FEDERAL COURT OF AUSTRALIA Australian Securities and Investments Commission v Marco (No 18) (Funding Agreement Approval) [2025] FCA 1 File numbers: WAD 481 of 2018 WAD 40 of 2024 Judgment of: FEUTRILL J Date of judgment: 6 January 2025 Catchwords: CORPORATIONS – special purpose receivers of unregistered managed investment scheme – special purpose liquidators of an operator of the scheme – application for Court approval of and directions concerning special purpose receivers and special purpose liquidators entering into litigation funding agreement PRACTICE AND PROCEDURE – application for suppression and non-publication orders – confidential and commercially sensitive information – information disclosed to support approval of officer of the Court entering into a litigation funding agreement Corporations Act 2001 (Cth) ss 424, 477(2B), 601EE, 601EE(2); Pt 5.4B Legislation: Insolvency Practice Schedule (Corporations) ss 90-15(1), 90-20 Federal Court of Australia Act 1976 (Cth) ss 23, 37AF, 37AG(1)(a), 37AI, 37M Federal Court Rules 2011 (Cth) rr 2.25(1)(b)(ii), 2.32(1)(b), 2.32(3)(a), 2.32(4), 8.21, 9.08, 14.23 Cases cited: Australian Securities and Investments Commission v Marco (No 13) [2023] FCA 83 Australian Securities and Investments Commission v Marco (No 16) [2024] FCA 1000 [R] Division: General Division Registry: Western Australia National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Number of paragraphs: 47 Date of hearing: Determined on the papers Counsel for Napoli Corporate Pty Ltd: Mr MCJ Hoffmann KC Solicitor for Napoli Corporate Pty Ltd: Johnson Winter & Slattery / HWF Australia Counsel for the Liquidators and Receivers in WAD481/2018: Mr CA Dallimore Solicitor for the Liquidators and Receivers in WAD481/2018: Ashurst Australia ORDERS WAD 481 of 2018 BETWEEN: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION Plaintiff CHRIS MARCO First Defendant AND: AMS HOLDINGS (WA) PTY LTD (ACN 164 700 485) Second Defendant AMS HOLDINGS (WA) PTY LTD (ACN 164 700 485) AS TRUSTEE FOR AMS HOLDINGS TRUST (and another named in the Schedule) Third Defendant order made by: FEUTRILL J DATE OF ORDER: 6 JANUARY 2025 THE COURT NOTES THAT: A. The Court made orders on 2 September 2024, amongst others, appointing Jason Stone and Glenn Franklin special purpose receivers and managers of Scheme Property for the Special Purpose and as special purpose liquidators of AMS Holdings (WA) Pty Ltd (receivers and managers appointed) (in liq) for the Special Purpose (Special Purpose Appointment Orders). B. Capitalised terms used in these orders are used in the same way and have the same meaning as in the (Special Purpose Appointment Orders). THE COURT ORDERS THAT: 1. In the Special Purpose Appointment Orders the reference to the 'affidavit of Paul Philipus Jacobus Buitendag sworn 5 July 2024' in paragraph D of the notes to those orders and the reference to the 'affidavit of Mr Buitendag sworn 2 July 2024' in paragraph 17(1) of those orders both be amended to read 'the affidavit of Paul Philipus Jacobus Buitendag sworn 5 March 2024 filed in proceeding WAD 481 of 2024'. 2. Paragraphs 17 to 20 of the Special Purpose Appointment Orders, as varied by orders made on 10 and 26 September 2024, be discharged. 3. Until further order, pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth) on the ground set out in s 37AG(1)(a) (the order is necessary to prevent prejudice to the proper administration of justice) the following documents in the proceeding are confidential for the purposes of r 2.32(1)(b) and r 2.32(3)(a) of the Federal Court Rules 2011 (Cth) and prohibited from publication except to the persons identified in paragraph 4 of these orders: (a) Confidential Exhibits "PPJB-1", "PPJB-13", "PPJB-14" and "PPJB-15" to the affidavit of Paul Philipus Jacobus Buitendag sworn 5 March 2024. (b) Confidential submissions of Napoli Corporate Pty Ltd in support of the special purpose appointment application and funding agreement approval application filed on 13 May 2024. (c) Supplementary submissions of Napoli Corporate Pty Ltd filed on 4 July 2024. (d) Transcript of the hearing in open Court on 4 July 2024. (e) Unredacted reasons for the orders made on 2 September 2024. (f) Affidavit of Paul Philipus Jacobus Buitendag sworn 21 October 2024. (g) Affidavit of Jason Glenn Stone sworn 21 October 2024. (h) Transcript of the hearing in open Court on 12 December 2024. 4. The following persons may inspect the documents set out in paragraph 3 of these orders and publication of the documents to them is not prohibited. (a) Napoli Corporate Pty Ltd and its legal representatives; (b) the SP Receivers and SP AMS Liquidators and their legal representatives; (c) CHC Investment Fund III Pty Ltd (by its officers, employees, servants and agents); (d) the Australian Securities and Investments Commission; (e) the Receivers and Liquidators (Robert Michael Kirman and Robert Conry Brauer) and their legal representatives; (f) any person who is the administrative or other support staff of a person referred to in the previous sub-paragraphs; (g) any other person who has obtained the prior written consent of Napoli Corporate Pty Ltd and (or) the SP Receivers and SP AMS Liquidators; and (h) all necessary staff of the Court including any associate, any orderly and any court recording officer. 