FEDERAL COURT OF AUSTRALIA Shannon (in his capacity as receiver and manager of North East Wiradjuri Co Limited) v North East Wiradjuri Co Limited (No 3) [2012] FCA 106 Citation: Shannon (in his capacity as receiver and manager of North East Wiradjuri Co Limited) v North East Wiradjuri Co Limited (No 3) [2012] FCA 106 Parties: DAVID SHANNON IN HIS CAPACITY AS RECEIVER AND MANAGER OF NORTH EAST WIRADJURI CO LIMITED (ACN 125 329 526) (RECEIVERS AND MANAGERS APPOINTED) AND NORTH EASTERN WIRADJURI COMMUNITY FUND LIMITED (RECEIVERS AND MANAGERS APPOINTED) (ACN 132 314 008) and BRUCE GLEESON IN HIS CAPACITY AS RECEIVER AND MANAGER OF NORTH EAST WIRADJURI CO LIMITED (ACN 125 329 526) (RECEIVERS AND MANAGERS APPOINTED), MARTIN RONALD DE LAUNEY, WENDY LEWIS and LYNETTE SYME v NORTH EAST WIRADJURI CO LIMITED (RECEIVERS AND MANAGERS APPOINTED) (ACN 125 329 526) AND NORTH EASTERN WIRADJURI COMMUNITY FUND LIMITED (RECEIVERS AND MANAGERS APPOINTED) (ACN 132 314 008), BILL ALLEN, ESTER CUTMORE and ROBERT BUGG File number: NSD 1320 of 2010 Judge: JACOBSON J Date of judgment: 9 February 2012 Catchwords: PRACTICE AND PROCEDURE - adoption of referee's report - relevant principles Legislation: Federal Court Act 1976 (Cth), s 54A Federal Court Rules 2011, Order 28.67 Uniform Civil Procedure Rules 2005, r 20.14 Cases cited: Chocolate Factory Apartments Limited v Westpoint Finance Pty Limited [2005] NSWSC 784 Super Pty Limited (formerly known as Leda Constructions Pty Limited) v SJP Formwork (Aust) Pty Limited (1992) 29 NSWLR 549 Date of hearing: 9 February 2012 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 12 Counsel for the First, Second and Third Plaintiffs: Ms S Pritchard Solicitor for the First, Second and Third Plaintiffs: Gillis Delaney Lawyers Counsel for the Defendants: Mr A Collett IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1320 of 2010 IN THE MATTER OF NORTH EAST WIRADJURI CO LIMITED (ACN 125 329 526) (RECEIVERS AND MANAGERS APPOINTED) BETWEEN: DAVID SHANNON IN HIS CAPACITY AS RECEIVER AND MANAGER OF NORTH EAST WIRADJURI CO LIMITED (ACN 125 329 526) (RECEIVERS AND MANAGERS APPOINTED) First Plaintiff BRUCE GLEESON IN HIS CAPACITY AS RECEIVER AND MANAGER OF NORTH EAST WIRADJURI CO LIMITED (ACN 125 329 526) (RECEIVERS AND MANAGERS APPOINTED) AND NORTH EASTERN WIRADJURI COMMUNITY FUND LIMITED (RECEIVERS AND MANAGERS APPOINTED) (ACN 132 314 008) Second Plaintiff MARTIN RONALD DE LAUNEY First Applicant WENDY LEWIS Second Applicant LYNETTE SYME Third Applicant AND: NORTH EAST WIRADJURI CO LIMITED (RECEIVERS AND MANAGERS APPOINTED) (ACN 125 329 526) First Defendant NORTH EASTERN WIRADJURI COMMUNITY FUND LIMITED (RECEIVERS AND MANAGERS APPOINTED) (ACN 132 314 008) Second Defendant BILL ALLEN First Respondent ESTER CUTMORE Second Respondent ROBERT BUGG Third Respondent JUDGE: JACOBSON J DATE OF ORDER: 9 FEBRUARY 2012 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. An order pursuant to rule 28.67 of the Federal Court Rules 2011 adopting in full the report of the referee, the Hon Murray Wilcox AO QC, dated 15 November 2011, given in accordance with orders for referral pursuant to section 54A of the Federal Court Act 1976 made11 March 2011. 2. An order pursuant to section 249G(1) of the Corporations Act 2001 that an annual general meeting of the members of NEWCO be called (the NEWCO AGM) for the purpose of electing directors of the company. 