Supreme Court New South Wales Medium Neutral Citation: In the matter of PILT Nominees Pty Ltd - Londish v Seller & ors [2011] NSWSC 74 Hearing dates: 1 & 2 February 2011 Decision date: 24 February 2011 Jurisdiction: Equity Division - Corporations List Before: Ward J Decision: Orders made on 2 February 2011 dismissing applications for the setting aside of judicial advice and repayment of monies. Order made 24 February 2011 dismissing third and fourth interlocutory processes and amended originating process against eighth, eleventh and twelfth defendants Catchwords: JUDICIAL ADVICE - application by plaintiff to set aside judicial advice for material non-disclosure and for repayment of trust funds paid out to trustees in reliance on such judicial advice - claim by defendants for variation of injunction to permit payment out of costs in accordance with judicial advice - HELD - application to set aside judicial advice dismissed - injunction varied - CORPORATIONS - application to declare invalid winding up resolution of company invalid or, in the alternative, to terminate winding up pursuant to s 482 Corporations Act 2001 - application for leave to commence a derivative suit against the defendant - HELD - dismiss applications re alleged invalidity of winding up resolution - leave to commence a derivative suit refused - PROCEDURE - whether issue estoppel or Anshun estoppel - HELD - issue estoppel and Anshun estoppel established Legislation Cited: Corporations Act 2001 (Cth) Taxation Administration Act 1953 (Cth) Trustee Act 1925 (NSW) Cases Cited: Agricultural & Rural Finance v Atkinson [2010] NSWSC 1396 Avanes v Marshall [2007] NSWSC 191 Bidald Consulting Pty Ltd v Miles Special Builders Pty Ltd [2005] NSWSC 1235 (2005) 226 ALR 510 Blair & Perpetual Trustee Co Ltd v Curran (Adam's will) (1939) 62 CLR 464 Cadima Express Pty Ltd (in liq) v Deputy Commissioner of Taxation (1999) 157 FLR 424 Carpenter v Pioneer Park Pty Ltd (2008) 71 NSWLR 577 Chahwan v Euphoric Pty Ltd [2008] NSWCA 52; (2008) 65 ACSR 661 Champerslife Pty Ltd v Manojlovski & Anor [2010] NSWCA 33 Charben Haulage Pty Ltd (in liq) V Beilby (t/as Costello) [2010] NSWSC 510 Charlton v Baber 47 ACSR 31 Cuthbertson v Hobart Corporation (1921) 30 CLR DCT v Lencal Excavations Pty Ltd [2004] NSWSC 783 DCT v Sydney Concrete Steel Fixing Pty Ltd (1999) 17 ACLC 972 Dubolo Pty Ltd v Codrington Investment Corporation Pty Ltd (1998) 26 ACSR 723 Ehsman v Nutectime Int'l Pty Ltd [2006] NSWSC 887; (2006) 58 ACSR 705 Fidelitas Shipping Co Ltd v V/O Exportchleb [1966] 1 QB 630 Fiduciary Ltd v Morningstar Research Pty Ltd [2005] NSWSC 442; (2005) 53 ACSR 732 Gamser v Nominal Defendant (1977) 136 CLR 145 Garrard (T/as Arthur Anderson & Co and ors v Email Furniture Pty Ltd (1993) 32 NSWLR 662 Goozee v Graphic World Group Holdings Pty Ltd [2002] NSWSC 640; (2002) 42 ACSR 534 GT Motor Inns Pty Ltd and Re (1980) 4 ACLR 881 Hargrave v Schumann, unreported 17 November 2010 Henderson v Henderson (1843) 3 Hare 100 HFGC Nominees (No. 2) v Hancock as Liquidator of 246 Arabella Investments Pty Ltd (in liq) [2010] FCA 1005 In the matter of PILT Nominees Pty Limited & Anor, no. 2909/2009, unreported Ling v The Commonwealth (1996) 68 FCR 180 Londish v Sheahan & Ors - In re Valofo Pty Ltd [2010] NSWSC 337 Macedonian Orthodox Community Church v His Eminence Petar Diocesan Bishop of Macedonian Orthodox Diocese of Aust & NZ (2008) 237 CLR 66 Maher v Honeysett & Maher Electrical Contractors Pty Ltd [2005] NSWSC 859 Mercy & Sons Pty Ltd v Wanari Pty Ltd (subject to deed of company arrangement) (in liq), [2000] NSWSC 756 Metledge v Bambakit Pty Ltd (in liq) [2005] NSWSC 160 Murphy v Abi-Saab (1995) 37 NSWLR 280 P&O Nedlloyd BV v Arab Metals Co & ors (No 2) [2006] EWCA Civ 1717 Permewan Wright Consolidated v A.G. (1978) 35 NSWLR 365 Philip Morris v Adam P Brown Males Fashions Pty Ltd (1980) 31 ALR 232 Prendergast v Rolcoss (in liq) [2008] NSWSC 146 Ragless v IPA Holdings Pty Ltd (in liq) [2008] SASC 90; (2008) 65 ACSR 700 Re Data Homes Pty Ltd [1972] 2 NSWLR 22 Re Elvi Pty Ltd; Re Fullin Enterprises Pty Ltd (1983) 1 ACLC 910 Re Warbler Pty Ltd (1982) 6 ACLR 526 Swansson v RA Pratt Properties Pty Ltd [2002] NSWSC 583; (2002) 42 ACSR 313 Thoday v Thoday [1964] P 181; [1964] 1 All ER 341, [1964] 2 WLR 371 Thomas A Edison Ltd v Bullock (1912) 15 CLR 679 Zavodnyik v Alex Constructions Pty Ltd (2005) 67 NSWLR 457 Texts Cited: Spencer Bower, Turner and Handley, The Doctrine of Res Judicata, 3rd edn Category: Procedural and other rulings Parties: Peter Gregory Londish (Plaintiff) Ross Edward Seller (First Defendant) PILT Nominees Pty Ltd (Second Defendant) PILT Managers Pty Ltd (Third Defendant) Baltarna Pty Ltd (Fourth Defendant) Sanabu Pty Ltd (Fifth Defendant) Radio Nominees Pty Ltd (Sixth Defendant) A T Lawyers Pty Ltd (Seventh Defendant) Valofo Pty Ltd (in liq) (Eighth Defendant) Londish Nominees Queensland Pty Ltd (Ninth Defendant) Vesudi Investments Pty Ltd (Tenth Defendant) Ian Russell Lock (Eleventh Defendant) John Sheahan (Twelfth Defendant) Sidney Londish (Thirteenth Defendant) David Charles Bowman (Fourteenth Defendant) Annette Bowman (Fifteenth Defendant) Davlon Management Pty Ltd (Sixteenth Defendant) Leighford Pty Ltd (Seventeenth Defendant) Seldam Pty Ltd (Eighteenth Defendant) Roticil Pty Ltd (Nineteenth Defendant) Grayworth Pty Ltd (Twentieth Defendant) Tiffany Properties Pty Ltd (Twenty First Defendant) Masalo Pty Ltd (Twenty Second Defendant) Representation: Counsel: C J Bevan (Plaintiff) J E Sexton SC (First, Second & Fourth Defendants F Gleeson SC with D Sulan (Eleventh & Twelfth Defendants) Solicitors: Hartmann & Associates (Plaintiff) Atanaskovic Hartnell (First, Second & Fourth Defendants O'Neill Partners (Eleventh & Twelfth Defendants) PC Evans (Thirteenth & Fourteenth Defendants) File Number(s): 10/326572 Judgment 1HER HONOUR: Before me for hearing on 1-2 February this year were various interlocutory applications brought in proceedings commenced by Mr Peter Londish in relation to PILT Nominees Pty Limited (the second defendant). These proceedings are themselves one of a number that have been commenced in what has been described as a protracted dispute between members of the Londish family (in particular, between Mr Peter Londish and his father and brother-in-law, Messrs Sidney Londish and David Bowman, respectively). 2The disputes between the parties have arisen against the background, and must be considered in the context, of the not uncomplicated corporate and trust structure in which the Londish family interests are held. 3Briefly, at the relevant time, PILT Nominees (as trustee of the Prime Indexed Lease Trust (PILT)) was the owner of various service station properties which were the subject of lease to a major petrol company for a number of years (those properties now having been sold). The sole beneficiary of PILT is Baltarna Pty Limited (the fourth defendant) as trustee of the Baltarna Trust. The sole beneficiary of the Baltarna Trust is Valofo Pty Ltd (the company now in liquidation, to which Messrs Lock and Sheahan, the eleventh and twelfth defendants, were appointed first as administrators and then liquidators). Valofo (the eighth defendant) is the wholly owned subsidiary of Londish Nominees Queensland Pty Limited (LNQ) (the ninth defendant), which in turn is the wholly owned subsidiary of Vesudi Investments Pty Ltd (Vesudi) (the tenth defendant). The bulk of the shares in Vesudi (after a minority shareholding for the benefit of Mr Ian Londish, another son of Mr Sidney Londish, or interests associated with him) are held as to a third each by companies controlled respectively by Mr Peter Londish (Feenix Investments Pty Limited), Mr Sidney Londish (Tiffany Properties Pty Limited, the twenty first defendant) and Mr Bowman (Masalo Pty Limited, the twenty second defendant) as trustees for their respective family trusts. 4The relevant chain of control between the respective companies (as summarised by Palmer J in the context of earlier proceedings in 2010) is that Mr Sidney Londish and Mr David Bowman, through their respective companies, together control Vesudi, which controls LNQ, which in turn controls Valofo; and Valofo is the sole unitholder of the Baltarna Trust the trustee of which is in turn the sole beneficiary of PILT. 5Collectively, I will refer to Mr Seller, PILT Nominees and Baltarna as the "Trustees", consistently with the manner in which reference was made to them on the hearing of the interlocutory applications, although as I understand it Mr Seller has not himself conceded that he holds his interest in the two trust companies as trustee. The Trustees were represented at the hearing by Mr Sexton SC. 6Separately represented (by Mr Gleeson SC, appearing with Mr Sulan of Counsel) were Valofo and the liquidators who have been appointed to it (Mr Ian Lock and Mr John Sheahan). Where I refer to them collectively I do so as the Valofo parties, otherwise I refer to Messrs Lock and Sheahan simply as the liquidators. 7The only other defendants appearing on the hearing before me were Mr Sidney Londish (the thirteenth defendant and Mr Peter Londish's father) and Mr David Bowman (the fourteenth defendant and Mr Peter Londish's brother-in-law). These were the directors of Valofo who resolved to appoint the administrators and then liquidators of Valofo. At the hearing on their behalf was Mr Evans, solicitor, who attended (according to his submissions on costs, forwarded to me after the close of the hearing) in order to be in a position immediately to object to any issue affecting his clients that "was not effectively addressed or challenged" by Mr Gleeson. (As it was, Mr Evans did not see the need so to intervene and simply adopted Mr Gleeson's submissions.) 8Mr Peter Londish has a number of complaints as to events that have occurred in relation to the affairs of the companies higher up the corporate chain than Valofo and complains about the circumstances in which the decision was made to place Valofo in external administration and then in liquidation as a company in insolvency. He also complains about actions taken by a solicitor, Mr Ross Seller, (the first defendant) in his capacity as a director of PILT Nominees, PILT Managers and Baltarna and in relation to his role as advisor in relation to the service station investment scheme. Mr Sellers (together with a Mr Crossman who is not a party to these proceedings) acted in relation to the setting up of the structure, through which the Londish family interests invested in the service station properties (a structure under which certain tax losses were apparently relied upon by Valofo to file a nil return for a number of tax years). 9In his substantive proceedings, Mr Peter Londish seeks relief against a variety of parties: against Mr Seller and the entities he controls (PILT Nominees, PILT Managers, Baltarna and a number of other companies), such relief including a declaration that the Baltarna Trust was a sham and that Valofo is the sole unit holder and sole beneficiary of PILT; orders for the accounting to Valofo by Baltarna of moneys received by it out of the PILT trust fund and for the winding up of Baltarna in insolvency; orders for the winding up in insolvency of PILT Nominees and PILT Managers; declarations as to Mr Seller's conduct and orders that Mr Seller (who it is alleged has at all times held his share in the capital of PILT Nominees, PILT Managers and Baltarna as nominee or trustee for members of the Londish family including Mr Peter Londish; for payment of damages for breach of fiduciary duty and an account for moneys paid to Mr Seller or taken by him out of the money or property of the PILT/Baltarna companies and trusts); against Mr Sidney Londish and Mr Bowman, for oppression in the affairs of the Londish group of companies (Vesudi, LNQ and Valofo); against Mr Sidney Londish and Mr Bowman, being the appointors of Messrs Lock and Sheahan as administrators and liquidators of Valofo (no relief seems to be sought against the liquidators directly); against Mr Sidney Londish and Mr Bowman regarding an alleged sham sale to them of Londish Group assets (home units in a project known as the Grandview Project) for no consideration in June 2000 and oppression arising from their alleged misappropriation of Londish Group assets and monies since 2004; and an application is made for the winding up of various companies named as defendants in Part A of the Amended Originating Process filed pursuant to leave granted by Barrett J on 15 November 2010 on the just and equitable ground and/or for oppression. 10Also filed on 22 November 2010, pursuant to the leave granted by his Honour, is a Statement of Claim which pleads (in some 80 or so pages) the causes of action "and their particularisation" in support of Mr Peter Londish's claims for relief in the Amended Originating Process. 11In broad terms, the relief that Mr Peter Londish is principally seeking against Mr Seller and his companies is to recover on behalf of Valofo the sum of approximately $9m that it is said has wrongfully been paid out of the company at Mr Seller's direction or at his behest. (In that regard, the liquidators of Valofo have also shown an interest in investigating the conduct of Mr Seller but Mr Peter Londish's complaint seems to be that they have not done so with sufficient diligence and have not yet committed themselves to prosecuting proceedings for the recovery of sums paid out to Mr Seller and his companies.) 12The applications before me can broadly be divided into two categories: those involving the Trustees and those involving the Valofo parties. At the conclusion of the submissions in relation to the applications involving the Trustees, I indicated the conclusion I had reached on those applications and made orders accordingly. I informed the parties that I would publish reasons for my decision as soon as possible thereafter. These are those reasons. I then excused Mr Sexton from further attendance and proceeded to finish hearing the applications involving the Valofo parties. As part of these reasons I now publish my decision in relation to those other applications. 13Briefly, the respective interlocutory applications before me were as follows. (i) Applications re Trustees 14In relation to the Trustees, by a Fourth Interlocutory Process Mr Peter Londish initially sought declaratory relief and orders setting aside certain judicial advice given (in 2009 and 2010, respectively) by each of White J and Pembroke J (that relief not ultimately being pressed), together with orders for the repayment of trust moneys paid out in reliance on the challenged judicial advice (which relief was pressed). (An order was also sought that Mr Seller file and serve an affidavit accounting for all trust funds paid out by trustee companies under his control.) 15As a procedural matter, the Fourth Interlocutory Process also sought an order for the consolidation or listing and hearing together in these proceedings of separate proceedings that have brought by the Valofo liquidators (for their appointment as trustees of PILT and the Baltarna Trust with these proceedings). (That application was not in terms dealt with and given that the Valofo liquidators' application for the removal of the trustees of those two trusts and for their appointment under s 70 of the Trustee Act has been listed for hearing later this week and the applications before me had only been listed for two days it would not have been possible to hear the two together without vacating the hearing before me which did not seem to be the most expeditious way of dealing with the various matters in dispute.) 16Mr Peter Londish has also sought relief against the Trustees in his Third Interlocutory Process, namely an order for the payment into Court of a sum of money currently held in a solicitor's trust account (the Gibson Trust Fund) which is presently subject to undertakings earlier given to the Court. This represents the remaining proceeds of sale of the last service station asset of PILT. (An order was also sought by him to restrain any further ex parte judicial advice applications by the Trustees - a direction along those lines in due course being agreed by the Trustees). 17The Trustees, in turn, have sought orders pursuant to an Interlocutory Process filed by them on 25 January 2011 for the variation of interlocutory orders made by Barrett J on 15 (and amended on 18) November 2010, by consent restraining the payment out of moneys held in the Gibson Trust Fund. It was said that these consent orders cut across the operation of the orders earlier made by Pembroke J in relation to the payment out of the respective trust funds (i.e. those of PILT and the Baltarna Trust) of costs in relation to the matters the subject of the judicial advice given by his Honour (and potentially, although this was not conceded by the Trustees, cut across the subsequent orders made by Ball J on a further application for judicial advice last year). 18The orders made by Barrett J included a direction permitting the payment out (notwithstanding the primary restraint on payment out of the trust fund made by his Honour at that time) of the proper costs of Counsel and solicitors for the Trustees of and incidental to a direction for the inspection of documents placed before the Court on the respective judicial advice applications over which there was not a claim for privilege. (Hence it did not seem to me likely that his Honour had intended the injunction to preclude the use of the trust funds where that was the subject of a judicial advice costs order.) (ii) Applications re Valofo parties 19As against the Valofo parties, Mr Peter Londish has sought orders (and declarations) under the Third Interlocutory Process for leave under s 47IB of the Corporations Act to proceed against Valofo, being a company in liquidation (it having been joined as a defendant to these proceedings); for leave under s 237 of the Act to bring these proceedings by way of derivative suit on behalf of Valofo; a declaration as to the invalidity of the resolution made by the board of Valofo (in which an alleged fourth director of the company, Mr Martin Thompson, did not participate) appointing the external administrators to Valofo; and declarations as to the invalidity of the creditors' resolution for the winding up of Valofo in insolvency and for the appointment of the liquidators to Valofo and the winding up of the company; alternatively, an order for the termination of the winding up of Valofo under s 482 of the Corporations Act , with effect from 5 January 2010, on the basis of the alleged improper conduct of its liquidators or the improper purposes of the director/creditors who appointed them. (In closing submissions, Counsel for Mr Peter Londish, Mr Bevan, emphasised that there was no allegation of improper conduct or involvement in an improper purpose on the part of the Valofo liquidators.) Facts 20Relevant to an understanding of how the present dispute has arisen is that the investment of the Londish family in the service stations in question was an investment that seems to have been intended to remain in place for a particular time and then be wound up (on the expiry of the service station leases), with tax losses being available to Valofo in the interim. (As I understand it, on the sale of the service station properties it was intended that PILT would be wound up, with the proceeds of sale then being able to be distributed to its beneficiary, Baltarna, through which a distribution would be made to Valofo and thence, through the corporate shareholdings, ultimately shared by the three arms of the Londish family (excluding Mr Ian Londish). 21I have outlined above the broad structure of the Londish family group. Mr Peter Londish (as did Mr Bowman) became a director of Valofo in 1995 (the two replacing Mr Sidney Londish and Mr Ian Londish). 22At some time in or around 2000 it seems that there was a residential development project (the Grandview project) involving one or more of the Londish interests. The final wash up of this project seems to have been the source of some dissention between the three new Londish family members involved in the present dispute (Messrs Sidney and Peter Londish and Mr Bowman). Indeed, claims in relation to the Grandview project (and oppression of Mr Peter Londish's interests in relation thereto) is one of the matters pleaded in the Statement of Claim in these proceedings. (In essence, Mr Peter Londish alleges that he was excluded from a one third share of profit from that project, in circumstances where Sidney and David each took apartments in the development for no costs and that an "equalisation payment" was due to him. 23Mr Martin Thompson, a chartered accountant, had for some years provided accounting services to companies in the Londish group of companies. It appears from ASIC records that in 2002, Mr Thompson was appointed first as a director of Vesudi and then as a director of Valofo. (Mr Bowman denies that Mr Thompson was ever in fact appointed as a director of Valofo but ultimately nothing turns on this earlier recorded directorship since Mr Thompson is recorded as having ceased to be a director of Valofo on 31 October 2003. Mr Peter Londish says that this was without his consent but Mr Bevan confirmed that no issue was pressed as to the authenticity of Mr Londish's resignation as a director in 2003). 