FEDERAL COURT OF AUSTRALIA Ernst & Young (Reg) v Tynski Pty Limited [2003] FCAFC 233 CORPORATIONS – appeal from an interlocutory judgment – authority of directors to institute proceeding in name of companies after appointment of receivers and managers – directors instituted proceeding challenging appointment of receivers and managers and against third party – application by third party to have proceeding dismissed against them – whether prior consent of receivers and managers necessary to institute proceeding in name of companies – whether costs indemnity conditional to institution of proceeding in name of companies in receivership - validity of the solicitors retainers – significance of the directors' challenge to the validity of appointment of the receivers and managers Brooklands Motor Co Ltd (in rec) v Bridge Wholesale Acceptance Corporation (Australia) Ltd [1993] MCLR 448 considered Chartspike v Chahoud [2000] NSWSC 625 cited Deangrove Pty Ltd (Receivers and Managers Appointed) v Commonwealth Bank of Australia [2001] FCA 173; 108 FCR 77 discussed Dow Jones & Company Inc v Gutnick (2002) 77 ALJR 255 cited Halliday v High Performance Personnel Pty Ltd (in liq) (formerly SACS Group Pty Ltd)(1993) 113 ALR 637 referred to Hawkesbury Development Co Ltd v Landmark Finance Pty Ltd [1969] 2 NSWR 782 referred to Inglis v Moore (No 2) (1979) 46 FLR 470 referred to Moss Steamship Company, Limited v Whinney [1912] AC 254 considered Newhart Developments Ltd v Co-operative Commercial Bank Ltd [1978] QB 814 referred to Tudor Grange Holdings Ltd v Citibank NA [1992] Ch 53 referred to ERNST & YOUNG (REG) v TYNSKI PTY LIMITED (ACN 008 162 123) (RECEIVERS AND MANAGERS APPOINTED) S 417 of 2003 BRANSON, MARSHALL and STONE JJ 21 OCTOBER 2003 SYDNEY (HEARD IN ADELAIDE) IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY S 417 of 2003 ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: ERNST & YOUNG (REG) FIRST APPELLANT ERNST & YOUNG CORPORATE FINANCE PTY LIMITED (ACN 003 599 844) SECOND APPELLANT AND: TYNSKI PTY LIMITED (ACN 008 162 123) (RECEIVERS AND MANAGERS APPOINTED) FIRST RESPONDENT NORSBAY PTY LIMITED (ACN 008 205 687) (RECEIVERS AND MANAGERS APPOINTED) SECOND RESPONDENT FRESREND PTY LIMITED (ACN 008 174 990) (RECEIVERS AND MANAGERS APPOINTED) THIRD RESPONDENT GARTNER FARMS PTY LIMITED (ACN 086 128 880) (RECEIVERS AND MANAGERS APPOINTED) FOURTH RESPONDENT AUSVINE VITICULTURAL MANAGEMENT PTY LIMITED (ACN 007 184 901) (RECEIVERS AND MANAGERS APPOINTED) FIFTH RESPONDENT GARTNERS' VINICULTURE MANAGEMENT PTY LIMITED (ACN 080 534 989) (RECEIVERS AND MANAGERS APPOINTED) SIXTH RESPONDENT SKYBAY PTY LIMITED (ACN 008 163 782) (RECEIVERS AND MANAGERS APPOINTED) SEVENTH RESPONDENT VAMTOWN PTY LIMITED (ACN 008 061 407) (RECEIVERS AND MANAGERS APPOINTED) EIGHTH RESPONDENT M J GARTNER PTY LIMITED (ACN 077 644 181) (RECEIVERS AND MANAGERS APPOINTED) NINTH RESPONDENT NATIONAL AUSTRALIA BANK LIMITED (ACN 004 044 937) TENTH RESPONDENT JUDGES: BRANSON, MARSHALL AND STONE JJ DATE OF ORDER: 21 OCTOBER 2003 WHERE MADE: SYDNEY (HEARD IN ADELAIDE) THE COURT ORDERS THAT: 1. The appeal be dismissed. 2. The appellants pay the respondents' costs. IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY S 417 of 2003 ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: ERNST & YOUNG (REG) FIRST APPELLANT ERNST & YOUNG CORPORATE FINANCE PTY LIMITED (ACN 003 599 844) SECOND APPELLANT AND: TYNSKI PTY LIMITED (ACN 008 162 123) (RECEIVERS AND MANAGERS APPOINTED) FIRST RESPONDENT NORSBAY PTY LIMITED (ACN 008 205 687) (RECEIVERS AND MANAGERS APPOINTED) SECOND RESPONDENT FRESREND PTY LIMITED (ACN 008 174 990) (RECEIVERS AND MANAGERS APPOINTED) THIRD RESPONDENT GARTNER FARMS PTY LIMITED (ACN 086 128 880) (RECEIVERS AND MANAGERS APPOINTED) FOURTH RESPONDENT AUSVINE VITICULTURAL MANAGEMENT PTY LIMITED (ACN 007 184 901) (RECEIVERS AND MANAGERS APPOINTED) FIFTH RESPONDENT GARTNERS' VINICULTURE MANAGEMENT PTY LIMITED (ACN 080 534 989) (RECEIVERS AND MANAGERS APPOINTED) SIXTH RESPONDENT SKYBAY PTY LIMITED (ACN 008 163 782) (RECEIVERS AND MANAGERS APPOINTED) SEVENTH RESPONDENT VAMTOWN PTY LIMITED (ACN 008 061 407) (RECEIVERS AND MANAGERS APPOINTED) EIGHTH RESPONDENT M J GARTNER PTY LIMITED (ACN 077 644 181) (RECEIVERS AND MANAGERS APPOINTED) NINTH RESPONDENT NATIONAL AUSTRALIA BANK LIMITED (ACN 004 044 937) TENTH RESPONDENT JUDGES: BRANSON, MARSHALL AND STONE JJ DATE: 21 OCTOBER 2003 PLACE: SYDNEY (HEARD IN ADELAIDE) REASONS FOR JUDGMENT the court INTRODUCTION 1 This appeal from an interlocutory decision is brought pursuant to leave granted by the learned primary judge (Mansfield J). On 14 March 2003 Mansfield J refused an application made by the appellants (who were the first and second respondents before his Honour) for an order dismissing this proceeding to the extent that the respondents to the appeal (who were the third to the eleventh applicants before his Honour) ('the Gartner companies') seek relief against the appellants. 