Federal Court of Australia McMillan Investment Holdings Pty Ltd v Morgan [2023] FCAFC 9 Appeal from: Morgan v Sydney Allen Manufacturing Pty Limited (In Liquidation) [2021] FCA 1669 File number: NSD 1376 of 2021 Judgment of: YATES, BEACH AND MARKOVIC JJ Date of judgment: 16 February 2023 Catchwords: BANKRUPTCY AND INSOLVENCY — appeal against making of a pooling order under s 579E(1) of Corporations Act 2001 (Cth) – whether primary judge erred in finding that s 579E(1)(b)(iv) applies – where primary judge satisfied that alleged chose in action was "particular property" capable of being "used" for the purposes of s 579E(1)(b)(iv) – where alleged chose in action was a joint right to sue held by second and third respondents to the appeal – where joint right came into existence after second and third respondents sold a business allegedly carried on jointly by them – where primary judge found a connection between alleged chose in action and a future undertaking carried on jointly by second and third respondents – whether time should be extended to permit the respondents to rely on a notice of contention to support the judgment below – appeal allowed Legislation: Bankruptcy Act 1966 (Cth) s 43 Corporations Act 2001 (Cth) ss 439C, 553, 553D, 579, 579E, 601AD, 601AE, 601AH Corporations Regulations 2001 (Cth) regs 5.6.47, 5.6.48, 5.6.49, 5.6.50, 5.6.54, 5.6.63, sch 2 Federal Court Rules 2011 (Cth) r 36.24 Cases cited: 5G Developments Pty Ltd (in liq) v Massie [2021] FCA 791 Brodyn Pty Ltd v Dasein Constructions Pty Ltd [2004] NSWSC 1230 Capocchiano v Young [2013] NSWSC 879 Donoghue v Russells (A Firm) [2021] FCA 798 Ex parte Leung (1986) 9 FCR 518 Johnston v McGrath [2005] NSWSC 1183; 195 FLR 101 Morgan v Sydney Allen Manufacturing Pty Limited (In Liquidation) [2021] FCA 1669 Promoseven Pty Ltd v Markey, in the matter of Bluechip Development Corporation (Cairns) Pty Ltd (in liq) (recs and mgrs apptd) [2013] FCA 1281 Re Australian Hotel Acquisition (in liq) [2011] NSWSC 1374 Re Galaxy Media Pty Ltd (recs and mgrs apptd) (in liq) [2001] NSWSC 917; 167 FLR 149 Re Lombe [2011] NSWSC 1536; 87 ACSR 84 Re Mendonca; Ex parte Commissioner of Taxation (1969) 15 FLR 256 Re St Gregory's Armenian School Inc [2015] NSWSC 1465; 109 ACSR 27 Re Vassis; Ex parte Leung (1986) 9 FCR 518 Re Watch Works Australia Pty Ltd (in liq); Ex parte Frances [2020] WASC 6 Sands Contracting Pty Ltd v Cant [2021] FCA 638 Selim v McGrath [2003] NSWSC 927; 177 FLR 85 Sons of Gwalia Ltd (admin apptd) v Margaretic [2005] FCA 1305; 55 ACSR 365 Tanning Research Laboratories Inc v O'Brien [1990] HCA 8; 169 CLR 332 Theophile v Solicitor-General [1950] AC 186 Westpac Banking Corp v Totterdell (1998) 20 WAR 150; 29 ACSR 448 Division: General Division Registry: New South Wales National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Number of paragraphs: 252 Date of hearing: 20 May 2022 Counsel for the Appellant: Mr Bret Walker SC with Mr Julian Svehla Solicitor for the Appellant: Somerset Ryckmans Counsel for the Respondents: Mr Marcus Pesman SC Mr Michael Rose Solicitor for the Respondents: ERA Legal ORDERS NSD 1376 of 2021 BETWEEN: MCMILLAN INVESTMENT HOLDINGS PTY LTD Appellant AND: JOHN MAXWELL MORGAN First Respondent SYDNEY ALLEN PRINTERS PTY LTD (IN LIQUIDATION) Second Respondent SYDNEY ALLEN MANUFACTURING PTY LTD (IN LIQUIDATION) (and another named in the Schedule) Third Respondent order made by: YATES, BEACH AND MARKOVIC JJ DATE OF ORDER: 16 FEBRUARY 2023 THE COURT ORDERS THAT: 1. The appeal be allowed. 2. The respondents' application to extend time within which to file their proposed notice of contention be refused. 3. Orders 3, 4 and 5 made on 2 December 2021 in the proceeding below be set aside. 4. The respondents pay the appellant's costs of the appeal. 5. In the absence of the parties reaching agreement as to the costs of the proceeding below: (a) the appellant file and serve written submission on the question of those costs (limited to 3 pages) within 7 days of the making of this order; (b) the respondents file and serve written submissions in answer (limited to 3 pages) within a further 7 days; (c) the appellant file and serve any written submissions in reply (limited to 2 pages) within a further 7 days; and (d) the question of costs of the proceeding below be determined on the papers. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT YATES J: Introduction 1 This is an appeal against the making of a pooling order under s 579E(1) of the Corporations Act 2001 (Cth) (the Act). Such an order can be made on the application of a liquidator (s 579E(11)) in relation to a group of two or more companies if two conditions are satisfied. The first condition is that each company in the group is being wound up: s 579E(1)(a). The second condition is that any of the subparagraphs of s 579E(1)(b) apply. 2 If the two conditions are satisfied, the Court must be satisfied, further, that it is just and equitable to make an order that the group be a pooled group for the purposes of the provision. 3 It is not in dispute that the first condition is satisfied in the present case. The question raised on the appeal is whether the primary judge erred in concluding that the second condition is satisfied because s 579E(1)(b)(iv) applies: (iv) one or more companies in the group own particular property that is or was used, or for use, by any or all of the companies in the group in connection with a business, a scheme, or an undertaking, carried on jointly by the companies in the group; ... 4 The respondents—John Morgan (the first respondent) who is the liquidator of the second and third respondents, Sydney Allen Printers Pty Ltd (in liquidation) (SAP) and Sydney Allen Manufacturing Pty Ltd (in liquidation) (SAM)—also sought a pooling order on the basis that SAP and SAM are "jointly liable for one or more debts or claims": s 579E(1)(b)(ii). Because he concluded that subpara (iv) applies, the primary judge refrained from deciding whether subpara (ii) also applies. 5 The appellant, McMillan Investment Holdings Pty Ltd (MIH), submits that the primary judge erred in finding that subpara (iv) applies. It submits that the primary judge should have found that subpara (iv) does not apply, with the consequence that his Honour should not have proceeded to determine whether it is just and equitable that a pooling order be made. As a result, MIH submits that the primary judge's discretion in making the pooling order miscarried. 6 The respondents in this appeal defend the making of the pooling order under s 579E(1)(b)(iv). They also seek to support the pooling order on the basis of s 579E(1)(b)(ii). To this end, they seek an order extending the time in which to file a notice of contention advancing subpara (ii) as an additional basis on which the pooling order can be made. An extension of time is required because, pursuant to r 36.24 of the Federal Court Rules 2011 (Cth), the notice of contention should have been filed within 21 days after the notice of appeal was served. The notice of appeal was served on 31 December 2021. The notice of contention should have been filed by 4 February 2022. MIH opposes time being extended. Background 7 The following facts are based substantially on the primary judge's findings. 8 Prior to 2013, SAP and SAM operated a colour printing business from rented premises in Rydalmere. In about late 2013, the business relocated to Condell Park. At the time of the move, about 80 staff were employed by SAP in the business. SAM owned, or had rights over, expensive and substantial printing presses. It had also provided security over certain of its assets. The security included security for credit facilities which certain suppliers of materials (necessary for the printing work to be done) had provided. 9 The business operated on the basis that, while SAM owned the equipment used in the business, SAP did all the printing work. To this end, SAP ordered supplies for the business using the credit facilities that SAM had created. SAP also paid the suppliers. The internal accounts between SAP and SAM included entries under which, notionally, SAP paid the creditors on behalf of SAM. 10 As the primary judge explained it, SAM did not receive any, or any sufficient, remuneration or return from SAP for providing the machinery and credit facilities which enabled SAP to conduct the business. On the other hand, the two companies' accounting records showed that, as at 7 April 2016, SAM owed SAP over $1 million. 11 In about May 2014, MIH became involved in the provision of finance to, or in having some form of financial relations with, the companies. Mr Morgan alleges that MIH and its principals, Robert McMillan and his daughter Julie-Anne McMillan, became involved in the management of SAP and SAM. Indeed, Mr Morgan alleges that Mr McMillan and Ms McMillan became shadow directors of SAP and SAM. 12 On 27 March 2015, MIH, SAP, and SAM entered into a finance facility (the MIH facility) under which SAP and SAM were described as "the borrower". Clause 3.6 of the MIH facility was to the effect that SAP and SAM were jointly liable for all amounts due in respect of the "secured money", representing the "principal money" and all interest accrued on the principal money but which has not been added to it. 13 On 7 April 2016, Mr Morgan and Geoffrey Davis were appointed as joint and several administrators of SAP. On the same day, they were also appointed as joint and several liquidators of SAM. 14 On 13 April 2016, a receiver and manager (John Warner) was appointed to SAP under the MIH facility. Subsequently, on 2 May 2016, Mr Warner was also appointed as the receiver and manager of SAM (once again, under the MIH facility). 15 On 4 May 2016, Mr Warner, SAP, and SAM entered into an agreement with Print Warehouse Australia Pty Limited (Print Warehouse) to sell, as a going concern, the assets and business operated by SAP and SAM, for the stated purchase price of $1.3 million (the sale agreement). The sale agreement described the purchase price as GST exempt because the business was being sold as a going concern. The commencement of the agreement was 5 May 2016, with completion to take place eight weeks after the payment of a deposit. 16 The primary judge noted that, in a letter dated 4 July 2016, MIH's legal representative informed Mr Warner that the purchase price originally offered by Print Warehouse had been "reduced at the last minute" and that "the McMillans agreed to the reduced purchase price". This appears to be an explanation of why the purchase price in the sale agreement was stated to be $1.3 million. 17 However, on 4 May 2016, McMillan Group Services Pty Limited (MGS), who the primary judge described as "an associated company of MIH or Mr and Ms McMillan", issued an invoice to Print Warehouse for the sum of $330,000 ($300,000 plus GST of $30,000). The description in the invoice was: To our costs in relation to services provided in connection with printing plant and equipment. 18 The primary judge referred to this as a "curious invoice" and noted that, although a party to the proceeding before him, MIH had given no evidence in relation to the invoice and no evidence of any dealing to which the invoice could relate. 19 On 5 May 2016, Print Warehouse paid the invoiced sum to MGS. 20 Mr Morgan alleges that MGS did not provide any services to MGS and that the amount paid to MGS was, in truth, "an asset of one or both of" SAP and SAM, which had been diverted, improperly, from SAP and SAM. 21 In other words, the "true" purchase price for the assets and business was not the sum of $1.3 million stated in the sale agreement but $1.6 million (recognising that, as part of the purchase price for the assets and business, the additional sum of $300,000 would not have attracted GST of $30,000). As the liquidator of SAP and SAM, Mr Morgan seeks to recover this sum from MGS, Mr McMillan, and Ms McMillan. 22 On 13 May 2016, at a second meeting of creditors, Mr Morgan and Mr Davis were appointed as liquidators of SAP. 23 On 14 February 2020, Mr Davis retired as a liquidator of SAP. 24 A further matter relevant to this appeal is the fact that, on 5 April 2018, Mr Davis (while still a liquidator of SAM), lodged a Form 578 request with the Australian Securities and Investments Commission (ASIC) seeking that SAM be deregistered on the basis that: There are no funds left in the creditors' voluntary liquidation to hold a final meeting and also the affairs of the company are fully wound up. 25 ASIC deregistered SAM on 10 June 2018. As a consequence of deregistration, SAM ceased to exist and all its property (other than property held by it on trust) vested in ASIC: s 601AD(1) and (2) of the Act. Any property held by SAM on trust vested in the Commonwealth: s 601AD(1A) of the Act. 26 As part of the proceeding below, Mr Morgan sought an order under s 601AH of the Act that SAM's registration be reinstated and that, upon reinstatement, he be re-appointed as liquidator of the company. The primary judge granted that relief on 2 December 2021, at the same time as he made the pooling order that is the subject of this appeal. The effect of the reinstatement order was that SAM is taken to have continued in existence as if it had not been deregistered, and any property which had vested in the Commonwealth or ASIC (as a consequence of the deregistration) revested in SAM: s 601AH(5) of the Act. The primary judge's reasons 27 As I have noted, because the primary judge found that subpara (iv) applies in the present case, he refrained from considering whether subpara (ii) also applies. 28 On the basis of certain observations made by Barrett J in Re Lombe [2011] NSWSC 1536; 87 ACSR 84 (Lombe), the primary judge was satisfied that a chose in action, in the form of a right to sue, can be "particular property" which is capable of being "used" within the meaning of s 579E(1)(b)(iv). 29 At [97] – [98], the primary judge continued: 97 Here, Mr Morgan identified that both SAP and SAM have jointly and severally a present chose in action, as the former owners of the business that Mr Warner sold to Print Warehouse pursuant to the direction of MIH and or Mr and or Ms McMillan to accept the reduced purchase price, in circumstances where it appears that MGS, as a related company of MIH, received $330,000 contemporaneously in relation to the very business that was being sold but not accounted for in reduction of the secured debt that SAM and SAP owed to MIH. Mr Morgan, SAM and SAP will be able to use, as a chose in action, "particular property" that is now being used, or will be if SAM is reinstated and a pooling order made, by both of the companies in connection with their undertaking carried on jointly to discharge their debts and conduct recovery of their assets which, Mr Morgan contends, should have been brought to account in their favour at the time of the sale of their business in 2016. The chose in action comprised the claim on behalf of both SAM and SAP to recover monies that allegedly were wrongfully paid to MGS, a company associated with MIH by Print Warehouses (sic), as purchaser, instead of to the companies. 98 I am satisfied that that chose in action is "particular property" owned by both SAM and SAP that is used, or for use, by them in connection with an undertaking carried on jointly by them as companies in the group: Re Lombe 87 ACSR at 96–97 [55], [63], within the meaning of s 579E(1)(b)(iv). 30 The primary judge's reasoning appears to be this: (a) SAP and SAM presently own "particular property"—namely, a chose in action—being, specifically, a joint right to sue to recover money which should have been paid to them jointly as part of the realisation of the assets and business they jointly owned and sold but which was, in fact, diverted to MGS (an entity associated with MIH, Mr McMillan, and Ms McMillan); and (b) assuming SAM's registration as a company is reinstated and a pooling order made, this chose in action can and will be used by SAP and SAM in connection with a joint undertaking by them to discharge their debts and recover their assets. 31 The primary judge did not identify the cause of action which, in his view, was available to SAP and SAM in this regard, although at [97] his Honour appears to envisage that it is one maintainable by SAP and SAM jointly against MGS. 32 In the course of oral submissions in this appeal, Senior Counsel for the respondents referred to a number of actual or potential causes of action relevant to this question. 33 First, it was said that SAP and SAM have causes of action against Mr McMillan and Ms McMillan for breach of their statutory duties under the Act as (shadow) directors of SAP and SAM. I pause to observe that, if that is so, the breaches can only be breaches of duties allegedly owed by Mr McMillan and Ms McMillan to SAP and SAM individually, not jointly. Thus, this "property" cannot be jointly owned by SAP and SAM. Each would have its own, discrete cause(s) of action against Mr McMillan and Ms McMillan for the breach(es) of duty alleged. 