5. The Registrar be directed: (a) to mark the documents set out in paragraph 3 as confidential on the Court file; and (b) refer any application under r 2.32(4) of the Rules to inspect a document identified in paragraph 3 to a judge of the Court together with a copy of these orders and the reasons for these orders. 6. By 31 January 2025 Napoli Corporate Pty Ltd and the SP Receivers and SP AMS Liquidators file: (a) a redacted copy of the affidavit of Paul Philipus Jacobus Buitendag sworn 5 March 2024 with Confidential Exhibits "PPJB-1", "PPJB-13", "PPJB-14" and "PPJB-15" removed; (b) a redacted copy of the transcript of the hearing in open Court on 4 July 2024 with the parts of the transcript highlighted in yellow in the marked-up copy of the transcript provided to their solicitors under cover of an email from the Court on 6 January 2025 removed or covered so as to be unable to be inspected; and (c) a redacted copy of the transcript of the hearing in open Court on 12 December 2024 with the parts of the transcript highlighted in yellow in the marked-up copy of the transcript provided to their solicitors under cover of an email from the Court on 6 January 2025 removed or covered so as to be unable to be inspected. 7. There be no order as to the costs of Napoli Corporate Pty Ltd and the SP Receivers and SP AMS Liquidators in the proceeding from 2 September 2024 to 12 December 2024. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. ORDERS WAD 40 of 2024 IN THE MATTER OF NAPOLI CORPORATE PTY LTD ACN 612 470 970 NAPOLI CORPORATE PTY LTD ACN 612 470 970 First Plaintiff BETWEEN: JASON STONE Second Plaintiff GLENN FRANKLIN Third Plaintiff order made by: FEUTRILL J DATE OF ORDER: 6 JANUARY 2025 THE COURT NOTES THAT: A. The Court made orders on 2 September 2024, amongst others, appointing Jason Stone and Glenn Franklin special purpose receivers and managers of Scheme Property for the Special Purpose and as special purpose liquidators of AMS Holdings (WA) Pty Ltd (receivers and managers appointed) (in liq) for the Special Purpose in proceeding WAD 481 of 2018 (Special Purpose Appointment Orders). B. Capitalised terms used in these orders are used in the same way and have the same meaning as in the (Special Purpose Appointment Orders). THE COURT ORDERS THAT: Leave to amend the originating process 1. Napoli Corporate Pty Ltd, Jason Stone and Glenn Franklin, as the plaintiffs in the proceeding, have leave to reopen the hearing of the originating process to apply for orders for leave to amend the originating process and for approval and directions relating to a funding agreement that is an exhibit to the affidavit of Jason Glenn Stone sworn 21 October 2024 and filed in proceeding WAD 481 of 2018. 2. Pursuant to r 9.08 of the Federal Court Rules 2011 (Cth) Napoli Corporate Pty Ltd cease to be a party to the proceedings and Jason Stone and Glenn Franklin (in their capacities as SP Receivers and SP AMS Liquidators) be the plaintiffs in the proceeding. 3. Pursuant to r 8.21 of the Rules the plaintiffs have leave to amend the originating process in the form of the 'Substituted Originating Process' that is Annexure 'A' to these orders. 4. The plaintiffs have leave to read and rely on the affidavits of Jason Glenn Stone sworn 21 October 2024 and Paul Philipus Jacobus Buitendag sworn 21 October 2024 each filed in proceeding WAD 481 of 2018 on the hearing of the substituted originating process. 5. By 31 January 2025 the plaintiffs file the Substituted Originating Process and service thereof be dispensed with. Approval to enter into funding agreement 6. Pursuant to s 477(2B) of the Corporations Act 2001 (Cth) the plaintiffs, in their capacities as SP AMS Liquidators, have approval to enter into, and cause AMS Holdings to enter into, the proposed funding agreement that is Confidential Annexure 'JGS-1' to the affidavit of Jason Glenn Stone sworn 21 October 2024 (Funding Agreement). 7. Pursuant to paragraph 5 of the orders of the Court made in proceeding WAD 481 of 2018 on 2 September 2024, s 601EE of the Corporations Act and s 23 of the Federal Court of Australia Act 1976 (Cth), the plaintiffs, in their capacities as SP Receivers, have approval to enter into the Funding Agreement. 8. Pursuant s 90-15(1) and s 90-20 of Sch 2 of the Insolvency Practice Schedule (Corporations) of the Corporations Act, s 601EE(2) of the Corporations Act and s 23 of the Federal Court Act, the plaintiffs would be acting properly and are justified in entering into and acting in accordance with the Funding Agreement on behalf of and as SP AMS Liquidators and as SP Receivers. Confidentiality orders 9. Pursuant to r 2.25(1)(b)(ii) of the Rules the Registrar be directed to accept the following documents as documents filed in proceeding WAD 40 of 2024 on the same date and at the same time as those documents were accepted for filing in proceeding WAD 481 of 2018: (a) Supplementary submissions in relation to confidentiality and non-publication orders of Napoli Corporate Pty Ltd and the SP Receivers and the SP AMS Liquidators accepted for filing in WAD 481 of 2018 on 15 October 2024. (b) Affidavit of Paul Philipus Jacobus Buitendag sworn 21 October 2024 and accepted for filing in WAD 481 of 2018 on 22 October 2024. (c) Affidavit of Jason Glenn Stone sworn 21 October 2024 and accepted for filing in WAD 481 of 2018 on 22 October 2024. 10. Paragraph 4 of the orders made on 2 September 2024 be discharged. 