Porter Street Investments Pty Ltd v Nellbar Pty Ltd

[2022] WASCA 33 (S)

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT  :   THE COURT OF APPEAL (WA)

CITATION: PORTER STREET INVESTMENTS PTY LTD -v- NELLBAR PTY LTD [2022] WASCA 33

CORAM:   BUSS P

BEECH JA

VAUGHAN JA

HEARD:   14 DECEMBER 2021

DELIVERED          :   18 MARCH 2022

FILE NO/S:   CACV 105 of 2020

CACV 97 of 2020

BETWEEN:   PORTER STREET INVESTMENTS PTY LTD

First Appellant

WOODHAVEN PTY LTD

Second Appellant

JOHN LOAD CECIL JONES

Third Appellant

BURCHELL FRANCIS CECIL JONES

Fourth Appellant

AND

NELLBAR PTY LTD

First Respondent

HAMPTON TRANSPORT SERVICES PTY LTD

Second Respondent

ON APPEAL FROM:

Jurisdiction              :   SUPREME COURT OF WESTERN AUSTRALIA

Coram:   MASTER SANDERSON

Citation: NELLBAR PTY LTD -v- JONES PARTNERS PTY LTD [No 2] [2020] WASC 336

File Number            :   COR 266 of 2013, COR 265 of 2013

Catchwords:

Appeal - Corporations law - Oppressive conduct - Buy-back and transfer orders made - Whether orders interlocutory or final - Whether master erred in law by failing to order up-to-date valuations for shares and property the subject of buy-back and transfer orders - Whether master made weighting errors in failing to order up-to-date valuations - Whether failure to order up-to-date valuations was unreasonable or plainly unjust - Whether master erred in law in not granting leave or liberty to apply - Whether master erred in law in failing to exercise the discretion to amend orders to allow for up-to-date valuations and such failure was unreasonable or plainly unjust - Whether court should make orders sought by the appellant - Turns on own facts

Legislation:

Corporations Act 2001 (Cth), s 232(d) - (e), s 233(1)

Result:

Appeal allowed

Category:    B

Representation:

Counsel:

First Appellant	:	NDC Dillon
Second Appellant	:	NDC Dillon
Third Appellant	:	NDC Dillon
Fourth Appellant	:	NDC Dillon
First Respondent	:	PJ Hannan
Second Respondent	:	No appearance

Solicitors:

First Appellant	:	HHG Legal Group
Second Appellant	:	HHG Legal Group
Third Appellant	:	HHG Legal Group
Fourth Appellant	:	HHG Legal Group
First Respondent	:	Nova Legal
Second Respondent	:	No appearance

Case(s) referred to in decision(s):

Autodesk Inc v Dyason (No 2) [1993] HCA 6; (1993) 176 CLR 300

Campbell v Backoffice Investments Pty Ltd [2008] NSWCA 95; (2008) 66 ACSR 359

Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304

Carr v Finance Corporation of Australia Ltd (No 1) [1981] HCA 20; (1981) 147 CLR 246

Currie v Currie [No 2] [2019] WASCA 2

Dr Shanahan v Jatese Pty Ltd [2019] NSWCA 113

Dynasty Pty Ltd v Coombs [1995] FCA 1447; (1995) 59 FCR 122

ES Gordon Pty Ltd v Idameneo (No 123) Pty Ltd (1994) 15 ACSR 536

Fitzpatrick v Cheal [2012] NSWSC 261; (2012) 264 FLR 313

Foody v Horewood [2007] VSCA 130; (2007) 62 ACSR 576

Gronow v Gronow [1979] HCA 63; 144 CLR 513

Hall v Nominal Defendant [1966] HCA 36; (1966) 117 CLR 423

Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2018] WASCA 185

House v The King [1936] HCA 40; (1936) 55 CLR 499

In re Cumana Ltd [1986] BCLC 430

In re London School of Electronics Ltd [1986] Ch 211

John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd [2010] HCA 19; (2010) 241 CLR 1

Licul v Corney [1976] HCA 6; (1976) 180 CLR 213

Lovell v Lovell [1950] HCA 52; (1950) 81 CLR 513

Mallet v Mallet [1984] HCA 21; (1984) 156 CLR 605

Meyer v Solomon [2021] WASCA 168

Mopeke Pty Ltd v Airport Fine Foods Pty Ltd [2007] NSWC 153; (2007) 61 ACSR 395

Nellbar Pty ltd v Jones Partners Pty Ltd [2018] WASC 292

Nellbar Pty Ltd v Jones Partners Pty Ltd [No 2] [2020] WASC 336

News Ltd v Australia Rugby Football League Ltd [1996] FCA 870; (1996) 64 FCR 410

Patterson v Humphrey [No 2] [2016] WASC 343

Profinance Trust SA v Gladstone [2001] EWCA 1031; [2002] 1 WLR 1024

Rawson v Hobbs [1961] HCA 72; (1961) 107 CLR 466

Re Scientific Management Associates Pty Ltd [2019] NSWSC 1643; (2019) 141 ACSR 115

Short v Crawley (No 30) [2007] NSWSC 1322

Smith Martis Cork & Rajan Pty Ltd v Benjamin Corporation Pty Ltd [2004] FCAFC 153; (2004) 207 ALR 136

State of Victoria v Sutton [1998] HCA 56; (1998) 195 CLR 291

Wicks v Bennett [1921] HCA 57; (1921) 30 CLR 80

JUDGMENT OF THE COURT:

Overview

1. This consolidated appeal[1] concerns orders made on 27 August 2020[2] and 4 September 2020 by Sanderson M in action COR/266/2013.  In substance, so far as presently relevant:

   1.The orders made 27 August 2020[3] provided for certain transactions to proceed based on prices established by a valuation as at 30 June 2017 (notwithstanding that the appellants sought orders for up-to-date valuations of the relevant assets).

   2.The orders made 4 September 2020 dismissed the appellants' application to re-open so as to amend the orders made 27 August 2020 to provide for the transactions to proceed based on up-to-date valuations of the relevant assets.[4]

   [1] Appeal CACV/97/2020 and appeal CACV/105/2020 were consolidated by orders of Gilich R made 22 September 2020: WAB 10 - 11.

   [2] The appeal notice dated 10 September 2020 confines the decision the subject of appeal CACV/97/2020 to pars 4, 12 and 27 of the orders made 27 August 2020: WAB 2.

   [3] BAB 18 - 23.

   [4] See BAB 1, 111 - 112.  See also appellants' submissions dated 3 September 2020 pars 1, 20, 41, 47 BAB 116, 118 - 119, 123, 124, 127 (par 4A), 128 (par 12A).

2. The 27 August 2020 orders were made in the context of the master having earlier made declarations as to oppressive conduct in terms of ss 232(d) and (e) of the Corporations Act 2001 (Cth) and were in the nature of remedial orders pursuant to s 233(1) of the Act.

3. Broadly speaking, the appellants complain about the transactions proceeding in circumstances where the master rejected their contention that the relevant prices should be determined based on up-to-date valuations.

4. For the reasons that follow the master's discretion miscarried in determining the fair value of the assets.  In particular, the order providing for a transfer price of one of the assets known as Edjudina Station was unreasonable or plainly unjust because it was made in circumstances where, properly understood, there was no evidence before the master as to the value of that asset.  However, in terms of the disposition of the appeal, we would not make the orders wanted by the appellants.  But there is an available alternate mechanism, identified in [167] - [168] below, which is satisfactory as a matter of justice and fairness to correct the error that has been identified in the orders the subject of the appeal.

Background facts

1. The Jones family held interests in a number of trading businesses and assets through various corporate entities.  What follows is somewhat simplified but suffices to provide the necessary factual context for the issues before the court on the consolidated appeal.

2. Historically, the business interests held by the Jones family were established by three brothers: Barton Cecil Jones Snr - known as 'Boss' (Boss Jones), John Jones and Burchell Jones.  Boss Jones is deceased.  John Jones is the third appellant and is the second defendant in COR/266/2013.  Burchell Jones is the fourth appellant and is the third defendant in COR/266/2013.  John Jones and Burchell Jones are associated with the first and second appellants - Porter Street Investments Pty Ltd (Porter Street) and Woodhaven Pty Ltd (Woodhaven) - those companies being the fourth and fifth defendants in COR/266/2013 respectively.

3. Boss Jones' interests in the various businesses and assets were held by Nellbar Pty Ltd (Nellbar).  Nellbar is the plaintiff in COR/266/2013 and is the first respondent in the consolidated appeal.  Boss Jones' sons Barton Cecil Jones Jnr (Bart Jones) and David Jones are now directors of Nellbar.

4. The master described two main businesses:[5]

   1.Hampton Transport Services Pty Ltd (Hampton Transport) - Hampton Transport is a successful transport and logistics enterprise which also incorporates a mining and civil services division undertaking open pit mining, earthmoving and civil work services.  It was established by Boss Jones and, during his lifetime, was Boss Jones' particular area of interest.  After Boss Jones' death the day-to-day management of Hampton Transport's business was carried out by Bart Jones and David Jones.

   2.Jones Partners Pty Ltd (Jones Partners) - Jones Partners is in the nature of a conglomerate holding shares in listed mining entities, hotels in Esperance and extensive agricultural interests.  The day-to-day management of Jones Partners was carried out by John Jones and Burchell Jones.

   [5] Nellbar Pty ltd v Jones Partners Pty Ltd [2018] WASC 292 (Nellbar No 1) [5] - [8].

5. Nellbar held a one-third interest in Hampton Transport and Jones Partners.  John Jones and Burchell Jones, through their respective companies, also each held a one-third interest in Hampton Transport and Jones Partners.[6]

   [6] Nellbar No 1 [6].

6. In unchallenged affidavit evidence John Jones identified the ownership structure and interests of the Hampton Transport group in these terms:[7]

[7] Affidavit of J L C Jones sworn 28 July 2020 attachment 'JLCJ-1' GAB 109.

1. Relevantly to the issues on appeal:

   1.The shares in Hampton Transport are owned equally by Nellbar (1/3^rd interest), Porter Street (1/3^rd interest) and Woodhaven (1/3^rd interest).

   2.Hampton Transport owned 50% of the shares in Road Trains of Australia Pty Ltd (RTA), the other two shareholders of RTA being Bart Jones (25%) and Wirildi Pty Ltd (25%).  Wirilidi Pty Ltd is a company associated with David Jones.

   3.Hampton Transport owns a property known as 'Edjudina Station'.

2. There is limited material before this court as to RTA and Edjudina Station.  RTA predominantly carried out a livestock transport business covering the top half of Australia with additional transport services including the transport of water, cement and fuel.[8]  RTA is a significant enterprise.  For example, an independent expert report (IER) prepared by a court expert, Sherif Andrawes, records the fair value of RTA's motor vehicle fleet as being $29.122 million based on a valuation provided to Mr Andrawes as at 31 December 2015.[9]  Edjudina Station is apparently a substantial livestock pastoral property in the Goldfields region.[10]

   [8] Independent expert report of Sherif Andrawes dated 20 April 2018 in relation to Hampton Transport appendix 6 item 2 GAB 325.

   [9] IER pars 10.3.49 - 10.3.50 GAB 264.

   [10] Affidavit of J L C Jones sworn 3 September 2020 attachment 'JLCJ-1' GAB 117 - 119.

3. The master described the Jones family as having 'divided into two camps'.[11]  He referred to these as the 'Nellbar interests' (ie Bart Jones and David Jones) and the 'Jones party interests' (ie John Jones and Burchell Jones and their respective companies).  As early as 2008 both camps realised that they needed to separate their business interests.  No agreement could be achieved.  However, according to the master, the position was really quite simple.  Nellbar wished to buy John Jones and Burchell Jones out of Hampton Transport; John Jones and Burchell Jones wished to buy Nellbar out of Jones Partners.  While that end point was 'always clear' the mechanics of the separation caused difficulties.[12]

   [11] Nellbar No 1 [1].

   [12] Nellbar No 1 [9].

The litigation before the master

1. Nellbar commenced two corporate oppression proceedings on 24 December 2013.  COR/265/2013 concerns Jones Partners.  Jones Partners is the first defendant.  Porter Street and Woodhaven are the second and third defendants respectively.  COR/266/2013 concerns Hampton Transport.  Hampton Transport is the first defendant.  John Jones, Burchell Jones, Porter Street and Woodhaven are the second to fifth defendants respectively.  In what follows it will be convenient to refer to John Jones, Burchell Jones, Porter Street and Woodhaven as the 'Jones party interests' or the 'appellants'.

2. The consolidated appeal only involves orders made in COR/266/2013, ie orders made in the proceedings as to Hampton Transport.  However, COR/265/2013 and COR/266/2013 are intertwined.  When the master made orders on 27 August 2020 and 4 September 2020 in COR/266/2013 he also made orders in COR/265/2013.  Accordingly, in what follows it is sometimes necessary to also refer to what has occurred in COR/265/2013.