34 Secondly, it was suggested that there could also be causes of action against Mr McMillan and Ms McMillan for breaches of their fiduciary duties to SAP and SAM, with a related cause of action against MGS for knowing participation in those breaches. However, once again, these causes of action could only be separate causes of action brought at the suit of SAP and SAM individually, not jointly, against Mr McMillan, Ms McMillan, and MGS. 35 Thirdly, it was said that SAP and SAM have a joint cause of action against MGS for money had and received for their use. This appears to be the cause of action which the primary judge envisaged at [97] – [98]. The appeal MIH's submissions 36 At the forefront of MIH's submissions is the question whether, assuming a relevant chose in action exists in the form of a right to sue, the chose in action is "particular property that is or was used, or for use … in connection with a business, a scheme, or an undertaking carried on jointly by the companies in the group" within the meaning of subpara (iv). 37 MIH submits that, if there was a business, scheme, or undertaking carried on jointly by SAP and SAM, it was the colour printing business. This is, in fact, how the respondents advanced this limb of subpara (iv) before the primary judge. Their written submissions in the proceeding below state: The Companies clearly each contributed to a business, scheme or undertaking carried on jointly by all of them, being a full colour printing business from shared premises, with shared plant, equipment and staff, and shared financial arrangements. The condition in subsection 579E(1)(b)(iv) is therefore satisfied. 38 MIH submits that, at the time the alleged chose in action came into existence—which I will take to be the cause of action against MGS apparently envisaged by the primary judge—the printing business (as a business, scheme or undertaking carried on jointly by companies in the group) was no longer carried on by SAP and SAM. In other words, the chose in action only came into existence following the sale of the assets and business, and once the $330,000 was paid by Print Warehouse to MGS. It follows that it could not be "property that is or was used, or for use" in connection with that business. MIH submits that this is fatal to the application of subpara (iv). It submits that, to "overcome this fatality", the primary judge posited, at [97] – [98], another "undertaking"—namely, an undertaking carried on jointly by SAP and SAM "to discharge their debts and conduct recovery of their assets which … should have been brought to account in their favour at the time of the sale of their business in 2016". 39 MIH submits that there are a number of "insurmountable difficulties" with the primary judge's finding in this regard. 40 According to MIH, the first difficulty is that there could not have been such an "undertaking", as that expression is properly understood in the context of subpara (iv). 41 The second difficulty is that there could not have been a "joint" undertaking in which the chose in action was being used up to the time when the pooling order was made, because SAM had been deregistered on 10 June 2018 and its registration was not reinstated until 2 December 2021, when the pooling order itself was also made. 42 The third difficulty is that, in MIH's submission, the primary judge impermissibly looked to the future use of the alleged chose in action once the pooling order was made. In other words, the joint undertaking which the primary judge had in mind at [97] – [98] was an undertaking that would be jointly carried on by SAP and SAM as a consequence of SAM's reinstatement and the making of the pooling order itself. However, subpara (iv) refers to a business, scheme or undertaking that is or was jointly carried on by the companies in the group before the pooling order is made. In MIH's submission, this is a jurisdictional fact that is required to be established in order to make the pooling order. The joint undertaking cannot be a purely future undertaking, let alone a future undertaking springing from the making of the pooling order itself. 43 The fourth difficulty is that, prior to the making of the pooling order, there could not have been an undertaking carried on jointly by SAP and SAM to discharge their debts and conduct recovery of their assets given that: (a) prior to completion of the sale agreement both SAP and SAM were in liquidation; and (b) absent a pooling order, the winding up of a company is ordinarily conducted on a "stand-alone specific entity basis": Re Watch Works Australia Pty Ltd (in liq); Ex parte Frances [2020] WASC 6 (Watch Works) at [31]. 44 The fifth and further confounding difficulty is that, prior to the making of the pooling order and the order reinstating SAM's registration, there could not have been any "joint" undertaking carried on by SAM with SAP in any event. According to MIH, after completion of the sale agreement, SAM "did nothing". It received no debts and, on 5 April 2018, its liquidators sought its deregistration on the basis that its affairs had been fully wound up. 45 MIH advances a number of further submissions that challenge the existence of the chose in action on which the respondents rely. 46 First, MIH submits that it is established that the surplus funds from the sale of a business, scheme or undertaking cannot be "particular property" that is used in connection with that business, scheme or undertaking: Re Australian Hotel Acquisition (in liq) [2011] NSWSC 1374 at [44]; Lombe at [46]; Watch Works at [42]. MIH submits that, if that be so, it must follow that a right to sue to recover such moneys cannot be "particular property" such as to satisfy the subpara (iv) "gateway". 47 Secondly, MIH submits that the existence of the alleged chose in action lies only in assertion—indeed, speculation—with insufficient evidence to support the proper drawing of any inference that the sum paid by Print Warehouse to MGS forms any part of the purchase price for the assets and the business sold by SAP and SAM. 48 Thirdly, MIH submits that, in any event, the primary judge should have found that, in fact, MIH had brought to account the payment made to MGS because of a concession it (MIH) had made in a proceeding which it had commenced against the guarantors under the MIH facility. The primary judge referred to this at [33]: 33 In 2018, MIH began proceedings in the Supreme Court of New South Wales against Mr and Mrs Mangos and Mr Wallace seeking recovery under their guarantees to it of SAP's and SAM's debts and other transactions entered into between those individuals and MIH (the MIH proceeding). Relevantly, in the third further amended statement of claim that Ms McMillan verified on 23 April 2019, MIH pleaded (in pars 12A and 12B) that on about 5 May 2016, MGS received $330,000 from Print Warehouse and that "in order to avoid any dispute in this proceeding, and solely for the purposes of this proceeding, MIH brings to account" the $330,000 payment as a deduction against, and in reduction of, the amounts that MIH claimed against the guarantors. I was informed from the bar table that the MIH proceeding is set down for hearing in the Supreme Court in 2022. Despite MIH's vigorous pursuit of Mr Mangos and Mr Wallace, the evidence revealed they did not now own, although they previously had owned, real property. (Emphasis in original.) 49 Fourthly, MIH submits that any claim by SAP and SAM is one properly brought against Christopher Wallace as the receiver who sold the assets and business on behalf of SAP and SAM, not (it seems) against MGS. 50 Fifthly, MIH submits that the alleged chose in action is not the property of SAP and SAM, but of their liquidators. The respondents' submissions 51 The respondents submit that the primary judge was correct to find that subpara (iv) applies, for the reasons given by his Honour at [97] – [98]. In this connection, the respondents submit that nothing said by the primary judge in those paragraphs of his reasons "ought be controversial". 52 The respondents accept that the chose in action on which they rely, as "particular property" for the purposes of subpara (iv), only came into existence once the printing business had been sold. They contend, however, that, when considering whether this is "particular property" that "is or was used, or for use … in connection with a business, a scheme, or an undertaking, carried on jointly by the companies in the group", SAP's and SAM's business (the colour printing business) was not limited to "active" trading. They contend that "recovering money owed is a fundamental part of carrying on business"—meaning, here, a fundamental part of carrying on the business that has been sold. 53 In this connection, the respondents call in aid the jurisdictional principle in bankruptcy law that "carrying on business" extends to the winding up of the business and the collection of the business's debts: Re Mendonca; Ex parte Commissioner of Taxation (1969) 15 FLR 256 at 260 – 261; Re Vassis; Ex parte Leung (1986) 9 FCR 518 at 525 – 526; Theophile v Solicitor-General [1950] AC 186 at 201. 54 They also submit that the word "undertaking", as used in subpara (iv), does not have the limited meaning for which MIH contends. They submit that it is perfectly apt, in this context, to speak of an "undertaking" to discharge debts and recover assets. 55 The respondents also contend that MIH's submissions conflate the conduct of the two liquidations with the conduct of the single business or undertaking carried on by SAP and SAM. They submit that an obvious difficulty with MIH's submission is that, if the appointment of a liquidator to two companies severs their previous joint business or undertaking, then the Court could never make a pooling order. 56 The respondents also addressed MIH's submissions concerning the existence of the alleged chose in action on which they rely. They submit that there was evidence from which it could be inferred that SAP and SAM had a cause of action against MGS. They submit that the evidence supports an inference that Mr McMillan and Ms McMillan directed Mr Wallace to accept a lower purchase price (than originally offered by Print Warehouse) for the assets and business that were sold by SAP and SAM, and that there could be nothing controversial in the primary judge's finding, at [97], that MGS "received $330,000 contemporaneously in relation to the very business that was being sold but not accounted for in reduction of the secured debt that SAM and SAP owed to MIH". 57 They submit, further, that Lombe establishes that a chose in action, in the form of a right to sue, can be "particular property" for the purposes of subpara (iv) and that such property is capable of being "used" within the meaning of that provision by simply being held, where the holding can be regarded as the source of some advantage. They submit that the right to sue here is, properly considered, one that is exercisable by SAP and SAM against MGS (recognising that there might be separate and independent causes of action against other parties). In this connection, they contend, contrary to MIH's submissions, that the chose in action is their property, not the liquidator's property, and that the claim for the diverted funds is against MGS, not against the receiver, Mr Wallace. Analysis 58 In my respectful view, the primary judge erred in concluding that the "gateway" provided by s 579E(1)(b)(iv) applies. 59 The following principles in relation to the application of subpara (iv) emerge from the cases. The parties do not suggest that we should depart from these cases. 60 First, when referring to "particular property", the provision is dealing with extant property—property that is owned at the time the pooling order is made: Re Australian Hotel Acquisition (in liq) [2011] NSWSC 1374 (Australian Hotel) at [43] – [44]; Lombe at [40]; Watch Works at [42]. 61 Secondly, the "particular property" must be property that "is used or … (is) for use" or "was used or … (was) for use": Lombe at [40]. Further, the "use" (past or present) must be, or have been, in connection with a business, scheme or undertaking carried on jointly by the companies in the group. It follows that if, for example, a business carried on jointly by the companies in the group, and its assets, are sold, the surplus funds from the sale cannot be "particular property" that answers that description: Australian Hotel at [44]; Lombe at [44] – [47]; Watch Works at [42]. 62 Thirdly, the "business, scheme or undertaking" carried on jointly by the companies in the group can be a past business, scheme or undertaking. This is apparent from the facts and discussion in Lombe at [4], [24], [29], [34], [35], and [37], and in Watch Works at [15], [16], [45] and [62]. Critically, however, the "particular property" that was used, or was for use, in the business, scheme or undertaking must remain in existence: Lombe at [48] and [63]. 63 Fourthly, "particular property" is not confined to tangible property, but extends to intangible property, including a chose an action in the form of a right to sue: Lombe at [57] – [58]; Watch Works at [43] and [65] – [66]. As I have said, it is not in contest in this appeal that a chose in action, in the form of a right to sue, can qualify as "property" for the purposes of subpara (iv). 64 Fifthly, the "use" of a chose in action, in the form of a right to sue, will usually be the use to which the right of action can be put—namely, by bringing the relevant action: Lombe at [54]. However, there may be a "use" of "particular property", including a chose in action in the form of a right to sue, simply by holding it, where the mere holding can be regarded as the source of some advantage for the holder: Lombe at [61]; Watch Works at [44]. 65 Sixthly, when referring to the "use" of the "particular property", the words "in connection with" a business, scheme or undertaking include a "use" that is ancillary or incidental to the business, scheme or undertaking: Lombe at [64] – [67]; Watch Works at [45]. 66 Here, the alleged chose in action is not the surplus funds derived from the sale, under the sale agreement, of the printing business and its assets, as a going concern, on 4 May 2016. Rather, the alleged chose in action is SAP's and SAM's joint right to sue MGS for part of the value of the printing business and assets, which SAP and SAM allege was improperly diverted to MGS in the form of the sum of $330,000 paid by Print Warehouse at the time of the sale. 67 Plainly, having regard to the time at which it came into existence, this alleged right cannot be presently existing "particular property" that was used, or was for use, by SAP and SAM, in connection with the conduct of a printing business which they had already sold. Even more so, the alleged right cannot be presently existing "particular property" that is used, or is for use, by SAP and SAM jointly in that business. 68 In this appeal, none of the parties contends otherwise. However, as I have recorded, in the proceeding below, the respondents contended that the requirement of subpara (iv)—that there be a connection between the "use" of the presently existing "particular property" and "a business, a scheme or an undertaking, carried on jointly by the companies in the group"—was satisfied because SAP and SAM contributed to "a full colour printing business from shared premises, with shared plant, equipment and staff, and shared financial arrangements": see the respondents' submission quoted at [36] above. 69 The primary judge implicitly rejected that contention by positing, at [97], a connection between the alleged chose in action and an "undertaking carried on jointly [by SAP and SAM] to discharge their debts and conduct recovery of their assets … which should have been brought to account in their favour at the time of the sale of their business in 2016". 70 Contrary to the respondents' submission, I am persuaded that the joint undertaking to which the primary judge referred was not a past or (at the time the primary judge considered the question) present joint undertaking by SAP and SAM, but a future joint undertaking by them. This is made clear by the primary judge's reference, at [97], to the fact that "Mr Morgan, SAM and SAP will be able to use" the alleged chose in action "if SAM is reinstated and a pooling order made". Plainly, on this reasoning, there could not be a use of the alleged chose in action "by both companies in connection with their undertaking" unless SAM's registration were reinstated. Further, it is clear that the primary judge envisaged that this undertaking would be accomplished by SAP and SAM, or at least facilitated, through the Court making the pooling order that was sought. 