Airpeak Pty Ltd & Ors v Jetstream Aircraft Ltd & Anor [1997] FCA 158 (4 March 1997)

CATCHWORDS

PROCEDURE - application for separate hearing - security for costs

CORPORATIONS LAW - application to strike out claims - standing of creditor under section 1324 to take action based on alleged breach of director's duties - effect of Part 9.4B on standing under section 1324

Trade Practices Act 1974 (Cth) s 52

Corporations Law ss 232, 1324, Part 9.4B

Federal Court Rules Order 29 Rule 2

The Broken Hill Proprietary Company Limited -v- Bell Resources Limited [1984] 2 ACLC 157; 8 ACLC 609

QIW Retailers Ltd -v- David Holdings Pty Ltd & Ors (No. 2) [1992] 37 FLR 57; 109 ALR 377

Allen v Atalay [1994] 12 ACLC 7

Mesenberg -v- Cord Industrial Recruiters Pty Limited [1996] 39 NSWLR 128; 14 ACLC 519; 19 ACSR 483

AIRPEAK PTY LTD AND ORS -v- JETSTREAM AIRCRAFT LTD AND ANOR

No. NG 870 of 1995

EINFELD J

SYDNEY

4 MARCH 1997

IN THE FEDERAL COURT OF AUSTRALIA )

NEW SOUTH WALES DISTRICT REGISTRY ) No. NG 870 of 1995

GENERAL DIVISION )

Between: AIRPEAK PTY LTD AND ORS

Applicants

And: JETSTREAM AIRCRAFT LTD AND ANOR

Respondents

[Plus: Cross Claims on file]

MINUTE OF ORDERS

The Court:

1. Declares that the first respondent has standing pursuant to section 1324 of the Corporations Law to bring its claims for contravention of sub-sections (4) and (6) of section 232 of the Law.

2. Dismisses the application to strike out paragraphs 19-22, 59-61 and 69-75 of the first respondent's cross-claim.

3. Adjourns the application for a separate hearing of the matters pleaded in paragraphs 19-22, 59-61 and 69-75 until after the events referred to in 5.

4. Orders the $20,000 cash deposit and the guarantee from the first applicant to remain as security for costs.

5. Orders further security of costs up to the end of discovery and inspection and the filing and serving of the statements on which the parties intend to rely, for an amount to be agreed between the parties or mediated by a Registrar.

6. Reserves liberty to apply as to the quantum of the security in the event that agreement cannot be reached.

7. Reserves costs of all motions.

Note: Settlement and entry of orders are dealt with in accordance with Order 36 of the Federal Court Rules.

EINFELD J

SYDNEY

4 MARCH 1997

IN THE FEDERAL COURT OF AUSTRALIA )

NEW SOUTH WALES DISTRICT REGISTRY ) No. NG 870 of 1995

GENERAL DIVISION )

Between: AIRPEAK PTY LTD AND ORS

Applicants

And: JETSTREAM AIRCRAFT LTD AND ANOR

Respondents

[Plus: Cross claims on file]

REASONS FOR JUDGMENT

EINFELD J SYDNEY 4 MARCH 1997

FACTUAL BACKGROUND

The applicants in these proceedings, Airpeak Pty Ltd (Airpeak), Air Transportation Group Pty Ltd (Air Transportation) and Bamsky Pty Ltd (Bamsky) (together, the Air Transportation Group or the applicants), respectively carry on the businesses of

(a) air transportation of passengers and carriage of freight,

(b) freight distribution services, aircraft frame and engine maintenance, and

(c) supply of aircraft spare parts.

Air Transportation owns the whole of the issued share capital of Airpeak and Bamsky. The first respondent, Jetstream Aircraft Pty Ltd (Jetstream), manufactures and sells aircraft and aircraft components worldwide. The second respondent, Trident Turboprop (Australia) Pty Ltd (Trident), owns and leases aircraft. In this judgment I refer to all companies involved in the case by their present names unless otherwise indicated.

