Mighty River International Limited v Hughes & Anor; Mighty River International Limited v Mineral Resources Limited & Ors
[2018] HCATrans 120
[2018] HCATrans 120
IN THE HIGH COURT OF AUSTRALIA
Office of the Registry
Perth No P7 of 2018
B e t w e e n -
MIGHTY RIVER INTERNATIONAL LIMITED (BVICN 1482079)
Appellant
and
BRYAN HUGHES AS DEED ADMINISTRATOR OF MESA MINERALS LIMITED (ACN 009 113 160) (SUBJECT TO DEED OF COMPANY ARRANGEMENT) AND DANIEL BREDENKAMP AS DEED ADMINISTRATOR OF MESA MINERALS LIMITED (ACN 009 113 160) (SUBJECT TO DEED OF COMPANY ARRANGEMENT)
First Respondent
MESA MINERALS LIMITED (ACN 009 113 160) (SUBJECT TO DEED OF COMPANY ARRANGEMENT)
Second Respondent
Office of the Registry
Perth No P8 of 2018
B e t w e e n -
MIGHTY RIVER INTERNATIONAL LIMITED (BVICN 1482079)
Appellant
and
MINERAL RESOURCES LIMITED (ACN 118 549 910)
First Respondent
BRYAN HUGHES AS DEED ADMINISTRATOR OF MESA MINERALS LIMITED (ACN 009 113 160) (SUBJECT TO DEED COMPANY ARRANGEMENT) AND DANIEL BREDENKAMP AS DEED ADMINISTRATOR OF MESA MINERALS LIMITED (ACN 009 113 160) (SUBJECT TO DEED OF COMPANY ARRANGEMENT)
Second Respondent
MESA MINERALS LIMITED (ACN 009 113 160) (SUBJECT TO COMPANY ARRANGEMENT)
Third Respondent
KIEFEL CJ
GAGELER J
NETTLE J
GORDON J
EDELMAN J
TRANSCRIPT OF PROCEEDINGS
AT PERTH ON TUESDAY, 19 JUNE 2018, AT 10.15 AM
Copyright in the High Court of Australia
____________________
MR C.R.C. NEWLINDS, SC: May it please the Court, I appear with my learned friends, MR D.R. SULAN and MR P.R. GAFFNEY, and we appear for the appellants in both appeals. (instructed by Nova Legal)
MR N.C. HUTLEY, SC: If your Honours please, I appear with my learned friend, MS J.K. TAYLOR, for the respondents in P7/2018 and the second and third respondents in P8/2018. (instructed by Clayton Utz)
MR J.T. GLEESON, SC: May it please the Court, I appear with MR B.R. KREMER, for Mineral Resources Limited, which is the first respondent in P8/2018. (instructed by Bennett + Co)
KIEFEL CJ: Yes, Mr Newlinds. I take it that the parties have revised their time estimates; otherwise we will be here rather later than 4.15. I think they were all two and a half hours.
MR HUTLEY: I think we are just going to split two and a half hours, your Honour.
MR NEWLINDS: I think we will be all right, your Honour.
KIEFEL CJ: That sounds feasible.
MR NEWLINDS: Our case is that the deed of company arrangement, the subject of this proceeding is void because it does not contain what we contend is a mandatory provision. The reason it did not contain that mandatory provision is because this deed of company arrangement was a proxy for an extension of the convening period and so was put together with the express and acknowledged purpose of allowing the administrator more time to conduct investigations, bring in potential proposals and put a proposal to creditors, the theory being under the deed that if creditors were happy with that future proposal, there could be a meeting to vary the deed and there would then be what might be described as a more orthodox deed of company arrangement.
Our case is that because there was not substantial compliance with the Act the saving provisions in section 445G are not operational because there was no substantial compliance and accordingly the deed is void and the Court should declare it so and then proceed to wind the company up.
KIEFEL CJ: Mr Newlinds, could I interrupt you at this early point just to clarify something? Your principal point is that the deed of company arrangement, it is not a deed of company arrangement, and in your submissions you point to the mandatory requirement, as you put it, in relation to specification of property. But you also refer to the scheme of Part 5.3 and its purpose, and you say that the express purpose for the terms of this deed of company arrangement are contrary to the statutory object or purpose.
MR NEWLINDS: We do.
KIEFEL CJ: Are you relying, as you did in the Court of Appeal, on that itself as a basis for an order under section 445G(2)?
MR NEWLINDS: Yes. If we are right and there has not been compliance with the Act, and if you come to G to determine whether the Court should declare void or not void, the question of what was the purpose of this deed becomes relevant.
KIEFEL CJ: But do you say that the fact that the deed of company arrangement was entered into for a purpose which is contrary to the scheme is itself a basis for declaring it void, that is, putting aside the question of the mandatory requirement in relation to property? I think that was contention number 3 in the Court of Appeal.
MR NEWLINDS: It was contention number 3 in the Court of Appeal. I think the way we put it here is it feeds into the one point. We say the reason you have this non‑compliance is because the deed was setting out to do something that the Act did not envisage.
KIEFEL CJ: But if you are wrong about the mandatory point, do you still rely upon it being contrary to purposes to found an order under 445G(2)?
GORDON J: The other way of putting it is this, is it not, that if you are right about the contrary purposes, that is, that the deed taken as a whole regardless of the property point is contrary to the objects and purposes of Part 5.3A, the property point falls away?
MR NEWLINDS: It does, that is right.
EDELMAN J: Is not the effect of your concession in paragraph 7 of your reply in the penultimate sentence that what you are describing as the mandatory requirement in 444A(4)(b) is really just an indicia that feeds into this ultimate point?
MR NEWLINDS: Yes. Well that is why I opened with ‑ ‑ ‑
EDELMAN J: Yes.
MR NEWLINDS: This is the problem and the reason you have this lack of property is because of the purpose and that is why the purpose does not fit with the Act. Now, your Honours understand the background that is set out in paragraphs 5 to 10 of our primary written submissions. In short, Mighty River is a minority shareholder and creditor of the company. Mineral Resources is a majority shareholder and creditor of the company.
There were complaints and assertions by my client that the directors of the company, who were also directors of Mineral Resources, were acting in a way that was not consistent with their duties. There had been an application to the Federal Court for documents, which had been successful before a trial judge and before the Full Court.
The position between the parties was there were arguments about whether there had been full production of documents when Mineral Resources, who was providing the funds to allow the company to continue to operate, withdrew support and the directors appointed the voluntary administrator.