71 The "gateway" provided by subpara (iv) requires, as a precondition of that provision applying, presently existing "particular property" whose past or present "use" be in connection with a past or present business, scheme or undertaking, carried on jointly by the companies in the group, not in connection with a business, scheme or undertaking yet to be carried on jointly by the companies in the group. For this reason, the primary judge erred in finding that subpara (iv) applies. 72 I do not accept the respondents' submission that SAP's and SAM's business (the colour printing business) was not limited to "active" trading and that, up to the time at which the pooling order was sought, SAP and SAM were continuing to carry on that business, jointly, by "recovering money owed". 73 First, I observe that this case is not the one that the respondents put to the primary judge. This is made clear from their submission quoted at [37] above. It is, in substance, a new case raised for the first time on appeal. 74 Secondly, this new case is not supported by evidence. To begin with, there is no evidence to support the contention that, after the sale of the colour printing business, and in the course of (a) SAP's administration and then winding up, and (b) SAM's winding up, SAP and SAM jointly carried on the activity of recovering assets of the colour printing business. This evidential gap is not filled by arguing that the recovery of debts and other assets of a business is an aspect of carrying on that business, and then positing what SAP and SAM could have done in that regard. The question is whether SAP and SAM were, in fact, jointly carrying on the activity of recovering debts and other assets of the colour printing business after its sale. The respondents' contention fails for want of proof. 75 Further, there could not have been any activity carried on by SAP and SAM jointly after SAM's deregistration on 10 June 2018. The fact that the primary judge made an order on 2 December 2021 reinstating SAM's registration—with the consequence that SAM is taken to have continued in existence as if it had not been deregistered—does not mean that, between 10 June 2018 and 2 December 2021, SAM carried on particular activities which, in fact, it did not carry on, and could not possibly have carried on, in that period. 76 Therefore, subject to consideration of the respondents' notice of contention, MIH's appeal should be allowed. In reaching this conclusion, it is not necessary to reach a view on all the other submissions advanced by MIH, including its submissions as to the existence of the alleged chose in action. The notice of contention Introduction 77 The respondents contend that the pooling order can be supported under s 579E(1)(b)(ii). The respondents' contention is based on an allegation previously made by MIH—which, as it happens, the respondents disputed and continue to dispute—that SAP is liable to MIH under the MIH facility. It is to be recalled that SAP and SAM were jointly liable to MIH, under the MIH facility, for all amounts due in respect of the "secured money". 78 The following facts are relevant to the respondents' contention. 79 On 14 January 2021, Mr Morgan called for proofs of debt to be lodged in SAP's liquidation. The proofs of debt were to be lodged by 29 January 2021 in the form of Form 535 (Formal Proof of Debt or Claim (General Form)) (Form 535): see Sch 2 to the Corporations Regulations 2001 (Cth) (the Regulations). 80 On 29 January 2021, MIH lodged a proof of debt in SAP's liquidation, using Form 535, for the sum of $2,156,966.42. The claimed debt was expressed as having arisen, in part, from SAP's alleged liability to MIH under the MIH facility. 81 On 15 February 2021, Mr Morgan rejected the proof of debt. The Notice of Rejection of Formal Proof of Debt or Claim (the Notice of Rejection), in the form of Form 537, recorded that the claim related to amounts said to have been advanced by MIH under the MIH facility to either SAP or SAM and stated that: Despite request to do so, MIH has failed and refused to provide information and or documentation to support a number of the asserted claims against the Company and or SAM identified in schedule 1 titled "Facility Agreement/MIH/SAP and SAM" annexed to the proof of debt. 82 The Notice of Rejection recorded, further, that, on Mr Morgan's analysis, MIH had not only been "entirely repaid" under the MIH facility, but had, in fact, been overpaid (including through receipt of the sum of $300,000 paid by Print Warehouse to MGS), with the result that MIH was indebted to SAP. The Notice of Rejection reserved the right to recover the overpayment from MIH: as to which, see [88] below. 83 In his report to SAP's creditors, dated 16 April 2021, Mr Morgan referred to his rejection of MIH's proof of debt. He said that, in the absence of MIH having appealed against that rejection, he did not consider MIH to be a creditor of SAP. 84 However, later, MIH did apply to the Court to appeal against the rejection of its proof of debt (the proof of debt appeal). The primary judge found as follows: 42 On 21 July 2021, MIH filed an originating process against Mr Morgan and SAP appealing against the rejection, seeking a declaration that it was a creditor of SAP in the sum of $2,156,966.42 and an order that Mr Morgan be directed to admit its proof of debt in that sum in SAP's winding up. 43 On 26 July 2021, the liquidator's solicitors wrote to MIH's solicitors saying that the rejection had occurred because MIH had failed to provide information that MIH said it held and supported its claim. Mr Morgan offered to allow MIH the opportunity of providing that information within seven days. The solicitors for the parties appear to have engaged in further correspondence. 44 On 3 September 2021, I ordered that MIH provide a response to the liquidator's solicitors' letter of 26 July 2021 by 13 September 2021. 45 On 28 September 2021 ERA Legal wrote to the solicitors for MIH, noting that MIH had not complied with the order of 3 September 2021. 46 On 29 September 2021, MIH's solicitors wrote back asserting that the preparation of MIH's revised proof of debt "[was] nearing an advanced stage". They foreshadowed that there would be a number of schedules, and explained that documents were being extracted and collated, but that in the circumstances of the lockdown, that had occurred because of the COVID-19 pandemic, no doubt, there were some difficulties in locating certain documents going back to the year 2015 and earlier, that they needed to check and cross-check. 47 On 5 October 2021, ERA Legal replied, saying that the liquidator did not accept the matters set out in the 29 September 2021 email. They asserted that the suggestion that the preparation of the proof of debt was nearing an advanced stage was surprising, given the commencement of the appeal and the passage of time. They required MIH's evidence in support of the proof of debt by 22 October 2021. 48 On the material before me, the position still is that MIH had not yet complied with the order of 3 September 2021 or provided the liquidator with particulars to support its appeal and proof of debt. 85 In addition to these facts, I note that, on 3 September 2021, the primary judge (who was also case managing the proof of debt appeal), made an order in that proceeding that Mr Morgan notify MIH of his position in relation to "the admission of [MIH] as a creditor of [SAP] by 27 September 2021". On 28 September 2021, Mr Morgan's solicitors informed MIH's solicitors that Mr Morgan did not agree to withdraw the Notice of Rejection. 86 Further, during the course of the hearing below, Mr Morgan declined to withdraw the Notice of Rejection when asked by the primary judge to make his position clear. 87 On 3 December 2021, the primary judge made an order in the proof of debt appeal that MIH file and serve its evidence in support of its appeal on or before 28 January 2022, failing which the appeal would be dismissed. As events transpired, MIH did not file any evidence. On 9 February 2022, the primary judge made an order that the proof of debt appeal be dismissed and ordered MIH to pay Mr Morgan's and SAP's costs of that proceeding. 88 Finally, on 18 March 2022, Mr Morgan, SAP, and SAM commenced a proceeding in the Supreme Court of New South Wales against MIH and other parties (the SAP/SAM Supreme Court proceeding). In that proceeding, Mr Morgan, SAP, and SAM alleged that MIH had been "entirely repaid" under the terms of the MIH facility and that it had also been paid amounts, purportedly pursuant to that facility, to which it was not entitled. These claims echo the basis on which Mr Morgan rejected MIH's proof of debt, as expressed in the Notice of Rejection. 89 Thus, despite the fact that Mr Morgan rejected MIH's proof of debt in its entirety, and despite the fact that the respondents allege, in the SAP/SAM Supreme Court proceeding, that MIH has been "entirely repaid" under the terms of the MIH facility, the respondents nevertheless seek to enliven subpara (ii) in this appeal on the basis that, by lodging its proof of debt, MIH had made a "claim" that SAP was a debtor under the MIH facility to which SAM was jointly liable. 90 For its part, MIH submits that, although it had claimed that SAP was indebted to it under the MIH facility, its proof of debt was rejected by Mr Morgan. According to MIH, Mr Morgan's determination, in that regard, stands. Importantly, it submits that this was the legal status of its proof of debt at the time the application for the pooling order was heard by the primary judge. Thus, subpara (ii) could not have applied at the time that the pooling order was made. The primary judge's observations 91 The primary judge made the pooling order before Mr Morgan, SAP, and SAM commenced the SAP/SAM Supreme Court proceeding. However, based on Mr Morgan's rejection of MIH's proof of debt, the primary judge observed that the position advanced by the respondents in respect of the application of subpara (ii) was, on face value, "somewhat incongruous", and that the disagreement between the parties as to whether subpara (ii) applies was "somewhat bizarre": [86] and [92]. 92 The primary judge recorded the parties' acceptance that the expression "debts or claims" in subpara (ii) should be construed consistently with s 553(1) of the Act. His Honour continued: 94 The onus is on the liquidator to establish that the pre-condition in s 579E(1)(b)(ii) has been established. I am inclined to think that the inference should be drawn that MIH is unable or unwilling to establish its claim that it is a creditor of SAP. It has given no explanation of why it has not yet provided the liquidator with the material to support its proof of debt the subject of the order made on 3 September 2021, now, more than two months later than its previous position in its solicitors' letter of 5 October 2021 that said its preparation was well advanced. However, I will refrain from making a finding about whether, SAM and SAP are jointly liable to MIH for one or more debts of claims. That is because I can find that s 579E(1)(b)(iv) is satisfied. Analysis 93 Section 553(1) of the Act provides: (1) Subject to this Division and Division 8, in every winding up, all debts payable by, and all claims against, the company (present or future, certain or contingent, ascertained or sounding only in damages), being debts or claims the circumstances giving rise to which occurred before the relevant date, are admissible to proof against the company. 94 This provision of the Act uses the terms "debt" and "claim" indiscriminately to refer to the same thing: Sons of Gwalia Ltd (admin apptd) v Margaretic [2005] FCA 1305; 55 ACSR 365 at [17]; Johnston v McGrath [2005] NSWSC 1183; 195 FLR 101 at [47]. 95 The Regulations provide that a liquidator is entitled to admit a debt or claim without formal proof: reg 5.6.47(2). However, s 553D(1) of the Act provides: (1) A debt or claim must be proved formally if the liquidator, in accordance with the regulations, requires it to be proved formally. 96 In this connection, reg 5.6.48(1) of the Regulations provides: (1) Subject to subregulation (1A), a liquidator may from time to time fix a day, not less than 14 days after the day on which notice is given in accordance with subregulation (2), on or before which creditors of the company whose debts or claims have not been admitted are formally to prove their debts or claims. 97 Section 553D(3) of the Act provides: (3) A debt or claim is proved formally if it satisfies the requirements of the regulations relating to the formal proof of debts and claims. 98 In the present case, reg 5.6.49(2)(b) of the Regulations required MIH's proof of debt to be in accordance with Form 535. As I have noted, Form 535 is contained in Sch 2 to the Regulations. Regulation 5.6.50 prescribes the contents of a formal proof of debt or claim. 99 Reg 5.6.63 of the Regulations provides: A dividend in the winding up of the affairs of a company may be paid only to a creditor whose debt or claim has been admitted by the liquidator at the date of the distribution of dividends. 100 In a winding up, the proof of debt procedure proceeds on the basis that recognition of a creditor (as distinct from a mere claimant to creditor status) will be determined by the adjudication of a proof of debt: Selim v McGrath [2003] NSWSC 927; 177 FLR 85 at [78]. In Tanning Research Laboratories Inc v O'Brien [1990] HCA 8; 169 CLR 332 at [7], Brennan and Dawson JJ observed that, in determining whether to admit or reject a proof of debt, a liquidator has been said to act in a quasi-judicial capacity according to standards no less than the standards of a court or judge. Their Honours observed that this description of a liquidator's function reflects a duty, on the liquidator's part, to distribute assets to those who are "truly entitled". 101 In Re Galaxy Media Pty Ltd (recs and mgrs apptd) (in liq) [2001] NSWSC 917; 167 FLR 149, Santow J reflected on the nature of this capacity and stated: 30 … It does not follow at all that the requirement to act quasi-judicially means that the person or office-holder upon whom the obligation is imposed, is required actually to exercise a judicial function. Rather, it draws on the judicial analogy, calling for an equivalent impartiality in the application of legal criteria [to] determine whether a proof of debt should be admitted or not. 31 Moreover, the quasi-judicial character of the role and the varying financial circumstances of each liquidation means that a liquidator is not required to replicate the judicial process in its full extent and rigour. But it must still be done with the impartiality one would expect of a judge, and by reference to legal principle rather than arbitrarily. 102 The Act provides, through reg 5.6.54(2) of the Regulations, the right to appeal a liquidator's decision to reject a formal proof of debt. The principles which apply on an appeal against such a rejection are encapsulated in the following observations of Kunc J in Capocchiano v Young [2013] NSWSC 879 at [46] – [47] (followed in Promoseven Pty Ltd v Markey, in the matter of Bluechip Development Corporation (Cairns) Pty Ltd (in liq) (recs and mgrs apptd) [2013] FCA 1281 at [37]; Sands Contracting Pty Ltd v Cant [2021] FCA 638 at [14]; and 5G Developments Pty Ltd (in liq) v Massie [2021] FCA 791 at [146]): 46 The relevant legal principles are not in doubt. An appeal against the rejection of a proof of debt is a hearing de novo. The Court must take into account all relevant evidence, whether or not it was before the liquidator at the time the proof was rejected. The fundamental question is whether the claim sought to be proved is a true liability of the company enforceable against it according to law. Nevertheless, the claimant bears the onus to demonstrate that the liquidator was wrong in rejecting the proof. If that onus is not discharged, the Court will not overturn the liquidator's decision. If the Court is unable to conclude either way whether the proof should be admitted, then the liquidator's decision must stand. 47 The authorities for the principles summarised in the preceding paragraph are Tanning Research Laboratories Inc v O'Brien (1990) 169 CLR 332 at 338-341 (per Brennan and Dawson JJ); Re Kentwood Constructions Ltd [1960] 1 WLR 646 at 647-648; Westpac Banking Corporation v Totterdell (1998) 20 WAR 150 at 154 per Ipp J, Pidgeon and White JJ agreeing; Re Galaxy Media Pty Limited (recs and mgrs apptd) (in liq); Walker and Another (in their capacity as recs and mgrs of Galaxy Media Pty Ltd) v Andrew (as liq of Galaxy Media Pty Ltd) and others (2001) 39 ACSR 483; [2001] NSWSC 917 at [23]-[34]. 