11. Until further order, pursuant to s 37AF of the Federal Court Act on the ground set out in s 37AG(1)(a) (the order is necessary to prevent prejudice to the proper administration of justice) the following documents in the proceeding are confidential for the purposes of r 2.32(1)(b) and r 2.32(3)(a) of the Rules and prohibited from publication except to the persons identified in paragraph 12 of these orders: (a) Affidavit of Paul Philipus Jacobus Buitendag sworn 5 March 2024. (b) Affidavit of Paul Philipus Jacobus Buitendag sworn 16 April 2024. (c) Confidential submissions of Napoli Corporate Pty Ltd in support of the special purpose appointment application and funding agreement approval application filed on 13 May 2024. (d) Affidavit of Paul Philipus Jacobus Buitendag sworn 2 July 2024. (e) Affidavit of Michelle Clare Silvers sworn 2 July 2024. (f) Supplementary submissions of Napoli Corporate Pty Ltd filed on 3 July 2024. (g) Transcript of the hearing in open Court on 4 July 2024. (h) Unredacted reasons for the orders made on 2 September 2024. (i) Affidavit of Paul Philipus Jacobus Buitendag sworn 21 October 2024. (j) Affidavit of Jason Glenn Stone sworn 21 October 2024. (k) Transcript of the hearing in open Court on 12 December 2024. 12. The following persons may inspect the documents set out in paragraph 11 of these orders and publication of the documents to them is not prohibited. (a) Napoli Corporate Pty Ltd and its legal representatives; (b) The SP Receivers and SP AMS Liquidators and their legal representatives; (c) CHC Investment Fund III Pty Ltd (by its officers, employees, servants and agents); (d) the Australian Securities and Investments Commission; (e) the Receivers and Liquidators (Robert Michael Kirman and Robert Conry Brauer) and their legal representatives; (f) any person who is the administrative or other support staff of a person referred to in the previous sub-paragraphs; (g) any other person who has obtained the prior written consent of the plaintiffs; and (h) all necessary staff of the Court including any associate, any orderly and any court recording officer. 13. The Registrar be directed: (a) to mark the documents set out in paragraph 11 as confidential on the Court file; and (b) refer any application under r 2.32(4) of the Rules to inspect a document described in paragraph 11 to a judge of the Court together with a copy of these orders. 14. By 31 January 2025 the plaintiffs file: (a) a redacted copy of the transcript of the hearing in open Court on 4 July 2024 with the parts of the transcript highlighted in yellow in the marked-up copy of the transcript provided to their solicitors under cover of an email from the Court on 6 January 2025 removed or covered so as to be unable to be inspected; (b) a redacted copy of the affidavit of Paul Philipus Jacobus Buitendag sworn 21 October 2024 with paragraphs [8] and [9] removed or covered so as to be unable to be inspected; and (c) a redacted copy of the transcript of the hearing in open Court on 12 December 2024 with the parts of the transcript highlighted in yellow in the marked-up copy of the transcript provided to their solicitors under cover of an email from the Court on 6 January 2025 removed or covered so as to be unable to be inspected. Costs 15. There be no order as to the costs of the proceeding before 2 September 2024. 16. The plaintiffs' costs of the proceeding on and from 2 September 2024 to 12 December 2024 be paid out of any Special Purpose Property. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT FEUTRILL J: Introduction 1 These reasons concern orders that will be made in two related proceedings: WAD 481 of 2018; and WAD 40 of 2024. 2 In WAD 40 of 2024 orders will be made to approve Jason Stone and Glenn Franklin, as special purpose receivers and managers and as special purpose liquidators, entering into a litigation funding agreement in connection with the special purpose for which they were appointed. In both proceedings, orders will be made for confidentiality and non-publication of certain documents or parts of documents filed in each proceeding relating to the special purpose appointment and funding agreement approval applications. 3 The path to these orders has been tortuous. An explanation of the background is necessary to understand the orders to be made and the reasons for them. Background WAD 481 of 2018 4 The Australian Securities and Investments Commission commenced proceeding WAD 481 of 2018 in November 2018 against Chris Marco and AMS Holdings (WA) Pty Ltd. There have been 17 judgments concerning that proceeding; this is number 18. 5 Relevantly, in December 2020, the Court made orders appointing Robert Michael Kirman and Robert Conry Brauer joint and several receivers and managers of property of an unregistered managed investments scheme and of property of AMS Holdings and appointing them joint and several liquidators of the Scheme and AMS Holdings. In these reasons Mr Kirman and Mr Brauer are referred to as the Receivers and (or) Liquidators and the unregistered managed investment scheme as the Scheme. (These terms and other capitalised terms are used in these reasons in the same way and with the same meaning as in the other reasons for judgments given in proceeding WAD 481 of 2018.) 6 The Winding Up Orders conferred various powers on the Receivers and Liquidators and made provision for the Receivers to deliver up to the Liquidators property of the Scheme. In February and March 2023, the Court made orders relating to pooling of parts of the property of the Scheme and property of AMS Holdings as a single fund (described as the 'Fund') and for distribution of the Fund in accordance with priorities and a methodology described in the Pooling and Distribution Orders. 7 On 5 March 2024 Napoli Corporate Pty Ltd filed an interlocutory process in proceeding WAD 481 of 2018 by which it sought the appointment of Mr Stone and Mr Franklin as special purposes receivers and managers and liquidators for the (special) purpose of investigating, commencing, continuing and otherwise pursuing potential claims against Westpac Banking Corporation and others in relation to alleged involvement in misappropriations of property of the Scheme and (or) breaches of trust or fiduciary duty by the operators of the Scheme (Mr Marco and AMS Holdings). On 2 September 2024 orders were made in WAD 481 of 2018 appointing Mr Stone and Mr Franklin special purpose receivers and managers of the Scheme Property (SP Receivers) and special purposes liquidators of AMS Holdings (SP AMS Liquidators) for the Special Purpose (as described in those orders). WAD 40 of 2024 8 On the same day as filing the special purpose appointment application, Napoli Corporate, Mr Stone and Mr Franklin filed an originating process in proceeding WAD 40 of 2024 by which orders were sought for Mr Stone and Mr Franklin to enter into a funding agreement with a litigation funder relating to the potential claims against Westpac and others. The proceeding was brought under, amongst other provisions, s 477(2B) and s 601EE(2) of the Corporations Act 2001 (Cth). Mr Stone and Mr Franklin purported to be parties to that proceeding as special purposes receivers and managers of the Scheme and special purposes liquidators of AMS Holdings. Self-evidently, at the time that proceeding was commenced, Mr Stone and Mr Franklin had not been appointed and, therefore, the proceeding was, to that extent, inchoate and misconceived. 9 The moving parties (Napoli Corporate, Mr Stone and Mr Franklin) filed affidavits in support of the special purpose appointment application in WAD 481 of 2018 and filed affidavits in support of the funding agreement approval application in WAD 40 of 2024. The moving parties sought confidentiality or non-publication orders with respect to certain of these affidavits or parts of them in both proceedings. 10 After the special purpose appointment and funding agreement approval applications were filed, the matters were listed for a case management hearing on 19 April 2024. At that hearing certain difficulties and deficiencies in the materials filed in support of the applications were exposed. Thereafter, further affidavits, written submissions, and amended applications were filed and both applications were ultimately listed for hearing and heard in open Court on 4 July 2024. 11 Although proceeding WAD 40 of 2024 was premature, in accordance with s 37M of the Federal Court of Australia Act 1976 (Cth), the affidavit material was read and relied upon and submissions made on the basis that, if special purpose appointment orders were made, the Court would then treat the funding agreement approval application as having been made immediately upon making those orders and determine it on the materials lodged before and oral submissions made on 4 July 2024 without the need for a second and separate hearing in proceeding WAD 40 of 2024. 12 After hearing the moving parties, the Court reserved its decision on 4 July 2024. Subsequent events 13 On 12 August 2024 the moving parties filed notices of change of solicitors in WAD 481 of 2018 and in WAD 40 of 2024. The Court also received an informal communication from the newly appointed solicitors concerning the proposed funding agreement. The substance of that communication was to the effect that the moving parties sought approval of a different funding agreement to that which was before the Court on 4 July 2024. No request to re-list the funding agreement approval application was made. No minute of proposed orders identifying the funding agreement for which approval was sought was filed. Additionally, no formal application to amend the originating process was made and no affidavit was filed in support of any application to seek approval for a different funding agreement. 2 September orders 14 As already mentioned, on 2 September 2024, orders were made appointing SP Receivers and SP AMS Liquidators in WAD 481 of 2018. 15 The Special Purpose Appointment Orders conferred certain powers on the SP Receivers pursuant to s 601EE(2) of the Corporations Act and s 23 of the Federal Court Act for the Special Purpose. These powers are derived from and may be conceived of as a sub-set of the powers conferred on the Liquidators (of the Scheme) under the Winding Up Orders made in December 2020. The SP AMS Liquidators also have the powers conferred on any liquidator of a company under the Corporations Act with respect to AMS Holdings for the Special Purpose. The operation of those orders was made subject to and conditional upon the SP Receivers and SP AMS Liquidators providing written undertakings to the Court, in effect, not to seek payment of any remuneration or reimbursement for expenses out of the property of the Scheme or AMS Holdings other than the Special Purpose Property. On 11 October 2024 those undertakings were given to the Court. 16 In proceeding WAD 40 of 2024 an order was made to the effect that the proceeding was taken to have been commenced on 2 September 2024, an amended originating process lodged on 3 July 2024 was taken to be the originating process filed on 2 September 2024 and all affidavits and other documents lodged with the Court in respect of proceeding WAD 40 of 2024 before 2 September 2024 were taken to have been filed on 2 September 2024. However, while I was satisfied that approval of the funding agreement before the Court on 4 July 2024 should be given, I was not prepared to make the orders sought on the application because of the informal communication the Court had received from the moving parties' newly appointed solicitors on 12 August 2024 referred to earlier in these reasons. In my reasons for decision, published to the moving parties on 2 September 2024, I indicated that, while I was not prepared to make orders informally, subject to addressing matters of formality and notice to interested parties, the funding agreement approval application may be able to be dealt with on the papers without a further oral hearing. As a consequence, orders were made standing over the substantive orders sought on the originating process in WAD 40 of 2024 to a date to be fixed. Confidentiality orders 17 As already mentioned, the moving parties sought confidentiality and non-publication orders with respect to affidavits or parts of the affidavits filed in support of the special purpose appointment and funding agreement approval applications in each of proceeding WAD 481 of 2018 and WAD 40 of 2024. Similar orders were also sought with respect to written submissions that had been lodged with the Court on 10 May 2024 and 3 July 2024. For reasons published to the moving parties on 2 September 2024, I was satisfied that confidentiality and non-publication orders were necessary to prevent prejudice to the proper administration of justice. Accordingly, orders were made that certain documents or parts of documents filed in proceeding WAD 481 of 2018 and in proceeding WAD 40 of 2024 are 'confidential' and are not to be published to any person other than certain identified persons. 18 In proceeding WAD 481 of 2018 I also made an order pursuant to s 37AI of the Federal Court Act that had the effect of prohibiting publication of my reasons for decision and the transcript of the hearing in open Court on 4 July 2024 until 16 September 2024 and requiring the moving parties to file and serve any minute of proposed orders for non-publication of those documents and supporting material by 9 September 2024. The operation of that order was extended by orders made on 10 September and 26 September 2024, in effect, until the Court determined whether to make suppression or non-publication orders with respect to the reasons and transcript. Further documents lodged 19 On 14 October 2024 the moving parties lodged a minute of proposed suppression or non-publication order in proceeding WAD 40 of 2024. That is, it was not lodged in the proceeding in which an order was made for that document to be lodged (WAD 481 of 2018). That document was not accepted for filing. 20 On 15 October 2024 written submissions in support of the proposed orders were lodged in WAD 481 of 2018. That document was accepted for filing but did not address any minute of proposed orders that had been lodged or filed in WAD 481 of 2018. (That is, the minute of proposed orders was lodged in WAD 40 of 2024.) 21 On 15 October 2024, an amended interlocutory process for special purpose appointment orders was also lodged in WAD 481 of 2018. Given that orders had been made on that application on 2 September 2024, the reason or purpose of lodging that document was not and is not clear. Nonetheless, it was accepted for filing on 15 October 2024. No application to re-open to seek leave to amend that interlocutory process has been made, heard or determined. That document can be ignored for present purposes. 22 On 22 October 2024 the moving parties lodged affidavits of Mr Stone and Mr Buitendag sworn 21 October 2024 in proceeding WAD 481 of 2018. These documents were accepted for filing in that proceeding on 22 October 2024. Although these affidavits manifestly relate to the funding agreement approval application, they were not lodged in and were not accepted for filing in WAD 40 of 2024. 23 It follows that, as of 22 October 2024, no minute of proposed orders for suppression or non-publication of the reasons and transcript had been filed in WAD 481 of 2018, as ordered, and no formal application to amend the originating process or any affidavits in support had been filed in WAD 40 of 2024, as invited. That is, notwithstanding the orders made on 2 September 2024 and the reasons published to the moving parties that day, the moving parties had taken no clear or coherent steps in proceeding WAD 481 of 2018 or WAD 40 of 2024 to bring finality to the special purpose appointment and funding agreement approval applications as of 22 October 2024. Applications re-listed 24 Following communications between the moving parties' legal representatives and the Court, the special purpose appointment and funding agreement approval applications were re-listed for a hearing in open Court on 12 December 2024. On the morning of that hearing, the Court received a further minute of proposed suppression and non-publication orders and a minute of further amended originating process. Both were identified documents to be 'lodged' in proceeding WAD 40 of 2024. Hearing on 12 December 2024 25 On 12 December 2024 applications for suppression or non-publication orders and for approval of a funding agreement were heard in open Court. 