The relevant provisions that we need to look at are, of course, section 444A4 and section 445G, but can I come to those provisions in the context of the Act to try and make good our submission that the express purpose of the Act is not consistent with what occurred here, and the context of all of the relevant sections very much assists our construction of the provisions.
We have handed up our three‑page document. May I apologise, your Honours, it is entitled P7 of 2018. It is meant to stand as our outline in both appeals. There is no relevant distinction between the issues that arise on both appeals.
Your Honours understand we brought a case seeking declarations that the deed was void against the company and the administrator only. Reasonably late in the piece, Mighty River came in and brought their own case. Mineral Resources sought declarations that the deed was valid and the proceedings were heard together and the issues in one are the same - the issues in one are the same as the issues in the other.
So if we can pick up the Act which is in volume 1 of the three volume joint book of authorities and start just passing through the definition section at 107 of the book, you find the definition of “property” in section 9 of the Act at the bottom of the page on the left.
GORDON J: Mr Newlinds, can I ask for you to speak up just at the moment. I am just having difficulty. I understand you are not well.
MR NEWLINDS: No. I will persevere, your Honour.
GORDON J: Thanks.
NETTLE J: I think the microphone is too low. It is not picking you up, Mr Newlinds.
MR NEWLINDS: I do not usually have this problem.
NETTLE J: I know, but this is wrong. It is not working properly.
MR NEWLINDS: So we are at page 107, the definition of “property”, left‑hand page:
property means any legal or equitably estate or interest (whether present or future and whether vested or contingent) in real or personal property of any description and includes a thing in action -
There is a reference in subsection (a) to Part 5.3A and section 435B but that has no impact on the arguments in this case. If we then go forward to page 134 of the book, we can see section 435A, so the Part 5.3A has express objects and there are two scenarios of course:
The object of this Part is to provide for the business, property and affairs of an insolvent company to be administered in a way that:
(a)maximises the chances of the company, or as much as possible of its business, continuing in existence -
Now, in relation to this company, there has never been a suggestion – there has never been a suggestion that this company could or ought to continue into existence, and so it is (b) that is engaged:
if it is not possible for the company or its business to continue in existence‑results in a better return for the company’s creditors and members than would result from an immediate winding up of the company.
So the object is – and the Harmer report and the second reading speech make it clear that there was a thought about that liquidations were too expensive and too slow and did not produce particularly great returns for creditors and if they did they took a long time. So this system was brought in to allow a quicker resolution to allow creditors to have a say in the fate of the company with the hope to bring a distribution to creditors speedily.
While we accept the various references in our learned friend’s submissions that the idea was to have flexibility and for creditors to have control, that is all well and good but it was also meant to happen in a very truncated timeframe with an investigation that, by definition, was going to be incomplete and an ability for all creditors to make a decision and that is all dealt with in the convening period.
GAGELER J: Did I understand your submission to be that the proposal for possible recapitalisation does not involve the company continuing in existence within the meaning of paragraph (a)?
MR NEWLINDS: We do not think so. Of course, the actual future proposal is not outlined, but it has always been our understanding that the proposal would involve some return to creditors by use of the ASX listing shell being sold itself as an asset. Perhaps we will look at the report to see what the administrator was suggesting might happen.
There is then section 435C, which starts at the bottom of that page. This is the convening period. The administration begins and ends. It begins when the administrator is appointed; it ends on the happening of one of the things in subsections (2) or (3). Then:
(2)The normal outcome of the administration of a company is that:
(a)a deed of company arrangement is executed by both the company and the deed’s administrator; or
(b)the company’s creditors resolve . . . that the administration should end –
If that happens the company goes back to the directors; and:
(c)the company’s creditors resolve . . . that the company be wound up.
(3)However, the administration of a company may also end because:
(a)the Court orders, under section 447A or otherwise, that the administration is to end . . .
(b)the convening period, as fixed by subsection 439A(5), for a meeting of the company’s creditors ends:
(i)without the meeting being convened . . . and
(ii)without an application being made . . . under subsection 439A(6) -
and (c), there are various other iterations dealing with applications to extend the convening period under 439A(6). The next port of call is at page 149 which is section 438A, which is what the administrator is required to do. He or she is to:
investigate the company’s business, property, affairs . . . and
(b)form an opinion about each of the following matters:
(i)whether it would be in the interests of the company’s creditors for the company to execute a deed of company arrangement;
(ii)whether it would be in the creditor’s interests for the administration to end;
(iii)whether it would be in the creditor’s interest for the company to be wound up.
What he does, once he has carried out those investigations and formed that opinion, if you go to page 154, under section 439A:
(1)The administrator of a company under administration must convene a meeting of the company’s creditors –
which is generally known as the second creditors’ meeting or, sometimes, the section 439A meeting.
(2)The meeting must be held within 5 business days before, or within five business days after, the end of the convening period.
In subsection (3) the administrator gives notice of the meeting. In subsection (4) the administrator provides a report, within which there is a subsection (b), a statement setting out the administrator’s opinion as to what would be in the creditors’ best interests. Then over the page, subsection (5) tells us what the convening period is. Depending on what time of the year it is, it is either 25 business days or 20 business days. Then in subsection (6) there is a power in the court to:
extend the convening period on an application made during or after the period referred to in paragraph (5)(a) or (b), as the case requires.
Under subsection (7), if an application is made under subsection (6) after the period has expired then the court has to take various matters into account.
Then 439B, top of the next page, there is a provision for an adjournment of the meeting by creditors’ resolution but it cannot exceed 45 days and then 439C, the creditors have three choices: they decide to enter into either deed of company arrangement, end the administration or wind the company up.
There are then Divisions 6 and7 which we can pass over but there is a whole series of provisions which deal with protection of the company’s property and third parties’ property or property that other people have interest in during the administration period.
Your Honours understand that during this period, there is a stay on all court proceedings. There is a stay on secured creditors enforcing their rights unless they commence to do that before the administrator was appointed. The directors no longer have control of the company, the administrator does and so there is a whole series of provisions where the court can deal with situations to protect the interests of those people whose legal rights are affected by the operation of the appointment of the administrator.
We can then move to Division 10 which starts at page 188 and this is section 444A. So, the section applies where the creditors decide that the company enter into a deed of company arrangement. The first thing we know about a deed of company arrangement is that it has to be in writing and it is on a piece of paper because subsection (3) tells us that:
The administrator of the company must prepare an instrument setting out the terms of the deed.