103 Of particular importance to the notice of contention is the fact that the liquidator's decision to reject a proof of debt stands unless the claimant demonstrates that the liquidator's decision was wrong: see also Westpac Banking Corp v Totterdell (1998) 20 WAR 150; 29 ACSR 448 at 451; Brodyn Pty Ltd v Dasein Constructions Pty Ltd [2004] NSWSC 1230 at [32] – [33]; Re St Gregory's Armenian School Inc [2015] NSWSC 1465; 109 ACSR 27 at [35]. 104 The question of decisive importance in the present case is not whether the claim made by MIH in its proof of debt was of the character of a debt or claim that responds to s 553(1) of the Act but whether, at the time when the pooling order came to be made, the precondition of subpara (ii) was satisfied—namely that, at that time, SAP and SAM were jointly liable for one or more debts or claims. 105 The claim that MIH had made against SAP was based on SAP's alleged liability to MIH under the MIH facility. The respondents do not rely on the existence of any other debt or claim for the purposes of subpara (ii). Mr Morgan, in the exercise of his statutory function, had determined that MIH's claim, made through its proof of debt, should be rejected in its entirety. He had found that SAP's liability to MIH under the MIH facility had been satisfied and that MIH was not a creditor of SAP. He rejected the proof of debt accordingly. 106 The primary judge's inclination expressed at [94] (quoted above) ultimately proved to be sound because, in the end, MIH was either unable or unwilling to establish, in the face of Mr Morgan's rejection of the proof of debt, that it was a creditor of SAP. What is more, the respondents continue to assert, in substance, the correctness of Mr Morgan's decision through the SAP/SAM Supreme Court proceeding. 107 Given that there was no successful appeal against Mr Morgan's rejection of MIH's proof of debt, Mr Morgan's decision, in that regard, stands. This was also the state of affairs at the time that the pooling order came to be made. Given that, on Mr Morgan's determination, SAP was not liable "for one or more debts or claims" (being debts or claims under the MIH facility), it follows, necessarily, that it could not be "jointly liable" with SAM for such debts or claims. 108 In my view, subpara (ii) does not apply in the present case. For that reason alone, time should not be extended to permit the respondents to rely on the notice of contention. In those circumstances, it is not necessary for me to dwell on the other submissions advanced by MIH on this question. Disposition 109 In my view the appeal succeeds. An order to that effect should be made and the respondents should pay MIH's costs of the appeal. 110 A question remains as to what, if any, other orders should be made. It appears that the proceeding below was commenced with a view to obtaining a pooling order, which necessarily required SAM's registration as a company to be reinstated, and an order that Mr Morgan be re-appointed as SAM's liquidator. 111 Given these matters, the notice of appeal seeks orders that: (a) all the orders made by the primary judge on 2 December 2021 be set aside; (b) the originating process be dismissed; (c) SAM be deregistered; and (d) Mr Morgan and SAP pay MIH's costs of the proceeding below as well as its costs of the appeal. 112 The extent of the relief sought in the notice of appeal was raised during the course of MIH's oral submissions in chief. At that time, Senior Counsel for the respondents accepted that the proceeding below was advanced on the basis that either all relief sought by the respondents should be granted, or no relief granted. However, circumstances have since changed, with Mr Morgan, SAP, and SAM having commenced the SAP/SAM Supreme Court proceeding. For this reason, it would not be appropriate to grant relief that would affect SAM's current registered status or Mr Morgan's status as SAM's liquidator, and thus interfere with that proceeding. 113 In these circumstances, I would not grant all the relief sought in the notice of appeal. I would, however, hear the parties further on the question of the costs of the proceeding below, unless they can agree, now, on whom the burden of those costs should fall. I certify that the preceding one hundred and thirteen (113) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Yates. Associate: Dated: 16 February 2023 REASONS FOR JUDGMENT BEACH J: 114 McMillan Investment Holdings Pty Ltd (MIH) has asserted that the primary judge erred in finding that the statutory condition specified in s 579E(1)(b)(iv) of the Corporations Act 2001 (Cth) was satisfied in relation to Sydney Allen Printers Pty Ltd (in liquidation) (SAP) and Sydney Allen Manufacturing Pty Ltd (in liquidation) (SAM), such that he was empowered, if just and equitable to do so, to make a pooling order. 115 I should note that prior to the hearing of the application for a pooling order, SAM had been deregistered. Accordingly, one of the orders sought was for the reinstatement of SAM, but such a reinstatement order was predicated on his Honour appointing the first respondent, Mr John Morgan, as liquidator of SAM and also making the pooling order. Of course, on the reinstatement of SAM and such appointment, the condition specified in s 579E(1)(a) was satisfied. 116 Now in my view the s 579E(1)(b)(iv) condition was not satisfied. Consequently, the primary judge was not empowered to make a pooling order utilising such a purported foundation. 117 Before turning to the central question on this appeal, let me briefly set out some of the background. Some background 118 On 27 March 2015, MIH entered into a facility agreement with SAP and SAM as borrowers concerning the making of advances. Various securities were taken over the assets of SAP and SAM being real property mortgages and fixed and floating charges. Guarantees were given by two directors. 119 Now prior to 7 April 2016, SAP and SAM had carried on businesses in the colour printing sector from various premises using employees who were all employed by SAP. SAP did all the printing work, but SAM owned the equipment used. 120 On 7 April 2016, SAP was placed in voluntary administration and Mr Morgan and Mr Geoffrey Davis were appointed as its joint and several administrators. The same day, Messrs Morgan and Davis were appointed as joint and several liquidators of SAM pursuant to a creditors' voluntary liquidation. Also on 7 April 2016, Scottish Pacific Business Finance Pty Ltd, which had provided debt factoring finance to SAP, appointed receivers and managers under its charge over the book debts. 121 On 8 April 2016, MIH appointed Mr Anthony Warner as receiver of SAP's assets, other than over the book debts, under a security instrument granted by SAP and SAM to MIH contemplated under the facility agreement. But later on the same day, Mr Warner retired as receiver. 122 On 12 April 2016, Eastern Media Group Pty Ltd entered into a business licence agreement with SAP pursuant to which it carried on SAP's former business under licence until a contract for the sale of SAP's business and SAM's business was entered into. 123 On 13 April 2016, MIH re-appointed Mr Warner as receiver of SAP's assets, other than over the book debts. Further, on 2 May 2016, Mr Warner was appointed the receiver of SAM under the MIH security instrument that I have previously referred to. 124 On 4 May 2016, Mr Warner, as the receiver of both SAP and SAM, other than concerning SAP's book debts, sold the businesses previously carried on by SAP and SAM to Print Warehouse Australia Pty Ltd (PWA) for the price of $1.3 million. The completion date was stipulated to be within eight weeks of the commencement date (5 May 2016). Completion in fact occurred on 1 July 2016 and the sale proceeds of $1.3 million were paid to MIH. 125 On 5 May 2016, McMillan Group Services Pty Ltd (MGS), which was an entity associated with MIH, Mr Robert McMillan and Ms Julie-Anne McMillan, was paid by PWA the sum of $330,000 (inclusive of GST) pursuant to an invoice dated 4 May 2016 from MGS to PWA. 126 Relevantly for present purposes, the respondents contend that the $330,000 payment comprised part of the agreed purchase price for the businesses of SAP and SAM sold to PWA. It is said that the true purchase price for the sale of the businesses of SAP and SAM to PWA was therefore more than $1.3 million as disclosed in the sale agreement. 127 On 13 May 2016, at the second meeting of creditors of SAP, a resolution was passed pursuant to s 439C that SAP be wound up and that Messrs Morgan and Davis, who had been the administrators, be appointed as joint and several liquidators. I note that Mr Davis retired as a liquidator of SAP on 14 February 2020. 128 Now to this point in the chronology it may be noted that from 13 May 2016, both SAP and SAM were in liquidation and also in receivership. 129 On 10 June 2018, SAM was deregistered by ASIC at the request of Messrs Morgan and Davis, SAM's liquidators. 130 On 2 December 2021 the primary judge ordered the reinstatement of the registration of SAM and appointed Mr Morgan as liquidator. The pooling order was also made, which as a consequence of the other orders could take effect. 131 Let me then turn to the main question which has various dimensions. The present appeal 132 Now before the primary judge, the $330,000 payment from PWA to MGS assumed particular significance with the claim concerning it constituting the relevant existing "particular property" relied on by the respondents to satisfy the jurisdictional pre-condition under s 579E(1)(b)(iv). The claim concerning the $330,000 payment can be conveniently referred to as the alleged chose in action. 133 The primary judge determined that the s 579E(1)(b)(iv) condition had been satisfied principally on the following basis (at [97]): Here, Mr Morgan identified that both SAP and SAM have jointly and severally a present chose in action, as the former owners of the business that Mr Warner sold to Print Warehouse pursuant to the direction of MIH and or Mr and or Ms McMillan to accept the reduced purchase price, in circumstances where it appears that MGS, as a related company of MIH, received $330,000 contemporaneously in relation to the very business that was being sold but not accounted for in reduction of the secured debt that SAM and SAP owed to MIH. Mr Morgan, SAM and SAP will be able to use, as a chose in action, "particular property" that is now being used, or will be if SAM is reinstated and a pooling order made, by both of the companies in connection with their undertaking carried on jointly to discharge their debts and conduct recovery of their assets which, Mr Morgan contends, should have been brought to account in their favour at the time of the sale of their business in 2016. The chose in action comprised the claim on behalf of both SAM and SAP to recover monies that allegedly were wrongfully paid to MGS, a company associated with MIH by Print Warehouse, as purchaser, instead of to the companies. 134 In my view, the primary judge fell into error in finding that the jurisdictional precondition in s 579E(1)(b)(iv) was satisfied. Section 579E(1)(b)(iv) required his Honour to be satisfied on the evidence that the alleged chose in action was not only "particular property" which was presently owned by one or both of SAP and SAM at the time of the hearing and/or decision, but that the particular property "is or was used, or for use" in connection with a "business, scheme or undertaking carried on jointly" by SAP and SAM. 135 Of course, "particular property" for the purposes of s 579E(1)(b)(iv) can encompass intangible property including a chose in action and the idea of "use" can include holding. In the present case the alleged chose in action relates to or underlies a claim that Mr Morgan on behalf of SAP and SAM wishes to bring against MGS to recover the $330,000 payment, which he asserts forms part of the proceeds of sale of the SAP and SAM businesses effected by Mr Warner as receiver. 136 Now the alleged chose in action in the present case arose after the companies were placed into insolvency administration, both receivership and liquidation, and after and as a consequence of their businesses having been sold. And here lies the difficulty. 137 If there was a business, scheme or undertaking carried on jointly by SAP and SAM, it was the colour printing business. The companies clearly each contributed to a business, scheme or undertaking carried on jointly by all of them, being a full colour printing business from shared premises, with shared plant, equipment and staff, and shared financial arrangements. 138 But because the alleged chose in action could only have come into existence after the printing business had been sold, the chose in action being a claim to surplus proceeds of sale not properly accounted for, it was incapable of being particular property that is or was used or for use in connection with the printing business. By then, such a joint business was no longer being carried on by SAP and SAM. 139 Now to overcome this difficulty, the primary judge found that the relevant business, scheme or undertaking carried on jointly by SAP and SAM was not the printing business but rather an undertaking carried on jointly by SAP and SAM to discharge their debts and to carry out the recovery of their assets. But with respect, this attempt at a solution to the problem was unattractive. 140 It was incorrect to characterise the SAP and SAM then liquidators' steps to get in moneys in SAP's and SAM's liquidations, in accordance with their statutory duties, by making a claim for the $330,000 payment arising out of the completed sale of their businesses, as the joint carrying on of a business, scheme or undertaking in SAP's and SAM's insolvency administrations. 141 If there was any business or undertaking of the nature found by the primary judge, it was not carried on jointly by SAP and SAM but rather was carried on separately by each company through their liquidators in relation to their separate liquidations. Absent legislative authority, a liquidator cannot consolidate assets and liabilities of different companies and creditors can only share in the assets of the company against which they are entitled to lodge a proof of debt. 142 Until SAM was deregistered on 10 June 2018, Messrs Morgan and Davis, as liquidators of SAP and SAM, carried on two separate and stand-alone liquidations in accordance with the statutory provisions relating to insolvent companies. Absent pooling, each of the liquidations of SAP and SAM were legally required to be conducted separately by their liquidators. There accordingly could be no alleged joint undertaking jointly carried on by SAP and SAM. 143 Further and more generally, if the alleged chose in action comprises particular property that was owned by one or both of SAP and SAM at the time of the hearing or decision, it was necessary for the primary judge to decide whether it is or was used, or for use in connection with a business, scheme or undertaking carried on jointly by SAP and SAM. 144 Now such an inquiry into use directs attention to both the then present as it was before his Honour, and the past. So, it must be found that at the time of the primary judge's decision, which is embraced by the phrase "is ….used, or for use", or previously, which is embraced by the phrase "used or for use", the alleged chose in action is or was being used or for use in connection with the alleged joint undertaking. But there are several difficulties. 145 First, there was no alleged joint undertaking in which the alleged chose in action was presently being used on 2 December 2021 when the pooling order was made. SAM was deregistered on 10 June 2018 and was not reinstated until 2 December 2021. There could not be any alleged joint undertaking carried on during this period of time or at the time of the primary judge's decision. 146 Second, the primary judge directed his attention to a future use of the alleged chose in action once the pooling order was made. But this was problematic. The relevant statutory inquiry is directed to present and/or past use, not future use. The phrase "for use in" means available for use at the present or in the past, not future use. Further, it is impermissible to have regard to what will happen if a pooling order is made in determining whether there is jurisdiction to make a pooling order. 