FEDERAL COURT OF AUSTRALIA Pascoe, in the matter of Brentwood Village Limited (in liquidation) [2014] FCA 1295 Citation: Pascoe, in the matter of Brentwood Village Limited (in liquidation) [2014] FCA 1295 Parties: SCOTT DARREN PASCOE AS LIQUIDATOR OF BRENTWOOD VILLAGE LIMITED (IN LIQUIDATION) AND BRENTWOOD VILLAGE LIMITED (IN LIQUIDATION) ACN 002 570 087 File number: NSD 1123 of 2014 Judge: GLEESON J Date of judgment: 27 November 2014 Catchwords: CORPORATIONS – application for Court's retrospective approval under s 477(2B) of liquidator's entry into funding agreement – whether entry into agreement was proper exercise of liquidator's power – application granted PRACTICE AND PROCEDURE – confidentiality orders Legislation: Corporations Act 2001 (Cth) s 477(2B), 479(3) Federal Court of Australia Act 1976 (Cth) ss 37AF, 37AG Cases cited: Brentwood Village Limited (in liq) v Terrigal Grosvenor Lodge Pty Ltd [2014] FCA 1203 Corporate Affairs Commission v ASC Timber Pty Ltd (1998) 29 ACSR 109 Empire (Aust) Nominees Pty Ltd v Vince (2000) 35 ACSR 167 Fortress Credit Corporation (Australia) II Pty Ltd v Fletcher (2011) 85 ACSR 38 Hamilton as liquidator of ACN 101 634 146 Pty Ltd (in liquidation) [2014] FCA 687 In the matter of Gerard Cassegrain & Co Pty Limited (in liquidation) [2013] NSWSC 257 Octaviar Administration Pty Ltd (in liq) [2014] NSWSC 344 Onefone Australia Pty Ltd v OneTel Ltd [2010] NSWSC 498 Pascoe; in the matter of Matrix Group Ltd (in liq) [2011] FCA 1117 Re HIH Insurance Group Ltd (2001) 19 ACLC 1102 Re McGrath and Another (in their capacity as liquidators of HIH Insurance Ltd and Others) (2010) 78 ACSR 405 Re Spedley Securities Ltd (in liq) (1992) 9 ACSR 83 Stewart, in the matter of Newtronics Pty Ltd [2007] FCA 1375 Date of hearing: 25 November 2014 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 61 Counsel for the Plaintiffs: Mr Jack Hynes Solicitor for the Plaintiffs: K&L Gates IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1123 of 2014 IN THE MATTER OF BRENTWOOD VILLAGE LIMITED (IN LIQUIDATION) ACN 002 570 087 BETWEEN: SCOTT DARREN PASCOE AS LIQUIDATOR OF BRENTWOOD VILLAGE LIMITED (IN LIQUIDATION) First Plaintiff BRENTWOOD VILLAGE LIMITED (IN LIQUIDATION) ACN 002 570 087 Second Plaintiff JUDGE: GLEESON J DATE OF ORDER: 27 NOVEMBER 2014 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Pursuant to s 1322(4)(d) of the Corporations Act 2001 (Cth) ("Act"), the period for making an application under s 477(2B) for approval of the entry by the plaintiffs into the funding agreement at page 1 of "Confidential Exhibit SDP-1" is extended to 11 November 2014. 2. Pursuant to s 477(2B) of the Act, the entry by the plaintiffs into the funding agreement is approved. 3. Pursuant to s 479(3) of the Act, the first plaintiff is justified in acting on the funding agreement as though it had been approved pursuant to s 477(2B) prior to 31 October 2014. 4. The costs of the proceeding are costs in the liquidation of the second plaintiff. 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 1123 of 2014 IN THE MATTER OF BRENTWOOD VILLAGE LIMITED (IN LIQUIDATION) ACN 002 570 087 BETWEEN: SCOTT DARREN PASCOE AS LIQUIDATOR OF BRENTWOOD VILLAGE LIMITED (IN LIQUIDATION) First Plaintiff BRENTWOOD VILLAGE LIMITED (IN LIQUIDATION) ACN 002 570 087 Second Plaintiff JUDGE: GLEESON J DATE: 27 NOVEMBER 2014 PLACE: SYDNEY REASONS FOR JUDGMENT 1 This is an application by the first plaintiff ("liquidator") as liquidator of the second plaintiff ("Brentwood") for the Court's approval of the liquidator's entry into an agreement on behalf of Brentwood pursuant to s 477(2B) of the Corporations Act 2001 (Cth) ("Act"). 2 The agreement is a litigation funding agreement ("funding agreement") in respect of claims including Federal Court proceedings NSD1123 of 2014 ("recovery proceeding"). The agreement was made on 31 October 2014 but its continued operation remains subject to court approval being obtained by 30 November 2014. 3 The liquidator has sworn two affidavits upon which he relies in support of the application. The material exhibited to those affidavits includes the funding agreement, the statement of claim in the recovery proceedings and key documents relied upon to support allegations in the statement of claim. In addition, the liquidator tendered documents concerning negotiations for funding with the main creditor of Brentwood, the Australian Taxation Office ("ATO"). Those negotiations were unsuccessful. 4 By email dated 24 November 2014, the liquidator's solicitors informed the ATO of this application. By the time of the hearing, the liquidator's solicitors had not received a response from the ATO. The other creditors were also informed of the hearing by email, and did not respond. Relevant facts 5 The liquidator was appointed on 19 December 2013 pursuant to winding up orders made on the application of the Deputy Commissioner of Taxation. The ATO is Brentwood's most substantial creditor, being owed approximately $74.5 million in respect of outstanding income tax (inclusive of interest and penalties). The currently known claims and possible claims of other creditors total approximately $1 million. 