|Date of judgement||7 March 2014|
|Proceeding number||2013/270858; 2013/270865|
|Court or Tribunal||Supreme Court of NSW, Court of Appeal|
CORPORATIONS Application for leave to proceed against a company subject to a Deed of Company Arrangement pursuant to section 444E Corporations Act Reasonably arguable grounds to support grant of leave Whether would be futile or premature to grant leave to proceed
EQUITY Trusts and trustees Liability of beneficiaries to indemnify trustee Hardoon v Belilios principle
PROCEDURE When appeal lies By leave of court Threshold monetary value less than $100,000 Failure to comply with filing of notice under r51.22 Uniform Civil Procedure Rules Right of appeal to Supreme Court under Section 101(2)(r) of the Supreme Court Act
Capita Financial Group Ltd V Rothwells Ltd (1989) 15 ACLR 348
Causley v Countryside (No 3) Pty Ltd (NSW Court of Appeal, 2 September 1996, unreported)
Hardoon v Belilios  AC 118
Haviland v Joslow (No 4) Pty Ltd  2 NSWLR 318
Maher v Taylor  1 NSWLR 231
McLean v Burns Philp Trustee Co Pty Ltd (1985) 2 NSWLR 623
OgilvieGrant v East (1983) 7 ACLR 669
RWG Management Ltd v Commissioner for Corporate Affairs (Vic)  VR 385
The Chief Commissioner appealed against decisions of Bergin CJ that assessments had been incorrectly made in relation to land rich duty regarding the CrossCity Motorway Property Trust, and duty on the transfer of shares in CrossCity Motorway Pty Ltd. Before the appeals were heard, a deed of company arrangement was executed, requiring leave of the Court for the appeals to proceed.
Gleeson JA decided there was no utility at present in granting leave to proceed with the appeals, but acknowledged that circumstances may change that may warrant a further application for leave, such as the respondents’ financial position following completion of the sale process.
This matter consisted of two sets of proceedings:
In both proceedings, the Chief Commissioner appealed against the decision of Bergin CJ in Eq at first instance that the Chief Commissioner was incorrect to assess:
Subsequent to the appeals in both proceedings being filed by the Chief Commissioner, both CCMH and CCTM executed a deed of company arrangement on 11 November 2013. The effect of s 444E of the Corporations Act 2001 was that the Chief Commissioner could not proceed with the appeal proceedings against the respondents, or in relation to any of the respondents’ property, except with the leave of the court.
The issue for determination before the court was whether the Chief Commissioner, pursuant to s 444E of the Corporations Act 2001 (Cth), should be granted leave to proceed against the respondents (being companies subject to a deed of company arrangement).
Gleeson JA refused to grant the Chief Commissioner leave to proceed with the proceedings, and dismissed the applications by the Chief Commissioner with costs.
In refusing to grant leave, Gleeson JA found as follows:
Accordingly, Gleeson JA did not consider that there was any utility at present in granting leave to proceed with the appeals. However, Gleeson JA acknowledged that circumstances may change that may warrant a further application for leave, such as the respondents’ financial position following completion of the sale process of the tunnel by the receivers, or if the Deed Administrators obtain cost orders against the Chief Commissioner in the proceedings below.