Varma v Varma

[2010] NSWCA 358

Reported Decision: 81 ACSR 209

New South Wales

Court of Appeal

CITATION:	Varma v Varma [2010] NSWCA 358
HEARING DATE(S):	6 December 2010
JUDGMENT DATE:	16 December 2010
JUDGMENT OF:	McColl JA at 1
DECISION:	1. That the current interlocutory undertakings entered into by consent on 9 August 2010 be varied so as to allow Taj Food Sales Pty Ltd, the third respondent, (subject to the right of the appellant, if it exists, following the appeal or in any new trial to recover from the first respondent such part of the dividend paid to him, and to recover from the second respondent such part of the dividend paid to him), to declare and to pay a dividend to the first, second and fourth respondents, in accordance with their respective shareholding rights, a sum not exceeding in total $240,000, providing always that the said dividends must only be declared and paid out of the net profit of the third respondent. 2.Costs of the application be costs in the appeal. [The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
CATCHWORDS:	Procedure - appeal - dispute as to ownership of shareholding in company - application for declaration of dividend to enable respondents to fund costs of appeal
LEGISLATION CITED:	Corporations Act 2001 (Cth) Legal Profession Act 2004 (NSW)
CATEGORY:	Procedural and other rulings
CASES CITED:	Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685 Kalifair Pty Ltd v Digi-Tech (Australia) Ltd [2002] NSWCA 383; (2002) 55 NSWLR 737 New South Wales Bar Association v Stephens [2003] NSWCA 95; (2003) 52 ATR 602 Power v Ekstein [2010] NSWSC 137 Re D G Brims & Sons Pty Ltd (1995) 16 ACSR 559 Re Middle Harbour Investments Ltd (in liq) (Court of Appeal, 15 December 1976, unreported) Varma v Varma [2010] NSWSC 786 Varma v Varma [2009] NSWSC 1086 Whitlam v Australian Securities and Investments Commission [2002] NSWCA 312; (2003) 43 ACSR 73
PARTIES:	Gautam Varma - First applicant Arjun Varma - Second applicant Taj Food Sales Pty Ltd - Third applicant Estate of the Late Sah Dev Varma - Fourth applicant Parveen Varma - Respondent
FILE NUMBER(S):	CA 2009/289939
COUNSEL:	Mr EG Peterson for the Applicants (First, Second and Fourth respondents to the appeal) Mr BW Rayment QC with Mr RW Washington for the Respondent (Appellant)
SOLICITORS:	Hunt and Hunt Lawyers for the Applicants (First, Second and Fourth respondents to the appeal) Hall Partners for the Respondent (Appellant)
LOWER COURT JURISDICTION:	Supreme Court
LOWER COURT FILE NUMBER(S):	SC 2009/289939
LOWER COURT JUDICIAL OFFICER:	Ward J
LOWER COURT DATE OF DECISION:	16 July 2010
LOWER COURT MEDIUM NEUTRAL CITATION:	[2010] NSWSC 786

2009/289939

McColl JA

16 December 2010

Varma v Varma

Judgment

1 McCOLL JA: Parveen Varma brought proceedings in the Equity Division claiming that her late father-in-law, Mr Sah Dev (“Sid”) Varma, promised that as and from his death or upon and after his death all the shares in a family company, Taj Food Sales Pty Ltd (“TFS”), would belong to her (the “principal proceedings”). On 16 July 2010 Justice Ward held that she was not satisfied that Parveen had established that Sid made any alleged promise or representation to that effect and, accordingly, dismissed the proceedings: Varma v Varma [2010] NSWSC 786.

2 Parveen has appealed from that decision. The appeal is listed for hearing on 28 and 29 March 2011.

3 The defendants to the principal proceedings and the respondents to the appeal, are Gautam and Arjun Varma, TFS and the Estate of Late Sah Dev Varma (the “Estate”). As did the primary judge, and without any disrespect to the deceased or the individuals who are parties to the principal proceedings, for ease of identification, I propose to refer to them by their first names where appropriate.

4 On 28 July 2010 the primary judge ordered Parveen to pay the defendants’ costs of the principal proceedings up to and including 19 February 2010 on a party/party basis and to pay Arjun’s costs from 19 February 2010 on an indemnity basis. I note that although the applicants’ solicitors assert that her Honour ordered Parveen to pay both Gautam and Arjun’s costs from 19 February 2010 on an indemnity basis, the order as filed, only refers to the “second defendant’s [Arjun’s]” costs from that date. It was not suggested that anything turned on that for the purposes of the present application.