6 Until the litigation funding agreement was made, the liquidation of Brentwood had been unfunded. According to the liquidator, the liquidation is presently without any available funds or any other assets which may be applied to the expenses of the liquidation. All work undertaken by the liquidator, his staff and legal representatives prior to the litigation funding agreement was undertaken for no cost or on a speculative basis. 7 The liquidator's task has been made more difficult than it might otherwise have been because the liquidator has received no assistance from the company's apparently sole director, John Klumper. Mr Klumper is living in the Netherlands and is believed to be suffering from terminal cancer. 8 The liquidator's investigations identified transfers by Brentwood of two substantial assets to associated entities, during the ATO's audit of Brentwood's affairs and subsequent recovery action. The relevant assets are the Veronica Nursing Home at Kincumber ("Veronica Nursing Home"), transferred to Terrigal Grosvenor Lodge Pty Ltd ("TGL") and a property at Henry Parry Drive, Gosford ("Henry Parry Drive land"), transferred to ACN 153 892 436 Pty Ltd ("ACN Pty Ltd"). 9 The liquidator's investigations also identified a substantial unpaid loan from Brentwood to TGL. In particular, Brentwood's 2011 amended balance sheet discloses a non-current loan to TGL of $23,272,503. The liquidator has located other records that appear to support the existence of that loan. 10 By late May 2014, the liquidator determined that he, in his capacity as liquidator, and Brentwood had viable claims available to be brought against both TGL and ACN Pty Ltd. On 29 May 2014, the liquidator issued a report to all known creditors requesting funding to continue his investigations into the affairs of Brentwood. No creditor formally responded to that request. 11 Over the period May to October 2014, the liquidator sought funding from five potential funders in addition to the funder under the funding agreement ("funder"). 12 The liquidator became aware of steps by TGL and ACN Pty Ltd to transfer the Veronica Nursing Home and the Henry Parry Drive property to unrelated third parties. On 11 September 2014, the liquidator made a request to the ATO for an indemnity to obtain injunctive relief restraining TGL and ACN Pty Ltd from realising and transferring their assets to the detriment of Brentwood. This request was narrower in scope than the request for funding made to the funder. 13 On 8 October 2014, the ATO informed the liquidator that his request had been approved in principle. Between 8 and 23 October 2014, the liquidator had what he described as "exhaustive negotiations" with the ATO regarding the terms of the requested indemnity. 14 The liquidator provided to the Court two draft deeds between the liquidator and the Deputy Commissioner of Taxation. I have reviewed those documents, which reveal disagreement about substantial matters concerning the scope of the indemnity. Based on that review, I do not consider there to be any reason to believe that the liquidator's decision not to accept the terms proposed by the ATO was imprudent or unreasonable. 15 On 23 October 2014, the liquidator entered into a confidentiality agreement with the funder and submitted a request for funding, seeking amongst other things, funding for the purpose of obtaining the urgent freezing order and the recovery proceeding, and conducting examination proceedings under Part 5.9 of the Act. 16 On 29 October 2014, the funder provided indicative terms for proposed funding. The liquidator considered that the terms offered by the funder were superior to the terms that he had previously been offered by the ATO in eight identified respects. On the basis of the material provided to the Court, I am satisfied that the liquidator's assessment is not unreasonable, although I note that, in some respects, the ATO does not appear to have been asked to consider offering terms that are included in the funding agreement. Even so, several of the respects in which the liquidator considered the terms offered by the funder to be superior concern significant protections or rights that the ATO was apparently unwilling to provide. 17 On 29 October 2014, the liquidator informed the ATO of the funder's offer. He provided the ATO with the funder's indicative terms and identified reasons why the liquidator considered the offer to be superior to the offer made by the ATO. The liquidator also informed the ATO that he was of the view that it is in the interest of all creditors of Brentwood that the funder's offer be accepted. Finally, the liquidator sought the ATO's consent to the liquidator entering into the agreement with the funder. 