3. In the course of the proceedings the parties agreed to the appointment of a court expert under O 40 of the Rules of the Supreme Court 1971 (WA) (RSC). In COR/266/2013 Sherif Andrawes of the firm BDO Australia was appointed as an independent court expert to value Hampton Transport and its assets and each of its subsidiaries and their assets. A similar order was made in relation to Jones Partners in COR/265/2013. Mr Andrawes' IER for Hampton Transport was dated 20 April 2018 but assessed values as at 30 June 2017.[13]  Specific valuation amounts were provided for each of RTA[14] and Edjudina Station.[15]  However, the latter was no more than the adoption of a valuation provided to Mr Andrawes in the form of an undated 'directors' valuation' in an amount of $1,000,000.

   [13] IER pars 1.3.7, 3.1.1, 4.1.1, 4.3.1 GAB 201, 203 - 204.

   [14] IER par 4.1.2, 10.3.1 - 10.3.59 GAB 204, 259 - 266.  See also IER appendix 9 GAB 333.

   [15] IER appendix 9 GAB 333.

4. In terms of assumptions, Mr Andrawes was instructed to rely on the $1,000,000 directors' valuation of Edjudina Station.[16]  It is apparent that he did so in coming to his valuation of Hampton Transport.  Mr Andrawes used a future maintainable earnings approach but adopted a net asset valuation methodology as an alternative approach.[17]  In coming to a future maintainable earnings valuation Mr Andrawes adjusted for surplus assets that were not essential elements of Hampton Transport's business.[18]  The properties held by Hampton Transport, including Edjudina Station, were considered to be surplus - so in coming to his valuation figure Mr Andrawes added back the value of this property based on the $1,000,000 amount he had been provided with.[19]

   [16] IER par 2.2.1 GAB 202.

   [17] IER par 10.1.1.1 GAB 246.

   [18] IER par 10.1.2.6 GAB 246.

   [19] IER pars 10.2.59 - 10.2.60, 10.2.65 GAB 254 - 255.

5. In coming to a valuation for RTA, Mr Andrawes performed a net asset valuation cross check of a value obtained by a future maintainable earnings valuation.  Mr Andrawes adjusted the book value of RTA's motor vehicle fleet based on a valuation provided to him as at 31 December 2015.[20]  Again, this was consistent with Mr Andrawes' instructions to rely on such data.[21]  Ultimately, as the range for the future maintainable earnings valuation was lower than the net asset valuation but the high end of each was similar, Mr Andrawes adopted a valuation range for RTA based on a discount to the net asset valuation and the high end of the future maintainable earnings valuation.[22]

   [20] IER pars 10.3.49 - 10.3.50 GAB 264.

   [21] IER par 2.2.1 GAB 202.  See also IER appendix 9 GAB 333.

   [22] IER pars 10.3.54 - 10.3.59 GAB 265 - 266.

6. In Nellbar No 1 the master accepted that the methodology Mr Andrawes employed was proper and appropriate.[23]  In eventually providing for buy-out orders the master adopted the mid-point of the various ranges given in Mr Andrawes' valuations.[24]

   [23] Nellbar No 1 [20].

   [24] Nellbar No 1 [20].

7. The two proceedings were listed for hearing and proceeded to trial.  On the sixth day of trial the parties reached an in-principle agreement, although there were remaining differences as to the final form of the orders in each case.  In Nellbar No 1 the master dealt with these remaining differences and also an application to re-open to address valuation issues arising from the sale of one of Hampton Transport's property assets.  In the course of doing so the master set out, in detailed terms, the orders he intended to make in relation to both the Hampton Transport matter (COR/266/2013) and the Jones Partners matter (COR/265/2013)[25] (each being in terms of the Jones party interests' minute).

   [25] Nellbar No 1 [17] - [18].

8. On 30 November 2018, in COR/266/2013, the master made orders, among others, that:

   2.There be a declaration that the affairs of Hampton Transport Services have been conducted and are being conducted in a manner that was and is oppressive to, or unfairly prejudicial to, or unfairly discriminatory against Nellbar within the meaning of
   s 232(e) of the Corporations Act 2001 (Cth).

   3.There be a declaration that the affairs of Hampton Transport Services have been conducted and are being conducted in a manner that was and is contrary to the interests of Hampton Transport Services' members as a whole within the meaning of section 232(d) of the Corporations Act 2001 (Cth).[26]

   [26] BAB 6.

9. In addition, in par 4 of the orders of 30 November 2018, the master made a buy-out order pursuant to s 233(1)(d) of the Corporations Act ordering that subject to par 5:

   [W]ithin 120 days of the date of this order Porter Street Investments and Woodhaven shall transfer [their shares in Hampton Transport and certain other interests] to Nellbar and, simultaneously, Nellbar shall pay [Amount A] to or according to the direction of Porter Street Investments and Woodhaven.[27]

   [27] BAB 6.  The reference to '[Amount A]' appears in the order as extracted.  The materials before this court do not identify what is meant by 'Amount A'.  Apparently the relevant amount is identified in correspondence to which the parties and the master are privy.  However, it is clear from Nellbar No 1 that the amounts in the orders represent the mid-point of the IER valuation: Nellbar No 1 [20].

10. Paragraph 5 of the orders made 30 November 2018 in COR/266/2013 provided for compliance to be conditional upon and simultaneous with a buy-out of Nellbar's interests in relation to Jones Partners.

11. The master's reasons contemplated that the buy-out order might fail in which case there would be a need to consider alternate relief.  He stated:

    The orders in both matters anticipate what is effectively a shareholder buy-out.  It requires the Nellbar interests to find many millions of dollars to buy out Jones Partners.  There was no evidence led at the trial to indicate the Nellbar parties had the wherewithal to obtain the necessary funds.  That is not a criticism of the way the case was run - it was always anticipated if orders were made, time would be made available to the parties to effect a buy-out.  However, the fact remains a buy-out may not be possible.  If it is not, then some alternative method separating the parties' interests must be found.  In the minute of proposed orders they tendered, the Nellbar interests had what amounted to a self-executing order for liquidation.  In other words, if the Nellbar interests were not able to effect the buy-out within the specified time period, they would file a consent of a liquidator and all of the companies would be placed in liquidation.  Counsel for [the Jones party interests] was horrified by that prospect.  He referred to it - correctly in my view - as the 'Armageddon Scenario'.  It would have had the consequence of liquidating some companies which were highly profitable.  The appointment of the liquidator would have triggered provisions of finance arrangements and destroyed any goodwill within the group.  So it seemed to me the best option if a buy-out does not prove possible, was to bring the matter back for further consideration.[28](emphasis added)

    [28] Nellbar No 1 [22].

12. The master considered it preferable to stage the orders and give the matter of relief further consideration if and when the buy-out option failed.[29]  The orders of 30 November 2018 formally catered for this possibility by a self-executing order in par 14:

    If Nellbar does not pay [Amount A] in accordance with paragraph 4(1) within the 120 days provided for in paragraph 4(1) above, then the orders contained in paragraphs 4 - 9 above are discharged, and the matter is to be relisted for further orders.[30]

    [29] Nellbar No 1 [24].

    [30] BAB 8.

1. The master considered that if an overall buy-out by the Nellbar interests was not possible then further consideration should be given to the way in which the parties' interests were to be separated.[31]

   [31] Nellbar No 1 [25].

2. The parties were also given liberty to apply with respect to any issues which may arise with respect to the implementation of the orders (par 17).[32]

   [32] BAB 8.

Events following the orders of 30 November 2018

1. The master's orders of 30 November 2018 contemplated Nellbar completing its buy-out of Porter Street's and Woodhaven's shares in Hampton Transport within 120 days after 30 November 2018 - ie by 30 March 2019.  That did not happen.  Accordingly, the 30 November 2018 buy-out orders were discharged by operation of par 14 of the 30 November 2018 orders (see [25] above).

2. On 26 June 2019, after a further hearing on 6 June 2019, the master made fresh remedial orders in COR/266/2013 pursuant to s 233 of the Corporations Act.[33]  Among other things the 26 June 2019 orders provided for:

   1.Nellbar to purchase Porter Street's and Woodhaven's shares in Hampton Transport, for the same price as contemplated by the 30 November 2018 orders, by no later than 4 pm on 13 September 2019 (par 3).  The buy-out was again to be conditional upon and simultaneous with the buy-out of Nellbar's interests in relation to Jones Partners (pars 4 - 5).  The buy-out orders were again to be discharged automatically should Nellbar not complete the purchase as contemplated by the orders (par 6).

   2.The public auction of certain land owned by Hampton Transport and the distribution of the proceeds thereof (pars 8 - 16).

   [33] BAB 9 - 15.

3. By an order made 3 October 2019 the date of 13 September 2019 was extended to 14 October 2019.[34]

   [34] BAB 16.

4. It continued to be the case that Nellbar was unable to complete the purchase of Porter Street's and Woodhaven's shares in Hampton Transport as contemplated by the orders of 26 June 2019 as amended.  Accordingly, the second tranche of buy-out orders were also discharged by the effluxion of time for completion.  The 26 June 2019 orders contemplated that Nellbar would then apply to the court for further orders (par 7).  Nellbar eventually did so by a minute of proposed orders dated 30 June 2020[35] (at the same time seeking additional orders in COR/265/2013).[36]

   [35] BAB 72 - 79.  These were amended slightly in an amended minute of proposed orders dated 25 August 2020: BAB 85 - 92.

   [36] BAB 69 - 71.

5. The parties consented to an order, made 1 July 2020, that the Jones party interests file any competing minute of orders and affidavits in support thereof by 23 July 2020.[37]

   [37] BAB 26.

6. From 30 June 2020 Nellbar no longer sought orders providing for it to purchase Porter Street's and Woodhaven's shares in Hampton Transport.  Instead the orders sought in COR/266/2013 had five material features:

   1.RTA to buy-back all of the shares that Hampton Transport held in RTA for the 'RTA Sale Price' with Hampton Transport to distribute the net proceeds to Porter Street, Woodhaven, Nellbar, Bart Jones and David Jones in certain proportions (pars 4 - 8).  The 'RTA Sale Price' was not disclosed in the minute.  Instead it was identified in correspondence to the master.  Relevantly, as was explained to the master,[38] Nellbar proposed an amount which was 50%[39] of the mid-point valuation of RTA as determined in the IER, ie the value as assessed by Mr Andrawes as at 30 June 2017.

   2.RTA to buy-back various units held by Hampton Transport in a property trust with Hampton Transport to distribute the net proceeds to Porter Street, Woodhaven and Nellbar as a dividend (pars 9 - 11).

   3.Nellbar (or Nellbar's nominee) to purchase Edjudina Station from Hampton Transport for $1,000,000 with Hampton Transport to distribute the net proceeds to Porter Street, Woodhaven, Nellbar, Bart Jones and David Jones in certain proportions (pars 12 - 14).

   4.Nellbar, Porter Street and Woodhaven to transfer to Hampton Transport, for nil consideration, all their shares held in Hampton Livestock Transport Pty Ltd (pars 15 - 18).

   5.A procedure for the sale of the business and assets of Hampton Transport and the distribution of the net proceeds thereof to Porter Street, Woodhaven, Nellbar, Bart Jones and David Jones in certain proportions (pars 19 - 26).

   [38] ts 458.  See also ts 453.

   [39] Hampton Transport holding 50% of the shares in RTA. See [10] - [11] above.

7. Only the first and third aspects of the orders sought are material to the consolidated appeal (ie those described in [33.1] and [33.3] above).

8. The orders sought as to the RTA shares and Edjudina Station concerned assets held by Hampton Transport.  They were not directly concerned with the parties' shares in Hampton Transport.  However, the two proposed orders may be seen as being connected with a separation of the parties' respective interests in relation to Hampton Transport, and remediating the past oppressive conduct, in two ways.  First, the two proposed orders would divest Hampton Transport of two assets making it (or its business and assets) more suitable for a trade sale.  In that way the two proposed orders were facultative of the fifth category of proposed order.  Second, as described in [33.1] and [33.3] above, the two proposed orders provided for the parties to receive a distribution from their respective interests in relation to Hampton Transport.

9. The orders sought in COR/265/2013, in relation to Jones Partners, were simpler.  They contemplated Porter Street and Woodhaven being required to purchase Nellbar's shares in Jones Partners for a specified amount (par 4).  Settlement of the transfer and payment was to be simultaneous with the transactions contemplated by the minute in COR/266/2013 (par 5).  At the same time various loans were to be repaid (pars 5 - 8).

10. Nellbar's application for further orders was supported by an affidavit of Bart Jones sworn 26 June 2020.  Bart Jones stated that:

    1.The business relationship between the parties remained dysfunctional.[40]

    2.Nellbar had been unable to raise the money required to proceed with the purchase of Porter Street's and Woodhaven's shares in Hampton Transport.[41]

    3.RTA was in a position to obtain finance from Westpac Banking Corporation to allow the parties to separate their joint interests in RTA and the RTA property trust (as held by way of their joint interests in Hampton Transport).[42]

    4.Edjudina Station was a 'non-core asset' of Hampton Transport.  Orders for its purchase by Nellbar were sought for the purpose of 'cleaning up' Hampton Transport for a trade sale and offering a return to the shareholders of Hampton Transport.  This would leave the sale of the business and assets of Hampton Transport to be dealt with as a stand-alone proposition.[43]

    [40] Affidavit of B C Jones sworn 26 June 2020 par 29 GAB 64.

    [41] Affidavit of B C Jones sworn 26 June 2020 par 24 GAB 63.

