In the matter of Idoport Pty Limited (in liquidation)

[2015] NSWSC 1412

Supreme Court

New South Wales

Medium Neutral Citation:	In the matter of Idoport Pty Limited (in liquidation) [2015] NSWSC 1412
Hearing dates:	22 September 2015
Decision date:	22 September 2015
Jurisdiction:	Equity - Corporations List
Before:	Black J
Decision:	Direct that Steven John Sherman in his capacity as liquidator of Idoport is justified in entering into Deed of Release. Direct that Mr Sherman in his capacity as liquidator of Idoport would be justified in exercising an equitable lien over moneys payable to Idoport under Deed of Release for payment of his proper and reasonable remuneration. Reserve liberty to interested parties to apply to set aside the direction relating to the equitable lien within 14 days. Order that Mr Sherman’s costs be costs in the winding up.
Catchwords:	CORPORATIONS – winding up – application for directions under Corporations Act 2001 (Cth) s 479(3) – where liquidator sought direction that he was entitled to enter into a deed releasing obligations under a Consulting Agreement – where Consulting Agreement had previously been the subject of litigation – whether to make direction under s 479(3) of the Corporations Act 2001 (Cth). CORPORATIONS – winding up – application by liquidator for direction that he is entitled to equitable lien over money payable to the company under Deed of Release to satisfy his remuneration and expenses – where liquidator initially sought declaration to that effect – where leave granted to amend interlocutory process to seek a direction instead of declaration – whether to make direction under s 479(3) of the Corporations Act 2001 (Cth).
Legislation Cited:	- Corporations Act 2001 (Cth) ss 479, 479(3), 480, 480(c), 511, 556 - Supreme Court (Corporations) Rules 1999 (NSW) r 2.13
Cases Cited:	- GB Nathan & Co Pty Ltd (in liq) (1991) 24 NSWLR 674 - Handberg (in his capacity as liquidator of S & D International Pty Ltd (in liq) v MIG Property Services Pty Ltd [2010] VSC 336; (2010) 79 ACSR 373 - Re Addstone Pty Ltd (in liq) (1997) 25 ACSR 357 - Re Ansett Australia Ltd (Admins Apptd) and Korda [2002] FCA 90; (2002) 115 FCR 409 - Re Idoport Pty Ltd [2012] NSWSC 524 - Re Universal Distributing Co Limited (in liq) [1933] HCA 2, (1933) 48 CLR 171 - Sanderson v Classic Car Insurances Pty Ltd (1985) 10 ACLR 115 - Stewart (in his capacity as liquidator of Newtronic Pty Ltd (in liq) v Atco Controls Pty Ltd (in liq) [2014] HCA 15; (2014) 307 ALR 562
Category:	Procedural and other rulings
Parties:	National Australia Bank Limited & Ors (Plaintiffs) Idoport Pty Limited (in liquidation) (receivers appointed) (Defendant) Steven John Sherman in his capacity as liquidator of the Defendant (Applicant) National Australia Bank Limited (Party Appearing)
Representation:	Counsel: V E Whittaker (Applicant) J R Williams (Party Appearing)   Solicitors: Kemp Strang (Applicant) Herbert Smith Freehills (Party Appearing)
File Number(s):	2007/254047

Judgment – ex tempore

1. By Interlocutory Process filed on 11 June 2015 Mr Steven John Sherman in his capacity as liquidator (“Liquidator”) of the defendant, Idoport Pty Ltd (In Liquidation) (Receivers Appointed) ("Idoport"), brought an application under s 479(3) of the Corporations Act 2001 (Cth) and also sought a declaration as to his entitlement as to an equitable lien.

2. The liquidator also brought, in the alternative, an application for an order under s 480(c) of the Corporations Act that he be released as liquidator of Idoport. Ms Whittaker, who appeared for the liquidator, made clear that that application was a true alternative to the applications brought under s 479 of the Corporations Act and in respect of the equitable lien. The application today was conducted on the basis that it was preferable to first address the issues as to the direction under s 479 of the Corporations Act and the question of any lien before turning to any issue under s 480 of the Corporations Act. Given the conclusions that I will reach below it will not be necessary in this application to deal with a release under s 480 of the Corporations Act.

