying the execution of the charge, and in the case of a copy also verifying it as a true copy of such charge, is filed with the Registrar-General for registration in manner required by this Part within thirty days after the date of its creation, but without prejudice to any contract or obligation for repayment of the money thereby secured.
(2)When a charge becomes void under this section the moneys secured thereby shall immediately become payable.
…
190.(1) The court, on being satisfied that the omission to register a charge within the time required by this Act, or that the omission or mis-statement of any particular with respect to any such charge or in a memorandum of satisfaction, was accidental or due to inadvertence or to some other sufficient cause, or is not of a nature to prejudice the position of creditors or shareholders of the company, or that on other grounds it is just and equitable to grant relief, may on the application of the company or any person interested, and on such terms and conditions as seem to the court just and expedient, order that the time for registration shall be extended, or, as the case may be that the omission or mis-statement shall be rectified.
The uniform companies legislation passed by the States in the early 1960s contained, in Division 7 of Part IV, provisions concerning the registration of charges. The relevant parts of ss 100 and 106 of the Companies Act 1961 (NSW) were as follows:
100(1)       Subject to this Division where a charge to which this section applies is created by a company there shall be lodged with the Commission for registration within thirty days after the creation of the charge a statement of the prescribed particulars and –
(a)     the instrument (if any) by which the charge is created or evidenced: or
(b)     a copy thereof together with a statutory declaration verifying the execution of the charge and also verifying the copy as being a true copy of the instrument –
and if this section is not complied with in relation to the charge the charge shall, so far as any security on the company’s property or undertaking is thereby conferred, be void against the liquidator and any creditor of the company.
(2)     Nothing in subsection (1) shall prejudice any contract or obligation for repayment of the money secured by a charge and when a charge becomes void under this section the money secured thereby shall immediately become payable.
…
106     The Court, on being satisfied that the omission to register a charge (whether under this or any corresponding previous enactment) within the time required or that the omission or mis-statement of any particular with respect to any such charge or in a memorandum of satisfaction was accidental or due to inadvertence or to some other sufficient cause or is not of a nature to prejudice the position of creditors or shareholders or that on other grounds it is just and equitable to grant relief, may on the application of the company or any person interested and on such terms and conditions as seem to the Court just and expedient order that time for registration be extended or that the omission or mis-statement be rectified.
The development of the law prior to the Companies (State) Codes 1981
By 1906 the following can be said about the structure of, and approach to, ss 14 and 15 of the 1900 Act:
(a)A condition protecting rights in, or against, the property the subject of the charge which had been acquired would invariably be inserted into any order made pursuant to s 15.
(b)The “rights” contemplated by such usual condition included the rights of later secured creditors and persons who had taken a later interest in the assets of the company, but did not include those of general creditors, in the absence of a winding up.
(c)The “rights” contemplated by such usual condition did include those of general creditors if, before registration, a winding up had occurred, because the rights of general creditors at that point were those created by the statute (whether strictly in the nature of a trust or not) to have the property of the company administered for their benefit (the charge, at this point of time, being void) and such rights were viewed as in the nature of rights in, or against, the property of the company.
(d)The position of general creditors, in particular, but not necessarily limited to, those who gave credit after the time when the charge should have been registered, might, in any particular circumstances, need to be examined, perhaps in the presence of someone to represent their interests, to see whether any further condition was “just and expedient”.
(e)The nature of the inter-relationship between the voiding provision (ss 14 and 93) and the remedial provision (ss 15 and s 96) had been explained. The avoidance was not absolute, but only as a security, but that avoidance as a security was subject to the court’s power, in effect to validate, by the exercise of the power to extend time. If such power were exercised, and if registration occurred in accordance with the extension granted, the charge was taken to have been registered within time and was made valid ab initio, by the making of a nunc pro tunc order. The two provisions were read together to produce this result. (As earlier noted, s 79 of the 1929 Act commenced with the introductory phrase “Subject to the provision of this Part…”. See also the introductory words to s 100 of the Uniform Companies Acts in the 1960s in Australia. This is how the two sections had been interpreted, in any event, before these specific words came into the relevant legislation.)
(f)By the avoidance of the charge as a security, not only against the liquidator, but also any creditor, the provisions dealt not only with the security if a liquidation intervened, but also with the question of priorities between secured creditors.
Because of the importance of this early seminal period, it is appropriate to examine, in a little detail, the main reported decisions which dealt with most of the above propositions and the development of the jurisprudence up to 1981.
In In re Joplin Brewery Company Ltd [1902] 1 Ch 79 Buckley J saw the application under s 15 of the 1900 Act as a similar application to the application to register out of time under s 14 of the Bills of Sale Act (UK) 1878. Buckley J referred to the usual practice in applications under s 14 of the Bills of Sale Act of attaching to any order extending time a proviso to protect the rights of third parties. He said the following at 81:
These applications are made without serving the creditors, and the orders ought to be drawn so as to save the rights of persons who have become creditors of the company before registration is effected, just as in the case of bills of sale. I therefore direct that there be added to the order the words: “but that this order be without prejudice to the rights of parties acquired prior to the time when the debentures shall be actually registered”; and I intimate my opinion that these words ought to be added in every case, unless there is some good ground to the contrary – eg, in cases in which the order could not prejudice the rights of any creditors.
