Sommer & Co Pty Ltd v Pennywise Smart Shopping Australia Pty Ltd (In Liquidation)

[1993] HCATrans 60

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Adelaide No A31 of 1992

B e t w e e n -

SOMMER & CO PTY LTD

Applicant

and

PENNYWISE .SMART SHOPPING

AUSTRALIA PTY LTD

(in liquidation) and FREDERICK

CHARLES PERKINS

Respondents

Application for special leave

to appeal

DEANE J
DAWSON J

TOOHEY J

Sommer 1 12/3/93

TRANSCRIPT OF PROCEEDINGS

FROM ADELAIDE BY VIDEO LINK TO CANBERRA

ON FRIDAY, 12 MARCH 1993, AT 12.32 PM

Copyright in the High Court of Australia

MR J.R. SULAN OC:  May it please the Court, I appear with

MR M.A. CRAWLEY, for the applicant. (instructed by

Moody Rossi & Co)

MR N.W. MORCOMBE, QC: If it please the Court, I appear with

MR J.P. KEEN, for the first respondent.

(instructed by Finlaysons)

DEANE J: Yes, Mr Sulan?

MR SULAN:  If the Court pleases, we have prepared an outline

of the applicant's submissions. I do not know if

the Court has had an opportunity to consider those.

DEANE J:  We have them and we will just take a moment to

refresh our minds as to them, Mr Sulan.

MR SULAN: If the Court pleases, it is the applicant's

submission that this case turns on the

interpretation of section 452 of the Companies

(Northern Territory) Code. It of course has

Australia-wide implications. The section has been

repeated without any change in section 566 of the

Corporations Law. That also, as Your Honours would

be aware, has Australia-wide effect.

We would submit that the approach of the South

Australian court to the interpretation of that provision is in contradiction to the approach of the Western Australian court in Ledger's case and is contrary to the approach applied in the English authorities which deal with the English equivalent of the section.

We would submit that the decision of the Full

Court in this case has the effect of practically

defeating the object of the section. And our

submission is that that object, the object of the

section, is to ensure that companies are prevented

from creating charges to secure past debts or

moneys which did not go to swell the company's

assets and become available to the creditors.

We would submit that the Full Court in South

Australia has erred in three substantial respects:

namely, in its approach to how one determines

substance over form; secondly, that it has

misinterpreted the words ''pay to" in the section;

and thirdly, that it has therefore also

misinterpreted the words ''in consideration for"

which appear in the section. Our submission is

that they are the matters upon which we say this

Court ought to be concerned, that the

interpretation of that section by the South

Australian court is different and different to the

Sommer 2 12/3/93

interpretation applied by the Full Court in

Ledger's case.

Your Honours, could I deal, just for a moment,

with the facts of this particular case just to set

the scene. The respondent, Pennywise, is a company

that was involved in wholesale supermarket

operations. It effectively held all the shares of

Lendata through another company, Kearton, which was

the registered proprietor of land and buildings

used by Pennywise in its Kilburn operation.

Pennywise at the time of this transaction was in

difficulty.

The applicant in this application is a

property holder and property developer. It was

approached to determine whether it would be

interested in purchasing the land. The proposal

originally was that the applicant purchase Lendata

- its only operation was holding the land - for

$6 million. And the value of Lendata was assessed

by reference to its long term lease of the

premises. In other words the value of Lendata

depended entirely on the viability of Pennywise.

An amount of $1 million was advanced pursuant

to the arrangements. There was a loan agreement

between Lendata and the applicant. However, the

moneys in this case were paid at the direction of

Lendata to Pennywise and Pennywise used those funds as was intended for working capital. Part of the

arrangements were that Pennywise granted to the

applicant a debenture.

The issue, we say, that is of importance in

this case to which we would submit the Court ought
to have regard, is that the Court of Appeal, the

Full Court in South Australia, approached the case

too narrowly. It was accepted by the Court of

Appeal, the Full Court, that the test was one of

substance over form. But, in determining how one

assesses substance over form the court, in our

submission, overlooked the major factor that any

court should consider in determining substance over

form, and that is the purpose of the transaction

and the intention of the parties.

documentation and said, "Well, this is the form 11 • What the court did was, it looked at all the

Then it looked to the effect, how the documentation

was implemented, and said, "Therefore, substance

and form are one and the same in this particular	11
transaction	•

In our submission, the way in which the test

was applied was wrong in law, because primarily, in

our submission, when one is determining substance

Sommer 3 12/3/93

over form, one must look to the purpose and intent

of the parties and, in our submission, the purpose

and intent of the parties in this transaction was
always to pay money to Pennywise to assess

Pennywise's financial viability, in order for the applicant to determine whether it wanted to go

ahead with the purchase of Lendata and therefore

the land.