147 Third, there was no evidence to support any finding of the alleged joint undertaking. After the completion of the sale of the businesses, SAM did nothing. SAM recovered no debts. There were no receipts or payments in SAM's liquidation from 7 April 2016 to 7 April 2017 according to the creditors report issued on 11 May 2017. And no further creditors reports were issued by SAM's liquidators until its affairs were fully wound up on 5 April 2018. Further, SAM had ceased trading three years before it was placed into liquidation. And once in liquidation, SAM had no funding, no assets and no prospects of recovery prior to its deregistration. On 5 April 2018, the SAM liquidators requested that ASIC deregister SAM as its affairs were fully wound up. 148 Fourth, in order for the alleged chose in action to be used or for use presently or previously in connection with the alleged joint undertaking, this undertaking had to arise after the alleged chose in action first came into existence which occurred on 1 July 2016 when the SAP and SAM businesses were sold to PWA. But after 1 July 2016 there could be no alleged joint undertaking for the reason that after 13 May 2016, being a date anterior to completion of the sale of the SAP and SAM businesses to PWA and the existence of the alleged chose in action, both SAP and SAM were in liquidation and receivership. After 1 July 2016 there was not and could not legally be a single business, scheme or undertaking carried on jointly by SAP and SAM in which the particular property is or was used or for use within the meaning of s 579E(1)(b)(iv). 149 Further, had there been proceedings, which there were not, brought by the liquidators of SAP and SAM which sought to recover money under the alleged chose in action, such proceedings would not have been an undertaking carried on jointly. As I have indicated, at that stage and then absent pooling, the SAP and SAM liquidators would have been required to apply such moneys in their separate liquidations. 150 Further, the fact that upon its reinstatement SAM is taken to have continued in existence as if it had not been deregistered (s 601AH(5)) did not retrospectively alter the following reality. For the period from 10 June 2018 to 2 December 2021 (the relevant period) SAM did not carry on any business, scheme or undertaking. Clearly, upon its deregistration, SAM ceased to exist (s 601AD(1)). Further, SAM's alleged chose in action vested in ASIC (s 601AD(2)). ASIC had all the powers of an owner (s 601AD(4)), including the power to dispose of or deal with this chose in action as it saw fit (s 601AE(2)(a)). Moreover, if this chose in action was jointly owned with SAP, it became jointly owned by SAP and ASIC for and over the relevant period. Further, ASIC did not carry on any business, scheme or undertaking referable to the alleged chose in action vested in it, whether alone or jointly with SAP. 151 Further, SAM's reinstatement did not result in the automatic resumption of office by Messrs Morgan and Davis, who were SAM's liquidators at the time of its deregistration. Accordingly, an order was made under s 601AH(3) appointing Mr Morgan as SAM's new liquidator. 152 So, SAM's reregistration together with the operation of s 601AH(5) did not deem SAM to have carried on a business, scheme or undertaking with SAP for the relevant period when SAM was deregistered and the alleged chose in action was vested in ASIC, with SAM having no liquidator. 153 Further, it is not correct to say that immediately upon SAM's reinstatement any alleged business, scheme or undertaking of SAP and SAM in relation to the alleged chose in action was then carried on. Carrying on a business, scheme or undertaking connotes acts of a repetitive nature. There was a very short window indeed between making the order for reinstatement and making the pooling order. Neither the relevant use or for use in connection with, nor the repetitive acts required for carrying on, a business, scheme or undertaking could occur in this very short window. 154 Where SAM had been deregistered over the relevant period and SAM's reinstatement and the SAP/SAM pooling order were sought in the one hearing, this very short window was the moment in time within which the existence of a business, scheme or undertaking carried on jointly under s 579E(1)(b)(iv) had to be considered. Section 579E(1)(b)(iv) was not about a future joint undertaking but one that had to exist at the time of the Court's consideration or decision to make a pooling order. 155 In summary, his Honour was in error in finding that the condition in s 579E(1)(b)(iv) had been satisfied. The notice of contention 156 I agree with what Yates J has written on this topic and would refuse the extension of time sought. Conclusion 157 In summary, I would allow the appeal and agree in the orders proposed by Yates J. I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Beach. Associate: Dated: 16 February 2023 REASONS FOR JUDGMENT MARKOVIC J: 158 On 2 December 2021 orders were made pursuant to s 601AH of the of the Corporations Act 2001 (Cth) for the reinstatement of the third respondent, Sydney Allen Manufacturing Pty Ltd (in Liquidation) (SAM), the appointment of the first respondent, John Maxwell Morgan, as SAM's liquidator and pursuant to s 579E(1) of the Corporations Act that the second respondent, Sydney Allen Printers Pty Ltd (in Liquidation) (SAP) and SAM be a pooled group: see Morgan v Sydney Allen Manufacturing Pty Limited (In Liquidation) [2021] FCA 1669 (referred to as Reasons). 159 The appellant, McMillan Investment Holdings Pty Ltd, appeals from those orders. In particular it contends that the primary judge erred in finding that the statutory precondition in s 579E(1)(b)(iv) of the Corporations Act was satisfied in relation to SAP and SAM so as to enliven the Court's jurisdiction to proceed to consider whether to make the order that SAP and SAM be a pooled group. 160 The Australian Securities and Investments Commission (ASIC) is named as the fourth respondent. It did not participate in the appeal. 161 As a preliminary matter, I note that by its notice of appeal McMillan seeks to have all of the orders made on 2 December 2021 set aside. That is so because, at least at the time the notice of appeal was filed, it understood that the reason for making the order reinstating SAM was the pooling order. That is, if no pooling order was to be made then the reinstatement of SAM served no purpose. However, by the time of the hearing of the appeal that position had seemingly changed in that SAP and SAM had commenced the proceeding contemplated by Mr Morgan at the time of the hearing before the primary judge and described at [179] below. Thus, in the event that McMillan is successful in setting aside the order made by the primary judge pursuant to s 579E(1) of the Corporations Act, it does not follow that the balance of the orders, going to the reinstatement of SAM, ought to be set aside. They are not the subject of any ground of appeal and there is utility in them remaining on foot. 162 Mr Morgan, SAM and SAP (collectively respondents) have filed and served a notice of contention on which they seek leave to rely. They contend that the primary judge refrained from finding whether SAM and SAP were jointly liable to McMillan for one or more debts or claims and that his Honour should have found that they were so jointly liable. McMillan opposes the grant of leave and, if leave is granted, the relief sought in the notice of contention. background 163 The following facts are, for the most part, taken from the Reasons. 164 SAP and SAM operated a colour printing business, initially from premises in Rydalmere and, from about late 2013, from premises in Condell Park. 165 From at least the time that SAP and SAM moved the printing business to Condell Park: (1) the business had about 80 staff, all of whom were employees of SAP; (2) SAM owned, or had rights over, printing presses manufactured by, among others, Heidelberg Graphic Equipment Limited; and (3) SAM had provided security over certain of its assets to Heidelberg and other suppliers of material, namely BJ Ball Pty Limited and KW Doggett & Co Pty Ltd. Those companies subsequently entered into a form of merger and became Ball & Doggett Pty Ltd. 166 It seems that SAP ordered supplies using credit facilities created by SAM and which were subject to the security granted by SAM to the suppliers. SAP caused Heidelberg, BJ Ball and KW Doggett to be paid in the ordinary course of its business operations and, as between SAP and SAM, journal entries were made through their general ledgers under which, notionally, SAP paid creditors on behalf of SAM. 167 By at least early 2014 SAP did all of the printing work and SAM owned the equipment which SAP used in the printing business. SAM does not appear to have received any, or any sufficient, financial remuneration or return from SAP for providing its machinery and credit facilities to enable SAP to conduct the business. However, by 7 April 2016, as between SAP and SAM, the books of those companies recorded that SAM owed SAP over $1 million. 168 In about May 2014 McMillan commenced either providing finance or, as described by the primary judge, having some sort of financial relations with SAP and SAM. The directors of McMillan are Robert McMillan and his daughter, Julie-Anne McMillan. Mr Morgan, in his capacity as liquidator of SAP and SAM, alleges that McMillan, Mr McMillan and Ms McMillan became involved in the management of SAP and SAM and, ultimately, became shadow directors by reason of their direction and conduct of those companies' operations and financial affairs and the degree of information which McMillan required from them. 169 In about 2014 a dispute arose with the landlord of the Condell Park premises. That dispute was resolved upon McMillan, SAP and SAM entering into a facility dated 27 March 2015 for the provision of finance between McMillan as lender, SAP and SAM as borrowers and John Mangos and Christopher Wallace, who at the time were both directors of SAP and SAM, as guarantors (McMillan Facility). The McMillan Facility secured the amount due to the landlord of the Condell Park premises and monies owed by SAP and SAM to Westpac Banking Corporation. 170 On 28 August 2015, upon receiving payment, Westpac assigned its debt and the securities it held for payment of the amount due to it by SAP and SAM to McMillan. The borrowers under the facility with Westpac were SAP, SAM and Mr Mangos and his wife. Guarantees of the amounts owing to Westpac were given by SAP, SAM, Mr and Mrs Mangos and Mr Wallace. 171 On 7 April 2016: (1) John Morgan and Geoffrey Davis were appointed joint and several administrators of SAP by Mr Mangos; and (2) the members of SAM resolved to appoint Messrs Morgan and Davis as its joint and several liquidators. 172 On 13 April 2016 McMillan appointed John Warner as receiver and manager of SAP pursuant to the McMillan Facility. 173 On 2 May 2016 McMillan appointed Mr Warner as receiver and manager of SAM pursuant to the McMillan Facility. 174 On 4 May 2016: (1) Mr Warner in his capacity as receiver and manager of SAM entered into, and caused each of SAM and SAP as "seller" to enter into, a sale agreement with Print Warehouse Australia Pty Limited as "buyer" and Mr Mangos for the sale of the business operated by SAP and SAM as a going concern for $1.3 million. The sale included the business, business names, goodwill, work in progress and goods deliverable to any customer, intellectual property and the printing presses and other equipment, among other assets. The commencement date of the sale agreement was 5 May 2016 and completion was to take place eight weeks after payment of the deposit; and (2) McMillan Group Services Pty Limited (MGS), a company related to McMillan, issued an invoice to Print Warehouse for, and was paid, $330,000 (incl. GST) for its "costs in relation to services provided in connection with printing, plant and equipment" ($330,000 Payment). 175 On 13 May 2016, at the second creditors' meeting of SAP, the creditors resolved to place SAP into liquidation pursuant to s 439C(c) of the Corporations Act and Messrs Morgan and Davis became SAP's liquidators. 176 On 4 July 2016 PMF Legal, McMillan's lawyers, sent a letter to Mr Warner which included: A much stronger offer was received from Print Warehouse Australia. This purchase price was reduced at the last minute and McMillans agreed to the reduced purchase price. 177 On 5 April 2018 Mr Davis lodged a form 578 with ASIC seeking that SAM be deregistered on the basis that there were no funds in the creditors' voluntary liquidation to hold the final meeting and "the affairs of the company are fully wound-up". 178 On 10 June 2018 SAM was deregistered by ASIC. 179 McMillan commenced proceeding no 2018/218097 in the Supreme Court of New South Wales against Mr and Mrs Mangos and Mr Wallace as first, second and third defendants respectively for, among other things, recovery of amounts said to be owing by them pursuant to the McMillan Facility. In its third further amended statement of claim filed on 26 April 2019 McMillan pleaded: (1) the receipt of the $330,000 Payment by MGS from Print Warehouse; and (2) that "in order to avoid any dispute in [the] proceeding, and solely for the purpose of [the] proceeding" it would bring to account the payment of $300,000 by Print Warehouse to MGS "as a deduction against and in reduction of the MIH/SAM & SAP Payments" which were defined as payments made by McMillan in the sum of $1,460,876.61 in the period from 5 March 2015 to about 6 July 2016 at the request of SAP, SAM and Messrs Mangos and Wallace. 180 On 14 February 2020 Mr Davis retired as a liquidator of SAP, leaving Mr Morgan as its sole liquidator. 181 McMillan lodged a proof of debt in the liquidation of SAP claiming $2,156,966.42 pursuant to the McMillan Facility and the assigned Westpac debt and securities. On 15 February 2021 Mr Morgan rejected McMillan's proof of debt. In doing so he: noted that McMillan had failed and refused to provide information to support a number of its asserted claims; rejected the claim insofar as it was based on any amounts said to be due under the debt assigned by Westpac and its associated securities; noted that on 5 May 2016 MGS had received the $330,000 Payment from Print Warehouse as undisclosed consideration for the sale of SAP's and SAM's business; and asserted that, in light of his analysis, McMillan was indebted to SAP, not the other way around. 182 On 21 July 2021 McMillan commenced a proceeding against Mr Morgan in his capacity as liquidator of SAP and SAM appealing against the rejection of its proof of debt. In that proceeding McMillan seeks a declaration that it is a creditor of SAP for $2,156,966.42 and an order that the liquidator be directed to admit its proof of debt in SAP's winding up. As at the time the primary judge made the pooling order pursuant to s 579E(1) of the Corporations Act that proceeding remained on foot. 183 At the time of the hearing before the primary judge Mr Morgan indicated that, if SAM was reinstated, he was appointed its liquidator and a pooling order was made, he proposed to bring a proceeding in which he would make the following claims as summarised at [9] of the Reasons: • Mr Mangos pursuant to s 588M(2) of the Act for recovery, at least of about $4.5 million, being an amount equal to what Mr Morgan asserts is the loss or damage suffered by persons to whom the companies incurred debts during the period of two years from the relation back day, namely, between 7 April 2014 to 7 April 2016; • Christopher Wallace, a former director of SAM and SAP, also pursuant to s 588M(2), for the period between 7 April 2014 and his resignation on 25 November 2015, for recovery of about $2.25 million; • the principals of [McMillan], Robert McMillan (Mr McMillan) and his daughter, Julie-Anne McMillan (Ms McMillan), pursuant to s 588M(2), on the basis that Mr Morgan contends that they were shadow directors of SAP and SAM during the period between when [McMillan] began providing finance under a facility agreement (the [McMillan] facility) made on 27 March 2015, to 7 April 2016 for recovery of at least $3.65 million; • [McMillan], pursuant to s 1317H of the Act, seeking that it pay SAP and SAM the same sum as he claims against Mr and Ms McMillan; and • an associated company of [McMillan] or Mr and Ms McMillan, namely, McMillan Group Services Pty Limited (MGS), seeking recovery of $330,000, including GST, that it received which Mr Morgan claims were proceeds of the sale, on or about 4 or 5 May 2016, of the business of SAP and SAM, effected by their receiver appointed by [McMillan], John Warner. 