    [42] Affidavit of B C Jones sworn 26 June 2020 par 38 GAB 65.

    [43] Affidavit of B C Jones sworn 26 June 2020 par 42 GAB 65.

11. The appellants responded to Nellbar's application for further orders by an affidavit of John Jones sworn 28 July 2020. Dealing with the five aspects of the application in the same order as set out at [33] above the position of the appellants was:

    1.The appellants did not oppose a buy-back of Hampton Transport's shares in RTA provided that the RTA shares were revalued.[44]  John Jones stated:

    [44] Affidavit of J L C Jones sworn 28 July 2020 pars 13 - 16 GAB 106 - 107.

    14.However [the appellants] believe that the buyback should be at the fair current value of the shares bought back.

    15.The BDO valuation of RTA as at 30 June 2017 (contained in BDO's valuation report on [Hampton Transport] dated 20 April 2018) is now 3 years out of date and does not present a fair view of the current value of RTA or its shares, because it does not take account of the company's last 3 years of trading performance.

    16.I believe that [the purchase price] as referred to in the [orders sought by Nellbar] should be based on an update of the BDO valuation which includes an updated valuation of the RTA fleet, to be obtained from BDO as soon as possible.

    2.The appellants did not oppose a transfer of Hampton Transport's units in the RTA property trust provided that the units were revalued.[45]  (However, when the matter was argued before the master, counsel for the Jones party interests did not press for revaluation of this asset.)[46]

    3.The appellants did not oppose a transfer of Edjudina Station from Hampton Transport to Nellbar (or Nellbar's nominee) 'at fair value' provided that Edjudina Station was revalued.[47]  John Jones stated:

    22.In the course of these proceedings, no independent valuation of Edjudina Station has been presented to the Court.  In its 2018 valuation of [Hampton Transport], BDO relied on what was described as a directors' valuation (see Appendix 9).  To my knowledge no such valuation was ever carried out by the [Hampton Transport] Board and I believe the valuation relied on by BDO was carried out by Bart Jones alone.

    23.Edjudina Station is a valuable asset of [Hampton Transport] and if it is to be transferred to Nellbar (or Nellbar's nominee), the transfer should be at full current value as determined by a licensed valuer with relevant experience, such as Greg Smith of Elders Real Estate WA.

    4.The appellants did not oppose the transfer of the Hampton Livestock Transport Pty Ltd for nil consideration.[48]

    5.The appellants accepted that it was appropriate for the court to order the appointment of an agent to sell the mining services and civil contracting business of Hampton Transport, or alternatively the equipment fleet, broadly in the terms as proposed by Nellbar.[49]

    [45] Affidavit of J L C Jones sworn 28 July 2020 pars 17 - 20 GAB 107.

    [46] ts 463.

    [47] Affidavit of J L C Jones sworn 28 July 2020 pars 21 - 23 GAB 107 - 108.

    [48] Affidavit of J L C Jones sworn 28 July 2020 par 24 GAB 108.

    [49] Affidavit of J L C Jones sworn 28 July 2020 par 9 GAB 105.

12. John Jones also agreed that the business relationship between the parties remained dysfunctional.[50]

    [50] Affidavit of J L C Jones sworn 28 July 2020 par 6 GAB 104.

13. Nellbar's application for further orders was set down for a special appointment before the master on 26 August 2020.  On 25 August 2020, shortly before the hearing, the appellants filed a minute of the proposed orders they sought on the application.[51]  The lateness of the minute excited comment by counsel for Nellbar.[52]  However, apart from some indemnities, the only amendments of consequence were to provide for the asset buy-backs and transfers to be at current values as determined by independent experts.[53]  Accordingly, the proposed amendments on the part of the Jones' party interests were consistent with the position evinced in John Jones' affidavit sworn 28 July 2020 (see [38] above).

    [51] BAB 96 - 106.

    [52] ts 447, 452.

    [53] Appellants' minute of proposed orders dated 25 August 2020 pars 4A, 9A, 12A GAB 97, 99, 100.

14. After hearing argument on 26 August 2020 the master reserved his decision overnight. The following morning, on 27 August 2020, the master gave brief oral reasons. The reasons are considered at [57] - [60] below. In substance, the master rejected the appellants' contention that the asset buy-backs and transfers should proceed on up-to-date valuations to be obtained from independent experts. However, the master was persuaded that the appellants' indemnity point should be accepted. Accordingly, the master made orders largely in the terms sought by Nellbar but with the addition of the indemnity order sought by the appellants.[54]

    [54] BAB 18 - 23.

15. For the purpose of the consolidated appeal the relevant orders are the following orders made on 27 August 2020 in COR/266/2013:

    4.By no later than 4.00 pm on the Settlement Date [ie 7 business days after the date of the orders]:

    (i)[Hampton Transport] shall transfer to RTA all shares held by [Hampton Transport] in RTA; and

    (ii)Mr John Jones, being a director of RTA, shall do all things necessary to join with Mr Bart Jones and Mr [David] Jones, being the other directors of RTA, to cause RTA to:

    (a)pay the RTA Sale Price to [Hampton Transport], at the same time as the transfer of the shares referred to in subparagraph (1) above, for distribution by [Hampton Transport] as provided for in paragraphs 7 and 8 below; and

    (b)thereafter cancel the shares referred to in sub-paragraph (1) above.

    …

    12.By no later than 4.00 pm on the Settlement Date:

    (i)[Hampton Transport] shall transfer Edjudina Station to Nellbar or Nellbar's nominee; and

    (ii)Nellbar shall pay [$1,000,000] to [Hampton Transport] for distribution by [Hampton Transport] as provided for in paragraphs 13 and 14 below.

16. We will not reproduce the orders for distribution as provided for in pars 7, 8, 13 and 14 of the orders made on 27 August 2020.  It suffices to observe that pars 4 and 12 contemplated that Hampton Transport would receive the consideration for the buy-back of the RTA shares and the sale of Edjudina Station.  Hampton Transport was then to provide for transaction costs and various taxes and imposts.  The net proceeds thereafter were to be distributed by Hampton Transport to Porter Street, Woodhaven, Nellbar, Bart Jones and David Jones in designated proportions (with Porter Street, Woodhaven and Nellbar to receive their distributions in the form of a fully franked dividend).

17. It will be recalled that the 'RTA Sale Price' was derived from the mid-point valuation of RTA as assessed by Mr Andrawes in the IER (see [33.1] above).  The $1,000,000 payable in respect of Edjudina Station is the undated 'directors' valuation' referred to in the IER (see [16] above).  Accordingly, the relevant transfer prices implicit in the master's orders of 27 August 2020 were derived from the IER dated 20 April 2018 which assessed values as at 30 June 2017.  As counsel for Nellbar stated before the master, the prices provided for in the orders were based on the IER.[55]

    [55] ts 453.

18. The practical effect of pars 4 and 12 of the orders made 27 August 2020 was that:

    1.RTA was to carry out a buy-back of Hampton Transport's shares in RTA at the RTA Sale Price.  To the extent, if any, that the RTA Sale Price undervalued the RTA shares, the remaining shareholders in RTA (ie Bart Jones and Wirildi Pty Ltd) benefitted at the expense of Hampton Transport - with a flow on detrimental effect to Porter Street and Woodhaven (among others) so far as they would receive a reduced distribution under the consequential orders in pars 7 and 8.

    2.Nellbar was to purchase Edjudina Station for $1 million.  To the extent, if any, that the $1 million undervalued Edjudina Station, Nellbar benefitted at the expense of Hampton Transport - with a flow on detrimental effect to Porter Street and Woodhaven (among others) so far as they would receive a reduced distribution under the consequential orders in pars 13 and 14.

19. The orders made in COR/266/2013 on 27 August 2020 differed from the earlier s 233 orders (ie those made 30 November 2018 and 26 June 2019) in one material respect. The previous s 233 buy-out orders provided for a self-executing discharge, with the matter to be relisted for further orders, if Nellbar failed to pay the amount payable for Porter Street's and Woodhaven's shares in Hampton Transport. There was no like provision in the 27 August 2020 orders. Accordingly, unlike the earlier s 233 orders, it was contemplated that the transactions under the 27 August 2020 orders would be finally effectuated. In any event the continued operation of the orders was not dependent on Nellbar's ability to complete.

20. The 27 August 2020 orders did contain a liberty to apply provision.  There was liberty to apply 'with respect to any issues which might arise concerning the implementation of the orders' (par 31) (emphasis added).[56]

    [56] BAB 23.

21. The master also made orders in COR/265/2013 providing for the buy-out of Nellbar's shares in Jones Partners.[57]  Those orders were largely uncontroversial.  Relevantly, the share transfer and payment was to occur simultaneously with completion of the transactions contemplated by the 27 August 2020 orders in COR/266/2013.  However, in the course of oral submissions counsel for Nellbar suggested that, if there was to be a revaluation of Hampton Transport's assets, fairness then required a revaluation of Jones Partners' assets.[58]  In his oral reasons delivered on 27 August 2020 the master seemingly accepted the force of that submission stating that, had he ordered a revaluation of Edjudina Station, he would also have had to have a look at whether or not the Jones Partners shares ought to be revalued.[59]

    [57] BAB 27 - 28.

    [58] ts 472, 474.

    [59] ts 480.

22. On 3 September 2020 the appellants applied to the master for a variation or suspension of the orders made on 27 August 2020 in COR/265/2013 and COR/266/2013.[60]

    [60] BAB 107 - 112.

23. The appellants' applications were purportedly made pursuant to the liberty to apply granted in the 27 August 2020 orders.[61]  In form the applications were to suspend the various transactions contemplated by the 27 August 2020 orders.  In substance, among other things, the appellants sought orders to amend the 27 August 2020 orders so as: (1) to allow for the obtaining of up-to-date valuations of the assets the subject of the RTA shares buy-backs and the Edjudina Station transfer; and (2) to provide for the amounts as determined by the revaluations to be the subject of the varied orders.[62]  In that regard, in a minute of proposed orders dated 3 September 2020 attached to written submissions in support of the applications, the appellants sought amended orders which, in effect, reproduced as to the RTA shares and Edjudina Station the orders in the appellants' minute of 25 August 2020 as had been rejected by the master on 27 August 2020.[63]

    [61] See appellants' solicitors' letter dated 3 September 2020 BAB 107.

    [62] See appellants' submissions dated 3 September 2020 pars 1, 41 BAB 116, 123.

    [63] BAB 126 - 132 - see esp. pars 4A, 12A BAB 127, 128.  Compare BAB 97 - 106 see esp. pars 4A, 12A BAB 97, 100.

24. In short, as was stated by counsel for the appellants at the oral hearing before the master, what was brought by the appellants was an application for the master 'to review' his 27 August 2020 orders.[64]

    [64] ts 486.  See also ts 499 (where counsel for the appellants characterises the application as one to re-open).

25. At the appeal hearing, counsel for the appellants (who had also appeared for the appellants on the 4 September 2020 hearing before the master) refused to accept that the appellants were seeking to have a second bite of the cherry.[65]  But that is exactly the substance of what the appellants were doing.  The appellants, having belatedly put on further evidence, were back before the court endeavouring to persuade the master to rescind the earlier orders and instead order up-to-date valuations - thereby asking the master to do that which he had declined to do on 27 August 2020.

    [65] Appeal ts 36.

26. The appellants' application was supported by an affidavit of John Jones sworn 3 September 2020.[66]  John Jones relevantly deposed to the following effect:

    [66] GAB 110 - 192.

    1.On 2 September 2020 (ie after the 27 August 2020 orders) he had engaged a valuer to prepare a market appraisal of Edjudina Station.  The market appraisal of that date provided for a value of $3,299,100 (that value excluding livestock and plant & equipment).[67]

    [67] Affidavit of J L C Jones sworn 3 September 2020 pars 4 - 5 GAB 111 - 112.  See also attachment 'JLCL-1' GAB 117 - 119.

    2.Management accounts for RTA as at 30 April 2020 showed the following increases when compared to the figures on which the IER was based as at 30 June 2017:[68]

    [68] Affidavit of J L C Jones sworn 3 September 2020 pars 6 - 9, 17 GAB 112, 114.

IER (as at 30 June 2017)	Management Accounts (as at 30 April 2020)
Cash and cash equivalents	$3,764,000	$7,363,096
Total net assets	$15,738,000	$20,245,465

3.The 'net assets' figure was based on book values of RTA's fleet assets (ie cost less accumulated depreciation) rather than fair market values.[69]

4.RTA's fixed asset register had a balance sheet written down value of $24,149,000 as at 30 June 2017 - a figure referred to in the IER.[70]  However, for the corresponding period the 'insurance value' of the fixed asset register was $46,951.731, a difference of $22,802,731.  John Jones asserted that the insurance value of RTA's transport fleet was more likely to be reflective of market value than the amounts used in the IER.[71]

5.An updated valuation report of RTA from Mr Andrawes would take approximately 4 weeks and cost between $34,500 and $39,500 (ex-GST) (this included an allowance for a desktop appraisal of RTA's fleet assets to be obtained and provided to Mr Andrawes).[72]

6.Porter Street and Woodhaven would suffer prejudice as shareholders of Hampton Transport if the RTA shares buy-back and Edjudina Station transfer were not purchased at current fair market value (John Jones contending that the buy-back and transfer would otherwise occur at an undervalue).[73]

[69] Affidavit of J L C Jones sworn 3 September 2020 pars 9.3, 19 GAB 112 - 114, 115.

