Re Christopher Martin King (Deceased; Official Trustee in Bankruptcy v RZO Pty Ltd [1997] FCA 35 (6 February 1997)

C A T C H W O R D S

BANKRUPTCY - Executor of deceased estate carrying on business formerly conducted by deceased - not authorised to do so by will - on legal advice, executor ceased carrying on the business about six months after death of deceased - entered into arrangement with would- be purchaser of business for advance of moneys to pay estate debts - advances to be set off against purchase price if business purchased - lender then used business assets of estate to carry on similar business - administration of estate delayed - deceased's children commenced testator's family maintenance proceedings - those proceedings settled - order made for estate to be administered in bankruptcy - lender lodged proof of debt for advances - whether entitled to subrogation to any right of executor to indemnity - whether executor was carrying on business for purpose of realisation - whether executor entered into loan arrangement to preserve assets of the business - whether executor entitled to indemnity in respect of debts incurred - challenge to trial judge's factual findings - those findings based partly on assessment of witnesses' reliability - whether lender's proof should be reduced to take into account use of assets - no agreement to pay for such use during relevant period - lender not charging or claiming interest in moneys advanced.

Vacuum Oil Co Pty Ltd v. Wiltshire [1945] HCA 37; (1945) 72 CLR 319

Benmax v. Austin Motor Co Ltd [1955] AC 370

Watt or Thomas v. Thomas [1947] AC 484

Abalos v. Australian Postal Commission [1990] HCA 47; [1990] 171 CLR 167

Warren v. Coombes [1979] HCA 9; (1979) 142 CLR 531

Devries v. Australian National Railways Commission [1992] HCA 41; (1993) 177 CLR 472

Rennie v. The Commonwealth of Australia (1995) 61 FCR 351

RE CHRISTOPHER MARTIN KING (DECEASED); OFFICIAL TRUSTEE IN

BANKRUPTCY v. RZO PTY LTD

No. TG 27 of 1996

BURCHETT, CARR & KIEFEL JJ.

PERTH (Heard in Hobart)

6 FEBRUARY 1997

IN THE FEDERAL COURT OF AUSTRALIA )

TASMANIA DISTRICT REGISTRY ) No. TG 27 of 1996

GENERAL DIVISION )

On appeal from a judge of the Federal Court of Australia

RE: CHRISTOPHER MARTIN KING

(DECEASED)

OFFICIAL TRUSTEE IN

BANKRUPTCY

Appellant

AND: RZO PTY LTD

Respondent

CORAM: BURCHETT, CARR & KIEFEL JJ.

PLACE: PERTH (Heard in Hobart)

DATE: 6 FEBRUARY 1997

MINUTES OF ORDERS

THE COURT ORDERS THAT:

1. The appeal be dismissed.

2. The appellant pay the respondent's costs of the appeal.

Note: settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA )

TASMANIA DISTRICT REGISTRY ) No. TG 27 of 1996

GENERAL DIVISION )

On appeal from a judge of the Federal Court of Australia

RE: CHRISTOPHER MARTIN KING

(DECEASED)

OFFICIAL TRUSTEE IN

BANKRUPTCY

Appellant

AND: RZO PTY LTD

Respondent

CORAM: BURCHETT, CARR & KIEFEL JJ.

PLACE: PERTH (Heard in Hobart)

DATE: 6 FEBRUARY 1997

REASONS FOR JUDGMENT

THE COURT:

Introduction

This is an appeal from orders made by a judge of this Court, Heerey J, upon review [under s.104 of the Bankruptcy Act 1966 (Cth) ("the Bankruptcy Act 1912 ")] of the appellant's decision, as trustee of the abovementioned bankrupt estate, to reject the respondent's proof of debt in the sum of $113,444.00. His Honour reversed that decision and ordered the appellant to admit the respondent's amended proof of debt in the sum of $128,163.58.

Factual Background

The following factual background is taken largely from the learned trial judge's reasons for judgment. Mr Christopher Martin King ("C.M.King") carried on business as a sole proprietor until his death on 16 September 1991. The business comprised the hiring out of lighting and sound equipment, and the like, together with marquees. C.M.King conducted the business from premises which he owned at 117 Lansdowne Crescent, West Hobart . He also rented some premises at Salamanca Place which were used for storage. Superficially, it appeared that the business was profitable and that C.M.King was a man of substance. This turned out not to be the case.