26 The moving parties sought orders that would have the effect of making parts of the reasons for decision published to them and the transcript of 4 July 2024 confidential and indefinitely prohibiting or restricting publication of those parts of the documents. 27 It also emerged during the hearing that the moving parties sought leave to amend the originating process in WAD 40 of 2024 and sought orders uplifting the affidavits of Mr Stone and Mr Buitendag sworn 21 October 2024 from the file in WAD 481 of 2018 and re-filing those affidavits in WAD 40 of 2024. Further, the moving parties sought orders approving the SP Receivers and SP AMS Liquidators entering into a funding agreement that is an exhibit to Mr Stone's affidavit of 21 October 2024. 28 As both WAD 481 of 2018 and WAD 40 of 2024 were listed and called on for hearing on 12 December 2024, in accordance with s 37M of the Federal Court Act, I determined to hear all submissions and took all submissions and affidavits as made and read in both WAD 481 of 2018 and WAD 40 of 2024. Confidentiality orders 29 With that rather long explanation of the background to the orders, it is convenient to start with the further confidentiality orders the moving parties sought. 30 As a consequence of the submissions made on 12 December 2024, I am persuaded that parts of the reasons given on 2 September 2024 and the transcripts of the hearings in open Court on 4 July 2024 and 12 December 2024 should not be published. However, I consider that a redacted version of my reasons and transcripts should be published or available for public inspection. The redacted reasons are published separately to these reasons: Australian Securities and Investments Commission v Marco (No 16) [2024] FCA 1000 [R]. The reasons for non-publication of the unredacted reasons and transcripts are the same as the reasons given for non-publication of the source information in those reasons: Marco (No 16) [R] at [97]-[104]. 31 I also consider that the affidavit of Mr Stone and parts of the affidavit of Mr Buitendag sworn on 21 October 2024 should remain confidential and publication of that information should be restricted to the persons identified in the orders. These affidavits address the latest funding agreement for which the plaintiffs sought the Court's approval. For the reasons given in Marco (No 16) [R] at [97]-[103], that information is confidential, commercially sensitive and it would prejudice the proper administration of justice if it were published. 32 Due to the somewhat irregular and confused manner in which the moving parties have approached the applications and have lodged and filed documents in WAD 481 of 2018 and WAD 40 of 2024, I consider it prudent to discharge the confidentiality and non-publication orders made on 2 September 2024, as varied on 10 September and 26 September 2024, and start again with new and separate confidentiality and non-publication orders in both WAD 481 of 2018 and WAD 40 of 2024 covering the separate and overlapping confidential documents, including the reasons and transcript, in each proceeding. 33 To minimise the effect that the confidentiality and non-publication orders will have on the principle of open justice, I will also make orders requiring the moving parties to file redacted versions of certain documents. Any person may apply to the Court to inspect the unredacted versions of the documents in accordance with r 2.32(4) of the Federal Court Rules 2011 (Cth). The confidentiality and non-publication orders also do not prevent a person to whom publication is prohibited from applying to the Court for leave to inspect a confidential document under r 2.32(4). However, I have directed the Registrar to refer such applications to a judge of the Court having regard to the confidential nature of the documents and the reasons for restricting publication. Leave to amend the originating process in WAD 40 of 2024 34 At the time of the hearing on 4 July 2024 the moving parties sought the Court's approval for the SP Receivers and SP AMS Liquidators to enter into a funding agreement that was attached to the confidential affidavit of Ms Silvers sworn 2 July 2024. That agreement was reviewed and its terms explained in the reasons I published to the moving parties on 2 September 2024. I also said in those reasons that I was satisfied that it would be appropriate to approve that funding agreement: see, Marco (No 16) [R] at [45]-[59], [92]-[96]. However, as explained earlier in these reasons, after reserving my decision on 4 July 2024, the Court received further communications from the moving parties' new solicitors that created uncertainty regarding the funding agreement for which the Court's approval was sought and, for that reason, no orders were made on 2 September 2024 concerning approval of the funding agreement: Marco (No 16) [R] at [60]-[62]. 