We would submit that if one looks at the

transaction, the moneys which were secured were new moneys. They were paid to Pennywise, albeit at the

direction of Lendata, and therefore the section, or the exception to the section was fulfilled, because it was always the intention of the parties in this

case to pass the moneys to Pennywise, for Pennywise

to use as it wished in keeping its business afloat,

and for the applicant to test the viability of

Pennywise.

Therefore, in our submission, the Full Court

fell into a fundamental error in the application of

the test and the application of the section, and it

is our submission that that is the matter of law

which this Court ought to determine.

DAWSON J:  You say that at any event you come within the

true meaning of the words of the section?

MR SULAN:  We say, in any event, however one looks at the

facts of this matter, we come within the meaning of

the section. We come within it - if one goes to

will not read the whole section, but the relevant

the section, and it appears in the judgment of the

words to which I refer are that the floating charge

is void:

unless it is proved that the the company

immediately after the creation of the charge

was solvent -

well, that is not relevant: 

invalid except to the amount of any moneys
paid to the company at the time or
subsequently to the creation of and in
consideration for the charge -

We say, that if one looks at this transaction, the

moneys were paid to Pennywise. They were paid to

Pennywise in consideration for the charge, and the

fact that they were paid at the direction of

Lendata is not to the point and, in our submission,

the Full Court in determining that they were not

paid to Pennywise misinterpreted the section.

Sommer 4 12/3/93

DEANE J:  You say "in consideration of" is not to be

interpreted in any contractual sense?

MR SULAN:  Not in any contractual sense, and there is

authority to that effect. It is by reason of, or

looking at the substance of the transaction, and I

could point Your Honours to the case of Re Orleans

which is in the book of authorities which I have

provided Your Honours; the case of Re Matthew

Ellis, again which has been provided to

Your Honours.

DEANE J:	What is your best case on "in consideration of"?
MR SULAN:	The best case on "in consideration of" - - -
DEANE J:	You had better take us to whatever you think is

the best case.

MR SULAN:  Yes, if I could take Your Honours to the case of

Yoevil, which appears at page 15 of the applicant's

book of authorities, and in particular at page 33.

The passage commencing at the first paragraph in

the second column:

In these circumstances it seems to me

that Romer J. in In re Thomas Mortimer Ltd.

and Plowman J. in the present case were right

in refusing to construe the word

"consideration" in its strict sense in the

context of the present section.	I agree with
Plowman J. that the expression "in

consideration for the charge" means in this

context "in consideration of the fact that the

charge exists," and that the relevant question

of fact is whether the payments subsequently

made would have been made if the charge had

not been given.

There is further authority that "in consideration

for" means by reason of. But, in our submission,

on the undisputed facts in this case Pennywise

would never have given the charge in favour of

Sommer & Co. unless it was to receive the funds,

and it was always the intention of the lender, and

that is not in dispute and appears in the judgment

of the Full Court, that the moneys were to go to

Pennywise to assess for Sommer & Co, the applicant,

the viability of Pennywise in the future. And, of

course, if it was viable then the sale of Lendata

might have gone ahead.	As it turned out Pennywise
was not viable.

The important factor, Your Honours, we say

that the purpose of the section was to prevent

existing creditors from being preferred to other

creditors in situations where a company was

Sommer 5 12/3/93

insolvent and it created a charge. It was never

designed and never intended by the legislature that

this section would catch bona fide transactions

where the insolvent company actually obtained the

benefit of new moneys, and that is exactly what

happened in this case.

Sommer & Co, the applicants, were never a

creditor of Pennywise. They only became a creditor

of Pennywise at the time that Pennywise created the
charge in favour of Sommers and, we would submit

that it was new money, actual new money that went

to Pe~~ywise for Pennywise to use, as it wished, in

its business and for the continuation of its

business.

The way in which the Full Court has

interpreted the section, in our submission, flies

in the face of the words of the section. We would

submit that the result of the Full Court's approach

to the section in South Australia will have the

effect that this provision will be interpreted

differently in South Australia to other States, and

in particular Western Australia and Victoria.