24In March 2008, Mr Seller (who was involved in the establishment of the overall investment structure and who presently controls each of PILT Nominees, PILT Managers and Baltarna), acting as appointor under the Baltarna Trust Deed, removed the Baltarna Class Trust as a beneficiary of the Baltarna Trust thus leaving Valofo as the only beneficiary of that trust. 25Hotly in dispute before me was whether in April 2008 Mr Thompson was validly appointed as a director of Valofo. In evidence was a copy of minutes of a meeting of directors of Valofo purportedly held in Sydney at 10am on 8 April 2008 at which it was resolved that Mr Thompson be 'reinstated' as a director. The sole directors of the company at that stage were Mr Peter Londish and Mr Bowman. Mr Bowman adamantly denies having been in attendance at any such meeting and denies having agreed to the appointment of Mr Thompson as a director. The only reason put forward for the need for an additional director at that time was the need to sign a document in relation to the company (for the Deed of Retirement and Appointment of Trustee in relation to PILT). That document was not signed by Mr Peter Londish and Mr Thompson until 17 April 2008 but Mr Peter Londish said it had been anticipated that it would be signed on an earlier date. (This reason for Mr Thompson's appointment was not put forward until Mr Peter Londish's cross-examination.) 26Mr Bowman made it clear that he would not have agreed to the execution of that document (which suggests that the purported appointment of Mr Thompson might have been to get around a difficulty with Mr Bowman - something inconsistent with there having been a meeting between Mr Bowman and Mr Peter Londish for that purpose). For his part, Mr Thompson recalls that he was asked to consent to being a director and he understood that this was in order to help Mr Peter Londish with something and to sign a document - presumably the 17 April deed. However, he does not recall doing anything as a director of the company or attending any company meetings and when initially asked about this he did not suggest that he had in fact been appointed as a director. Mr Thompson's recollection is limited to the fact that he has since seen a minute referring to his appointment as a director (and simply accepts that he may have been appointed as a director but does not know). 27Mr Bowman's evidence was that he travelled to Brisbane on 8 April (and there was documentation recording the accruing of frequent flyer points on that day). Although Mr Bowman could not recall precisely when he flew to Brisbane, his evidence was that he usually flew up early in the day. I would infer that on this occasion he did so on the 7.35am flight to which reference appears in the frequent flyer records. 28Mr Peter Londish's evidence in this regard was less credible - his initial assertion that Mr Bowman was in Sydney for the meeting later becoming a suggestion that the meeting was over the telephone. Mr Peter Londish being unable to say where he was when the meeting took place. I consider Mr Bowman's account to be the more credible - first because the company minute is inconsistent with the likely travel of Mr Bowman on that day; secondly, because I would have expected company minutes to record that a meeting was by telephone if that was indeed that case; thirdly, because it was not until 15 April 2008 that a consent to act as director was signed by Mr Thompson (which seems to me to make it more likely that the resolution to appoint him would not have occurred until after the securing of that consent on15 April 2008) and, significantly, because Mr Peter Londish took no steps formally to have recorded in ASIC's records the appointment of Mr Thompson as a director of Valofo and there seems no reason for Mr Peter Londish not to have lodged the necessary form notifying of a change of officeholders of the company with reasonable promptness had the resolution actually been passed at that time in a meeting (however convened) with his then co-director Mr Bowman. 29In May 2008, Mr Crossman (who also is said to have had some involvement in the establishment of the investment) commenced proceedings for orders for the removal of Baltarna and PILT Nominees (as trustees of the Baltarna Trust and PILT respectively) in circumstances where it was alleged that the removal by Mr Seller of the Baltarna Class Trust as a beneficiary of the Baltarna Trust was void. (It was in the Crossman proceedings (since settled between the parties) that the first judicial advice the subject of challenge in the present proceedings was given by White J.) 30Certain interlocutory injunctions were granted by Hamilton J in the Crossman proceedings intended to preserve the status quo in relation to the disputed trust funds. There was then a dispute as to the alleged breach of those orders by reason of a substantial borrowing by PILT Nominees on the security of the service stations still owned by PILT Nominees in June 2008 ($11.3m, of which approximately $5.3m was paid to a company controlled by Mr Peter Londish - Davlon Management Pty Limited). 31Mr Peter Londish accepted in cross-examination before me that a payment of about $5.3m had been paid to Davlon, of which he acknowledged that he had received about $2m which he said was used for personal expenses and to pay Londish Group expenses. (In the witness box he seemed to suggest that he had held this money as some form of anticipatory offset against the - equalisation payment he considered due to him in relation to the profit entitlement he had claimed in respect of the 2000 Grandview project.) It was accepted by Mr Peter Londish that part of the moneys paid to Davlon at that time may have been the subject of a loan arrangement (and that only about $300,000 had been repaid) but denied that there was any fixed time for repayment of any such loan and disputed the amount of the payment that might be said to have been a loan). 32The borrowing by PILT Nominees in June 2008 became the subject of contempt proceedings (ultimately not pursued) by Mr Crossman against both Mr Seller and Mr Peter Londish (and the payment of moneys to Mr Crossman in connection with the contempt proceedings is something raised by the liquidators as one of the questionable matters concerning PILT Nominees and its directors, Mr Seller and Mr Peter Londish). 33In early 2009, Mr Bowman and Mr Sidney Londish commenced to take steps to assume control of the management of the various Londish Group companies. On 19 February 2009, as the majority shareholders (through their respective family companies) of Vesudi they signed a notice of removal of Mr Peter Londish as director of that company and for his replacement by Mr Sidney Londish (a step subsequently found by Brereton J to have been valid). Notices were also signed on behalf of Vesudi and then LNQ purporting to remove Mr Peter Londish as director of LNQ ad Valofo respectively. The notice purporting to remove Mr Peter Londish as director and secretary of Valofo was issued on 26 February 2009. Those steps were the subject of a challenge before Brereton J, who gave an ex tempore judgment in the matter on 2 October 2009. 34Meanwhile, on 16 July 2009, Mr Sidney Londish and Mr Bowman purporting to be the sole directors of Valofo resolved to appoint Mr Lock and Mr Sheahan as administrators of the company pursuant to s 436A of the Corporations Act. The first meeting of creditors was held on 27 July 2009. 35In August 2009, a litigation lending agreement was entered into by the liquidators. According to Mr Lock, this was to facilitate investigations into the affairs of the company (not to fund any litigation that might ensue therefrom). In August 2009 examination summonses and orders for production were issued against Mr Peter Londish and Mr Seller. There was resistance by both to the examinations. (I mention this only because of the criticism made by Mr Peter Londish that the liquidators have been dilatory in the prosecution of claims against Mr Seller and his companies.) 36A second meeting of creditors was convened on 19 August 2009. 37On 2 October 2009, Brereton J delivered an ex tempore judgment on the application by Mr Peter Londish for a declaration that the administrators had not been validly appointed (and for consequential orders). That application was brought on two bases - first, that the administrators were not duly appointed (having regard to the alleged invalidity of the notices removing Mr Peter Londish from the relevant meeting - hence squarely raising the issue as to the constitution of the board at the time of the relevant resolution though not by reference to Mr Thompson) and, secondly, that they were appointed for an improper purpose. As noted in the subsequent appeal judgment, the case was decided only on the basis of the invalidity ground (Mr Peter Londish having acceded to that approach). 38Brereton J held that there was no valid and effective resolution of LNQ to remove Mr Peter Londish as a director and replace him with Mr Sidney Londish and therefore that Mr Peter Londish remained at all material times a director of LNQ; hence the notice to Valofo was ineffective and Mr Sidney Londish had never been appointed as a director of Valofo; thus the appointment of the administrators was not a valid and effective act on the part of that company. 39Further resolutions in relation to the replacement of Mr Peter Londish as a director of Vesudi, LNQ and Valofo were passed on 16 October 2009 (to address the defects found by Brereton J to have affected some of the notices issued in February 2009). The administrators nevertheless appealed from the decision of Brereton J (according to Mr Lock at the instigation of the litigation funder in order to challenge the costs orders made against him for which they were responsible). 40In late October 2009, Valofo's former solicitors (ClarkeKann (NSW) Pty Limited) served a statutory demand on the company, claiming the sum of $25,579.75 in relation to an invoice 29 May 2009. (Mr Peter Londish later took an assignment for value of this debt in November 2009, for the purposes of asserting standing as a creditor of the company, which he duly did). That debt remains unpaid. 41On 26 November 2009, Mr Sidney Londish (having by then been validly appointed as a director of Valofo) and Mr Bowman resolved, pursuant to s 436A of the Corporations Act that Valofo was insolvent and again appointed Messrs Lock and Sheahan as voluntary administrators. 42Proofs of debt were lodged by various entities associated with Mr Bowman and others. (Mr Bowman's evidence was that at least some of those proofs of debt related to the payment of legal fees for advice sought in connection with the June 2008 transactions. Mr Peter Londish disputes that these are genuine debts and Mr Bevan noted that the liquidators had not admitted them as debts of the company. As at the time of the November resolution, however, there was at least the ClarkeKann debt and a smaller debt owing to the solicitor now acting for Mr Sidney Londish and Mr Bowman in these proceedings (Mr Evans). (The existence of the unpaid ClarkeKann debt, on which Mr Peter Londish relied for his standing as a creditor and the failure by his company Feenix Investments to repay a debt owing by it to the company - thus suggesting the debt was not a readily realisable asset of the company - were matters relied upon by Palmer J in due course to dispose of the suggestion that the board of Valofo had no basis to form the opinion that the company was insolvent on 26 November 2009.) 43On 8 December 2009, a summons was filed by the administrators of Valofo against PILT Nominees to preserve the trust assets in their hands (in response to which undertakings were given to restrain the use of the trust funds which led to the payment into Court of the sum of $1.2m and the retention in the Gibson Trust Fund of approximately $500,000). 44Mr Peter Londish shortly thereafter commenced proceedings on 10 December 2009, challenging the administrators' appointment and seeking an order for the termination of the administration of Valofo on the basis that it was not insolvent at the time of the November resolution and that the resolution had been passed for an improper purpose. It was apparently alleged that the administrators were biased. 45These proceedings were in due course heard by Palmer J ( Londish v Sheahan & Ors - In re Valofo Pty Ltd [2010] NSWSC 337) in February 2010 and his Honour delivered his reasons for judgment on 28 April 2010. By the time of the hearing, a creditors' resolution had been passed (on 15 January 2010) that Valofo be wound up and that the administrators be appointed as liquidators. The matter had also by then proceeded by way of pleadings, a Statement of Claim having been filed in January 2010. 46Palmer J handed down judgment on 28 April 2010. As the precise nature of the issues which were before and determined by his Honour is relevant to the liquidators' estoppel defence to the claims made against them in the present proceedings, it will be necessary later to refer in some detail to his Honour's reasons for judgment. Suffice it to note for present purposes that his Honour held that the resolution placing Valofo in liquidation was for a proper purpose [41], namely to obtain a better return for its sole shareholder, LNQ; that the involvement of the administrators in the prior invalid administration of Valofo did not make them incapable of administering the affairs of Valofo [45] and, relevantly, his Honour said that he did not accept the submission made on behalf of Mr Peter Londish that the resolution to wind up Valofo was invalid because Valofo was not validly in administration and was not insolvent and that it was passed for improper purposes. 47His Honour said that there was no doubt that Valofo was placed in administration in November 2009 (as it had been also in July 2009) so that the administrators, with the benefit of litigation funding, could pursue Valofo's rights through its unitholding in the Baltarna Trust, to attack the transactions relating to the service stations and to secure the distribution of the sale proceeds of the PILT assets to Valofo and thence to their own companies. (It was recognised by his Honour that those proceedings might be expected to cause focus to be placed on the conduct of Mr Peter Londish as director of PILT Nominees. Palmer J noted that Mr Londish as a director of PILT Nominees did not wish to be sued in relation to that transaction [at 20] and observed that Mr Peter Londish's interest in the PILT litigation was not primarily concerned with his status as a creditor of Valofo but with his interest as a director and shareholder of PILT Nominees.) 48In his Statement of Claim in the proceedings that came before Palmer J for hearing, Mr Peter Londish had sought relief of the same kind sought here in relation to the termination of the winding up of Valofo. 49Of the issues before Palmer J, as expressly noted by his Honour at [8], were not only whether the liquidators were disqualified from accepting appointment as administrators by virtue of their prior dealings with Valofo and with the appointors and whether the Court should replace them as liquidators but also whether the appointment of the voluntary administrators was invalid on the ground that Valofo was not insolvent and the appointment was not for a proper purpose and whether the creditors' resolution to wind up Valofo was invalid on the ground that the company was not validly in administration and was not insolvent, and that the resolution to wind up the company was for an improper purpose . His Honour noted at [9] that in view of Mr Peter Londish's agreement that Valofo should remain in liquidation the issues other than as to whether the liquidators should be replaced "have practical consequences only for the costs orders which must ultimately be made". 50(Palmer J noted the submission of Mr Burchett of Counsel that the purpose of placing the company in voluntary administration was improper because it was not in accordance with the objects of administration as expressed in s 435A of the Corporations Act. His Honour expressed the view that the litigation before him was part of a dispute as to who was to get what out of the proceeds of sale of the assets of PILT. The improper purpose alleged by Mr Peter Londish appeared to be that the placement of Valofo in administration was to benefit the interests of Mr Sidney Londish and Mr Bowman through the recovery of assets ultimately for the benefit of their companies. His Honour did not accept that there was an improper purpose.) 51Relevantly, his Honour noted in his judgment that on 16 October 2009 Mr Sidney Londish was appointed a director in place of Mr Peter Londish and that the validity of that appointment was not in issue. It may be seen from the above that the basis on which Mr Peter Londish had attacked the validity of the respective resolutions in the proceedings before Palmer J had included the allegation that Valofo was not insolvent and that the resolution was passed for an improper purpose. What was also raised (but not pursued) was the issue as to the constitution of the board and whether it included Mr Thompson. 52The Court of Appeal decision handed down its decision on the appeal from the decision of Brereton J in October 2010. By this time, as will be apparent from the above, not only had the administrators had been reappointed but also an application had been brought and determined by Palmer J in relation to that re-appointment. The majority (Young JA and Lindgren AJA) concluded that the relevant notices did not purport to be resolutions of Vesudi or LNQ (and thus Mr Peter Londish had not been validly removed and Mr Sidney Londish had not been validly appointed as a director of Valofo on 26 February 2009) but that purported appointment of the administrators on 16 July 2009 was not invalid on the basis that it was just and equitable to make a validating order under s 1322(4)(a) of the Corporations Act . (The question whether the matter should be remitted for a rehearing on the issue of improper purpose was answered in the negative on the basis that Mr Peter Londish had accepted the primary judge's invitation to decide the matter based on invalidity alone; improper purpose would have been relevant to the primary judge's discretion to validate under s 1322(4) which was litigated; and that improper purpose in the relation to the appointment of the same administrators by the same directors on 26 November 2009 had, in the interim, been rejected by Palmer J (and there was no evidence suggesting a change in the position as regards solvency or anything else going to improper purposes between 16 July 2009 and 26 November 2009.) (see Hodgson JA at [36].) 53On 10 November 2010 the ATO issued notices of assessment to Valofo. Although it was suggested in these proceedings that there was no power to issue these assessments (on the basis that they were amended assessments and issued outside the time within which such assessments could issue) the evidence from a senior ATO lawyer was that they were original assessments (a computer glitch having led to a computer notice being issued shortly after the manual assessment) and that the earlier returns being nil returns there was no deemed assessment for the years prior to 2004 (hence these were original assessments within time). Mr Bevan confirmed following this evidence that there was no issue taken by Mr Peter Londish as to the tax assessments being invalid for the purposes of this application. 54I have referred above to the steps which Mr Lock deposed to having taken since his appointment with Mr Sheahan as administrator and then liquidator of the company. Mr Lock's evidence was that since the completion of the initial investigation, he and Mr Sheahan have personally funded the liquidation. Although there were criticisms of the way in which the administration and winding up had been conducted I saw nothing in Mr Lock's evidence to suggest that he was behaving otherwise than as a professional liquidator conscious of his position as an official liquidator (even though not here a court appointed liquidator). I considered his evidence as to the basis on which he would act in the liquidation on independent advice to be a sensible and reasonable approach. 55The criticisms made of Mr Lock (and by extension Mr Sheahan perhaps) were that he had delayed in the commencement of proceedings against Mr Seller and his companies (explicable in my view due to the desirability of completing liquidators' examinations and obtaining and acting on considered advice); had delayed in lodging an objection to the ATO assessments (explained by reference to the advice he had received from the ATO); and his conduct in raising with the ATO the potential tax exposure of the company (which I can hardly see is something that goes adversely to his credit in light of his position as liquidator and responsibility to ascertain the debts of the company). 