[70] Affidavit of J L C Jones sworn 3 September 2020 par 19.2 GAB 114.  The figure that may be derived from the IER is actually $24.148 million comprising $1.437 million for plant and equipment and $22.711 million for motor vehicles: IER par 7.3.24 GAB 231.  However, for the purpose of his net asset valuation assessment Mr Andrawes adopted a fair value for the motor vehicles of $29.122 million: IER pars 10.3.49 - 10.3.50 GAB 264.

[71] Affidavit of J L C Jones sworn 3 September 2020 par 19.2 GAB 114 - 115.

[72] Affidavit of J L C Jones sworn 3 September 2020 pars 12 - 14 GAB 113.

[73] Affidavit of J L C Jones sworn 3 September 2020 pars 15 - 20 GAB 113 - 115.

1. Nellbar responded to the John Jones' affidavit with an affidavit sworn by its solicitor, Kevin Gammage.  Mr Gammage established that the Edjudina Station appraisal was by a person who had last physically inspected the property 12 years earlier (par 8).[74]

   [74] GAB 193 - 195.

2. The appellants' application was listed urgently.  The appellants requested an urgent listing as the settlement contemplated by the court's orders made 27 August 2020 was to occur before 4 pm on 7 September 2020.  In the event the master heard and determined the application on 4 September 2020.

3. The master dismissed the appellants' application in both COR/265/2013 and COR/266/2013 with reasons to follow.[75]  Written reasons for decision were delivered on 18 September 2020.[76]

   [75] BAB 1, 29.

   [76] Nellbar Pty Ltd v Jones Partners Pty Ltd [No 2] [2020] WASC 336 (Nellbar No 2).

The master's reasons

1. The master gave brief oral reasons for the 27 August 2020 orders.[77]

   [77] ts 480 - 481.

2. At the outset the master said that two things struck him.  First, the length of time that had been taken to get to this point - both the length of the proceedings (having commenced in 2013) and the circumstance that time was spent trying to reach a resolution prior to the issue of proceedings.  Second, that the arrangement now proposed was, according to the master, 'pretty much the only outcome that was available'.

3. The master went on to say:

   Why it has taken this long is not really a matter that I need to consider at the moment.  I dare say that there's plenty of blame to be shared around, but all of that leads me to the view that what has to happen now is an outcome which brings an end to the proceedings.  It is very tempting to have updated figures for particularly the business sale.  I'm not satisfied that the month that is proposed would be sufficient time for a proper valuation.

   I'm also not sure that it wouldn't - a valuation which might possibly be higher wouldn't torpedo the deal as negotiated with Westpac [ie the arrangement for finance as referred to in Bart Jones' affidavit sworn 26 June 2020], but more than that it just is a case which needs to be terminated.

   Independent of anything else I did carefully consider the prospect of a revaluation of the Edjudina Station, but I think, in fairness, had I adopted that approach I would also have had to have a look at whether or not Jones Partners ought be revalued.

   In other words, one thing leads on to the next, all of it leads to further delay and none of it I think is in the best interests of the parties.  Accordingly, it seems to me that the orders proposed by [Nellbar] ought be adopted with one addition and that is the order which appears as 6A in the [Jones party interests'] minute [dealing with the indemnity point].[78]

   [78] ts 480.

4. Accordingly, four matters were material to the master's decision to proceed with Nellbar's proposed orders and reject the up-to-date valuations sought by the appellants.  First, the protracted period of time that the parties had been in dispute meant that it was in their best interests that the proceedings be brought to an immediate conclusion.  Second, allied to the first point, the master was not satisfied that the revaluations sought by the appellants would be obtained in a time frame of one month as had been suggested.  Third, if Edjudina Station was to be revalued then the master would have to consider whether or not Jones Partners should also be revalued.  Fourth, a higher revaluation might prejudice the availability of finance and the ability of Nellbar to bring about the conclusion of the proceedings as contemplated by the proposed orders.

5. The master's reasons for the 4 September 2020 orders characterised the application before him as an application to re-open.[79]  He had been asked to reconsider (or revisit) the 27 August 2020 decision not to make orders allowing for a revaluation of the assets.[80]  To place the reasons in context the master recounted the long and tortured history of the litigation up to Nellbar's minute of 30 June 2020.[81]  He then set out the material procedural and evidentiary background to the hearing on 26 August 2020 and his reasons for the orders of 27 August 2020.[82]

   [79] Nellbar No 2 [1].

   [80] Nellbar No 2 [10], [12].

   [81] Nellbar No 2 [2] - [3].

   [82] Nellbar No 2 [3] - [9].

6. The master summarised his reasons for the 27 August 2020 order as being that it would not be in the interests of justice to allow for further valuation evidence - particularly given the length of time the proceedings had been on foot.[83]

   [83] Nellbar No 2 [9].

7. After referring to John Jones' affidavit sworn 3 September 2020 the master said that much of it was hearsay.  However, the master was nevertheless prepared to accept that it was arguable that: (1) there had been a significant increase in the value of certain assets; and (2) the Jones party interests would receive less than a fair entitlement.[84]

   [84] Nellbar No 2 [10].

8. Despite that evidence the master rejected the application for two reasons:

   1.First, the master was satisfied that the liberty to apply provision (under which the application was brought) would not allow for the revaluation of the assets.  The appellants were seeking to vary the nature or substance of the 27 August 2020 orders rather than supplementing them.  To make the orders as proposed by the Jones party interests would be to effectively revisit the master's original decision.[85]

   2.Second, the master remained of the view that it was not in the interests of justice to order a revaluation of the assets.  An additional reason for this was the last-minute nature of the orders sought by the appellant.  The appellants could have filed detailed affidavits in relation to value before the hearing on 26 August 2020.[86]

The framework of the consolidated appeal: grounds of appeal, notice of contention, leave to appeal and the orders wanted

Grounds of appeal

[85] Nellbar No 2 [12].

[86] Nellbar No 2 [13].

1. The grounds of appeal are in two parts.  Grounds 1 - 4 concern the orders of 27 August 2020.  Grounds 5 - 6 concerns the orders of 4 September 2020.

2. As to the orders made 27 August 2020, the appellants contend that:

   1.The master erred in law in failing to order up-to-date valuations of the RTA shares and Edjudina Station to determine the fair values thereof (grounds 1 and 2).

   2.The master erred in law and fact in failing to order up-to-date valuations of the RTA shares and Edjudina Station to determine the fair price to be paid for the assets in that he:

   (a)gave too much weight to the time that it would take to obtain such valuations; and

   (b)gave too little weight to the fact that the failure to use up such valuations may operate to cause Porter Street and Woodhaven to suffer prejudice,

   (ground 3).

   3.The master erred in law in failing to order up-to-date valuations of the RTA shares and Edjudina Station insofar as such failure was unreasonable and plainly unjust (ground 4).

3. As to the orders made 4 September 2020, the appellants contend that:

   1.The master erred in law in not granting leave to apply or liberty to apply and, having granted such leave or liberty, the master should have amended the orders made on 27 August 2020 to require up-to-date valuations of the RTA shares and Edjudina Station given that the failure to use such valuations would operate to cause Porter Street and Woodhaven to suffer 'extreme prejudice' (ground 5).

   2.The master erred in law in failing to exercise the discretion to amend the orders to allow for up-to-date valuations in that the failure to do so was unreasonable and plainly unjust given that the failure to use such valuations would operate to cause Porter Street and Woodhaven to suffer 'extreme prejudice' (ground 6).

Nellbar's notice of contention

1. Nellbar relied on a notice of contention.

2. As to the 27 August 2020 orders, Nellbar contended:

   1.New expert reports would inevitably involve a repeat of the cross-examination undertaken at the June 2018 Hearing.

   2.New expert reports would inevitably be expensive.

   3.There was no evidence before the court to suggest that there had been any dramatic shift in value (up or down) since the date of the evidence adduced at the June 2018 Hearing.

   4.The law on the date of valuation for buy-out purposes did not dictate any particular valuation date - only a fair date.

   5.Nellbar was the victim of oppressive conduct and hence any detriment should lie where it falls - ie on the [Jones party interests].

3. As to the 4 September 2020 orders, Nellbar contended:

   6.The [3 September 2020 application] was, in substance, an application to re-open the [26 August 2020 hearing] so as to read [John Jones' affidavit sworn 3 September 2020] into evidence.

   7.The [appellants] had not made out a sufficient discretionary basis to re-open their case on the [26 August 2020], so as to permit [John Jones' affidavit] to be read into evidence on that application, given:

   (1)the date on which the [John Jones' affidavit] was filed vis-à-vis 23 July 2020 (being the date specified in the order made on 1 July 2020) and the hearing on 26 August 2020; and

   (2)the poor quality of [John Jones' affidavit] concerning the value of the subject assets, both on the face of [John Jones' affidavit] and in the light of the Gammage Affidavit.

   8.The principles governing applications to re-open virtually dictated, on the material before the Master on 4 September 2020, a dismissal of [the appellants'] de facto re-opening application.

4. The notice of contention is of doubtful utility.

5. In relation to the orders made 27 August 2020, par 4 of the notice of contention is a possible answer to grounds 1 and 2.  However, par 4 provides no ground to uphold the master's decision that is an additional ground not relied on by the master.  Similarly, pars 1, 2, 3 and 5 of the notice of contention are relevant to the proper disposition of ground 4.  But, if it be assumed that ground 4 succeeds notwithstanding those matters, neither individually nor collectively can the matters the subject of pars 1, 2, 3 and 5 comprise grounds to uphold the master's decision which were not relied on by the master.  At the most they are potentially relevant on a re-exercise of discretion by this court.

6. In relation to the orders made 4 September 2020, the master did treat the application by the appellants as an application to re-open.  It was on this basis that the master dismissed the application.  The master also had regard to the timing of the John Jones' affidavit as against the programming orders made 1 July 2020.

7. In the circumstances the matters raised by the notice of contention are best addressed, where necessary, in considering the grounds of appeal.

Leave to appeal: Are the 27 August 2020 orders final or interlocutory?

1. The appellants contended that the consolidated appeal required leave to appeal on the basis that the orders of 27 August 2020 and 4 September 2020 were interlocutory orders.[87]  For its part Nellbar did not quarrel with that characterisation, but instead opposed leave.[88]  We accept that the orders of 4 September 2020 are interlocutory in nature.  But the orders of 27 August 2020, as challenged on appeal, are qualitatively different.

   [87] WAB 3, 4.

   [88] First respondent's submissions pars 57, 73, 87(4), 90, 94(1), 95(1) WAB 55, 59, 61, 63, 64.

2. In differentiating between a final and an interlocutory order the starting point is to ask whether the order finally disposes of the rights of the parties in a principal cause between them.  An interlocutory order involves no final adjudication of substantive rights.  Regard must be had to legal rather than practical effect.  Whether an order finally disposes of the rights of the parties will be determined by examining the order itself.[89]

   [89] Hall v Nominal Defendant [1966] HCA 36; (1966) 117 CLR 423, 443; Licul v Corney [1976] HCA 6; (1976) 180 CLR 213, 225; Carr v Finance Corporation of Australia Ltd (No 1) [1981] HCA 20; (1981) 147 CLR 246, 248.

3. Counsel for the appellants relied on two matters in seeking to have the 27 August 2020 orders characterised as interlocutory.

4. First, counsel directed attention to the passage of Nellbar No 1 reproduced at [24] above and suggested that the master contemplated alternative orders if the orders made were unsuccessful in separating the parties' interests.[90]  The difficulty with that submission is that the master's observations in Nellbar No 1 were addressed to the 30 November 2018 orders rather than the 27 August 2020 orders.  Moreover, as already explained, the 27 August 2020 orders were substantially different to the 30 November 2018 orders in as much as no provision was made for the self-executing discharge of the 27 August 2020 orders if they were not performed on the date provided for completion of the proposed transactions.

   [90] Appeal ts 8 - 9.

5. Second, counsel submitted that the orders were supplementary to the court's declarations in terms of s 232 of the Corporations Act - thus being interlocutory as being in aid of those final orders. We accept that an order may be interlocutory when it is supplementary to a final judgment. But that is not the nature of pars 4 and 12 of the orders made on 27 August 2020. They are not orders in aid of the declarations of oppressive conduct. The declarations are self-contained and require nothing more to make them wholly effective. Rather than being supplementary to the declarations, in the sense of acting in aid of the declarations, pars 4 and 12 of the orders of 27 August 2020 are orders designed, in combination with the other components of the orders of 27 August 2020, to bring about a separation of the Nellbar interests and the Jones party interests. That is even the case with the contemplated sale of the business and assets of Hampton Transport. The order for sale is in peremptory terms (par 19). And, while the orders contemplate the parties seeking further directions if the sale is not completed in 12 months (par 26), nothing in the orders of 27 August 2020 provides for a self-executing discharge which might permit some other remedial orders under s 233 of the Corporations Act should it be that there is a delay in the sale and consequential distribution.