3. In those circumstances, it does not seem to me that there would be any obstacle to the liquidator bringing a further application for such release if and when it became appropriate for him to do so. Mr Williams, who appeared for National Australia Bank Ltd, ("NAB"), which is a creditor of Idoport and also has other interests to which I will refer below, made clear that NAB would take no point that the liquidator's not pursuing an application for release on this occasion prevented such an application at any future point. In particular, Ms Whittaker pointed to the possibility that the liquidator might seek such a release if he were to be drawn into expensive litigation in respect of matters addressed in this judgment in circumstances that he is presently unfunded. That, in any event, would likely be a significant development which would amount to a change of circumstances from those which have been addressed by this application.

Direction as to entry into Deed of Release

4. First, the liquidator seeks a direction under s 479(3) of the Corporations Act that he is justified in entering into a Deed of Release between Idoport, NAB, National Market Groups Ltd and AUSMAQ Ltd, which was in evidence in masked form, the consideration payable by NAB being masked (Exhibit A2) and also in unmasked form (Confidential Exhibit SJS3).

5. I should first refer to the circumstances in which the Court can make such a declaration before turning to the evidence on which the liquidator relies in support of the declaration sought in this application. Section 479(3) of the Corporations Act allows a liquidator to apply to a Court for directions in relation to a matter arising under a winding up. The function of the liquidator's action for direction under this section is to give the liquidator advice as to the proper course of action for him or her to take in the liquidation: Sanderson v Classic Car Insurances Pty Ltd (1985) 10 ACLR 115 at 117; Re Ansett Australia Ltd (Admins Apptd) and Korda [2002] FCA 90; (2002) 115 FCR 409 at [46]. The Court will typically not give directions where a matter relates to the making and implementation of a business or a commercial decision, where no particular legal issue is raised and there is no attack on the propriety or reasonableness of the decision, but may do so where a legal issue or attack on the propriety of the decision is raised: Sanderson v Classic Car Insurances Pty Ltd above at 117; GB Nathan & Co Pty Ltd (in liq) (1991) 24 NSWLR 674 at 686 - 687; Re Ansett Australia Ltd above at [65]. An example of such a direction in liquidation is that given in Re Addstone Pty Ltd (in liq) (1997) 25 ACSR 357, in respect of the liquidator's decision to discontinue appeals in litigation.

6. It is important to recognise that the Court's reluctance to give directions in respect of commercial matters is qualified in respect of matters which are capable of giving rise to legal controversy. In an application concerning the corresponding section applicable to voluntary liquidators, s 511 of the Corporations Act, in Handberg (in his capacity as liquidator of S & D International Pty Ltd (in liq) v MIG Property Services Pty Ltd [2010] VSC 336; (2010) 79 ACSR 373, Warren CJ, in considering whether to approve a compromise of litigation, observed that the liquidator in that case was:

"Not seeking commercial advice from the Court. He has already made what he regards as the appropriate and reasonable commercial decision. It is contained in the settlement deed. Having made that decision, he now asks the Court to protect him from the potentially unreasonable behaviour of other parties involved in these proceedings. He is seeking the protection which the Court is able to provide him in light of the difficult and litigious circumstances in which he finds himself, and the risk that they pose to his continuing ability to effectively and equitably wind up the second plaintiff."

7. It seems to me that this case, like Handberg, is not one where the liquidator is seeking to have the Court make a commercial judgment for him. As will emerge below, he has made a commercial judgment, based on a series of factors which are identified in the evidence before me. As in Handberg, he has formed a view as to what is an appropriate and reasonable commercial decision, namely to enter into the Deed of Release. In the particular circumstances, which involve an extraordinarily long history of litigation, by any standards, it is not surprising that the liquidator is concerned as to the possibility that his decision might be attacked, and here, like in Handberg, it seems to me that he is seeking the protection which the Court may provide, in confirming that his decision is justified, having regard to the matters which he has indicated he has taken into account. The importance of such a direction is that a liquidator is then protected against a claim for breach of duty if he acts in accordance with that direction and he has made full disclosure to the Court in the relevant application.