If I can take Your Honours for a moment to

Ledger's case.

DEANE J: Before you do that, Mr Sulan, can you point to any

statement of principle - and I am using "principle"

to include the effect of the section in the

judgment of the Full Court - which you say is

wrong.

MR SULAN: Yes, could I take Your Honours to the judgment of

the Full Court, and in particular to the passage at

page 61, where the court says at the bottom of the

page, line 25:

No doubt, the existence of the Debenture and

floating charge, as well as the Guarantee,

granted by Pennywise, would ensure that the

money would be directed to the company, that

all parties contemplated it would be directed,

namely, to Pennywise. There was nothing in

the evidence as I read it, nor do counsel's

submission suggest any such evidence, nor

certainly was there anything in the documents,

that could compel Lendata to issue this

authority and direct payment to Pennywise.

The court then goes on. It is my submission that

from that passage, the error in principle that the

court fell into was to determine that in those

circumstances that was not a payment to Pennywise.

Sommer 6 12/3/93

DEANE J:  What if Lendata had been buying an asset from

Pennywise and had directed the payment of the money

to Pennywise in payment of the purchase price of

that asset? Would you say that the section did not

apply?

MR SULAN:  I am sorry, if Lendata had been purchasing an

asset from Pennywise - - -

DEANE J:  And had directed the payment of the money to

Pennywise in payment of the purchase price of that

asset, which was then transferred to Lendata.

Would you say that the - - -

MR SULAN:	In that case, Your Honour, the section might well apply because there, the substance of the
transaction would have been to deprive Pennywise of an asset to Lendata.

DEANE J: Well, was not the substance of the transaction

here to extinguish an asset of Pennywise?

MR SULAN:  The asset being the loan by Lendata?

DEANE J: Yes.

MR SULAN: In our submission, it was not, in substance,

because Lendata was in no position and could not

repay the $1.6 million. It was only in a position

to repay - that asset was valueless, in effect.

DEANE J:  To extinguish the loan to Lendata.

MR SULAN: Yes, but we would say, in our submission, that

the loan to Lendata was valueless in those
circumstances, because the Lendata loan depended

upon the value of the land.

DEANE J: Well, what if the land had not been valueless?

MR SULAN: Well, it certainly was not valueless but it was

not worth $6 million, and the evidence clearly

establsihed, Your Honour, that it could only be

worth $6 million if valued on the basis of a

leasehold to Pennywise on a long term.

DEANE J: But what if Lendata had had sufficient assets to

discharge the loan?

MR SULAN:  Then the position might have been different

because the substance of the transaction and the

form may have been different, taking into account

all the circumstances. But we would submit that in

this case, clearly, the substance of the

transaction was to pay moneys to Pennywise and

Pennywise thereby granted a charge over the land.

Sommer 12/3/93

DEANE J: But you skip the step. It was to pay money to

Pennywise at the direction of Lendata in extinction of a loan owing by Lendata to the amount of the

payment.

MR SULAN: That, in our submission, is the position if you

look only at the form of the transaction, but if

one looks at the substance, in our submission, the
only value in that loan from Lendata to Pennywise

could exist if Lendata was worth over $4.8 million,

because there was a charge to the Hong Kong Bank in

that amount, and the evidence clearly established

that that value could not be attained other than

through the lease to Pennywise, and that was the

only way in which that debt of Lendata's to

Pennywise had any value at all.

So, in all the circumstances of the case, it

is our submission that the court did not apply the test of substance over form correctly, because one

has to look at the whole transaction, and we would

submit that what the court did in this case was to

divide the transaction up into different

transactions, look at the effect, but it never

looked at the purpose and the intention of the

parties. And clearly, at the time that the

transaction was entered into the intention of the

parties was not to reduce Lendata's loan to

Pennywise; the intention of the parties was for

Sommer & Co to provide funds to Pennywise for

Pennywise to use those funds as it wished as

working capital in order for Sommer & Co to

determine whether there was any viability of

Pennywise and therefore any value in the premises

that were owned by Lendata. And that was the

purpose and intention of the parties - - -

DEANE J: Yes, I follow that.

MR SULAN:  - - - and it is our submission that that is where

the Full Court erred.

DEANE J: But it still brings you back to the question

whether moneys paid to a company at the direction

of its debtor to extinguish the debt owing by that debtor, moneys paid in consideration of the charge

which the company gives to another company which

lends the money to its debtor. Your answer, as I

follow it is, it is not if the debtor is solvent,

but it is if the debtor is insolvent.