184 SAP and Mr Morgan were funded by the Attorney-General's Department administering the Fair Entitlements Guarantee Scheme Recovery Program to bring the application for reinstatement of SAM and for a pooling order as well as in relation to the proposed proceeding described above. The position in relation to that funding, as summarised by the primary judge at [50] of the Reasons, is: … The Department stated that, if the Court were to reinstate SAM but declined to order that it and SAP be pooled as a group, it would not provide an indemnity or funding to Mr Morgan in relation to any litigation commenced on behalf of SAM. It stated that the Department would not fund SAM or its liquidator in the event that a pooling is not made because it had not paid out any employee entitlements under the FEG Act in the winding up of SAM. The Department stated that it supported Mr Morgan's present application but would fund Mr Morgan in pursuing the claims on behalf of SAP, were this application granted even if a pooling order were not made. 185 By originating process filed on 18 March 2022 in the Supreme Court Mr Morgan in his capacity as liquidator of SAP and SAM, SAP and SAM commenced the proposed proceeding referred to at [183] above against Messrs Mangos, Wallace, McMillan, Mr McMillan, Ms McMillan and MGS as defendants. the legislative scheme 186 Section 579E of the Corporations Act empowers the Court to make a pooling order and relevantly provides: Making of pooling orders (1) If it appears to the Court that the following conditions are satisfied in relation to a group of 2 or more companies: (a) each company in the group is being wound up; (b) any of the following subparagraphs applies: … (ii) apart from this section, the companies in the group are jointly liable for one or more debts or claims; … (iv) one or more companies in the group own particular property that is or was used, or for use, by any or all of the companies in the group in connection with a business, a scheme, or an undertaking, carried on jointly by the companies in the group; the Court may, if the Court is satisfied that it is just and equitable to do so, by order, determine that the group is a pooled group for the purposes of this section. Note 1: Section 9 provides that pooling order means an order under subsection (1) of this section. Note 2: See also subsection (12) (just and equitable criteria). Consequences of pooling order (2) If a pooling order comes into force in relation to a group of 2 or more companies: (a) each company in the group is taken to be jointly and severally liable for each debt payable by, and each claim against, each other company in the group; and (b) each debt payable by a company or companies in the group to any other company or companies in the group is extinguished; and (c) each claim that a company or companies in the group has against any other company or companies in the group is extinguished. Note: For exemptions, see paragraph 579G(1)(a). … (10) The Court must not make a pooling order in relation to a group of 2 or more companies if: (a) both: (i) the Court is satisfied the order would materially disadvantage an eligible unsecured creditor of a company in the group; and (ii) the eligible unsecured creditor has not consented to the making of the order; or (b) all of the following conditions are satisfied: (i) a company in the group is being wound up under a members' voluntary winding up; (ii) the Court is satisfied that the order would materially disadvantage a member of that company; (iii) the member is not a company in the group; (iv) the member has not consented to the making of the order. Note: For eligible unsecured creditor, see section 579Q. Standing (11) The Court may only make a pooling order on the application of the liquidator or liquidators of the companies in the group. Just and equitable criteria (12) In determining whether it is just and equitable to make a pooling order, the Court must have regard to all of the following matters: (a) the extent to which: (i) a company in the group; and (ii) the officers or employees of a company in the group; were involved in the management or operations of any of the other companies in the group; (b) the conduct of: (i) a company in the group; and (ii) the officers or employees of a company in the group; towards the creditors of any of the other companies in the group; (c) the extent to which the circumstances that gave rise to the winding up of any of the companies in the group are directly or indirectly attributable to the acts or omissions of: (i) any of the other companies in the group; or (ii) the officers or employees of any of the other companies in the group; (d) the extent to which the activities and business of the companies in the group have been intermingled; (e) the extent to which creditors of any of the companies in the group may be advantaged or disadvantaged by the making of the order; (f) any other relevant matters. 187 As was observed by Barrett J in Re Lombe [2011] NSWSC 1536; 87 ACSR 84 at [3]: It can be said, at some risk of oversimplification, that, because of s 579E(2), the effect of a pooling order, once made, is to cause several distinct windings up, as they affect creditors only, to be administered as if they were a single winding up, with all available assets from all administrations applied towards the debts and claims of the creditors of all companies rateably according to the amounts of their debts and claims and as if they were the creditors of a single company. the proceeding before the primary judge 188 Before the primary judge Mr Morgan sought an order pursuant to s 601AH of the Corporations Act that SAM be reinstated and that he be reappointed as its sole liquidator and an order pursuant to s 579E(1) of the Corporations Act that the group of companies comprising SAP and (the to be reinstated) SAM be a pooled group. McMillan opposed the making of those orders. 189 At [9] of the Reasons the primary judge described the claims which Mr Morgan would pursue should the orders he sought for the reinstatement of SAM and for the pooling of SAP and SAM be made (see [183] above). 190 At [11] the primary judge identified the issues that were in dispute between the parties and which required determination. Relevantly in relation to the application for a pooling order his Honour articulated the issues in the following way: (2) whether the conditions for the making of a pooling order under s 579E have been satisfied in respect of: (a) a ground under either s 579E(1)(b)(ii) or (iv) (the gateway issue), (b) whether there was no material disadvantage to any unsecured creditor under s 579E(10)(a) (the material disadvantage issue), and, (c) whether, for the purposes of s 579E(12), there was sufficient intermingling of the affairs of SAM and SAP to warrant the making of the pooling order (the just and equitable issue). 191 The primary judge first considered the question of reinstatement of SAM and resolved the issues that arose in relation to that aspect of the proceeding in favour of the liquidator, Mr Morgan. His Honour was satisfied that SAM could be reinstated and that Mr Morgan could be appointed as its liquidator. It is not necessary to set out his Honour's reasoning. 192 The primary judge then turned to consider whether a pooling order should be made. In doing so his Honour first considered the "gateway issue", namely whether either of the jurisdictional conditions in subs 579E(1)(b)(ii) or (iv) of the Corporations Act for a pooling order were satisfied. 193 The primary judge concluded that the condition in s 579E(1)(b)(iv) was satisfied and for that reason did not need to consider whether the condition in s 579E(1)(b)(ii) was satisfied. As to the former, at Reasons [97]-[98], after referring to the decisions in Re Lombe and Re Watch Works Australia Pty Ltd (in liq) & Anor; Ex Parte Francis & Ors [2020] WASC 6, the primary judge relevantly said: 97 Here, Mr Morgan identified that both SAP and SAM have jointly and severally a present chose in action, as the former owners of the business that Mr Warner sold to Print Warehouse pursuant to the direction of [McMillan] and or Mr and or Ms McMillan to accept the reduced purchase price, in circumstances where it appears that MGS, as a related company of [McMillan], received $330,000 contemporaneously in relation to the very business that was being sold but not accounted for in reduction of the secured debt that SAM and SAP owed to [McMillan]. Mr Morgan, SAM and SAP will be able to use, as a chose in action, "particular property" that is now being used, or will be if SAM is reinstated and a pooling order made, by both of the companies in connection with their undertaking carried on jointly to discharge their debts and conduct recovery of their assets which, Mr Morgan contends, should have been brought to account in their favour at the time of the sale of their business in 2016. The chose in action comprised the claim on behalf of both SAM and SAP to recover monies that allegedly were wrongfully paid to MGS, a company associated with [McMillan] by Print Warehouses, as purchaser, instead of to the companies. 98 I am satisfied that that chose in action is "particular property" owned by both SAM and SAP that is used, or for use, by them in connection with an undertaking carried on jointly by them as companies in the group: Re Lombe 87 ACSR at 96–97 [55], [63], within the meaning of s 579E(1)(b)(iv). 194 Having found that the precondition to the exercise of the power in s 579E(1)(b)(iv) of the Corporations Act had been met, the primary judge went on to consider if a pooling order should be made. His Honour found that there was no evidence that any unsecured creditor of a company in the group would suffer any material disadvantage if an order was made and that in fact the evidence was to the contrary such that s 579E(10) did not preclude the making of a pooling order: Reasons at [99]. 195 His Honour considered McMillan's submission that the making of a pooling order would not be just and equitable but found, having regard to the criteria in s 579E(12) of the Corporations Act, that the activities of the businesses of both SAP and SAM had been intermingled and, as a pooling order would advantage the creditors of both companies, the case for a pooling order was compelling. His Honour observed that the effect of a pooling order would be to eliminate intercompany balances between SAP and SAM for the use of each company's property which, based on the evidence before him would, even assuming a low estimate of recovery, still result in a significant recovery for the pooled group: Reasons at [100]-[104]. The notice of appeal 196 In its notice of appeal McMillan raises the following grounds of appeal, all of which challenge the finding made by the primary judge that the condition specified in s 579E(1)(b)(iv) of the Corporations Act was satisfied: 1 The trial judge erred in finding that the condition specified in section 579E(1)(b)(iv) of the Corporations Act 2001 (Cth) was satisfied in relation to the Second Respondent, Sydney Allen Printers Pty Ltd (in Liquidation), and the Third Respondent, Sydney Allen Manufacturing Pty Ltd (in Liquidation) (which was deregistered when the proceeding in the court below commenced and until immediately before the pooling order was made). 2 The trial judge should have found that the condition specified in section 579E(1)(b)(iv) of the Corporations Act 2001 (Cth) was not satisfied and that this had the consequence that the Court could not proceed to determine whether it was just and equitable to make a pooling order under section 579E(1) of the Corporations Act 2001 (Cth) in respect of the Second Respondent and the Third Respondent. 3 In failing to find that the condition specified in section 579E(1)(b)(iv) of the Corporations Act 2001 (Cth) was not satisfied, the discretion thereafter exercised by the trial judge in making the pooling order miscarried. The parties' submissions 197 McMillan relied on detailed written submissions which I summarise below. However, its principal submission concerned whether the "particular property" owned by one or more companies in the group "is or was used" by any of SAP and/or SAM in connection with a business, scheme or undertaking carried on jointly by them. 198 McMillan did not dispute that "particular property" for the purposes of s 579E(1)(b)(iv) could encompass intangible property including a chose in action. However, it submitted that although a chose in action in the nature of a right to sue may comprise "particular property", the alleged chose, which was the $330,000 Payment, was no more than a mere unfounded assertion. It submitted that, alternatively, the alleged chose was not presently existing "particular property" needed to satisfy s 579E(1)(b)(iv) of the Corporations Act, nor was it used in the way required by the subsection. 199 McMillan submitted that there are at least three decisions which have held that surplus money after a sale should not be classified as presently existing "particular property" within the meaning of s 579E(1)(b)(iv) of the Corporations Act, referring to Re Australian Hotel Acquisition (in liq) [2011] NSWSC 1374 at [44]; Re Lombe at [41]-[47] and Re Watch Works at [40]-[45]. McMillan noted that in the latter case, Vaughan J said that s 579E(1)(b)(iv) has a limiting effect so that surplus money held after sale of the businesses carried on by the relevant companies is not presently existing "particular property" within the meaning of that subsection. 200 McMillan contended that, by parity of reasoning, the chose in action to recover surplus funds arising after sale of the businesses of SAP and SAM cannot be "particular property" within s 579E(1)(b)(iv) of the Corporations Act. It submitted that if surplus moneys received and banked by a liquidator is not "particular property", a chose in action to recover and bank such moneys also cannot be "particular property". 201 McMillan next submitted, in relation to the phrase "business, scheme or undertaking" in s 579E(1)(b)(iv) of the Corporations Act, that the term "business" was well understood, the term "scheme" had been considered in Re Lombe but that the term "undertaking" is not as well understood. It submitted that, if there was a "business, scheme or undertaking", it was the printing business described at Reasons [3] and [12]-[14] and, because the alleged chose could only have come into existence after the printing business had been sold (the chose in action being a claim to surplus proceeds of sale not properly accounted for) it was incapable of being "particular property" that is or was used, or for use, in connection with the printing business which by then was no longer being carried on by SAP and SAM. 202 McMillan observed that to overcome this fatality the primary judge found at Reasons [97] (see [193] above) that the relevant "business, scheme or undertaking" carried on jointly by SAP and SAM was not the printing business but an "undertaking carried on jointly by [SAP and SAM] to discharge their debts and conduct recovery of assets" (referred to by McMillan as the alleged joint undertaking). McMillan submitted that is not an "undertaking" within the meaning of s 597E(1)(b)(iv) of the Corporations Act, nor is it a business or scheme carried on jointly by SAP and SAM. 203 McMillan submitted that if, contrary to its submissions, the alleged chose comprises "particular property" owned by SAP and/or SAM at the time of the primary judge's decision, it was necessary for the primary judge to also determine whether it "is or was used, or for use in connection with a business, scheme or undertaking carried on jointly by" SAP and SAM. It contended that the inquiry into use directs attention to both the present and the past and that it must be found that at the time of the primary judge's decision or previously the alleged chose is/was being used or for use in connection with the alleged joint undertaking. McMillan identified the following as difficulties which would prevent such a finding being made: (1) there was no alleged joint undertaking in which the alleged chose was presently being used on 2 December 2021 when the pooling order was made; (2) the primary judge directed his attention to a future use of the alleged chose once a pooling order was made which was impermissible for two reasons. First, the inquiry is directed to present and/or past use, not future use and the phrase "for use in" means available for use at present or in the past, not future use. Secondly, it is impermissible to have regard to what will happen if a pooling order is made in determining whether there is jurisdiction to make such an order; (3) there was no evidence to support any finding of the alleged joint undertaking; and (4) in order for the alleged chose to be used or for use presently or previously in connection with the alleged joint undertaking, the undertaking had to arise after the alleged chose first came into existence which occurred after 1 July 2016 when the SAP and SAM businesses were sold to Print Warehouse. However, after 1 July 2016 there could be no alleged joint undertaking because after 13 May 2016 both SAP and SAM were in liquidation. 