8. With that background, I will summarise the evidence relied upon in respect of the application, then turn to the submissions made by Ms Whittaker in support of the direction which is sought, then return to the further issue which arises in respect of a claim to an equitable lien by the liquidator.

9. I should first note that there is comprehensive evidence as to the service of the application upon interested persons, including creditors of Idoport. That evidence is contained in an affidavit of Mr Linden, the solicitor for the liquidator, dated 21 September 2015, which records service of the interlocutory process and Mr Sherman's affidavit, to which I will refer below, on several creditors of Idoport. Further evidence is given in affidavits of Mr Mark Faraday dated 17 September 2015 as to service of the interlocutory process and Mr Sherman's affidavit upon Mr Maconachie who directly and through an associated company, Negubo Pty Ltd, claims to be a creditor of Idoport. There is further evidence relating to such service in affidavits of Mr Page dated 17 September 2015 and Ms Demetre dated 17 September 2015. So far as Mr Maconachie is concerned, there can be no doubt as to his knowledge of the proceedings, because at one point he appeared in them, pursuant to leave granted by Brereton J under r 2.13 the Supreme Court (Corporations) Rules 1999 (NSW), before requesting the Court to withdraw that leave, which Brereton J then did. So far as Mr Maconachie is aware of the proceedings, I proceed on the basis that Negubo Pty Ltd, which has been served with the proceedings and which Mr Maconachie is sole director and sole shareholder, is also aware of the proceedings. There is evidence of service of the proceedings on JA Evennett & Co and several other creditors, including secured creditors of the company, Fulham Partners LLC and Portsmouth Partners LLC.

10. Mr Linden's evidence indicates that the liquidators have gone further than to serve the proceedings upon those creditors, having provided continuing updates to those creditors as to the progress of the proceedings, in a matter which seems to me to have given a full opportunity to those creditors to appear, if they sought to do so. In the event, only NAB as appeared in the proceedings, although I note that it appears that a representative of the secured creditors and Mr Maconachie have been in Court at least for part of the application.

11. The application is supported by an affidavit of Mr Sherman dated 11 June 2015. Mr Sherman notes that he was appointed as liquidator of Idoport in 3 September 2008, and at the time of his appointment, Idoport had a bank account with a credit balance of a little over $1,000. Idoport was also party to a Consulting Agreement dated 13 September 1996 with NAB and other entities, which is the subject of this application, and has previously been the subject of substantial proceedings. After the liquidator’s appointment, secured creditors of Idoport, Fulham Partners LLC and Portsmouth Partners LLC, appointed a receiver of Idoport, and that receiver and two other persons appointed in his place have been in place from 2008 until today.

12. The liquidator sets out the identity of creditors of Idoport, and the background to the Consulting Agreement and the lengthy litigation relating to it, which had commenced in 1998 and continued through until 2002, when the proceedings were dismissed by reason of Idoport's failure to provide security for costs. The liquidator points out that the costs in the proceedings were subsequently assessed by Einstein J, on a lump sum basis, as in excess of $42 million and by May 2012 the amount subject to that assessment, with interest, had increased to approximately $85 million. The liquidator also points to the fact that cl 20.1 of the Consulting Agreement provides that the rights and obligations of each party to the agreement are personal and cannot be assigned, encumbered or otherwise dealt with without the prior consent of the other party, not to be unreasonably withheld. That is a matter of significance, for reasons that I will note below.

13. I should also note, at this point, that the history of matters to which I have referred above has been set out, in a useful summary, by Ball J in Re Idoport Pty Ltd [2012] NSWSC 524. I do not rely on that judgment as establishing any matter that is in issue before me, but the history of events as outlined in Mr Sherman's affidavit seems to me to be consistent with that set out in that judgment.