56Finally by way of background I note that it seems to be accepted that the assets of PILT were at least worth around $12.5m in 2008 (the liquidators contend they were worth some $16m). Of that amount Mr Peter Londish himself seems to contend that a significant sum was misappropriated by Mr Seller (and certainly his pleading makes various allegations as to misconduct or breach of fiduciary duty by Mr Seller in relation to the payments out of PILT). There is a sum of $1.2m that has been paid into court. The remainder is in the Gibson Trust Fund and, according to Mr Bevan, in danger of imminent dissipation through legal fees. Mr Gleeson submits that there has been a highly questionable use of the trust funds by Mr Seller and by Mr Peter Londish. Whether that is ultimately established to be the case is one thing - I simply note that the fact that such allegations have been made underscores the position of conflict in which Mr Peter Londish's present application against the Valofo parties seems to put him. 57I turn then to the respective applications. (i) Applications in relation to the Trustees * Declarations/orders setting aside judicial Advice 58The principal relief initially sought by Mr Peter Londish in relation to the Trustees concerned declarations as to the manner in which judicial advice had been sought and obtained by the relevant trustees and for the setting aside of that judicial advice. 59The first judicial advice subject to challenge is that given by White J on 2 June 2009 in other proceedings ( In the matter of PILT Nominees Pty Limited & Anor, no. 2909/2009, unreported) to the effect that the trustees would be justified in defending the proceedings commenced against them in May 2008 by Mr Crossman (and were entitled to have recourse to the assets of the respective trusts of which they were a trustee for the purposes of paying the reasonable costs of defending the proceedings). 60The second challenged judicial advice is that given by Pembroke J on 2 November 2010 in the present proceedings to the effect that it was appropriate for the trustees to retain solicitors and counsel for the purpose of investigating and determining whether it was appropriate for them to defend the claims made against them in the present proceedings (and in proceedings 2009/5645 in this Court) and that the expenses of so doing could be recouped on an indemnity basis out of the assets of the trusts of which each is a trustee. 61Subsequent to the judicial advice given by Pembroke J in these proceedings, further judicial advice was obtained from by Ball J on 2 December 2010, in respect of which there is no challenge by Mr Peter Londish, the effect of which is to permit the trustees to have recourse to the assets of the trust funds for the steps taken in relation to the present application. 62Paragraphs 1 and 3 of the Fourth Interlocutory Process sought declarations that the judicial advice given by White J and Pembroke J, respectively, was obtained by a wilful concealment of material facts or by a misrepresentation of the true facts and circumstances which were relevant to the exercise of the discretion to give judicial advice in the terms sought by PILT Nominees and Baltarna (and, in the case of the judicial advice given in November 2010, that the application for such advice was in breach of an order that I had made, by consent, in this proceeding on 6 October 2010). 63(I note that the 6 October 2010 order in terms was as to the parties conferring about a regime for the distribution of the sale proceeds - not as to the requirement for any notice to be given of an application for judicial advice under s 63 of the Trustee Act. Hence, it was submitted by Mr Sexton that there cannot have been any breach of that consent order by the making of the application for judicial advice - the parties having conferred and having agreed to the payment into Court of a certain amount and the retention of the balance in the solicitor's trust account. That aspect of the matter was not pressed on the current application.) 64Paragraphs 2 and 4 of the Fourth Interlocutory Process then sought orders that the respective judicial advices be set aside pursuant to s. 63(2) of the Trustee Act 1925 (NSW). 65A not insubstantial volume of material was tendered in relation to this aspect of the applications (on which I understand Mr Peter Londish was intending to rely for the allegation that there had been material concealment at the time of the respective judicial advice applications), some of which material was the subject of a disputed claim by the Trustees of privilege. 66In that regard I note that Mr Peter Londish asserted that the material in question (being the advices given by various Counsel to PILT Nominees of which he was a director) was provided to him not only in his capacity as a director of PILT Nominees but also as a co-respondent (with Mr Seller) to a notice of motion in the Crossman proceedings for contempt of the injunction granted by Hamilton J. It was said that it was material the subject of joint privilege and/or common interest privilege. It was also contended that the privilege was as much the privilege of Valofo (as the sole beneficiary of the trust) as it was of the trustee and that where the Court has the discretion to grant the beneficiary access to the material as a beneficiary of the privilege in it for good reason (relying on Avanes v Marshall [2007] NSWSC 191 at [11]; [15] it should do so here as the relief sought by Mr Peter Londish was only for orders to benefit Valofo. 67It was further submitted by Mr Bevan that I should follow the course adopted by Einstein J in Agricultural & Rural Finance v Atkinson [2010] NSWSC 1396 at [4], namely to admit into evidence provisionally on the voir dire all of the evidence to which objection is taken on the ground of privilege, permit cross examination (if required) on all of that evidence provisionally on the voir dire also; and determine the admissibility of that documentary and oral evidence in the reasons for judgment on the substantive applications. Mr Sexton objected to that course on the basis that it was not an answer to the Trustees' concern that by so doing there might be a loss of privilege vis a vis the liquidators, who would have a clear interest in obtaining access to the material. I considered that the appropriate course was to determine first the challenge by Mr Sexton to the hearing of the applications to set aside the judicial advice, so as not to leave open room for argument on privilege issues unless necessary. 68As to the question whether I had power to entertain the application by Mr Peter Londish in this regard, Mr Sexton submitted, at the outset of the hearing before me, that Mr Peter Londish's application for the relief sought in paragraphs 1-4 of the Fourth Interlocutory Process was misconceived for two reasons: first, that the orders sought for the setting aside of the judicial advice amounted in substance to an appeal from two first instance judges of this Court that another first instance judge of the Court is not competent to entertain; and, secondly, as I had understood him (although he appeared later to cast this submission in a different way) that as the complaints made by Mr Peter Londish were as to the failure to put material before those judges that would have affected or changed their decision, the complaints should go back to the judges who gave the judicial advice in question. (When the second submission was later clarified, Mr Sexton referred to Macedonian Orthodox Community Church v His Eminence Peter the Diocesan Bishop of Macedonian Orthodox Diocese of Aust and NZ (2008) 237 CLR 66 as precluding an application retrospectively to White J or Pembroke J to revoke the judicial advice orders, and submitted that this must be a matter for appeal, the advice having already been given - a point conceded by Mr Bevan on the following day.) 69It was acknowledged by Mr Sexton that Mr Peter Londish (who appeared on the judicial advice application before Ball J but on not the earlier application before Pembroke J, which was conducted on an ex parte basis) was someone who would have standing to seek leave to appeal from the orders made on the respective judicial advice applications (referring to Cuthbertson v Hobart Corporation ( 1921) 30 CLR 16 at [25] and the Macedonian Church case). 70Mr Sexton submitted that s 63(2) of the Trustee Act (on which the orders setting aside the judicial advice were predicated in the Fourth Interlocutory Process) does not empower a single judge of this Court to hear an appeal from the decision of another single judge but simply has effect in determining (if and when the issue arises) whether a trustee is entitled to rely upon the judicial advice as discharging the trustee's duty. The right of appeal from an order made in the provision of judicial advice lies under s 63(11) of the Act and such an appeal is to comply with the provisions of Parts 54 and 55 of the Uniform Civil Procedure Rules . (Part 55.4 provides that an appeal lies to the Court of Appeal from an opinion, advice, direction or order given or made by the Court under s 63 of the Act.) 71As I apprehend it, the basis on which Mr Peter Londish maintained that a single judge was competent to make the declarations and orders sought in paragraphs 1-4 of the Fourth Interlocutory Process was that this was not in substance an appeal from the orders made by White and Pembroke JJ in the giving of judicial advice (in the sense that I was not being asked to determine that their Honours had erred in so doing) but, rather, that this was an instance of the jurisdiction of the Court to set aside an order obtained on an ex parte basis in breach of the applicant's duty of candour (such relief being available whether or not the applicant would have been entitled to the order in question following full disclosure). 72In that regard, I note that in Garrard (T/as Arthur Anderson & Co and ors v Email Furniture Pty Ltd (1993) 32 NSWLR 662, in the Court of Appeal, Mahoney A-P, with whom Clarke JA agreed, indicated that it was important that failure to comply with the duty of candour on an ex parte application was to be properly sanctioned and said that an order obtained in breach of that duty would almost invariably be set aside. His Honour there drew no distinction between an order in the nature of an injunction and an order "which otherwise creates or confirms rights which otherwise would not exist". (Here, of course, the provision of judicial advice by way of order does not, as was noted by Hallen AssJ in Hargrave v Schumann , unreported 17 November 2010, of itself determine any rights, though it has the potential to affect parties' rights, and does not create a res judicata.) 73In Thomas A Edison Ltd v Bullock (1912) 15 CLR 679, Isaac J said that when the court is asked to disregard the usual requirement of hearing the other side, then the moving party incurs a most serious responsibility. In the context of a judicial advice application, however, there is not the 'usual requirement of hearing' to which reference was made in the Edison case . In the Macedonian Church case the High Court noted that s 63 operates as an exception to the ordinary function of deciding disputes between competing parties in that "it affords a facility for giving 'private advice'"; private because its function is to give personal protection to the trustee. Their Honours said "Section 63 reflects a compromise between a procedure for affording private advice to trustees and the need for affected persons to be given a hearing in some cases". 74The consequence of incomplete disclosure (or concealment) is dealt with in the proviso to s 63(2), namely that if the trustee is guilty of any fraud or wilful concealment or misrepresentation in obtaining the opinion advice or direction then the trustee is not protected so far as the trustee's own responsibility is concerned from a claim for breach of the trustee's duty if the trustee acts in accordance with the opinion advice or direction. 75It seems to me that the appropriate course in the present case, if Mr Peter Londish sought (otherwise than in the context of an appeal from the orders by which judicial advice was given) a determination of the question whether there had been material concealment in the obtaining of the judicial advice on either or both of the occasions on which it had been obtained ex parte, would have been to seek a declaration, in effect, that the proviso to s 63(2) had not been satisfied (from which it would follow that the trustees could not rely on the judicial advice by way of a defence to an allegation that their conduct was in breach of their duties as trustees). That seems to have been what paragraphs 1 and 3 sought to do (though the need for this to be done on an interlocutory basis might have been moot) but in any event the application for orders setting aside the judicial advice on that basis went much further than that and were tantamount to an appeal that as a single judge it would not have been competent for me to entertain. 76In any event, the issue having been raised only in opening submissions by Mr Sexton, Mr Bevan requested time to consider that matter. When the issue came to be argued on the second day of the hearing, I was informed that Mr Peter Londish was not pressing his application for relief in paragraphs 1-4 of the Fourth Interlocutory Process (and formally sought leave to withdraw the claims for orders setting aside the judicial advice of White J and Pembroke J) and was limiting that part of the Fourth Interlocutory Process relating to judicial advice to paragraph 5. 77Accordingly, all that remained for me to determine in this regard was the application by Mr Peter Londish for an order for the repayment of trust funds paid out to the trustees in reliance on that earlier judicial advice for their legal fees. 78In supplementary submissions handed up on 2 February 2011, it was indicated that Mr Peter Londish sought the repayment of trust monies paid out for legal fees by the trustees after the judicial advice was given by White J and Pembroke J (and to challenge the Trustees' right to assert the protection of that judicial advice as an answer to that recovery claim), by disputing the satisfaction of the proviso in s 63(2) (even though, insofar as such a challenge was raised in paragraphs 1 and 3 of the Fourth Interlocutory Process, those paragraphs were not by then being pressed). 79For completeness, I note that the alleged material and intentional non-disclosure on relation to both judicial advice applications fell within three broad categories: first, the alleged failure to take their Honours to material in relation to the payment of trust monies to Mr Seller and his companies (disclosed in the affidavit sworn by Mr Seller in the Crossman proceedings); to the motion in which PILT Nominees and its directors had been charged with contempt for breach of Hamilton J's orders; and to an affidavit sworn by Mr Seller in which he gave his account of the genesis and terms of PILT and the Baltarna Trusts and his role in them (and, in particular the failure to disclose that Mr Seller was "planning to expend significant trust monies to fund the defence of his own personal position in the Crossman proceedings, both as the principal defendant to them and as the principal respondent to the contempt motion (in which Crossman was pressing for Seller's imprisonment if found guilty because of its flagrancy ... by utilising the same lawyers as the corporate trustees which were seeking the advice). secondly, the failure to inform their Honours of an opinion from Senior Counsel in March 2009 analysing Mr Seller's position as legal advisor of the Londish group and controlling director of the trustees of PILT and the Baltarna Trust, in which it was said a number of 'damning conclusions' were made as to the conduct of Mr Seller based on the evidence in an affidavit sworn by him; and thirdly, the failure to disclose an opinion from another Senior Counsel in May 2009 as to the (said to be detrimental) taxation consequences to Valofo from the upholding of the claims made on PILT and the Baltarna Trust by both Messrs Crossman and Seller as the advisors of Valofo for an interest in the trust funds. 80It was submitted that had their Honours been fully informed of this evidence it is highly unlikely that the judicial advice in question would have been given (or that any such advice would have been given so as to preclude Mr Seller from utilising trust funds for the defence of his own position). 81It was further submitted that the factual non-disclosure before Pembroke J was more flagrant for two reasons - first, that even less material was provided to Pembroke J than had been provided (even if not referred to) before White J; and, secondly, by reference to a comparison with the more extensive material put before Ball J only a short time after the ex parte application to Pembroke J. As to timing issues, reliance was placed on the fact that Pembroke J was not informed of observations made by Palmer J only one week earlier as to Mr Seller's unreasonable application to set aside an examination summons and his unreasonable refusal to cooperate with Valofo's liquidators in that regard. 82As noted above, the claim for declaratory relief in this regard was not pressed. Rather an order for the repayment of the trust funds drawn by the Trustees with the benefit of the judicial advice was sought by Mr Peter Londish on the basis that there is no prima facie right for a trustee to expend trust funds in the defence of allegations of breach of trust (it being necessary for a trustee to obtain judicial advice before defending such proceedings). Therefore, it was said, unless the Trustees could satisfy the proviso to s 63(2) they could not rely on the advice to justify the retention of the payment out of the trust funds. 83However, in circumstances where Mr Peter Londish was not pressing the claims for declaratory relief in relation to the alleged concealment, it seemed to me that there was a difficulty for him to establish, on an interlocutory basis, that there was a serious question to be tried that the withdrawal of the trust funds for the payment of legal expenses was in breach of trust. That is so because, until set aside (or a declaration is made that there had been misrepresentation or wilful concealment so as to preclude reliance on the judicial advice), the Trustees would have the benefit of the judicial advice in order to defend such a claim. 84What the order in paragraph 5 is necessarily predicated upon is a determination as to whether there was a serious question to be tried that there had been a breach of trust in relation to the withdrawal of the funds (and, in relation to funds already withdrawn, one that would more sensibly be dealt with at the conclusion of the hearing, since the moneys had already been disbursed) and/or whether, prospectively, there would be a breach of trust if further funds were withdrawn in accordance with the judicial advice. 85The concern, from Mr Peter Londish's point of view, was in effect put as one of timing. It was submitted by Mr Bevan that what was sought was a regime whereby the money be repaid and placed into Court so as to preserve the trust assets (and so that if, at the end of the day, the proviso to s 63(2) was not satisfied then there would be no loss to the beneficiary, Valofo). Mr Sexton, however, contended that this misconceived the function of judicial advice and that, such advice having been given, the trustees are entitled to rely on it in the absence of an appeal pursuant to which it is set aside. He submitted that the risk of depletion of the trust fund by the payment of those costs must have been something that had already been taken into account in the judicial advice given by the 3 separate judges of this Court (White, Pembroke and Ball JJ). 86Ultimately, I formed the view that what the application for the relief in paragraph 5 of the Fourth Interlocutory Process required me to do was impermissibly to revisit the judicial advice that had already been given insofar as it required me to form a view as to whether there was a serious question to be tried that the withdrawal of funds (notwithstanding the orders permitting that withdrawal) was a breach of trust. If a question as to balance of convenience were to have arisen, then it seemed to me that it was also relevant that the only funds now to be expended out of the trust funds, in accordance with the judicial advice already obtained are those necessary for the costs that Pembroke and Ball JJ considered appropriate for the Trustees to incur in obtaining advice as to whether to defend the proceedings and as to the costs of the application before Ball J. Those costs, it seemed to me, were likely to be of a relatively confined compass. 87Mr Bevan suggested that the matter should proceed by way of a voir dire to determine whether there was a prima facie case for intentional non-disclosure. However, in circumstances where what was ultimately sought was the relief in paragraph 5, on an interlocutory basis, for repayment of moneys predicated on there having been a breach of trust in the disbursement of those in the first place (which required an assessment of the entitlement of the Trustees to rely on the judicial advice that had been given but where there had been no appeal therefrom and the declaratory relief was not pressed), I did not consider it appropriate to entertain a procedure that might have other implications as between the various parties (in relation to any claim by the Valofo parties that legal professional privilege in certain of the material relied upon by the Trustees had been waived). 88I was therefore not satisfied that the order sought in paragraph 5 should be made on an interlocutory basis. Remaining relief 89The remaining relief sought by Mr Peter Londish against the Trustees related to the application in the Fourth Interlocutory Process for an order requiring Mr Seller to update an affidavit of payments made (in earlier proceedings) pursuant to the orders of White J and the order sought in paragraph 3 of the Third Interlocutory Process for the production of what seemed to be extensive company and financial records. 