204 McMillan submitted that until SAM was deregistered on 10 June 2018, there were two separate liquidations carried on by the liquidators in accordance with the statutory provisions relating to insolvent companies: one for each of SAP and SAM. Absent pooling, their respective liquidations were required to be carried on separately and accordingly there could be no alleged joint undertaking carried on by SAP and SAM. It contended that, had the liquidators of SAP and SAM brought proceedings for the recovery of money under the alleged chose in action, those proceedings would not have been an "undertaking … carried on jointly" and, absent a pooling order, the liquidators of SAP and SAM would have been required to apply such moneys in their separate liquidations. 205 McMillan submitted that after 1 July 2016 there was not and could not legally be a single business, scheme or undertaking carried on jointly by SAP and SAM in which the "particular property" is or was used, or for use within the meaning of s 579E(1)(b)(iv) of the Corporations Act. It contended that the primary judge erred in finding that there was and is the alleged joint undertaking in which the alleged chose is now being used or will be used if SAM is reinstated. 206 McMillan submitted that while its submissions recorded above proceeded on the basis that there was in fact the alleged chose in the nature asserted by the respondents, the evidence of the alleged chose rose no higher than mere assertion and speculation. It contended that it was not open to the primary judge to have made any factual finding or to have drawn any inference that the $330,000 Payment formed part of the purchase price for the SAP and SAM businesses. At its highest, the evidence disclosed no more than that an entity associated with McMillan, MGS, raised an invoice to Print Warehouse for $330,000 for "services provided in connection with printing plant and equipment" and that this transaction occurred at or about the same time as the SAP and SAM receiver entered into an agreement to sell those businesses to Print Warehouse for $1.3 million. 207 McMillan submitted that, even if it was open to make the finding, the primary judge should have found that it had brought the $330,000 Payment to account such that the alleged chose could not give rise to any arguable claim or cause of action by the liquidator of SAP and/or SAM to recover money or damages from MGS. McMillan also submitted that any claim was presumably against Mr Warner as receiver who sold the businesses on behalf of SAP and SAM, not MGS, given his duty to unsecured creditors to take reasonable care to sell the charged property for not less than its market value or, if there was no market value, for the best reasonably attainable price. 208 Finally, McMillan submitted that once all money due to it as secured creditor had been paid and the costs and expenses of the receivership discharged, the receiver holds any remaining moneys in trust for a subsequent encumbrancer, the debtor company or the liquidator, as the case may be. It contended that as both SAP and SAM were in liquidation, the right of the liquidator was a right to require the receiver to render proper accounts and to pay any surplus in the receivership. McMillan submitted that thus the alleged chose was or is the property of SAP and SAM's liquidator not of SAP and SAM per se, it is a right of the liquidator to call for accounts and to require any surplus to be paid to the liquidator for the purposes of the liquidations of SAP and SAM. 209 The respondents submitted that the chose in action, which was the purchase price wrongfully withheld from them i.e. the $330,000 Payment, was plainly "particular property" within the meaning of s 579E(1)(b)(iv) of the Corporations Act. 210 The respondents observed, by reference to the reasons in Re Lombe, that a chose in action in the form of a right to sue is capable of being "used" within the meaning of s 579E(1)(b)(iv) of the Corporations Act by the company entitled to exercise the right, and a person who owns property may "use" it "simply by holding it, where the mere holding can be regarded as the source of some advantage", relying on Re Lombe at [61]. 211 The respondents submitted that it was no answer to that conclusion to submit, as McMillan does, that the chose in action was no more than a "mere unfounded assertion" not supported by evidence. The respondents observed that submission was premised on an assertion that there was a complete lack of evidence as to the existence of the facts that McMillan and/or Mr and/or Ms McMillan gave a direction to Mr Warner as receiver to accept a reduced purchase price for the SAP and SAM businesses and that the $330,000 Payment formed part of the purchase price. They contended that that premise cannot be sustained. 212 As to the first part of the premise, the respondents submitted that, as McMillan observes, Mr Warner's primary duty was to McMillan which was controlled by Mr McMillan and Ms McMillan, McMillan did not adduce any evidence at trial and the objective contemporaneous evidence was (as recorded at Reasons [24]) that the "purchase price was reduced at the last minute and [the] McMillans agreed to the reduced purchase price". The respondents contended that plainly McMillan and/or Mr and/or Ms McMillan directed Mr Warner to accept the lower purchase price. 213 As to the second part of the premise, the respondents submitted that the primary judge did not find that the $330,000 Payment formed part of the purchase price. Rather, the primary judge found, correctly, that "MGS as a related company of [McMillan], received $330,000 contemporaneously in relation to the very business that was being sold but not accounted for in reduction of the secured debt that SAM and SAP owed to [McMillan]", a finding which the respondents say ought not to be controversial. The respondents noted that the primary judge (at Reasons [97]) went on to explain that the chose in action comprised the claim on behalf of both SAP and SAM to recover monies that allegedly were wrongfully paid by Print Warehouse, as purchaser, to MGS, a company associated with McMillan, instead of to those companies. 214 The respondents submitted that the claim foreshadowed before the primary judge was clearly one that McMillan pay SAP and SAM $300,000, being the net proceeds from the sale of the companies' assets which were diverted. They said that, as the chose in action represents moneys to which SAP and SAM were entitled as vendor, and which was not paid to them, the claim is properly to be made by them. They also said that as MGS received the funds, it is the proper respondent to that claim. While there may be separate and independent causes of action against other parties that does not preclude the existence of the claim against MGS. The respondents submitted that the claim is not against the receiver, but against the recipient of the funds, MGS. The receiver did not hold the funds and the "surplus" to which McMillan refers in its submissions does not exist. 215 The respondents submitted that McMillan's submission that the chose in action was not presently existing "particular property" is not to the point. They submitted that this case is not concerned with surplus proceeds held after a sale but with a present chose in action arising from that sale. The respondents distinguished the authorities relied on by McMillan on their facts and submitted that the determinative factor in each of the cases was not that certain property was surplus funds but rather that those funds were not owned by one or more of the relevant companies at the time of determination of the pooling application. 216 The respondents contended that, in any event, the primary judge correctly identified that in Re Watch Works at [70]-[74] Vaughan J "concluded that the purpose for which certain money had been deposited into a liquidation account was to enable the businesses of the two companies to be carried on until a sale was completed. Therefore, Vaughan J was satisfied there that the account itself was 'particular property' and held that purpose met the conditions in s 579E(1)(b)(iv)". The respondents submitted that once that is accepted so too must the primary judge's conclusion (at Reasons [97]) that the respondents will be able to use, as a chose in action, "particular property" that is now being used, or will be if SAM is reinstated and a pooling order made, by both companies in connection with their undertaking carried on jointly to discharge their debts and conduct recovery of their assets which should have been brought to account in their favour at the time of the sale of their business in 2016. 217 As to the question of whether there was a "business, scheme or undertaking", the respondents submitted that it was undoubtedly correct that SAP and SAM carried on a colour printing business and that does not detract from the correctness of the conclusion reached by the primary judge. Nor does it preclude a finding that SAP and SAM might have carried on more than one business, and at different times. There is no basis to limit the breadth accorded to the terms "business", "scheme" and "undertaking" as McMillan attempts to do. 218 The respondents submitted that the chose in action arose once the printing business had been sold and that it is not in contention that, at the time of the sale, that business had debts and those debts remained outstanding. The respondents contended that McMillan seeks to restrict the "business" of SAP and SAM to one where there was active trading, none of the authorities to which it refers place that restriction on the definition and, plainly, recovering moneys owed is a fundamental part of carrying on business. 219 The respondents further submitted that, in the context of bankruptcy law, it is well settled that one might carry on business where active trading has ceased but the business is still being wound up and debts are being collected or paid. They contended that in that context and where one accepts, as McMillan does, that "undertaking" can sometimes be used as a synonym for business, there is nothing incorrect about the conclusion of the primary judge that the relevant undertaking was the undertaking carried on jointly by SAP and SAM to discharge their debts and recover assets. 220 In relation to the question of whether the chose in action is or was used or was for use in connection with the joint undertaking, the respondents submitted that for the reasons set out at [217]-[219] above, the chose in action was and remains used in connection with the joint undertaking carried on by SAP and SAM. They submitted that McMillan's submission that there could not be any joint undertaking carried on at the time of the Court's decision ignores the effect of s 601AH(5) of the Corporations Act upon the reinstatement of a company. They said that, in any event, immediately upon reinstatement, that undertaking was carried on. 221 The respondents submitted that McMillan did not identify any basis for its submission that the primary judge directed his attention to future use of the chose in action once a pooling order was made. The respondents observed that McMillan's submission to that effect appeared to arise out of the primary judge's comments at Reasons [97] but contended that a plain reading of the relevant passage indicates that the primary judge correctly identified the current use of the chose in action and that the passage in issue foreshadows what might occur. It did not form any part of his Honour's determination. Rather, and irrespective of whether a pooling order was made, immediately upon reinstatement SAP and SAM would jointly hold a chose in action for recovery of the diverted funds. 222 The respondents also submitted that McMillan's contention that, because SAM's liquidators requested that it be deregistered as its affairs were "fully wound up", a pooling order ought not to have been made did not withstand scrutiny. That was for two reasons. First, the respondents said that this argument was raised at trial in the context of whether it was just and equitable to reinstate SAM and not to challenge the making of the pooling order. Secondly, they said that the submission ignores the "practical reality that there were no funds in SAM". As at April 2018 the state of accounts between SAM and SAP suggested that SAM owed SAP over $1 million and SAM had no assets. The respondents referred to Reasons at [80] where the primary judge set out evidence to the effect that a liquidator does not have to incur expenses when there are no funds in the company and he or she has spent considerable time and effort until then in reporting to ASIC and creditors as required by the Corporations Act. They also referred to Reasons at [81]-[82] where the primary judge explained that the meaning of the expression "finally wound up" is dependent on the context in which it is used and there was no suggestion from the time that the liquidators had written their May 2017 report that any creditor had come forward with an offer of funding or other assistance to enable the liquidators to carry out any further tasks. 223 Finally, the respondents contended that McMillan's submission that, because SAM and SAP were, until SAM's deregistration, conducted as separate liquidations, there was no joint undertaking, sought to conflate impermissibly the conduct of the two liquidations with the conduct of the single business or undertaking. The respondents submitted that if the appointment of a liquidator to two companies severed their previous joint business or undertaking, then the Court could never make a pooling order. The respondents contended that McMillan's submission ignores the point that, whilst two companies might be in separately conducted liquidations, any joint business or undertaking carried on by them can properly continue. Consideration 224 It was not in dispute that "particular property" for the purposes of s 579E(1)(b)(iv) of the Corporations Act includes a chose in action: see Re Lombe at [54], [58]. 225 The relevant chose in action for the purpose of the liquidator's application for a pooling order is SAP and SAM's claim for $330,000 from MGS (and others) which it contends was paid by Print Warehouse to MGS at about the time of the sale of their jointly operated printing business to Print Warehouse and which amount represented a reduction in the amount otherwise payable to purchase the business which was diverted to MGS at the direction of McMillan and/or Mr and/or Ms McMillan. 226 As described by senior counsel for the respondents, SAP and SAM have brought a claim to recover the $330,000 Payment being a reduction in the purchase price for the business they operated jointly. Among other things, in the proceeding they allege that Mr McMillan and Ms McMillan were shadow directors of SAP and SAM, in that capacity they owed the duties set out in, among others, s 180 of the Corporations Act to those companies and, in allowing the diversion of a part of the purchase price to MGS, they breached those duties. They also allege that, pursuant to s 79 of the Corporations Act, MGS was knowingly concerned in the breaches by Mr and Ms McMillan of their duties owed to SAP and SAM. In the alternative, SAP and SAM allege that the sum is repayable as monies had and received. 227 The first question that arises is whether the chose in action described at [225] above is presently existing "particular property". McMillan contends that it is not. In doing so it relies on the analysis in Re Watch Works to support its contention that surplus proceeds of sale are not presently existing particularly property. 