5 By notice of motion filed 19 November 2010, the applicants, Gautam, Arjun and the Estate, the first, second and fourth respondents to the appeal (and the corresponding defendants in the principal proceedings) seek the following relief:

“1. An order that the current interlocutory undertakings entered by consent on 9 August 2010 be varied so as to allow the Third Respondent to declare and to pay a dividend to the First, Second and Fourth Respondents, in accordance with their respective shareholding rights, a sum not exceeding in total $240,000, or such other maximum amount as this Honourable Court sees fit, providing always that the said dividends must only be declared and paid out of the net profit of the Third Respondent.
2. Further or in the alternative, an order pursuant to section 98 of the Civil Procedure Act 2005 NSW (“the Act”), or, alternatively, pursuant to the Court’s inherent jurisdiction, that pending the assessment of the costs orders made in favour of the First and Second Respondents (“the Respondents”) against the Appellant in earlier Supreme Court proceedings numbers 4300 of 2009, 101455 of 2009 and 4308 or 2009 (“the costs”) that the Appellant pay to the Respondents the sum of $180,000 or such other amount as this Honourable Court sees fit, on account of the costs.
3. Further or in the alternative, an order pursuant to section 67 of the Act and further or in the alternative pursuant to Part 12 rule 12.10 of the Uniform Procedure Rules 2005 NSW that the appeal be stayed pending payment by the Appellant to the Respondents of the sum of $180,000 or such other amount as this Honourable Court sees fit, on account of the costs.
4. Such other further or consequential relief as this Honourable Court sees fit.”

Background

6 Gautam and Arjun are the executors of the Estate. Gautam is the Managing Director of TFS. Arjun and Parveen are also directors. All individuals are also shareholders of TFS. Gautam and Arjun each have a 33 per cent shareholding. They acquired those interests by share transfer from Sid in 2008: primary judgment (at [228]). Sid retained a 33 percent holding which is now an estate asset pending distribution subject, I assume, to the outcome of the appeal. Parveen owns one ordinary share in TFS which represents less than 0.01 per cent of its issued share capital.

7 In addition to the question whether Sid had made the promise Parveen alleged, the question arose at trial as to whether an express trust was created pursuant to which he agreed to hold the shares in TFS during his lifetime in his own name and, as at the date of his death, on trust for Parveen and, if so, whether when they acquired their shares in 2008, Gautam and Arjun knowingly participated in or procured a breach of that trust and/or took their shares as volunteers, or, if not as volunteers, with notice of the Parveen’s alleged equitable interest in or claim to the shares: primary judgment (at [16]).

8 The principal proceedings were commenced in 2009. In October 2009 on application by Parveen, Rein J granted an interlocutory injunction restraining Gautam and Arjun from encumbering, selling or transferring their shares in TFS and from taking any steps to remove Parveen from her position as director for any reason other than that relating to her performance or lack of performance as a director. His Honour otherwise refused Parveen’s application for an interlocutory injunction which included an application to restrain the defendants to the principal proceeding from exercising any rights attaching to their shareholding in TFS: Varma v Varma [2009] NSWSC 1086.

9 The application for wider interlocutory relief appears to have been renewed during the trial. The primary judge recorded:

“275 At the conclusion of the hearing (upon Parveen, on the one hand, and Gautam and Arjun, on the other hand, through their respective counsels giving the usual undertaking as to damages and also giving an undertaking not to communicate to third parties as to the said undertakings), certain undertakings were given on a ‘without admissions’ basis. Those undertakings (for the period up to judgment and except as otherwise ordered by the court) related to the borrowing of funds from the company; the issue of any cheque or payment otherwise than in the ordinary course of its ordinary business (which business includes the purchase and negotiating of US dollars and other foreign exchange and import letters of credit for the purposes of the grain trading business of the third defendant); the disposal of any of the assets of the company or entry into any transaction otherwise than in the ordinary course of its ordinary business; the payment of dividends; and the increase of the salaries or benefits referrable to their employment or services rendered by them to the company. (This followed evidence that there had been unsecured borrowings raised by Gautam and Arjun from the company in the period following prior to this hearing and after an interlocutory hearing before Rein J in which Parveen had sought injunctive relief to restrain, among other things, conduct of that kind.)”