Now, those are the terms of the deed that the report had to explain to creditors and then subsection (4):
The instrument must also specify the following -
and then there is the list of what we contend are requirements, some of which are mandatory and some of which are not. Firstly, the deed has to say who the administrator is and (b) is the one at the heart of the case:
the property of the company (whether or not already owned by the company when it executes the deed) that is to be available to pay creditors’ claims -
So, I will come back to that section but there is a series of parts to it; the first is the property of the company and the second is:
that is to be available to pay creditors’ claims -
It does not have to exist at the time of the deed. It can be future property:
(d)to what extent the company is to be released from its debts;
(e)the conditions (if any) for the deed to come into operation;
(f)the conditions (if any) for the deed to continue in operation;
(g)the circumstances in which the deed terminates;
(h)the order in which proceeds of realising the property referred to in paragraph (b) are to be distributed among creditors bound by the deed -
So the submissions going each way at this point of the argument are, of course, we draw attention to the lack of the phrase “if any” or like words in subsection (b) in contradistinction to those concepts in (c), (e), (f) and also (d), when it says:
to what extent the company is to be released –
Subsection (g), of course, does not have “if any” or a like phrase but that is the circumstances in which the deed terminates. Now, I will take you in a few moments to the provisions of the Act that talk about when a deed terminates. So, it is not possible to have a deed that says this deed cannot terminate or will never terminate. That would be contrary to the Act. So it makes sense why that provision does not have an “if any” in it.
Of course, we also draw attention to (h) because (h) refers back to the property that has apparently been referred to in (b) and requires there to be a statement about how it is to be distributed amongst the creditors bound by the deed. Then over the page, you have section 444B - the deed has to be executed within 15 days by the company. There have been a number of cases where companies have failed to execute the deed within that time and I will take you to a couple of those. Section 444D on page 190 is the crux of how this all works. Once a deed of company arrangement has been entered into it:
binds all creditors of the company, so far as concerns claims arising on or before the day –
Now, that is the section that the Lehman Brothers Case was about and that case determined that it bound creditors but only concerning claims they had against the particular company, not against other people or companies. Then 444DA is a requirement to have a statement or a provision dealing with the priority that employee creditors would be given:
A deed of company arrangement must contain a provision to the effect that, for the purposes of the application by the administrator of the property of the company coming under his or her control under the deed, any eligible employee creditors will be entitled to a priority -
At page 196 you have section 44GA:
The administrator . . . may transfer shares in the company if the administrator has obtained:
(a)the written consent of the owner of the shares; or
(b)the leave of the Court.
So that is a provision that is sometimes used and there are a number of cases where leave has been sought for an administrator to deal with people’s shares in a company. The touchstone that has developed in the jurisprudence is that the court needs to be satisfied that there is no residual value in those shares to the shareholder before it would allow them to be transferred pursuant to a deed. Then if you go to page 197, we have Division 11, which is “Variation, termination and avoidance”. At 445A creditors can vary deeds:
may be varied by a resolution passed at a meeting . . . convened under section 445F, but only if the variation is not materially different from a proposed variation set out in the notice of the meeting.
The court can overrule a variation by creditors. So any creditor can go to the court and complain about a variation. Section 445C tells us when the deed must terminate. So really, when we think back to section 444A(4)(g), what we think would be required is that the deed would have to say these things: “This deed will terminate on the happening of one of those events” and then of course can have its own, and they often do, termination events – for example, if a sum of money is not paid by a certain date, it sometimes says the deed will terminate automatically. But there is a minimum amount of things that would have to go into a deed to satisfy subsection (h).
In 445CA, creditors can terminate a deed in certain circumstances. In 445D, the court may terminate a deed in certain circumstances. Section 445F is about meetings of creditors to consider proposed variations and terminations and then 445G, which is on page 201 –we characterise this as the second question in this appeal, what happens if this deed of company arrangement is found by this Court to be void.
Our construction of section 445G is as follows. We say if the Court finds that there has been a non‑compliance with the Act under subsection (2) it should make an order declaring the deed void unless subsection (3) is engaged. Subsection (3) has a gate to a discretion. To get through that gate, the person seeking to validate what would otherwise be a void deed needs to satisfy the Court that:
(a)the provision –
and that is a reference back to the provision in subsection (2):
was substantially complied with; and
(b)no injustice will result for anyone bound by the deed –
There is also a section (4):
Where the Court declares a provision of a deed of company arrangement to be void, the Court may by order vary the deed, but only with the consent of the deed’s administrator.
So where we are at issue at this point is our learned friend says there is a discretion at large and that even if your Honours are with me, the matter needs to be remitted to the courts below to exercise that discretion and they contend, probably rightly, that if that is the case that would happen with updated evidence before the court and that therefore we should stop at that point.
We say that is not right. We say that they need to get through the subsection (3) gate and they cannot do that because if we are right there has not been substantial compliance because you either comply with this requirement or you do not; there is no middle ground.
EDELMAN J: But the essence of your point, as I understood you at the start, is really that the non‑compliance with the purpose and the particular provisions means that there is no deed of company arrangement so 445G(3) would not be a question of substantial compliance, it is just that there is no deed to engage it.
MR NEWLINDS: Yes, well, we would put it that way but if we cannot get that far or if it is a deed but there has been a breach of the Act or a provision of the Act we would say you have to get through subsection (3), you cannot get through substantial compliance but you also cannot show no injustice because the purpose of the part has miscarried. Just a couple more sections, your Honours ‑ ‑ ‑
KIEFEL CJ: Just before you go on though, in relation to the wider question of the deed of company arrangement being contrary to the scheme and purposes of the Act you might need to address whether subsection (1) in its reference to whether the deed was entered into in accordance with this part directs attention to specific provisions or whether the fact that it is contrary to the scheme and purpose is sufficient ‑ ‑ ‑
MR NEWLINDS: Yes, well, our case would be if it is contrary to the scheme or provision – if it is contrary to the whole scheme, Justice Edelman’s point is if it is just not a deed, it is not a deed, you do not really need to worry about G but if it is something that gets close to being a deed but does not comply with the provisions of the Act then G is engaged.
Subsection (4) - our learned friend, Mr Gleeson, says that there is an extant application to vary under subsection (4). We think there are two short answers to that. The first is the administrator has never consented to any application to vary the deed and the second is subsection (4) only has a part to play if the court declares a provision of a deed of a company arrangement to be void. Our case is the Court should declare this deed to be void in toto and, therefore, subsection (4) has no work to do.