The applicants have alleged in their statement of claim that between October 1993 and 25 May 1994, in the course of its business and for the purpose of seeking certain contracts to supply Airpeak and Air Transportation with certain aircraft and associated products and services, Jetstream made a number of representations to Airpeak. These representations basically went to the highly efficient and competitive performance of Jetstream's J41 aircraft, their suitability to the applicants' businesses, and their potential for creating a higher earning capacity for the applicants. Further representations were also made by Jetstream to the three applicants that Jetstream would acquire a 40% shareholding in Pacific Aviation (Australasia) Pty Ltd (Pacific) from Air Transportation for $US5 million on or before 25 May 1996, for the purposes of providing on ground support services to Jetstream aircraft in Australia. The details of this planned acquisition involved the purchase, by Air Transportation or an acquired shelf company, of the whole of the equity in Pacific from Ansett Transport Industries (Operations) Pty Limited (Ansett). Jetstream would lend Air Transportation $US5 million to help fund the acquisition, and would in return acquire a 40% equity shareholding in Pacific.

Allegedly relying on the representations relating to the J41 aircraft and the acquisition by Jetstream of a 40% equity shareholding in Pacific, the members of the Air Transportation Group entered into a number of transactions:

1. Airpeak entered into a lease purchase agreement with Jetstream for five of its J41 aircraft and a lease agreement with Jetstream for two of its HS748 aircraft. Airpeak also retained Pacific to carry out refurbishment work and engine maintenance and repair services.

2. Bamsky, a shelf company acquired by Air Transportation specifically for the acquisition of Pacific:

(a) entered into a loan agreement with Jetstream for $US5 million, and

(b) granted a fixed and floating charge to Jetstream over its assets and undertakings to secure its obligations pursuant to the loan agreement with Jetstream.

3. Bamsky and Air Transportation entered into an agreement with Pacific and Ansett to purchase the whole of the shareholding in Pacific from Ansett.

4. Air Transportation:

(a) entered into a business agreement with Jetstream in respect of the acquisition of ten J41 aircraft, and the provision of financial assistance for the purchase of the whole share capital of Pacific;

(b) executed a document entitled "Side Letter No.1 to Business Agreement" whereby Jetstream agreed to assist Air Transportation to help dispose of three Beechcraft aircraft and arrange settlement of an outstanding commitment to Beechcraft in respect of two Beechcraft aircraft;

(c) executed a document entitled "Side Letter No. 2 to Business Agreement" whereby Jetstream was granted the right to convert its $US5 million loan to Bamsky to a 40% non-transferable equity shareholding in Pacific Aviation;

(d) entered into a Deed of Guarantee and Indemnity (Bamsky Guarantee) with Jetstream whereby it guaranteed the obligations of Bamsky under the loan agreement referred to in paragraph 2(a);

(e) entered into Lease Purchase Agreements with Jetstream to guarantee the obligations of Airpeak pursuant to each of the agreements referred to in 1; and

(f) entered into a Deed of Novation with Trident and Airpeak whereby Jetstream novated all its rights and obligations under the lease purchase agreement to Trident.

The applicants' case

The applicants allege first that the representations concerning its aircraft made by Jetstream were misleading and deceptive or likely to mislead or deceive within the meaning of those terms in section 52(1) of the Trade Practices Act 1974 (the Act), in a number of respects which are not presently relevant. Secondly, they claim breach of contract by Jetstream in that its J41 aircraft had defective materials, defective design and manifest error in Manuals. The applicants thirdly allege that Jetstream is estopped from enforcing its $US5 million loan agreement with Bamsky and the Bamsky Guarantee. They seek damages against Jetstream pursuant to section 82 of the Act and seek to set aside the Lease Agreement, the Deed of Novation, the loan agreement and each of the Deeds of Guarantee and Indemnity, pursuant to section 87 of the Act.

Cross Claim

By way of cross claim, Jetstream claims large sums of money from Airpeak, Air Transportation and Bamsky, alleging breach of obligations under various agreements including:

1. permitting Pacific to incur financial indebtedness in contravention of clause 11.3 of the Bamsky Guarantee;

2. breach by Air Transportation and Bamsky of their obligations under the Bamsky Guarantee and the loan agreement, by their granting to the 3rd and 4th cross-respondents, Mr and Mrs McGowan (the McGowans), who are and were at all material times directors of the companies in the Air Transportation Group, a charge over Air Transportation's assets and undertakings. As a result Jetstream says that it is an unsecured creditor of Air Transportation in an amount in excess of $US5 million;

3. outstanding rent and various amounts due as security deposits under the lease agreements entered into between Airpeak and Jetstream for the two HS748 aircraft; and

4. breach by Air Transportation of its obligations under the Lease Purchase Agreements entered into by Air Transportation to guarantee the obligations of Airpeak under the lease agreements.