10 On 9 August 2010 Gautam, Arjun and Parveen through their respective counsel gave undertakings and consented to orders made by Hodgson JA. The undertakings and matters noted by were, relevantly:

“Upon the Appellant and the First and Second Respondents, through their respective counsel, giving the usual undertaking as to damages and also giving the undertaking to the Court not to communicate to third parties as to the following undertakings:
The Appellant and First and Second Respondents give the following undertakings to the Court on a ‘ without admissions’ basis:
Up to judgment in the Appeal and in this matter and except as otherwise ordered by the Court, the Appellant and the First and Second Respondents undertake:
…
4. Apart from the declaration and payment of an interim or final dividend of $300,000 which is permitted, and the Appellant and the First and Second Respondents each agree is permitted (subject to the right of the Appellant, if it exists, following the Appeal or in any new trial to recover from the First Respondent such part of the dividend paid to him, and to recover from the Second Respondent such part of the dividend paid to him), not to cause the Third Respondent to enter into any payment of dividend without the written consent of the Appellant, the First and Second Respondents and all of them without the prior leave of the Court.
…
The Court :
…
2. Notes that in consideration of the undertakings given by the Appellant, the First and Second Respondents will not make application that the Appellant provide security for the costs of the Appeal…”

11 These undertakings substantially reflected the undertakings into which the parties entered by consent at the conclusion of the trial, save for the express reference to the permitted dividend and its recovery and other matters particular to the appeal.

12 Gautam and Arjun bring the present application to vary the interlocutory regime agreed on 9 August 2010 so that they can receive a further dividend payment in order to pay outstanding and ongoing legal costs and disbursements.

Outstanding costs orders

13 Prior to Parveen commencing the principal proceedings, she commenced three other actions referred to respectively as the “tutor suit”, the “Corporations List suit” and the “Probate suit”. These proceedings were discussed in the primary judgment (at [276] ff).

14 Mr Thomas Bray, an administrator ad litem appointed to the Estate discontinued the tutor suit. On 16 July 2010 Ward J made orders in that suit including an order that Parveen pay Gautam, Arjun and TFS’s costs of the proceedings from their commencement up to and including 14 May 2009 on a party/party basis, that from 15 May 2009 Parveen, Gautam, Arjun and TFS bear their own costs of the proceedings and that each of them be entitled to reimbursement out of the Estate for costs paid by them in relation to Mr Bray’s costs of the proceedings: Varma v Varma [2010] NSWSC 785.

15 Parveen discontinued the Corporations List suit and the Probate suit with Gautam and Arjun’s consent on the basis that she pay their costs.

16 The applicants’ solicitors have had bills of costs prepared in relation to the tutor, the Corporations List and the Probate suits. The bills of costs were served in assessable form on Parveen on 27 October 2010. The total amount of those bills of costs is $255,104.94. It does not appear Parveen has yet forwarded any objections to the bills of costs to the applicants or applied for a costs assessment.

Events since 9 August 2010 undertakings

17 In accordance with the consent undertakings, TFS declared a dividend in the sum of $300,000 payable as to $100,000 each to the applicants.

18 According to an affidavit sworn by Ms Tronson, the applicants’ solicitor, Gautam and Arjun have disbursed the dividends they received to pay personal loans taken out to pay legal fees, to pay outstanding legal fees and disbursements including counsels’ fees and to secure the retention of senior counsel for the appeal. Ms Tronson also deposes that Gautam and Arjun have instructed her that they have not had any recourse to the Estate’s funds save to the extent that the primary judge’s decision of 16 July 2010 permitted them to be reimbursed out of the Estate for costs they had paid to Mr Bray (approximately $20,000) and to pay a solicitor’s invoice associated with obtaining probate ($8,112,34).

19 Ms Tronson also deposes that:

(a) the current outstanding professional costs and disbursements owing by Gautam and Arjun to her firm in relation to the proceedings previously filed by Parveen are approximately $249,000 rounded down;

(b) the current outstanding disbursements for the various proceedings filed by Parveen including counsels’ fees are approximately $225,002.21;

(c) the current estimated costs and disbursements for the preparation of the appeal are in the vicinity of at least $200,000.