90As to the first, as already noted the affidavit in question was sworn in other proceedings (the Crossman proceedings) in which White J had made the first of the orders for judicial advice now being challenged. Mr Bevan informed me that Mr Seller had consented to the provision of that information in the earlier proceedings (and, as I understood it, in the context of the pending contempt application). 91Mr Sexton submitted that the relief sought in paragraph 6 was otiose insofar as it was being sought in aid of the relief claimed in paragraph 5, if that relief was not being granted (as I had indicated). Mr Bevan pressed that relief on the basis that Mr Peter Londish had incomplete knowledge of what had happened since Mr Seller had sworn his affidavit in the Crossman proceedings and that it was necessary to have that information in order to finalise the expert evidence in these proceedings. I was told that some expert evidence has already been prepared and what is sought is information from Mr Seller to update that evidence. It seemed to me that, put on this basis, what was really being required was an exercise in the nature of a combination of preliminary discovery and a direction for the service of affidavit evidence in advance of the ordinary timetable. As I am informed that the expert evidence has already been served in Mr Peter Londish's case, all that would now happen, as I understand it, if the additional material were to be served would be for there to be an updating affidavit filed from the expert(s). I saw no reason why orders should be made for this at this stage of the proceedings. 92As to the second matter, I considered that the provision of financial records should be dealt with in the course of discovery. Again this was sought in order to facilitate the preparation of evidence by Mr Peter Londish but that evidence has already been served. I saw no reason to make orders for discovery at this stage in advance of the pleadings having closed. In particular, I was concerned that, until the Trustees had received advice as to whether to defend the proceedings, it would not be known what stance would be taken by them and it might be that the cost of compliance with orders for the provision of documents at this stage would be wasted - either because the claims would not be defended or because the issues on the pleadings might then be confined to a more limited scope. (I note that Mr Sexton had indicated that if an order of this kind were made he would seek that it be on terms that the Trustees' costs of complying with it should be paid on an indemnity basis immediately out of the trust fund.) I was not persuaded that it was appropriate to make such orders at this stage. 93In relation to the application for an order for the payment into Court of the moneys currently held in the Gibson Trust Fund on the basis of the allegation that the Trustees and PILT Managers had dissipated or were proposing to dissipate the moneys in that fund by the procedure of regular applications for judicial advice to authorise the expenditure of the fund. Criticism was made in this regard of the liquidators in not opposing the payment out of moneys from the trust funds and in not opposing the ju dicial advice application made on 2 December 2010 to Ball J. I did not accede to this application on the basis that it did not seem to me that I should proceed on the basis of an assumption that the Trustees would act in contempt of the orders made by Barrett J - and the present application to vary those orders was an indication that they took their obligations to comply with them seriously. If so, and the only other withdrawal was as permitted by the Court, then the premise on which this order is sought seems to be that I should assume in advance that incorrect judicial advice might be given in future in this regard. I do not think that is a proper basis on which to make such an order and I can see no advantage to Valofo in having the money held in Court as opposed to held subject to undertakings proffered to and orders made by the Court. 94(On the remaining application by Mr Peter Londish, the Trustees consented to an order for notice to be given of any further application for judicial advice at the time such an application was filed.) Trustees' claim for variation of injunctions 95I turn then to the claim by the Trustees for the variation of the terms of the injunction granted (by consent) on 18 November 2010 to permit the drawing of funds the subject of the orders for judicial advice made by White and Pembroke JJ (and to remove any doubt as to the ability of the Trustees to draw down from the quarantined funds the amounts permitted by the orders of Ball J, which have not been challenged). 96Mr Sexton noted that the orders sought by the Trustees relate to costs and disbursements incurred since the application for judicial advice to Pembroke J (including the applications before each of Barrett J and Ball J); the costs of the exercise authorised by Pembroke J for the investigation of whether to defend the proceedings and the costs of the application before me. An order was also sought to permit the release of funds the subject of earlier undertakings which undertakings had been superseded by the orders made by Barrett J. 97Mr Bevan made it clear that Mr Peter Londish did not oppose the withdrawal of funds as contemplated by the order of Ball J and that, if that required any variation to the 18 November orders of Barrett J, then there was no opposition to such a variation. However, other than as noted above, Mr Bevan submitted that variation of the order was not appropriate in the absence of proof of a material change in circumstances. Mr Bevan referred to the :heavy onus [for an applicant] in seeking to disturb an order made in the exercise of a discretionary power" ( Philip Morris v Adam P Brown Male Fashions Pty Ltd (1980) 31 ALR 232 at 253.3; affirmed at (1981) 148 CLR 457 (HCA); and also Permewan Wright Consolidated v A.G. (1978) 35 NSWLR 365 at 367.E (Reynolds JA), applying Gamser v Nominal Defendant (1977) 136 CLR 145). 98Mr Sexton in response submitted that the consent orders were made without argument before his Honour and in the context of a busy Corporations List. 99It seemed to me that this was not an application by reference to a change in circumstances but by reference to the fact that the interaction between this order and the orders that had only shortly before been made by Pembroke J had not been fully appreciated by the parties (and I doubt had been drawn to his Honour's attention). 100In the circumstances I considered it appropriate, to avoid any further dispute as to the interaction between Barrett J's order restraining payment out of the funds and the orders made by Pembroke and Ball JJ in relation to the payment of costs out of the trust fund, to make orders formally varying the November orders. Costs 101As to the Trustees' costs of the present application, Mr Bevan submitted that for a number of reasons the appropriate order was for costs to be reserved until the conclusion of the proceedings. First, it was said that there had been a number of problems beyond the Mr Peter Londish's control (in that he had received no notice of the first two applications for judicial advice) and that he had asserted either a joint or common interest privilege in the advices received by the Trustees, which question had not been determined (one way or the other). Secondly, it was submitted that it was premature to award costs against a party suing in a representative capacity (on behalf of Valofo) until the allegations against the Trustee had been determined on the merits. (In passing I note that Palmer J did not accept that Mr Peter Londish's motives for bringing a similar application had been so altruistically motivated - rather, his Honour saw Mr Peter Londish as being motivated by a desire not to be sued. Be that as it may, Mr Peter Londish has nevertheless taken it upon himself to assert claims that he recognises it would be open to the liquidators to bring against the Trustees and there is an element of multiplicity of costs in this regard.) 102Mr Sexton sought costs orders to follow the event and that they be paid out of the assets of the trust in accordance with the judicial advice given by Ball J. 103I considered it appropriate, where the main substance of the application brought against the Trustees and the time spent in debating that application (as well as the bulk of the material tendered by Mr Peter Londish) related to orders for the setting aside of judicial advice by two other judges of this Court and where that relief was not ultimately pressed (and was conceded in submissions not to be appropriate), costs should be awarded in favour of the Trustees (notwithstanding that Mr Peter Londish has commenced the proceedings in a representative capacity on behalf of the corporate trustee and even accepting his assertion that he has been hampered by a lack of information from the Trustees). 104Accordingly, I made orders in accordance with the Short Minutes handed up by Mr Sexton. 105I turn then to the applications made against the Valofo parties on which I reserved my judgment. (ii) Application for relief re Valofo parties 106Under the Third Interlocutory Process, broadly speaking, the relief sought is twofold: first, to declare the winding up resolution in relation to Valofo to be invalid or alternatively to terminate the winding up of Valofo (and on either basis to effect the removal of the liquidators) and, secondly, for leave on the part of Mr Peter Londish to commence a derivative suit against Mr Seller and the trustee companies with which he is associated for, inter alia, the recovery by Valofo of money allegedly taken by Mr Seller and his companies in breach of trust. (Mr Peter Londish's determination to have the conduct of the proceedings himself, rather than leave them to the liquidators of Valofo to commence, is evident from the fact that a lengthy (over 80 page) Statement of Claim has already been filed with some apparent expedition in 6 weeks, I was told, (and expert evidence has been prepared ahead of the close of pleadings). 107The hearing of the application in relation to the first of those matters is of some urgency, since there is on foot an application (listed this week) by the liquidators for their appointment pursuant to s 70 of the Trustee Act as the new trustees of the two trusts (PILT and the Baltarna Trust) or, alternatively, as the receivers of the remaining trust funds of the trusts (being the funds paid into Court or held in the Gibson Trust Fund). As I understand it, the liquidators' application is intended to facilitate the pursuit of a claim for return of the moneys distributed out of PILT and/or the Baltarna Trust funds (potentially against Mr Peter Londish and Davlon as well as Mr Seller and his companies) so as to secure a return to Valofo. Mr Lock, in cross-examination, indicated that this course of action was based on Senior Counsel's advice due to a concern that there might be an as to the standing of Valofo otherwise to pursue the claims it sought to bring in relation to the payments made out of the trust funds. (This application is opposed by Mr Peter Londish on the basis that it will cause the collapse of the trusts by the merging of the interests of the trustee and beneficiary. That will be a matter in due course to be raised on the liquidators' application and it is not appropriate for me to comment on that matter, save to note that the liquidators point to the personal interest he has in proceedings not being brought against him.) 108As to the relief sought under s 482 of the Act (i.e., to terminate the winding up) is concerned, Mr Bevan made it clear that this was final relief being sought at an interlocutory stage of the proceedings (not interlocutory relief). Mr Bevan explained that bound up with this is the issue as to the validity of the resolution to place Valofo into liquidation at the end of 2009.) The application to terminate the winding up is thus said to be coupled with the application for leave under s 237 (Mr Bevan conceding that while the company is in liquidation leave under s 237 is precluded by reference to the decision in Chahwan v Euphoric Pty Ltd (2008) 245 ALR 780; 65 ACSR 661 ). On the basis that this is put as final relief, Mr Gleeson submits that if the claim in relation to the winding up is unsuccessful the Amended Originating Process should be dismissed as against his clients (and Mr Bevan did not suggest otherwise). 109An initial difficulty for Mr Peter Londish is that he has already sought (more than once) to challenge the appointment of the administrators to Valofo. He did so before Brereton J (and then in the Court of Appeal) having regard to the invalidity of the notices issued by LNQ and Valofo but had raised at that time also an issue as to the improper purpose of the resolution in question. He did so again before Palmer J raising again issues as to the invalidity of the resolution there under consideration on grounds including as to the solvency of the company and the alleged improper purpose of the parties appointing the administrators. He now brings a further challenge in relation to the November 2009 resolution, asserting that there was a fourth director (Mr Thompson) on the board of the company and that he had been excluded from the board meeting but also again raising issues of solvency of the company and improper purpose. Not surprisingly, the liquidators maintain that Mr Londish is estopped from so doing - either by way of the principle of issue estoppel or by way of an Anshun estoppel. 110Mr Peter Londish's main complaint before me as to the validity of the resolution to wind up Valofo is that he says the company was never validly put into administration. He then says that the other directors who attended the creditors' meeting and voted to wind up the company were not valid creditors (pointing to the fact that only two people who were voting as creditors had proofs of debt accepted by the liquidators - Mr Peter Londish, who had taken an assignment of debt from a creditor, and Mr Evans, the solicitor acting for the twelfth and thirteenth defendants, who he says had a conflict of interest in voting on the resolution). 111Another difficulty for Mr Peter Londish's application is that since the winding up resolution was passed, the Australian Taxation Office has raised an assessment of some $3.7million against Valofo, which if valid would leave little doubt that it is now insolvent, but I am asked not to take that into account in exercising a discretion to terminate the winding up of Valofo. 112I turn to the respective matters on which relief is sought. s 471B application 113A preliminary issue is as to the leave sought under s 471B of the Corporations Act for Mr Peter Londish to have leave to proceed against Valofo Pty Limited (in liq) (as a nominal defendant). The claim is said to be pleaded for the benefit of Valofo as the sole beneficiary of PILT and the Baltarna Trust. Relevantly, Mr Bevan says that the oppression case is not pleaded against Valofo. A review of the Statement of Claim confirms that relief is not sought directly against Valofo. 114Section 471B provides that: While a company is being wound up in insolvency or by the Court, or a provisional liquidator of a company is acting, a person cannot begin or proceed with: (a) a proceeding in a court against the company or in relation to property of the company; or (b) enforcement process in relation to such property except with the leave of the Court and in accordance with such terms (if any) as the Court imposes. 115This ensures that a company in liquidation does not face a multiplicity of legal proceedings that are expensive, time consuming and potentially unnecessary ( Altinova Nominees Pty Ltd v Leveraged Capital Pty Ltd (Receivers and Managers Appointed) (in liq) [2009] FCA 42 [17 - 19]). 116As to the principles pursuant to which leave to proceed will be granted, it has been held that the Court's discretion is broad but not absolute, and must be exercised fairly. It can only be exercised if a serious question to be tried is shown ( King v Yurisich [2006] FCA 1369; (2006) 59 ACSR [9 - 15]). There is not an exhaustive list of the circumstances in which it may be appropriate for the Court to grant leave to proceed, but they have been said to include factors such as the amount and seriousness of the claim, the degree of complexity of the legal and factual issues involved, and the stage to which the proceedings, if already commenced, may have progressed ( Nommack (No 100) Pty Ltd v FAI Insurances Ltd (in liq) (2003) 45 ACSR 215; Re Gordon Grant and Grant Pty Ltd [1983] 1 Qd R 314 [317]). 117Where claims are made in relation to the property of a company in liquidation the question considered is usually whether there is a suitable alternative means of proceeding (such as the submission of a proof of debt). The question whether a plaintiff should be granted leave under s471B is then largely reduced to one of choosing between alternative forms of procedure ( Re Gordon Grant and Grant Pty Ltd [1983] 1 Qd R 314 per McPherson J [317]; Vagrand Pty Ltd (in liq) v Fielding (1993) 41 FCR 550 [555]; Swaby v Lift Capital Partners Pty Ltd [2009] FCA 749 [24]). 118Mr Bevan submits that there is no need for such leave but has sought it in response to the issue having been raised by the liquidators. The reason that Mr Bevan submits that leave is not necessary is that he says Mr Peter Londish is not seeking relief against Valofo's property as such but, rather, is seeking to sue for Valofo's benefit under a derivative action. In other words, Mr Bevan says that s 47IB is concerned with a claim upon the property of the company rather than, as is the case here, a claim which seeks to reinstate the property of the company. 119Insofar as Valofo is joined to the present proceedings only as a necessary party and no relief is sought against it, I am of the view that it would be appropriate to make the order sought. As it is, in light of my findings on the remaining issues to be considered, nothing turns on this issue. Issues re validity of winding up/termination of winding up 120Of the more substantive issues before me, I consider first the issues relating to the winding up of Valofo and the position of the liquidators, since that is relevant to whether the claim for leave to bring a derivative suit can be sustained. 121Logically, before considering whether the contentions as to the invalidity of the winding up resolution are correct, it is necessary to determine the claim that Mr Peter Londish is estopped from pursuing his claims by reason of an issue estoppel or Anshun estoppel. Only if the estoppel issues are determined contrary to the liquidators, does the question arise as to whether the resolutions to place the company in administration and then in liquidation are invalid by reason on the exclusion from participation of Mr Thompson (and the assertion that article 55 of Valofo's articles can be relied upon to validate those resolutions) or as to whether the discretion should be exercised to terminate the winding up of the company. 122(Apart from the concern as to the insolvency of the company and the perception that these proceedings are an attempt to thwart the liquidators in their recovery actions, the other fundamental matters put by Mr Gleeson against the grant of leave to Mr Peter Londish in the present case are that the liquidators and the main creditor (ATO) both oppose the grant of leave and that Mr Peter Londish has not offered appropriate indemnities or security to ensure that Valofo is properly protected in the event that proceedings are commenced it its name (though I note in that regard that Mr Bevan has proffered an undertaking by Mr Peter Londish to meet any conditions set for the grant of leave).) * Estoppel 123Mr Gleeson submits that the present challenge to the appointment of the liquidators raises the same essential facts as those raised in the proceedings determined Palmer J in 2009 adversely to Mr Peter Londish and is no more than a second run of the case brought by Mr Peter Londish in the proceedings heard by and determined. (There was no appeal from the decision of Palmer J.) 124In particular, Mr Gleeson submits that the following factual issues have been raised in both proceedings: Whether Mr Sidney Londish and Mr David Bowman constituted the board of Valofo at the time that the administrators were appointed; Whether Mr Thompson was appointed a director of Valofo in April 2008; Whether Valofo was insolvent in January 2010 when the liquidators were appointed; Whether the appointment of the administrators was for an improper purpose; and Whether the winding up resolution invalid because Valofo was not validly in administration or was not insolvent or because the winding up resolution was passed for an improper purpose. 125In respect of those issues it is submitted that Palmer J: accepted that the board was properly constituted at [19], [21] implicitly rejected that Mr Thompson was a director by reason of that finding [19], [21] held that Valofo was insolvent at the relevant time; [28] rejected the assertion that the appointment of the administrators was for an improper purpose; [47] and rejected the assertion that the winding up resolution was invalid because Valofo was not validly in administration, was not insolvent or was passed for an improper purpose [40]-[41]. 