18 On 30 October 2014, the ATO responded by saying: Given the Commissioner's earlier offer of indemnity funding the Commissioner is, to say the least, disappointed that the liquidator has chosen to 'shop elsewhere' for indemnity funding. We advise that the Commissioner is of the view that the return demands by the indemnity funder for the provision of the indemnity funding, is substantial and will greatly diminish any return to unsecured creditors, of which the Commissioner is by far and away the largest. In the present circumstances the Commissioner will neither support nor oppose any application by the liquidator for Court approval to enter into an agreement with [the funder] for indemnity funding in terms, substantially, as set out in [the funder's] letter to you dated 29 October 2014. 19 Significantly, the ATO did not respond by offering funding on the same or better terms as the funder. 20 Within an hour of signing the funding agreement, on Friday 31 October 2014, the liquidator commenced the recovery proceeding against TGL and ACN Pty Ltd by an application to the corporations duty judge. The proceedings were commenced urgently, in view of the expected completion of TGL's sale of the Veronica Nursing Home the following Monday 3 November 2014. 21 In this context, the liquidator did not take steps to obtain Court approval in respect of the funding agreement prior to signing it. Recovery proceeding 22 Particular events that led to the commencement of the recovery proceedings are set out in my judgment in Brentwood Village Limited (in liq) v Terrigal Grosvenor Lodge Pty Ltd [2014] FCA 1203 ("earlier judgment") at [8] to [10]. An outline of the case then made by the liquidator against TGL and ACN Pty Ltd is set out at [29] to [40] of the earlier judgment. If successful, the recovery proceedings stand to raise significant funds in the winding up. 23 On the liquidator's ex parte application, the Court ordered TGL to deposit the sum of $15 million from the proceeds of the sale of the Veronica Nursing Home into Court or such other account as was agreed between the parties. 24 On 3 November 2014, the orders were varied and TGL was required instead to deposit the net proceeds to which it was entitled on completion of the sale of the Veronica Nursing Home into Court or such other account agreed between the parties. 25 Ultimately, the sale of the Veronica Nursing Home was completed but no funds were paid into Court. 26 Thereafter, the liquidator applied for orders for the provision of information and documents by TGL and ACN Pty Ltd. That application is the subject of my earlier judgment. 27 On 14 November 2014, the liquidator filed a statement of claim pleading the facts upon which he relies to impugn the transactions involving the Veronica Nursing Home and the Henry Parry Drive land, and including claims against John Klumper and his children, Paul Klumper and Veronica Klumper-Peters. The statement of claim was settled by both senior and junior counsel. 28 At a directions hearing on 20 November 2014, leave was granted to join Paul Klumper and Veronica Klumper-Peters to the proceeding. On that occasion, the liquidator foreshadowed an application for leave to join John Klumper and for substituted service. Liquidator's evidence concerning funding agreement 29 The liquidator's evidence is that, in his experience, which includes involvement in the negotiation of more than 20 funding arrangements, 30% to 60% is the usual range for a "funder's premium" in funding agreements (that is, the percentage of the net proceeds of litigation which are payable to a funder on successful resolution). In his experience, in the insolvency context and subject to the risks involved, funder's premiums in the range of 40% to 60% are not unusual. 30 The liquidator's evidence is that the effect of the funding agreement is that he and Brentwood have agreed to pay the funder an amount calculated by reference to percentages stated in his affidavit. Broadly, this is correct, although there is a floor on the amount to which the funder is entitled. As a result, if the proceeds of the recovery proceeding are small, there may be circumstances in which the funder's premium may exceed the expected percentage premium. 31 The liquidator's opinion is that the premium is commercially reasonable particularly having regard to: (1) The risk in funding the proposed public examinations where there is a prospect that the examinations will not result in claims being able to be pursued; and (2) The risk that claims that are ultimately pursued do not result in any positive net recoveries. 