MR SULAN:  Yes, Your Honour. My submission is that one has

to look at all the circumstances to determine what

in substance occurred and "paid to" is not

necessarily restricted to paid to only the debtor.

"Paid to" can be paid to the company creating the

charge at the direction of the debtor if, in

Sommer 12/3/93

substance, what was intended by the parties was a

payment by the lender to the company which created

the charge.	Our submission is that is where the
Full Court fell into error.	The fact that it was

at the direction of Lendata does not mean that the

section ought to be interpreted in the way in which

the Full Court interpreted it because one must look

at all the circumstances surrounding the

transaction, and in these circumstances clearly the

intention and purpose of this transaction was to

pay money to Pennywise.

DEANE J:  I would of course add "in extinction of Lendata's

debt".

MR SULAN:	In our submission, that was one of the effects that may have occurred, but that was only of value
if the transaction eventually went ahead and
Sommer & Co purchased the land, and that relied
solely on the viability of Pennywise. So one comes
back to the question of the intention and purpose
of the parties.

DAWSON J: In one sense, you say the form of the transaction

was that the money was paid to Pennywise.	I mean,
that is what happened.	The money never went to

Lendata, and the Full Court is really saying, "but in substance it was a payment to Lendata".

MR SULAN:	Yes, that is not what the Full Court said, of course.
DAWSON J:	I know it is not what they said.
MR SULAN:	Our submission is that if the form of it was a

payment - - -

DAWSON J: There is no doubt the moneys were paid to

Pennywise and there is no doubt that Pennywise gave

a charge.

MR SULAN:  And in our submission the substance of the

transaction was a payment to Pennywise, new money

to Pennywise in order for it to test its viability

and Lendata really is subsidiary to the whole

transaction. So if I can take up Your Honour,

Mr Justice Dawson's point that if the form of the

transaction is a payment to Pennywise, we would say

the substances is also a payment to Pennywise in

consideration for it creating the charge, and

that - - -

DEANE J: But if somebody in Pennywise had said, "As a

matter of substance, why have we got this money?"

would the answer not be, "Believe it or not Lendata

has arranged to pay its debt"? I mean it would not

Sommer 9 12/3/93

be, "We have got them in consideration of the

charge".

MR SULAN:  We would say no, Your Honour. We would say one

has to remember that, of course, Lendata and

Pennywise were controlled by the same persons and,

in fact, Lendata was a wholly owned subsidiary of

Pennywise. So the person sitting in the seat of

the officer or director of Pennywise would say, "We
got the money to see if we are viable, to see if
eventually Sommer & Co are prepared to purchase

Lendata, and Lendata's value is dependent on whether we can keep this company, Pennywise,

going." That would have been the answer that would

have been given, in our submission, in this case,

and that is our complaint, that if one goes to the

purpose and intention of the parties in this case,

all the parties in this case, the form of the

documentation was never what was intended by the

parties.

What was intended by the parties was to make

an assessment of Pennywise's viability and, in our

submission, if one goes to the mischief of the

section, the mischief in the section is designed to

ensure that one group of creditors are not

preferred to another. In this case that did not

happen.

Your Honours, I do not think I can put my

submission any higher than I have. I was going to

take Your Honours for a moment to the decision in

Ledger's case, and in particular to the approach of

the Court in that case to determining substance and

form. Could I take Your Honours firstly to page 56

of the book of authorities and to the judgment of

Mr Justice Wallace when he was dealing with

section 452, where His Honour said:

A bona-fide honest transaction carried out in the normal course of business does not

contravene the section.

Then also if I could take Your Honours to the

judgment of Mr Justice Brinsden, which appears at

page 66, starting at the last two lines:

Money paid to a company will not be deemed for

the benefit of the company if it is
insufficient to prop up or help to prop up the

apparently insolvent company and the real

purpose is to benefit certain creditors.

So it would be our submission that the Western

Australian Full Court has applied a purpose and

intent test to substance, and that is where we say

the approach of the South Australian Full Court

Sommer 10 12/3/93

differs and is in variance to the approach of the

Western Australian Court. That is the matter which

we would submit would entitle this Court to look at

section 452 and its successor, and the manner in

which it ought to be interpreted, and the manner in

which one ought to look at substance over form.