6. The orders of 27 August 2020, taken as a whole, are final in their legal effect.  They dispose finally of the rights inter se of the Nellbar interests and the Jones party interests as concerns the assets the subject of the orders, thus resolving the claim the subject of the oppression proceedings.  Paragraphs 4 and 12 of the orders take their character from the character of the orders as a whole; they are also final orders, not interlocutory orders.

7. Accordingly, the appellants did not require leave to appeal insofar as the consolidated appeal challenged pars 4 and 12 of the orders made 27 August 2020.  But, as will be seen, the character of the orders as final orders rather than interlocutory orders has implications for grounds 5 and 6.

The orders wanted by the appellants if successful on appeal

1. The orders wanted by the appellants, as originally stated in their appellant's case, were most unusual.  Following the 4 September 2020 orders the parties proceeded to the settlement contemplated by the 27 August 2020 orders.  Accordingly, as originally proposed, the orders wanted by the appellants sought to vary the orders of 27 August 2020 by:

   1.Appointing Mr Andrawes and another nominated person as independent court experts pursuant to O 40 RSC to value Hampton Transport's RTA shares and Edjudina Station as at 4 September 2020 (pars 2.1.1, 2.1.5, 2.2.1, 2.2.4).

   2.Providing that, to the extent that the valuations exceed the amount paid at settlement pursuant to the 27 August 2020 orders, Hampton Transport be entitled to payment of the difference (pars 2.1.6, 2.2.5).

2. The appellants' written submissions did not address the source of the court's power to make orders of the kind wanted.  Equally, however, Nellbar did not contend in its written submissions that orders to the effect of the appellants' orders wanted were beyond power should the appeal be allowed.  Nellbar contented itself with arguing that, should the appeal be allowed, it be on the condition that Porter Street and Woodhaven undertake to consent to orders being made in COR/265/2013 for a revaluation of Jones Partners' assets.[91]

   [91] First respondent's submissions pars 73, 90 - 93, 94(4), 95(4) WAB 59, 63 - 65.

3. At the appeal hearing counsel for the appellants was unable to identify the source of this court's power to make orders of the type sought in the appellant's case.[92]  There were other problems with the orders wanted.  For example, the orders wanted contemplated the revaluations determining a price that would be binding on the parties without capacity for either party to make submissions or for the court itself to determine the price.  When this and other deficiencies in the orders wanted were exposed in the course of argument counsel for the appellants was provided with an opportunity to produce a fresh minute of the orders wanted.[93]

   [92] Appeal ts 10 - 11.

   [93] Appeal ts 14, 47 - 48.

4. A minute of substituted orders wanted provided by counsel for the appellants after the luncheon adjournment perpetuated the original deficiencies and added some others.  There was, for example, no consideration of who was to pay any additional amount and whether that person was a party to the appeal and the proceedings below.  Counsel for the appellants sought and was afforded a further opportunity to file and serve a minute of further substituted orders wanted.[94]

   [94] Appeal ts 48 - 51, 53, 57.

5. Post-appeal hearing the appellants filed a minute of further substituted orders wanted, the material features of which were to seek orders that:

   1.The appellants be granted leave to issue a third-party notice to RTA to claim that RTA be ordered to pay Hampton Transport the shortfall between the price already paid for the RTA shares buy-back and the amount determined by Mr Andrawes on a revaluation in accordance with sub-par 2 below (par 2.1).

   2.Mr Andrawes be appointed as an independent court expert pursuant to O 40 RSC to value Hampton Transport's RTA shares as at 27 August 2020 taking into account the market value of the RTA equipment fleet as at that date (pars 2.2, 2.6).

   3.RTA pay the shortfall so determined to Hampton Transport within 60 days after the receipt of Mr Andrawes' valuation (such proceeds to be distributed to Porter Street, Woodhaven, Nellbar, Bart Jones and David Jones in accordance with the 27 August 2020 orders) (par 2.7).

1. The appellants sought a similar regime in relation to Edjudina Station, nominating a property valuer to be appointed as a court expert (pars 2.8, 2.9, 2.13, 2.14).  Here, however, the appellants sought that the third-party notice be issued to Edjudina Station Pty Ltd and that Edjudina Station Pty Ltd pay any shortfall as determined by the revaluation.[95]  Edjudina Station Pty Ltd is the entity which, as Nellbar's nominee, took the transfer of Edjudina Station pursuant to par 12 of the 27 August 2020 orders.

   [95] Although, in the alternative, the appellants sought orders that Nellbar pay any shortfall: Appellants' substituted orders wanted dated 21 December 2021 par 4.

2. Insofar as the minute of further substituted orders wanted impacted on the parties (and RTA and Edjudina Station Pty Ltd), the orders took the form of additional orders made in the consolidated appeal rather than substituted or varied orders in COR/266/2013.

3. In the alternative to the kind of orders outlined in [86] - [87] above, the appellants sought an order that the 'issue of the accounting' as to any shortfall in relation to the RTA shares (but not Edjudina Station) be remitted to the primary court for determination (par 3).  In submissions accompanying the minute of further substituted orders wanted the appellants summarised this as being an order for remittal of the proceedings to the primary court.[96]

   [96] Appellants' submissions dated 21 December 2021 par 7.

4. On 12 January 2022, pursuant to leave granted at the appeal hearing, Nellbar filed submissions addressing the minute of further substituted orders wanted.  Broadly speaking, Nellbar resisted the third-party joinder orders and identified other alleged deficiencies in the minute.  We will return to the matters raised by Nellbar, and the appellants' minute of further substituted orders wanted, after addressing the merits of the grounds of appeal.

Buy-out and transfer orders under s 233 of the Corporations Act 2001 (Cth)

1. Before turning to address the grounds of appeal, it is convenient to make some more general observations about the principles applying to buy-out and transfer orders under s 233 of the Corporations Act.

2. Where one or both of the conditions in ss 232(d) or (e) of the Corporations Act are satisfied the court may make an order under s 233 of the Act.

3. Section 233(1) is in wide terms. The court 'can make any order under this section that it considers appropriate in relation to the company'. The remedial power under s 233(1) is confined only to the extent that the subject-matter, scope and purpose of the provision may enable the court to determine that a particular exercise of the power would be definitely extraneous to any object the legislature could have had in mind. In determining what is definitely extraneous regard must be had to the non-exhaustive list of permissible kinds of orders in ss 233(1)(a) - (j).

4. The orders made by the master on 27 August 2020 are unusual. Where oppression is found it is common for the court to make a compulsory purchase or buy-out order. Such an order is contemplated by s 233(1)(d). Alternatively, the court may make a buy-back order under s 233(1)(e). Either kind of order will end the business relationship between the oppressor and the oppressed party. In the present case, however, the orders the focus of the appeal effectively resulted in the disposal of company assets (rather than shares of the oppressor or the oppressed party) as a step along the way to an eventual cessation of the business relationship. Moreover, the disposals were not to a third-party. Nellbar's nominee acquired Edjudina Station. And, while strictly Hampton Transport's RTA shares were bought-back and cancelled, the effect of the transaction was that Bart Jones and Wirilidi Pty Ltd (the company associated with David Jones) became the holders of all of the shares in RTA.

5. The nature of the two transactions occasioned some of the same risks that accompany a buy-out order or buy-back order.  In particular, if the value fixed by the court as the relevant price is at an undervalue or an overvalue one party will be benefitted and the other party will be disadvantaged.  That being the case it is instructive to consider aspects of the authorities concerning determination of value for the purpose of a buy-out order or a buy-back order.

6. Section 233(1) of the Corporations Act does not prescribe the basis on which the price for shares is to be fixed if a compulsory purchase order or a buy-back order is made.  As Gummow, Hayne, Heydon and Kiefel JJ stated in Campbell v Backoffice Investments Pty Ltd:

   Although s 233(1)(d) gives the court power to make an order for the purchase of shares by a member, the Corporations Act is silent about the terms on which such a sale may be ordered.  In particular, the Corporations Act does not identify the basis upon which the price for the shares is to be fixed if an order for compulsory purchase is made. Under earlier forms of the oppression provisions of companies legislation, orders were made for the compulsory sale of shares by one member to another at prices to be fixed according to various criteria. In some cases the price has been fixed at the value the shares would have had at the commencement of the proceedings but for the effect of the oppressive conduct. In other cases a date other than the date of commencement of the proceedings has been fixed. Again, there is no reason to give the present oppression provisions some narrower construction. In particular, the power given to the court by s 233(1)(d) should not be hedged about by implied limitations.[97]  (citations omitted)

   [97] Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304 [178].

7. The following principles appear from the authorities:

   1.The court has a wide discretion once s 233 has been enlivened by a finding of oppression under s 232 - a discretion that extends both as to the appropriate remedy and, if the court orders compulsory purchase of shares, as to the mode of valuation of the shares.[98]

   2.The purpose of a buy-out order is not to compensate for loss; it is to separate the oppressor and the oppressed.[99]

   3.The court should fix a price for the shares that represents a fair value in all the circumstances of the case.[100]

   4.In looking to the 'fair value' one must look at all the circumstances of the case and seek to put the oppressed in the same position as nearly as can be if there had been no oppression, erring, if there is to be any erring, on the side of the oppressed.[101]

   5.The date at which the shares are to be valued varies having regard to all relevant circumstances.[102]

   6.There is no hard rule as to the selection of the valuation date.[103]  The question is what is the fair time for valuation of the shares having regard to the overriding requirement of justice and fairness to both parties in all the circumstances of the case.[104]  As was said by Chernov JA (Neave JA agreeing) in Foody v Horewood:

   [T]he court's discretion in determining the date of valuation in respect of shares to be purchased from an oppressed minority shareholder is wide and absolute, subject to the requirement that it be exercised judicially, and is to be informed by the justice and fairness of the particular situation.  In [the judgment under appeal] his Honour recognised, correctly, I think, that there is no firm rule by which the relevant date of valuation is to be selected …[105]

   [98] Smith Martis Cork & Rajan Pty Ltd v Benjamin Corporation Pty Ltd [2004] FCAFC 153; (2004) 207 ALR 136 [70].

   [99] Campbell v Backoffice Investments Pty Ltd [2008] NSWCA 95; (2008) 66 ACSR 359 [122].

   [100] Dynasty Pty Ltd v Coombs [1995] FCA 1447; (1995) 59 FCR 122, 143.

   [101] ES Gordon Pty Ltd v Idameneo (No 123) Pty Ltd (1994) 15 ACSR 536, 540.

   [102] Dynasty Pty Ltd v Coombs (144).

   [103] Dr Shanahan v Jatese Pty Ltd [2019] NSWCA 113 [123].

   [104] Foody v Horewood [2007] VSCA 130; (2007) 62 ACSR 576 [37].

   [105] Foody v Horewood [35].

8. In short, the overriding requirement when valuing the shares of a company for the purpose of a compulsory purchase order or a buy-back order is that the valuation, and the date at which the valuation is carried out, be fair.  What fairness requires depends on the facts of the particular case.[106]

   [106] Short v Crawley (No 30) [2007] NSWSC 1322 [1237]; Fitzpatrick v Cheal [2012] NSWSC 261; (2012) 264 FLR 313 [225].

Grounds 1 - 4: Disposition of the appeal against the orders made 27 August 2020

Grounds 1 and 2: Failure to apply alleged rule of law in not ordering up-to-date valuations

1. The nub of the appellants' contention in support of grounds 1 and 2 was that there was a rule of law that the master was bound to follow to the effect that in providing for a buy-back or transfer as a remedy for oppressive conduct the valuation date must be the date of the order (or as close as possible to the date of the order in the circumstances).[107]  In the alternative, to the extent that there was an element of discretion, the appellants contended that there was a rule of law that the date of the order should be used as the valuation date other than in exceptional circumstances.[108]  The master was said to have acted contrary to the suggested rule of law in making the 27 August 2020 orders without providing for up-to-date valuations.

   [107] Appeal ts 28.

   [108] Appeal ts 21 - 22, 26, 28.

2. Subject to one matter, the decision in Foody v Horewood (see [97.6] above) is an insurmountable obstacle to the appellants' first proposition.  To similar effect is the decision of the Full Court of the Federal Court in Dynasty Pty Ltd v Coombs.  There, in a passage recently quoted with approval by Bell P (as his Honour then was),[109] the Full Court observed that the date at which shares are to be valued in oppression cases varies having regard to all relevant circumstances.[110]  At the appeal hearing the court raised Dynasty Pty Ltd v Coombs and Foody v Horewood with counsel for the appellants.  Counsel was asked whether he contended that those decisions were plainly wrong.  Counsel for the appellants did not contend that the decisions were plainly wrong.[111]  Nor are we persuaded that Dynasty Pty Ltd v Coombs and Foody v Horewood are plainly wrong.  To the contrary we are, with respect, satisfied that these decisions of intermediate appellate courts on corporations legislation applying throughout the Commonwealth of Australia are plainly correct.  Both should be followed - a conclusion that, but for one matter that must now be addressed, requires the rejection of the appellants' first proposition.

   [109] Dr Shanahan v Jatese Pty Ltd [123].

   [110] Dynasty Pty Ltd v Coombs (144).

   [111] Appeal ts 27.