On 31 July 1995, the eighth cross-respondent, Impulse Airlines Pty Limited (Impulse), previously known as Callmoon Pty Limited, entered into an agreement, conveniently referred to throughout these proceedings as "the Callmoon Agreement", with Airpeak, Air Transportation and the sixth cross-respondent, Air Freight and Distribution Services Pty Limited. Pursuant to this agreement the businesses previously carried on by the latter group of companies were sold to Impulse.

Jetstream claims that Air Transportation and Bamsky misrepresented that all of the money obtained under the loan agreement would be used for either the purchase or benefit of Pacific, thus inducing the loan. Jetstream also claims that the McGowans have acted improperly and contrary to subsections (4) and (6) of section 232 of the Corporations Law and seeks orders pursuant to section 1324 of the Corporations Law for these breaches. Finally, Jetstream seeks to have the Callmoon Agreement set aside.

Interlocutory Motions

By a motion filed on 26 November 1996, the applicants have moved to strike out paragraphs 19-22, 59-61, 69-75 of Jetstream's cross claim which deal with the case against the McGowans. The claim is that Jetstream does not have standing pursuant to section 1324 of the Corporations Law to bring a claim alleging a breach of section 232(4) or 232(6) of the Corporations Law and that in any event there should be a separate hearing of the issues raised under these sections.

By a motion filed on the 27 November 1996, the respondents seek orders that the applicants provide further security for costs in a form and a sum to be ordered by the Court, and that the respondents be granted leave to administer interrogatories. In relation to the interrogatories, the applicants argue that leave should not be granted to administer those interrogatories relevant to those paragraphs of Jetstream's cross claim which are the subject of their motion.

The request for leave to administer interrogatories was partially dealt with by consent and was adjourned. Judgment was reserved on the strike out application and the application for security of costs. These reasons for judgment therefore deal with those motions.

CROSS CLAIMS UNDER SECTION 232: PARAGRAPHS 19-22, 59-61 & 69-75

Within these paragraphs is found Jetstream's claims against the McGowans on the basis that Jetstream is a person whose interests have been affected by the conduct complained of within the meaning of section 1324 of the Corporations Law. The applicants as cross respondents assert that Jetstream does not have standing pursuant to section 1324(2)(b) to bring such an action. In the alternative they argue that these claims should be dealt with in a separate hearing.

The subject matter of the challenged paragraphs is as follows:

Paragraphs 19-22

On 27 May 1994 the McGowans were granted a charge over the assets and undertakings of Air Transportation. The charge was then lodged with the Australian Securities Commission and registered under the Corporations Law. Jetstream alleges that the McGowans improperly used their positions as directors of Air Transportation, in contravention of section 232(6) of the Corporations Law, to secure the charge for their own benefit, or failed to take due care as directors, in breach of section 232(4) of the Corporations Law, in allowing the charge to be granted without making due enquiries. Jetstream asserts that the McGowans' charge, as a secured charge, will take priority over Jetstream's claim under the guarantee as an unsecured creditor, thus causing the value of the guarantee given by Air Transportation for the loan to Bamsky to have been lessened to the extent of the McGowans' charge.

Paragraphs 59-61

In paragraph 57, Jetstream states that in accordance with Side Letter No. 1 to the Business Agreement, it paid US$3.2 million into an account in the name of Quinn Trading. In paragraph 59, Jetstream asserts that out of this same account, moneys were remitted to Air Transportation and credited to an account entitled "Loans from Shareholders". Then on a monthly basis, Jetstream claims, the McGowans' personal expenses, treated as business expenses, were netted off against the money in the same account, purportedly on the basis that the money in the account was contributed by them, thereby causing detriment to Air Transportation.

Paragraphs 69-75

A number of transactions allegedly authorised by the McGowans involving the improper use of their positions as directors to gain benefits for themselves or cause detriment to Air Transportation are alleged in these paragraphs:

1. In the years 1992 - 1995 the McGowans transferred large sums of money from Air Transportation accounts to a number of accounts in the United States of America.

2. On 11 November 1994, at the request of the McGowans, Jetstream paid $US100,000 due to Air Transportation into the account of Quinn Trading Limited which was applied to something other than for the use and benefit of the Air Transportation Group.