2 Receivers and managers have been appointed in respect of the whole of the property of each of the Gartner companies. This proceeding, to the extent to which it has been instituted in the name of the Gartner companies as applicants, has two aspects. First, the Gartner companies, together with the first and second applicants, challenge the validity of the appointment of the receivers and managers. Secondly, the Gartner companies, together with the first and second applicants, make claims under the Trade Practices Act 1975 (Cth) ('the TPA') and at common law against National Australia Bank Limited ('NAB'), the appointor of the receivers and managers, and the appellants. The solicitors acting on behalf of the Gartner companies in this proceeding are instructed by directors of the Gartner companies and not by the receivers and managers. 3 The appellant sought unsuccessfully to persuade the primary judge that the Gartner companies, by reason of the appointment of the receivers and managers, did not have the authority to institute this proceeding against the appellants. On this appeal the appellants again contend that the Gartner companies did not have the authority to commence this proceeding against them. They contend that the primary judge erred in not dismissing this proceeding to the extent that the Gartner companies seek relief against them. 4 For the reasons set out below we have concluded that this appeal should be dismissed. In summary, we have concluded that the power of the Gartner companies to cause this proceeding to be commenced, in both of its aspects, is clear. We have further concluded that the capacity of the directors of the Gartner companies to instruct solicitors to institute and maintain this proceeding in the name of the Gartner companies is not open to be challenged on the application of the appellants. background facts 5 It is necessary to set out the facts which lie behind this appeal in greater detail. 6 The first appellant is a partnership the members of which carry on business as chartered accountants. The second appellant is a company which carries on a consulting business. A reference in these reasons for judgment to 'Ernst & Young' is, unless the context suggests otherwise, a reference to both appellants. 7 The Gartner companies are companies in which Michael John Gartner ('Mr Gartner') and Alice Winifred Gartner ('Mrs Gartner'), or Mr Gartner alone, hold shares. Mr and Mrs Gartner and the first to ninth respondents will together be referred to as 'the Gartner Family Group'. 8 Each of the Gartner companies in November 2001 executed a debenture in favour of NAB which was subsequently registered in accordance with Part 2K.2 of the Corporations Act 2001 (Cth). It is agreed that the debenture executed by Tynski Pty Limited as mortgagor on 23 November 2001 is representative of the debentures executed by the other Gartner companies. By that debenture Tynski Pty Limited, described as 'the Mortgagor', in return for NAB agreeing to give or to continue giving credit and banking facilities to it or at its request, charged all and every part of its undertaking 'and all its property and assets whatsoever and wheresoever both present and future'. Clause 4.3 of the debenture relevantly provides: 'Without the consent of the Bank, the Mortgagor may not: (a) dispose of, part with or deal with the whole or any major part of its undertaking; or … (g) dispose of, part with or deal with any Mortgaged Property upon which the charge created by this Deed is fixed.' 9 Clause 14.1 of the debenture sets out the rights of the NAB on enforcement after an event of default under the debenture. Those rights include the right to appoint a receiver 'of the whole or any of the Mortgaged Property.' Clause 17.4 of the debenture is concerned with the powers of the receiver. It gives the receiver very extensive powers including the power, in the name of the mortgagor and at the cost of the mortgagor, to exercise in respect of the mortgaged property all of the powers of an absolute owner. The clause also gives the receiver power to take, defend, compromise or appeal proceedings in the name of the mortgagor. 