Buckley J noted at 80 (in a case before him of a family business, the few owners all supporting the application and an entirely solvent company) about the making of orders under the Bills of Sale Act 1878:
…these orders are made readily upon proper evidence of accident or inadvertence for the reasons that by the insertion of these words [the without prejudice qualification] the rights of absent parties are not affected.
The reference by Buckley J to the protection of “rights of persons who have become creditors” was to be the focus of some judicial discussion and disagreement in due course, to which I will come.
Within six weeks of In re Joplin Brewery being decided, Swinfen Eady J in In re Spiral Globe Ltd [1902] 1 Ch 396 dealt with an application under s 15 of the 1900 Act in circumstances of the intervention of a winding up and a less than solvent company. Debentures had been issued and, due to inadvertence, not registered. In April 1901, resolutions of the company were passed for the voluntary winding up of the company and the appointment of a liquidator. The assets of the company were not sufficient to satisfy unsecured creditors in full, without recourse to the property charged by the debentures. The applicant sought an order under s 15 without the proviso imposed by Buckley J in In re Joplin Brewery. It is important to understand the arguments of counsel for the debenture holders, who said that the imposition of the proviso would give general creditors access to property by inadvertence and through no fault of the debenture holders (a kind of “windfall” argument) and that the Bills of Sale Act cases could be distinguished, because in those cases true property rights had intervened – a creditor in one case had taken goods in execution and, in another, a trustee in bankruptcy had acceded to the estate of the holder of the bill of sale. After a winding up, it was said, general creditors had no right to the property of the company. Also it was said that if any proviso was to be made, only creditors who had become such since creation of the debentures should be its subject. Swinfen Eady J rejected all these arguments and stated as follows at 399:
…It is true that on the winding-up of a company the property does not become vested in the liquidator as it does become vested in the trustee of a bankrupt on the bankruptcy of an individual. But the principle of the cases before referred to is not limited in its application to those cases in which the ownership of or property in goods or chattels has actually changed; it extends, in my judgment, to cases in which the rights of third persons have actually accrued, and which would be prejudicially affected if registration were allowed without saving and protecting those rights. Upon a winding-up the rights of the whole body of the company’s creditors have intervened, and the position of the liquidator, and through him of all the general creditors of the company, would now be very much prejudiced if the time for registration were unconditionally extended. The Company being now in liquidation, the difficulty cannot be avoided by issuing fresh debentures. The order will therefore be made, but with the addition of the words before mentioned.
[emphasis added]
The result was that Swinfen Eady J made an order which was of no utility, as counsel had submitted. His Lordship might just as easily (its effect being understood to have been the same) have dismissed the application on the grounds of the intervention of the winding up and the accrual of the rights of creditors. It is important to note, however, that Swinfen Eady J was of the view that the winding up wrought a change to the rights of all creditors.
Buckley J returned to the question in February 1902 in In re S Abrahams & Sons [1902] 1 Ch 695, where debentures were issued and not registered. In October 1901, the company passed a resolution for voluntary winding up. Thereafter, an application was made under s 15 of the 1900 Act. The assets of the company were insufficient to pay the debenture in full plus costs. If the extension were to be granted, the general creditors would have obtained nothing. In argument Buckley J said (at 697):
Ought an order extending the time to be made after a winding-up has commenced? True there is no vesting of the company’s property in the liquidator, but the rights of parties have crystallised.
Counsel for the applicant debenture holders then referred to the course taken by Swinfen Eady J in In re Spiral Globe. Counsel for the liquidators was not called on. In his reasons Buckley J said at (698-701):
The applicant desires that the order extending the time may be made without the insertion therein of the words which I inserted in the order made in In re Joplin Brewery Co. What he wants is an order operating retrospectively to a date prior to the commencement of the winding-up. I cannot make such an order.
[Buckley J then described the financial position of the company describing other debenture holders in respect of securities issued before 1 January 1901, general creditors and continued.]
…If I made such an order as has been asked for, the holders of the debentures for 5000l., whose security is now barely sufficient, would be prejudicially affected, and if any surplus remained the unsecured creditors would be prejudicially affected, for the effect of the order would be to give the applicant priority over them in respect of his debt of 500l.
What ground is there for making such an order?
…
But, in my judgment, I ought not to make any order which will prejudice the position of the other creditors.
…
When this company went into liquidation in October, 1901, the rights of its creditors attached, and the unsecured creditors had the right to say that the assets should be administered on the footing that only the holders of the debentures which did not require registration and the holders of any debentures which required registration and had been registered should have priority.
I cannot see that there is any principle on which I ought to take those rights away. Sect. 14 of the Act of 1900 says that if the debentures are not registered within a certain time they shall be “void against the liquidator and any creditor of the company.”
…
Unless in very exceptional cases, I think that orders extending the time for registration ought to be qualified as in In re Joplin Brewery Co. I am unable to see how, if a winding-up has commenced, an order containing the words inserted in the order made in that case can do anybody any good. If you have secured and unsecured creditors of a company in liquidation, you must, under an order in the form in In re Joplin Brewery Co., first pay the secured creditors in full or to the extent of the assets. If there is a surplus after paying the secured creditors in full, the debenture-holder whose debenture has not been registered in time, and who obtains an extension of time on the terms imposed in In Re Joplin Brewery Co cannot claim priority over but will come in pari passu with the unsecured creditors, and this position he would obtain without any order from the Court under s 15 of the Act of 1900. Such an order as I made in In re Joplin Brewery Co. would, in my judgment, be useless to the applicant. Under these circumstances his summons must be dismissed with costs.
[emphasis added]