126Those same facts are put in issue in the Third Interlocutory Process (see paragraphs [11] - [13] for the first two issues; [12] and [17] for the third; [15] and [16] for the fourth; and [13] - [17] for the fifth. The corresponding paragraphs of the Statement of Claim and Defence in the 2009 proceedings are noted as follows: Statement of Claim [7]-[10]- Defence [7[-[9],[19] Statement of Claim [10](a) -Defence [9], [19] Statement of Claim [10] - Defence [9].[19 Statement of Claim [10] - Defence [9], [19] Statement of Claim [14]-[22] - Defence [13[, [19] 127Reference is made also to paragraph [8] of Palmer J's reasons for judgment (in which his Honour summarised the four issues that he saw as having arisen for determination). 128I was taken to the Written Submissions handed up on behalf of Mr Peter Londish in the Palmer J proceedings and to the List of Issues and written submissions handed up on behalf of Mr Sidney Londish and Mr Bowman in those proceedings (together admitted as Exhibit 4 in the present proceedings) in support of the proposition that the constitution of the Board (and in particular whether Mr Thompson was a member of the Board at the relevant time) had been before his Honour (although the latter was ultimately not pressed as an issue for determination by his Honour). (Mr Bevan submits that these are irrelevant for the purposes of considering whether there is an issue estoppel and that, in considering either estoppel, reliance cannot be placed on what was contained in the submissions put on behalf of the liquidators in the Palmer J proceedings.) Issue estoppel 129Diplock LJ in Thoday v Thoday [1964] P 181, 197-198, [1964] 1 All ER 341, [1964] 2 WLR 371 explained the concept of issue estoppel as a species of estoppel res judicatam: [Estoppel per rem judicatam] ... is a generic term which in modern law includes two species. The first species, which I will call 'cause of action estoppel', is that which prevents a party to an action from asserting or denying, as against the other party, the existence of a particular cause of action, the non-existence or existence of which has been determined by a court of competent jurisdiction in previous litigation between the same parties. ... The second species, which I will call 'issue estoppel', is an extension of the same rule of public policy. There are many causes of action which can only be established by proving that two or more different conditions are fulfilled. Such causes of action involve as many separate issues between the parties as there are conditions to be fulfilled by the Plaintiff in order to establish his cause of action; and there may be cases where the fulfilment of an identical condition is a requirement common to two or more different causes of action. If in litigation upon one such cause of action any of such separate issues as to whether a particular condition has been fulfilled is determined by a court of competent jurisdiction, either upon evidence or upon admission by a party to the litigation, neither party can, in subsequent litigation between one another upon any cause of action which depends upon the fulfilment of the identical condition, assert that the condition was fulfilled if the court has in the first litigation determined that it was not, or deny that it was fulfilled if the court in the first litigation determined that it was. But 'issue estoppel' must not be confused with 'fact estoppel', which, although a species of 'estoppel in pais', is not a species of estoppel per rem judicatam. The determination by a court of competent jurisdiction of the existence or nonexistence of a fact, the existence of which is not of itself a condition the fulfilment of which is necessary to the cause of action which is being litigated before that court, but which is only relevant to proving the fulfilment of such a condition, does not estop at any rate per rem judicatam either party in subsequent litigation from asserting the existence or non-existence of the same fact contrary to the determination of the first court ." (my emphasis) 130In Fidelitas Shipping Co Ltd v V/O Exportchleb [1966] 1 QB 630, 641 his Lordship said: The final resolution of a dispute between parties as to their respective legal rights or duties may involve the determination of a number of different 'issues,' that is to say, a number of decisions as to the legal consequences of particular facts, each of which decisions constitutes a necessary step in determining what are the legal rights and duties of the parties resulting from the totality of the facts . To determine an 'issue' in this sense, which is that in which I shall use the word 'issue' throughout this judgment, it is necessary for the person adjudicating upon the issue first to find out what are the facts, and there may be a dispute between the parties as to this. But while an issue may thus involve a dispute about facts, a mere dispute about facts divorced from their legal consequences is not an 'issue'. 131In P&O Nedlloyd BV v Arab Metals Co & ors (No 2) [2007] 1 WLR 2288 at [24], reference was made by Moore-Bick LJ to the explanation of the test for distinguishing those facts, the determination of which will give rise to an estoppel, in Spencer Bower, Turner and Handley, The Doctrine of Res Judicata , 3 rd edn, as involving the enquiry as to "whether the determination was so fundamental to the decision that the latter cannot stand without it." 132In Champerslife Pty Ltd v Manojlovski & Anor [2010] NSWCA 33 at [106], Handley JA P said: The test for an issue estoppel or a cause of action estoppel is objective. For issue estoppel it is whether the precise question of fact or law sought to be litigated in the later proceedings was decided in the earlier as a fundamental basis for the decision . For cause of action estoppel it is whether the cause of action in the later proceedings is in substance the same as that litigated to judgment in the former. (my emphasis) 133In Blair & Perpetual Trustee Co Ltd v Curran (Adam's will) (1939) 62 CLR 464 , Dixon J said at 531-2: A judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies. The estoppel covers only those matters which the prior judgment ... necessarily established as the legal foundation or a justification of its conclusion ... 134Writing extra-judicially in "Res Judicata: General Principles and Recent Developments", Handley AJA said this of issue estoppel: Another form of res judicata is issue estoppel. A judicial decision on one cause of action may require the court to d e cide issues of fact or law which may become issues in later litigation between the same parties involving a different cause of action. If the first court determines, by evidence or admission, that some ingredient of a cause of action does or does not exist, and that determination was fundamental to the decision, it will issue estop the parties in later litigation. The leading Australian decision is Blair v Curran particularly the judgment of Dixon J. Issue estoppel, as its name implies, only applies to issues. There is no estoppel as to evidentiary facts or legal questions which are no more than steps in reasoning to the determination of an issue. ... The doctrine of issue estoppel extends to issues that were assumed or conceded in the prior litigation. A decision on an issue against the party who succeeded does not give rise to an issue estoppel because it was not fu n damental to the decision in his favour. Where several grounds for succeeding on a cause of action are upheld, there is no estoppel on the separate findings because none are fundamental. Examples include a number of particulars of negl i gence, or different breaches of the same contract occurring at the same time. There will be cause of action estoppels but no issue estoppel as to any particular of negligence or particular breach. Anshun Estoppel 135The principle articulated by Sir James Wigram VC in Henderson v Henderson (1843) 3 Hare 100 at 115 was as follows: [W]here a given matter becomes the subject of litigation in, and of adjudication by, a Court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of a matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. 136In Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45 ; 147 CLR 589 at 602-3 Gibbs CJ, Mason and Aickin JJ said: ... there will be no estoppel unless it appears that the matter relied upon ... was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it. Generally speaking it would be unreasonable not plead a [matter] if, having regard to the nature of the plaintiff's claim, and its subject matter it would be expected that the defendant would raise the defence and thereby enable the relevant issues to be determined in the one proceeding. In this respect we need to recall that there are a variety of circumstances, some referred to in the earlier cases, why any party may justifiably refrain from litigating an issue in one proceeding yet wish to litigate the issue in other proceedings eg expense, importance of a particular issue, motives extraneous to the actual litigation, to mention but a few. 137In Anshun (at 603) it was further said that: It has generally been accepted that a party will be estopped from bringing an action which, if it succeeds, will result in a judgment which conflicts with an earlier judgment ... The likelihood that the omission to plead a defence will contribute to the existence of conflicting judgments is obviously an important factor to be taken into account in deciding whether the omission to plead can found an estoppel against the assertion of the same matter as the foundation for a cause of action in a second proceeding. By "conflicting" judgments, we include judgments which are contradictory, though they may not be pronounced on the same cause of action. It is enough that they appear to declare rights which are inconsistent in respect of the same transaction. 138Allsop P i n Champerslife at [4] emphasised that the mere fact that the matter could have been raised does not mean it should have been raised (for the operation of the Anshun principle), repeating the statement in Anshun itself that the matter " has to be so relevant as to make it unreasonable not to raise it ". (my emphasis). Substantial similarity in the factual basis for the claims is said to be a necessary but not sufficient condition for application of the principle ( Gibbs v Kinna [1999] 2 VR 19 per Kenny JA). 139In Charben Haulage Pty Ltd (in liq) V Beilby (t/as Costello) [2010] NSWSC 510, it was noted that there are a variety of circumstances in which a party may justifiably refrain from litigating an issue in one proceeding yet wish to litigate the issue in other proceedings (such as expense, the importance of the particular issues, and motives extraneous to the actual litigation). The test remains one of reasonableness having regard to the circumstances. 140In Champerslife , at [107] - [109], Handley JA, having considered the test for issue estoppel, went on to consider the broadening of the enquiry to be undertaken where the question was one of Anshun estoppel and made it clear that the enquiry in such a case is not restricted to the pleadings and reasons for judgment (and hence in the present case there can be no suggestion that it would be inappropriate to take into account the submissions that were made before the Court in the previous proceedings). His Honour said: The principle in Henderson v Henderson (1843) 3 Hare 100 [67 ER 313] at p 115 [p 319] widens the scope of both forms of res judicata estoppel without introducing subjective factors. The test is whether the new point "properly belonged to the subject of litigation" in the earlier proceedings. The relevant evidence is restricted to the pleadings in both proceedings and the reasons for judgment in the earlier. Where the extended form of res judicata in Anshun or Johnson i s in issue the enquiry is extended to include the reasonableness of the litigant's conduct in the earlier proceedings, or the existence of an abuse of process in the later. Application of the above principles 141Mr Gleeson submits that the matters sought to be re-agitated before me were all fundamental matters to the case determined by Palmer J and that in those circumstances Mr Peter Londish is estopped from seeking to re-litigating any of those issues in the present case (citing Blair v Curran and Murphy vAbi-Saab (1995) 37 NSWLR 280 per Gleeson CJ at 287-8). It was said that to allow Mr Peter Londish to do so would be against the administration of justice and would risk inconsistent findings from the same Court in respect of the same issues. Broadly speaking I accept that submission. 142In particular, Mr Gleeson noted that before Palmer J, Mr Peter Londish had adopted an inconsistent position in relation to the insolvency question (as he had done before me) in asserting that Valofo was not insolvent yet relying on an unpaid debt owed to him as giving standing to bring the claim as a creditor of Valofo and in seeking to attack the debts of other creditors that had incurred debts to ClarkeKann for the same legal work as his assigned debt. 143Those matters were said to be in issue before Palmer J (in the sense that his Honour decided Valofo was insolvent and that the creditors who had voted on the winding up resolution did not act for an improper purpose). 144Mr Bevan contends that no res judicata has arisen as there has been no merger in a judgment of an issue determined by a Court (as distinct from issues which could have been determined but were not). He submits that the case which Mr Peter Londish now maintains on the Third Interlocutory Process is not the same as that which was determined by Palmer J and stresses what he describes as the 'limited nature' of that decision. 145In essence, Mr Bevan says that all that was determined by Palmer J determined (and hence all that he seemingly accepts as capable of giving rise to an issue estoppel) was the application to disqualify the liquidators from holding office as liquidators on the grounds of conflict of interest and improper purpose. This submission rests on the proposition that because Mr Peter Londish withdrew a proposed application to challenge the validity of the winding up (as Palmer J noted at [6]) there was no determination of any issue in relation to that challenge. (It must be noted, however, that in the proceedings before Palmer J, Counsel then appearing for Mr Peter Londish made it very clear that he was still pressing the issue of the solvency of the company and Palmer J made findings in relation to that issue which he considered of relevance in relation to the question of costs.) 146Mr Bevan submits (and I broadly accept) that the question as to whether there is an issue estoppel is to be determined on the pleadings with reference to the judgment (and that the materials tendered before Palmer J as contained in Exhibit 4 are irrelevant for that purpose), citing Chamberlain v DCT (1988) 164 CLR 502 at 507-509. 147However, while it may be that the case for primary relief, as it was finally put before his Honour (see [42] of his Honour's judgment), was limited to the challenge to the appointment of Messrs Lock and Sheahan as administrators and later as liquidators of Valofo, it is also necessary to consider what issues fell to be determined by his Honour when considering the exercise of his discretion both as to the principal relief and as to the question of costs. (Further, the fact that a case was put forward and abandoned in relation to the challenge to the resolutions by reference to the constitution of the board is a matter that goes directly to the reasonableness of Mr Peter Londish now challenging the validity of the relevant resolutions and the winding up itself on the very same basis - to be considered in the context of the Anshun estoppel defence.) 148There are, in essence, three areas of potential overlap between the proceedings - the allegations as to the constitution of the board at the relevant time(s); the allegations as to the solvency of the company; and the allegations as to improper purpose. 149As to the first, the constitution of the board at the relevant time or times, I accept that the validity of the resolution by reference to the constitution of the Board was not pressed for determination by his Honour (though the constitution of the board appears to have been an assumed fact - and issue estoppel can lie for facts assumed by the court which are necessary to determine an issue in the proceedings). It was, however, pleaded in paragraph 10(a) of the Statement of Claim that Mr Thompson was "another validly appointed director ... who did not participate in the decision". Was that assumed fact fundamental to or necessary for the determination of the issues in the proceedings before Palmer J? His Honour seemed to consider that all of the issues as identified by him in paragraph [8] of his judgment (including the determination of the issue as to whether the company was validly in administration) were necessary to determine for the purposes of the relief sought (if only as to costs) and on that basis it might be said that the issue of the constitution of the board (and the adoption of the assumed fact that it was comprised only of Mr Sidney Londish and Mr Bowman) were necessary for his decision and could give rise to an issue estoppel. I accept, however, that there is more doubt in relation to the question as to the constitution of the Board. 150It seems to me that there is a reasonable argument that it was not necessary for the determination of the issues set out above (or a necessary or relevant matter to take into account on the costs application) that a finding be made as to the precise constitution of the board in November 2009. Therefore, I am left in some doubt as to there being an issue estoppel on this particular issue. (Given the conclusion I have reached on the Anshun estoppel, it is not necessary to resolve this issue. Had it been, then I would have found there was an issue estoppel based on the pleading of Mr Thompson's valid appointment to the board and his Honour's apparent acceptance that the two members of the board at the relevant time were Mr Sidney Londish and Mr Bowman.) 151Apart from the submission that the administrators were never validly appointed as such under s 436A(1) of the Act (by reason of the exclusion of Mr Thompson from the resolution to appoint them), which is the first ground on which the challenge to the validity of the winding up was made, there other two grounds relied upon for the relief sought relate to the alleged solvency of the company and the allegations in relation to improper purposes. 152The bases on which Mr Bevan submitted in these proceedings that a finding should be made as to the invalidity of the winding up of Valofo by its creditors on 26 November 2009 and the appointment of the joint administrators as the company's joint liquidators on that date under s 439C(c) of the Act (or should alternatively make an order terminating the winding up) covered broadly similar ground. 153As to the question of solvency, it is submitted that Valofo was not insolvent on 26 November 2009, and that none of the persons who voted in support of the resolution to wind up the company in insolvency at that stage believed it to be insolvent. In support of this submission it is said that Valofo at that stage had only two valid creditors - Mr Peter Londish (by reference to the debt of which he had taken an assignment) and Mr Evans (the solicitor for Valofo, Mr Sidney Londish and Mr Bowman) for a debt claimed in the sum of $5,000 for legal fees. It was submitted that Mr Evans was precluded from voting at the meeting (being the company's solicitor), in that he was then retained by Valofo to advise it on its external administration and possible liquidation and was casting a decisive vote at the creditors' meeting because the only other valid creditor was Mr Peter Londish and he had opposed the winding up resolution. No authority was cited for that proposition. Insofar as the issue is one of a conflict between Mr Evans' personal interest in the debt owed to him and his duties as a solicitor to the company, on ordinary principles one would consider that proper disclosure would have addressed the situation. Moreover there might well be a distinction between a claim for fees relating to the liquidation or administration itself (for which a claim might lie in the administration of the insolvency and a claim for prior fees more generally incurred in relation to services to the company). In any event, nothing ultimately turns on this issue. 154Insofar as Mr Sidney Londish, Mr Bowman, and their respective wives and trustees of their family trust purported to vote as creditors, Mr Bevan points to the fact that their proofs of debt had not been assessed by the administrators and were not subsequently accepted by the liquidators (although I note that Mr Lock says the liquidators have not ruled on any proofs of debt other than that of the ATO). It is therefore contended that Mr Peter Londish was the only creditor entitled to vote on the resolution and his vote against the resolution should have prevailed. 155(In particular, Mr Bevan submits that there was no evidence to support the claims for the nominal debts claimed to have been owed to Mr Sidney Londish, Mr Bowman, their wives and their family trust trustees and referred to what was said by Palmer J [2010] NSWSC 337 at [23].) 156For the purposes of considering whether there is an issue estoppel on these matters, I note that the issues ultimately determined by Palmer J as to the solvency of the company at the relevant time were matters that his Honour was pressed by Counsel then appearing for Mr Peter Londish to determine. There was an express election not to withdraw those allegations. That can only have been seen by Mr Bevan's client, therefore, as essential to the determination of the claim for relief in that case. His Honour's determination as to whether the appointment was for an improper purpose must have taken into account the findings made in relation to the solvency of the company. 157In terms of the issue of insolvency therefore (that being a ground on which I was pressed to make determinations in Mr Peter Londish's favour in the current proceedings) and as to the position of creditors, those were the subject of express findings by his Honour and I consider that there is a clear issue estoppel in that regard. 158In relation to the improper purposes ground, it is submitted that the persons who voted to place Valofo into liquidation were acting for an improper purpose (namely to procure the liquidators to recover from Mr Seller and companies under his control the remaining $ 1.8m in the PILT trust fund and, after sharing the $ 1.8m remaining trust funds with the liquidators' litigation funder (the percentage share attributed thereto being 40%), to pay it to themselves in equal shares to the exclusion of the plaintiff as a one-third ultimate shareholder of Valofo , consistently with what is alleged to have been Mr Sidney Londish and Mr Bowman's exclusion in 2000 of Mr Peter Londish from the one-third share the latter claims of the Londish Group's 30% interest in an $11.9m profit of the Grandview apartment complex project. This is said to be different from the improper purposes alleged before Palmer J in 2010. 159Pausing there, Mr Bevan made it clear that Mr Peter Londish was not conducting that the liquidators were acting for any improper purpose (although they are criticised for a number of matters (delay in the commencement of proceedings for the recovery of moneys paid out to Mr Seller and his companies; the manner in which the ATO was notified of the potential tax issue leading up to the issue of the tax assessments; and failure to lodge an objection to the tax assessments within a 60 day period). The improper purpose alleged by Mr Peter Londish seems, therefore, to be one referable to what the controlling minds of Valofo might do if and when moneys are received by the company (and after the payment out by the liquidators of the company's debts). A distribution to the company's sole shareholder (LNQ) would leave any surplus funds paid out of the liquidation to be distributed or used by it. Mr Peter Londish's concern is that until the funds are in the hands of Vesudi (and perhaps even then) he has no control over their distribution. That, however, does not seem to me to provide a basis on which I could conclude that the decision to place Valofo into administration and then liquidation was part of a grand scheme to deprive Mr Peter Londish of benefits to which his family trust company might ultimately become entitled as a one-third shareholder of Vesudi. 160Mr Bevan contends that the purpose found by Palmer J at [39] is not the improper purpose now alleged. It is said that Mr Peter Londish now contends that the improper purpose was the recovery of trust assets by third party controllers of Valofo (the liquidators) to facilitate the distribution of its assets upstream to Messrs Sidney Londish and Bowman, to the exclusion of Mr Peter Londish as a one-third shareholder of Valofo, consistently with the historical course of conduct of the affairs of Valofo, which Mr Peter Londish alleges in his Amended Originating Process and Statement of Claim amounts to oppressive conduct. (Reference is made to the so-called 2000 'Grandview Project profit' as an example of that oppressive conduct.) It is said that no such case was sought to be made out before Palmer J. 161The case as pleaded before Palmer J particularised the improper purpose for which the November appointment was said to have been made in paragraph 10(c) as including that it was made "for the purpose of pursuing in the name of Valofo the claims of [Mr Sidney Londish and Mr Bowman] (and their respective entities in respect of the Baltarna Trust and PILT, in order to procure a distribution to Valofo and hence to them without accounting to the Plaintiff for their previous drawings, liabilities incurred and payments made by him in accordance with the accounts of the Londish Group and/or without personal expense or liability for costs". True it is that there is no express reference to oppression; however, the exclusion of Mr Peter Londish from claimed entitlements is raised. 162In that regard, it seems to me that the distinction sought to be drawn between the purpose so pleaded and that Palmer J found not to be improper and the improper purpose that it is now alleged to have been held (if in truth there be a distinction) is somewhat disingenuous. Both purposes encompass the winding up the company so as to enable a claim for the recovery of the funds in question (and the exclusion of Mr Peter Londish from a share therein) - the only difference in the present proceedings seems to be that there is an elaboration upon that purpose to allege that such conduct would amount to oppression (of a kind said previously to have occurred). The immediate purpose remains the same and is improper or not as the case may be. What is now pleaded with more precision is the legal consequence of what is said would flow from implementation of that purpose. However, the exclusion of Mr Peter Londish from a distribution of funds to which he claims to be entitled (being the foundation for the oppression claim) seems also to be encompassed in both ways in which the improper purpose is alleged. 163Palmer J held that the purpose underlying the decision to appoint the administrators was not an improper purpose (and the Court of Appeal later made a conscious decision not to remit the matter on the improper purpose issue in relation to the July 2009 resolution, in light of Palmer J's finding). In my view the overlap between the allegations in relation to improper purpose is such that an issue estoppel does arise on this aspect of the claim (although there would be no issue estoppel as to whether the conduct, if it occurs, does amount to oppression). 164While there may be a question as to whether an issue estoppel arises as to the constitution of the Board (and the consequences of a finding as to Mr Thompson's appointment or otherwise as a director of the company) (although on balance I consider there is, it being an assumed fact that seems to have been a matter necessary to his Honour's determination of the issues then before him), in my view the conduct of the case in relation to this issue clearly gives rise to an Anshun estoppel. 165Mr Bevan submits, and it was not disputed, that as the liquidators assert an estoppel defence to the Third Interlocutory Process, they bear the onus of making good that estoppel defence. He correctly points out that an Anshun estoppel depends on reasonableness. That reasonableness is to be determined objectively. 166Mr Bevan submits that, save for Exhibit 4, there is no evidentiary basis for the contention by the liquidators that it was unreasonable not to bring before Palmer J for determination the issues now before the court. He submits that the liquidators bear the onus of proving that Mr Peter Londish had available one year ago, when he sought to challenge the fitness of Messrs Lock and Sheahan to act as the liquidators of Valofo, all of the information and evidence on which he now relies to terminate the winding up in the Third Interlocutory Process. I am not satisfied that the requirement to establish unreasonableness goes so far as a requirement to establish precisely what evidence the plaintiff had to raise a claim that it is said should have been raised in the earlier proceedings. In any event, this submission fails because the evidence establishes that (whatever evidence may then have been available) it was sufficient for Mr Peter Londish to have raised the issue in his pleadings and submissions (and I do not accept that I should assume that he did so without having a proper basis for so doing). 167What the Anshun principle requires is that a party bring forward its whole case (unless it is reasonable not to do so) rather than not raising issues relevant to the case at hand and leaving those to be the subject of litigation in separate proceedings. 168Mr Gleeson submits that, absent any or any proper explanation from Mr Peter Londish, a close connection between the facts in the sets of proceedings makes it unreasonable for him not to have agitated the issue in the earlier proceedings (citing Ling v The Commonwealth (1996) 68 FCR 180 at 184; Zavodnyik v Alex Constructions Pty Ltd (2005) 67 NSWLR 457 at [39]-[40]). 169In the present case it is submitted, and I accept, that the overlapping facts are significant. Both the Palmer J proceedings and the present proceedings concerned the validity of the appointment of the liquidators by reference to the composition of the board of Valofo, the insolvency of Valofo in 2009, and the alleged improper purpose of the winding up resolution on 5 January 2010. The evidence establishes that Mr Peter Londish was aware of the issue as to the appointment of Mr Thompson. He can hardly not have been, since it was he who prepared the relevant Board minute (in the meeting, he says, though he cannot recall where or when or even how that meeting took place) and since he then entered into the Deed of Retirement and Appointment of Trustee with Mr Thompson. 170Where the principal factual issue in this case involves the composition of the board of Valofo, it is relevant to note that this was in issue not only before Palmer J but also before the Court of Appeal, in considering the appeal from Brereton J's decision. 171Mr Bevan asserts that much of the evidence now relied on by Mr Peter Londish has only become available since the application was made to Palmer J. However, in this regard he is referring not to the evidence in relation to Mr Thompson but to the evidence in relation to the status of those creditors who purported to wind up the company (and even then this seems to be on the basis of non-acceptance of proofs of debt that were challenged by him at the time of the Palmer proceedings in any event). The evidence in relation to Mr Thompson is evidence of which Mr Peter Londish must have been aware at all relevant times, since the assertion that he was a director is one that was made in the submissions handed up to Palmer J (paragraph 6 (ix) (c) - "The resolution appointing the Administrators was not of the Board, in that it involved only 2 of the at least 3 directors; Martin Thompson having not been involved " (my emphasis)). 172The relevance of Exhibit 4 is disputed by Mr Bevan. Insofar as it contains his own client's submissions it is said that it addresses a case proposed to be made but later withdrawn by Mr Peter Londish and that as no reasons for its withdrawal were given the only available inference is that Mr Peter Londish was not then confident that he could then make out a challenge to the validity of the winding up a year ago. Mr Bevan submits that this suggests that it was not unreasonable to expect Mr Bevan to have done so on advice. However, Palmer J's reasons suggest that the withdrawal of the claim based on invalidity of the resolution was in fact predicated on an objection to the identity of the liquidators as not being independent which to me suggests an abandonment of any other claim in relation to the winding up resolution (at [7] Palmer J noted that Mr Burchett had informed the court "that Mr Londish was not now opposed to Valofo remaining in liquidation; what he really sought was the removal of Messrs Sheahan and Lock as liquidators and their replacement by a liquidator whom Mr Peter Londish regarded as independent". Insofar as I can draw any inference from what was apparently said to Palmer J at the time, it would not support the conclusion for which Mr Bevan now seems to contend. 173Insofar as the objection to reliance being placed on Exhibit 4 is put on the basis that the submissions of the defendants can hardly support an Anshun estoppel against Mr Peter Londish as he has no control over their defences, that seems to me to ignore the fact that in considering the reasonableness of Mr Peter Londish now seeking to raise allegations made and not pursued before Palmer J (when the same issues were there being considered) one matter to take into account would surely be that the parties had prepared for the hearing on the assumption that this was an issue and the election not to pursue that claim must surely have been taken as a considered decision not to challenge the winding up on that ground. (In that regard it is relevant to note that the Court of Appeal did not consider it appropriate to remit an undecided issue for determination where the parties had proceeded at trial on the basis that the determination of the remaining issue would be determinative of the outcome.) 174It seems to me that even if there is no issue estoppel arising in relation to the allegations that relate to Mr Thompson's membership or otherwise of the Board, this is a clear case where an Anshun estoppel would arise. 175It seems to me to be wholly unreasonable for Mr Peter Londish now to plead a case that Mr Thompson was a director at the relevant time when he has already raised this in earlier proceedings (and presumably allowed the defendants to go to Court assuming that they would need to meet such a case) and has then withdrawn it in circumstances where it must surely be seen as part of the whole of the circumstances on which the appointment of the administrators was to be challenged if that challenge were to be pursued. To test that proposition it seems to me that it would be surely be unreasonable for there to be a succession of attempts to challenge the validity of the winding up based on the status of one or more additional persons as members of the Board. Insofar as the issue was before Palmer J as to whether the company was validly in administration (even if the only practical consequence of that issue by the time of judgment was as to costs orders) and Mr Peter Londish was aware of and had already raised an issue as to Mr Thompson's membership of the Board, it seems to me that it was reasonable to expect that any such issue be determined then and there and not in any separate proceedings at a later time. 176In relation to the suggestion that the improper purpose ground is now being put differently from that before Palmer J, again I think it manifestly unreasonable for the whole of the case on unreasonableness not to have been articulated before his Honour. The vice of that not having been raised is that it highlights the public policy rationale underlying the estoppel - namely the risk of inconsistent findings. The very fact that Mr Bevan submitted that, had the Court of Appeal been aware of the alleged fourth director it might have come to a different decision in the exercise of its discretion, implicitly acknowledges the relevance of that matter to the issues considered by Palmer J. 177Tellingly, it is submitted for Mr Peter Londish that "it is questionable whether any relief at all would have been granted by the Court of Appeal had it been aware that the exclusion from the decision-making process to place Valofo into administration was not merely of one director, as the Court assumed to be the case (so that he was bound to be outvoted by the other two directors, Messrs Bowman and Sidney Londish, in any event) but rather of half of its directors (Messrs Thompson and Peter Londish), which necessarily led to a deadlocked board and no resolution to go into administration being passed at all." If so, then it illustrates the risk of inconsistent findings by reference to the failure of Mr Peter Londish to raise all his complaints in relation to the winding up at the earlier time. 178In conclusion, therefore, I find that Mr Peter Londish is precluded by way of issue estoppel from raising in the present proceedings the three grounds on which he seeks to rely to terminate the winding up or otherwise to obtain declarations as to the invalidity of the winding up - being the constitution of the board, the alleged solvency of the company and the improper purpose allegations (now said to constitute oppression). I further consider that even if an issue estoppel had not arisen in relation to any one or more of those issues, Mr Peter Londish would now be estopped by way of application of an Anshun estoppel from raising those issues. 179That disposes of the claims against the Valofo parties on the winding up aspect of the matter. However, I proceed to consider briefly what the position would have been had I decided that Mr Peter Londish was not so estopped. Appointment of Mr Thompson 180The significance of this issue arises first as to whether Article 55 would operate to validate any otherwise invalid directors' resolution. 181Article 55 of the Valofo articles provides: A resolution in writing, signed by the majority of the Directors for the time being entitled to receive a notice of a meeting of Directors, shall be valid and effectual as if it had been passed at a meeting of the Directors duly convened and held... 182It is acknowledged that as at the time the company was placed into administration in July 2009, Mr Sidney Londish and Mr Bowman were duly appointed directors of the Board. Mr Bevan, however, submits that the effect of the Court of Appeal's finding in October 2010 (notwithstanding that it validated the resolution) was that Mr Peter Londish was also a director as at that date. The Court of Appeal declared that Mr Peter Londish had not been validly removed as a director of either LNQ or Valofo on 25 and 26 February 2009. It nevertheless held that the appointment of Messrs Lock and Sheahan as the administrators of Valofo on 16 July 2009 was not invalidated by reason of the invalid removal of Mr Peter Londish as a director of those two companies. 183I t is submitted that a lthough the resolution of 16 July 2009 is not invalidated by the mere fact that Mr Peter Londish was invalidly removed as a director of Valofo on 26 February 2009, nonetheless Mr Peter Londish remained a director holding office in Valofo at the date of the resolution as a matter of law as found by the Court of Appeal. It is therefore said that it as at 16 July 2009 there were four directors holding office in Valofo, a resolution could only have been validly passed under article 55 (whether it be to appoint administrators or to do any other act on behalf of the company) on 16 July 2009 if three or more of them supported the resolution. Accordingly, i t is submitted that the appointment of administrators to Valofo on 16 July 2009 was invalid by reason of the exclusion of Mr Thompson from the resolution to appoint them to take control of the affairs of Valofo, notwithstanding that it has been held by the Court of Appeal not to be invalid by virtue of the established invalid removal of Mr Peter Londish as a director of both LNQ and Valofo. It is said that nothing either found or declared by the Court of Appeal affects this conclusion. 184Mr Bevan therefore submits that if Mr Thompson was also a director Valofo had 4 directors as at that date who were entitled to notice of and participation in the relevant Board meetings; and that article 55 cannot be invoked to assist in this regard since a majority of 4 directors would not have been 2 (and hence it could not be assumed that the resolution would have been operative). (Such an argument would not assist in relation to the November meeting by which time Mr Peter Londish had in fact been removed as a director.) 185The significance of article 55 from the Valofo parties' perspective is that if one assumes that Mr Thompson was a director and did not receive notice of the meeting which resolved to place Valofo into administration, nevertheless this is of no moment since article 55 would operate to cure any problem arising from a failure to notify Mr Thompson of the meeting. In that regard, it seems to me that there is force in the submission that (it having been held that as at July 2009 Mr Peter Londish remained a director of the company, article 55 could not be invoked to validate a decision by 2 of the (on that hypothesis) 4 directors). Nothing turns, however, on this as I am not satisfied that it has been established that Mr Thompson was validly appointed as a director in 2008 and, as noted above, it does not appear to affect any resolution after the November meeting. 186(Although an issue was raised on the submissions as to whether Mr Thompson had ever been validly removed as a director, by reference to the analysis of what was required for such a step as set out by Hodgson JA at [5]-[14], Mr Bevan confirmed in the course of hearing that Mr Peter Londish does not suggest that the resignation by Mr Thompson in 2003 was effective. Rather, his assertion is that Mr Thompson had been appointed as a member of the Board on 8 April 2008 and therefore it could not be assumed that (had Mr Peter Londish been permitted to vote) there would have been a majority vote in favour of the resolution to appoint administrators to the company.) 