3. Funds from Air Transportation accounts were used by the McGowans to acquire personal assets.

4. The McGowans represented to Westpac Banking Corporation that they would use the proceeds from the sale of a property owned by them to discharge a temporary loan made by Westpac to an Air Transportation account. However, Jetstream claims that the McGowans' real intention was to keep the proceeds of the sale concealed in another account, and to use part of the $US5 million paid by Jetstream to Bamsky to discharge the Westpac loan while still claiming that they had discharged the loan and thus that Air Transportation was indebted to them.

5. The Callmoon Agreement, whereby the businesses previously carried on by Air Transportation, Airpeak and Air Freight and Distribution Services were sold to Impulse, was entered into specifically to avoid the liability which those businesses may have incurred to Jetstream and/or Trident arising from the aircraft lease transactions.

STANDING FOR AN ACTION UNDER SECTIONS 232(4) & (6)

Throughout the challenged paragraphs, Jetstream asserts that the McGowans' actions have caused detriment to Air Transportation thus affecting Jetstream's ability as a creditor to recover against it. Jetstream says that it is consequently a person whose interests have been affected within the meaning of section 1324 of the Corporations Law. Jetstream emphasises that it is not seeking damages, but various orders requiring money received by the McGowans in breach of the Act to be returned to the company and an order setting aside the Callmoon Agreement so that the assets transferred under its terms could be returned to the companies.

Standing to seek injunctions for contravention of the Corporations Law in general is set out in section 1324. This section gives the Court power to grant injunctions upon the application of the Australian Securities Commission (the Commission) or of any person whose interests have been, are or would be affected by certain conduct of specified types of individuals. The "interests" referred to in section 1324(1) and 1324(2)(b), on which Jetstream relies for its standing, has been interpreted broadly by the courts. In The Broken Hill Proprietary Company Limited -v- Bell Resources Limited [1984] 2 ACLC 157; 8 ACLC 609, Hampel J in the Victorian Supreme Court reasoned that the Companies Code, now replaced by the Corporations Law, was intended to enable interested persons to obtain injunctions to prevent actual or proposed contraventions of the Code. Consequently, "interests" in section 574 of the Code, now section 1324 of the Law, was interpreted (at 162) as referring to "interests of any person (which includes a corporation) which go beyond the mere interest of a member of the public". See also QIW Retailers Ltd -v- David Holdings Pty Ltd & Ors (No. 2) [1992] 37 FLR 57; 109 ALR 377. In Allen v Atalay [1994] 12 ACLC 7, a case also involving an alleged contravention of section 232 of the Corporations Law, Hayne J stated at 10:

... it is in my view arguable that a creditor having a right to prove in the liquidation of a company may be a person whose interests are affected by a contravention which is alleged to have led to the diminution in the value of his claim against the company.

Through its cross-claim, Jetstream asserts that it is a creditor of the applicants and that, in breaching their duty as directors of Air Transportation, the McGowans have caused detriment to Air Transportation, consequently making the company less able to meet Jetstream's claims. Thus, if Jetstream establishes itself as a creditor of Air Transportation by successfully defending the action brought by the applicants, that meets, so the argument goes, the requirements for standing under section 1324.

The applicants' argument that Jetstream does not have standing for the injunctions sought was based on a recent judgment by Justice Young of the NSW Supreme Court in Mesenberg -v- Cord Industrial Recruiters Pty Limited [1996] 39 NSWLR 128; 14 ACLC 519; 19 ACSR 483. In consequence, the applicants assert, standing for an action for breach of these sections is exclusively defined by Part 9.4B of the Corporations Law entitled "Civil and Criminal Consequences of Contravening Civil Penalty Provisions".

The argument proceeded thus. Section 232(6B) identifies subsections (4) and (6) of section 232 as civil penalty provisions as defined by section 1317DA of Part 9.4B which provides for civil and criminal consequences of contravening these provisions, or of being involved in a contravention of them. Pursuant to section 1317EB(1), only the Commission, its delegate or a person authorised by the Minister, may apply for a civil penalty order for the breach of a civil penalty provision. In Mesenberg Justice Young held that breaches of section 232 are dealt with exclusively by the civil penalty provisions in Part 9.4B. His Honour's reasoning was that it is more appropriate for regulators such as the Commission rather than for shareholders or creditors to commence proceedings for breach of section 232 because to allow otherwise would invite the mischief that the rule in Foss v Harbottle had been introduced to eradicate. Commenting on the decision in Allen v Atalay, Justice Young said at 134:

I have extreme disquiet as to whether the legislature really intended that whenever there is a breach of even a very minor part of the Corporations Law any shareholder or creditor of the company, because he or she can say that he or she has a stronger interest than the ordinary member of the company, should be able to displace the role of the directors or the liquidators and make the decision to prosecute a breach.