Whilst I am of the view that the history leading up to, and the secondary material surrounding, the 1981 Code were such that the proper construction of s 205 of the 1981 Code was that once winding up or official management intervened no statutory role for any court extension was contemplated by subs 205(1) and (2), I am not prepared to conclude that the contrary view is patently or plainly wrong. The contrary view has been expressed, if I may respectfully say so, by judges of great learning and experience.
Whilst I am mindful of the position of the litigants before the Court and their interest in seeing the result of the appeal determined according to the views of those who heard the appeal, it should not be forgotten that the case was fought below, and the appeal was brought to this court, on the foundation that the intervention of winding up did not remove the role of the court under subs 266(4) as relevant to the operation of subs 266(1) and (2).
In these circumstances, and following, as I must, what the High Court said in Marlborough Gold Mines, I proceed to decide the appeal on the basis that the intervention here of the administration of the Company under Part 5.3A of the Corporations Act did not exhaust the role of subs 266(4) and the Court retained the power to extend time, relevantly, for the purposes of par 266(1)(c)(i), subs 266(2) and par 266(1)(d).
The second question of construction: Is the charge void at the critical day pending an order under subs 266(4)?
This issue was of primary significance to the submissions of the parties. The correct answer to it affects, importantly, the character and the context of the exercise of the discretion within subs 266(4). Indeed, the answer to this question provides the tool to rationalise the widely differing exercises of discretion displayed by courts in Australia since 1981: cf Gough Company Changes (2nd Ed) at p775. The course of authority since the early twentieth century described above is relevant to this question.
Mr Macfarlan QC, who appeared with Mr Castle for GE, submitted that (in relation to s 266 of the Corporations Act, but his submissions could be applicable to s 205 of the 1981 Code and s 266 of the Corporations Law) subs 266(1) provides for the voidness of charges only unless circumstances thereinafter referred to did not occur. On the occurrence of one of the events in pars 266(1)(a), (b) and (ba) of the Corporations Act, the existence of a possibility of a later court order under subs 266(4) for the purposes of par 266(1)(c)(i), subs 266(2) and par 266(1)(d) meant that it could not be concluded at that time (the critical day) that the charge was void. For instance, if, at the critical day, a court was reserved on an extension application it could not be said that the charge was void awaiting nunc pro tunc remedying and validation by force of the court order. That would, it was conceded, have been the position under earlier legislation before the 1981 Code; but under ss 205 and 266, it was submitted, no avoidance occurs unless (not ‘unless and until’ or ‘until’) certain circumstances can be said not to exist. If one is to construe the references to court extension in subss 205(2) and 266(2) and pars 205(1)(d) and 266(1)(d) as encompassing future orders (whether in proceedings commenced or not) the consequence, it was said, is that one cannot say at the critical day that the charge is void merely because the relevant court order has not yet been made.
Mr Macfarlan referred in particular to what Needham J said in Vector Capital at 6, where his Honour, after discussing the differences between the 1981 Code and earlier legislation, said the following:
I think that these differences, as I have said, are significant. The power of the court – s 106 of the Act, s 205(3) of the Code – is expressed in similar terms, but it bears in each case upon legislative provisions having those significant differences. For example, the strong argument, under the previous legislation, that an order extending time for registration of the charge should not, except in the most extraordinary circumstances, be made when a winding up commences because the effect of the winding up is to give the unsecured creditors a beneficial interest in the assets of the company, must be considerably weakened in the case of the provisions of the Code because of the existence of s 205(1)(d). That subsection envisages registration after the commencement of a winding up provided it is within forty-five days of the creation of the charge or within the period for registration as extended by the Court under s 205(3). The legislation treats the rights of unsecured creditors to an interest in the assets of the company as being expressly subject to the Court’s power to extend time.
[emphasis added]
Whether or not Vector Capital is authority for the proposition as enunciated by Mr Macfarlan need not be decided. If, however, this underpinning submission is correct, it undermines entirely what might be termed the strict or narrow approach to the exercise of discretion exhibited in the reasons of the Court of Appeal delivered by Lord Brightman in In re Ashpurton, the Full Court in Douglas-Brown, Batt J in Campbell Finance, Wheeler J in Morris v Woodings, and Branson J in Re Lloyd Authority Furniture. If, in circumstances of a winding up, when the court is considering the matter the charge is not void the property the subject of the charge has not fallen into the statutory regime described by Buckley J in In re Anglo-Oriental Carpet Manufacturing. On this view, the winding up of the company and its state of solvency are relevant but by no means determinative, or even dominating, factors. On this view, to grant the extension is not to destroy crystallised rights of unsecured creditors over the property covered by the void charge, because the charge is not void unless the order for extension is refused.
This view of the change in the Code informed the approach of Needham J in Vector Capital and Hansen J in NAB v Davis & Waddell. In these cases, and in other cases such as the Full Court of the Queensland Supreme Court in Sanwa, Thomas JA in Re Freightlines Northern Territory, and Murray J in Re Fairline Furniture the enquiry as to the existence of “exceptional circumstances” was a broad one with the question of whether the making of the order was “just and equitable” more prominently in view. The winding up of the company was one, but only one, of the relevant factors, and by no means determinative or overwhelming.