10 This proceeding was instituted on 13 August 2002 by the filing of an application in the Court in which the members of the Gartner Family Group are named as applicants and Ernst & Young and NAB are named as respondents. The application discloses that the members of the Gartner Family Group claim relief against Ernst & Young pursuant to ss 51AA, 52 and 82 of the TPA and at common law for breach of contract and negligence. The relief claimed by the members of the Gartner Family Group against NAB includes a declaration that certain facilities, guarantees, mortgages and debentures have been validly rescinded. 11 The pleadings contained in the amended statement of claim ('the statement of claim') may relevantly be summarised as follows: (a) acting in reliance on certain representations made by Ernst & Young, the Gartner Family Group decided to raise the funds necessary to develop a winery by using the assets of the Gartner Family Group as security for the repayment of the funds; (b) acting in reliance on certain representations made by Ernst & Young and NAB respectively the Gartner Family Group accepted an offer by NAB to provide various financial facilities totalling $24.91 million secured against the assets of the Gartner Family Group; (c) the Gartner Family Group entered into facilities which included guarantees, mortgages and debentures ('the NAB Facilities') and drew down the NAB Facilities; (d) before the completion of the winery NAB refused to allow further drawings on the NAB Facilities; (e) the Gartner Family Group thereafter rescinded the NAB Facilities; and (f) on 9 August 2002, NAB, relying on defaults under the NAB Facilities, appointed Messrs Carter and Hart as receivers and managers of the Gartner companies. 12 By its pars 2 and 4 of its defence NAB has pleaded: '2. [the Gartner companies] are, by virtue of appointments made by the National on the 9th day of August 2002, subject to receivership and management. The receivers and managers of [the Gartner companies] Bruce James Carter and John Ronald Hart, are in control of all of the assets and undertakings of [the Gartner companies], including any right or interest of those applicants in the within proceedings. … 4. Neither the receivers or managers of [the Gartner companies] or the administrators … have consented to the institution of the within proceedings, nor bring them in the name of [the Gartner companies].' 13 It is not in dispute that Messrs Carter and Hart ('the receivers') did not cause this proceeding to be instituted and they are not providing instructions to the solicitors on the record for the Gartner companies. It is accepted that the directors of the Gartner companies, without giving prior notice to the receivers, caused the proceeding to be instituted. It is the directors of the Gartner companies who are providing instructions to the solicitors on the record for the companies. The receivers have not formally objected to this proceeding being brought in the name of the Gartner companies. Nor have they sought to take effective control of the proceeding or any aspect of it. The receivers have not required the directors to provide an indemnity to the Gartner companies in respect of the costs of the proceeding. 14 Pursuant to a notice of motion dated 4 October 2002 Ernst & Young moved the Court for an order dismissing the proceeding insofar as it is brought by the Gartner companies against Ernst & Young. reasons of the primary judge 15 Mansfield J accepted that, subject to the validity of the appointment of the receivers (which depends upon the validity of the purported recision of the NAB Facilities which include the debentures authorising the appointment of receivers) the receivers have the right to institute and conduct proceedings in the name of the Gartner companies against Ernst & Young in respect of the causes of action alleged. His Honour further accepted that, subject to whether the debentures had been validly rescinded, the causes of action were assets of the Gartner companies subject to the various debentures. 16 Mansfield J, however, rejected the argument that the power to bring and maintain this proceeding in the name of the Gartner companies is exclusively vested in the receivers, so that the directors have no such power unless they act with the express prior consent of the receivers. His Honour also rejected the argument that such consent could only be given if the receivers had secured a satisfactory indemnity for any costs liability incurred so as to avoid the risk of diminution of the assets the subject of the several debentures. His Honour took the view that it was for the receivers to determine the terms upon which they might consent to the directors instituting proceedings. 