32 Although unsecured creditors are likely to receive a smaller proportion of the net proceeds (by virtue of the funder's premium) than the amount under the ATO offer, the liquidator considered it commercially reasonable and appropriate for him to enter into the funding agreement for reasons including particularly the following: (1) The funder was able to agree funding in a relatively short period of time which allowed the liquidator to seek freezing orders prior to completion of the sale of the Veronica Nursing Home; (3) The agreement provided the liquidator with some assurance that he is able to conduct public examinations which will enable him to further his investigations into the affairs of Brentwood which may identify other claims able to be pursued; and (4) The premium is part of the "price" for providing a significant indemnity to cover any undertaking as to damages and for conducting examinations. In the liquidator's assessment, there is no reasonable prospect of being able to obtain a better price for the funding he requires. 33 Overall, the liquidator considers that it was in the commercial interest of Brentwood for him to enter into the funding agreement as liquidator and on behalf of Brentwood. 34 Without having entered into the agreement (and subject to Court approval), it is the liquidator's belief that it would not be possible to pursue available claims for the benefit of Brentwood's creditors as a whole. In his opinion, the agreement is in the best interests of all creditors. Statutory provisions 35 Section 477(2B) of the Corporations Act 2001 (Cth) ("the Act") provides: (2B) Except with the approval of the Court, of the committee of inspection or of a resolution of the creditors, a liquidator of a company must not enter into an agreement on the company's behalf (for example, but without limitation, a lease or a an agreement under which a security interest arises or is created) if: (a) without limiting paragraph (b), the term of the agreement may end; or (b) obligations of a party to the agreement may, according to the terms of the agreement, be discharged by performance; more than 3 months after the agreement is entered into, even if the term may end, or the obligations may be discharged, within those 3 months. 36 Section 479(3) of the Act provides: (3) The liquidator may apply to the Court for directions in relation to any particular matter arising under the winding up. Case law Retrospective approval of funding agreement 37 A liquidator should seek the Court's approval before entering into a long term agreement: Stewart, in the matter of Newtronics Pty Ltd [2007] FCA 1375 ("Newtronics") at [25]. 38 However, the Court may give retrospective approval to an agreement under s 477(2B) in appropriate circumstances: Hamilton as liquidator of ACN 101 634 146 Pty Ltd (in liquidation) [2014] FCA 687; Newtronics at [25]; Re HIH Insurance Group Ltd (2001) 19 ACLC 1102; Empire (Aust) Nominees Pty Ltd v Vince (2000) 35 ACSR 167 ("Empire"). 39 In this case, in considering whether to give retrospective approval, it is relevant to note that the agreement will terminate if the Court's approval is not given by 30 November 2014. Section 477(2B) 40 In Pascoe; in the matter of Matrix Group Ltd (in liq) [2011] FCA 1117 at [7] ("Pascoe"), Jacobson J said, regarding the application of s 477(2B): The relevant test was stated by Austin J in Leigh; Re AP and PJ King Pty Ltd (in liq) [2006] NSWSC 315 at [23] ("Leigh"): Although the court has the statutory task [under s 477(2B)] of giving "approval" to a liquidator's agreement that may end more than three months after it is entered into, the case law shows that the court undertakes something less than a complete "merits review". As Giles J said in Re Spedley Securities Ltd (in liq) (1992) 9 ACSR 83 at 85–6: ... the court is necessarily confined in attempting to second guess the liquidator in the exercise of his powers, and generally will not interfere unless there can be seen to be some lack of good faith, some error of law or principle, or real and substantial grounds for doubting the prudence of the liquidator's conduct. 41 The Court is not concerned with matters of commercial judgment but is concerned to be satisfied that the entry into the agreement is a proper exercise of power and not ill-advised or improper on the part of the liquidator: In the matter of Gerard Cassegrain & Co Pty Limited (in liquidation) [2013] NSWSC 257 at [11] ("Cassegrain") citing Empire and Re McGrath and Another (in their capacity as liquidators of HIH Insurance Ltd and Others) (2010) 78 ACSR 405 ("Re McGrath"). The Court does not simply "rubber stamp" whatever is put forward by a liquidator: Newtronics. 42 In Corporate Affairs Commission v ASC Timber Pty Ltd (1998) 29 ACSR 109 at 118, Austin J said that the role of the court is not to reconsider all of the issues that the liquidator has considered as if it were hearing a matter de novo, but rather: …to simply review the liquidator's proposal, paying due regard to his or her commercial judgment and knowledge of all of the circumstances of the liquidation, satisfying itself that there is no error of law or ground for suspecting bad faith or impropriety, and weighing up whether there is any good reason to intervene in terms of the "expeditious and beneficial administration" of the winding up. 43 Factors relevant to whether there are grounds for doubting the good faith or prudence of a proposed litigation funding