While allowing the Court to order compensation to be paid to the disadvantaged company on the application for a civil penalty order (section 1317HA), Part 9.4B makes no provision for an injunction to be granted. The Commission or its delegate can only seek an injunction under section 1324. His Honour thus concluded at 137 that:

... except in so far as s 1324 can be used by the Commission in aid of its rights under Pt 9.4B, or a delegate of the minister is a person affected, there is no longer any right for a person affected (not being the Commission or person referred to in s 1317EB) to seek an injunction in respect of an alleged contravention of s 232.

I respectfully agree with Justice Young that only the Commission, its delegate or a person authorised by the Minister, is entitled to apply for and enforce civil penalty orders. However, it seems to me with due respect, as it appears to do to Hampel and Hayne JJ, to go against the plain terms of section 1324 (expressly giving anyone with an interest above the interests of a member of the public the right to apply for an injunction) to say that it can only be used by persons having standing under Part 9.4B when section 232 is being activated. The concern that shareholders or creditors should not be allowed through litigation to interrupt the proper running of a company is certainly valid. However, the Court has the ultimate discretion in these matters as to whether to grant an injunction, in that it can choose to award damages instead of an injunction, or even refuse relief altogether if it considers the circumstances to be unworthy of intervention.

I therefore hold that Jetstream has standing pursuant to section 1324 of the Corporations Law to bring its claims for contravention of subsections (4) and (6) of section 232 of the Corporation Law, and thus refuse the application to strike out paragraphs 19-22, 59-61 & 69-75 of Jetstream's cross claim.

APPLICATION FOR SEPARATE HEARING OF ISSUES RAISED IN PARAGRAPHS 19-22, 59-61 AND 69-75 OF JETSTREAM'S CROSS CLAIM

The applicants assert that it is not appropriate for the issues raised in these paragraphs to be heard until it has been established that Jetstream is a creditor of Air Transportation. The applicants claim that the issues raised are only relevant if Jetstream is found to be a creditor of Airpeak and Air Transportation and this in turn depends upon it successfully defending the applicants' action. The applicants therefore apply for a separate hearing of these matters under Order 29 Rule 2 of the Federal Court Rules.

I do not see a real problem with paragraphs 19-21 of the cross claim which deal specifically with the alleged charge granted to the McGowans over Air Transportation. This claim relates directly to Jetstream's claims in tort and contract that Air Transportation breached the Bamsky Guarantee by granting the charge. I therefore see no reason to order a separate hearing of the issues raised in paragraphs 19-21.

Within the rest of this very complex case, there are really two separate areas of litigation. First are the applicants' claims of misrepresentations and breaches of contract by Jetstream in respect of the sale and lease of defective aircraft. Second are the cross claims alleging breaches of obligations by the applicants under various agreements arising out of the facts that would exist should the applicants' claim fail. The issues in paragraphs 59-61 and 69-75 primarily concern the movement of money within the Air Transportation Group. The only link Jetstream claims to these transactions is that the money used in the transactions may have had its source in money deposited by Jetstream with the intention that the money be used for a specific purpose, and that the transactions complained of may have reduced the prospects of Jetstream recovering if it successfully establishes itself as a creditor.

As it seems to me, these issues are not intimately tied to the issues raised in the rest of the cross claim, viz. whether the applicants have breached their obligations under the various agreements, thus entitling Jetstream to damages and moneys owed. Rather the questions raised are relevant to the ability of Jetstream to recover money should it successfully defend the action. Without trying or being able to second guess the possible course of this hearing, I cannot see a significant overlap in the evidence required to establish Jetstream's other claims and the evidence that would be adduced to trace the internal transactions. To venture into these areas during the hearing would seem to be allowing Jetstream to ask questions which it may never be entitled to ask.

However, I do foresee a problem in ordering a separate hearing for the issues raised in paragraphs 59-61 and 69-75, viz. the difficulty in separating the issue of credit from the substantive issues involved in the action under section 242 of the Corporations Law. It is quite possible that the cross-examination of the McGowans as to their credibility will venture into the issues raised in paragraphs 59-61 and 69-75 as Jetstream attempts to establish that the McGowans should not be believed on what they say about the applicants' claim because of their alleged improper conduct as directors. It is then likely that the issues in paragraphs 59-61 and 69-75 will in fact become part of the case, possibly prejudicing the trial of these issues at a later date.