3. The additional matter for consideration is that Dynasty Pty Ltd v Coombs and Foody v Horewood concerned the valuation of shares in the company the subject of the oppressive conduct.  Does the circumstance that the RTA shares and Edjudina Station were assets held by Hampton Transport rather than shares in Hampton Transport mean that Dynasty Pty Ltd v Coombs and Foody v Horewood should be distinguished? The appellants did not suggest that this was a valid point of distinction. Nor, in principle, do we view this difference as a valid point of distinction. In both instances the court is exercising the discretionary power under s 233(1) of the Corporations Act.  It is the discretionary character of the remedial power - one not 'hedged about by implied limitations' - which explains the wide discretion recognised in Foody v Horewood.  That consideration applies equally whether the order concerns the valuation of shares in the company the subject of the oppressive conduct or assets held by that company.

4. There is no merit in the appellants' first proposition in support of grounds 1 and 2.

5. In support of the appellants' alternate proposition counsel for the appellants relied on the English decision of Profinance Trust SA v Gladstone[112] and two first instance Australian decisions.[113]  Neither of the Australian cases provide any support for the appellants' alternate proposition.  By way of example, in Mopeke, Brereton J (as his Honour then was) expressed his conclusion as to the appropriate date of valuation by reference to how justice between the parties was best achieved '[i]n the context of this case.'[114]  Profinance Trust SA v Gladstone is a decision of the Court of Appeal of England and Wales.  Counsel for the appellants relied on the following passage:

   The starting point should in our view be the general proposition stated by Nourse J in In re London School of Electronics Ltd:[115] 'Prima facie an interest in a going concern ought to be valued at the date on which it is ordered to be purchased.'  That is, as Nourse J said, subject to the overriding requirement that the valuation should be fair on the facts of the particular case.

   The general trend of authority over the last 15 years appears to us to support that as the starting point, while recognising that there are many cases in which fairness (to one side or the other) requires the court to take another date.[116]

   [112] Profinance Trust SA v Gladstone [2001] EWCA 1031; [2002] 1 WLR 1024.

   [113] Mopeke Pty Ltd v Airport Fine Foods Pty Ltd [2007] NSWC 153; (2007) 61 ACSR 395 [96]; Re Scientific Management Associates Pty Ltd [2019] NSWSC 1643; (2019) 141 ACSR 115 [297].

   [114] Mopeke Pty Ltd v Airport Fine Foods Pty Ltd [96].

   [115] In re London School of Electronics Ltd [1986] Ch 211, 224.

   [116] Profinance Trust SA v Gladstone [60] - [61].

6. We do not accept that, in this passage, the Court of Appeal was stating any rule of law, let alone a rule of law in the inflexible terms suggested by the appellants (one where the court is bound to value as at the date of the order unless there are exceptional circumstances).  To the contrary, the second paragraph of the passage at [103] presents as recounting what is revealed as a matter of fact having examined various recent dispositions.  In this respect care must be taken not to elevate into a rule of law what might be seen as a common disposition on a particular set of facts - all the more so when the relevant statutory provision entrusts the court with a discretion to be exercised having regard to the particular circumstances before it.

7. Importantly, throughout Profinance Trust SA v Gladstone the Court of Appeal acknowledged that the task of determining the time at which the shares should be valued involved an exercise of judicial discretion.[117]  Among other things the Court of Appeal recorded that the decided cases on the appropriate valuation date recognise that the court has a wide discretion[118] and quoted from cases where this has been recognised.[119]  Moreover, in the passage relied on by counsel for the appellants, the Court of Appeal quoted from the judgment of Nourse J in In re London School of Electronics Ltd.  The relevant quotation from In re London School of Electronics Ltd reads in full:

   If there were to be such a thing as a general rule, I myself would think that the date of the order or the actual valuation would be more appropriate than the date of the presentation of the petition or the unfair prejudice.  Prima facie an interest in a going concern ought to be valued at the date on which it is ordered to be purchased.  But whatever the general rule might be it seems very probable that the overriding requirement that the valuation should be fair on the facts of the particular case would, by exceptions, reduce it to no rule at all.  That that is so is already suggested by such authorities as there are on this question.[120]  (emphasis added)

   [117] Profinance Trust SA v Gladstone [7], [10], [19], [31], [39] - [40], [49], [59] - [60].

   [118] Profinance Trust SA v Gladstone [19].

   [119] Profinance Trust SA v Gladstone [39] - [40] (referring to In re Cumana Ltd [1986] BCLC 430, 436, 445).

   [120] In re London School of Electronics Ltd (224).  The Court of Appeal referred to the relevant passage in fuller terms in Profinance Trust SA v Gladstone at [33].

8. Accordingly, as was implicitly recognised in Dynasty Pty Ltd v Coombs,[121] in In re London School of Electronics Ltd Nourse J was not advancing a general rule.  To the contrary, Nourse J was explaining why, if one purported to state a general rule, it would, by exceptions, reduce to no rule at all.  Consequently, the Court of Appeal in Profinance Trust SA v Gladstone cannot be taken to be stating a general rule, by quoting from Nourse J in In re London School of Electronics Ltd. Rather, appreciating that in the passage relied on by counsel for the appellants the Court of Appeal was itself re-exercising the discretion (having concluded that the trial judge had erred in the exercise of his discretion), the Court of Appeal was identifying the relevant starting point on the facts of the case before it.  Moreover, that appears readily in as much as the passage relied on by counsel for the appellants is preceded by the statement: 'In our view this court should resolve the matter on the basis of what we have called the core of undisputed fact'.

   [121] Dynasty Pty Ltd v Coombs (144).

9. So understood, Profinance Trust SA v Gladstone provides no support for the appellants' alternate proposition.  In any event the alternate proposition is inconsistent with the intermediate appellate court decisions in Dynasty Pty Ltd v Coombs and Foody v Horewood.  We would follow and apply those decisions for the reasons we have given in rejecting the appellants' first proposition.  That alone means that the appellants' alternate proposition in support of grounds 1 and 2 must be rejected.

10. There was no error of law as suggested by grounds 1 and 2.  In fixing a price for the buy-back of the RTA shares and the transfer of Edjudina Station the master was exercising a discretion.  The discretion extended to selecting the valuation date.  That involved choosing a valuation date that was fair and just to both parties in all the relevant circumstances of the case.  There was no immutable or general rule as to the date at which the assets were to be valued.  A challenge to the master's order necessarily involves a challenge to a broad-based discretionary judgment.  It must be shown that there was discretionary error in a House v The King sense.[122]

    [122] See House v The King [1936] HCA 40; (1936) 55 CLR 499, 505.

11. Grounds 1 and 2 fail.

Ground 3: Alleged weighting error in not ordering up-to-date valuations

1. Ground 3 simply asserted weighting errors in the exercise of the master's discretion.  Two such weighting errors were advanced.  First, the appellants complained that the master gave 'too much weight' to the time it would take to obtain up-to-date valuations.  Second, the appellants complained that the master gave 'too little weight' to the circumstance that the failure to use up-to-date valuations may operate to cause Porter Street and Woodhaven to suffer prejudice.

2. In complaining that the master gave too little weight to the latter consideration the appellants did not contend that the master did not take the consideration into account.  Nor could they.  In referring to the appellants' desire for fresh valuations the master plainly had in mind the possibility that the absence of up-to-date valuations may be to the appellants' disadvantage.

3. Where, as here, the master was exercising a wide discretion - one informed by the requirement that the valuation date chosen be fair and just to both parties in all the circumstances of the case - a disagreement only on matters of weight does not, in itself, justify appellate interference.[123]  The attribution of weight to one or more factors in a combination of factors is the essence of a discretionary judgment.  The extent to which matters of weight may justify appellate intervention in respect of a discretionary judgment was discussed by Latham CJ in Lovell v Lovell in a passage that bears repeating:

   If completely irrelevant considerations have been taken into account and they have really affected the decision the case is clear, and the order, though made in the exercise of a discretion, should be set aside.  Similarly, if relevant considerations are plainly ignored the same result follows.  But when the appellate tribunal is considering questions of weight it should not regard itself as being in the same position as the learned trial judge.  In the absence of exclusion of relevant considerations or the admission of irrelevant considerations an appellate tribunal should not set aside an order made in the exercise of a judicial discretion … unless the failure to give adequate weight to relevant considerations really amounts to a failure to exercise the discretion actually entrusted to the court.[124] (emphasis added)

   [123] Gronow v Gronow [1979] HCA 63; 144 CLR 513, 519.

   [124] Lovell v Lovell [1950] HCA 52; (1950) 81 CLR 513, 519. See also Mallet v Mallet [1984] HCA 21; (1984) 156 CLR 605, 614.

1. It follows that ground 4 should be upheld.  Implied error in the exercise of the master's discretion has been established.  The master was, with respect, in error in fixing the fair values of the RTA shares and Edjudina Station in the absence of up-to-date values.  In the particular circumstances of this case the master should have provided for up-to-date valuations of the RTA shares and Edjudina Station before fixing the fair values of the assets.

Grounds 5 - 6: Disposition of the appeal against the orders made 4 September 2020

1. The upholding of ground 4 means that it is not necessary to address grounds 5 and 6.  It is, however, appropriate to do so, not in the least because the outcome of grounds 5 and 6 may have costs consequences.  Grounds 5 and 6 concern the orders of 4 September 2020, which were the subject of a separate appeal (CACV/105/2020) before its consolidation with the appeal against the orders of 27 August 2020.  There will be identifiable costs associated with the appeal against the orders of 4 September 2020 that are separate and distinct from the costs associated with the appeal against the orders of 27 August 2020.

2. Ground 5 is entirely without merit.

3. In part ground 5 challenges the master's conclusion that the application made on 3 September 2020 exceeded what was permissible pursuant to the grant of liberty to apply.  Paragraph 31 of the orders of 27 August 2020, which granted liberty to apply 'with respect to any issues which may arise concerning the implementation of the orders contained herein' (emphasis added), was in limited terms. By their application of 3 September 2020 the appellants did not seek to deal with an issue that had arisen in the implementation of the orders made only seven days earlier. Rather, as discussed at [49] - [52] above, the appellants sought that the master review his 27 August 2020 orders so that - to the extent the appellants had been unsuccessful following the 26 August 2020 hearing - the master might rescind the 27 August 2020 orders and substitute them with orders providing for up-to-date valuations as the appellants had sought all along.

4. The master was, with respect, correct to characterise the application as one where he had been asked to reconsider or revisit his 27 August 2020 decision not to make orders allowing for a revaluation of the RTA shares and Edjudina Station.  The master was also, again, with respect, correct to reject the application for the reasons that he gave as to the unavailability of the liberty to apply provision for such a purpose (see [64.1] above).  It was undeniable that the application had been brought pursuant to the liberty to apply granted by par 31 of the 27 August 2020 orders made in COR/266/2013.  The limits of what can be done under an order for liberty to apply are well known.[134]  It is plain that the orders sought by the appellants amounted to a variation or impermissible change to the 27 August 2020 orders and went well beyond supplementing those orders.

   [134] See eg Patterson v Humphrey [No 2] [2016] WASC 343 [16].

5. There is another aspect to ground 5.  The appellants claim that the master erred in law in not granting leave to reapply for the 27 August 2020 orders to be the subject to up-to-date valuations of the RTA shares and Edjudina Station.  In referring to 'leave to reapply', rather than the 'liberty to apply' provision in the 27 August 2020 orders, the appellants are apparently contending that the 27 August 2020 orders were interlocutory orders which could, on application, be varied unless such an application would constitute an abuse of process.[135]  The difficulty with the appellants' contention - and this aspect of ground 5 - is that, for reasons already stated, the orders of 27 August 2020 are final orders, not interlocutory orders.

   [135] Appeal ts 6, 9, 37 - 39; Appellants' submissions pars 19 - 20 WAB 23.

6. Counsel for the appellants refused to accept that this aspect of ground 5 must fail if the relevant 27 August 2020 orders were final orders.  However, beyond mentioning the interests of justice, counsel offered no principled basis, and referred to no authority, as to how in the absence of an appeal a perfected final order might be amended or varied so as to permit a litigant to obtain what had previously been sought and rejected after a full hearing where there was no complaint of fraud and the litigant had been afforded procedural fairness.[136]  The court has no general power to amend or vary such an order in these circumstances.  If there was such a general power there would be no finality in litigation and no need for appeals.  It was not open to the master to grant 'leave to apply' in relation to the 27 August 2020 orders as is suggested by the alternate aspect of ground 5.

   [136] Appeal ts 39.

7. Ground 5 fails.

8. Ground 6 alleges that the master's discretion miscarried in failing to 'exercise the discretion to amend' the 27 August 2020 orders to allow for up-to-date valuations.  Accordingly, it presupposes that there was such a discretion.  For the reasons given in rejecting ground 5 there was no such discretion.  Ground 6 fails.

9. The appeal against the orders made on 4 September 2020 was hopeless.  It should not have been brought or pursued.  Leave should be refused insofar as the appellants have sought leave to appeal in relation to the orders made 4 September 2020.

The orders wanted

1. The appellants have, by ground 4, established an error that calls for correction.  However, it does not follow that the appellants have established an entitlement to the orders moved for by the appellants' minute of further substituted orders wanted dated 21 December 2021.  It is now necessary to consider whether this court should grant relief in terms of those orders wanted by the appellants.