In our submission, there are two planks on our

application as to why this Court ought to grant

special leave. The first is the strict

interpretation of the section and the way in which

the Full Court approached it. The second is the

question of how one determines substance over form

and the test to be applied. We say that it is a

purpose test. The Full Court of South Australia

has applied a different test, in our submission.

It has looked at effect, not at purpose and intent

of the parties, and in our submission that is why

this Court ought to grant special leave. If the

Court pleases.

DEANE J:  Thank you, Mr Sulan. Yes, Mr Morcombe.

MR MORCOMBE:  If it please Your Honours, I have provided a

written outline of argument;	I hope it has reached
Your Honours.

DEANE J: Yes, we have that. What is the extent of the

difference between the present and prospective

sections?

MR MORCOMBE:  I understand a copy has been provided for

Your Honours. It is substantially different as to

the way it is expressed, but the likelihood is that

it has very little practical effect as to any

change. For example, Your Honour, paragraph (2)(a)

of 588FJ refers to the term "an advance paid" as

opposed to "moneys paid", and it is set out in a

different form. Also in the same paragraph, "or at

its direction" is also new.

DEANE J:

It is hard to see whether that will make "paid to

the company" more or less ambiguous, is it not?

MR MORCOMBE:  Yes, Your Honour. I hope it was not

introduced for that purpose. If it please

Your Honours, three Full Courts in Australia have

now considered the old section 452 of the Code, and

it is my submission that the approach of each of

those Full Courts has been consistent. There have

been, naturally, different facts before each of

those three courts, but each of the three courts

have consistently said that one not only looks to

the form but to the substance of the transaction.

If one looks at the substance of the

transaction, that is predominantly an exercise of

Sommer 11 12/3/93

application of facts to a particular section. In
my submission, there is no conflict between the

three Full Court decisions which currently stand in

Australia, and the only argument that may be put as

to any difference in attitude or approach of the

courts is in respect of how they have applied the

facts before them to the common principle which

runs through those three cases.

In my submission, there is nothing in any of those three decisions which would cause one to say
that one does anything other than look at the substance of the transaction. Clearly, in my

submission, that is exactly what the Full Court in

South Australia did in the case at bar.

Could I pause to take Your Honours to page 20

of the application book to look at the precise

terms and the structure of section 452, because

there has been some debate as to whether it was in

consideration for the charge. But I would point

out that the phrase "the amount of any moneys paid

to the company" is then simply qualified by that

which follows thereafter.

The primary point for consideration in the

case at bar is whether any amount of moneys were
paid to Pennywise. There is no doubt that the
ultimate recipient of the moneys was to be

Pennywise. My client has never argued any differently, and it was accepted by the Full Court

that that was the case.

However, the loan documents were structured as

a loan from Sommer & Co. to Lendata and

deliberately so - both by Lendata and by Sommer &

Co. and I refer Your Honours to page 49 of the

application book which sets out those two reasons

as to why the form of the agreement was as it was.

The first reason was that:

If Sommer & Co did take over the shares in

Lendata -

and I would remind Your Honours that Sommer & Co

received an option in respect of the shares of

Lendata, but:

If Sommer & Co did take over the shares in

Lendata it was in Sommer & Co ..... interest

that Lendata owe as little as possible to

Pennywise, because that gave Mr Saint greater

control over the destiny of Lendata; he would

be beyond the reach of Pennywise -

Sommer 12 12/3/93

if it was structured as a loan from Sommer & Co to

Lendata, as opposed to a loan from Sommer & Co to

Pennywise. The second reason was that:

If Mr Saint was going to put money on the

table at that point in time, he was better off

structuring it as a loan to Lendata rather

than, advancing monies to Pennywise direct -

In my submission, those two documents clearly indicate that the substance of the transaction as

well as the form of the transaction was that there
was to be a loan from Sommer & Co to Lendata,

acknowledged by all that those moneys would then be

on paid to Pennywise in reduction of the then

existing debt owing by Lendata to Pennywise.

In my submission, it would not have been

possible for any of those three parties to then

subsequently come back and suggest that Lendata was

not liable to Sommer & Co in respect of the

indebtedness thereby created.

DEANE J:  Mr Morcombe, can you just remind us of the flow of

money?

MR MORCOMBE:  Yes, Your Honour. The flow of money was

direct from Sommer & Co to Pennywise upon .a written

authority given by Lendata to Sommer & Co

requesting that those moneys be paid direct to

Pennywise.