There appear to be three options open to the Court in these difficult circumstances. Firstly, all the issues could be heard in one comprehensive hearing, thereby creating the possibility of lengthening and increasing the costs of what is already going to be a long and expensive piece of litigation, by including evidence on matters that may in fact never be litigated. The second option is to order a separate hearing and require the parties in the applicants' case to limit their cross-examination on credit so as not to substantially venture into the issues set down for the separate hearing. The third possibility is to hear the body of the applicants' case and then consider whether if the applicants are to succeed at all, it is likely to be on some basis other than credit, and if not, postpone judgment until the completion of the trial on the cross claims under section 232 and the connected issues of credit.

At this stage of the proceedings, this decision can only be made on intuition. The case is some distance from a hearing and it is not possible to be more than superficially knowledgeable of what will and will not prove decisive or even significant evidence. The Court's general experience is that separating hearings is, at the end of the day, usually neither economical nor efficient. It also tends to militate against settlement or the sensible conduct and resolution of the issues between the parties. This case does not seem to be an exception. Far from making for a simpler, less expensive and shorter hearing, it seems to me at this stage that separation of the issues may actually lengthen the overall litigation between the parties, add to the complication and expense, and make for possibly arbitrary rulings on admissibility of evidence in the initial trial and some duplication of evidence in the second hearing. Moreover, nothing should be done in a case such as this to make possible a need to change Judges between each of the hearings with all the attendant chances of having to acquaint a new Judge with all that has gone before, and of a possibly inconsistent finding.

Should the inappropriateness of this approach become clearer at a later point in the interlocutory stages of the proceedings, the applicants can renew their application for a separate hearing of the cross claim. For the present, I intend to adjourn it until it is renewed by the applicants, if at all, after the completion of discovery and inspection and the filing and serving of the statements on which the parties intend to rely at the hearing.

SECURITY AS TO COSTS

Currently, the applicants have deposited $20,000 cash with the Registrar of the Court as security for costs and have in addition provided $60,000 worth of guarantees from Airpeak. In March 1996 I stood over an application for an alternative form of security until after the next financial year when the company's financial figures for the whole of the financial year to June 1996 would be available.

The respondents have now filed a motion on 27 November 1996 seeking further security for costs. They challenge the creditworthiness of Airpeak and are seeking either cash or undoubted security such as a bank guarantee, or an unlimited guarantee by the McGowans as controllers of the applicant company.

Having reviewed the evidence previously before the Court, looked at the audited financial statements dated 30 June 1996 and the management financial reports of September 1996, and listened to the parties' submissions, I am not convinced that the Air Transportation Group is in the position to fund the costs of such a complex and lengthy action which may involve witnesses testifying or coming to Australia from overseas. On the other hand, the hearing is still some way off and the Group may get itself into a position during the intervening period where it would be able to pay the costs of the action. Meanwhile, the respondents should in my view be protected from the possibility that work now being done could not be afforded if the action fails or is discontinued in circumstances requiring the applicants to pay the respondents' costs.

The $20,000 cash deposit and the guarantee from Airpeak will remain as security for costs. However, on the basis that those behind the applicant companies, the McGowans, seem to me well able to support their Group if they wish the action to proceed, I propose to order further security up to the end of discovery and inspection and the filing and serving of the statements on which the parties intend to rely. At that time it will be possible to review security again in the light of the position at that time.

The parties informed me at the hearing that I do not need to address the issue of the quantum of the security as they have agreed on a figure of $563,800, apparently to cover all the costs of the case. In these circumstances I can safely leave it to the parties to settle on a lesser sum to reflect my view of the extent of the security that should now be given. If necessary, a Registrar of the Court can assist the parties to reach agreement including make an indicative assessment to promote agreement. Liberty to apply for an order as to quantum will be reserved in the event that agreement cannot be reached. Costs of all the motions will be reserved until a convenient later date.

For the applicant David M.J. Bennett QC & Mr C.J. Leggat instructed by Richard Arthur Schmidt of Bull, Son & Schmidt Solicitors

For the respondents Noel C. Hutley SC instructed by Peter Johnstone of Blake Dawson Waldron Solicitors

Date of hearing 2 December 1996

Date of judgment 4 March 1997