agreement include, relevantly: (1) The liquidator's prospects of success in the liquidation; (2) The nature and complexity of the cause of action; (3) The extent to which the liquidator has canvassed other funding options; (4) The level of the funder's premium; (5) The liquidator's consultation with creditors; and (6) The risk involved in the claim (including the amount of costs likely to be incurred in the proposed litigation, the extent to which the funder is to contribute to those costs, and the extent to which the funder is to contribute to the defendant's costs if the action is not successful, or towards any order for security for costs): cf Cassegrain at [12], referring to Leigh. See also Fortress Credit Corporation (Australia) II Pty Ltd v Fletcher (2011) 85 ACSR 38 at [24]. 44 In considering whether to give approval under s 477(2B) and to give directions under s 479(3), the Court must consider the purposes for which the powers of a liquidator exist. One overriding purpose is to serve the interests of those concerned in the winding up: Fortress at [40]; Re McGrath at [13] of Appendix 1. In Pascoe at [10], Jacobson J said that this principle seems to be drawn from Re Spedley Securities Ltd (in liq) (1992) 9 ACSR 83. Section 479(3) 45 In Cassegrain at [18], Black J said: The function of a liquidator's application for directions under [s 479(3)] is to give the liquidator advice as to the proper cause of action for him or her to take in the liquidation; Re Ansett Australia Ltd (admins apptd) v Korda [2002] FCA 90; (2002) 115 FCR 409; (2002) 40 ACSR 433 at [46]. The Court will typically not give such a direction where a matter relates to the making and implementation of a business or commercial decision, where no particular legal issue is raised and there is no attack on the propriety or reasonableness of the decision, but may do so where a legal issue or an attack on the propriety of the decision is raised: Re G B Nathan & Co Pty Ltd (in liq) (1991) 24 NSWLR 674 at 686-687; (1991) 5 ASCR 673; Re Ansett Australia Ltd at [65]. For example, the Court gave a direction to a liquidator that he would be acting properly in discontinuing appeals in Re Addstone Pty Ltd (in liq) (1997) 25 ACSR 357, where Mansfield J observed at 363 that one circumstance in which such a direction may be given is, "where the liquidator's proposed decision is the subject of criticism by a particular creditor or creditors as being unreasonable or mala fides." In [Pascoe], Jacobson J observed that such a direction could be made, inter alia, where there was a legal issue of substance or procedure such as the propriety or reasonableness of the particular course. A liquidator is protected against a claim for breach of duty if he or she acts in accordance with a direction given by the Court under s 479(3) and he or she made full disclosure to the Court in the relevant application. Consideration 46 I have reviewed the draft deeds between the ATO and the liquidator, which indicate disagreement about several substantial matters concerning the scope of the indemnity. Based on that review, in my opinion, the liquidator's decision not to accept the terms proposed by the ATO does not appear to have been imprudent or unreasonable. 47 I have also reviewed the funding agreement. It is apparent that the liquidator has been able to agree terms of a kind that were not acceptable to the ATO, at least in the context of the more limited funding sought. The ATO received information about the key terms of the funding agreement and did not respond by matching or bettering those terms. 48 I note the ATO's criticism that the return demanded by the funder is substantial, however, I also note the liquidator's evidence that the funder's premium is well within the range of premiums that are typically sought in such matters. Implicit in the ATO's decision not to support or oppose the application is that the ATO does not consider the liquidator's entry into the funding agreement to involve any lack of good faith or prudence on the liquidator's part. 49 As to the prospects of the recovery proceedings, I note that the statement of claim has been settled by both senior and junior counsel. The liquidator was able to demonstrate a good arguable case to the corporations duty judge for the purpose of obtaining ex parte relief. I also reached a similar conclusion in the earlier judgment at [52] and [53]. 50 I accept the submission that there is a likelihood that a success in the recovery proceeding will benefit creditors. There is a prospect of substantial recoveries if the liquidator is successful, and the proceedings as currently framed are not unduly complex or likely to be protracted. I also accept that there is no identifiable prejudice to third parties that might be occasioned by the funding agreement, if approved. 51 The liquidator has made significant attempts to secure funding and considers that no better funding arrangement is available. 