17 At [29] Mansfield J observed: '…the receivers have not explicitly consented to the institution of the proceedings against the bank. In the light of the decision in Deangrove, and the cases referred to including Newhart Developments Ltd v Co-operative Commercial Bank Ltd [1978] 1 QB 814 at 819, 821 (Newhart), such consent is not necessary. I think, on the evidence, the receivers apparently neutral attitude on that aspect reflects a proper understanding of the authorities. The evidence indicates also that they have not sought, or have not yet sought, any indemnity from the directors or shareholders of the Gartner companies in respect of the proceedings, be they against the bank or against the accountants. In my view, that is a matter for their commercial judgment. It is clear that they have identified the issue as to the recission of the several debentures as significant. There is an agreement to seek to have the Court hear and determine that issue first and separately. If the Gartner companies succeed on that aspect of the matter, they will be free to pursue the claim against the accountants (and any damages claim against the bank) through the directors. If, on the other hand, the debentures remain in force, the receivers may then seek (and, on the authorities as I comprehend them, would be entitled to) an indemnity of the nature discussed. Such considerations reinforce my conclusion that the issue of whether any indemnity should be provided to the bank at the present time is a matter for the receivers in the present circumstances, rather than one imposed as a matter of law and independently of the wishes of the receivers and the bank in the light of the terms of the several debentures and the Corporations Act.' 18 Mansfield J at [39] concluded: 'There is here no apparent clash between what the directors regard as being in the best interests of the Gartner companies and what the receivers regard as being in the best interests of the bank, as their appointor. So long as that position is maintained, I do not consider that the directors can be said to have no power in law to have instituted and to maintain the proceedings against the accountants. If there were such a clash, its resolution would depend upon the terms of the several debentures, the terms of appointment of the receivers, and their statutory powers. But, in my judgment, the accountants are not entitled to the order they seek, which in effect assumes such a clash, in the present circumstances. If permitted to do so, they would be seeking to take advantage indirectly of contractual arrangements between the Gartner companies and the bank where, as between those parties, there is no relevant disputation at present.' consideration 19 The appellants argued that the following four inter‑related propositions were relevant to this appeal and, as we understood it, dictated that the appeal should be allowed: (1) a chose in action may be secured in the same way as any other asset or property; (2) the right of a debenture holder to take proceedings in the name of the company is just as much a security for the debt as any other rights given by the debenture; (3) the broad effect of the appointment of a receiver and manager is to divest the directors of the company of their management powers during the currency of the receivership in respect of the assets which are the subject of the appointment; and (4) the powers of the receivers and managers are exclusive in relation to assets the subject of the appointment, unless and until the receivers and managers relinquish possession and control over such assets. 20 We do not find it necessary to determine whether each of the above propositions would be valid in its entirety were the validity of the appointment of the receivers not subject to challenge. In this case the appellants do not challenge the capacity of the directors to instruct solicitors to institute proceedings in the name of the Gartner companies to challenge the validity of the appointment of the receivers. This proceeding was itself instituted for that purpose albeit that it was also instituted for other purposes. The continuing challenge to the validity of the appointment of the receivers has, in our view, a greater significance than the appellants are willing to accept. We return to this issue in [24]‑[28] below. 21 It is a curious aspect of this case that it is the appellants, and not the receivers or NAB, who seek to have the claims brought by the Gartner companies against the appellants dismissed on the ground that it is the receivers who have the exclusive power to make such claims against them. On the issue of the right of the appellants to move the Court for an order dismissing the proceeding Mr Robertson, counsel for the appellants, argued: '… it comes from the position that my clients are on notice of the appointment of the receiver and manager. My clients will have an obvious prejudice if the matter proceeds and the companies have brought the action without authority and, in those circumstances, my clients would be in a position at the end of the day where, not only might they only be unsecured creditors – as the correspondence between the solicitors discloses – but they may be in a position where they have forever forsaken their position in relation to costs.' 22 The appellants were not able to identify any authority for the proposition that a respondent to a legal proceeding, who has no interest in or under the instrument authorising the appointment of a receiver, may obtain an order dismissing the proceeding on the basis that the receiver, and not the directors, was the person authorised to give instructions for the institution of the proceeding. The appellants did, however, place reliance by analogy on Moss Steamship Company, Limited v Whinney [1912] AC 254 ('Moss Steamship'). 23 Moss Steamship concerned the powers of a court‑appointed receiver. At issue was whether the court‑appointed receiver had given a shipper a contractual lien over certain goods for past unsatisfied freight due to the shipper from the company to which the receiver had been appointed. By majority the House of Lords concluded that the shipper was not entitled to a lien over the goods. Their Lordships did not speak with one voice as to the reason for this conclusion. Lord Loreburn LC considered it material that the proceeding was instituted between the receiver and the shipper and the company was not a party. His Lordship also concluded that the receiver, being court-appointed, was not an agent of the company and it was sufficiently conveyed to the shipper that he was contracting with it personally as receiver and manager. The Earl of Halsbury based his conclusion on the receiver's lack of knowledge of the contractual provision intended to create the lien. Lord Atkinson, like Lord Loreburn LC, took the view that the receiver was not the agent of the company but rather an officer of the court. Additionally, Lord Atkinson considered that the receiver had no power, without the leave of the court, to create a lien over the company's goods. Moss Steamship provides no support for the appellant's argument that because they are on notice of the appointment of the receivers they may invoke the terms of the debentures under which the receivers were appointed. 24 It is not, we think, open to dispute that directors of a company have the capacity, notwithstanding the 'apparently all-embracing terms' of a debenture and the appointment of a receiver and manager to instruct solicitors to institute proceedings in the name of the company to challenge the debenture (Hawkesbury Development Co Ltd v Landmark Finance Pty Ltd [1969] 2 NSWR 782 per Street J at 790-791; Deangrove Pty Ltd (Receivers and Managers Appointed) v Commonwealth Bank of Australia [2001] FCA 173; 108 FCR 77 per Sackville J esp. at [40]). As is mentioned above, the appellants did not argue to the contrary, although they argued that the right is conditional on the provision of an appropriate indemnity as to costs. 25 In this proceeding the Gartner companies do, in the relevant sense, challenge the debentures under which the receivers were purportedly appointed. They contend that the debentures were rescinded before the receivers were appointed. Subject to the issue of whether there is a rule of law that the directors must in such circumstances provide to the company a satisfactory indemnity as to costs, this proceeding was therefore validly instituted. This conclusion does not, of course, answer the question of whether every claim made in the proceeding is maintainable on the instructions of the directors. 26 The requirement that directors who initiate and maintain proceedings in the name of the company to challenge the debenture under which a receiver was appointed must ordinarily provide the company with a satisfactory indemnity against costs, is a requirement that exists for the benefit of the debenture holder (Brooklands Motor Co Ltd (in rec) v Bridge Wholesale Acceptance Corporation (Australia) Ltd [1993] MCLR 448 per Thomas J at 452; Newhart Developments Ltd v Co-operative Commercial Bank Ltd [1978] QB 814 per Shaw LJ, with whom Stephenson LJ agreed, at 819). If, as here, neither the debenture holder nor the receiver requests the provision of an indemnity against costs, it may be assumed that the debenture holder's interests do not require the protection that would be afforded by an indemnity. We agree entirely with the approach adopted by Thomas J in Brooklands Motor Co Ltd (in rec) v Bridge Wholesale Acceptance Corporation (Australia) Ltd at 452 where his Honour declined to extend the protection which the requirement confers on a debenture holder to a third party. The desire of the appellants to have security in respect of their costs is capable of being addressed in the usual way (see O 28 of the Federal Court Rules). 27 Moreover, the contention of the appellants that a purported proceeding in the name of a company, instituted by directors in their residual capacity without the consent of the receiver and without the provision of a suitable indemnity against costs, would be invalid and unable to be validated by the retrospective approval of the receiver must be rejected. In Deangrove Pty Ltd (Receivers and Managers Appointed) v Commonwealth Bank of Australia Sackville J declined to dismiss a proceeding instituted in the name of a company on the instructions of the directors of the company without the consent of the receivers and managers of the company. His Honour stood the proceeding over to allow a director to provide or offer appropriate security to support an indemnity offered well after the institution of the proceeding. By doing so his Honour implicitly recognised that the proceeding was validly instituted. Similarly in Tudor Grange Holdings Ltd v Citibank NA [1992] Ch 53 Sir Nicholas Browne‑Wilkinson VC at 63 indicated that the possibility of an indemnity being forthcoming rendered it inappropriate to strike out immediately a proceeding on the ground that a suitable indemnity against costs had not been provided. These decisions are consistent with the ordinary rule that a client can ratify the actions of a solicitor and thereby overcome any want of authority (Chartspike v Chahoud [2000] NSWSC 625 at [10]). 28 For the above reasons we conclude that the argument of the appellants that this proceeding was not validly instituted must be rejected. 29 It nonetheless remains necessary to consider whether the claims made in the proceeding by the Gartner companies against the appellants should be dismissed. It is not contended that the Gartner companies, in whose names the proceeding has been brought, lack the capacity to sue the appellant on the causes of action identified in the application and the statement of claim. Rather, it is contended that the directors of the various Gartner companies lacked the capacity to cause this proceeding to be brought in the name of the Gartner companies because the right to pursue the causes of action had vested in the receivers. In truth, the appellants seek to challenge the validity of the retainer of the solicitors purporting to act in this proceeding for the Gartner companies so far as the proceeding involves claims against the appellants. The solicitors have been retained on the authority of the directors; the appellants contend that only the receiver could authorise the solicitors' retainer. 30 No notice of contention has been filed in respect of the following finding recorded in [23] of the judgment at first instance: 'It is clear … that subject to the validity of the appointment of the receivers (which, in turn, depends upon whether the several debentures were validly rescinded before their appointment), the receivers under the several debentures granted by the Gartner companies had, and have, the right to institute and conduct proceedings in the name of the Gartner companies against [Ernst & Young] in respect of the causes of action alleged. It is also clear that, subject to whether the several debentures have been validly rescinded, the causes of action are assets of each of the Gartner companies subject to the several debentures.' 