There are, it seems to me, significant difficulties with this construction of s 266. Its acceptance would mean that the statute is providing for a state of uncertainty as to the immediate status of the charge for an indeterminate length of time as and from the “critical day” including the commencement of statutory management of the company (either by a liquidator or administrator) in which early clarity of position is of importance, and in the case of an administrator, of critical importance. The charge is not void, but it cannot be said to be valid until the circumstances satisfying “unless” can be seen to be present. A construction of an Act which does not make clear, for instance, whether a liquidator or a receiver may take possession of assets on a particular day and keeps that judgment in abeyance for an indefinite period of time until a court decides an application under subs 266(4) is to be rejected, unless the words and context compel such an impractical result. They do not.
The section commences with the word “Where”. That preposition relates to events whose occurrence is later marked in subs 266(8) by the phrase the “critical day”. A temporal element in the word “Where” can be seen. That assists in seeing the word “unless” used as “unless and until”. This is not to imply anything into s 266, but it is to give the section a temporal content, in particular in the words “Where” and “unless”. So viewed, the charge is void unless and until a later court order under subs 266(4) feeds the circumstances in par 266(1)(c)(i), through subs 266(2), or in par 266(1)(d), thereby validating the charge. True it is, as Needham J said in Vector Capital at 6:
The legislation treats the rights of unsecured creditors to an interest in the assets of the company as being expressly subject to the Court’s power to extend time.
However, that was always the case. Section 14 of the 1900 Act was subject to the validating effect (by a nunc pro tunc extension of time) of s 15.
This does not mean that the charge is void if the 45 day period, or an extension period already provided for by an order of the court, is yet to expire on the critical day. In such a case the validity of the charge is contemplated by the section. The certainty required at the critical day is not compromised by that degree of suspense. Such charges are valid and will remain so unless a notice is not lodged within that time. This operation of par 266(1)(d) does not, however, cause a structurally different approach to be undertaken to the balance of the operation of the section in avoiding charges at the critical day. I do not agree that this aspect of par 266(1)(d) (as par 205(1)(d) of the 1981 Code) weakened the consequences of the avoidance of the charge as at the critical day as described by Needham J in Vector Capital at 6.
If s 266 be so construed, some degree of certainty is given to the liquidator or administrator. At least he or she knows who may take possession of the asset in question, and that the receiver or secured creditor must go to the court to make out a case for an order under subs 266(4).
Whilst this view is not my preferred view of the section (see above), it does give some effect to the emphasis in the Eggleston Committee’s Report on the criticality of the intervention of the events in pars 205(1)(a) and (b) of the 1981 Bill and Code.
The third question: What is the applicable principle in exercising the discretion under subs 266(4) where an event contemplated by pars 266(1)(a),(b) and (ba) has occurred.
The answer to the second construction question provides an important element to understanding the scope of the task in subs 266(4), in particular where an event contemplated by pars 266(1)(a), (b) and (ba) has occurred.
Subsection 266(4) provides for a broad judicial discretion informed, at least at one level, by what is “just and equitable”. On numerous occasions the High Court has made clear that judicial discretions entrusted to courts are to be read liberally for the purpose intended by the statute in question and are not to be constrained or limited by glosses or implications not found in the relevant statute: see CDJ v VAJ (1998) 197 CLR 172 at 201; The Owners of the Ship ‘Shin Kobe Maru’ v Empire Shipping Company Inc (1994) 181 CLR 404 at 421; PMT Partners Pty Ltd (in liquidation) v Australian National Parks and Wildlife Service (1995) 184 CLR 301 at 313 and 316; Knight v FP Special AssetsLtd (1992) 174 CLR 178 at 205; FAI General Insurance Co Ltd v Southern Cross Exploration NL (1988) 165 CLR 268 at 290; David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265 at 275-76; Emanuele v Australian Securities Commission (1997) 188 CLR 114 at 136-37; Oshlack v Richmond River Council (1998) 193 CLR 72 at 81; Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1 at 56-7; Abebe v Commonwealth (1999) 197 CLR 510 at 586-87; Re JJT; Ex parte Victoria Legal Aid (1998) 195 CLR 184 at 201; Commonwealth v SCI Operations Pty Ltd (1998) 192 CLR 285 at 301; Eastman v R (2000) 203 CLR 1 at [81]; Australasian Memory Pty Ltd v Brien (2000) 200 CLR 270 at [17]; and Gerlachv Clifton Bricks Pty Ltd (2002) 188 ALR 353 at [14]
That guiding principle, however, does not alter the fact that the court will be called on to exercise the power in subs 266(4) in many different circumstances. Some only of those circumstances are referred to in pars 266(1)(a), (b) and (ba). In those circumstances, the court will approach the exercise of the power with a recognition of the consequences of the occurrence of the relevant event in pars 266(1)(a), (b) and (ba).
The first matter to be borne in mind is that the Parliament has provided that the charge be rendered void. That is the case in respect of the intervention of winding up, administration and the execution of a deed of company arrangement.
In circumstances where winding up has intervened, that means that at the time the court is examining the matter, the property the subject of the charge has fallen under the control of the liquidator to be dealt with according to the statutory regime built around s 501 of the Corporations Act.
The effect of the equivalents of s 501 of the Corporations Act and the scheme for winding up in insolvency under legislation prior to 1989 (in England) and prior to 1981 (in Australia) was viewed unanimously by the courts as virtually fatal to any application. The general body of creditors was protected by the usual In re Joplin Brewery proviso. Expression of a like view has fallen from a number of judges in Australia since 1981, including Malcolm CJ and Rowland J in Douglas-Brown, Batt J in Campbell Finance, Wheeler J in Morris v Woodings and Branson J in Re Lloyd Anthony Furniture.
These cases, as does In re Ashpurton, express what of course must be a discretion (since that is the command of the legislature) in terms of “exceptional circumstances”. Properly understood, this is not to engraft a limitation or implication on to subs 266(4) impermissibly contrary to the High Court cases referred to above, but it is merely to recognise that if winding up has occurred, the general creditors have statutory rights of the kind discussed by Buckley J in In re Anglo-Oriental Carpet Manufacturing and that if those rights are to be vanquished by the exercise of the power, circumstances sufficient to justify that consequence must be shown. The “exceptional circumstances” are circumstances sufficient to justify that outcome.