By his will dated 9 July 1991 C.M.King appointed his brother Mr Nicholas John King ("Mr King") as sole executor of his will and sole beneficiary of his estate. The will did not contain any express authority for Mr King to carry on the business.

Mr King had worked as an employee in his brother's business for some (unspecified) time, but had little awareness of its financial position. The accounting records were in a very poor state. After his brother's death, Mr King encountered what he described as an "avalanche of debts". Mr Anthony Miller had been employed in the business by C.M.King since March 1990. He continued to work in the business after C.M.King's death. Mr Miller and Mr King contacted creditors and asked, among other things, that they freeze all accounts of the estate and open new accounts under the name "N.J.King as Trustee of the Estate of C.M.King". The income of the business was used to meet ongoing operating expenses and interest accruing on the debts of C.M.King, including banking accommodation from the Australia and New Zealand Banking Group Ltd.

In February or March 1992 Mr King called for tenders for the purchase of the business. The best offer received was $7,800.

In March 1992 Mr King told Mr Miller that he was unable to pay the debts and liabilities of the estate and asked for assistance. A meeting took place on 26 March 1992 at which Mr King told Mr Miller that the business would cease trading at the end of the month.

At about the same time, C.M.King's son and daughter gave notice that they would commence proceedings for further provision out of their father's estate under the Testator's Family Maintenance Act (Tas). Their applications were filed in the Supreme Court of Tasmania on 15 and 21 July 1992 respectively.

Mr Miller arranged for the acquisition of a company for the purpose of acquiring the assets of the business formerly carried on by C.M.King. That company is the present respondent RZO Pty Ltd ("RZO"). Its directors were Mr King, Mr Douglas Edwards and Mr John Sutherland. Mr Miller was general manager. Mr Edwards had also been an employee of C.M.King. The initial shareholders in RZO Pty Ltd were two companies associated respectively with Mr Edwards and Mr Sutherland. Mr Miller became a shareholder in the company in July 1995.

On about 31 March 1992 Mr King ceased carrying on the business.

On 14 April 1992 a meeting was held at the Lansdowne Crescent premises. Those present were Mr King, Mr Miller, Mr Edwards and Mr Sutherland. The following document was prepared and signed.

"MINUTES

STATEMENT

Nichols [sic] King as Trustee for the Estate of the late CM King has requested financial assistance from RZO Pty Ltd for the Estate as the Estate no longer has any income and that ANZ Bank interest and other ongoing expenses will continue to compound increasing the liabilities of the Estate.

1. It was resolved and agreed by the Directors of RZO Pty Ltd that RZO Pty Ltd will lend money to make payments of accounts for the "Estate of the late Christopher Martin King" of which Nicholas King is the Trustee on the basis of the following terms:

a. RZO Pty Ltd is interested in acquiring the assets of the Estate.

b. In return for services RZO Pty Ltd will have first option on the acquisition of assets of the estate.

c. All payments made to the Estate or its creditors by RZO Pty Ltd will be credited as payments towards the purchase of the Estate assets or repaid as a loan.

d. Nicholas King as Trustee for the Estate will sign the minutes of this meeting as acceptance of these terms.

2. It is noted that Nicholas King acting as Trustee for the Estate of the late CM King accepts the terms as described above and will sign the minutes of this meeting separately as a Director of RZO Pty Ltd and as Trustee for the Estate of the Late CM King.

The minutes are accepted by the Directors of RZO Pty Ltd.

Nicholas John King: (sgd) N J King

Douglas Wayne Edwards: (sgd) D W Edwards

John Finlay Sutherland: (sgd) J F Sutherland

Date: 14/4/92

Signed as Trustee for the Estate of the Late CM King.

Nicholas King: (sgd) Nicholas King

Date: 14/4/92"

From about 14 April 1992 RZO operated a similar kind of business to that previously carried on by C.M.King, although it targeted a different market, namely the concert market, corporate business and conventional theatre. The business of C.M.King had concentrated on marquees, weddings and power distribution and display panels for exhibitions. RZO did not acquire any contracts or work in progress from Mr King. It traded under its own name, although for a few months it used the same telephone numbers as those of the business previously operated by Mr King.

Between 29 April 1992 and 18 July 1993 RZO paid a total of $128,163.58 in respect of what the learned trial judge found to be the debts and liabilities of the estate of C.M.King. Those debts included interest due to the Australia and New Zealand Banking Group Ltd, payments due under vehicle and equipment leases and hire purchase agreements, rental of the Salamanca Place premises and sundry creditors of C.M.King and Mr King in his capacity as executor of the estate.