14. The liquidator’s evidence is that Idoport is entitled to receive certain performance bonuses in accordance with the Consulting Agreement although the evidence to which I have been taken indicates that those performance bonuses have been calculated, rightly or wrongly, as nil in recent years. There has been correspondence between the receivers appointed by the secured creditors, the liquidator and NAB in respect of that matter but the liquidator has taken the view that it was a matter for the receivers to pursue. In any event, it seemed difficult to see that the liquidator was in a position to pursue that issue, in circumstances where, as I have noted, he has been unfunded throughout the entirety of the liquidation. The liquidator’s evidence is that he presently does not have the books and records of Idoport, which were provided to him when he was first appointed, but had since been made available to the receivers appointed by the secured creditors. Ms Whittaker points out that that matter, together with the financial constraints upon the liquidator, plainly impedes a full assessment by the liquidator of the prospects of any claims that Idoport may have had against NAB, quite apart from the dismissal of the proceedings against NAB many years ago, and a barring order made against Idoport in respect of further pursuit of those claims as a result of its failure to meet the cost of those proceedings.

15. The liquidator notes that the then receiver of Idoport had called for expressions of interest for the sale of rights that Idoport had under the Consulting Agreement in 2009, and that, at least so far as the liquidator is aware, neither the then receiver nor the current receivers of Idoport concluded any agreement in relation to an assignment of rights under the Consulting Agreement. It seems to me that the inference that no such agreement was reached can readily be drawn, both because of the logic of the position, to which the liquidator refers, and because of the absence of any indication of such an agreement in the correspondence between the liquidator and his solicitors and the receivers and their solicitors.

16. In early 2015, after the determination of proceedings before Ball J which dealt with the question whether certain rights under the Consulting Agreement were subject to the security of the secured creditors, and an appeal from those decisions to the Court of Appeal, the liquidator forwarded a creditor's update to creditors of Idoport in which he sought advice as to any party who might be interested in obtaining an assignment of the Consulting Agreement. At the same time, it appears that he approached NAB in respect of soliciting interest in an assignment of the Consulting Agreement, although the form of transaction which is now proposed with NAB does not involve such an assignment. The liquidator notes that NAB made a confidential offer, which is in evidence (Confidential Exhibit SJS-2) in respect of a release agreement with Idoport, which would involve a payment to Idoport in an amount that is, as I noted above, subject to a claim to confidentiality. The liquidator subsequently advised creditors of that matter.

17. The liquidator’s evidence is that the receivers subsequently made an enquiry as to whether he proposed further to advertise the sale of the Consulting Agreement. The liquidator, by his solicitors, advised that he did not propose to do so, for reasons set out in that correspondence. I will refer to those reasons in more detail below. The liquidator also refers to communications with Mr Maconachie in relation to the proposed transaction with NAB, and I will refer to those communications below.

18. In paragraph 39 of his affidavit, Mr Sherman explains the reasons why he did not advertise the sale of the Consulting Agreement which, as Ms Whittaker points out, are also of substantial importance for his assessment of the value of that Consulting Agreement to Idoport which is, in short, that it has no present value to Idoport. He notes that, first, the advertisement placed by the receiver in December 2009 did not result in any assignment of the Consulting Agreement. He expresses the view, which appears to be reasonably open to him, that it is unlikely that any party would be prepared to pay costs in excess of $96 million, including interest, so as to now pursue proceedings in respect of any claims which Idoport may have against NAB. He also thinks it unlikely that any party would wish to take an assignment of a cause of action relating to events that took place more than fifteen years ago. He also expresses the view that it is unlikely that any party to the Consulting Agreement could obtain NAB's consent to an assignment of it, as the terms of it require, for the purposes of bringing further proceedings in respect of it. I recognise that such consent may not be unreasonably withheld by NAB, under the terms of the Consulting Agreement, but it seems to me that the liquidator's reasoning in that regard nonetheless has practical force. Finally, but relevantly, the liquidator points out that in any event he does not have funds with which to progress an advertising campaign, although I refer below to some financial support offered by the secured creditors in that regard.