2. The orders wanted seek to cater for the circumstance that, after the 4 September 2020 orders, the parties proceeded to completion pursuant to the 27 August 2020 orders (there being no stay in relation to the orders).  Hampton Transport and RTA have completed the buy-back of the RTA shares contemplated by par 4 of the 27 August 2020 orders.  Nellbar's nominee, Edjudina Station Pty Ltd, has taken the transfer of Edjudina Station contemplated by par 12 of the 27 August 2020 orders.

3. The appellants do not seek to undo the buy-back or the transfer.  The appellants' complaint is only as to the price paid to Hampton Transport.  Whether that complaint has substance will depend on the revaluations that are sought as part of the substituted orders wanted.  The appellants seek, through such retrospective revaluations at or about the time of the transactions, to establish that the prices were at an undervalue.  To the extent of any undervalue the appellants seek consequential orders providing for RTA and Edjudina Station Pty Ltd to make further payments so that, by this court's order, the completed buy-back and transfer are in substance at full value as determined by the revaluations.

4. We would not make orders in terms of par 2 of the appellants' minute of further substituted orders dated 21 December 2021.  There are, in our view, a number of fundamental deficiencies with the orders sought that make them inappropriate to correct the error identified on the appeal.

5. First, the orders wanted initially provide for and are then premised on the joinder of RTA and Edjudina Station Pty Ltd to the primary proceedings.  This is with a view to RTA and Edjudina Station Pty Ltd being ordered to pay any shortfall determined by the revaluations.  Curiously, it is contemplated that RTA and Edjudina Station Pty Ltd are to be joined as third-parties to the primary proceedings on application of the appellants.  It is well understood that proceedings between a defendant and a third-party are analogous to an action by the defendant (as plaintiff) against the third-party (as defendant).  There is, however, no specification of the basis on which any of the appellants could claim to be entitled to contribution or indemnity from one or both of RTA or Edjudina Station Pty Ltd - or otherwise to be entitled to any relief or remedy against them.  To the contrary, the orders wanted only contemplate a payment to Hampton Transport.  In this respect the proposed use of the third-party procedure is misconceived and inappropriate.

6. There is a more fundamental problem with the proposed orders for payment by RTA and Edjudina Station Pty Ltd.

7. Neither RTA nor Edjudina Station Pty Ltd are parties to the appeal.  Yet, despite their not having participated in the appeal (or, for that matter, the primary proceedings) the orders wanted contemplate that this court will make orders - without RTA and Edjudina Station Pty Ltd being heard - that will provide for RTA and Edjudina Station Pty Ltd to pay undetermined amounts to Hampton Transport.  A person is entitled and required to be joined to proceedings if that person's rights against, or liabilities to, any party to the proceedings in respect of the subject matter of the proceedings may be directly affected by an order which may be made.  An order with such a direct effect should not be made unless the person whose rights or liabilities are affected is also joined as a party.[137]

   [137] Currie v Currie [No 2] [2019] WASCA 2 [236] (referring to: News Ltd v Australia Rugby Football League Ltd [1996] FCA 870; (1996) 64 FCR 410, 523 - 525; State of Victoria v Sutton [1998] HCA 56; (1998) 195 CLR 291 [76] - [81]; John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd [2010] HCA 19; (2010) 241 CLR 1 [131], [140]).

8. In the absence of joinder of RTA and Edjudina Station Pty Ltd to the appeal this court should not make orders which will directly affect their rights and liabilities.  The payment orders as contemplated by the orders wanted are plainly of that character; the orders contemplate that RTA and Edjudina Station Pty Ltd will be required to make the shortfall payments to Hampton Transport.  And, in the circumstances of this case, it is far too late for the appellants to be seeking orders that RTA and Edjudina Station Pty Ltd be joined to the appeal.  That is particularly so where the primary proceedings proceeded to a hearing and final determination (based in part on an in-principle agreement) without RTA and Edjudina Station Pty Ltd being joined and having an opportunity to adduce evidence and be heard.  In any event there is no application before the court for RTA and Edjudina Station Pty Ltd to be joined as parties to the appeal.

9. Second, the orders wanted contemplate that the revaluations as determined by court experts appointed by this court will fix the prices for the RTA shares and Edjudina Station.  There will be no capacity for the parties (or RTA and Edjudina Station Pty Ltd) to cross-examine the experts or otherwise be heard on the revaluations.  In the circumstances of this case that kind of order is inappropriate as a matter of procedural fairness.  Moreover, ordinarily price should be determined by the court rather than an expert appointed by the court.  Thus, while it is common in an oppression case to appoint an appropriate expert to provide a referee report, it is for the court to adopt the report and thereby fix the price.  In the primary proceedings the parties consented to orders for a court expert rather than a referee.  But nevertheless it was for the master to accept or reject the evidence of the court expert - which the master did after consideration of the IER and hearing from the parties.

10. Third, the orders wanted only apply to require a payment where one of the revaluations results in a higher price for the RTA shares or Edjudina Station.  It is at least theoretically possible that there might have been an overpayment (ie a revaluation as at the time of the transaction may result in a lower price for the RTA shares or Edjudina Station).  To our mind, where the appellants have insisted on revaluations as at the date of the transactions, they should be exposed to this downside risk as well as the potential benefit of a higher price on revaluation.

11. Fourth, as a matter of form the orders wanted present as additional orders taking effect of themselves as orders in the appeal rather than orders setting aside and varying the 27 August 2020 orders in COR/266/2013. This alone is not fatal to the appellants' minute of further substituted orders. The orders wanted could be modified so that in form and substance they are within jurisdiction and power having regard to s 58(1)(a) of the Supreme Court Act 1935 (WA) and s 233 of the Corporations Act.  It is, however, worthwhile recording this additional deficiency.

12. The joinder and payment issues (see [149] - [152] above) are the most significant of the deficiencies.  Those deficiencies alone are such that we would not make orders in terms of par 2 of the appellants' minute of further substituted orders dated 21 December 2021.  The additional matters we have referred to reinforce our conclusion that the orders wanted by the appellants are inappropriate to correct the error identified on the appeal and should not be made.

13. In the alternative, the appellants sought remittal to the primary court.  (In earlier iterations of their orders wanted the appellants sought remittal to a judicial officer other than the master.  When asked why this was so counsel for the appellants could advance no proper reason why the remitter should be to a judicial officer other than the master.[138]  Insofar as the appellants' post-appeal hearing minute of further substituted orders wanted refers simply to remittal to the primary court for determination it is apparent that the appellants now accept, correctly, that any remitter should be to the master.)

    [138] Appeal ts 51 - 53.

14. The appellants' argument for remittal went no further than to contend that, rather than try to deal with what were complex issues, this court should just remit the matter back to the primary court for determination with the benefit of this court's reasons.[139]

    [139] Appeal ts 52.  No reasons were advanced to support the proposed remittal in the appellants' submissions in support of the minute of further substituted orders wanted dated 21 December 2021: Appellants' submissions dated 21 December 2021 par 7.

15. That invitation must be rejected.  Were it to be acceded to, the proposed remitter would, in our view, amount to no more than this court abrogating its duty and functions.  In the circumstances of this case, where it is not suggested that the master failed to make necessary factual findings, it should not be left to the primary court to formulate appropriate orders to correct the error identified on appeal.  The ordinary course should be followed.  The appellants should formulate the orders they want this court to make.  This court ought then determine whether the orders are within power and appropriate to correct the error as found by the court.  It is for this court, rather than the primary court, to create a framework that deals with and corrects the orders of the primary court - albeit that, within that framework, it may be necessary to remit some aspect of the working out of those orders to the primary court.

16. For these reasons we would not make the alternate orders for remitter to the primary court.

17. Two further matters should be mentioned in connection with the orders wanted.

18. First, the minute of further substituted orders sought that the revaluation be as at 27 August 2020.  Presumably that was because 27 August 2020 was the date of the orders that led to the buy-back of the RTA shares and the transfer of Edjudina Station.  Nellbar instead sought a revaluation date of 30 June 2021 on the basis that this was the completed end of financial year nearest to now.[140]  It is difficult to understand the logic of a June 2021 date when the transactions were completed in early September 2020.  We would not, in the exercise of discretion, have adopted 30 June 2021 as the revaluation date when it was nearly ten months after the completion of the transactions.  If, for reasons of simplicity and ready access to financial information, it is convenient to adopt a date other than the date of the orders or the transaction date, the obvious candidate is 30 June 2020 insofar as that was some two months earlier than the orders and the transaction date.

    [140] First respondent's submissions dated 12 January 2022 par 25.

19. Second, Nellbar sought that any orders on appeal be subject to an undertaking given to this court by Porter Street and Woodhaven to consent to orders in COR/265/2013: (1) for a 30 June 2021 revaluation of Jones Partners; and (2) for Porter Street and Woodhaven to make a shortfall payment to Nellbar to the extent that the revaluation amount was more than the price paid for Nellbar's shares in Jones Partners.[141]  The appellants said that they would not oppose the primary court making orders to the effect that the Jones Partners shares ought to be revalued as at 27 August 2020 but wished to be heard in relation to the orders to be made to give effect to such an order.[142]

    [141] First respondent's submissions dated 12 January 2022 par 31.

    [142] Appellants' submissions dated 21 December 2021 par 12.

20. If we had been persuaded that it was appropriate to make orders in terms of par 2 of the minute of further substituted orders we would only have done so on the condition that Porter Street and Woodhaven give an undertaking to the court which had the effect of replicating the outcome of this appeal mutatis mutandis for COR/265/2013 and Nellbar's shares in Jones Partners.  That, to our mind, would have been necessary as a matter of justice and fairness - something apparently recognised by the appellants insofar as they did not oppose orders providing for the revaluation of the Jones Partners shares.

Conclusion: the appropriate approach to remedy

1. While, in respect of ground 4, the appellants have identified error in the decision of the master to refuse to order up-to-date valuations, the orders wanted by the appellants are inappropriate and should not be made.

2. It is, as previously mentioned, for the appellants to formulate the orders they want this court to make.  On occasions the court may consider it necessary or appropriate to modify the orders wanted - although, depending on the nature and extent of the modifications, procedural fairness considerations may intrude.  As with judgment after trial, this court does not confine itself to granting the relief which is specified and, subject to affording the parties procedural fairness, will give such relief as is appropriate to the facts as found and the conclusions reached (provided that the relief is not in respect of a different cause of action to that relied on by the plaintiff).[143]  This possibility is recognised in the appellants' minute of further substituted orders dated 21 December 2021.  The final order mentioned was in the form of a general prayer for relief.  The appellants sought 'further or other order on [sic] this Honourable Court deems appropriate'.

   [143] Wicks v Bennett [1921] HCA 57; (1921) 30 CLR 80, 100; Rawson v Hobbs [1961] HCA 72; (1961) 107 CLR 466, 485; Autodesk Inc v Dyason (No 2) [1993] HCA 6; (1993) 176 CLR 300, 318. See also Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2018] WASCA 185 [76].

3. At the appeal hearing the court identified a possible approach to the orders that might be open should the appeal be successful.  That possibility arose out of the circumstance that the 27 August 2020 orders for the trade sale of the business and assets of Hampton Transport had yet to be effectuated.  It was suggested that it might be possible for the eventual distribution contemplated by those orders to be varied to adjust for any price differential determined by up-to-date valuations of the RTA shares and Edjudina Station.[144]

   [144] Appeal ts 12.

4. Counsel for the appellants initially embraced that possibility.[145]  However, when asked to produce a minute of substituted orders wanted, the appellants did not take up the suggestion - apparently for the reason that Nellbar did not 'fit into that model'.[146]  That concern is difficult to understand.  Nellbar is a shareholder of Hampton Transport.  It has received a distribution from the buy-back of the RTA shares and the sale of Edjudina Station and will receive a distribution from the trade sale of Hampton Transport's business and assets.  Nellbar is also associated with those persons and entities who will have benefitted to the extent, if any, that the RTA Sale Price undervalued the RTA shares or the $1 million 'directors' valuation' undervalued Edjudina Station (see [45] above).  In the circumstances it would, in our opinion, be consistent with the justice and fairness of this particular situation to adjust, in favour of Porter Street and Woodhaven, Nellbar's eventual distribution from the trade sale of Hampton Transport's business and assets so as to account for any price differential in relation to the RTA shares and Edjudina Station following a determination of the value of those assets at or around the time of the 27 August 2020 orders.

   [145] Appeal ts 12 - 13.

   [146] Appeal ts 49.

1. In reaching that conclusion it is relevant that counsel for Nellbar stated that there was no objection in principle to the approach as identified by the court.[147]  Counsel also accepted that the approach was 'far more workable' than the models advanced by the appellants.[148]  Nevertheless, as we are not satisfied that counsel for Nellbar was on notice that the hearing of the appeal was the final opportunity to advance submissions in opposition to the approach as identified by the court, we would permit counsel for Nellbar to put such submissions on delivery of these reasons, should Nellbar wish to do so.

   [147] Appeal ts 54 - 55.

   [148] Appeal ts 54.