DEANE J: And, what, it was done by?

MR MORCOMBE:	By cheque, Your Honour.
DEANE J:	By a cheque made out to Pennywise?

MR MORCOMBE: In fact I think there were two cheques, but

yes. The $1 million was paid by cheque direct from

Sommer & Co to Pennywise.

DAWSON J:  Now that being so, you talk about the structuring

of the loan, but money was paid to Pennywise.

MR MORCOMBE: In that sense, yes, Your Honour.

DAWSON J:  And it was paid in consideration of, in the sense

of because of, the charge which was given by

Pennywise.

MR MORCOMBE: In that sense, yes, Your Honour.

DAWSON J: That is what the section says.

MR MORCOMBE: With respect, Your Honour, it is a question of

looking not only at the flow of funds. In my

submission it is not possible to analyse the matter

Sommer 13 12/3/93

by ignoring the fact that Sommer & Co deliberately

set this up as the creation of an indebtedness.

DAWSON J: That may be so, but the section does not say

there has to be a loan contract between Pennywise

and the payer.

MR MORCOMBE: That is true, Your Honour, but in my

submission, if one looks at the substance then it

is clear, as a result of the -

DAWSON J: That is what I find strange. The substance was,

the fact was, that the money went to Pennywise.

The fact was that in return Pennywise gave a

charge.

MR MORCOMBE:  Your Honour, that brings me back

DAWSON J:  The form was what you talk about structuring the loan, is it not. Or am I quite wrong in

approaching it that way?

MR MORCOMBE:  Your Honour, that brings me back to the very

first point I made, that - - -

DEANE J:  Mr Morcombe, before you get back to it, that might

be a convenient time for us to take an adjournment

for lunch what means, if it is not inconvenient to

you and Mr Sulan, we will adjourn now until a

quarter past one Adelaide time, quarter to two

Canberra time.

AT 1.17 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 1.46 PM:

DEANE J: Yes, Mr Morcombe?
MR MORCOMBE:	If it please Your Honours.  Could I go back to

Your Honour Justice Dawson's question to me,

because I suggest, with respect, it fortifies my

earlier submission that the complaint of the

applicant in this case is that there was a wrong
application of the facts to the law and, in my
submission, there is no dispute as to the law and
the approach of the courts, it is simply a question
of how one applies the principle that one looks to

the substance of the case when analyzing the facts.

Given the common application in Australia of

taxation on deposits in bank accounts, it is not

Sommer 14 12/3/93

uncommon for certain parties to be bypassed in

order to avoid the multiple deposit of moneys, and

I rhetorically ask, "Could the legal result really

be any different if Sommers had drawn a cheque to to Pennywise?". In my submission it had exactly

the same effect. Lendata, in any event, would end

up indebted to Sommer & Co, and the fact that the

cheque went direct to Pennywise on the written

authority of Lendata, in my submission, makes no

difference to the substance of the case. A part of

the substance of the case was to reduce the

indebtedness of Lendata to Pennywise. That could

not have been achieved if the substance of the case

was a payment from Sommer & Co to Pennywise.

Your Honours, the new section which comes into effect in June refers to the word "advance" as

opposed to the word "payment", and on Your Honour

Justice Dawson's question it may be that there is some distinction in the case at bar according to

whether the word used is "advance" or "payment".

If it please, those are my submissions.

DEANE J: Thank you, Mr Morcombe. Yes, Mr Sulan?

MR SULAN:  Your Honours, I have one short point and that is

that in this case there was no evidence that

Sommers ever knew that there was any indebtedness

between Lendata and Pennywise, and if one comes

back to intention and purpose then, in our

submission, it could never have been the intention

of Sommers to reduce the indebtedness of Lendata to

Pennywise. They are my submissions, thank you.

DEANE J:  The decision of the Full Court in this case rested

upon that court's view of the particular facts.

Notwithstanding what has been said by Mr Sulan QC

on behalf of the applicant, the Court does not consider that an appeal would give rise to any
question of construction of general importance or

any question of general principle. Accordingly,

the application for special leave to appeal is

refused.

MR MORCOMBE: If it please, I seek costs.

DEANE J:	Mr Sulan?
MR MORCOMBE:	Yes, I have no submission.
DEANE J:	The application is refused with costs.

AT 1.50 PM THE MATTER WAS ADJOURNED SINE DIE

Sommer 15 12/3/93