On 10 June 1992 probate of the will of C.M.King was granted to Mr King on his undertaking not to dispose of any of the assets, other than for the purpose of paying the debts of the estate, for a period of three months from the date of grant.

Payments by RZO under the 14 April 1992 agreement ceased as a result of a further agreement reached at a meeting on 3 June 1993 attended by Mr King, Messrs Miller, Edwards and Sutherland, Mr Hugh Murray of Messrs Archer Bushby (RZO's solicitors) and Mr Robert Whitehouse of Messrs Wise, Lord & Ferguson (RZO's accountants). The minutes of RZO recording the agreement reached on 3 June 1993 are as follows:

"MINUTES

1. It was resolved and agreed by the Directors of RZO Pty Ltd that RZO Pty Ltd would from 3/6/93 cease to lend money to make payments of accounts for the "Estate of the late Christopher Martin King" of which Nicholas King is the Trustee or Executor of the will and a substantial beneficiary.

2. It was resolved and agreed by the Directors that RZO Pty Ltd would with the approval of the Trustee or Executor of the Estate of the Late Christopher Martin King to [sic] initiate the transfer and accept assignment of Esanda Finance leases, asset purchase and hire purchases to aid the estate by reducing the estate's liabilities.

3. It was resolved and agreed by the Directors that RZO Pty Ltd would write to the Trustee or Executor of the Estate of the Late Christopher Martin King advising of the withdrawal of financial backing and requesting formal long term contracts relating to:

(a) The Leasing of the West Hobart Hall

(b) The rental of plant and equipment from the Estate

4. It was resolved and agreed by the Directors that RZO Pty Ltd would endeavour to recover monies paid to the Estate of the late Christopher Martin King totalling approximately $ 115,000 dollars.

5. It was resolved and agreed by the Directors of RZO Pty Ltd that rental monies for the West Hobart property and the Estate plant and equipment may be deducted from the monies already paid to the Estate.

6. The meeting concluded with Robert Whitehouse stating that as he was also the accountant for the Estate of the Late Martin King he would look into the Estate accounts, assets and liabilities in order to ascertain a current financial position.

End of Meeting

The minutes as accepted by the Directors of RZO Pty Ltd.

Nicholas John King: (sgd) Nicholas King

Douglas Wayne Edwards: (sgd) D W Edwards

John Finlay Sutherland: (sgd) J F Sutherland

Date: 3/6/93"

Shortly thereafter, Mr King and RZO reached an agreement whereby RZO leased the Lansdowne Crescent premises from Mr King at a rent of $8,000 per annum plus payment of rates, taxes and electricity, for a period of two years with an option to renew the lease for a further two years. The parties also agreed that RZO would lease the plant and equipment for $15,000 per annum. At first instance, the appellant conceded that the "vast majority" of the moneys due under these agreements had been paid, although much of the plant and equipment and the Salamanca Place premises were not in fact used by RZO.

At various times prior to June 1995, Mr Miller was involved in discussions with the directors of RZO (including Mr King) concerning the purchase of the estate's plant and equipment. Many figures and proposals were canvassed from time to time.

On 15 September 1993 the Testator's Family Maintenance Act 1935 proceedings brought by C.M.King's children were settled. On 13 December 1994 an order was made for C.M.King's estate to be administered under Part XI of the Bankruptcy Act. On 13 June 1995, RZO agreed to purchase the estate's plant and equipment for the sum of $33,095. The basis of this figure was a valuation by an equipment supplier.

On 8 March 1995 RZO lodged a proof of debt which was subsequently amended to the amount of $128,163.58. The quantum of the claim is admitted. On 10 May 1996 the Official Trustee rejected the claim on the grounds that he was not satisfied that RZO had a debt provable in the estate, that there was insufficient evidence available to determine the nature of any contractual relationship between RZO and Mr King as executor of the deceased estate, that any debt might more properly be described as a debt owing by Mr King and that, in the alternative, any payments made by RZO were payments properly made for the use of the assets of the estate from time to time. On 31 May 1996, RZO applied to this Court for review of the Official Trustee's rejection of its proof of debt.