228 In answering this question it is convenient first to consider the decision in Re Lombe. In that case, as is the case here, receivers and managers appointed by a secured creditor of each company, save one, in the group of companies the subject of an application for a pooling order had sold the assets and undertaking of those companies. The company to which there had been no appointment sold its own assets and undertaking in conjunction with the sales by the receivers and managers. Accordingly, none of the companies in question owned goodwill or any tangible property used in the conduct of their business at the time the liquidator made the application under s 579E of the Corporations Act for a pooling order. Rather, they held the balance of the proceeds of sale. 229 In applying for a pooling order the liquidator relied on s 579E(1)(b)(iv) of the Corporations Act. Justice Barrett identified the questions for the court to be "whether, at the time of the court's decision, particular property 'is or was used, or for use' in a relevant way and is property that 'one or more companies in the group own'": at [40]. His Honour referred to the decision in Re Australian Hotel noting that in that case Windeyer AJ considered whether a pooling order could be made in circumstances similar to those before his Honour, namely where a secured creditor had sold hotel premises and businesses previously carried on by the relevant companies. At [41] his Honour set out Re Australian Hotel at [42]-[44] including relevantly that: 44 I do however consider that SPAC did mortgage the Surfers Paradise Hotel to the CBA to support the borrowing and to that extent that property was used in connection with a business carried out by the AHA companies but not the North Ryde companies. However the Surfers Paradise Hotel has been sold and is no longer particular property now owned by SPAC. The ordinary construction of (iv) requires the property to be now owned not previously owned so the particular mortgage transactions do not assist under (iv). The evidence is that the property now held in the companies is the surplus money available after sale of the Parramatta Hotel and any surplus from sale of North Ryde Hotel if the claim of Barcroft Holdings to be secured creditor is not successful. These surplus funds are not particular property within (iv). As I have said if there were any particular property it no longer exists. Again the requirements of (iv) are not made out. 230 Despite an invitation to do so, Barrett J refused to depart from the decision in Re Australian Hotel and the construction adopted by Windeyer AJ in that case. At [44] his Honour observed: But the plain words are uncompromising in the message they deliver. Both s 579E(1)(b)(iii) and (iv) deal with a case where property "is or was used, or for use" in connection with a business, scheme or undertaking, thus extending to both a case in which property is now used (or for use) and a case in which property was at some earlier time used (or for use); but each provision makes it perfectly plain that it is concerned only with property that is now owned. 231 His Honour then turned to consider whether, having regard to that construction of s 579E(1)(b)(iv) of the Corporations Act, it was possible to conclude that particular property that is or was used in connection with the relevant undertaking was still owned, despite the sales of the businesses. In that case the relevant property was the product of a cross guarantee. After examining the terms of the cross guarantee, at [53]-[55] his Honour observed that: 53 The chose in action created by the deed is, in a direct and immediate sense, a chose in action which is held by No 5 as the trustee and which No 5 has acknowledged that it holds "for the benefit of" each creditor. 54 To the extent that it is sensible to speak of a chose in action, in the form of a right to sue, being "used", the relevant "use" will usually be that to which the right of action can be put by bringing the relevant action — here, recovery steps that No 5, as trustee, could take for the benefit of a creditor against the group entity by which the money was payable. 55 Choses in action no doubt accrued also to each group entity upon the execution of the deed, although these were not enforceable until the time referred to in cl 3.2. Each other group entity, as a guarantor, could, at that point require the trustee to institute debt recovery proceedings against the group entity liable to pay and, after satisfying the guarantee, claim by subrogation the trustee's rights against the defaulting group entity. The rights to require the trustee to act in those ways arose immediately upon the deed being executed but, until a debt of a group entity became due and payable, the right, although existing, was not exercisable. 232 At [58] Barrett J noted that there was nothing in the legislation confining s 579E(1)(b)(iv) of the Corporations Act to tangible property, that intangible property may well be used in connection with a business, undertaking or scheme and that could include debts. In considering whether the choses in action arising from the cross guarantee were "used" in the sense contemplated by the section, his Honour observed (at [61]) that a person who owns property may "use" it simply by holding it "where the mere holding can be regarded as the source of some advantage". His Honour found that each of the companies had vested in it a chose in action since execution of the deed of cross guarantee and thus each such company presently has property in the form of that chose in action which was used by the company "to maintain in existence the economies and administrative advantages that came from the ASIC order" which became available as a result of the execution of the deed of cross guarantee: at [63]. 233 In Re Watch Works Vaughan J came to the same conclusion insofar as proceeds of sale of a business were concerned. There his Honour considered an application by the liquidators of two companies, Watch Works Australia Pty Ltd (in liq) and Cobbler Plus Services Pty Ltd (in liq), for an order pursuant to s 579E of the Corporations Act that Watch Works and Cobbler Plus are a pooled group and ancillary orders. In their application, the liquidators only sought to rely on s 579E(1)(b)(iv) of the Corporations Act. At [38] Vaughan J observed in relation to the subsection that: The focus of the inquiry under sub-par (iv) is the actual state of affairs. One or more of the companies must own 'particular property' that is or was used, or for the use, by any or all of the companies in the group in connection with, among other things, a business carried on jointly by the companies in the group. In the present case the plaintiff liquidators pointed to the funds in the Watch Works' liquidation account as being the relevant particular property. (Footnote omitted.) 234 At [40]-[45], in relation to what he described as the "related requirements of ownership and use" in s 579E(1)(b)(iv), his Honour referred to Re Lombe and Re Australian Hotel and stated at [42] that: The plaintiff liquidators accepted that I should not depart from the construction of s 579E(1)(b)(iv) adopted in Re Australian Hotel Acquisition (in liq) and Kirby Street (Holding) Pty Ltd; Re Lombe. That concession was properly made. It cannot be suggested that the decisions are plainly wrong. To the contrary, the text of s 579E(1)(b)(iv) compels the conclusion reached in those decisions. The consequence is that s 579E(1)(b)(iv) requires that the plaintiff liquidators identify some presently existing 'particular property' owned by one or both of Watch Works or Cobbler Plus which was relevantly used in connection with a business, scheme or undertaking carried on jointly by the companies. The proceeds of realisation from the sale of the Watch Works and Cobbler Plus businesses will not suffice. 235 It is beyond doubt that the surplus proceeds of sale of the business carried on by SAP and SAM cannot be "particular property" for the purposes of s 579E(1)(b)(iv) of the Corporations Act. But that is not the "particular property" relied on by the respondents. Rather, they contend that the "particular property" is the chose in action to recover that part of the proceeds of sale which was diverted to MGS. As Barrett J recognised in Re Lombe, "particular property" may comprise intangible property. 236 The chose in action arises from the sale of the business. SAP and SAM have a cause of action for recovery of the $330,000 Payment from MGS which is presently existing and, it follows, is presently owned. In any event, and despite the detailed written submissions on which the appellant relied, as senior counsel developed McMillan's submissions at the hearing of the appeal, there appeared to be no dispute, at least for the purposes of McMillan's argument on the appeal, that SAP and/or SAM owned the particular property at the time the primary judge made orders, as required by s 579E(1)(b)(iv), and that they continue to do so. 237 The more vexed question is whether the "particular property", which is the chose in action, is or was used, or for use, by SAP and/or SAM in connection with a business, scheme or undertaking carried on jointly by them. 238 The first thing to observe is that these are alternatives. That is, the Court must be satisfied that the particular property which is presently owned by SAP and/or SAM is used or was used or is for use by them in connection with their joint business, scheme or undertaking. 239 The gravamen of McMillan's submissions is that the particular property in this case was not in use or used, or for use by SAP and SAM and the requisite use could not have been made out had the primary judge adopted the correct approach to the identification of the jointly carried on "business, undertaking or scheme". McMillan contends that the alleged claim for recovery of the $330,000 Payment did not come into existence when there was any "business, scheme or undertaking" carried on jointly by SAP and SAM. 240 McMillan contended that by the time of the sale of the printing business to Print Warehouse (and the contemporaneous payment of the sum in issue to MGS), the business which had been jointly carried on by SAP and SAM had ceased. 241 The respondents accept that the chose in action arose upon the sale of the printing business. It was at the time of the sale that they were deprived of part of the purchase price and thus it was from that time that the chose in action, being a cause of action against Mr and Ms McMillan and MGS for recovery of the amount which they say should have formed part of the purchase price but which was diverted to MGS, came into existence. 242 However, the business, scheme or undertaking carried on jointly by SAP and SAM did not necessarily cease upon sale of the printing business. Rather, its nature changed from one of actively carrying on a business to one of recovery and payment of debts. 243 In Donoghue v Russells (A Firm) [2021] FCA 798 Rangiah J considered the meaning of the term "carrying on business in Australia" in the context of s 43(1)(b)(iii) of the Bankruptcy Act 1966 (Cth), which is one of the jurisdictional preconditions to the making of a sequestration order. In addressing a submission as to whether that phrase could be described as having "a very wide meaning", his Honour said: 30 … In Theophile v The Solicitor-General [1950] AC 186, the House of Lords considered s 1(2) of the Bankruptcy Act 1914 (UK) which defined a "debtor" as including a person who, "was carrying on business in England, personally, or by means of an agent or manager". Lord Porter held at 201: In a sense it is true that the appellant was not actively carrying on business within three months of the presentation of the petition, but there is a series of cases…which in unbroken sequence have decided that trading does not cease when, as the expression is, "the shutters are put up," but continues until the sums due are collected and all debts paid. 31 In In re Bird v Inland Revenue Commissioners; Ex parte the Debtor [1962] 1 WLR 686, the Court of Appeal at 693, 697-698 and 699, described the ratio decidendi of Theophile as being that, "trading is not completed until you have performed all the obligations that the fact of trading imposed upon you". 32 In Mendonca, Gibbs J referred at 574-575 to, "the somewhat wide understanding of those words ["carrying on business"] that has come to be established in bankruptcy law", citing Theophile and Bird. 33 In Vassis, Burchett J at 525-526 adopted the view of Gibbs J and added that the words, "either personally or by means of an agent or manager", are words of extension, not limitation. Justice Burchett held that the debtor was "carrying on business in Australia" since the winding-up of the debtor's business and the payment of its debts had not been concluded. 244 Although the phrase used in s 579E(1)(b)(iv) of the Corporations Act is slightly different I see no reason why the term as understood in the context of the Bankruptcy Act would not be equally applied to a company being wound up pursuant to the provisions of the Corporations Act. Indeed, given that a pooling order is sought in circumstances where each company in the relevant group is being wound up it must be the case that in many instances the business, scheme or undertaking will, at the time the requirements for the making of a pooling order are considered, be at the stage described in the authorities referred to in Donoghue. 245 Finally it is necessary to consider whether the chose in action is or was used in connection with that joint business. 246 Insofar as present or past use is concerned, that the alleged cause of action had not been commenced at the time of the hearing before the primary judge does mean that that it was not in use or used. As was recognised in Re Lombe at [61], a person who owns property may "use" it by holding it "where the mere holding can be regarded as the source of some advantage". Here the property, being the chose in action, was held by SAP since the sale of the printing business and, once reinstated, by SAM. In holding the property SAP and SAM enjoy an advantage in that they have a cause of action by which they can recover for their/their creditors' benefit the amount which they allege was paid to MGS at the time of the sale of the printing business against those persons who they contend breached their duties owed to them or were knowingly concerned in those breaches. 247 Insofar as use or past use in connection with a jointly held business, scheme or undertaking is concerned, a complexity arises because as at 10 June 2018 SAM was deregistered. It was reinstated by orders made by the primary judge on 2 December 2021 when his Honour also made the order pursuant to s 579E of the Corporations Act. In a temporal sense at the time the primary judge considered the requirements of s 579E(1)(b)(iv) of the Corporations Act and the question of whether the particular property is or was used, or for use, by any of SAP and or SAM in connection with a business, scheme or undertaking carried on jointly by them, SAM remained deregistered thus raising a question about how the use at that time could be in connection with a business, scheme or undertaking carried on jointly by SAP and SAM. 248 The primary judge made the orders for reinstatement of SAM first. The effect of those orders was and is that SAM is taken to have continued in existence as if it had not been deregistered and, among other things, any property that vested in the Commonwealth or ASIC revests in SAM: see s 601AH(5) of the Corporations Act. His Honour then made the pooling order pursuant to s 579E(1) of the Corporations Act. Thus at the time the pooling order was made SAM was taken to have continued in existence and so to have continued in its joint business or undertaking with SAP of getting in and paying debts. 249 Contrary to McMillan's submissions, that there are or were, absent a pooling order, two distinct liquidations with the liquidator required to discharge his duties in relation to each, liquidation does not preclude the carrying on of a joint business or undertaking for the purposes of s 579E(1)(b)(iv) of the Corporations Act. To conclude otherwise would make the subsection unworkable given that the premise for, and a precondition to, seeking a pooling order is that there are companies in a group, each of which is being wound up separately and in relation to which, absent a pooling order, the liquidator of each is required to apply any recoveries in that company's liquidation to payment of creditors of the particular company. 250 Finally, to the extent that the primary judge, at [97] of the Reasons, reasoned that "Mr Morgan, SAP and SAM will be able to use, as a chose in action, 'particular property' that is now being used or will be if SAM is reinstated and a pooling order made, by both companies" (my emphasis), I accept the respondents' submission that, insofar as his Honour referred to future use, he was addressing the consequence of making an order pursuant to s 579E(1) of the Corporations Act. That aspect did not form part of his Honour's reasons for the determination of the "gateway" issue and whether the respondents had otherwise established the criteria in s 579E(1)(b)(iv) of the Corporations Act. conclusion 251 It follows from the above that I am of the view that McMillan has failed to make out its grounds of appeal. Accordingly it is not necessary for me to consider whether the respondents should be granted leave to rely on their notice of contention and if so whether the ground raised therein should be upheld. 252 I would make orders dismissing the appeal with costs. I certify that the preceding ninety-five (95) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Markovic. Associate: Dated: 16 February 2023 SCHEDULE OF PARTIES NSD 1376 of 2021 Respondents Fourth Respondent: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION