Reported Decision : 43 ACSR 573 (2003) 21 ACLC 151 New South Wales Supreme Court CITATION : Arcfab v Boral, Arcfab v Flyash [2002] NSWSC 1188 CURRENT JURISDICTION: Equity FILE NUMBER(S) : SC 2530/01, 2531/01, 2532/01 HEARING DATE(S) : 4 November, 2 December 2002 JUDGMENT DATE : 11 December 2002 Arcfab Pty Ltd (P) 2530/01, 2531/01, 2532/01 PARTIES : Boral Ltd (D) 2530/01, 2531/01 Flyash Australia Ltd (D) 2532/01 JUDGMENT OF : Austin J COUNSEL : Mr M Dempsey with Mr M Henry (A/D) Mr V F Kerr (R) SOLICITORS : Murphy & Maloney (A/D) Williams Lawyers, Bowral (R) CATCHWORDS : CORPORATIONS - deed of company arrangement - deed incorporating s 553C of Corporations Act - claims by and against company extinguished by deed of company arrangement - whether, after termination of deed, company can sue to recover net amount claimed from defendant Corporations Act 2001 (Cth) ss 444A, 444D, 444H, 553C LEGISLATION CITED : Corporations Regulations Reg 5.3.A.06 & Sch 8A cl 2, 6 & 8 Supreme Court Rules Pt 31 r 2 ABB Engineering Constructions Pty Ltd v Freight Rail Corporation [1999] NSWSC 1037 Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485 Citicorp Australia Ltd v Official Trustee in Bankruptcy (1996) 71 FCR 550 GM & AM Pearce and Co Pty Ltd v RGM Australia Pty Ltd [1998] 4 VR 888 CASES CITED : Gye v McIntyre (1999) 171 CLR 609 Hathway v Cavanagh [2002] NSWSC 1113 Metal Manufactures Ltd v Hall (as administrator of Transtate Pty Ltd) [2002] NSWSC 298 Stein v Blake [1996] AC 243 Young v Sherman [2002] NSWCA 281 DECISION : See under heading "Conclusion" IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION AUSTIN J WEDNESDAY 11 DECEMBER 2002 2530/01 ARCFAB PTY LTD V BORAL LTD 2531/01 ARCFAB PTY LTD V BORAL LTD 2532/01 ARCFAB PTY LTD V FLYASH AUSTRALIA LTD JUDGMENT (Revised for typographical errors 12 December 2002) HIS HONOUR: Introduction 1 These three proceedings were commenced in the District Court and transferred to this Court. The plaintiff, which is a design and engineering firm, seeks to recover from Boral Ltd (the defendant in two of the proceedings) and its subsidiary Flyash Australia Ltd (the defendant in the other proceeding) in respect of work done on three building projects, namely work on a shiploader at Port Kembla, work on the Clyde Depot silo and blending plant, and work on a Flyash classifying and outloading plant at Mt Piper. All the claims arise out of contracts alleged to have been entered into before September 1995. Following amendments to the statement of claim pursuant to orders made on 4 November 2002, proceeding No 2530 of 2001 has become otiose and will be discontinued. The deed of company arrangement 2 On 15 September 1995 the directors of the plaintiff resolved to appoint a voluntary administrator. On 14 December 1995 the plaintiff entered into a deed of company arrangement, and the voluntary administrator became administrator under the deed. After a process of administration the deed was terminated on 29 June 1998. 3 Under the deed, an administration fund was constituted, comprising realisations of the assets of company (clause 7) that were in existence or had their origins prior to the fixed date (15 September 1995), and provisions were made for distribution of the fund to "participating creditors" (excluding a group of "excluded creditors" connected with the plaintiff and its related companies). 4 As required by s 444A(4)(i), the deed specified 15 September 1995 as the day on or before which claims must have arisen if they were to be admissible under the deed. According to s 444D(1), the deed bound all creditors of the company, so far as concerned claims arising on or before that day. 5 Clause 16.1 provided: "Upon receipt of those realisations referred to in Clause 7 hereof which in the opinion of the Administrator are commercially feasible to recover, the Administrator shall distribute the Administration Fund in the manner herein provided. The Administrator may in his sole discretion determine (a) which realisations are commercially feasible to recover and (b) may at any time review and change that decision as to which realisations are commercially feasible to recover." 6 Clause 2.2 (d) of the deed stated that: "the Company is released from its debts and liabilities including those of the excluded creditors to the extent provided for in Clause 5 and 6 of Schedule 8A and clause 12.4 hereof but is not released from its debts and liabilities in respect of the non-participating creditors". 7 Clause 12.4 was headed "Release from Creditors" and stated: "As at the Termination Date of the within Deed, the Company shall be released from all claims, demands, costs and expenses by or on behalf of any Creditor (excluding non-participating Creditors) as hereinbefore defined. This Deed may be pleaded by the Company in bar to any claim by any such Creditor (excluding the non-participating Creditors). The Company shall not be released from any claims made by non-participating Creditors made against the Company provided that any such claims are made against the Company subsequent to the Termination Date." 8 "Creditor" was defined to mean "any person or entity who has or claims to have any claim or claims against the Company arising out of or having its origin in any matter occurring on or prior to the fixed date [15 September 1995] or out of any transaction act or omission of the Company on or before the fixed date whether the claim be present future or contingent and whether liquidated or otherwise and whether in contract or in tort or howsoever arising". 9 According to s 444H, the deed released the company from debts in so far as it provided for the release and the creditor was bound by the deed. Principal statutory provisions 10 Section 444A (5) of the Corporations Law in force at the time of the deed, a provision identical to s 444A(5) of the Corporations Act 2001 (Cth), states that a deed of company arrangement is taken to include the "prescribed provisions", except so far as it provides otherwise. Regulation 5.3A.06 of the Regulations under the Corporations Law, corresponding to the equivalent regulation under the present Corporations Act, prescribed the provisions in Schedule 8A to the Regulations. The deed did not purport to exclude Schedule 8A; on the contrary, clause 1 (a) provided that except to the extent of any provision to the contrary, the provisions of Schedule 8A of the Corporations Regulations applied to the deed. Under clause 2(j) of Schedule 8A and clause 14 of the deed, the administrator's powers included the power to bring and defend proceedings on behalf of or in the name of the company. 11 Clause 6 of Schedule 8A states: "If the administrator has paid to the creditors their full entitlements under this deed, all debts or claims, present or future, actual or contingent, due or which may become due by the company as a result of anything done or omitted by or on behalf of the company before the day when the administration began and each claim against the company as a result of anything done or omitted by or on behalf of the company before the day when the administration began is extinguished." 12 Clause 8 of Schedule 8A states: "Subdivisions A, B, C and E of Division 6 of Part 5.6 of the [Law] apply to claims made under this Deed as if the references to the liquidator were references to the administrator of this Deed." 13 Subdivision A of Division 6 of Part 5.6 includes the following section: "553C (1) Subject to subsection (2), where there have been mutual credits, mutual debts or other mutual dealings between an insolvent company that is being wound up and a person who wants to have a debt or claim admitted against the company: (a) an account is to be taken of what is due from the one party to the other in respect of those mutual dealings; and (b) the sum due from the one party is to be set off against any sum due from the other party; and (c) only the balance of the account is admissible to proof against the company, or is payable to the company, as the case may be. (2) A person is not entitled under this section to claim the benefit of a set-off if, at the time of giving credit to the company, or at the time of receiving credit from the company, the person had notice of the fact that the company was insolvent." The separate question for determination 14 Defences have been filed in each case. The defences contend that the plaintiff's claims, if otherwise valid, have been extinguished by s 553C, as incorporated into the deed of company arrangement. Thus, paragraph 35 of the Defence in proceeding number 2531 of 2001 says: "in answer to the whole of the Amended Statement of Liquidated Claim the defendant says that: (1) the respective entitlements and obligations the subject of allegations and claims in the Amended Statement of Liquidated Claim were part of the mutual credits, mutual debts and other mutual dealings between the plaintiff and the defendant within the meaning of s 553C of the Corporations Law; (2) the effect of the incorporation of s 553C of the Corporations Law in the Company Deed was that: (a) at the date of the commencement of the Company Deed an account was taken of amounts due between the plaintiff and the defendant in respect of their mutual dealings and a balance of that account was, at that time, struck for the purposes of the administration, (b) on the striking of the balance the plaintiff's claims and the defendant's claims arising out of the Agreement were extinguished; (c) only the balance of the account was admissible to proof by the defendant against the plaintiff company, or was payable by the defendant to the plaintiff company, as the case may be, in the administration, (d) upon the termination of the Company Deed, there is no right of action at law in either the plaintiff company or the defendant to claim the balance, and (3) in the premises, the plaintiff is not entitled to the relief claimed or any relief against the defendant." 15 Paragraph 30 of the Defence in proceeding number 2532 of 2001 is to the same effect. 16 When the matter first came before me on 4 November 2002, the defendants sought orders under Part 31 rule 2 of the Supreme Court Rules for the determination of a separate question in each proceeding, relating to whether the deed and s 553C had the effect of extinguishing the plaintiff's claims. At that time the plaintiff was claiming gross amounts in each proceeding, unaffected by any set-off. After some discussion, the parties agreed that it would be appropriate for the plaintiff to amend its statement of claim in each proceeding, to plead such matters relating to set-off under s 553C as it might consider appropriate. I made orders granting leave to the plaintiff to do so, and I directed the defendants to re-formulate their separate questions for determination. I directed the exchange of written submissions, and I specifically directed the defendants to identify in their submissions the factual bases on which they asserted that any "net debt" owed by them to the plaintiff had been extinguished. 17 Subsequently amended statements of claim were filed. In proceeding No 2531 of 2001 the plaintiff claims a total amount of $162,289, which purports to allow set-off of some but not all of the claims asserted by the defendant. Similarly in proceeding No 2532 of 2001 the plaintiff claims $250,269, which purports to make an allowance for some but not all of the defendant's claims. In each case, the defendant contends that, apart from the effect of the deed of company arrangement and s 553C, it would have a claim in excess of the plaintiff's net claim. 18 On 2 December 2002 the defendants moved for orders in proceedings Nos 2531 and 2532 of 2001 in the following terms: "1. The court orders pursuant to Part 31 rule 2 that the court determine the following question separately, preliminary to any other issues in the proceedings: (1) Whether, by reason of the matters stated in paragraph [35 in No 2531/30 in No 2532] of the Defence to the Amended Statement of Liquidated Claim, the claims made by the plaintiff in the Amended Statement of Liquidated Claim have been extinguished. 2. The court notes that: (1) If the answer to the question is in the affirmative, judgment will be ordered in favour of the defendant. (2) If the answer to the question is in the negative (in whole or part), directions are to be made for the conduct and disposal of the remaining issues in the proceedings." 19 I proceeded to hear the application for an order for the determination of that separate question, and, on the assumption that such an order would be made, the determination of the separate question. I have no difficulty making an order for determination of a separate question as sought by the defendants. The plaintiff did not resist such an order at the hearing on 2 December 2002. This is one of those relatively unusual cases where the criteria for the making of an order for the determination of a separate question, set out in the judgment of Rolfe J in ABB Engineering Constructions Pty Ltd v Freight Rail Corporation [1999] NSWSC 1037, are satisfied: see Hathway v Cavanagh [2002] NSWSC 1113, paragraphs 35ff. I am in a position to decide the separate question on the pleadings and a few admitted facts, without having had to hear any oral evidence, let alone make any decisions about credit, and if my decision favours the defendants then the proceedings will have been brought to an end. The more difficult issue is to determine the answer to the separate question. The effect of set-off under a deed of company arrangement 20 The following propositions are common ground: (1) the defendants are "Creditors" of the plaintiff for the purposes of the deed, and they are not Excluded Creditors or non-participating Creditors; (2) the pleadings filed by the parties in the proceedings assert what amount to mutual dealings for the purposes of s 553C; (3) s 553C had the effect that on the date of commencement of the deed, accounts were taken of the mutual dealings between the company and the defendant in respect of each project; (4) if, upon the taking of such accounts, either of the defendants was owed any balance by the company, that defendant was entitled to claim the balance within the administration under the deed; (5) neither of the defendants lodged a proof of claim in the administration under the deed; (6) clause 12.4 of the deed had the effect that upon the termination of the deed, the company was released from the claims of Creditors including the defendants. 21 Those propositions are consistent with GM & AM Pearce and Co Pty Ltd v RGM Australia Pty Ltd [1998] 4 VR 888, a case which was the basis of many of the submissions before me. It is a case which requires careful attention. 22 There the appellant sued the respondent for a debt of about $10,000. Subsequently the respondent appointed a voluntary administrator and then its creditors approved a deed of company arrangement. With two exceptions, the deed of company arrangement was not materially different from the deed in the present case, and in particular Schedule 8A (including clauses 6 and 8 of the Schedule) was not excluded. The exceptions were that: · the definition of "creditors" in the deed under consideration in that case was confined to the creditors listed as such in the schedule to the deed and any other creditors that the administrator saw fit to admit as genuine claimants against the company, whereas in the present case the definition of "Creditor" in the deed extended to any person claiming to have a claim against the company arising out of events prior to 15 September 1995; and · the deed in that case stipulated (in clause 11.1) that the claims of creditors must be proved as if the relevant parts of Part 5.6 of the Corporations Law applied, whereas in the present case clause 11.1 gave the administrator a discretion to admit claims before the final distribution, even though a proof of claim had not been lodged. 23 Just before the creditors of the respondent approved the deed of company arrangement, the solicitors for the appellant wrote to the administrator (who became the deed administrator once the deed was approved) asserting an offsetting claim for an amount greater than the amount claimed by the respondent. However the administrator did not deal with the offsetting claim, because the appellant did not formally prove the claim. The administration under the deed came to an end. 24 By its defence to the respondent's proceeding for recovery of the debt, the appellant admitted the debt but pleaded as a set-off damages in excess of the respondent's claim. The defence asserted that the set-off arose because the respondent had entered into a deed of company arrangement that incorporated s 553C. The appellant asserted that the respondent's claim in debt had been satisfied by virtue of the administration process and in particular, s 553C. 25 The appellant's defence failed before the magistrate who heard the proceeding for recovery of the debt. On appeal, O'Bryan J agreed with the magistrate's decision. He saw Gye v McIntyre (1999) 171 CLR 609 as authority for the proposition that, where a claim is made by a trustee in bankruptcy against a person who asserts a claim against the bankrupt, s 86 of the Bankruptcy Act 1966 (Cth) automatically operates to produce a set-off between the claims, whether or not the person asserting a claim against the bankrupt lodges a proof of debt in the bankruptcy. However, his Honour distinguished Gye v McIntyre, evidently on the ground that the set-off produced by the incorporation of s 553C into the deed was limited to "claims made under this deed" (Schedule 8A, clause 8); and the appellant's asserted claim had not been "made under" the deed, having regard to the terms of clause 11.1, because no proof of claim had been lodged during the deed administration. 26 The question formulated for the Court of Appeal of the Supreme Court of Victoria was whether the magistrate and O'Bryan J erred in finding that the provisions of s 553C did not apply in relation to the claim by the respondent and the set-off claimed by the appellant. The Court allowed the appeal, holding that s 553C and the provisions incorporating it into the deed caused an automatic set-off of the claims of the respondent and the appellant, with the result that the respondent's claim had been extinguished. 27 Batt JA (with whose reasons Ormiston and Callaway JJA agreed) observed (at 896) that if the respondent had been a natural person who had become a bankrupt, s 86 of the Bankruptcy Act would have applied, automatically at the time the bankruptcy took effect, to the respondent's claimed debt and the appellant's offsetting claim, even though the appellant had not proved in the bankruptcy. This would have been so, in Batt JA's opinion, whether the net amount produced by the set-off was an amount owing to the bankrupt by the other person or to the other person by the bankrupt. He relied on Gye v McIntyre. 28 His Honour then compared the wording of s 86 of the Bankruptcy Act with the wording of s 553C of the Corporations Law. He noted that s 553C refers to "a person who wants to have a debt or claim admitted" whereas s 86 refers to "a person claiming to prove a debt". He held (at 899) that this difference in wording did not produce any relevant difference of substance, and accordingly the principle in Gye v McIntyre was as applicable to a company liquidation as to a personal bankruptcy. 29 Batt JA then considered whether the position under a deed of company arrangement was different from the position in company liquidation and bankruptcy, having regard to the wording of clause 8 of Schedule 8A and in particular, the words "claims made under this deed" in that clause. He concluded (at 901) that those words should be understood as extending to claims capable of being made under the deed. Callaway JA observed (at 890) that the words of clause 8 are not words of limitation, or at all events they have a like effect to the words "who wants to have a debt or claim admitted" in s 553C. 30 The decision in the Pearce case is a unanimous decision by an intermediate Australian appellate court. As a judge at first instance, I should follow that decision: Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485. It is applicable to the facts of the present case. The two differences in the facts, noted above, cause Batt JA's reasoning to apply a fortiori. 31 However, the decision does not directly govern the issue before me. In the Pearce case, the effect of recognising an automatic set-off between the claims by the company and the other person was to extinguish the company's claim completely. It was unnecessary to consider whether, if the set-off merely reduced but did not extinguish the company's claim against the other person, the net claim could be pursued after termination of the deed of company arrangement. 32 Batt JA did not consider that question. However, his Honour raised for consideration the question whether the balance in favour of the other person against the company could be claimed after termination of the deed of company arrangement. Having held that s 553C operated upon the commencement of the deed to convert the other person's original claim into a net claim, he expressed the opinion, obiter (at 901), that this net balance was extinguished upon termination by virtue of clause 6 of Schedule 8A. With respect, these remarks seem to follow inevitably from the decision reached by his Honour and the wording of clause 6 of the Schedule. 33 The application of Batt JA's observations to the present case is made difficult by the fact that there has been no determination of the value of the plaintiff's net claims and the defendants' counter-assertions. If the defendants were correct in their assertion that their claims are greater than the net claims of the plaintiff, Batt JA's observations would be applicable and consequently the defendants could not recover the surplus from the plaintiff. If, on the other hand, the plaintiff's has a net entitlement to recovery, his Honour's opinion does not directly assist me, because clause 6 of Schedule 8A does not purport to extinguish claims by the company, as opposed to claims due by the company and claims against the company. Because the separate question for determination only arises if one assumes that the plaintiff has a net entitlement to recovery, I shall assume that this is the case, for the purpose of determining the separate question. 34 Gzell J expressed an opinion similar to Batt JA's observations, by relying on the terms of the deed rather than Schedule 8A, in Metal Manufactures Ltd v Hall (as administrator of Transtate Pty Ltd) [2002] NSWSC 298. In that case a person asserted an offsetting claim against the company, greater than the company's claim against that person. Gzell J held that, upon the commencement of a deed of company arrangement there was an automatic set-off under s 553C, leaving that person with a claim for a balance, for which it failed to lodge a proof. His Honour observed (at paragraph 9) that the claim to the balance was extinguished upon termination of the deed by the operation of the provisions of the deed. Were the plaintiff's net claims (assumed to exist) extinguished upon termination of the deed? 35 The Pearce case leads to the proposition that upon commencement of the deed of company arrangement in this case, there was an automatic set-off of the claims of the plaintiff and the defendants, with the result that from that moment, the plaintiff's original claims were replaced by claims to net amounts. According to s 553C(1)(c), to the extent that the amount of the company's claim exceeded the offsetting claim, only the balance of the account was payable to the company. 36 The provisions of the deed of company arrangement applied to the plaintiff's claims to the net amounts produced by the application of s 553C. They were property of the company subject to the deed, because they were claims to payment of liquidated amounts (net of set-off) constituting choses in action, assignable as such: Citicorp Australia Ltd v Official Trustee in Bankruptcy (1996) 71 FCR 550, applying Stein v Blake [1996] AC 243. By clause 6.1 the property available to pay the claims of participating creditors was the administration fund and interest earned by it. By clause 7.1 the administration fund consisted of realisations from all of the assets of the company that were in existence or had their origins prior to 15 September 1995. Being property of the company, the net claims were "assets" and accordingly the "realisation" of the net claims was to form part of the administration fund. The administrator was required to distribute the administration fund under clause 16.1 upon the receipt of those realisations which in his opinion were commercially feasible to recover. He had a discretion under that clause to determine which realisations were commercially feasible to recover. 37 The administrator did not, during the course of the administration, pursue the net claims against the defendants. The proceedings were each commenced in the year 2000, well after termination of the deed. There was therefore no "realisation" of the assets for the purpose of distribution under the deed. It must follow that either the administrator exercised his discretion under clause 16.1 to determine that those realisations were not commercially feasible to recover, or he failed to address the question of recovery of the net claims. In either event, when the deed was subsequently terminated, the administrator's powers and obligations as administrator ended and he was released and discharged from his office and his obligations under clause 16.4, although the termination of the deed did not affect its previous operation (s 445H) and things done by the administrator were valid by virtue of s 451C. 38 As far as I can see, nothing in this state affairs leads to the proposition that termination of the deed extinguished the plaintiff's entitlement (assumed to exist) to recover net amounts from the defendants. 39 The defendants drew to my attention a difference in wording between the provisions of the Corporations Act and the Bankruptcy Act on mutual set-off. Under s 553C(1)(c) the net amount is payable to the company, whereas under s 86(1)(c) the net amount is in equivalent circumstances payable to the trustee in bankruptcy, as the High Court noted in Gye v McIntyre at 621. It appears to follow that in the case of bankruptcy, if the net amount is not recovered by the trustee in bankruptcy prior to the bankrupt's discharge, it is not open to the discharged bankrupt to demand payment. The defendants urged me to conclude that, since s 553C is equivalent to s 86, any net amount recoverable by the company as a result of a set-off under a deed of company arrangement is only recoverable in the administration of the deed, and not by the company after termination of the deed. 40 That submission is inconsistent with the literal words of s 553C(1)(c), which says that the net amount is payable to the company. The company continues to exist after termination of the deed of company arrangement. It seems to follow that any net amount payable under the section continues to be payable to the company. 41 The defendants submitted that such a conclusion would be contrary to public policy, and the intention of the legislature, because it would permit directors or administrators to effect a fraud on creditors, and allow shareholders post-administration to be unjustly enriched. On this submission, the company should not be allowed to prosecute a net claim after termination of the administration, because at that stage creditors in the administration would have lost their opportunity to obtain any benefit from the realisation of the claim. 42 It seems to me that the questions of public policy are finely balanced. Against the considerations urged upon me by the defendants, the plaintiff pointed out that one of the purposes of the system of voluntary administration under the Corporations Act, in contrast with company liquidation, is to enable the company to emerge from a process of administration with its business continuing in existence (see s 435A(a)). The kind of manipulation of Part 5.3A, to defeat the interests of creditors, envisaged by the defendants would obviously be deplorable. But it is not obvious that recovery of the net amount by the company must be limited in all circumstances to the period of administration, in order to address such abuse. One can readily envisage cases where recovery of the net amount would appear to be legitimate. Indeed, the deed in the present case seems to contemplate one such situation - that is, where the administrator judges that it is not commercially feasible to pursue the net claim during the administration. If there were real evidence of abuse of the Part 5.3A procedure, there may be other grounds for judicial intervention: see, for example, Young v Sherman [2002] NSWCA 281. My conclusion is that giving the words their literal meaning does not produce an outcome contrary to public policy or presumed legislative intention. 43 I do not find it unfair that any net claim of a creditor against the company is extinguished, by the operation of the provisions of the deed and/or clause 6 of the Schedule, while no provision of the deed or the law extinguishes the company's right to pursue a net claim. It is open to creditors to pursue their net claims within the administration. They have voted for a deed that does not make provision for the extinguishment of net claims by the company. In the present case, the deed expressly contemplates that the administrator may choose not to pursue recoveries where he judges that it would not be commercially feasible to do so. 44 I can find nothing in the terms of the deed to support the view that termination extinguished the plaintiff's entitlement to pursue net claims. Clause 16.1 seems to me to work against the defendants' submission. It contemplates that there may be assets of the company that it is not commercially feasible to recover. That can only mean that any assets so described do not form part of the administration fund, are not distributable to creditors, and remain vested in the company after termination of the deed. Amongst such assets might be net claims produced by set-off under s 553C. 45 The defendants invited me to infer that, since the plaintiff's net claims were not pursued (and therefore not "realised") by the administrator, he had chosen to abandon them. Again, this submission appears to me to be contrary to clause 16.1. The clause suggests, as I have said, that either the administrator exercised his discretion not to pursue the net claims on the basis that they were not commercially feasible to recover, or that he simply did not consider the matter. In either event, there is no ground for asserting that the net claims have disappeared. Conclusion 46 In my opinion the defendants have not shown that, under the terms of the deed of company arrangement or the Corporations legislation, any entitlement that the plaintiff may have had to pursue net claims against the defendants, after set-off under s 553C, has been extinguished upon termination of the deed. Consequently the answer to the question for separate determination should be: "The claims made by the plaintiff in the Amended Statements of Liquidated Claim in proceedings Nos 2531 of 2001 and 2532 of 2001 have not been extinguished by reason of the matters stated in paragraph 35 in proceeding No 2531 of 2001 or paragraph 30 in proceeding No 2532 of 2001." 47 I shall make an order for separate determination under Part 31, and I shall answer the separate question in the manner just stated. I shall hear the parties on the question of costs. ********** Last Modified: 12/16/2002 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. 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