The last estimate may be slightly high insofar as it is based on a three day hearing estimate whereas the appeal has been set down for two days.

20 Mr E Peterson, who appears for the applicants, informed me that in the event I permit TFS to declare and pay a dividend to the applicants as sought in the motion, that sum will be divided three ways between each applicant in accordance with their respective shareholdings.

Evidence on the application

21 Gautam and Arjun’s sole source of income is the salary they receive from TFS. Gautam lives in a house owned by the company. Arjun owns his house subject to a home and a personal loan mortgage.

22 To date Gautam and Arjun have funded the costs associated with the principal proceedings primarily by raising personal loans from banks, by the use of a dividend of $60,000 each paid by TFS in about October 2009 and by a shareholder’s loan of $150,000 each from TFS in January 2010. As I have said, they used the dividend of $100,000 declared after the August unertaking to pay off the personal bank loans, legal fees and to place monies in trust with their solicitors as security for senior counsel’s fees for appearance on the appeal. The balance will shortly also have to be put into that trust account as further security for senior counsel’s fees. As I have also said, they have paid Mr Bray the amount owed to him. They have been reimbursed for that amount by the Estate.

23 To date Gautam and Arjun have paid at least $590,000 in legal fees, associated costs and disbursements with respect to the four sets of proceedings Parveen has brought.

24 A dispute arose during the hearing as to whether Gautam and Arjun had, despite Parveen’s objection, disbursed dividends of $160,000 which had been paid to the Estate. To resolve that dispute, the applicants tendered a copy of the Estate’s bank account statement showing a credit balance of $151,682.35 as at the end of September 2010. The only amounts which have been withdrawn from the account since the August undertakings are the two sums earlier referred to to pay the costs of obtaining probate and to reimburse Mr Bray. I am satisfied that Gautam and Arjun have not otherwise disposed of the Estate’s funds. They have, in effect, acceded to Parveen’s objection to them having recourse to Estate funds for the purpose of the Estate paying its costs of resisting the appeal.

25 Gautam has annexed draft financial statements to his affidavit for TFS for the financial year ending 30 June 2010. According to those draft accounts, TFS’s profit before income tax (“PBIT”) for that financial year is $793,145.33. TFS’s retained earnings for that financial year, according to the draft statements, are $4,264,260.40.

26 In her affidavit of 6 August 2010 read in the present application, Parveen was unable to say that TFS was not then in a position to declare and pay a dividend. She referred however to correspondence annexed to her affidavit which passed between herself and Gautam and Arjun in late 2009. In that correspondence she complained about their then proposal to declare dividends for the year ending 2008. Her complaint appeared primarily to relate to TFS’s cash balance of $1.6 million and amounts it owed its bankers on letters of credit which, she suggested, placed its overdraft facility under maximum demand. Gautam and Arjun responded to that correspondence in a lengthy letter in which they sought to disabuse Parveen of her understanding of the quantum of TFS’s overdraft facility and its then utilisation as well as her understanding of how dividends could be paid.

27 Neither counsel who appeared before me suggested that I should seek to resolve this debate. It is sufficient to note, in my view, that TFS has sufficient PBIT from which a dividend of $240,000 can be paid, as well as substantial retained earnings from which any dividend could be paid: s 254T, Corporations Act 2001 (Cth).

28 In her most recent affidavit of 2 December 2010, Parveen expresses concern that Gautam and Arjun have not proffered any security for the monies they have taken to date, and seek further to take by way of dividends, pending the outcome of the appeal. She expresses concern that any further distribution by way of dividends will dissipate TFS’s assets. She also says that if she was ordered to pay the amount of $180,000, representing some part of the amount the applicants may recover pursuant to the costs orders in their favour in relation to the tutor, Corporations List and Probate suits, she would not be able to fund the appeal.