52 I am satisfied, on the basis of the liquidator's evidence and my review of the funding agreement and the draft deeds between the liquidator and the ATO that there is no reason to conclude that the liquidator's entry into the funding agreement was other than a proper exercise of his power, or that it was an ill-advised or improper act on the part of the liquidator. 53 Accordingly, I will grant the approval sought under s 477(2B). 54 As to the direction sought under s 479(3), I am satisfied that this direction should be made in the light of the criticism contained in the ATO's letter dated 30 October 2014 and the findings set out above. Confidentiality 55 Section 37AF of the Federal Court of Australia Act 1976 (Cth) provides: (1) The Court may, by making a suppression order or non-publication order on grounds permitted by this Part, prohibit or restrict the publication or other disclosure of: (a) information tending to reveal the identity of or otherwise concerning any party to or witness in a proceeding before the Court or any person who is related to or otherwise associated with any party to or witness in a proceeding before the Court; or (b) information that relates to a proceeding before the Court and is: (i) information that comprises evidence or information about evidence; or (ii) information obtained by the process of discovery; or (iii) information produced under a subpoena; or (iv) information lodged with or filed in the Court. (2) The Court may make such orders as it thinks appropriate to give effect to an order under subsection (1). 56 By s 37AG(1)(a), the Court may make a suppression order or non-publication order on the ground that the order is necessary to prevent prejudice to the proper administration of justice. By s 37AG(2), a suppression order or non-publication order must specify the ground or grounds on which the order is made. 57 At the hearing of the liquidator's application, I made the following confidentiality orders: 1. Pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth), for the duration of proceeding NSD 1123 of 2014 including any appeal and subject to any order made on application of a person interested in those proceedings, the following documents be marked "Confidential", placed in a sealed envelope on the court file and are not to be published and/or accessed except pursuant to an order of the Court: (a) the exhibit marked "Confidential Exhibit SDP-1" to the affidavit of Scott Darren Pascoe sworn 10 November 2014; (b) pages 349 to 365 of the exhibit marked "SDP-1" to the affidavit of Scott Darren Pascoe sworn 10 November 2014; (c) the affidavit of Scott Darren Pascoe sworn 10 November 2014; (d) annexure A to the affidavit of Scott Darren Pascoe sworn 25 November 2014; (e) any transcript of the hearing of this proceeding; (f) the written submissions filed on behalf of the plaintiffs; (g) any reasons for judgment in this proceeding, 58 As Barrett J noted in Onefone Australia Pty Ltd v OneTel Ltd [2010] NSWSC 498, the subject matter of an application of this kind is "commercially confidential and sensitive… related to aspects of the litigation that any plaintiff, protecting its own interests and the integrity of the litigation process in which it is engaged, would take particular care to keep from the other party or parties to the litigation. Those aspects relate to the funding of the litigation". 59 The clear public interest in the due and beneficial administration of the estates of insolvent companies for the benefit of creditors is a relevant consideration in favour of s 37AF orders in this case. In particular, I am satisfied that communications between the liquidator and the ATO are properly within the scope of the orders as they are commercially confidential and sensitive communications relating to the liquidator's efforts to obtain suitable funding. 60 In my respectful view, the approach taken by Black J in Re Octaviar Administration Pty Ltd (in liq) [2014] NSWSC 344 at [14] to [21] is a useful guide in this case. Thus, in my view, it would not serve the interests of justice to require the liquidator to expend time and money in identifying particular material within his affidavits that should be redacted because it is confidential, recognising that this may be necessary in the event that an application is made by a person with sufficient interest for access to materials presently within the scope of the s 37AF order. 61 However, disclosure of reasons for judgments is an essential aspect of the principle of open justice. Accordingly, I propose to give the liquidator an opportunity to make submissions on which parts of these reasons should remain the subject of the s 37AF order. I will stand the proceeding over to a suitable time in the next seven days for the purpose of addressing any submissions on this point and publishing either these reasons or a redacted version. I certify that the preceding sixty-one (61) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gleeson. Associate: Dated: 27 November 2014