2. Subject to any such submissions, to give effect to the conclusions we have reached we would make orders allowing the appeal and providing for consequential relief along the lines of those identified by the court in the course of the appeal hearing (see [167] - [168] above).  The parties should confer and provide a minute that is suitable to achieve that outcome.  In formulating the minute the parties should be conscious of and accommodate the concerns as stated in [153] - [156] above.  For the avoidance of doubt, we would make the orders conditional on the provision of an undertaking of the type contemplated in [163] - [164] above.  The terms of that undertaking should be agreed and recorded in a schedule to the minute. 

3. If, however, the appellants remain unwilling to entertain relief of the type identified by the court then, absent some other suggested orders that are within power and appropriate to correct the error as found by the court, we would dismiss the appeal despite upholding ground 4.

4. We would hear from the parties as to the costs of the appeal.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

AT
Research Associate to the Honourable Justice Vaughan

18 MARCH 2022

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT  :   THE COURT OF APPEAL (WA)

CITATION:   PORTER STREET INVESTMENTS PTY LTD -v- NELLBAR PTY LTD [2022] WASCA 33 (S)

CORAM:   BUSS P

BEECH JA

VAUGHAN JA

HEARD:   18 MARCH 2022

PUBLISHED           :   8 APRIL 2022

FILE NO/S:   CACV 105 of 2020

CACV 97 of 2020

BETWEEN:   PORTER STREET INVESTMENTS PTY LTD

First Appellant

WOODHAVEN PTY LTD

Second Appellant

JOHN LOAD CECIL JONES

Third Appellant

BURCHELL FRANCIS CECIL JONES

Fourth Appellant

AND

NELLBAR PTY LTD

First Respondent

HAMPTON TRANSPORT SERVICES PTY LTD

Second Respondent

ON APPEAL FROM:

Jurisdiction              :   SUPREME COURT OF WESTERN AUSTRALIA

Coram:   MASTER SANDERSON

Citation: NELLBAR PTY LTD -v- JONES PARTNERS PTY LTD [No 2] [2020] WASC 336

File Number            :   COR 266 of 2013, COR 265 of 2013

Catchwords:

Practice and procedure - Terms of orders - Where appellant has failed to submit adequate orders wanted - Turns on own facts

Practice and procedure - Costs - Indemnity costs sought - Turns on own facts

Legislation:

Nil

Result:

Appeal allowed conditional on order 4
Costs orders made

Category:    B

Representation:

Counsel:

First Appellant	:	N D C Dillon
Second Appellant	:	N D C Dillon
Third Appellant	:	N D C Dillon
Fourth Appellant	:	N D C Dillon
First Respondent	:	P J Hannan
Second Respondent	:	No appearance

Solicitors:

First Appellant	:	HHG Legal Group
Second Appellant	:	HHG Legal Group
Third Appellant	:	HHG Legal Group
Fourth Appellant	:	HHG Legal Group
First Respondent	:	Nova Legal
Second Respondent	:	No appearance

Case(s) referred to in decision(s):

Ben-Pelech v Royle [2020] WASCA 168 (S)

Porter Street Investments Pty Ltd v Nellbar Pty Ltd [2022] WASCA 33

Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S)

JUDGMENT OF THE COURT:

1. These reasons should be read with Porter Street Investments Pty Ltd v Nellbar Pty Ltd,[149] to which these reasons are supplementary.  On delivery of the Appeal reasons the parties were unable to agree orders.  The parties remained divided on whether there should be orders as contemplated in the Appeal reasons and, if so, the terms of such orders.  There was also a dispute as to costs.

   [149] Porter Street Investments Pty Ltd v Nellbar Pty Ltd [2022] WASCA 33 (Appeal reasons).

2. Nellbar resisted orders allowing the appeal.  This was notwithstanding that the appellants sought relief along the lines of that identified by the court in the Appeal reasons[150] (albeit that the appellants' drafting left a lot to be desired).  Counsel for Nellbar contended that orders of the type sought by the appellants would not work insofar as, in the event that the RTA shares or Edjudina Station had been bought‑back or transferred at an undervalue, Nellbar would have to meet the whole of any adjustment.  Inevitably that is so.  But it is unremarkable in circumstances where there are three shareholders in Hampton Transport, and the transactions sought and obtained by Nellbar resulted in it (or persons or entities associated with it) being potentially advantaged while the other shareholders (Porter Street and Woodhaven) were potentially disadvantaged.  Ultimately what is required to eliminate any unfairness or injustice as between the shareholders is an appropriate adjustment as between the shareholders.

   [150] See Appeal reasons [167] - [168], [170].

3. This is possible by appropriate modification to the primary court's orders made 27 August 2020 insofar as, by pars 8, 14 and 25, there was to be distribution by Hampton Transport to each of Porter Street, Woodhaven and Nellbar in the same percentages (each receiving 26% of the net proceeds of the RTA shares, Edjudina Station and the sale of Hampton Transport's business and assets as a fully franked dividend).  Put simply, in terms of doing practical justice as between the two disputing camps, any notional 'under' distribution to the first and second appellants on the two completed transactions could be adjusted for by a like 'top-up' distribution on the future transaction, and vice versa.

4. When this was debated between counsel for Nellbar and the court, and the significance of the various equivalent orders for distribution was understood, counsel for Nellbar accepted that with some 'tweaking' the orders as proposed by the appellants could be fixed.  Counsel said that his suggested 'knock-out blow' in answer to the appeal being allowed 'would not fly'.  However, it remained the case that there were drafting deficiencies in the orders as sought by the appellants and the undertaking that they proffered.

5. Apart from a miscellany of typographical and transpositional errors, the orders and undertaking proposed by the appellants were deficient in as much as:

   1.The orders contemplated remitter to determine the RTA Sale Price and the Edjudina Station Amount.  It is, however, unnecessary and unproductive to redetermine those amounts.  The relevant transactions have already been completed based on those amounts.  What is required is remitter to determine the actual value of the assets at the time of the transactions, so as to determine what, if any, differential exists as between the true values and the RTA Sale Price and the Edjudina Station Amount.

   2.The orders did not properly adjust for the effect of any under or over payment (as between the RTA Sale Price and the Edjudina Station Amount and the true values) because what the appellants contemplated was a direct payment as between Nellbar and Porter Street/Woodhaven (or the other way round) rather than appropriately adjusting the final fully franked dividend under par 25 of the orders.  (In part this explains the opposition to the orders as voiced by counsel for Nellbar on delivery of the Appeal reasons.)

   3.The undertaking was couched in terms of not opposing appropriate orders in action COR/265/2013 rather than consenting to an undertaking of the kind mentioned in the Appeal reasons.[151]

   [151] Appeal reasons [163] - [164].

6. This was the appellants' fourth attempt at drafting the orders wanted.  The failure to submit adequate orders to give effect to the Appeal reasons was conspicuous and such as to cast doubt on whether the appellants' legal representatives were capable of drafting the necessary orders.  In the circumstances the court considered that there was little to be gained in inviting the appellants' legal representatives to have yet another try.  Instead the court determined that it would prepare and circulate the orders.

7. Proposed orders as drafted by the court are set out at [12] below.

8. On costs, the appellants sought the costs of appeal CACV/97/2020 and the hearing before the primary court on 4 September 2020 so far as relevant to the issues raised by the appeal.  The appellants accepted that they should pay Nellbar's costs of appeal CACV/105/2020.  Nellbar sought those costs on an indemnity basis.  Nellbar also submitted that, having regard to the limited degree of success the appellants had enjoyed in appeal CACV/97/2020, there should be no order as to the costs of that appeal.

9. There is no basis for the appellants to have any costs in relation to the hearing before the primary court on 4 September 2020.  That application was misconceived; it should never have been brought.[152]  The primary court's costs order must stand.  In terms of appeal CACV/105/2020 the only issue is whether Nellbar should have its costs of the appeal on an indemnity basis.  Those costs should be paid on an indemnity basis.  This court has characterised that appeal as hopeless.[153]  It is appropriate that the appellants' liability for costs be assessed on an indemnity basis as the appeal is one that should never have been brought or pursued.[154]

   [152] Appeal reasons [49] - [52], [136] - [144].

   [153] Appeal reasons [144].

   [154] Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S) [10.6]; Ben-Pelech v Royle [2020] WASCA 168 (S) [6] - [8], [18], [20].

10. The appellants disturbed the order under appeal in appeal CACV/97/2020.  Costs should follow the event.  However, the appellants raised a number of matters that were without merit.  Grounds 1 - 3 constitute discrete and severable issues on which the appellants failed and which added to the costs of the appeal in a significant and readily discernible way.  Ground 4, which was the sole ground on which the appellants were successful, received next to no exposition in the appellants' written and oral submissions.  The orders wanted by the appellants were deficient despite the appellants having multiple opportunities to provide appropriate orders.[155]  Indeed, the deficiency continued on delivery of reasons.  The court has had to draft the appropriate orders.  The issues on which the appellants have failed, and the continued failure to produce orders wanted capable of being made by the court, have undoubtedly resulted in Nellbar incurring costs that it ought not to have incurred.  In all the circumstances it is just and fair that the appellants should only recover a portion of their costs.  The appropriate order is that, subject to one matter, Nellbar pay one third of the appellants' costs in relation to appeal CACV/97/2020.

    [155] See Appeal reasons [82] - [90], [145] - [160], [165].

11. The exception to that costs order is that the appellants should not recover any costs post-appeal hearing.  The work done post-appeal hearing largely concerned the orders wanted.  What was provided on behalf of the appellants was well below the standard that this court expects of legal practitioners practising in the court.  It is not work for which there should be any costs recovery as against Nellbar.  Moreover, on delivery of these supplementary reasons we would hear from the legal representatives for the appellants as to why an order should not be made to ensure that the appellants are not charged for any post-appeal hearing costs.

12. Subject to hearing from the parties as to any matters as to the details of the orders, but without revisiting the matters already ventilated, we would make orders as follows:

    1.(a)     Appeal CACV/97/2020 is allowed.

    (b)    Appeal CACV/105/2020 is dismissed.

    2.Paragraph 25 of the orders of the Supreme Court of Western Australia made 27 August 2020 in action COR/266/2013 is varied as follows (the underlining identifying variations to the original order):

    'Upon receipt of the proceeds of sale referred to in paragraph 24(2) above and determination of the Gross Adjustment Amount, Hampton Transport Services shall forthwith distribute those proceeds in the following manner:

    (i)26% thereof plus one half of the Adjustment Amount, to Porter Street Investments as a fully franked dividend;

    (ii)26% thereof plus one half of the Adjustment Amount, to Woodhaven as a fully franked dividend;

    (iii)26% thereof minus the Adjustment Amount, to Nellbar as a fully franked dividend;

    (iv)11% to Mr Bart Jones;

    (v)11% to Mr Dave Jones.

    WHERE:

    (A)the 'Adjustment Amount' is 52% of the Gross Adjustment Amount; and

    (B)the 'Gross Adjustment Amount' is the sum of:

    (a)the fair value of Hampton Transport Services' shares in RTA as at 7 September 2020 minus the RTA Sale Price; plus

    (b)the fair value of Hampton Transport Services' interest in Edjudina Station (including livestock and plant & equipment) as at 7 September 2020 minus the Edjudina Station Amount.

    3.Action COR/266/2013 is remitted to Sanderson M to determine for the purposes of par 2 above:

    1.the fair value of Hampton Transport Services Pty Ltd's shares in Road Trains of Australia Pty Ltd as at 7 September 2020 (see par 25(B)(a) in par 2 above); and

    2.the fair value of Hampton Transport Services Pty Ltd's interest in Edjudina Station (including livestock and plant & equipment) as at 7 September 2020 (see par 25(B)(b) in par 2 above).

    4.Orders 1 - 3 are subject to and conditional upon the appellants filing by 4 pm on the day being 2 business days after the date of these orders an undertaking in the form in the schedule to these orders duly executed by the first and second appellants.

    5.The parties have liberty to apply in relation to the implementation of these orders (including their implementation if no or insufficient franking credits are available) and the implementation of the undertaking.

    6.In relation to appeal CACV/97/2020, the first respondent pay one third of the appellants' costs of the appeal excluding all post-appeal hearing costs.

    7.In relation to appeal CACV/105/2020, the appellants pay all the costs incurred by the first respondent except insofar as the costs are of an unreasonable amount or have been unreasonably incurred so that, subject to those exceptions, the first respondent is completely indemnified by the appellants for its costs in relation to appeal CACV/105/2020.

    8.The costs the subject of appeal CACV/97/2020 and appeal CACV/105/2020 are to be assessed if not agreed.

    Schedule

    The first and second appellants undertake to the first respondent and the court that, if in action COR/265/2013 the first respondent seeks orders for a 7 September 2020 revaluation of Jones Partners Pty Ltd and for the first and second appellants to make a shortfall payment to the first respondent to the extent that the revaluation amount is more than the price paid for the first respondent's shares in Jones Partners Pty Ltd, the first and second appellants will consent to the orders sought by the first respondent so that the outcome in action COR/265/2013 as to Nellbar's shares in Jones Partners Pty Ltd replicates mutatis mutandis the outcome of this appeal.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

AT
Associate to the Honourable Justice Vaughan

8 APRIL 2022