35 While the moving parties had not made any formal application to re-open the application heard on 4 July 2024, as has been mentioned, they lodged a minute of proposed further amended originating application before the hearing on 12 December 2024. Then, it emerged during that hearing on 12 December 2024 that the moving parties, in substance, applied for leave to re-open the hearing to amend the originating process and to read and rely upon the affidavits of Mr Stone and Mr Buitendag filed on 22 October 2024 in proceeding WAD 481 of 2018 in support of the amended originating process in proceeding WAD 40 of 2024. Further, it became clear that the real moving parties in proceeding WAD 40 of 2024 are the SP Receivers and SP AMS Liquidators and Napoli Corporate is no longer a necessary party to that proceeding. 36 I am satisfied the leave to re-open, amend, read and rely on the affidavits should be granted and orders should be made to give effect to that leave and to remove Napoli Corporate as a party in proceeding WAD 40 of 2024. That leave and those orders are consistent with the approach that I invited the moving parties to take in Marco (No 16) [R] at [62]. 37 At the hearing on 12 December 2024 I invited the SP Receivers and SP AMS Liquidators to lodge a minute of proposed orders and substituted originating process to give effect to the leave and orders I proposed making. A minute of substituted originating process was lodged with the Court on 19 December 2024. I am satisfied the leave should be granted to the amend the originating process in terms of that minute pursuant to r 8.21 and that Napoli Corporate should cease to be a party to the proceeding pursuant to r 9.08 of the Rules. Approval of funding agreement 38 The SP AMS Liquidators apply for an order pursuant to s 477(2B) of the Corporations Act for approval to enter into and to cause AMS Holdings to enter into the proposed funding agreement that is an exhibit to Mr Stone's affidavit of 21 October 2024. The SP AMS Liquidators also apply for an order pursuant to s 424 and 601EE(2) of the Corporations Act and s 90-15(1) and s 90-20 of Sch 2 of the Insolvency Practice Schedule (Corporations) of the Corporations Act and (or) s 23 of the Federal Court Act that they would be justified in entering into and acting in accordance with the funding agreement. 39 The SP Receivers apply for an order pursuant to r 14.23 of the Rules that they have approval to enter into and cause AMS Holdings to enter into the funding agreement and that they would be justified in acting in accordance with the funding agreement. 40 Although I have granted leave for the originating process to be amended, the form of the orders sought in the substituted originating process reflects a continuing confusion on the part of the plaintiffs about the nature of their functions and roles as special purpose receivers of property of the Scheme, on the one hand, and their functions and roles as special purpose liquidators of AMS Holdings, on the other hand. The differing nature of these functions and roles was explained in Marco (No 16) [R] at [63]-[94]. 41 The SP Receivers were appointed pursuant to s 601EE(2) of the Corporations Act and s 23 of the Federal Court Act. In that capacity, irrespective of the label, they act as receivers and managers of property of the Scheme and their power and authority to do so is derived from the orders of the Court. Consistently with the orders made appointing the Liquidators (as liquidators of the Scheme), the orders for appointment of the SP Receivers make Pt 5.4B of the Corporations Act, including s 477(2B), applicable to them. Part 5.4B is made applicable to the Liquidators and SP Receivers, not directly as a legislative instrument, but as part of the powers and requirements of the order appointing them under s 601EE(2). Therefore, by operation of the orders of appointment, the SP Receivers are required to satisfy s 477(2B) as if the Scheme were a company in liquidation even though the Scheme is not a company and the SP Receivers are not liquidators in that sense. However, s 477(2B) applies to the SP AMS Liquidators directly, as a legislative instrument, because they are special purpose liquidators of the company, AMS Holdings. 42 Separately, the Court has power to give directions to liquidators of companies under s 90-15 of the IPSC. Likewise, the Court has power to give directions to receivers and managers appointed by the Court under s 601EE(2) of the Corporations Act and s 23 of the Federal Court Act. (Section 424 of the Corporations Act has no application to court-appointed receivers.) These powers of direction may be exercised in relation to the winding up of AMS Holdings and of the Scheme in respect of the Special Purpose Property. The proper subject of applications for directions under these provisions is the manner in which the liquidator or receiver should act in carrying out his or her functions. The only binding effect of, or arising from, a direction given in pursuant of such an application is that the liquidator or receiver, if he or she has made full and fair disclosure to the Court of the material facts, will be protected from liability for any alleged breach of duty as liquidator to a creditor or contributory to the company or breach of duty as receiver to a member of the Scheme in respect of anything done by him or her in accordance with the direction: see, e.g., Australian Securities and Investments Commission v Marco (No 13) [2023] FCA 83 at [29], and the authorities there cited. 