This has not, however, been a uniform approach in Australia since 1981. All the authorities in Australia since 1981, which assume the existence of the relevant power of the court after the intervention of winding up, used language containing expressions of the need for “exceptional circumstances”. It is fair to say, however, that the individual exercises of discretion, both refusing to exercise and exercising the power, display a huge difference in approach. In my view, they also betray an underlying difference in principle.
Though not clearly expressed in all cases, underlying the difference of approach are competing views as to the importance of the effect of winding up. If the effect of winding up under the Code, the Corporations Law and Corporations Act was of the same nature as under the previous legislation in respect of the property the subject of the charge, it would be difficult to resist the conclusions that the stricter approach, reflected in the views of, amongst others, Malcolm CJ and Rowland J, Batt J, Wheeler J and Branson J, should be followed and that a number of the reported cases were, arguably, wrongly decided. If the effect of non or late notification under ss 205 and 266 at the point of winding up was to avoid the charge and thus bring the property the subject of the charge within the purview of the statutory regime created for the benefit of all unsecured creditors, an extension of time would have the effect of destroying crystallised rights. That was how the Australian provisions before 1981 and the English provisions before 1989 operated. That was why the “usual proviso” protected unsecured creditors if a winding up intervened before registration.
The task is to give effect to subs 266(4). The discretion may be exercised if the events in pars (a) and (b) in subs 266(4) are, or are not, present, or in circumstances which, “on other grounds”, make it “just and equitable” to grant relief. One does not engraft a rule on to that section that in certain circumstances (for instance after a winding up) some different test applies. The discretion is a broad one, but it comes to be exercised in the circumstances which have happened.
If a winding up has intervened, the rights of creditors of a statutory and quasi-proprietorial kind have crystallised. Over a century of authority recognises the character and importance of that circumstance. In circumstances of the intervention of a winding up, whilst the cases have used the phrase “exceptional circumstances”, the appropriate way of expressing the matter conformably with the width of the discretion, is to say that it is to be exercised in the recognition of intervening rights of all creditors, the nature of which rights has been described by courts without debate for over a century. These rights arise because of the avoiding effect of s 266. The ex post facto validation of the charge and the consequent destruction of the creditors’ rights are possibilities, as they always were; but the circumstances would need to be sufficient to warrant the destruction of crystallised rights in the nature of property over the property the subject of the charge. To say that the intervention of a winding up is but one factor to take into account is apt to deflect attention from these considerations involving the consequences of winding up.
To the extent that cases such as Vector Capital, Sanwa, NAB v Davis & Waddell and Re Freightlines refer to a more “inflexible” or “rigid approach” in England in this regard, as not being relevant to the operation of s 205 of the Code, s 266 of the Corporations Law or s 266 of the Corporations Act, I respectfully disagree. Cases such as In re Ashpurton in England and Douglas-Brown in Australia correctly identify the important consequences of winding up. They are in accordance with an unquestioned and uniform judicial approach throughout the whole of the twentieth century to the effect of winding up on creditors’ rights. As I have said, they do not impermissibly fetter the discretion or engraft a limitation on it. Rather, they recognise, consequent upon the avoidance of the charge by operation of the statute, the statutory rights of all unsecured creditors crystallising over property falling within the unsecured assets upon winding up and the need for circumstances to exist which would warrant the destruction of these rights.
The intervention of a winding up is only one of the events in pars 266(1)(a), (b) and (ba). The legislature has equated the events in (b) and (ba) with (a) in terms of their effect. That is not to say, however, that the occurrence of the events in (b) and (ba) creates statutory rights in creditors identical to those crystallised upon a winding up. The purpose and conduct of an administration are obviously different from a winding up. The role of the administrator is not to distribute and apply the existing assets of the company for the benefit of the existing creditors (cf 501) but, in the terms of s 437A:
(1) While a company is under administration, the administrator:
(a)   has control of the company's business, property and affairs; and
(b)   may carry on that business and manage that property and those affairs; and
(c)    may terminate or dispose of all or part of that business, and may dispose of any of that property; and
(d)   may perform any function, and exercise any power, that the company or any of its officers could perform or exercise if the company were not under administration.
(2)Nothing in subsection (1) limits the generality of anything else in it.
This statutory form of management of the affairs of the company is for the benefit of all concerned: see s 435A. During administration, the company’s assets receive a degree of protection from creditors: see Division 6. One outcome may be a deed of company arrangement. This affects the property of the company: par 444A(4)(a) and s 444E. Although it is not apt to equate the position of unsecured creditors after the events in pars 266(1)(b) and (ba) with the position of unsecured creditors after the event in par 266(1)(a), the creditors should be seen as having the benefit of an expeditious regime for independent control of the company and its assets conformable with the provisions of Part 5.3A. That can also be seen in the light of the historical approach in Australian courts (to the contrary of the approach of the English courts between 1933 and 1967 or 1983) of viewing the interests of unsecured creditors as relevant to the grant of an extension in circumstances of doubtful solvency or insolvency: see In re Flinders Trading and Re Dudley Engineering.