187This gives rise to the main factual issue in dispute before me - namely whether Mr Thompson was re-appointed to the board of Valofo on 8 April 2008. Mr Bevan says that this occurred in order to facilitate Valofo giving informed consent to the replacement of the then trustee and manager of PILT by the new trustee and manager, PILT Nominees and PILT Managers, something that he said was necessary in order to avoid the obligation that the outgoing trustee would otherwise have had to vest the two trust funds in Valofo (as had been the original intention of the investment scheme). Mr Peter Londish gave evidence to that effect. 188As to this factual dispute, the onus of establishing that Mr Thompson was a director at the relevant time must lie on Mr Peter Londish. 189In that regard, Mr Gleeson points to the fact that Mr Thompson was unaware that he had been re-appointed to Valofo's board (and expressed doubts about this on 12 August 2010 when he signed a statement to that effect). Mr Bevan discounts this on the basis that he says the statement was prepared for Mr Thompson by the liquidators' solicitors without being provided with the Valofo board minutes dated 8 April 2008 making his re-appointment. It is submitted that had Mr Thompson seen the minutes he would no doubt not have expressed reservations about the status of his reappointment. It seems to me that this is an exercise in speculation. Mr Thompson cannot have recalled being appointed as a director at the time of his original statement and his present recollection is no more than an assumption based on what the minutes he has now been shown record. 190Mr Bevan submits that what the Court of Appeal did was no more than to protect the resolution of Messrs Bowman and Sidney Londish to place Valofo into external administration from invalidity on the sole ground that Mr Peter Londish, a director of Valofo, was wrongfully excluded from the resolution, by exercising its discretion to validate under s. 1322(4)(a) of the Act; it did not protect from invalidity under s. 1322(4)(a) of the Act the resolution to place Valofo into administration by reason of the exclusion of Mr Thompson from the resolution, which is the ground now relied on by Mr Peter Londish. 191Mr Bevan submits that this is in essence a dispute as to credit. He relies on the minute of the Valofo board resolution (of 8 April 2008) as establishing the validity of Mr Thompson's appointment. 192As to credit, Mr Bevan submits that if Mr Bowman had genuinely disputed the validity of Mr Thompson's appointment to the board on 8 April 2008, it could be expected that when Mr Bowman learnt a year later that Mr Thompson had purportedly been acting as a board member he would have taken umbrage at such conduct (but did not dos so; simply questioning Mr Thompson as to whether he had consented to trust funds being lent to Davlon rather than being paid as a distribution to Valofo). 193Mr Bowman, in the witness box, displayed the air of someone who was not surprised that there might have been some purported conduct (being adamant that he did not consider Mr Thompson ever to have been appointed) and in that context he response might simply have been to try and ascertain what had been happening behind his back, so to speak, leaving for a later day any complaint about the means by which it had occurred. 194In any event, what seems to me more telling is the inconsistent evidence of Mr Peter Londish in relation to the alleged directors' meeting on 8 April 2008; the failure of Mr Peter Londish to take any steps to register the change in the directorships of the company; the objective unlikelihood of an appointment as director of someone before they had formally consented to act; and the convenient coincidence of timing between the purported appointment as director and the signing of a document that I accept Mr Bowman would not have necessarily been prepared to sign at the time. 195The significance of the fact that Mr Thompson had previously sent a letter to Mr Bowman in April 2009 and signed a statement in August 2010 to the effect that he did not recall or did not consider he had been appointed a director in April 2008 seems to me to support the version of events for which Mr Bowman contends (whether or not Mr Thompson had been shown a board minute to that effect). The fact remains that he cannot have understood that he had been appointed if he had no recollection of it and no recollection of doing anything at all as a director other than perhaps signing a document. 196Mr Thompson's evidence was that he was "confused" as to whether he was a director and he accepted that his only basis for thinking that he had been appointed a director was because he had been shown the document purporting to record a minute of a meeting at which he was said to have been appointed. I have already indicated that I do not accept Mr Peter Londish's evidence that there was such a meeting. 197Mr Thompson confirmed that he had never attended any board meetings of Valofo and had not discussed his appointment with the other Valofo director, Mr Bowman. He said that he had signed various documents at the request of Mr Peter Londish but seemed to have no idea why he had done so . 198It is submitted by Mr Gleeson that Mr Peter Londish had a clear reason for seeking (secretly) to appoint Mr Thompson as a director to Valofo (that being to set in train a series of events which involved Valofo consenting to the replacement of the trustee of PILT and the control of any distribution out of PILT, and his subsequent authorisation at PILT level to the payments to Davlon) and, as I apprehend it, that purpose would have been lost had the appointment been drawn to Mr Bowman's attention. I accept Mr Bowman's evidence that he was unaware that such steps had been taken on behalf of Valofo. 199(I note that Mr Gleeson also submits that the suggestion that Mr Thompson was appointed on 8 April to execute a deed that was not executed until17 April 2008, because Mr Bowman was to be in Brisbane at that time, has the flavour of a recent invention (there being no such explanation in Mr Peter Londish's affidavit). Given that the documentation was prepared and apparently signed with advice from lawyers, there is no explanation or documentation from them as to arrangements for signing of the deed or changes in the scheduled time for that to occur, to support Mr Peter Londish's version of events. Mr Gleeson points out that there is no evidence to suggest that a board meeting had been held by Valofo to authorise the signing of the deed, or that the date for signing the deed had to be 17 April (and no other date), or that the deed could not be executed in counterparts, or that Mr Bowman was unable to sign the document in Brisbane, or that Mr Bowman could not appoint an alternative director to carry out such a task. 200I am not satisfied that Mr Peter Londish's evidence is reliable in this regard and I find on the b alance of probabilities that there was no board meeting of Valofo (whether in person or over the telephone) on 8 April 2008 and that Mr Thompson was not appointed a director on 8 April 2008. 201In any event, even had I been persuaded to this point that the issues should be determined in favour of Mr Peter Londish on the winding up application point, I am not satisfied that the proper exercise of discretion would be to terminate the winding up of the company or to remove the liquidators for the reasons set out below. Discretion 202In Meltedge v Bambakit Pty Ltd [2005] NSWSC 160 at [5], Barrett J noted that the jurisdiction to terminate a winding up under s 482 is discretionary and that the court may have regard to a range of factors. His Honour noted also that, while not to be rigidly applied (as indicated in Dubolo Pty Ltd v Codrington Investment Corporation Pty Ltd (1998) 26 ACSR 723), useful guidance could be found in the list of criteria set out in the judgment of Master Lee QC in Re Warbler Pty Ltd (1982) 6 ACLR 526. Those criteria included that: 1. The granting of a stay is a discretionary matter, and there is a clear onus on the applicant to make out a positive case for a stay: Re: Calgary and Edmonton Land Co Ltd (In liq) (1975) 1 WLR 355 at pp 358-359 per Megarry J. .... 4. The attitude of creditors, contributories and the liquidator is a relevant consideration: sec 243(1), Calgary and Edmonton Land Co Ltd (supra). 5. The current trading position and general solvency of the company should be demonstrated. Solvency is of significance when a stay of proceedings in the winding-up is sought: In re a Private Company (1935) NZLR 120; Re Mascot Home Furnishers Pty Ltd (197 0 ) VR 593 at p 598. ... 7. The general background and circumstances which led to the winding-up order should be explained: Krextile Holdings Pty Ltd v Widdows (supra). 203It is therefore for Mr Peter Londish to make out a positive case for termination, having regard to factors including the above. 204Mr Gleeson submits that there are two reasons why the Court should not terminate the winding-up of Valofo. 205First, that Valofo was insolvent at the time of that the creditors resolved to wind up the company. It is submitted that unless the Court rules that each of the proofs of debt was invalid as at 5 January 2010 (and doubt is raised as to the Court's power to do so in circumstances where there was no challenge under s 1321 of the Corporations Act by the plaintiff to the liquidators' decision to admit the creditors for voting at the 5 January 2010 meeting) then there were unpaid debts which had not then and have not been satisfied (including the ClarkeKann debt assigned to Mr Peter Londish). Mr Gleeson notes that Mr Bowman gave evidence that he considered that Valofo's lack of cash-flow and its desire to incur professional fees in investigating or pursuing claims in respect of the PILT assets meant that it was appropriate to appoint administrators and points to evidence tendered by Mr Peter Londish from Valofo's other director (Mr Sidney Londish) to similar effect. 206Secondly, and in my view this is of great significance, Mr Gleeson points to the fact that the ATO is presently a creditor of Valofo for around $4m. It is submitted (and I agree) that this debt cannot be ignored for the purpose of an application to terminate the liquidation and is an overwhelming impediment to that application (relying on what was said in Prendergast v Rolcoss (in liq) [2008] NSWSC 146 per White J at [25]). I accept that any order terminating the winding up now would have the effect of prejudicing the interests of the ATO even if the other alleged creditors' debts were to be disallowed. Further, even if there is an issue as to the liquidators' conduct in drawing the potential tax liability to the attention of the ATO (and I do not accept that there is), it does not alter the fact that there is such a debt. 207In Mercy & Sons Pty Ltd v Wanari Pty Ltd (subject to deed of company arrangement) (in liq), [2000] NSWSC 756, Austin J had earlier noted that voluntary winding up is a procedure less subject to judicial supervision and considerations of the public interest than court ordered winding up and had identified the various categories of interests to which the court has regard when considering an application to terminate a winding up as being the interests of creditors "taking into account whether they object to the proposed termination" (and potential future creditors); the interests of the liquidator (particularly with respect to costs; the interests of contributories; and the public interest " including matters of commercial morality taking the initial approach that insolvent companies should be wound up : Re Data Homes Pty Ltd [1972] 2 NSWLR 22." (my emphasis) 208Mr Bevan conceded that one must take into account the solvency of the company today (whatever its position was at the time of the resolution to place the company in liquidation). Initially, it was submitted that the company was not presently insolvent (in the sense of being unable to pay its debts as and when they fall due), when 'proper account' was taken of the recent income tax debt of approximately $3.9m imposed on Valofo by the ATO. 209In that regard, it seems that Mr Peter Londish's advisers had formed the opinion that the assessments issued on 10 November 2010 to Valofo (creating a debt due to the Commonwealth as from 3 December 2010, 21 days after their service on Valofo's tax agents, Mann Judd, on 12 November 2010) were amended assessments. On that basis it was contended that the ATO's amended assessments were statute-barred and not a valid debt for the purposes of proving in Valofo's liquidation and hence for s 482 purposes. It was submitted by Mr Bevan that, in the absence of fraud or evasion, the ATO has no power to amend the assessments of Valofo beyond the 2006 tax year (if it is a large business entity, which neither accountant supports) or the 2008 tax year (if it is a small business entity, as is likely) (by reference to s 170(1) Table items 1-5 of the ITAA36). 210I accept the evidence from Mr Zafirou of the ATO as to the circumstance in which the second assessment issued. Mr Bevan ultimately did not press the tax assessment issue and conceded that it is recognised that the Court must not terminate any winding up (even if the winding up is held to be invalid) unless there is convincing evidence as to current solvency (referring to Re Elvi Pty Ltd; Re Fullin Enterprises Pty Ltd (1983) 1 ACLC 910; GT Motor Inns Pty Ltd and Re (1980) 4 ACLR 881.) 211However, Mr Bevan contended that the Court nonetheless had the power under s 482 of the Act to treat the debt as not being a relevant liability of Valofo for the purpose of exercising the statutory discretion to terminate or stay the winding up and that this was particularly so if serious doubt was cast upon the legitimacy of the tax debt by the party applying for the termination or stay (referring to DCT v Lencal Excavations Pty Ltd [2004] NSWSC 783; DCT v Sydney Concrete Steel Fixing Pty Ltd (1999) 17 ACLC 972; Metledge v Bambakit Pty Ltd (in liq) [2005] NSWSC 160 at [33]). 212It was further submitted by Mr Bevan that no weight should be placed on the liquidators' opinion as to solvency because they had been instrumental in causing the tax debt to be incurred by Valofo in the first place. 213On this issue, reliance was placed on Mr Thompson's evidence as to the circumstances in which the tax audit was commenced. The evidence of Mr Lock was that he had become aware of a potential tax exposure when (in effect) this was used as a negotiating lever (or, in Mr Lock's words, blackmail) in the course of the settlement discussions with Mr Seller. Mr Lock, in my view quite properly, formed the opinion that he should raise the question of any tax liability with the ATO. As a professional liquidator (whether or not court appointed) it seems to me that it cannot be said that it was improper to raise with the ATO the question whether it was a creditor (and to draw the ATO's attention to the suggestion by the company's legal adviser that there may be such a liability). 214In any event, Mr Bevan conceded by the close of the hearing before me that the assessments had the effect of rendering the company insolvent. The question then is as to whether I could properly exercise a discretion to terminate the winding up of a company that appears at present to be hopelessly insolvent. 215I note that Mr Peter Londish confirmed, through his Counsel, that if the winding up were to be terminated he would undertake to the Court to use his best endeavours to procure the remainder of the board of Valofo to resolve to lodge an objection against the amended assessments and to appeal against any disallowance of the objections under Part IVC of the Taxation Administration Act, 1953 (Cth); and (if Valofo's board refused to undertake those steps) would apply to the Federal Court of Australia for leave to do so personally as a derivative action on behalf of Valofo at his risk as to costs under s 501 of the Act (referring to HFGC Nominees (No. 2) v Hancock as Liquidator of 246 Arabella Investments Pty Ltd (in liq) [2010] FCA 1005 at [7-10] and [21-[23]). 217As to this discretionary issue, there is a very real risk that if an order for the termination of the winding up were to be made this would simply have the effect of an insolvent company to go back into the commercial world (something said in Bidald Consulting Pty Ltd v Miles Special Builders Pty Ltd [2005] NSWSC 1235; (2005) 226 ALR 510 at [289] to be contrary to commercial morality). 218I do not consider that this is a matter where it would have been appropriate (had I otherwise been satisfied as to Mr Peter Londish's claim) to make orders of the kind sought in relation to the termination of the winding up. Derivative suit 219Next I turn to the second aspect of the relief sought by Mr Peter Londish vis a vis the Valofo parties. Mr Peter Londish seeks leave, in his capacity as a member of a related body corporate of Valofo, by reference to a one-third interest in Vesudi (the ultimate holding company of Valofo) to bring proceedings on behalf of Valofo, as sole beneficiary of the Baltarna Trust, seeking the relief in the Amended Originating Process and based on the facts pleaded in the Statement of Claim in order to reinstate trust assets of about $9m from Mr Seller and companies under his control. 220Mr Peter Londish seeks to do so in general terms on the basis of his assertion that the liquidators of Valofo have shown no interest whatsoever in doing so. In particular, Mr Bevan places emphasis on the fact that since 8 December 2009 (when the liquidators commenced proceedings against Mr Seller and the companies under his control) the liquidators have obtained no relief against Mr Seller, save for securing undertakings to inform them of his intention to pay out further trust funds to himself and/or his companies. It is asserted that the liquidators have acquiesced in Mr Seller's conduct to pay further trust funds to his companies and have failed to appear to oppose (with Mr Peter Londish) the judicial advice sought by Mr Seller and his trustee companies for the Court's imprimatur to his expenditure of further trust funds when they have been given notice of such applications. 221Mr Bevan is critical of the fact that the liquidators have formulated no statement of claim or summons against Mr Seller and his trustee companies and those of his other companies which have received about $9m in trust funds to seek the recovery of those trust funds for the benefit of Valofo (pointing to the speed with which it is said that Mr Peter Londish has prepared his pleading). 222It seems to be submitted that the liquidators have focussed only on ensuring that there are funds available for their own costs (although this is inconsistent with the submission that they have been acquiescent in funds being made available to the Trustees out of the trust fund). Mr Peter Londish asserts that the steps currently being undertaken in relation to the application for appointment to PILT and the Baltarna Trust is undertaken for the liquidators' own benefit (to secure payment of their remuneration and legal fees) rather than for Valofo's benefit. 223At the outset I must say that I cannot accept that the liquidators have behaved in any way improperly in relation to the conduct of the liquidation to date, on the evidence before me. It seems that they have quite properly obtained legal advice in relation to the conduct of proceedings and it seems to me that the choice for example as to how best to prepare for the commencement of proceedings (by examination summonses and by removing any doubts as to standing) cannot properly be criticised (whether or not that be the manner in which Mr Peter Londish may have chosen to pursue the recovery of the moneys). 224As to the specific requirements for an application for leave to bring a derivative suit, Mr Bevan submits that Mr Peter Londish has standing to support his application for leave under s 236 of the Corporations Act because he is a member of a related body corporate of Valofo via his one third interest in Vesudi, the ultimate holding company of Valofo (though in fact that interest is through another corporate entity) and is a former officer of Valofo. It is submitted that he is otherwise qualified as he sues for Valofo's benefit at his own expense and (having regard to the undertaking Mr Peter Londish proffers in connection with this leave) without any risk to Valofo as to costs. 225However, as pointed out by Mr Gleeson (and accepted by Mr Bevan), the Court does not have power to grant leave under s 237 of the Corporations Act while the company is in liquidation ( Chahwan ). Therefore, having already determined that the winding up should not be terminated, it follows that the application for leave under s 237 of the Act must be dismissed. 226Nevertheless, for completeness I address the position on the assumption that (contrary to my findings) I had been satisfied that the winding up had been terminated and therefore there was not the difficulty adverted to above in relation to Mr Peter Londish's application. 227What s 237(2) requires is that there be a serious question to be tried. A party seeking leave to bring a derivative suit does not need to prove any element of the derivative suit in order to satisfy s 237(2). 