At page 209 is Division 13 which has the title “Powers of Court”. Your Honours have seen on the way through that the court has a number of opportunities to get involved, usually at the suit or always at the suit of someone and so while we accept our learned friend’s emphasis on flexibility, court staying out of things and creditors having control, that has also – that has limitations and the limitations are in the Act itself and the court has quite a lot of jurisdiction over deeds of company arrangement.
The most widely used these days is section 447A which allows the court if it is persuaded that it is appropriate to do so to actually make an order as to how the Act is to apply in relation to a particular company, so, a very, very broad power, no doubt put in there by the legislation to allow maximum flexibility but if you want flexibility beyond the terms of the Act then the court has to get involved and be persuaded to make such an order.
Section 447B, the court can make orders to protect particular creditors during an administration period. Section 447C, the court can declare whether an administrator has been properly appointed. Section 447D, an administrator can seek directions about any matter in connection with the performance of the administrator’s functions. Then 447E, the court does have continuing supervision over the administrator of a company or deed.
Of course, your Honours understand there are two periods. There is the period when the company is under deed – is involuntary administration, and there is then a voluntary administrator which some of the sections apply to. There is then a second period if the company executes a deed. It is then under a deed of company arrangement. The person who used to be the voluntary administrator is usually the deed administrator, but the Act continues to have some work to do in relation to the deed administrator. That I think is the provisions of the Act that we think are relevant to the matter at hand.
If I could then go back to our outline of oral argument, the first point our learned friends make is that they criticise us for focusing too much on the phrase “the property” in section – actually before I do that, I should take your Honours to the deed. There is a book called “Appellant’s Joint Book of Further Materials”. If your Honours pick up that book and we can start at page 92. This is the 439A report by the administrator before the meeting. If your Honours have page 92 ‑ ‑ ‑
GORDON J: This is the second one, is it?
MR NEWLINDS: This is the second one. This same statement was in the first one but this is the one that went to the actual meeting. So if your Honours have page ‑ ‑ ‑
GORDON J: Did not the first one go as well?
MR NEWLINDS: I am sorry, your Honour?
GORDON J: The first one went as well at the time of the original meeting.
MR NEWLINDS: Yes, your Honour is quite right. There was an adjournment. Sorry, your Honour.
GORDON J: That is all right.
MR NEWLINDS: This statement was in both, in the same terms. So if your Honours have page 92 and turn it sideways, it is in the right‑hand column and we are looking at clause 9.3, so this is the recommendation:
9.3. The Company Execute a Deed of Company Arrangement
We intend to propose a Recapitalisation DOCA at the forthcoming meeting of creditors.
The Recapitalisation DOCA is essentially an extension of the Administration Period to allow sufficient time for the Administrators to -
and I will not read the rest, but it bears a remarkable similarity to the obligations of an administrator during the investigation period of the – before preparing his or her report. If we then go forward to page 161, there is the deed of company arrangement. It is called “Deed of Company Arrangement – Recapitalisation”. At page 164 of the book there are some recitals under the heading “Background” and recital C is in the following terms:
The objective of this deed is to provide sufficient time for the Administrators to conduct further investigations into the Company’s property and affairs, and to explore the possibility of a restructure or recapitalisation of the Company to determine the likely outcomes to creditors and form an opinion as to whether a deed of company arrangement or liquidation is in the best interests of creditors of the Company.
So there you have the express purpose of this particular deed and it is to allow the administrator to conduct further investigations and inquiries to determine a likely outcome and form an opinion as to whether a deed of company arrangement or liquidation is in the best interests of creditors. Now, it is a paraphrase, but it is exactly the same thing that the administrator is meant to do during the convening period.
NETTLE J: It means he has not done it during that period, you say?
MR NEWLINDS: It means he has not done it during that period.
NETTLE J: So 438A is not complied with?
MR NEWLINDS: That is what we would say. Now, our learned friends say, no that is not ‑ ‑ ‑
GORDON J: So if you look at the terms of clause 15 read with recital C, you would say it is a statutory re‑enactment of 439A4 read with 438.
MR NEWLINDS: I would say that. What would be said against me though is our learned friends would point out that once the company executes this deed of company arrangement the legal regime does change slightly. The administrator had more powers as voluntary administrator, for example, compulsory investigation powers and the like. They change a little bit but we say what they were setting out to do expressly was to extend the convening period and we have a finding by the Master at first instance ‑ ‑ ‑
GORDON J: It is a bit – it is more than that, too, is it not, in this sense, that if you – that may be right that there is a readjustment of certain legal rights, but if you read this document as a whole and read in particular things like clause 9.4 which says the administrators can provide information as they see fit to creditors - so there is, in effect, a redrafting of the statute from a period of a maximum of about 45 days to 170 days ‑ ‑ ‑
MR NEWLINDS: Or further.
GORDON J: Or further.
MR NEWLINDS: Because of the variation provision. There was no secret about this and ‑ ‑ ‑
GORDON J: To come back to a point I put to you at the beginning, it has nothing really to do with no property. It has to do with the fact that this DOCA, or purported DOCA as you would put it, as I understand it, is inconsistent with the objects and purposes of Part 5.3A and, in effect, re‑crafts the statute to suit themselves.
MR NEWLINDS: Yes. That is the first point. The second point ‑ ‑ ‑
GORDON J: The first point? That is it, is it not?
MR NEWLINDS: Well, if we win on the first point then it certainly is.
GORDON J: But what is left?
MR NEWLINDS: The second point is the reason this deed cannot comply with the mandatory requirements is because it is setting out to do something that the Act did not contemplate.
GORDON J: That is just a flip of the same coin, is it not – flipside of the same coin?
MR NEWLINDS: I have a feeling I should not be arguing with your Honour. I agree.
GORDON J: Well. I mean, if you walk through the way you put it, you put it that you say there are certain statutory requirements in terms of time limits consistent with the object and purpose of Part 5.3A, as I understand your argument.
MR NEWLINDS: Yes.
GORDON J: They are short and sharp. The court said on more than one occasion it is to be strictly imposed for the very reason the part was set up. As I understand it, you say this purported DOCA is inconsistent in its objects and purposes with those objects and purposes because it extends those periods beyond that which would ever contemplate it and includes additional powers, including 9.4 and others, which are inconsistent with Part 5.3A.
MR NEWLINDS: The Act did contemplate there being an extension of the period, but we say the only way that can be done is by an application to the court.
EDELMAN J: But textually what this comes down to is either it is a DOCA or it is not within 5.3?
