FEDERAL COURT OF AUSTRALIA Apostolou v VA Corporation of Aust Pty Ltd [2011] FCAFC 103 Citation: Apostolou v VA Corporation of Aust Pty Ltd [2011] FCAFC 103 Appeal from: Apostolou v VA Corporation Aust Pty Ltd [2010] FCA 64 Parties: VASILIKI APOSTOLOU (AS TRUSTEE OF THE VA UNIT TRUST & VASILIOU FAMILY TRUST) and ANDREW VASILIOU (AS TRUSTEE OF THE VA UNIT TRUST) v VA CORPORATION OF AUST PTY LTD (ACN 006 760 792), DAVID CHARLES QUIN, CLYDE PETER WHITE (AS JOINT LIQUIDATORS OF VA CORPORATION OF AUST PTY LTD (ACN 006 760 792), PERPETUAL TRUSTEE COMPANY LIMITED (ACN 000 001 007), CHALLENGER MANAGED INVESTMENTS LIMITED (ACN 94 002 835 592) and REGISTRAR OF TITLES ANDREW VASILIOU v CHALLENGER MANAGED INVESTMENTS LIMITED (ACN 002 835 592), PERPETUAL TRUSTEE COMPANY LIMITED (ACN 000 001 007), COMMISSIONER OF STATE REVENUE, CITY OF PORT PHILLIP COUNCIL, JOHN MATTHIES & CO and REGISTRAR OF TITLES File number(s): VID 143 of 2010 VID 704 of 2008 Judges: PERRAM, NICHOLAS & YATES JJ Date of judgment: 15 August 2011 Corrigendum: 22 September 2011 Catchwords: BANKRUPTCY AND INSOLVENCY – sale of property by mortgagee – whether mortgagee had power of sale – whether notice of default properly served and the power of sale properly exercised BANKRUPTCY AND INSOLVENCY – conduct of liquidators – where liquidators sought court order for sale of property – whether liquidation unnecessarily delayed BANKRUPTCY AND INSOLVENCY – conduct of liquidators – where company in liquidation is solvent – whether liquidators failed to take steps to terminate liquidation Legislation: Corporations Act 2001 (Cth) s 477(2)(c) Federal Court of Australia Act 1976 (Cth) s 24(1A) Transfer of Land Act 1958 (Vic) ss 4(2), 76(1), 77(1) Cases cited: Ashenhurst v James (1745) 3 Atk 270 Grissel v Money (1869) 33 LJ Ch 312 Hewett v Court (1983) 149 CLR 639 Meredith v Commissioner of Taxation (2002) 125 FCR 308 Stockl v Rigura Pty Ltd [2004] NSWCA 73 Stone v Farrow Mortgage Services Pty Ltd (in liq) [1999] NSWCA 435 Date of hearing: 24 February 2011 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 65 NSD 143 of 2010 Counsel for the Appellants: Mr A Vasiliou appeared in person Counsel for the First Respondent: The First Respondent did not appear Counsel for the Second and Third Respondents: Mr R S Randall Solicitor for the Second and Third Respondents: Thomsons Lawyers Counsel for the Fourth and Fifth Respondents: Mr D J Williams SC with Mr S Rubenstein Solicitor for the Fourth and Fifth Respondents: Norton Rose Counsel for the Sixth Respondent: The Sixth Respondent did not appear VID 704 of 2008 Counsel for the Appellant: Mr A Vasiliou appeared in person Counsel for the First and Second Respondents: Mr D J Williams SC with Mr S Rubenstein Solicitor for the First and Second Respondents: Norton Rose Solicitor for the Third Respondent: Mr R J McInnes of Victorian Government Solicitor's Office Counsel for the Fourth Respondent: Mr N Wallace Solicitor for the Fourth Respondent: McCluskys Solicitor for the Fifth Respondent: Mr P Fox of John Matthies & Co Counsel for the Sixth Respondent: The Sixth Respondent did not appear FEDERAL COURT OF AUSTRALIA Apostolou v VA Corporation of Aust [2011] FCAFC 103 CORRIGENDUM 1. The reference to "Challenger Managed Investments Limited (ACN 94 002 835 592)" in this judgment as a respondent in file VID 143/2010 should be a reference to "Challenger Managed Investments Limited (ACN 002 835 592)". I certify that the preceding one (1) numbered paragraph is a true copy of the Corrigendum to the Reasons for Judgment herein of the Honourable Justices Perram, Nicholas & Yates. Associate: Dated: 22 September 2011 IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 143 of 2010 ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA BETWEEN: VASILIKI APOSTOLOU (AS TRUSTEE OF THE VA UNIT TRUST & VASILIOU FAMILY TRUST) First Appellant ANDREW VASILIOU (AS TRUSTEE OF THE VA UNIT TRUST) Second Appellant AND: VA CORPORATION OF AUST PTY LTD (ACN 006 760 792) First Respondent DAVID CHARLES QUIN Second Respondent CLYDE PETER WHITE (AS JOINT LIQUIDATORS OF VA CORPORATION OF AUST PTY LTD (ACN 006 760 792) Third Respondent PERPETUAL TRUSTEE COMPANY LIMITED (ACN 000 001 007) Fourth Respondent CHALLENGER MANAGED INVESTMENTS LIMITED (ACN 94 002 835 592) Fifth Respondent REGISTRAR OF TITLES Sixth Respondent JUDGES: PERRAM, NICHOLAS & YATES JJ DATE OF ORDER: 15 AUGUST 2011 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The appeal is dismissed. 2. The appellants are to pay the respondents' costs including reserved costs. Note: Settlement and entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. The text of entered orders can be located using Federal Law Search on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 704 of 2008 ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA BETWEEN: ANDREW VASILIOU Appellant AND: CHALLENGER MANAGED INVESTMENTS LIMITED (ACN 002 835 592) First Respondent PERPETUAL TRUSTEE COMPANY LIMITED (ACN 000 001 007) Second Respondent COMMISSIONER OF STATE REVENUE Third Respondent CITY OF PORT PHILLIP COUNCIL Fourth Respondent JOHN MATTHIES & CO Fifth Respondent REGISTRAR OF TITLES Sixth Respondent JUDGES: PERRAM, NICHOLAS & YATES JJ DATE OF ORDER: 15 AUGUST 2011 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Leave to appeal is refused. 