The above is the broad context in which the discretion in subs 266(4) should be approached. The power is a widely expressed one, but it must be exercised bearing in mind the effect of the occurrence of the events in pars 266(1)(a), (b) and (ba) and the rights, obligations and statutory schemes created by the Corporations Act, if the events referred to in pars 266(1)(a), (b) and (ba) have occurred.
The discussion by Millet J in In re Barrow Borough Transport Ltd [1990] 1 Ch 227 at 235-36, in the context of an extension application before the legislative changes of 1989, though in respect of the English legislation, helpfully, if I may respectfully say so, discusses the relevance of the occurrence of administration and the different matters which may be thrown up for consideration in an extension application. If reconstruction is capable of being achieved, there may be no reason to deny an extension; if reconstruction is unlikely, insolvency looms, at the very least. In this latter circumstance, given that creditors cannot, without following the scheme of Part 5.3A, wind the company up, there may be every reason, in a given set of circumstances, for a court to view the matter in a way analogous to the way it would view the matter had winding up intervened: that crystallised rights of creditors would shortly intervene, and recognising that without administration (the efficacy of which is not to be undermined) such rights may well already have intervened. If rehabilitation is not possible, in any particular circumstance, there may be a significant risk of impending crystallisation or falling in of the creditors’ rights in a winding up. The degree of likelihood and imminence of that eventuality will be a relevant, and likely powerful, consideration. There are a multitude of factual circumstances which might attend an assessment of what is “just and equitable” for the purposes of subs 266(4) if administration, but not winding up, has intervened. Consideration of whether, and the extent to which, particular aspects of the conduct of, and facts surrounding, an administration are relevant to the exercise of the discretion should await the resolution of real controversies. No particular aspect of this administration was said to be relevant to the exercise of discretion here.
The above is not inconsistent with an otherwise unchallenged view of an intermediate court of appeal. The authorities do not speak with one voice on this subject matter. A number of decisions, JJ Leonard, Douglas-Brown and Campbell Finance among them, proceed upon the basis that the change to creditors’ rights discussed by Buckley J in In re Anglo-Oriental Carpet Manufacturing is still a relevant analysis. Others, such as Sanwa, prefer the approach of Needham J in Vector Capital, part of which approach was the recognition by Needham J (at 6) of the weakening of what might be called the traditional approach by the presence of par 205(1)(d).
As I have earlier stated, I do not think that the structure of s 266 of the Corporations Act (or ss 205 and 266 of the Code and Corporations Law, respectively) is (or was) such as to remove the relevance of the approach of Buckley J in In re Anglo-Oriental Carpet Manufacturing, in this respect, if winding up had intervened.
The fourth and fifth questions: Whether the primary judge erred in his approach and if he did whether this Court should exercise the discretion in a different way.
The appellant criticised the reasons of the primary judge saying that they did not reveal the principle which his Honour applied. I do not agree. His Honour expressed the view that the starting point was a recognition that the charge was void. After surveying the facts, his Honour recognised that he could discount the likelihood of rehabilitation, and that liquidation or a deed were the likely outcomes. (In fact winding up in insolvency occurred after his Honour made the orders.)
His Honour stated at [16]:
…The intention of the legislature expressed in s 266(1) is that void securities should not disturb insolvent administration, whether by way of liquidation or deed of company arrangement, company administration being a precursor to each. This reflects what was described by Menzies J (a master of company law) as:
‘… a deeply rooted principle of company law that, when liquidation has commenced, one creditor should not be assisted by the Court to improve its position vis-à-vis other creditors.’
(Commercial Banking Co of Sydney Ltd v George Hudson Pty Ltd (in liquidation) (1973) 131 CLR 605 at 613). Section 266 has a long pedigree, both in Australia and in the United Kingdom, although not, of course, in relation to the new form of company administration, although it did apply in relation to its predecessor, official management.
This passage recognises (correctly) not only the void status of the charge at the time of hearing, but also the need to recognise the relevant statutory regimes of winding up and administration in the exercise of the discretion and the deeply rooted principle (subject to the statute) of equality of status of creditors in insolvent administration.
After referring to the history of, and practice in relation to, provisions of this type, and after noting the earlier firm practice of refusal of an extension once winding up intervened, and the decision of Needham J in Vector Capital, his Honour approached the matter as follows at [20]:
…Generally speaking, it is accepted that once winding up intervenes the secured creditor is required to show exceptional circumstances before time will be extended. That view was said by Hansen J to be consistent with the balance of the authorities in his recent comprehensive review of them (National Australia Bank Ltd v Davis & Waddell (Vic) Pty Ltd 44 ACSR 296 at [77]). That review identifies the relevant authorities. It is not for a single judge to endeavour to rationalise them all. It is fair to say that the actual decision in that case (and in some others relied upon by counsel for GE) indicates a more benign view of what might constitute “exceptional circumstances” than has been taken by some other judges.
I take his Honour in this passage not to be adopting a “more benign view” of “exceptional circumstances”. His Honour clearly was of the view that the charge (until any order) was void and was clearly moved by the views of Menzies J in Hudson’s case. Whilst his Honour did not express the matter quite as I have above, the use of the phrase of some currency, “exceptional circumstances”, the recognition of the voidness of the charge and the recognition and application of Hudson’s case lead me to conclude that his Honour was approaching the exercise of the discretion in a manner substantially as required by the statute and as discussed at [186] to [204] above. This is illustrated by what his Honour said at [21]:
…As counsel for Hewlett Packard correctly put, the starting point is that the security is void. In my opinion, the approach should be the same where there is the intervention of administration. As I have said, for all practical purposes, some form of insolvency administration will follow this administration, and it is clear from s 266(1) that the security is avoided equally against the scheme administrator as it is against a liquidator. Although care needs to be taken in considering United Kingdom authorities because of the different statutory regimes and the rather more inflexible approach prevailing there on winding up, there is enough similarity to make persuasive the analysis by Millett J in In re Barrow Borough Transport Ltd [1990] 1 Ch 277, particularly at 235.
I do not think that his Honour’s reference to the review of the authorities by Hansen J in NAB v Davis & Waddell (see [21] of the primary judge’s reasons) and his Honour’s reference to the “more inflexible approach” of the English authorities gainsays the conclusion referred to at [208] above.
His Honour’s exercise of discretion was attacked on a number of bases by the appellant. First, it was said that his Honour did not adopt a requirement of “exceptional circumstances”. For the reasons I have given, his Honour was not required to do so in terms. Nevertheless, as I have said, his Honour did use that phrase in a context which leads me to conclude that in substance he approached the matter in accordance with the manner required by the statute.
Secondly, it was said that there were no exceptional circumstances, beyond the matters reflected in paras (a) and (b) in subs 266(4), which the appellant characterised as only preconditions or a gateway to the exercise of the discretion, not matters relevant to the exercise of the discretion. I think that this submission illustrates the danger of using phrases such as “exceptional circumstances” as a surrogate for the terms of subs 266(4). So used by the appellant, it created a separate and distinct test, applied later in time to the enquiries referred to in paras (a) and (b) in subs 266(4). To do so is to rewrite the provision by adding a separate integer and making irrelevant to the consideration of that integer the matters relevant to paras (a) and (b) of subs 266(4). That is impermissible.