MR NEWLINDS: Yes. We have a finding by the trial judge at - this book is called joint core appeal book and it is paragraph 5 of the Master’s judgment where he says – and that is page 10:
On the evidence of Mr Hughes, it would seem these Holding DOCAs are widely used by insolvency practitioners particularly in large administrations. He frankly acknowledged during the course of cross‑examination that the purpose of using the Holding DOCA was to avoid the need for a court application to extend the convening period for the second creditation meeting.
There was no secret about it and he explained – he said well, that is a good thing because these court applications cost money, they take time and they are a bit of a nuisance.
So we have recital C. We then have - on page 166 there is a defined term being a “sunset date” which is 3 May 2017. Clause 4 on page 167, the administrator when doing anything under the deed is an agent of the company, and then clause 8 on page 168:
Subject to any variation of this deed, there will be no property of the Company available for distribution to Creditors under this deed.
Then the purpose is set out in clause 9 again. I will not read that but it is further investigation, seek proposals, consider the proposals ‑ ‑ ‑
GORDON J: Could I ask you one factual matter that you did not address of which I was not quite clear? Is it the position that between their appointment as initial administrators and the holding of either the first or second of the second meetings - so there was advertising of assets for sale, that is there were attempts made to commence realisation and those matters were not the subject of extensive reporting to the creditors.
MR NEWLINDS: I think that is right. A due diligence room was set up and yes, I think the answer to that is yes. Whether there was advertising or not, I cannot recall but certainly one of the big firms of accountants was retained and appointed to deal with the sale process.
GORDON J: If that is right, one wonders what happened to those steps being taken. It is another reason why one questions the object and purpose of what is being put forward. If you have already undertaken as you would under - ordinarily a company under administration attempts to identify and then advertise the assets in order to maximise return to creditors, and if you have started that process it is a bit odd to continue it without reporting or understanding and explaining why it was ‑ ‑ ‑
MR NEWLINDS: Yes.
GORDON J: If it had come before a judge in a commercial list they would have been asking those very questions.
MR NEWLINDS: Yes, of course. The answer to your Honour’s question directly is in - amongst other places - in Justice Beech’s judgment in the Court of Appeal at page 140 of the judgment book, paragraph 268:
On 18 July 2016, the Administrators caused certain advertisements to be placed in the press inviting expressions of interest for the acquisition of Mesa’s assets.
Of course, one of the things, without straying too much into the merits, one of the things the administrator had to grapple with was my client’s allegation that the company had assets in the shape of claims against its directors and that had become a running sore between my client and the administrator. His position was, he was continuing to investigate those particular assets.
Now, apart from not making the court application, none of this is particularly unusual. What has been proven over time is that the timeframe imposed by the Act is sufficient for small backyard‑type operations but relatively frequently is not seen to be sufficient for a larger, more complex company and so the applications to extend the convening period are pretty common.
Generally what the administrator needs to show is firstly, why is it that you need some more time, what have you done so far, what are you proposing to do and is there some hope that this will come to a resolution that is for the benefit of creditors. Also, as my learned junior reminds me, what do the creditors think, because it is an opportunity for creditors to be heard. Of course, the court is cautious because extending the convening period does impact what would otherwise be people’s legal rights to bring cases against companies for mortgagees to get their assets back and the like.
Clause 10 of the deed is a moratorium and deferral of all debts until the termination date. Clause 11, the deed can be pleaded in bar. Clause 13 – now, this series of provisions makes no sense at all, of course. So it has to say:
For the avoidance of any doubt, and for the purposes of section 444DA(1) of the Act, any eligible employee Creditors will be entitled to a priority at least equal to what they would have been entitled to if the property –
which there is not any of:
were applied in accordance with sections 556, 560 and 561 of the Act.
Then there is a reference to the FEG Act which is that Commonwealth legislation where employees are paid by the Commonwealth and the money is clawed back later which, of course, also makes no sense because there is no property under this deed.
So, these are just boilerplate provisions that have been put in. We know 13.1 has been put in expressly because of 444DA. It has been suggested below on some occasions that, well, perhaps they are there so that if and when there is a variation to the deed and there is some property to be distributed, you have already got the clauses ready to roll but they do not make any sense in the context of this deed.
Clause 15 is a reporting obligation which Justice Gordon has referred to and 15(b) is a report which looks for all the world like a 439A report and then subsection (c) is a meeting which looks for all the world like a 439A meeting.
Clause 17, our learned friends rely on. They say none of this matters because of the variation power because the deed can be varied by resolution of creditors. The deed of course did not need to say that. The Act says that could happen in any event but our learned friend’s answer to all of this is the administrator formed an opinion that what was best for the creditors was to continue investigations.
The best way to do that was to enter into a deed of company arrangement which the company has and that by use of the variation power in the future it is possible that the deed might be a deed that does either of the two things the Act contemplates. It either might allow the company to continue in existence or it might provide a distribution to creditors better than liquidation.
Therefore, you cannot read this piece of paper, in any way set in stone. You have to take into account what may or may not happen in the future and our answer is you have to judge this deed on its own terms, not by reference to some future deed which may or may not occur, the terms of which we do not know. Clause 18 complies with the provision that says you have to explain how the deed terminates.
GORDON J: What was the business that was being carried on in 18.2 that is referred to?
MR NEWLINDS: The business that was being carried on – it was a mining operation, it had some manganese tenements. It had some port access rights and it had a joint venture arrangement to do with a – a 50 per cent joint venture interest in two manganese projects, the other joint venturer being a subsidiary of Mineral Resources, certain mining tenements and a mining lease called the Boodarie Lease and an interest in a facility agreement with Pilbara Port Authority in respect of a berth at Utah Point which is an access to a port.
It was on – what do they call it – care and maintenance, so it was not actually doing anything but it did have supervisors and it had debts to pay and Mineral Resources were providing money by way of loan to allow it to pay it. So that is the deed.
If we could then go to our submissions which we have tried to encapsulate in our three‑page document, most of which I have touched upon but the first of which I should show your Honour a couple of first instance cases out of New South Wales.
Our learned friends make a point and what they say is when you look at section 444A(4)(b) it refers to property of the company before distribution to creditors. Our learned friend’s point is we cannot be writing, complaining about no property being referred to there because deeds often have money that comes in from outside sources. Shareholders, directors or other supporters will often inject money into a deed fund for distribution to creditors and that that is not property of the company for distribution to creditors. It is said against us that is property not of the company for distribution to creditors, therefore, if the purpose of this is to allow creditors to know what property is to be distributed to them it does not work.