Submissions

29 Mr B W Rayment of Queens Counsel, who appears with Mr W Washington for Parveen, opposes the application.

30 He submits first, that, by analogy with the principles applied in oppression suits, the court should not permit TFS’s funds to be used to defend those who constitute, in effect, the majority shareholders. He points out that the evidence discloses (even if the monies paid to the Estate are not taken in account) that, to date, Gautam and Arjun have applied $620,000 received from TFS to defray costs associated with the principal proceedings. Secondly, he submits that order 2 made on 9 August 2010 precludes the applicants from applying for order 3 in their notice of motion. Thirdly, he argues that the bills of costs submitted by the applicants in respect of the tutor, Corporations List and Probate suits are yet to be assessed pursuant to the costs assessment provisions of the Legal Profession Act 2004 (NSW). He drew attention to s 354 and s 355 of that Act which provide in substance, that where an application for a costs assessment has been made that process must be allowed to proceed to completion before any monies on account of those costs can be required to be paid into court or before any proceedings may be commenced or maintained to recover such costs. Fourthly, he contends that the amount permitted for dividends in the 9 August undertakings ought to have covered all anticipated costs and that the evidence did not disclose that anything unexpected had occurred in terms of costs being incurred since the payment of that dividend was agreed. Fifthly, he pointed out that the applicants did not propose to provide any security for the dividends.

31 Mr Peterson submitted that, as successful parties at first instance, the application should be approached on the basis that the applicants were entitled to retain their shareholding in TFS and, therefore, to receive dividends. He accepted that should the bills of costs submitted in relation to the other three sets of proceedings be assessed, that assessment would not inevitably lead to the applicants recovering the full amount of the $255,000 claimed but, contended that the amount of $180,000 the applicants asked the Court to order Parveen to pay on account of those costs was a reasonable assessment of the amount they might recover from that process. Next, he points out that each undertaking given on 9 August 2010 expressly contemplated an application for variance with the leave of the court. He pointed out that since the undertakings were given there had been further developments insofar as a hearing date has been appointed, a hearing time estimated and the three bills of costs prepared. He frankly acknowledged that in the event the appeal succeeded any reimbursement of dividends declared to date (and possibly declared as a result of this application) would have to be repaid to TFS by instalments. He submitted that that fact should be balanced against the fact that Parveen herself deposed that, in substance, she may be unable to pay costs payable by her in the event the appeal fails when regard is had to her evidence that payment of the $180,000 sought would compromise her ability to prosecute the appeal.

32 Both parties addressed the arguability of the appeal. Mr Rayment submitted that the primary judge prima facie appeared to accept Parveen’s account of the promise she said Sid made and also appeared to accept the evidence of third parties who said they had also heard the promise. Her Honour had, however, according to Mr Rayment, not acceded to Parveen’s claim because of the need for caution as to the irrevocability of testamentary promises and, in making findings of fact about oral promises said to have been made comparatively early in time.

33 On the other hand, the applicants drew attention to the fact that Sid’s words and actions between 1990 and 2008 were inconsistent with the alleged promise. They also pointed out that throughout that period, and particularly in 2008 when Gautam and Arjun acquired their shares in TFS, Parveen had behaved in a manner inconsistent with any alleged agreement: see primary judgment at ([145] – [146]).

Consideration

34 Prima facie, a successful party is entitled to the benefit of a judgment he or she has obtained: Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685 (at 694), approving Mahoney JA’s statement of Re Middle Harbour Investments Ltd (in liq) (Court of Appeal, 15 December 1976, unreported); Kalifair Pty Ltd v Digi-Tech (Australia) Ltd [2002] NSWCA 383; (2002) 55 NSWLR 737 (at [28]). That principle is ordinarily invoked when an appellant seeks a stay of the judgment below. It is equally applicable in my view where, as here, Parveen seeks to oppose the applicants having access to the benefit of their shareholding in TFS to which the primary judgment presently entitles them.

35 This is not a case, in my view, where the principles which prevent company funds being used to defend majority shareholders in oppression proceedings have direct application. Those principles, as recently discussed by Austin J in Power v Ekstein [2010] NSWSC 137; (2010) 77 ACSR 302 (at [111] ff) appear to be invoked in circumstances where the majority shareholders are having direct recourse to company funds to defend such proceedings. As Byrne J said in Re D G Brims & Sons Pty Ltd (1995) 16 ACSR 559 (at 591 - 592) (in a passage applied by Austin J (at [112]) and in most of the decisions to which his Honour refers (at [113]) such expenditure “infringes the basal principle that ‘the powers, and the funds, of a company may be used only for the purposes of the company’.”

36 The applicants do not directly seek to use TFS’s funds to defend the appeal. Rather they seek to use their entitlement as shareholders to receive a dividend to which they would, absent the current proceedings, be otherwise entitled. They recognise that they will be obliged to reimburse TFS for those dividends should rhe appeal succeed. In such a case, in my view, the principles Mr Rayment sought to invoke do not preclude me, if otherwise satisfied that it is appropriate, from varying the undertaking as sought in the motion.