19. The liquidator also sets out the fees and expenses which he has incurred. I recognise that, at least to some extent, any consideration payable in respect of this transaction will go, at least in part, to meet such fees, so far as the liquidator's fees and expenses will have a degree of priority under s 556 of the Corporations Act. The liquidator expresses the view that, taking into account all of these matters, the offer made by NAB which, I interpolate, is the only offer that has been made by any of the creditors, or procured by any of the creditors, should be accepted so that the liquidation can be finalised. He notes that, in the absence of accepting such an offer, there is no further work that he could undertake in the liquidation by reason of the barring order in respect of further proceedings against NAB and his lack of funds. That in turn is related to the application for release, which was his alternative application. The liquidator also, fairly, makes disclosure of an indemnity which he has received from NAB, after this proposal arose, in respect of remuneration and expenses in the liquidation to date and the costs of this application.

7. I have, in turn, been taken by Ms Whittaker, to comprehensive evidence which has been put before the Court in respect of the matters referred to in Mr Sherman's affidavit. They include the terms of the Consulting Agreement between Idoport, NAB and others, which would be the subject of the relevant transaction (Ex A1, tab 1). I have also been taken to reports provided by the liquidator to creditors, including the updating reports to which reference was made in Mr Sherman's affidavit (Ex A1, tab 2). I note in that respect, that the liquidator's most recent update of 18 March 2015 and 9 April 2015 to creditors, prior to correspondence with creditors in respect of this application, have been clear as to his reasoning in respect of the proposed transaction with NAB, and the matters which limit, in his view, the commercial value of the Consulting Agreement to Idoport.

8. I have also been taken to the position taken by the receivers appointed by secured creditors to Idoport, including in respect of the outcome of the proceedings before Ball J and the Court of Appeal, (Ex A1, tab 3) and in respect of the issues as to whether performance bonuses have been properly paid to Idoport. As I noted above, the receivers had also requested the liquidator, in April 2015, to consider placing an advertisement in newspapers in respect of any interest in the Consulting Agreement. For the reasons set out in Mr Sherman's affidavit, it seems to me that he cannot be criticised for not doing so, given the relative unlikelihood of such interest, in the circumstances to which he refers. I also note the fact that, in any event, he was not funded to pursue a further, and potentially complex, negotiation as to the terms of any such arrangement, although I recognise that the receivers had indicated that their appointors were prepared to meet out of pocket expenses and a "reasonable fee" for the liquidator's time in respect of the advertisements. The correspondence between the receivers’ and the liquidator's solicitors and, particularly, correspondence sent by the liquidator's solicitors, in turn made clear the reasoning, which is also set out in the liquidator’s affidavit, as to his assessment of the limited value of the Consulting Agreement to Idoport, and his intention to seek a direction from the Court on this application. As I noted above, neither the receivers, nor the secured creditors, who are their appointors, have sought to appear in the application, although their legal representative was present in Court. I have also been taken to substantial correspondence relating to the quantification of the performance bonus payable under the Consulting Agreement (Ex A1, tab 5).

9. My attention has also been drawn to communications between the liquidator and Mr Maconachie in respect of the proposed transaction with NAB (Ex A1, tab 6). Mr Maconachie has, in that correspondence, set out in detail his objections to the proposed transaction, and I have had regard, in particular, to a detailed letter dated 1 May 2015, to which Ms Whittaker has drawn my attention, which sets out those objections at length. I have had regard to those objections, although, I also note that Mr Maconachie, ultimately, did not seek to pursue the opportunity which he had, under r 2.13 of the Supreme Court (Corporations) Rules, to be heard in opposition to the application. In that correspondence, Mr Maconachie argues, among other things, that the Consulting Agreement was not assignable without his consent and that he did not consent to the transaction. It is by no means apparent that Mr Maconachie’s consent to an assignment was required, so far as he is not party to the Consulting Agreement, but, in any event, as Ms Whittaker pointed out, the transaction was not an assignment for which such consent would be required. Mr Maconachie also pointed, at some length, to obligations which he contends are placed upon the liquidator, but there seems to me to have had little regard to the fact that the liquidator is generally not obliged to take steps which he is not funded to perform.