So, what that hangs on is that money that comes not from the company but from outside sources is not property of the company. That question has been looked at in a number of different contexts over the years and the consensus amongst single judges is that property of the company for the purpose of section 444A(4)(b) includes company – property that comes into a company into the deed of company arrangement from a third party or into the hands of a voluntary administrator from a third party.
Can we hand up copies of two cases, your Honours - we are sorry these were not on our list? It all starts from a case by Justice Davies in the Federal Court in 1994 called Federal Commissioner of Taxation v All Suburbs Car Repairs. We are not giving you that case but what we have here in these two cases is, firstly, Justice Barrett and, secondly, Justice White saying that Justice Davies was right and explaining their thinking. So, I will just give your Honour the reference ‑ ‑ ‑
GORDON J: Is there any dispute about this principal proposition?
MR NEWLINDS: Yes, yes. As we read our learned friend’s written submissions, this is one of their big points against us. So, if I could take your Honour to ‑ ‑ ‑
EDELMAN J: But you accept in your reply at paragraph 7, for example, that it is possible that a debt for equity swap would not contravene section 444A(4)(b).
MR NEWLINDS: It is possible.
EDELMAN J: So, where does this point go, then?
MR NEWLINDS: What this point says is that property of – these cases are authority for the proposition that property of the company for the section 444D(4) includes money or property that comes, not just from the company, but from outside sources.
GORDON J: There is no dispute about that between you and the respondents, is there? If there is, I ‑ ‑ ‑
MR NEWLINDS: I thought there was, but perhaps I will leave that for reply.
NETTLE J: What does it matter? If you accept that a debt for equity swap is a valid DOCA, what does it matter?
MR NEWLINDS: I do not think we do accept a debt for equity swap per se would be a valid DOCA. I think our position would be a debt for equity swap, if that is all a DOCA does, and there is no property to be distributed to creditors, that would be a void deed of company arrangement. It could be saved by an application under 447A.
What we say about all the hypotheticals is that you need to look at the actual deed to see how it has been done. We are not aware of debt for equity swaps that just go through a deed of company arrangement with nothing more.
GORDON J: Your proposition is, as I understand it, that in relation to those kinds of arrangements they require court approval.
MR NEWLINDS: If there is no property for distribution of creditors, yes.
GORDON J: I am sort of lost at why you keep hanging on to this one linchpin. I do not think you can pick up one factor, can you, and just say that that is, in effect, the crux of it. It sits amongst a number of factors which I think is where we started this whole set of submissions and debate.
MR NEWLINDS: Yes.
GORDON J: The reason why those arrangements and the label “holding DOCA” are not very helpful, are misleading, is that each of those has been looked at individually by reference to the facts and circumstances on their terms to ascertain whether or not they are consistent with the objects of Part 5.3A and to the extent to which they are not the courts have regard to them and approve variation accordingly.
MR NEWLINDS: Correct.
GORDON J: So is that not the essence of your complaint here?
MR NEWLINDS: Yes, that the court should have been involved under an extension of the convening period.
GORDON J: Two things: first of all is that what is proposed is not consistent with the Part 5.3A objects but their solution was to apply and seek to get approval from a court to vary it.
MR NEWLINDS: Under 447A, yes, and that is our answer to the one‑dollar deed. There might be one‑dollar deeds that because of what else they do are very beneficial to creditors.
GAGELER J: You will have to spell out for me why there is an inconsistency with the objects of the part.
MR NEWLINDS: I will come to that.
GAGELER J: If it has a number of elements, I would like them listed, please.
MR NEWLINDS: It does. We have made our point about the words “if any” and we have identified that subsection (h) talks about property available to pay creditors’ claims. I have said what I wanted to say about flexibility. Flexibility is all well and good and it no doubt exists but there are limitations and the limitations are on the outer scope of the statute. There is nothing in the words of the statute that suggest that because flexibility was seen to be a good thing anything goes. There are still limits.
We have made our sidestepping argument as we describe it – that is, what should have happened here was an application under 439A(6) and it did not. We say that it is no answer to our argument to identify that it would be open to my clients to move to set aside the deed under section 445D because that inverts the onus and requires my client to persuade a court that the deed should be set aside.
I have dealt with the one‑dollar deed and the other hypotheticals and in particular we have noted that section 447A is a plenary power. The cases say it has limits but the limits are really at the point where the court needs to be satisfied that what is being suggested is consistent with the objects of the part. If the answer to that question is yes, the court can exercise the judicial discretion, can mould the Act to fit a particular state of affairs, however it likes.
Then we come to section 445G, what should happen next. I appreciate that at one level, if I win well enough, we do not get to 445G, but if we do we contend that you have the gateway in subsection (3) which our learned friends cannot satisfy for the reasons I have put. There is a case in the Full Court of the Federal Court called Emanuele v ASIC (1995) 63 FCR 54. A number of cases have followed it.
Apparently, understanding what the court said in that case was that there was just the general discretion as to whether to void or validate. We think that case has either been wrongly decided or more likely has been misinterpreted by the courts who have said they are following it and we think that the Full Court in Lehman Brothers 179 FCR 243, and the Court of Appeal in New South Wales in MYT v Mulcon both decided the operation of section 445G in the way that we contend.
So we conclude by saying the deed is void for the reasons we have been put. It cannot be saved under the saving provision for the reasons we have put. If that is right, the Court should make an order declaring it void. The company is insolvent. No one has ever suggested that it is not insolvent. It therefore should be wound up. It has always been accepted at the lower courts that if we got to that point there should be a winding‑up order. The debate was always whether Mr Hughes should be the liquidator or not. We accept that if this Court is minded to wind the company up that Mr Hughes should be the liquidator.
KIEFEL CJ: The alternative is to remit it to the court to consider further argument in relation to ‑ ‑ ‑
MR NEWLINDS: That is the alternative. The trouble with that alternative, if we get to that stage, you have a company that, if it is not wound up, must be under the control of its directors again. It is insolvent. It is true that the directors could immediately appoint another voluntary administrator and we could start the process again. But of course a liquidator is entitled to appoint a voluntary administrator. Our submission is there is no utility in sending it back; indeed, it would be dangerous because you have an insolvent company wandering around the community.
KIEFEL CJ: Is there any statutory provision for making an order for winding up when a deed is declared void or any case law?
MR NEWLINDS: Can we just deal with this? It is not as clear we would like it to be.
KIEFEL CJ: I wonder whether the position in which you are left under section 445G is that the deed no longer exists and the parties then have to move the court to do something – apply for winding‑up in the normal way.