3. Directions pursuant to section 1319 of the Corporations Act 2001 with respect to the convening, holding and conduct of the NEWCO AGM, including that: 3.1 the meeting be called and conducted in accordance with the provisions of the NEWCO Constitution; 3.2 the meeting be chaired by the receivers and managers (or either of them); 3.3 only the 55 persons listed in the "Referee's finding of fact and final ruling" dated 15 November 2011 as "North East Wiradjuri" as defined in clause 2.1 of the Constitution of North East Wiradjuri Co Ltd (NEWCO) (the listed persons): 3.3.1 be entitled to vote for the directors of NEWCO; and 3.3.2 be eligible for election as a director of NEWCO, namely: (1) William Garry ALLEN; (2) Betty (wrongly called Beryl) BUGG; (3) Elaine BUGG; (4) Joseph BUGG; (5) Robert BUGG; (7) Martin Ronald DE LAUNEY; (8) Wendy Ann LEWIS; (9) Lola McCONNELL; (12) Lynette SYME; (14) Robyn WILLIAMS; (15) Mavis AGNEW; (18) Geoff BRIDGE; (19) Brion BOOTH; (20) John BARTON; (21) Sally BRENNAN/DE LAUNEY; (24) Virginia DOIG; (25) Tanietta DE LAUNEY; (26) James DE LAUNEY; (27) Mark DE LAUNEY-CAMPBELL; (28) Ronald DE LAUNEY; (29) Talison DE LAUNEY; (30) Carol DE LAUNEY; (31) Christine DE LAUNEY/MARSHALL; (32) Adam DOIG; (33) Garrett DOIG; (34) James GODFREY; (35) Dianne HOCKINGS; (36) Lynda HARAN; (37) Shane HARAN; (38) Amber HARAN; (39) Ryan HARAN; (40) Eric HILL; (41) Nathan HOCKINGS; (42) Natasha Jane HOCKINGS; (43) Anthony KENNEDY; (44) Tim LUCAS (ALLEN): (45) Brett LUCAS (ALLEN); (46) Tola LYNCH; (47) Craig McCONNELL; (48) Robert McCONNELL; (49) Judith MURRAY; (50) Kelli MENZIES; (59) Gail RATCLIFFE; (60) Tahlia RATCLIFFE; (62) Emma SYME; (63) Isobel SIMPSON; (64) Lance SYME; (65) Leonie SIMPSON; (66) Dwayne SIMPSON; (67) Judith TAYLOR; (69) Simon James TAYLOR; (71) Patrick WILLIAMS-DAVIS; (72) Coral WILLIAMS; (73) Toni WHILLOCK; and (74) Donna WHILLOCK. 4. There be no order as to costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1320 of 2010 IN THE MATTER OF NORTH EAST WIRADJURI CO LIMITED (ACN 125 329 526) (RECEIVERS AND MANAGERS APPOINTED) BETWEEN: DAVID SHANNON IN HIS CAPACITY AS RECEIVER AND MANAGER OF NORTH EAST WIRADJURI CO LIMITED (ACN 125 329 526) (RECEIVERS AND MANAGERS APPOINTED) First Plaintiff BRUCE GLEESON IN HIS CAPACITY AS RECEIVER AND MANAGER OF NORTH EAST WIRADJURI CO LIMITED (ACN 125 329 526) (RECEIVERS AND MANAGERS APPOINTED) AND NORTH EASTERN WIRADJURI COMMUNITY FUND LIMITED (RECEIVERS AND MANAGERS APPOINTED) (ACN 132 314 008) Second Plaintiff MARTIN RONALD DE LAUNEY First Applicant WENDY LEWIS Second Applicant LYNETTE SYME Third Applicant AND: NORTH EAST WIRADJURI CO LIMITED (RECEIVERS AND MANAGERS APPOINTED) (ACN 125 329 526) First Defendant NORTH EASTERN WIRADJURI COMMUNITY FUND LIMITED (RECEIVERS AND MANAGERS APPOINTED) (ACN 132 314 008) Second Defendant BILL ALLEN First Respondent ESTER CUTMORE Second Respondent ROBERT BUGG Third Respondent JUDGE: JACOBSON J DATE: 9 FEBRUARY 2012 PLACE: SYDNEY REASONS FOR JUDGMENT 1 I have before me this morning an interlocutory application seeking orders, including an order pursuant to order 28.67 of the Federal Court Rules 2011, for the adoption in full of the report of the referee, the Honourable Murray Wilcox AO QC, dated 15 November 2011 given in accordance with orders which I made last year for the referral of the matter to a referee pursuant to section 54A of the Federal Court Act 1976 (Cth). 2 The order was not opposed by counsel for the respondents but he does not consent to the order. Nevertheless, it seems to me that consistently with the authorities of the Supreme Court of New South Wales which deal with a similar provision in the rules of the Supreme Court, I ought to adopt the report of the referee. 