The Decision at First Instance

In summary, the learned trial judge's conclusions were as follows:

. that the minutes of 14 April 1992 constituted a valid contract between RZO and Mr King as trustee of his late brother's estate. [His Honour construed that document as an agreement to lend such money as might be necessary to pay the debts of the estate, such loans to be set-off against the price for the anticipated purchase of the assets of the estate];

. that despite Mr King's evidence that there was "a gentlemen's agreement" that RZO would pay for the use of the assets of the business, there was no such agreement until 3 June 1993;

. that RZO had, pursuant to the loan agreement, made payments in satisfaction of debts of the business;

. that Mr King was carrying on the business for the purposes of realisation and entered into the loan agreement with RZO to preserve the assets of the business until they could be realised. Had RZO not advanced the money to pay the debts, the creditors would have seized the assets and there would have been nothing to realise;

. the moneys advanced by RZO pursuant to the loan agreement were debts of the estate and RZO was entitled to be subrogated to Mr King's claim to indemnity out of the estate;

. there should not be any set-off for any benefit that RZO might have obtained from use of the assets of the business prior to the agreement of June 1993. (It paid for use thereafter). Between 14 April 1992 and June 1993 there was no agreement for payment by RZO for use of those assets. It was to be inferred that in April 1992 it would not have been expected that realisation of the estate would take as long as it did. His Honour said that:

"Use of the assets by RZO is objectively to be seen as a likely purchaser of assets being given possession prior to completion in return for the (very considerable) advantage it conferred on the estate by agreeing to pay the estate's debts".

The Appeal

Whether there was a loan contract

Although, strictly speaking, this issue was not raised in the appellant's grounds of appeal, it formed the subject of submissions and can be dealt with quite shortly. Accordingly, we propose to do so.

The appellant submitted that the minutes of 14 April 1992 constituted no more than an acknowledgment that funds were to be provided, and was not a valid contract. It was said to be too uncertain to amount to a contract. The terms and conditions relating to repayment, the basis of repayment and the question of purchase of the business were, so it was put, matters for further negotiation. The appellant also submitted that, in the light of all the evidence, his Honour should have held that the document did not truly set out the arrangement between the parties.

The appellant did not submit, in as many words, that the minutes of 14 April 1992 were a sham. The appellant had expressly disclaimed any such contention before the learned trial judge. His Honour construed the minutes of 14 April 1992 as an agreement to lend such money as might be necessary to pay the debts of the estate, such loans to be set-off against the price for the anticipated purchase of the estate's assets. We do not think that it is necessary to decide whether that construction is entirely accurate. Any obligation imposed on RZO might not have been quite so extensive as to extend to loans amounting to the total debts of the estate. In our view, there is no need to decide whether the document imposed a legal obligation on RZO to lend money. It is sufficient, in our opinion, to find that the document was intended to record the terms and conditions upon which moneys were to be advanced by RZO and repaid to it. We would construe the document as evidencing an agreement that to the extent that RZO either lent moneys to Mr King in order to pay creditors of the estate or paid such moneys direct to those creditors, then those moneys were either to be credited as payment towards the purchase by RZO of the assets of the estate or repaid as a loan. That is what the document says. In the absence of express terms relating to repayment, the debt was repayable on demand if the anticipated purchase did not eventuate. The learned trial judge found that RZO did in fact advance moneys. The actual amount is not in issue. The document was signed by Mr King and two other directors of the company in that capacity and also by Mr King as trustee for his brother's estate. His Honour had the benefit of seeing the witnesses being cross-examined on their affidavits. His Honour decided that the minutes of 14 April 1992 should be accepted as reflecting the arrangement made between the parties. We do not think that this Court should on appeal make a different factual finding and go behind the document in which the arrangement was expressed in writing. The document reflects a perfectly sensible commercial arrangement, bearing in mind the doubt whether Mr King would ever be in a position to sell the business to the respondent. There is no reason to doubt that the parties did agree in the terms that they recorded. It must be remembered that there were, at that time, foreshadowed Testator's Family Maintenance Act proceedings. Under Tasmanian law an executor is not bound to distribute the estate of a deceased before the expiration of one year from the death: s.43 of the Administration and Probate Act (Tas). That section preserves the "executor's year" but, of course, would not authorise the carrying on of a business other than for the purposes of realisation.

There was some criticism from the appellant of his Honour's rejection of paragraph 4 of Mr King's affidavit sworn on 1 August 1996. In that paragraph Mr King deposed as follows:

"4. That I did not operate my deceased brother's business for the purpose of selling it. It was my intention to operate his business firstly until the administration of his deceased estate was complete and then as the sole beneficiary because I wish (sic) to retain the business that he had commenced in 1956. I was never advised by the solicitors acting for the deceased estate that I was under an obligation as executor to sell the assets of the deceased estate. I ran the business of the deceased estate as if it were my business and as if it would be my business for-ever."

In our view, the learned trial judge did not err in rejecting this evidence. We have three reasons for that view. The first is that, as his Honour noted (at p.8 of his reasons for judgment) although Mr King was an honest witness, he had understandable difficulties in recollecting detail. A reading of the transcript of his cross- examination readily confirms this. Secondly, it is quite clear from paragraphs 3, 5 and 6 of Mr King's affidavit that in paragraph 4 he was describing his intentions during the period before he was advised (probably in late March 1992 or early April 1992) that he had no right to carry on the business. When, on 14 April 1992, Mr King entered into the transaction with RZO, it was entirely open to his Honour to find that Mr King was engaged in the realisation of the assets of the deceased estate. Thirdly, in our opinion, Mr King's subjective intentions should be treated (as they were by his Honour) as less reliable than an objective assessment and characterisation of precisely what Mr King did in relation to the estate.

The Grounds of Appeal

There were five grounds of appeal. The first three grounds were that the following findings by his Honour were "against the evidence and against the weight of the evidence", namely:

. that Mr King was carrying on the business for the purposes of realisation;

. that Mr King entered into the loan arrangement with RZO to preserve the assets of the business; and

. that the loan arrangement between Mr King and RZO was part of the realisation process.

The fourth ground of appeal was that the learned trial judge erred by failing to take into account or properly take into account certain facts which, so it was submitted, established that RZO conducted the business for its own benefit between April 1992 and July 1993 and not to assist Mr King to preserve the business pending realisation. The fifth ground of appeal comprised a discrete, alternative assertion that the learned trial judge should have reduced RZO's proof of debt to take into account its use of the assets of the estate.

The principles which govern the extent to which an appellate court may reverse a trial judge's findings of fact or draw different inferences from such factual findings are to be found in a well-known line of cases including Benmax v. Austin Motor Co Ltd [1955] AC 370 at p.375 which adopted the relevant portion of Lord Thankerton's speech in Watt or Thomas v. Thomas [1947] AC 484 at pp.487-488 a case which in turn was expressly adopted by McHugh J (with whom each other member of the Bench agreed) in Abalos v. Australian Postal Commission [1990] HCA 47; (1990) 171 CLR 167 at p 178; Warren v. Coombes [1979] HCA 9; (1979) 142 CLR 531 and Devries v. Australian National Railways Commission [1992] HCA 41; (1993) 177 CLR 472. In this Court the principles were recently reviewed in Rennie v. Commonwealth of Australia (1995) 61 FCR 351 at pp. 354-8.

In respect of the first ground of appeal, senior counsel for the appellant relied heavily on paragraph 4 of Mr King's affidavit, which we have set out above. To the extent that his Honour's conclusion that Mr King was carrying on the business for the purposes of realisation may have been based on the learned trial judge's assessment of what Mr King said in the witness box, we do not think that the principles explained in the above cases permit us to interfere.

There was also objective evidence to support his Honour's conclusion that Mr King was only carrying on the business for the purposes of realisation. We refer to the unchallenged evidence that in February or March 1992 Mr King called for tenders for the purchase of the business and the best offer received was $7,800. Mr King, in cross-examination, described the offers then received as "absolutely ludicrous". There was in our view ample factual basis for his Honour's finding.

The same applies, in our opinion, to his Honour's conclusion that Mr King entered into the loan arrangement with RZO to preserve the assets of the business as part of the realisation process. The document itself reflects such a situation. There was evidence that Mr King had received legal advice in about April 1992 that he should not have continued to operate the business. It can be seen from paragraphs 5 and 6 of Mr King's affidavit that Mr King equated "about April 1992" with the date upon which he ceased operating his deceased brother's business. It was common ground that the executor ceased trading on or before 1 April 1992. Mr King was faced with a situation in which several items of plant used in the business were the subject of hire purchase or leasing agreements. He did not have the funds to maintain the payments due under those agreements. The same applied in respect of the leased premises at Salamanca Place. We do not think that his Honour erred in concluding (as he did) that:

"Had RZO not advanced the money to pay debts, the creditors would have seized the assets and there would be nothing to realise."