This attack by the appellant can also be seen as one which stated that if the exercise of the power were approached according to principle, no judge could have exercised it as the primary judge did. Expressed by the appellant, this submission was that there were, and could be seen to be, no exceptional circumstances. I would prefer to express this putative criticism by saying that no judge, understanding the approach which I have described, could have reached the conclusion his Honour did. I disagree. Winding up had not intervened, though its occurrence was a distinct possibility. There was plainly innocent inadvertence and some promptitude in application. The assets of the Company reflected, in significant part, the accommodation provided, which would not have been provided without security. A condition providing some cushioning of the effect of the order on the general creditors was attached. No particular prejudice based on reliance on the register was pointed to. No particular aspect of the administration in question was pointed to as militating against the exercise of the discretion. Whilst others may have exercised the discretion differently, in particular because of the apparent insolvency of the Company, I do not think that, approaching the matter as I have described, such a result was beyond the reasonable and proper exercise of discretion.
The appellant also submitted that the primary judge erred:
…in failing to have any or any sufficient regard to the fact that GE was likely to still receive 100 cents in the dollar as an unsecured creditor for its indebtedness even if the application to extend time failed and Daisytek went into liquidation;
This proposition was founded on what was said to be the effect of the subordination deed. No relevant error is shown by this submission. It may be that, as submitted, the deed is not able to be challenged in any way; but his Honour was not in a position to assess the worth of the Texan parent’s claims against the Company and the related company, which claims would provide the value to GE through the subordination deed. His Honour was perfectly entitled to say, as he did at [7]:
Factors which complicate the situation are the arrangement for capitalisation of inter-company debt and the effect of the subordination deed between (inter alia) GE and Daisytek Inc as to the subrogation of GE in relation to that debt. It is submitted that the subordination deed is not affected by the failure to notify the charge. I cannot determine those issues in this proceeding and, in any event, the resolution of them will depend upon commercial as well as legal considerations.
The appellant also said that his Honour erred:
…in failing to have regard to the potential and actual prejudice to unsecured creditors by reason of the granting of the extension of time sought by GE;
It is true that there was material to show that there would be a reduced recovery for unsecured creditors if the extension was granted, even with the condition. His Honour said at [22]:
Counsel for GE referred to a number of considerations which indicated that … there were no circumstances pointing to … any prejudice to creditors beyond that occasioned by the default itself. That is substantially correct. …
However, that expression of view of lack of prejudice was directed to a wider question, which was made clear by the following sentence:
…In particular, the security relates to current advances which, apart from the revenue losses which were being incurred, should have been reflected in current assets such as stock on hand or receivables. …
I cannot conclude that the primary judge failed to appreciate from the material before him that the unsecured creditors would receive a lower dividend if the extension were granted. Nor was the failure to treat that as determinative fatal to the exercise of the discretion. Crystallised rights on a winding up had not intervened; and in all the circumstances, as I have said, the ultimate exercise of discretion was one which can be seen as reasonably open.
I would not interfere with the exercise of the discretion. I would therefore dismiss the appeal.
In these circumstances it is unnecessary to deal separately with the issues raised in the amended notice of contention. In any event, I have, in substance, dealt with them in dealing with the second and third questions above.
Cross-Appeal
In the cross-appeal, GE complains about the attachment of the condition. The specific grounds were:
1.His Honour … erred in taking into account for the exercise of his discretion under section 266(4) of the Corporations Act 2001 (Cth) (the “Act”) the potential for prejudice to occur to unsecured creditors in circumstances where there was no evidence led of actual prejudice.
2.His Honour erred in holding that an order to extend time for lodgment of the charge given by Daisytek Australia Pty Limited to the Cross Appellant ought be made on the terms of a condition that might alleviate potential prejudice to unsecured creditors and ought to have held that the extension order be granted in the circumstances of the present case without a condition, whether in terms of order 2 or otherwise.
Concern with the effect on creditors, in circumstances of the intervention of one of the events in pars 266(1)(b) and (ba) was plainly a relevant and appropriate consideration: Re Dudley Engineering, In re Flinders Trading and In re Ashpurton Estates. That the interests of creditors are relevant does not mean that they always legitimately demand protection. The closer the company is to insolvency and to being wound up may, in any given case, militate against the favourable exercise of the power. This is so, in large part, because the closer such possibilities are, the closer is the crystallisation of rights of creditors in the nature of property. The likelihood and imminence of such crystallisation is, and always has been seen in Australia to be, a significant consideration. The consideration relevant to unsecured creditors cannot be limited, a priori, to circumstances where specific prejudice from acting on the faith of an incorrect register can be shown. The possible considerations are broader and their assessment will depend on all the circumstances. The differences of view in In re Flinders Trading between the Master and Bray CJ, on the one hand, and Sangster J, Mitchell J and Walters J, on the other, reflect the possibilities of such divergence: cf Re Dudley Engineering. This is especially so in applications that must, of their nature, be brought on and disposed of with a degree of dispatch. The approach of his Honour at [22] was not one evincing any error, in particular in the following passage:
It was argued for GE that no creditor has come forward and claimed actual prejudice through searching the Register, and also that most (if not all) of the ultimate unsecured creditors dealt with, or continued to deal with, Daisytek after notification was made. Whilst the interests of those who deal with a company during the period that the charge should have been notified but was not is a legitimate focus of attention, counsel for Hewlett Packard correctly submits that the grant of an extension of time affects the interests of unsecured creditors generally and that it is not possible, on an application of this kind, to require close proof of actual prejudice.
The condition attached was not foreign to the exercise of the discretion. It was directed, in a non-specific way, to alleviate the position, to a degree, of all creditors. The position of unsecured creditors was relevant. On the material before him, in particular in the light of the volume and velocity of trading, his Honour was unwilling to accept that some amelioration of the position of the unsecured creditors was not appropriate. That was a view which was open.
Further, GE itself propounded the condition. Reading the transcript and his Honour’s reasons, I think it to be reasonably likely that GE would not have received the benefit of any order for extension from his Honour, if it had not proposed the condition. A refusal of the application was plainly open in the light of the financial circumstances of the Company and the intervention of administration. What really has to be submitted was that the primary judge was bound to exercise his discretion to allow the extension unconditionally, and any other course would necessarily have been erroneous. I cannot agree. It was plainly open to his Honour to dismiss the application. It was, also, open to his Honour to attach a condition (especially one propounded by GE) which was rationally founded by reference to the increase in the Company’s liabilities since the time when notice should have been lodged, and which operated for the benefit of all creditors.
The cross-appeal should be dismissed also.
The orders that I would make are:
1.        The appeal be dismissed.
2.        The cross-appeal be dismissed.
3.        The appellant pay the costs of the respondents to the appeal.
4.        The cross-appellant pay the costs of the cross-respondents to the cross-appeal.