3 The principles which apply were comprehensively stated by Gleeson CJ in Super Pty Limited (formerly known as Leda Constructions Pty Limited) v SJP Formwork (Aust) Pty Limited (1992) 29 NSWLR 549 at 563 to 564. I need not repeat what was said by the Chief Justice, save to say that the court has a judicial discretion to exercise in a manner that is consistent both with the object and purpose of the rules and the wider setting in which they take their place. 4 As his Honour pointed out, it is undesirable to attempt closely to confine the manner in which the discretion is to be exercised, but it is important to bear in mind that the reference is not to be treated as "some kind of warm-up" for the real contest between the parties. 5 It may be that in some cases a proper exercise of the discretion would require a judge to determine the matter afresh. However, ordinarily it is only if the referee's report reveals some error of principle, some absence or excess of jurisdiction, or some patent misapprehension of the evidence, that there would be a reason for rejecting the report. 6 Also, where it is shown that there is evidence available to support the findings made by the referee or the issue involves a choice as between conflicting evidence, the court would not ordinarily interfere with the findings of fact made by the referee. 7 The relevant principles are discussed in some detail in the notes to Ritchie's Uniform Civil Procedure NSW (LexisNexis) at [20.24.5]. 8 The relevant rule in New South Wales is rule 20.14 of the Uniform Civil Procedure Rules 2005 and the notes make reference to the leading authorities. There is a useful summary of the relevant principles to be distilled from the decisions in Chocolate Factory Apartments Limited v Westpoint Finance Pty Limited [2005] NSWSC 784 at [7]. 9 In that case, McDougall J distilled 15 relevant principles from the authorities, and I respectfully adopt his Honour's distillation as an accurate statement of the principles which ought to be applied in applications made pursuant to order 28.67 of the Federal Court Rules. 10 I have considered in full the report of the referee in this matter. In my opinion, the proper exercise of my power under the rule is to make an order in accordance with order 28.67(1)(a) adopting in whole the referee's report. 11 The reference was which I ordered in March 2011 was an order under order 72A of the Federal Court Rules as then in force. However, the referee's report was provided in November 2011 after the new Rules came into effect. There is no substantial difference between order 72A and order 28.67 of the new Rules. Accordingly, it is not necessary for me to decide whether I am exercising my power under the former Rules or the new ones. For the reasons set out above, I make the orders sought in paragraph 1. 12 The other orders which are sought in paragraphs 2 and 3 of the interlocutory application follow from the adoption of the report. The receivers have consented to chair the meeting of the company and I will vary the terms of the proposed order 3(b) to provide for the meeting to be chaired by the receivers and managers or either of them. Otherwise, I would make orders in terms of paragraphs 1, 2 and 3. There will be no order as to costs of this interlocutory application. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson. Associate: Dated: 9 February 2012