2. The appellant is to pay the respondents' costs including reserved costs. Note: Settlement and entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. The text of entered orders can be located using Federal Law Search on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 143 of 2010 ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA BETWEEN: VASILIKI APOSTOLOU (AS TRUSTEE OF THE VA UNIT TRUST & VASILIOU FAMILY TRUST) First Appellant ANDREW VASILIOU (AS TRUSTEE OF THE VA UNIT TRUST) Second Appellant AND: VA CORPORATION OF AUST PTY LTD (ACN 006 760 792) First Respondent DAVID CHARLES QUIN Second Respondent CLYDE PETER WHITE (AS JOINT LIQUIDATORS OF VA CORPORATION OF AUST PTY LTD (ACN 006 760 792) Third Respondent PERPETUAL TRUSTEE COMPANY LIMITED (ACN 000 001 007) Fourth Respondent CHALLENGER MANAGED INVESTMENTS LIMITED (ACN 94 002 835 592) Fifth Respondent REGISTRAR OF TITLES Sixth Respondent IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 704 of 2008 ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA BETWEEN: ANDREW VASILIOU Appellant AND: CHALLENGER MANAGED INVESTMENTS LIMITED (ACN 002 835 592) First Respondent PERPETUAL TRUSTEE COMPANY LIMITED (ACN 000 001 007) Second Respondent COMMISSIONER OF STATE REVENUE Third Respondent CITY OF PORT PHILLIP COUNCIL Fourth Respondent JOHN MATTHIES & CO Fifth Respondent REGISTRAR OF TITLES Sixth Respondent JUDGES: PERRAM, NICHOLAS & YATES JJ DATE OF ORDER: 15 AUGUST 2011 WHERE MADE: sYDNEY REASONS FOR JUDGMENT THE COURT 1 There are two appeals before the Court. 2 The first appeal (VID 704 of 2008) is brought by Andrew Vasiliou against six respondents from orders made on 1 August 2008 whereby the primary judge dismissed the proceeding then before him (VID 285 of 2008) with an order that Mr Vasiliou pay the respondents' costs. 3 The second appeal (VID 143 of 2010) is brought by Mr Vasiliou and his wife, Vasiliki Apostolou, against six respondents (three of whom are also respondents in the other appeal proceeding) from a judgment and orders made on 11 February 2010 whereby the primary judge also dismissed the proceeding (VID 124 of 2008) with an order that Mr Vasiliou and Ms Apostolou pay the respondents' costs. 4 Both appeals were heard together. Mr Vasiliou appeared in person in both appeals and made submissions on his own behalf and, by leave, on behalf of Ms Apostolou. Ms Apostolou did not appear in person. 5 Both appeals arise out of the same factual background, which concerns, principally, the events surrounding the mortgagee sale by auction of real property at 181-185 St Kilda Road, St Kilda (the St Kilda property) on 6 March 2008. At that time the St Kilda property was owned by VA Corporation Australia Pty Ltd (in liquidation) (VA Corporation) as trustee of the VA Unit Trust. VA Corporation was then being wound up in insolvency. The liquidators of VA Corporation had sought an order from the Supreme Court of Victoria for the sale of the St Kilda property. However, they were overtaken by events. Perpetual Trustee Company Ltd (Perpetual) entered into possession of the St Kilda property and, as mortgagee, effected its sale. The appellants sought to obtain orders restraining the sale and completion of the sale, but were unsuccessful. 6 In proceeding VID 124 of 2008 (the 124 proceeding) the appellants claimed that Ms Apostolou had replaced VA Corporation as trustee of the VA Unit Trust prior to the commencement of the company's winding up, and that Mr Vasiliou had subsequently replaced Ms Apostolou. The primary claims were against Perpetual and the company's liquidators. The primary judge identified the broad outline of the appellants' claims to be, first, that Perpetual sold the St Kilda property at an undervalue at a time when it had no right to sell the property and, secondly, that the liquidators had acted either illegally or unreasonably in their handling of the winding up of VA Corporation and, for that reason, were not entitled to their fees and expenses as claimed. The primary judge found that none of these allegations could be sustained and dismissed the proceeding. 7 Although both first instance proceedings apparently share a common factual background and have some common parties, the judgments or orders, from which each appeal is brought, were given or made in quite different circumstances. It is necessary, therefore, to deal with each appeal separately. Appeal VID 704 of 2008 8 This appeal can be dealt with shortly. As noted, it arises from orders made in proceeding VID 285 of 2008 (the 285 proceeding). The grounds of appeal, in the precise form in which they appear in the notice of appeal, are as follows: 1. His Honour has erred in not allowing the full hearing of facts before His Honour actually dismissed the case before the Court. 2. The Court erred in not merging this case with the principal case VID 124 of 2008 now before the Court so for the Court to deal with serious issues of fraud organized by the parties mentioned in the VID 285 of 2008 in which have existing business or issues to answer regarding the theft of moneys belong to the either the "Company" or to Andrew Vasilious' Family TRUST., 3. His Honour erred in saying that the VA CORPORATION OF AUST PTY LTD ("The Company") is the true owner of the property or in fact its entitle to be on the Certificate of Title even. 4. His Honour erred in saying that Andrew Vasiliou he is not the true owner of the asset particularly paying it in full in accordance with Sale Contract entered into between himself and VIC ROADS on the 9th April 2008. 5. His Honour erred in not give sufficient weight to the High Court Rulings that who ever provides the money for any property is deem to be the true owner and such he or she allows to deal with it. 9 None of these grounds of appeal can be sustained. Indeed, grounds 3, 4 and 5 in the notice of appeal relate to alleged findings of the primary judge which, in light of the events which we will now describe, were not, and could not possibly have been, made in the 285 proceeding. 10 The 285 proceeding and the 124 proceeding came before the primary judge for directions on 1 August 2008. The appellants were represented by a legal practitioner (Mr Finkelstein). Mr Vasiliou was also present. The transcript indicates that some of the respondents in the 285 proceeding (the Commissioner of State Revenue and the City of Port Phillip, respectively the third and fourth respondents in this appeal) were seeking orders that the proceeding be summarily dismissed for reasons relating to Mr Vasiliou's standing to bring claims against those respondents. An issue was also raised by the primary judge as to whether there was any claim in the 285 proceeding that had not already been made in the 124 proceeding. 11 In the course of hearing submissions in relation to the question of standing, the following exchange took place: MR FINKELSTEIN: No, no, Andrew. Excuse me, your Honour. I think my client, Andrew Vasiliou, would agree with me that action number 285 should be dismissed. HIS HONOUR: Okay, fair enough. MR FINKELSTEIN: And I can't argue against any application for costs on that, your Honour, so I won't even waste your Honour's time. 12 The primary judge then dismissed the 285 proceeding, with costs, as he had been invited to do. 13 The transcript then records that the directions hearing continued with respect to "the main action" (namely, the 124 proceeding), in which Mr Vasiliou himself made certain observations, remarks and submissions. For example, in relation to the 124 proceeding, the following exchange took place: MR VASILIOU: - - - when this case is other, will be no other action taken to these people. Court action. HIS HONOUR: I know. MR VASILIOU: Right. I want to make that clear. HIS HONOUR: And I – okay. MR VASILIOU: There's no future actions rather than this one. If this one is finished, it's exploded, it's finished. HIS HONOUR: That's it. Okay. MR VASILIOU: No more legal action will be taken either from these people or that people. I can guarantee you that. MR FINKELSTEIN: Not even an appeal if you lose? MR VASILIOU: Appeal, yes. HIS HONOUR: Fair enough. MR VASILIOU: But no other action, sir. HIS HONOUR: Okay. 14 We are left in no doubt that Mr Vasiliou was cognisant that the primary judge had been invited by Mr Vasiliou's legal representative, with Mr Vasiliou's concurrence, to summarily dismiss the 285 proceeding with costs and that his Honour had acceded to that invitation. No findings of fact or legal determinations had been made by his Honour in respect of that proceeding. It is plain that, contrary to the premise of ground 2 in the notice of appeal, there was no application to the primary judge to "merge" the 285 proceeding with "the principal case", the 124 proceeding. 15 As the primary judge's orders were by way of summary disposition of the proceeding, the judgment from which the appeal is brought is interlocutory. Leave to appeal is required: s 24(1A) of the Federal Court of Australia Act 1976 (Cth); Meredith v Commissioner of Taxation (2002) 125 FCR 308, at [23]-[28]. Mr Vasiliou did not make any explicit application for leave to appeal. For the reasons we have given, any appeal, based on the present notice of appeal, would be hopeless. Acknowledging that leave to appeal is necessary, the appropriate course is to refuse leave to appeal from the orders that were made. We will so order. The appellant (Mr Vasiliou) must pay each of the respondents' costs. Appeal VID 143 of 2010 Introduction 16 The grounds of appeal, in the precise form in which they appear in the notice of appeal, are as follows: 1. His Honor erred in dismissing the Appellants' Application in the first instance. 2. His Honor has erred in not stopping the SALE of the principal "property" in the first place on the 4th of March 2008 and call in for accounts. 3. His Honor erred in law also to accept the fact that Perpetual Trustee the mortgagee have in fact complied with lands and Transfer Act Section 77 before it could take possession by serving against the mortgagor and the occupants of the "property" the required Notice before it can enter into possession of the mortgaged "property". 4. His Honor erred in his Judgment to say that there where unsecured creditors owed by the VA UNIT TRUST where the Company in liquidation it was entitle by way of indemnity bases. 5. His Honor erred to say that we have not supplied the necessary information to the Supreme Court appeal Judge to enable her honour to allow the appeal from Master Elthim who placed the Company illegally in liquidation or gave orders where the Master shouldn't have had in the first instance because LAND TAX is a secured debt. 6. His Honor erred in not take into account seriously and legally the severe neglect of duty and performances by the two liquidators who in fact sat around not doing their job delegated to them by the Court in the first instances and the failure to comply with their legal obligations' in accordance with the Corporations Act 2001 moral or otherwise and allow total catastrophic to incurred against the Company and against the VA UNIT TRUST. 7. His Honor erred to say that the two liquidators are in fact entitle to a payment of $470,000 for work done on behalf of the Company. 8. His Honor erred to accept that the two liquidators of the Company at the time of its liquidation Order being made they where entitle to interfered with the "properties" already being transferred to a new trustee in accordance with the VA UNIT TRUST DEED OF TRUST. 9. His Honor erred not to take into account the complete & comprehensive valuation made by John Dowling the Valuer and evidence giving that the "property" it was sold in a hurry to start with and that not enough preparation time it was allowed by the mortgagee that resulted in that property then it was sold well under value by more then $1,100.00 million dollars. 10. His Honor erred in not dismissing the Application either on the 4th of March 2008 when it was before him or when the property it was sold on the 6th of March 2008 even. 11. His Honor erred in allowing the mortgagee to keep future costs from the money that not belong to the Applicants even. 12. His Honor has not take into account that the new trustee of the VA UNIT TRUST have served against the Mortgagee notice calling in the mortgage for payment byt they refuse to comply with. 13. His Honor did not allow adequate time for hearing so some more witness to be called in to give evidence about the case. 14. His Honor erred in not take into account that the Company ex-directors done what they could to save the best interests of the VA UNIT TRUST and the Company's best interests. 15. His Honor erred to take into account that the debts that caused the liquidation of the Company where not being incurred by the Company in the first place but rather by VASILIKI APOSTOLOU and such accounts (if they where true owed) where due and payable by VASILIKI APOSTOLOU in accordance with the local Government Act 156 of 1989 and not the Company. 16. And any other errors of law that His Honor made that due to limited time frame and serious ill health of Andrew Vasiliou those can not be written down just at the moment and it will be added in an amended NOTICE OF APPEAL as soon as possible. 17 In making his oral submissions, Mr Vasiliou gave a detailed account of what he perceived to be important background material that would assist the Court in its consideration of this appeal. Much of this background had little or no bearing on the judgment from which the appeal is brought. Much of it related to proceedings in other courts (mainly, in the Supreme Court of Victoria where an appeal against the winding up of VA Corporation was heard and dismissed) and interlocutory proceedings in this Court (seeking, unsuccessfully, to restrain either the sale or completion of the sale of the St Kilda property, and from which leave to appeal was not sought at the time). It is apparent that a number of the grounds of appeal are addressed to these matters and are foreign to the judgment from which this appeal is brought. Some of the grounds of appeal are unintelligible. When invited to identify, by reference to the primary judge's reasons for judgment, the respect or respects in which the appellants contended that the primary judge erred, Mr Vasiliou said: "His judgment – the whole thing is wrong" and "It's wrong – every, every part". 18 We are therefore left to deal with the appeal largely by considering what can be distilled from the appellants' oral argument as it related to those parts of the notice of appeal that can be seen to reflect findings and conclusions in the judgment at hand. An outline of submissions, delivered by the appellants on the morning of the hearing of the appeal, does not illuminate matters greatly. 19 It is convenient to approach the matter as the primary judge did, dealing first with his Honour's findings and conclusions in relation to mortgagee sale of the St Kilda property and then with his Honour's findings and conclusions in relation to the liquidators' conduct. The mortgagee sale 20 Challenger Managed Investments Ltd (Challenger), the fifth respondent, was trustee of the Challenger Howard Mortgage Fund (formerly, the Howard Mortgage Trust) (the Fund). The Fund provided a loan facility to VA Corporation under which certain advances were made. The repayment of those advances was secured by two mortgages granted by VA Corporation to the then custodian of the Fund, Permanent Trustee Australia Limited (Permanent). As we will later describe, one of these mortgages was transferred by Permanent to Perpetual. 21 In relation to the claim concerning the mortgagee sale of the St Kilda property, the primary judge, after dealing with certain background matters relating to the advances made to VA Corporation under the loan facility (which do not seem to be controversial), noted a submission that Perpetual was not entitled to exercise any power of sale under the mortgage because it was required to extend the term of the loan. The primary judge found that there was nothing in this contention. No ground of appeal is raised in this regard and no submission was advanced by the appellants to identify error on the part of the primary judge in rejecting this contention. The primary judge also found that, by April 2007, interest on the loan had stopped being paid. The appellants did not dispute this finding. Subsequently a notice of default was served. The primary judge's finding in this regard was as follows: On 2 July 2007 Perpetual served a notice of default as required by s 76 of the Transfer of Land Act 1958 (Vic), calling upon VA Corporation to pay $93,000.00, being the amount of interest then in arrears. The notice stated that if the interest was not paid Perpetual would take possession of the St Kilda Road property with a view to its sale. Mr Vasiliou acknowledged that the company received the notice. Although Mr Vasiliou argued that the notice was not a good one, he could not point to any particular deficiency in it. In particular, he acknowledged that the default referred to in the notice had occurred. 22 In fact, the notice was served by Permanent, not Perpetual, but, for the reasons which follow, nothing ultimately turns on this. This notice and its consequences were the focus of a number of submissions advanced by Mr Vasiliou in this appeal. It is a matter to which we will return. 23 The primary judge then noted a contention by Mr Vasiliou that Perpetual was not entitled to exercise its power of sale because it should have agreed to refinance the loan. The primary judge found that the appellants were not entitled to complain about any failure (if there was one) to grant what would be, in effect, an indulgence. No particular submissions were advanced by the appellants as to how or why the primary judge erred in this finding, particularly in light of other findings by the primary judge that finance, as arranged by the appellants, was conditional and that, at the time when Perpetual effected the sale, there was no certainty that the new lender would put up the required funds. In any event, another significant issue was that, at the time, the appellants did not have title to the St Kilda property. The title was with VA Corporation, then in liquidation. 24 The primary judge recorded that the sum of $4.6 million was obtained from the sale of the St Kilda property and that this was significantly in excess of the valuation provided by the valuer engaged by Perpetual. The primary judge was critical of this valuation, preferring the valuation provided by Mr Dowling who had been retained by the appellants to carry out a valuation for the purposes of the trial. Mr Dowling provided an opinion that, at the date of the sale by auction, the property was worth $5.7 million. 25 The primary judge noted that it was largely, if not exclusively, on Mr Dowling's evidence that the appellants advanced their claim against Perpetual for breach of duty. 26 The primary judge found that, in exercising its power of sale, Perpetual was subject to duties at general law, under the Transfer of Land Act 1958 (Vic) (the Transfer of Land Act) and as a "controller" under s 420A of the Corporations Act 2001 (Cth) (the Corporations Act). The primary judge concluded, however, that there was no evidence to suggest that Perpetual had breached any duties it owed to VA Corporation. 27 In this connection, the primary judge had regard to the line of authority, represented by decisions such as Stone v Farrow Mortgage Services Pty Ltd (in liq) [1999] NSWCA 435; (1999) 12 BPR 22,175 and Stockl v Rigura Pty Ltd [2004] NSWCA 73; (2004) 12 BPR 23,151, which holds that one looks to the price actually obtained on sale as being evidence of the true value of the property (provided proper steps have been taken to advertise and sell the property). 28 In the present case, the primary judge found as follows: … Here, the evidence shows that the price obtained at the auction followed a reasonable marketing campaign. While Mr Dowling's evidence is that the price was below the property's true market value (a view I do not discount), in the absence of something to show that there had been conduct that amounted to a breach of duty on the part of Perpetual (or its agents who conducted the marketing and auctioning campaign) the claim against it must fail. There is no such evidence. Indeed, there is nothing to suggest any act or omission on the part of Sutherland Farrelly which led to the sale price being below the market price. If there was a sale at an undervalue, that is simply a fortuitous result. 29 By ground 9 of their notice of appeal, the appellants contend that the primary judge erred in not taking into account the evidence given by Mr Dowling as to the value of the St Kilda property. As the above quotation and other findings of the primary judge make clear, his Honour did take that evidence into account. By this ground the appellants also seem to challenge the primary judge's finding that the price obtained at the auction followed a reasonable marketing campaign. However, no submissions were advanced in the appeal as to why the primary judge erred in the finding he had made in this regard. 30 As we have noted, the focus of this aspect of the appeal was the notice of default and its consequences. In this connection Mr Vasiliou advanced three submissions under the overarching contention that the mortgagee did not have power to sell the St Kilda property. First, he submitted that, contrary to the express finding made by the primary judge, no notice of default had been served entitling Perpetual to exercise a power of sale with respect to the St Kilda property. In this connection Mr Vasiliou drew attention to the fact that the notice that was served was one that had been given by Permanent, not Perpetual, as mortgagee of the St Kilda property. Secondly, he submitted that the notice that was served was not for money due under the mortgage to Permanent. He said, somewhat incongruously, that the money was owing to Perpetual, not to Permanent. Thirdly, he submitted that the amount claimed under the notice included penalty interest which VA Corporation was not liable to pay. He said that, but for the inclusion of penalty interest, there was no default entitling Permanent to issue a notice under s 76 of the Transfer of Land Act. 31 The first submission is reflected in ground 3 of the notice of appeal. At trial, Mr Vasiliou accepted in cross-examination that a notice under s 76 of the Transfer of Land Act was served on VA Corporation, which, by then, was in liquidation, and that VA Corporation did not comply with that notice. 32 Section 76(1) of the Transfer of Land Act provides: If default is made in payment of the principal sum interest or annuity secured or any part thereof or in the performance or observance of any covenant express or implied in any such mortgage or charge and continues for one month or such other period as is therein expressly fixed, the mortgagee or annuitant may serve on the mortgagor or grantor of the annuity and such other persons as appear by the Register to be affected notice in writing to pay the money owing or to perform and observe the covenants (as the case may be). 33 Section 77(1) of the Transfer of Land Act provides: If within one month after the service of such notice or demand or such other period as is fixed in such mortgage or charge the mortgagor grantor or other persons do not comply with the notice or demand the mortgagee or annuitant may, in good faith and having regard to the interests of the mortgagor grantor or other persons, sell or concur with any other person in selling the mortgaged or charged land or any part thereof, together or in lots, by public auction or by private contract, at one or several times, and for a sum payable in one amount or by instalments, subject to such terms and conditions as the mortgagee or annuitant thinks fit, with power to vary any contract for sale and to buy in at any auction or to rescind any contract for sale and to resell without being answerable for any loss occasioned thereby and with power to make such roads streets and passages and grant and reserve such easements as the circumstances of the case require and the mortgagee or annuitant thinks fit, and may make and sign such transfers and do such acts and things as are necessary for effectuating any such sale. 34 We have already remarked that the requisite notice was served by Permanent, whereas the power of sale was exercised by Perpetual. Those events are explained by the fact that, at the time the notice was served on 2 July 2007, Permanent was, indeed, the mortgagee of the St Kilda property. Evidence before the primary judge showed that Permanent had subsequently transferred the mortgage to Perpetual by instrument dated 22 August 2007, which was, in turn, registered on 27 August 2007. As we have noted, the sale of the property by Perpetual took place on 6 March 2008. 35 On appeal, Perpetual submitted that, as a result of the transfer, it had "stepped into the shoes" of Permanent and had taken all the rights that had accrued to Permanent from having given a notice under s 76 of the Transfer of Land Act. It relied on a general statement to this effect in Tyler ELG, Young PW and Croft C, Fisher and Lightwood's Law of Mortgage (2nd Australian Ed, Lexis Nexis Butterworths, 2005) in para 14.2 on page 368, citing Ashenhurst v James (1745) 3 Atk 270; 26 ER 958. 36 We accept this submission. In our view there can be no doubt that the power of sale conferred by s 77 of the Transfer of Land Act on a "mortgagee" includes a transferee from that mortgagee. So much is made clear by the extended definition of "mortgagee" in s 4(2) of the Transfer of Land Act, which relevantly provides: In and for the purposes of this Act unless inconsistent with the context or subject-matter any description of or reference to any person as ... mortgagee … shall extend to his executors administrators successors transferees and assigns to the intent that every right power authority liability or obligation vested in or imposed on any such person by or under this Act shall devolve upon any such executor administrator successor transferee or assign. 37 The appellants do not dispute that VA Corporation did not comply with the notice served on it by Permanent. After the period prescribed in s 77(1) of the Transfer of Land Act, Permanent had the "right, power and authority" to sell the St Kilda property as thereby provided. That "right, power and authority" was vested in Permanent "by or under" the Transfer of Land Act. Upon the transfer of the mortgage to Perpetual that "right, power and authority" devolved upon Perpetual by operation of the Act. 38 As to the second and third submissions, it was a point of contention on the appeal that these submissions had been advanced by the appellants at the hearing before the primary judge. The primary judge recorded in his reasons (see at [21] above) that Mr Vasiliou had argued that the notice was not a good one, but said that Mr Vasiliou had pointed to no particular defect in it. Mr Vasiliou contended, but counsel for the fourth and fifth respondents (Perpetual and Challenger) disputed, that each of the second and third submissions had been advanced at the hearing before the primary judge. Neither submission is reflected in any ground of appeal. 39 We have looked at the transcript of the hearing before the primary judge and are unable to see that the second submission had been advanced. Moreover, we are unable to understand the factual basis for that submission. The material currently before us shows that two mortgages were originally registered in respect of the St Kilda property, both in favour of Permanent as mortgagee. The suggestion that money was owing to Perpetual, but not to Permanent, at the time that Permanent served the notice under s 76(1) of the Transfer of Land Act, sits discordantly with the objective fact that Permanent, and not Perpetual, was, at the relevant time, the mortgagee of the St Kilda property. We are satisfied that there is no basis for the second submission. 40 As to the third submission, Mr Vasiliou did complain, in the course of his oral evidence, that VA Corporation was not obliged to pay penalty interest. He was cross-examined on that matter. The cross-examination demonstrated that Mr Vasiliou's complaint was misconceived. Under the Deed of Loan into which it had entered, VA Corporation was obliged to pay interest at a rate defined as the "Higher Rate" (being the aggregate of the "Lower Rate" (as defined) and 4% per annum). In the event that VA Corporation paid interest as provided in the Deed of Loan, and also "duly observed and performed each and every covenant on [its] part contained or implied in each Transaction Document to which it is a party", then interest would be accepted at the Lower Rate (namely, 7.5% per annum) in lieu of the Higher Rate. The Deed of Loan incorporated the provisions of Memorandum No. AA674 filed in the Land Titles Office. An event of default under that document included the filing of an application for, or the making of an order for, the winding up of (in this case) VA Corporation. VA Corporation was wound up by order of the Supreme Court of Victoria on 29 March 2006. From March 2006 VA Corporation was charged interest at the Higher Rate. This is the penalty interest to which Mr Vasiliou referred in making the third submission. In the hearing before the primary judge Mr Vasiliou's only response was that he had never agreed to penalty interest being charged other than for the non-timely payment of interest. The evidence comprising the Deed of Loan and Memorandum No. AA674 plainly shows that contention to be incorrect. The third submission is thus without foundation. 41 There is an additional matter. In the course of his cross-examination, Mr Vasiliou did appear to suggest that, before the St Kilda property could be sold, it was necessary for a notice to be served calling for all moneys due under the mortgage to be paid (which Mr Vasiliou described as a notice of demand), in addition to the notice required by s 76(1) of the Transfer of Land Act (which Mr Vasiliou distinguished as a notice of default). This submission is reflected in the appellants' written outline of submissions to which we have referred, but not in their notice of appeal. The extent to which this point was agitated in the course of the hearing is unclear. Regardless, the point is bad. Section 76(1) of the Transfer of Land Act does not proceed on the basis that a "notice of demand" as well as a "notice of default" must be served before the power conferred by s 77(1) of the Act can be exercised. 42 The appellants did not advance any argument in relation to the other grounds of appeal apparently directed to the mortgagee sale of the St Kilda property: see grounds 11 and 12. The liquidators' conduct 43 The primary judge noted that the appellants' claims against the liquidators of VA Corporation had two elements: first, the liquidation was unnecessarily delayed because the liquidators sought a court order to sell the St Kilda property; secondly, the liquidators failed to take steps to terminate the liquidation once it became apparent to them that VA Corporation was solvent. 44 As to the first of these matters, the primary judge found that VA Corporation's debts had been incurred as trustee of the VA Unit Trust. VA Corporation had a right of indemnity in respect of those debts, supported by an equitable lien or charge over the trust assets. There were, however, no cash assets from which it could, as trustee, exercise its rights of reimbursement or exoneration in respect of those debts. It apparently had no other funds at its disposal to pay those debts. 45 An equitable lien or charge does not confer a right of sale of the property in respect of which the lien or charge is held. Thus a trustee's right of indemnity against non-cash assets is enforceable by a court order for sale (Grissel v Money (1869) 33 LJ Ch 312; Hewett v Court (1983) 149 CLR 639 at 663)) or the appointment of a receiver with a power of sale: see the discussion in Heydon JD and Leeming MJ, Jacobs' Law of Trusts in Australia (7th ed, Lexis Nexis Butterworths, 2006) at [2104]; Sykes EI and Walker S, The Law of Securities (5th ed, Lawbook Co., 1993) at 198. 46 The primary judge reasoned that, in the present case, the liquidators had two sources of power to sell the St Kilda property in order to enforce the right of indemnity. First, clause 8.3 of the deed constituting the VA Unit Trust conferred a power of sale on the trustee. After reviewing a number of authorities, the primary judge concluded that, where a trustee has legal title to property coupled with such a power of sale, the trustee may resort to that power in order to get in funds against which to exercise the trustee's right of indemnity: see at [40]-[46]. His Honour also considered that there was no reason why, in the present case, the liquidators could not resort to the power of sale conferred by s 477(2)(c) of the Corporations Act to enable the indemnity to be enforced. No issue arises on this appeal concerning his Honour's conclusions in this regard. 47 Notwithstanding these sources of power, the primary judge held that there were, in the present case, good reasons for the liquidators to seek a court order to sell the St Kilda property. His Honour expressed the position thus at [53] and [54]: Notwithstanding the existence of a power of sale, there were in this case good reasons for the liquidators to apply to the court for permission to sell. First, there was in existence a transfer by which VA Corporation had purported to transfer the property to Ms Apostolou. The transfer had been lodged in the Stamps Office and had been assessed to duty. That assessment was being challenged. Second, Mr Vasiliou had informed the liquidators that VA Corporation had no right to remain as the registered proprietor of the property. Third, Mr Vasiliou also denied that the trustee had a right of indemnity. Fourth, Mr Vasiliou was making a variety of complaints about the liquidators' conduct. Finally, the liquidators were acting on their solicitors' advice regarding matters which were not legally straightforward. These reasons made it proper, if not necessary, for the liquidators to seek the protection of a court order. No doubt proceedings would have been issued challenging any attempt on their behalf to sell the property. As things turned out, it was unnecessary for the Supreme Court to rule on the liquidators' application. The mortgagee's taking of possession rendered the liquidators' application redundant. 48 The primary judge then turned to consider the position of a company being wound up in insolvency where it turns out that the company is solvent and all that is required to pay out creditors is some reorganisation of the company's finances. The primary judge expressed the view (at [57]) that, if a reasonable restructuring is proposed by the contributories, a liquidator should take the steps necessary to facilitate that restructure. 49 The primary judge then made the following findings: It was highly likely that VA Corporation was solvent when it was wound up. At that time, in addition to the debt owed to Perpetual, there were two unsecured creditors: the State Revenue Office ($147,525.31 for unpaid land tax together with interest); and the City of Port Phillip ($55,188.93 for unpaid rates and costs). The liquidators had been in discussions with Mr Vasiliou regarding the potential refinancing of the St Kilda property, but "did not go out of their way to assist Mr Vasiliou, or to raise with him the possibility of seeking a stay or alternative orders to facilitate a potential refinance": at [64]. 50 In the end result, however, the primary judge found (at [65]) that there were a number of factors which justified a decision not to facilitate a refinance of the company's debts. His Honour found, importantly, that Mr Vasiliou would not have gone along with any arrangement that would have resulted in the payment of the two unsecured creditors. This led his Honour to conclude (at [66]) that it was "inevitable" that there could be no arrangement which the liquidators could reasonably adopt and that the St Kilda property would be sold, whether by the liquidators or the mortgagee. The appellants do not challenge these findings. 51 On 6 May 2008 the winding up of VA Corporation was permanently stayed. It was clear that the proceeds of sale of the St Kilda property (which the primary judge described as "a handsome profit for the company") would be more than enough to pay known creditors. The primary judge also made orders relating to how the proceeds of sale of the St Kilda property were to be paid. Those orders included an order that the balance of the proceeds of sale be paid to VA Corporation after certain sums had been paid into court. His Honour also made directions providing for (a) a review, pursuant to s 473(6) of the Corporations Act, of the liquidators' remuneration and expenses (other than in relation to the costs of the proceeding before his Honour), and (b) the taking of accounts in relation to sums due to Perpetual as mortgagee of the St Kilda property, including its costs and expenses (but excluding a claim by Perpetual to retain a certain sum against future legal costs arising out of the mortgage). 52 The notice of appeal raises four grounds apparently directed to the conduct of the liquidators: see grounds 6, 7, 8 and 15. None of these grounds was explored or developed in any way, and in the course of the appellants' oral argument no attempt was made to relate them to any of the primary judge's findings. 53 In their written outline of submissions the appellants did refer to the issue apparently supporting ground 8, and perhaps ground 15, of the notice of appeal, namely the allegation that VA Corporation had been replaced as trustee of the VA Unit Trust. We have already referred to that part of the primary judge's reasons dealing with the fact that a transfer purportedly transferring the St Kilda property to Ms Apostolou had been lodged in the Stamps Office and had been assessed to duty. 54 Whether a new trustee had been appointed to the VA Unit Trust is not a matter that needs to be decided in relation to the determination of the present appeal. The fact is that the St Kilda property remained registered in the name of VA Corporation and there is no material before us to suggest that VA Corporation had not incurred the debts to which we have referred, either as trustee of the VA Unit Trust or on its own account. On the material before us, there is no reason to doubt that VA Corporation had no funds to pay those debts. Once the St Kilda property had been sold by Perpetual exercising its power of sale, funds became available to pay the mortgage debt and the two unsecured creditors, as well as the expenses properly incurred in relation to the sale of the property and the liquidation of the company (including the liquidators' remuneration to be determined on review). Conclusion 55 None of the grounds of appeal apparently directed to the mortgagee sale and the conduct of the liquidators is made out. 56 There are other "grounds" in the notice of appeal that are apparently directed to other matters that are a source of contention for the appellants but that do not relate directly to the judgment from which this appeal is brought: see grounds 2, 5 and 10. It is not necessary for us to deal with those "grounds". 57 Ground 13 complains that the primary judge "did not allow adequate time for hearing", but no attempt was made to develop this complaint. There is no material before us that would suggest that the appellants did not have a full and proper hearing of their claims. 58 Ground 4 is unintelligible and ground 14 is irrelevant. 59 In relation to ground 15, the appellants did not articulate any additional ground of appeal they wished to rely on or seek leave to amend the notice of appeal to reflect such a ground. Mr Vasiliou did raise the possibility of the appellants being given general leave, after the hearing of the appeal, to file an amended notice of appeal. This was refused. The appellants were informed that the Court would consider an application to amend the notice of appeal when an amendment application was articulated. No such application was made. 60 It follows from the foregoing that the appeal should be dismissed. The appellants must pay each of the respondents' costs. Other matters relating to these appeals 61 Orders were made on 19 October 2010 for the preparation of both appeals for hearing, including orders requiring the appellants to file draft indexes to the appeal books and to file outlines of submissions, by certain times. These orders were ignored by the appellants. As a consequence, no appeal books were filed. On the morning of the hearing of the appeals, the appellants delivered an outline of their submissions, outside the time provided for in the orders. We have already noted that this outline does not illuminate matters greatly. 62 Prior to the appeals coming on for hearing, the failure of the appellants to comply with the Court's orders was brought to their attention. On a number of occasions the appellants canvassed the possibility of the appeals being adjourned but made no formal application in that regard. When the appeals were called on for hearing, Mr Vasiliou commenced to make submissions on his own behalf and on behalf of Ms Apostolou. 63 Some documents that were in evidence before the primary judge were handed up in the course of argument during the hearing. In the absence of appeal books having been filed or otherwise made available, the appellants were given leave to file "an appeal book" within 14 days after the appeal hearing. Corresponding leave was granted to the respondents after the appellants' "appeal book" had been served. The appellants and the fourth and fifth respondents (Perpetual and Challenger) thereafter provided respective bundles of documents on which they sought to rely in this appeal. The fourth and fifth respondents, and the second and third respondents (the liquidators), objected to the reception of a number of documents in the appellants' bundle on the ground that they were not in evidence before the primary judge. Ultimately, we do not need to deal with that objection. The contentious documents do not advance the appellants' respective appeals, as argued. 64 After the hearing of the appeals, the appellants sought, on successive occasions, to make what could be regarded as additional submissions. No leave was granted to the appellants to pursue that course. We have had no regard to that additional material for the purpose of determining these appeals. DISPOSITION 65 As we have indicated, leave to appeal in VID 704 of 2008 will be refused, with costs, and the appeal in VID 143 of 2010 will be dismissed, with costs. I certify that the preceding sixty-five (65) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Perram, Nicholas & Yates. Associate: Dated: 15 August 2011