31 The converse of the above finding is that, if the receivers have not been validly appointed, they do not have the right to institute and conduct proceedings in the name of the Gartner companies. If the receivers do not have that right, there could be no objection to the directors of the Gartner companies instructing solicitors to institute and conduct this proceeding; they would in such circumstances have the exclusive capacity to do so. As Street J observed in Hawkesbury Development Co Ltd v Landmark Finance Pty Ltd at 790: 'A valid receivership and management will ordinarily supersede, but not destroy, the company's own organs through which it conducts it affairs. The capacity of those organs to function bears a direct inverse relationship to the validity and scope of the receivership and management.' 32 The matters identified above suggest that resolution of the questions of who has the capacity to retain solicitors to bring proceedings in the name of the Gartner companies against the appellants, and whether or not that capacity is an exclusive capacity, cannot be conclusively determined ahead of the determination of the challenge to the validity of the appointment of the receivers. As is mentioned above, that challenge is made in this very proceeding. As we understand it, the issue of the validity of the appointment of the receivers is to be determined as a separate question ahead of the determination of other issues in the proceeding. 33 We are not persuaded that the Gartner companies are required to await the determination of their challenge to the appointment of the receivers before they can validly retain solicitors to initiate and maintain a proceeding in the name of the companies against the appellants in respect of the causes of action identified in the application and statement of claim. The receivers did not and have not taken steps to pursue the causes of action. The limitation periods in respect of the causes of action have commenced to run. As Gleeson CJ, McHugh, Gummow and Hayne JJ observed in Dow Jones & Company Inc v Gutnick [2002] HCA 56, (2002) 77 ALJR 255 at [36]: 'Clearly, the common law favours the resolution of particular disputes between parties by the bringing of a single action rather than successive proceedings.' Further, as between the directors and the receivers, the receivers may, if so advised, seek to rely on their asserted powers under the debentures to take control of the proceeding so far as it involves claims against the appellants. Assuming the debentures to be valid, NAB will reap the benefit, if any, of the proceeding if its outcome is favourable to the Gartner companies. 34 In our view, the receivers, or perhaps NAB, could have required the directors to provide to the Gartner companies a satisfactory indemnity as to costs but, as is mentioned above, they did not do so. For the reasons given above, we do not think that the appellants have any right to insist on the provision of such an indemnity. 35 The appellants bear the onus of establishing that the solicitors on the record in this proceeding for the Gartner companies are not authorised to act on behalf of the Gartner companies (Inglis v Moore (No 2) (1979) 46 FLR 470 at 482; Halliday v High Performance Personnel Pty Ltd (in liq) (formerly SACS Group Pty Ltd)(1993) 113 ALR 637 at 639). They have not satisfied that onus. In our view, the appellants have not shown any entitlement to an order dismissing the claims made by the Gartner companies against them. 36 We have reached the above conclusion by a somewhat different path than that taken by the primary judge. It is appropriate in that circumstance for us to record that we agree with the conclusion of the primary judge that the debentures, assuming their validity, create rights between NAB and the receivers on the one hand and the Gartner companies on the other but given no rights to the appellants. We further agree with his Honour's conclusion that the conduct of NAB and the receivers gives rise to the inference, which is not otherwise rebutted, that NAB and the receivers presently consent to the maintenance of this proceeding in the name of the Gartner companies against the appellants. 37 In our view the appeal should be dismissed with costs. I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court. Associate: Dated: 21 October 2003 Counsel for the Appellant: Mr I Robertson Solicitor for the Appellant: Kelly & Co Counsel for the First to the Ninth Respondents: Mr J Wells QC Solicitor for the First to the Ninth Respondents: Cosoff Cudmore Knox Counsel for the Tenth Respondent: Mr M Hoffman Solicitor for the Tenth Respondent: Finlaysons Date of Hearing: 25 August 2003 Date of Judgment: 21 October 2003