In the context of negotiations with RZO which were intended to lead to the purchase by that company of the assets of the business, the loan arrangement can readily be seen as having been entered into to preserve those assets as part of a realisation process. It is true that the realisation process took longer than may have been anticipated. However, in our view this was satisfactorily explained by the doubt created by the Testator's Family Maintenance Act proceedings. By June 1993 (some 14 months later) the parties entered into the further arrangements, described above, for RZO to lease the Salamanca Place premises and the plant and equipment. Some three months later the Testator's Family Maintenance Act proceedings were settled. In our opinion, the first three grounds of appeal are not made out.

In relation to the next ground of appeal i.e. that his Honour failed to take into account certain facts which, so it was said, established that RZO conducted the business of the deceased's estate for its own benefit between April 1992 and July 1993, we have two points to make. First, many of the matters which are alleged not to have been taken into account are expressly referred to in his Honour's reasons for judgment. For example the fact that the executor ceased trading on or before 1 April 1992, that RZO used the telephone numbers previously used by the deceased and the executor and, most importantly, that RZO used the assets of the business. Mr King's evidence was that RZO would have used less than 25% of the plant and equipment. Mr Miller's evidence was that the business conducted by RZO was substantially different to that conducted by C.M.King and subsequently by Mr King. His Honour found that RZO operated a similar kind of business but one which targeted a different market to that in which Mr King operated. The appellant relied on evidence that RZO had claimed the moneys outlaid by it under the loan arrangement as allowable deductions. In our view that is a matter between RZO and the Commissioner of Taxation. We fail to see how that matter can alter the legal characterisation of the payments as between Mr King and RZO. A more basic flaw in this ground of appeal is that it seeks to undermine the legal effect and the proper construction of the agreement reached and evidenced by the minutes of 14 April 1992. In our view his Honour did not err in the manner alleged by the appellant.

The conclusion that Mr King entered into the loan arrangement to preserve the assets of the business and as part of the realisation process means, as a matter of law, that he is entitled to an indemnity in respect of the debt incurred to RZO. RZO is, in turn, entitled to subrogation in respect of that indemnity. That debt was not only Mr King's debt but also a debt of the estate: Vacuum Oil Co Pty Ltd v. Wiltshire [1945] HCA 37; (1945) 72 CLR 319 at 324. His Honour referred to that decision and set out an extract from it which explains the relevant legal principles.

We now turn to the alternative claim that proof of debt should be reduced by an amount to reflect the use made by RZO of the assets of the estate between 14 April 1992 and 3 June 1993. His Honour found that there was no agreement for RZO to pay for the use of the assets of the business between those dates. His Honour also concluded that there should not be any set-off for any benefit that RZO might have got from the use of the assets of the business. His Honour concluded that such use was "... objectively to be seen as a likely purchaser of assets being given possession prior to completion in return for the (very considerable) advantage it conferred on the estate by agreeing to pay the estate's debts."

Senior counsel for the appellant submitted that his Honour's conclusions did not reflect the fact that RZO was using the assets of the business. On the contrary, it is clear from his Honour's reasons for judgment that his Honour expressly referred to this matter. The situation was one in which RZO outlaid funds free of interest and obtained the use of the assets of the business for the 14 month period in question. There being no agreement and no apparent unjust enrichment, we can see no basis for the claim that his Honour erred in declining to order a set-off. On the contrary, we would respectfully agree with his Honour's assessment of the situation.

Conclusion

For the above reasons, we would dismiss the appeal with costs. At the hearing of the appeal there was some discussion about whether RZO should have any priority over the other unsecured creditors. Counsel for RZO did not seriously press that claim. Effectively, he conceded that there was unlikely to be any such priority. In those circumstances, we do not consider that it is necessary to explore that question.

I certify that this and the preceding sixteen

(16) pages are a true copy of the Reasons for

Judgment of the Court.

Associate:

Date: 6 February 1997

Counsel for the Appellant: Mr E.W. Gillard QC with Mr P.G.Wood

Solicitors for the Appellant: Piggott Wood & Baker

Counsel for the Respondent: Mr A.Douglas with Miss S.Walken

Solicitors for the Respondent: Archer Bushby

Date of Hearing: 19 November 1996

Date of Judgment: 6 February 1997