228The criteria to be considered upon an application for leave to commence a derivative suit are: the probability that the company will not itself bring the proceedings, or properly take responsibility for them; whether the applicant is acting in good faith; whether it is in the best interests of the company that the applicant be granted leave; whether there is a serious question to be tried by the court (if the applicant is applying for leave to bring proceedings rather than intervene in any proceedings to which the company is a party); and either: at least 14 days before making the application to the court, the applicant gave written notice to the company of the intention to apply to the court for leave and of the reasons for applying; or it is appropriate for the court to grant leave even though notice was not given to the company: s 237(2). 229Each of these five criteria must be satisfied ( Goozee v Graphic World Group Holdings Pty Ltd [2002] NSWSC 640; (2002) 42 ACSR 534 at 541; 20 ACLC 1502). If all five criteria are satisfied, then the court is bound to grant the application ( Fiduciary Ltd v Morningstar Research Pty Ltd [2005] NSWSC 442; (2005) 53 ACSR 732 at 735; 23 ACLC 1100). Turning then to the respective criteria, I note as follows. 230Inaction by the company - The court must be satisfied that it is probable that the company will not itself bring the proceedings or properly take responsibility for the proceedings. 231Mr Bevan submits that it is self evident that the liquidators will not bring the proceeding Mr Peter Londish seeks to bring since they have had 15 months to do so (with litigation funding) yet their only demonstrated interest in that time has been securing control of the balance of the trust fund ($1.8m) (said to be for their own pecuniary benefit). He calls in aid in this regard the fact that the liquidators have opposed Mr Peter Londish bringing the proceeding for Valofo. As to these matters, the evidence was that the litigation funding in place was for investigation of claims and not for the prosecution of claims and that Mr Lock has been attempting to secure funding from creditors (in particular from the ATO - that being the context in which the ATO's proof of debt was admitted in advance of the consideration of other proofs of debt). I am not satisfied that the securing of the trust fund has been shown to be motivated by any personal gain to the liquidators. Nor do I think the reasons for the liquidators' apparent opposition to Mr Peter Londish commencing the proceedings in the name of Valofo are motivated by a desire for no such recovery proceedings to be commenced. Rather there seems to be a well founded concern as to the position of conflict in which Mr Peter Londish finds himself and perhaps a greater faith in the conduct of proceedings by their own legal team. 232Here, there is nothing that persuades me that the liquidators do not intend to progress reasonable avenues for recovery of funds for the benefit of the company's creditors and contributories. The fact that they may not have progressed them as vigorously as Mr Peter Londish thinks they should is not to the point. I am not satisfied that the first of the criteria has been established. 233Applicant's good faith - In determining this question, the court will have regard at least to the following matters: (i) whether the applicant honestly believes that a good cause of action exists and has a reasonable prospect of success; and (ii) whether the applicant is seeking to bring the derivative action for a collateral purpose which amounts to an abuse of process ( Swansson v RA Pratt Properties Pty Ltd [2002] NSWSC 583; (2002) 42 ACSR 313, at 320). However, the inquiry concerning the applicant's good faith is not limited to these two matters ( Chahwan v Euphoric Pty Ltd [2008] NSWCA 52; (2008) 65 ACSR 661). 234In Swansson it was said (ACSR at 320-21) that it will be relatively easy for the applicant to demonstrate good faith where the applicant is a current shareholder of the company who has more than a token shareholding and the derivative action seeks recovery of property so that the value of the applicant's shares would be increased. 235It is said by Mr Bevan again to be self evident that Mr Peter Londish will sue in good faith for Valofo's sole benefit because he seeks no relief for himself . It does not seem to me that this addresses the question of Mr Peter Londish's interest in avoiding personal exposure for his conduct as a director of PILT Nominees. 236The two factors identified by the court in Swansson as being relevant to consideration of the good faith requirement in s 237(2) were applied by Barrett J in Goozee v Graphic World Group Holdings Pty Ltd [2002] NSWSC 640; (2002) 42 ACSR 534; 20 ACLC 1502. His Honour held that the applicants were acting for a collateral purpose in that the applicants' purpose in seeking to bring the derivative action was to force the directors to pay dividends or else to force the directors to arrange for the applicants' shares to be purchased. The application to bring a derivative action was therefore denied. 237Here, it is submitted by the liquidators that there may be a collateral purpose in that Mr Peter Londish has an interest in avoiding proceedings against himself for recovery of moneys obtained by him. It seems to me that this is by no means a far-fetched assertion and I cannot be satisfied that this criterion is established. 238Best interests of the company - It is for Mr Peter Londish to establish that it is in the best interests of the company that he be granted leave. Mr Bevan submits that it is plainly in Valofo's best interests to recover the moneys allegedly misappropriated from trusts of which it is sole beneficiary for the sake of its creditors and its shareholders, who are the members of the Londish family, through their equal one-third interests in Vesudi's capital. I accept that to be the case. However, I am not satisfied that the substance of the redress which Mr Peter Londish seeks to achieve for Valofo is not available by means of the suit the liquidators already appear to have under consideration. 239In determining whether an application is in the best interests of the company, it is said that the fact that the applicant has a personal interest in the outcome of the action or the applicant has personal animus against other members of the company is not significant or decisive because this would be common in the types of disputes which lead to derivative actions ( Maher v Honeysett & Maher Electrical Contractors Pty Ltd [2005] NSWSC 859; Ehsman v Nutectime Int'l Pty Ltd [2006] NSWSC 887; (2006) 58 ACSR 705). 240I am of the view that this criterion is not satisfied having regard to the apparent position of conflict which Mr Peter Londish will almost certainly face in commencing proceedings on behalf of Valofo in relation to the disputed PILT transactions and having regard to the fact that there are independent liquidators capable and apparently not unwilling to pursue any such claims as they may be properly advised to bring. (As to the cost to the company of doing so through liquidators and not Mr Peter Londish, it seems that the liquidators intend to pursue funding from an external source in any event.) 241A serious question to be tried - In order to determine whether there is a serious question to be tried, the applicant must provide the court with sufficient material to enable the court to make this determination ( Charlton v Baber , above at ACSR 46). There is the same relatively low threshold to surmount as in the case of an application for an interlocutory injunction ( Swansson v RA Pratt Properties Pty Ltd ). 242It has been said that whether there is a serious question to be tried can be answered only by reference to an infringement of some legal or equitable right or the commission of some legal or equitable wrong ( Goozee , above, ACSR at 542 and Ragless v IPA Holdings Pty Ltd (in liq) [2008] SASC 90, at [40]; (2008) 65 ACSR 700; 254 LSJS 225). 243Mr Bevan points to the facts alleged in the Statement of Claim, as supported by the evidence of Mr Peter Londish (as the former co-director, together with the principal defendant, Mr Seller, of the principal trustee, PILT Nominees, who is alleged to be responsible for the breaches of trust and other serious conduct alleged), Mr Thompson (the former principal external accountant of the Londish Group) and Mr Neil Wickenden (the current external accountant of the Londish Group), as establishing the existence of a serious question for trial. 244It was in effect accepted by the liquidators that there is a serious question to be tried as far as the claims to recover moneys by Valofo are concerned and this criterion seems to me to be satisfied. 245Notice of proceedings to company - Mr Bevans relies upon the commencement of proceedings on 1 October 2010, at which time it is said that notice of an intention to bring a proceeding by Statement of Claim on behalf of Valofo was given (the liquidators giving no consent to bring the proceeding and being insistent on an application for leave under s 237 to be brought. To the extent that this might not have been notice strictly as required, s 237(2)(e)(ii) contemplates that a court can grant leave even if the applicant has not given written notice to the company of the intention to apply for leave and of the reasons for applying. Valofo, through the liquidators, has clearly been on notice of Mr Peter Londish's intention to seek relief of this kind. Conclusion as to s 237 application 246As is apparent from the above I am not satisfied of all of the requisite criteria and hence am not bound to grant (nor do I consider it appropriate to grant) leave to Mr Peter Londish to bring the derivative proceedings. I think it more appropriate that such proceedings be left to the independent liquidators to pursue in accordance with legal advice obtained by them. Inherent jurisdiction 247In his submissions, Mr Gleeson pointed out that there had been no application by Mr Peter Londish seeking to invoke the inherent jurisdiction of the Court to grant leave to commence proceedings in the name of Valofo (whilst the company was in liquidation. In reply, Mr Bevan sought to do just that (though the claim had not been put on this basis in the Interlocutory Process), accepting that the principle in Chahwan was uncontroversial (and maintaining that this was why Mr Peter Londish had made his application under that section concurrently with an application to terminate the winding up under s 482 or to have it declared invalid under s 439C of the Act). 248Mr Bevan further maintained that Mr Peter Londish would seek leave to sue for Valofo's benefit, as an exercise of the inherent jurisdiction of the Court, (even if the winding up were not to be terminated) on the basis of the delay in commencement or formulation of any court process seeking recovery action by the liquidators against Mr Seller and his companies for Valofo's benefit. 249Reliance was placed by Mr Bevan on the decision in HFGCNominees (No. 2) v Hancock [2010] FCA 1005, where leave to bring a derivative action on behalf of a company was granted to a director where the liquidators had decided not to pursue a tax appeal for the company against the ATO. Here, however, there has been no decision by the liquidators not to pursue recovery against Mr Seller or his companies. I accept Mr Lock's evidence that he will pursue whatever causes of action he is advised to bring in the interests of the creditors and contributories of the company and I do not consider that any adverse conclusion can be reached as to the manner in which the steps have been taken to date (by proceedings first with examination summonses and then making the application in relation to PILT and the Baltarna Trust. 250While the Court's inherent jurisdiction was not invoked until closing submissions, there is no further evidence on which Mr Peter Londish relies for such an application and it was not suggested that there was any prejudice to the liquidators in it being made at a late stage of the proceedings. However, Mr Gleeson did point out that the question of standing at common law is not as broad as that now permitted under statute, noting that Mr Peter Londish is not a member of the company . He is, however, a creditor. 251As to what is required to be shown for leave to be granted in the inherent jurisdiction of the Court, in Carpenter v Pioneer Park Pty Ltd (2008) 71 NSWLR 577, Barrett J considered the early cases in which the court had allowed a creditor or member to sue in the name of a company in liquidation in the exercise of its general equitable jurisdiction. His Honour noted (at [34]) that in considering whether to exercise such discretion the court's attention should be focused on three main matters: the question whether the proceedings proposed to be pursued have some "solid foundation", in that they exhibit such a degree of merit as to be neither vexatious nor oppressive and to present reasonable prospects of success; the attitude of the liquidator and the question whether "practical considerations support the initiation of the proceedings", with particular reference to the financial protection of the liquidator and the estate of the company by means of indemnity and, if indicated, security. 252As to those factors, it seems to be accepted that the Statement of Claim filed by Mr Peter Londish establishes that there is a serious question to be tried. However, the second consideration (regarded as an important consideration by Barrett J at [31] and similarly by Austin J in Cadima Express Pty Ltd (in liq) v Deputy Commissioner of Taxation (1999) 157 FLR 424 at [46]-[47]; 33 ACSR 527 at [46] - [47]) points heavily against the grant of leave. The liquidators oppose the grant (as does the ATO which on any view of things is accepted to be, at present, the company's major creditor). The liquidators maintain their intention to proceed with claims on behalf of Valofo but with the benefit, as I understand it, of considered advice once the outcome of their application to be appointed as trustees of PILT and the Baltarna Trust is known. That does not seem to me to be unreasonable or to warrant a conclusion that they will not prosecute diligently any claims they are advised to pursue. Nor do I think it can fairly be suggested that all they are seeking to do is to recover funds to pay for their own remuneration (as seemed to be suggested on behalf of Mr Peter Londish). 253Insofar as the basis for the grant of leave is put by Mr Bevan on the criticism of the alleged inaction by the liquidators since their appointment in terms of recovery actions against Mr Seller and his companies in respect of the dissipation of the PILT assets, Mr Gleeson points to the tasks in which the liquidators have been involved in that time: in particular, the various court proceedings in which the liquidators have been engaged; the examinations conducted by the liquidators; their attempts to seeks to n egotiate an overall settlement with Mr Seller (in the context of which Mr Seller apparently asserted that there was a tax office exposure of the kind that has now emerged); the negotiation of undertakings to ensure that a significant portion of the remaining trust assets ($1.2 m) has been paid into Court; and the application to replace PILT Nominees Pty Ltd and Baltarna Pty Ltd as trustees of the various trusts. Mr Lock's evidence was that after that application is heard, the liquidators intend to investigate and (if appropriate) prosecute actions against a number of parties and he denied that if that application were to be unsuccessful he would not take further steps to seek recovery of moneys from Mr Seller (and/or other parties). 254Insofar as the application is made in the inherent jurisdiction and discretionary factors arise, it is relevant to note that Mr Peter Londish is said to be in a position of hopeless conflict, being exposed to claims in relation to the $5m from PILT assets paid to Davlon. The liquidators refer to contemporaneous documents that suggest that all or a significant portion of the amounts received by Davlon was by way of a loan for 6 months with no interest, yet only about $300,000 has been repaid. (In cross-examination Mr Peter Londish accepted that the money had been paid to Davlon but first denied that it was a loan and then suggested that part of it may have been a loan. He seems to have regarded it as to be offset against moneys otherwise due to him and only repayable if at all in that context.) The liquidators submit that if it is not a loan then there is no basis established for the payment to Davlon. 255Whatever the position in that regard, it seems to me that there is a clear conflict of interest on Mr Peter Londish's part in seeking to act in the name of Valofo (and this seemed only to be highlighted by the submission later made on his behalf that the expeditious conduct of proceedings in this court in effect mandated that his proceedings be allowed to be prosecuted since otherwise he would simply have to bring his claims by way of a cross-claim). It does not seem to be answered by the proposition that any trust funds received by Mr Peter Londish will be accounted for as a set-off in a shareholder oppression suit (particularly where there is doubt as to the level at which that shareholder oppression suit would lie - Mr Bevan seemed to suggest that the apprehension of continuing oppressive conduct was at the LNQ level upwards and emphasised that the complaint about improper purpose was one that went to the appointment not the conduct of the liquidation). 256For the liquidators it was suggested that this was an attempt by Mr Peter Londish to thwart or obstruct them in their duties as liquidators (a conclusion that Palmer J's judgment suggests that he may have been inclined to accept back in 2010). If that is the effect of the relief Mr Peter Londish is seeking, then it does not seem to me to be the point that (as emphasised in reply by Mr Bevan) that in none of the affidavits sworn by Mr Lock does he assert any concern that Mr Peter Londish's proceedings against Mr Seller and his companies prevent him from making claims for Valofo. 257Having taken into account the above matters I am of the view that the appropriate persons to commence claims for Valofo while it is in liquidation (in the absence of anything to suggest a refusal or unwillingness or inability to do so) are the liquidators appointed to conduct its winding up. I consider that there is much force in the submission by Mr Gleeson that the conflict faced by Mr Peter Londish (a conflict to which Palmer J has already adverted in his judgment in the previous proceedings) is fatal to his claim to bring an action on behalf of Valofo. 258As to the third consideration referred to in Carpenter , I simply note that criticism was made of the fact that appropriate indemnities had not been proffered to ensure the protection of the liquidators and the company and that it was not sufficient to do, as was done here by Mr Peter Londish (namely to place himself in the hands of the Court as to conditions to be imposed (if any) on the grant of leave in the inherent jurisdiction or under s 237). I note that Mr Bevan emphasised Mr Peter Londish's acknowledgement that the proceeding would be brought at his personal risk as to costs (though he would seek indemnity from the company for those costs if the proceedings were successful). However, there was no consideration of the adequacy of such an undertaking (particularly in the context of litigation that might be expected to be hard fought and costly, given what little has been put before me by way of the history of the matter to date. 259I therefore do not consider this to be a case where leave should be granted in the inherent jurisdiction of the Court. Orders 260As to the Trustees, I have already made orders in relation to those aspects of the Third and Fourth Interlocutory Processes, including the costs of the application against them. 261I now dismiss the Third and Fourth Interlocutory Processes insofar as they concern Valofo with costs. 262I order judgment for the eighth, eleventh and twelfth defendants on the Statement of Claim in proceedings (326572 of 2010) and dismiss the Amended Originating Process against them with costs. 263As to the thirteenth and fourteenth defendants, their costs of the application were sought on the basis that it was necessary for him, in effect, to maintain a watching brief in case matters were raised that affected his clients' interests. While I would have been inclined to think that his clients could have relied upon the defence mounted by the liquidators in this regard, I am persuaded that it is in order to award costs in their favour by reference to two matters: first, this is a protracted dispute and one in respect of which it is apparent that there are strong feelings within the Londish family and as individual defendants I consider that Mr Sidney Londish and Mr David Bowman were entitled to be cautious in protecting their interests in this ongoing litigious saga; and, secondly, it seems to me unlikely that the costs will be large in the scheme of things. Accordingly, I order that the plaintiff pay the costs of the thirteenth and fourteenth defendants in relation to the Third and Fourth Interlocutory Processes. ********** 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. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 05 August 2011