43 Due to the Pooling and Distribution Orders and the manner in which the Scheme was operated, the primary function or role of the plaintiffs is as SP Receivers. The orders made to appoint the SP AMS Liquidators were ancillary and facilitative for the reasons given in Marco (No 16) [R]. Otherwise, although the sources of the power of appointment and of the functions and roles are separate and distinct, in practical terms, the functions and roles of the SP Receivers and SP AMS Liquidators are composite. Therefore, as explained in Marco (No 16) [R], it is appropriate to approach the 'approval' of the funding agreement in the same way that the Court would approach that question as if the plaintiffs only sought approval under s 477(2B) as special purpose liquidators of a company even though the question is really whether the Court should approve the plaintiffs entering into the funding agreement as special purpose receivers of property of the Scheme. As special purpose liquidators of AMS Holdings, the SP AMS Liquidators are given approval to enter into an agreement on the company's behalf. But, it is the company, not the liquidators, which will enter into the agreement. As special purpose receivers and managers of Scheme Property, the SP Receivers are given approval to enter into an agreement in their capacity as receivers and managers, in substance, on behalf of the members of the Scheme. But, it is the SP Receivers, not the members of the Scheme who will enter into the agreement. 44 There are no material differences between the funding agreement that was exhibited to Ms Silvers affidavit and the funding agreement exhibited to Mr Stone's affidavit. The differences are largely cosmetic and cater for a change in the plaintiffs' legal representatives from Johnson Winter Slattery to HWF Australia. There are more substantive changes to the lawyers' costs agreement that is incorporated by reference into the funding agreement. Many of these appear to be intended to address some of the observations that were made about the lawyers' costs agreement in Marco (No 16) [R]. By and large, I regard the edits as improvements in the clarity of the agreement. Mr Stone and Mr Buitendag also depose facts that are directed to bolstering their view that the commercial terms of the funding agreement are fair and reasonable and within prevailing market-based parameters. For the reasons given in Marco (No 16) [R], I was satisfied that it would be appropriate to approve funding in the terms of the proposed funding agreement exhibited to the confidential affidavit of Ms Silvers: Marco (No 16) [R] at [38]-[42], [45]-[59], [92]-[96]. That reasoning applies equally to the funding agreement exhibited to Mr Stone's affidavit. For the same reasons I am satisfied that the Court should give a direction to the SP Receivers and SP AMS Liquidators to the effect that they would be acting properly and are justified in entering into the funding agreement as SP Receivers and SP AMS Liquidators and as SP AMS Liquidators, causing AMS Holdings to enter into that agreement. Costs 45 The SP Receivers and SP AMS Liquidators have sought an order in WAD 40 of 2024 that the costs of the proceeding be paid out of any Special Purpose Property. On 2 September 2024 an order was made reserving the costs of that proceeding. 46 Having regard to the multiple iterations of the proposed funding agreement, premature commencement of the proceedings, repeated amendments to the originating process and the somewhat incoherent and confused manner in which the proceedings have been conducted, I am very reluctant to place the burden of the costs of proceeding WAD 40 of 2024 before 2 September 2024 on the Special Purpose Property and, in substance, the members of Scheme if a successful Claim is made. In my view, the appropriate order is that only the costs of proceeding WAD 40 of 2024 on and from 2 September 2024 until 12 December 2024 be paid out of any Special Purpose Property. 47 I also do not consider that the Special Purpose Property should bear the burden of any costs incurred to 'tidy up' documents filed or mis-filed in proceeding WAD 481 of 2018. Therefore, none of Napoli Corporate, Mr Stone or Mr Franklin will be entitled to the costs incurred in proceeding WAD 481 of 2018 between 2 September 2024 and 12 December 2024. I certify that the preceding forty-seven (47) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Feutrill. Associate: Dated: 6 January 2025 SCHEDULE OF PARTIES WAD 481 of 2018 Interest Persons Interested Person ROBERT MICHAEL KIRMAN AND ROBERT CONRY BRAUER AS INTERIM RECEIVERS Interested Person CAMERON SHAW, RICHARD ALBARRAN AND MARCUS WATTERS, THE JOINT AND SEVERAL ADMINISTRATORS OF AMS HOLDINGS (WA) PTY LTD (RECEIVERS APPOINTED) (ADMINISTRATORS APPOINTED) Interested Person CAMERON SHAW, RICHARD ALBARRAN AND MARCUS WATTERS, THE JOINT AND SEVERAL ADMINISTRATORS OF AMS HOLDINGS (WA) PTY LTD (RECEIVERS APPOINTED) (ADMINISTRATORS APPOINTED) AS TRUSTEE FOR AMS HOLDINGS TRUST (THE ADMINISTRATORS) Interested Person GIOVANNI MAURIZIO CARRELLO AS THE TRUSTEE IN BANKRUPTCY OF CHRIS MARCO Interested Person PATRICIA MAREE MARKOPOULOS Interested Person TONPOSE PTY LTD AS TRUSTEE FOR MARKS AUTOS SUPERANNUATION FUND ACN 008 850 057 Defendants Fourth Defendant: LOUGHTON PATTERSON PTY LTD AS TRUSTEE OF THE LOUGHTON PATTERSON UNIT TRUST