MR NEWLINDS: We did have a winding‑up application before the court.
KIEFEL CJ: It is extant? It has not been dealt with?
MR NEWLINDS: It is extant. We of course lost because the deed was said to be valid. We really relied on the insolvency basis. He said well, this is an insolvent company. If the deed is void, you should wind it up. Our submission is that there is no reason why the court would not take that course.
NETTLE J: Can I ask you one further question about 438A. I think you said in answer to one of my questions earlier that the administrators here did not comply with that section,; that is to say, expressed the three opinions that are called for by it, or am I wrong in what I say?
MR NEWLINDS: Can I just regroup, your Honour. I also need to answer Justice Gageler’s question, which I feel is a very similar question.
NETTLE J: Of course. It arose out of your treatment - page 97 of the appellant’s joint book of further materials, where you took us to the opinions expressed in the second report.
MR NEWLINDS: Yes. When I took your Honours to page 92 of the materials book, what the administrator said is, “What I am going to do under this deed of company arrangement is conduct some further investigations and form an opinion as to whether it would be in the interests of creditors to enter into a deed of company arrangement”.
NETTLE J: So the problem with this at 97 is not that it is an opinion that it is not in the interests to wind up the company, but “I am not yet in a position to say whether it is in the interests of the company to wind up”. Is that it?
MR NEWLINDS: That is it. What he said is, “It is in the interests of the company to enter into this holding DOCA”, if we can call it that – it is the administrator’s word – “because I need more time to consider what my real opinion, what my final opinion is under 438A.”
NETTLE J: It is in the interests of the company to keep it down the road.
MR NEWLINDS: Exactly. He said, “It is in the interests of creditors to do what I am suggesting we do, because I think it is in the interests of creditors that I carry out further investigations and the like”. But what he said is, “In my future report I might provide an opinion that the company enter into a deed of company arrangement”. What he really means is a varied version of this one.
KIEFEL CJ: Your point in relation to section 438A then is that those statements are frank acknowledgements that the opinions required by 438A have not been formed?
MR NEWLINDS: Exactly, because he has not had time to ‑ ‑ ‑
GORDON J: It is borne out in a sense by the description of the status of the administrator’s realisation program on page 89 of the further materials where they explain that they basically have not done anything since – because they cannot because they have been doing other things and they say we have really done nothing further in months on that question:
there has been a strong level of interest in the assets and also from parties interested in a recapitalisation . . . however that since the adjournment of the second meeting of creditors our focus has ‑ ‑ ‑
been elsewhere.
MR NEWLINDS: Well, your Honour, no doubt has heard a lot of these extension applications in earlier days. The affidavit would have had to have done better than that, we would respectfully suggest, but that is a different question. The court would have had jurisdiction and would have acted ‑ ‑ ‑
GORDON J: So what do we make of paragraph 8 of that report where it talks about the “estimated return to creditors”? Is that an answer to Justice Nettle’s question? It is on page 89. They say we note there will not be any property and therefore we have not provided a comparison of return.
MR NEWLINDS: What he is saying is, “I can’t do the comparison between whether it’s better for this company to stay in business or whether there should be just a return to creditors”. So, to answer Justice Gageler’s question, you do not just get it from 435A itself; you get it from the whole scheme of the Act. But the proposition is this. There was no suggestion, we think, in the report that there could be a deed of company arrangement that would maximise the chances of this company continuing in existence.
EDELMAN J: Is not your core point about purposes really 439A(6), which is that you say that 439A(6) needs to be read as “only the Court may extend the convening period”?
MR NEWLINDS: That is right. You need to look at the objects of the part, the scheme of the Act, the obviously short period that the administrator has to carry out a difficult task for doing these investigations, writing a report, calling a meeting, the effect on parties’ and third parties’ legal rights by the various moratoriums that are put in place and, yes, and it comes down to the only method.
If you want to extend the convening period because you are not in a position to recommend a proper deed of company arrangement, there is only one method and that is a section 439A(6) application, and that this deed, to put it bluntly, is nothing more and nothing less than a proxy for that. That was clearly admitted by the administrator. That takes it outside the purposes of the Act.
Now, the deed itself, to answer Justice Gageler’s question, what will be said against me is, no, well, this deed is good for creditors because there was this ASX shell which had some commercial value, and that if a company passed into liquidation that value would be lost and therefore if you knew nothing else about the affairs of this company, to not lose that shell is for the benefit of creditors somehow, and that therefore this further period is the best thing for creditors.
So we have two answers. Firstly, that is all well and good, but if that is what you wanted you should have gone to court. But secondly, that does not answer the question in section 435A(b), which is that there will be a better return to creditors under the deed than under a liquidation.
What is being said by the administrator is, “I don’t want to lose this ASX shell. I think that would be bad to do that”. But he cannot do the comparator as the Act envisaged that he or she would under section 435A(b). Even if there is some hope that the company might continue its existence - because of course no one knows what will happen in the future, so anything is possible – you do not know whether what you are doing maximises the chances of the business continuing or not, because you do not know if there is any chance of that at all. So, other than relying on what we said in writing, those are my submissions. If the Court pleases.
KIEFEL CJ: Thank you. Yes, Mr Hutley.
MR HUTLEY: Your Honours, before I go through the legislation and what we say the structures are, I just want to – your Honours were not taken to one fundamental provision which has to be addressed and my learned friend does not and that is 444B(6) at 189. That is why we have always understood that my learned friends needed to win 444A at some fundamental level. It is when executed by both the company and the deeds proposal – proposed administrator, the instrument becomes a deed of company arrangement and a deed of company arrangement is defined in section 9 and it:
means a deed of company arrangement executed under Part 5.3A or –
amendment and your Honours will find that at 76. That has also got to be understood against the context – before I go on - of 445H. If one is going to set aside one of these deeds, declare them void, in effect, 445H at 201 preserves all Acts, all Acts, up to that time. So we say there cannot be a serious argument that this was a deed of company arrangement if we complied with the mandatory terms.
I am not going to deal with the G arguments - my learned friend, Mr Gleeson, is going to deal with those, but one has to come to terms with the fact that there was an instrument, the instrument was executed and under 444B that became a deed of company arrangement. In our respectful submission, that is what the legislation says and it is done essentially because of the problem that if there is a chance to argue that there has been none months or years down the road, third party interests of a profound variety will have intervened potentially with extraordinary disadvantages to the company, their shareholders, their creditors and third parties.