10. In all the circumstances, it seems to me that this is a case in which the Court ought to give a direction in the form of the first direction sought by the liquidator. First, it seems to me that the liquidator’s assessment of the limited commercial value of the Consulting Agreement to Idoport, as matters now stand, is an assessment that is reasonably open to him in the present circumstances. Although, it is not a matter for the Court, in an application of this kind, to second-guess a liquidator's judgment as to commercial matters, it is somewhat difficult to see that Mr Sherman could have come, on any rational basis, to any view other than the view which he has, in fact, come. It seems to me that he could reasonably take the view that the prospects of any person now seeking to pursue litigation based on the Consulting Agreement, given the time that has passed and the costs burden which now faces Idoport, are somewhere between extremely remote and non-existent, and that the prospects of pursuit of performance bonuses, given the history of correspondence in the that matter, must also be minimal. In these circumstances, it seems to me that it is a rational commercial decision, and one which is consistent with the exercise of the liquidator's duties and good faith, for him to seek to realise what value can be realised from the Consulting Agreement, as matters stand, so as to bring the liquidation to an end, rather than be left in a position where his only other option is to seek release, because he is not funded to pursue any further steps in the liquidation.

11. I am also satisfied that, by reference to the reasoning in Handberg above, this is a proper case for a giving of a direction to the liquidator. Notwithstanding he has exercised his own commercial judgment in respect of these matters, the history of litigation in respect of Idoport, and the various interests involved, are such that he should properly be provided with the comfort that the Court can give that the decision which he has made is one that is consistent with his duties, and one that he may justifiably make.

Direction as to an equitable lien

25. A further question arose, which I will deal with more briefly, as to whether a direction should be given to the liquidator that he would be justified in exercising an equitable lien over any moneys payable to Idoport, pursuant to the Deed of Release, for payment of his costs and expenses, in negotiating and entering into the Deed of Release and making this application.

26. I should note that that application was originally brought as an application for a declaration to that effect. It is understandable that the application was brought in that form where, as Ms Whittaker points out, it could originally have been anticipated that one, or other of the parties, and, particularly, the receivers and the secured creditors, who might have taken a contrary view, would seek to become party to the proceedings. In the event, that did not occur and Ms Whittaker has, in my view correctly, accepted that it would not be appropriate for the Court to make a declaration where the only parties who might contest the relevant proposition are not party to the proceedings and would not be bound by it.

27. In these circumstances, the liquidator sought to amend the interlocutory process, and was granted leave to do so today, to seek a direction, implicitly under s 479(3) of the Corporations Act, that he would be justified in exercising such a lien in respect of the moneys payable for his costs and expenses. I have been conscious of the fact that, and I raised with Ms Whittaker in submissions that, notwithstanding the liquidator's efforts to give notice to other parties of the proceedings, they will not have been notified of the fact that such a direction is now sought, as distinct from a declaration. There seems to me to be substantial force in Ms Whittaker's submission that the substance of the issue was raised by notice to the parties that a declaration as to that issue was sought.

28. In any event, it seems to me to be possible to protect the interests of parties affected, by reserving liberty to apply within a short and specified period after I deliver my judgment. I had raised the question, in the course of submissions, whether it was appropriate to deliver a judgment, where a party might later seek to vary it or set it aside pursuant to that leave. However, I am conscious of the need to avoid imposing unnecessary costs of multiple Court attendances, in an unfunded liquidation, which would arise if I now adjourned the matter to allow further notice to creditors who may have no interest in appearing. It seems to me that a direction under s 479(3) of the Corporations Act is given by reference to the matters brought to the Court’s attention, and a creditor contemplating an application to set aside or vary that direction would reasonably assume that, if different matters were brought to the Court's attention or further arguments were put to it, it would potentially set aside or vary its decision. There ought to be no concern that a direction now given, on the basis of the matters put before me in this application, could not be revoked or varied if other matters which indicated it was not appropriate were raised.