I certify that the preceding one hundred and eighty three (183) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop.

Associate:
Dated: 21 November 2003

Counsel for the Appellant:

Mr B C Coles QC

Mr D Pritchard

Solicitor for the Appellant:

Henry Davis York

Counsel for the First Respondent:

Mr R B S Macfarlan QC

Mr T Castle

Solicitor for the First Respondent:

Mallesons Stephen Jaques

Counsel for the Second Respondent:

Mr M Cashion SC

Solicitor for the Second Respondent:

Kemp Strang

Date of Hearing:

24 September 2003

Date of Judgment:

21 November 2003

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 986 of 2003

BETWEEN:	HEWLETT PACKARD AUSTRALIA PTY LTD (ACN 004 394 763) APPELLANT
AND:	GE CAPITAL FINANCE PTY LTD (ACN 075 554 175) FIRST RESPONDENT MARTIN BROWN AND GREGORY HALL AS LIQUIDATORS OF DAISYTEK AUSTRALIA PTY LTD (ACN 075 675 795) SECOND RESPONDENTS
JUDGES:	WHITLAM, BRANSON & ALLSOP JJ
DATE OF ORDER:	21 NOVEMBER 2003 (Corrigendum 13 January 2004)
WHERE MADE:	SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 986 of 2003

JUDGES:	WHITLAM, BRANSON and ALLSOP JJ
DATE:	21 NOVEMBER 2003
PLACE:	SYDNEY

Counsel for the Appellant:	Mr B C Coles QC Mr D Pritchard
Solicitor for the Appellant:	Henry Davis York
Counsel for the First Respondent:	Mr R B S Macfarlan QC Mr T Castle
Solicitor for the First Respondent:	Mallesons Stephen Jaques
Counsel for the Second Respondent:	Mr M Cashion SC
Solicitor for the Second Respondent:	Kemp Strang
Date of Hearing:	24 September 2003
Date of Judgment:	21 November 2003