EDELMAN J: Mr Hutley, suppose you had a document or an instrument purporting to be a deed of company arrangement but with one clause which simply provided that the convening period shall be extended for 6 months, would you submit that that purported deed, because it is satisfied on its face section 444B(6), would be a deed of company arrangement?
MR HUTLEY: Yes, it may not last very long before a court because your Honour’s premise is that at such an extreme level it would be, in effect, applied to a court within nanoseconds and set aside.
GORDON J: So what is different here? Putting aside the factual matrix that is what happened here. There was an application to set it aside.
MR HUTLEY: Your Honour, there is no appeal, with respect, from the application to set it aside. The issue is that it was invalid ab initio. Now, all I want to overcome is the argument which has seemed to be developed that it is not a deed of company arrangement. It is. Section 444B(6) tells us that it is.
EDELMAN J: Does that submission then mean that 444A(1) needs simply to be read as though it is said that a company’s creditors resolve that the company execute an instrument. The deed of company arrangement has no substantive content other than the fact that it is an instrument.
MR HUTLEY: No. Well, your Honour, one can become involved in a semantic debate here. It is what is put before the meeting is what purports to be or that the meeting develops itself and I will come to that in due course, is a thing called the deed of company arrangement and it is executed in accordance with 444B. Section 444B(6) has a legal effect and that is a calculated legislative policy for every good reason associated with what one is dealing with here, dynamic, fluid, fast moving events where if one is – something is to take place, there has to be certainty.
GORDON J: That is a very odd – the position here is to the complete contrary.
MR HUTLEY: With respect, no, your Honour. I just wanted to deal with 444B(6). I now propose to go back to the beginning and go through the legislation. We say that is a central provision which your Honours were not taken to.
Could I then turn back? We propose to follow the following order of issues: the object and purpose of Part 5.3A and section 444A(4). Then we are going to deal with the text of section 444A(4) particularly and related provisions, then our learned friend’s submissions about the relevance of section 439 and the ability to apply for an extension of the convening period and, finally, the relief sought by the appellant we are not going to address. By agreement, my learned friend, Mr Gleeson, will deal with that part of the matter. One accepts that, starting at 435A of the Act, which you will find at page 134, your Honours, the expressed object is:
NETTLE J: Think that it is or think that it would be?
MR NEWLINDS: That it would be or might be.
NETTLE J: You say that here there was no expression of opinion that it would be in the interests, all that there was was the expression that it might be but I need more time to ascertain whether that would be so.
MR NEWLINDS: Correct. This is what I was saying this morning when I opened, it is because this is a holding deed ‑ it is not our word, it is the administrator’s word ‑ it is because it is a holding deed that it has the no property problem. One is driven by the other and that gives you a clue as to why our submission is correct. The legislature did not contemplate holding deeds and that is one of the reasons why they did require and expect there to be some property to be distributed to creditors.
Can I just go to the section itself? Section 444A, because, with respect, Mr Hutley does gloss over bits of it and the bit he did gloss over is the “if anys” in the other sections. Forgive me for being old‑fashioned, but the immediate textual, old‑fashioned method of construing a subsection like this would be to observe that in some of the other subsections the carve‑out of “if any” is there in brackets and it is not there in subsection (b) and it is not there in subsection (h).
Now, Justice Buss says, that is just different drafting technique. That is probably right because that is because people use different drafting techniques to convey different meanings. You cannot, in our respectful submission, construe subsection (b) by reading in the words “if any” when they are not there in circumstances where they have been used in the other subsections. That is the point on subsection (b).
The second point is you cannot distribute nothing and yet (b) and (h) both assume that there is something to distribute. And the third point is 444D(a) has just no work to do if one is talking about no property. Our learned friends say these are just provisions which make sure that the deed has within it things that the Act otherwise provides that the deed must have in it. We say, no, let us just look at the plain words of the subsection. These are things that must be in the deed and if they are not in the deed then there is a non‑compliance with the Act. That is our submission under ‑ as to the proper construction of that subsection.
We also have the failure to apply for an extension of the convening period. Mr Gleeson throws down the gauntlet to me and says, well, when you come to subsection (g) you have got to identify what is the parts of the Act that were not complied with. Well, I have got two that I can specifically identify. Section 444A(4)(b) and the failure to apply for an extension of the convening period when one was required to be sought.
Then, can I come to G, we are at issue there, this is 445G. Our submission is that there is no discretion at large in subsection (2), that the result in subsection (2) follows from whichever way the Court resolves the doubt. So, the jurisdiction is engaged by a doubt being identified by someone. It comes before the Court. The Court resolves that doubt, one way or the other. That question is either answered in the affirmative or the negative. That then drives what happens under subsection (2). So, the “may” in subsection (2) is really a must. That is the result that simply follows the resolution of the doubt.
The escape hatch for what is seen to be unfair or unfortunate results is subsection (3) and our learned friend has to get through that gate. That is the question of construction. That question of construction does not involve any element of discretion. If we are right, they cannot get through because there is not substantive compliance – not substantial compliance, so there is
nothing to remit. If we are wrong, and there is a discretion at large under subsection (2) then we accept that there should be a remittal.
I would say this though, your Honours. When before the Court of Appeal we sought to adduce further evidence, because what there were was a series of variations which just extended the sunset date, when we sought to put that material before the Court of Appeal, our learned friends strenuously opposed it and said that we were doing the wrong thing. In any event, they have now taken a completely and diametrically opposite position.
I accept – this is the final point – that a winding‑up order quintessentially, even though there is, if you like, a preponderance or a presumption in favour of a moving party if they are seeking to wind‑up an insolvent company and they are found to be a creditor ‑ which is us ‑ there is a step in that process which is discretionary. I have made my submissions. We do invite your Honours to move to that order, notwithstanding the material that Mr Gleeson has – it is either before your Honours or he has read it out, so your Honours know about it. In our respectful submission, none of that material would be sufficient to stop your Honours moving to a winding‑up order. Those are my submissions.
KIEFEL CJ: The Court will adjourn briefly to consider the course that it will take.
AT 3.31 PM SHORT ADJOURNMENT
UPON RESUMING AT 3.36 PM:
KIEFEL CJ: The Court is, at least by a majority, of the view that the appeals in each of P7 and P8 of 2018 should be dismissed with costs. The orders of the Court are that in each of appeals P7 and P8 of 2018 the appeal is dismissed with costs. The Court will publish reasons at a later date.
The Court will now adjourn to 10.15 am tomorrow.
AT 3.37 PM THE MATTER WAS ADJOURNED
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