37 Nevertheless, it cannot be gainsaid that the issue on appeal is whether the applicants are entitled to retain the shareholdings which are the source of TFS’s power to declare dividends in their favour. Gautam and Arjun do not offer security for repayment of the dividend they seek now to have declared in their favour. The position is less concerning insofar as the Estate is concerned because Gautam and Arjun have as earlier explained, not disbursed the dividends otherwise paid to it and, as I understand, in the event that a dividend is declared, do not propose to disburse that part of the dividend which the Estate would receive.

38 Insofar as Gautam and Arjun have received dividends to date, it should be noted that substantially all of those ($420,000) were received when they were under no restraint from seeking payment of dividends from TFS. Further, the August undertakings were agreed without Gautam and Arjun being required to provide any security for the dividends then permitted to be paid.

39 Two factors militate against Parveen being ordered to pay the sum of $180,000 the applicants seek in paragraph 2 and 3 of their motion. The first and most obvious one is that she does not have the money and has deposed that if she were required to pay it, her ability to prosecute the appeal will be frustrated. Secondly, insofar as paragraph 3 of the notice of motion is concerned, Gautam and Arjun, at least, are precluded by their agreement in August that in consideration of Parveen’s undertakings they would not seek security for costs. Thirdly, although, as I have said, it is not apparent that any application for a costs assessment has yet been made, I would anticipate that such an application will shortly be made. In such event the provisions of the Legal Profession Act to which I have referred would preclude ordering Parveen to pay any amount on account of those legal costs.

40 The situation, therefore, is that there is an impasse between the applicants recovering costs indisputably owing to them and thus frustrating Parveen’s ability to prosecute the appeal and, in the face of their not being able to receive a further payment by way of dividend, their ability to defend the appeal being frustrated.

41 In substance the effect of Parveen’s opposition to the application is that she is asking the Court to stay the judgment below. In such circumstances the overriding principle is to determine what the interests of justice require: New South Wales Bar Association v Stevens [2003] NSWCA 95; (2003) 52 ATR 602 (at [83]) per Spigelman CJ (Meagher and Sheller JJA agreeing). It is, as Mr Rayment clearly accepted, of relevance in that consideration to take into account Parveen’s prosects of success although not to engage in a detailed consideration of the merits of the appeal: Kalifair (at [18]); Whitlam v Australian Securities and Investments Commission [2002] NSWCA 312; (2003) 43 ACSR 73 (at [39]) per Giles JA.

42 The primary judgment is lengthy as one might expect in a case which turned upon the consideration of events which had happened over the course of close to two decades. As one might expect Mr Rayment’s submissions attractively painted a picture of the substantial merits of the appeal while, on the other hand, Mr Peterson’s submissions pointed somewhat compellingly to a pattern of behaviour over the period following the alleged making of the promise of conduct both on Sid’s and Parveen’s parts inconsistent with it having been made. It is not possible for me to say that there is no serious question for determination on appeal, nevertheless it appears to me that I must give weight to the fact that the primary judgment was in the applicants’ favour: Alexander (at 694).

43 In such circumstances, it is apparent, that the only possible source of funds to allow the applicants to prosecute their defence to the appeal is to permit TFS to declare a dividend as sought.

44 Accordingly I propose to make the first order sought in the notice of motion. I will not, however, do it in precisely the terms sought as they did not reflect the “right” of recovery which the August undertakings conferred on the appellant. That “right” should be preserved.

45 The notice of motion did not seek a costs order. In my view it is appropriate that the costs of the application be costs in the appeal.

Orders

46 I make the following orders:

1. That the current interlocutory undertakings entered into by consent on 9 August 2010 be varied so as to allow Taj Food Sales Pty Ltd, the third respondent (subject to the right of the appellant, if it exists, following the appeal or in any new trial to recover from the first respondent such part of the dividend paid to him, and to recover from the second respondent such part of the dividend paid to him), to declare and to pay a dividend to the first, second and fourth respondents, in accordance with their respective shareholding rights, a sum not exceeding in total $240,000, providing always that the said dividends must only be declared and paid out of the net profit of the third respondent.

2. Costs of the application be costs in the appeal.

**********