29. I also raised, in the course of submissions, whether the direction was necessary or appropriate, so far as, on one view, it went little further than to apply the principles that have long been established by the High Court's decisions in Re Universal Distributing Co Limited (in liq) [1933] HCA 2, (1933) 48 CLR 171; and have recently been reaffirmed by the High Court in Stewart (in his capacity as liquidator of Newtronic Pty Ltd (in liq) v Atco Controls Pty Ltd (in liq) [2014] HCA 15; (2014) 307 ALR 562, in the relevant circumstances. To put the proposition another way, it might be put that the proposition that the liquidator would be justified in exercising an equitable lien over moneys payable pursuant to the Deed of Release, for payment of his proper and reasonable costs in negotiating and entering into the Deed of Release and making this application, is so obviously correct that there is no need for a direction about it.

30. I have, ultimately, concluded that I should not take that view, for the reasons which Warren CJ identified in Handberg, to which I have referred above. It may be evident to a lawyer, who is familiar with the authorities in respect of the application of an equitable lien, that a liquidator's costs properly and reasonably incurred in bringing an amount into the liquidation are subject to a lien, and that that lien will take priority over the claim of a secured creditor where it would be unconscionable for the secured creditor to take the benefit of that fund without allowing for the liquidator's expenses in bringing it into the liquidation. While that may be apparent to a lawyer, it would not necessarily be apparent to creditors, who do not have legal expertise, or do not seek legal advice, and the liquidator is still exposed in the way Warren CJ noted in Handberg to the risk of potentially unreasonable views of other parties in that that regard. That seems to be sufficient in the particular context to warrant the direction, notwithstanding that it will go no further than to confirm the application of well-established principles in relation to the particular facts.

31. I should make clear that, although I am satisfied that such a direction should be given, it does not extend to any determination of a particular amount of the costs and expenses of the liquidator that are properly the subject of such a lien. As Ms Whittaker acknowledged in submissions, that is not a matter that has been in issue before me, and it has not been determined by me.

32. I will shortly make orders in substantially the form sought in the Amended Interlocutory Process, in paragraphs 1 and 2, but reserving the opportunity to persons who can establish a proper interest to apply to set aside order 2, to apply to do so within 14 days. It also seems to me that, in the relevant circumstances, an order should be made, unless Ms Whittaker does not seek it, that the costs of this application should be costs in the winding-up.

33. In these proceedings, I make its following orders:

1. Direct pursuant to s. 479(3) of the Corporations Act 2001 that Steven John Sherman in his capacity as liquidator of Idoport Pty Ltd (in liquidation) (receivers appointed) (Idoport) is justified in entering into the Deed of Release between Idoport, National Australia Bank Limited, National Markets Group Limited and AUSMAQ Limited, being Confidential Exhibit SJS3 to the affidavit of Steven John Sherman sworn 11 June 2015 filed in these proceedings (the Deed of Release).

2.    Direct that Steven John Sherman in his capacity as liquidator of Idoport would be justified in exercising an equitable lien over any monies payable to Idoport pursuant to the Deed of Release for payment of his proper and reasonable costs and expenses in negotiating and entering into the Deed of Release and making this application.

3.    Reserve liberty to any person who can establish a proper interest to apply to vary or set aside order 2 made above, within 14 days, and direct that Mr Sherman, as soon as practicable, notify creditors of Idoport of these orders.

4.    Mr Sherman's costs of this application be costs in the winding-up.

5.    Order that exhibits be returned.

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Decision last updated: 25 September 2015