Supreme Court New South Wales Medium Neutral Citation: In the matter of AT Air Group Pty Limited (in liq) [2012] NSWSC 1508 Hearing dates: 30 November 2012 Decision date: 07 December 2012 Jurisdiction: Equity Division - Corporations List Before: Black J Decision: Parties to be heard further before orders are made. Catchwords: CORPORATIONS - Winding up - Corporations Act 2001 (Cth) s 477(2B) - Application for approval for entry into deed of assignment - Whether entry into deed of assignment is a proper exercise of power and not ill advised or improper on the part of the liquidator - Whether error of law or lack of good faith in liquidator's exercise of power - Application for release from undertakings given in support of an interlocutory order - Material change in circumstance since undertakings were given. Legislation Cited: - Corporations Act 2001 (Cth) Pt 5.3A, ss 477(2B), 553, 553C Cases Cited: - Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc [1981] HCA 39; (1981) 148 CLR 170 - AT Air Group Pty Ltd [2012] NSWSC 774 - Ballard v Multiplex Ltd [2008] NSWSC 1019; (2001) 68 ACSR 208 - Barton v Atlantic 3 Financial (Australia) Pty Ltd [2004] QSC 376; (2004) 212 ALR 348 - Chen v Karandaris [2002] NSWCA 412 - Empire (Aust) Nominees Pty Ltd v Vince [2002] VSC 324; (2000) 34 ACSR 167 - Gye v McIntyre [1991] HCA 60; (1991) 171 CLR 609 - Johnson v Gore Wood & Co (2000) UKHL 65; [2002] 2 AC 1; [2001] 2 WLR 72 - Pitt-Owen v Lenin [2006] NSWSC 748 Re AT Air Group Pty Ltd [2012] NSWSC 774 Re McGrath & Anor (in their capacity as liquidators of HIH Insurance Ltd) [2010] NSWSC 404; (2010) 78 ACSR 405 - Venetian Nominees Pty Ltd v Conlan (1999) 17 ACLC 301 - VPlus Holdings Pty Ltd v Bank of Western Australia Ltd [2012] NSWSC 1327 Category: Interlocutory applications Parties: AT Air Group Pty Limited (in liq) (First Plaintiff) Ross Seller (Second Plaintiff) Aquatic Air Pty Ltd (Third Plaintiff) Avtex Air Services Pty Ltd (Fourth Plaintiff) Dieter Siewart (First Defendant) Liesolotte Siewart (Second Defendant) Heron Airlines Travel Pty Ltd (Administrator appointed) (Third Defendant) Wingaway Air Pty Ltd (in liquidation) (Fourth Defendant) Representation: Counsel: R.D. Marshall (Third and Fourth Plaintiffs) B. DeBuse (Defendants) Solicitors: Bartier Perry (Third and Fourth Plaintiffs) Marsdens (Defendants) C. Brown (Interested Parties) File Number(s): 12/169096 Judgment 1By Interlocutory Process dated 5 November 2012, the Applicant and Third Plaintiff, Aquatic Air Pty Limited ("Aquatic") applies for an order that the First, Second and Third Plaintiffs be released from undertakings given to the Court on 25 June 2012 ("Undertakings") to the extent necessary to permit them to enter into a proposed Deed of Assignment in favour of Aquatic, in respect of a causes of action of the First Plaintiff, AT Air Group Pty Limited ("AT Air") against the Defendants, Mr Dieter Siewart and others. Aquatic also seeks approval, under s 477(2B) of the Corporations Act 2001 (Cth) for AT Air to enter into the proposed Deed of Assignment. Factual background 2I should briefly set out something of the factual background to the proceedings, which I do not understand to be contested for the purposes of this application. 3Mr and Mrs Siewart owned all shares in three companies which carried on an airline business, Wingaway Pty Limited ("Wingaway"), Heron Air Transport Pty Limited ("Heron") and Avtex Air Services Pty Limited ("Avtex"). Following negotiations commencing in January 2010, agreements were entered on 22 July 2011 providing for the sale of the shares in Wingaway and Heron to AT Air for $2.3 million ("Main Share Sale Agreement") and for the sale of the shares in Avtex to AT Air for $200,000 ("Avtex Share Sale Agreement"). The Main Share Sale Agreement provided for a deposit of $200,000, of which $100,000 was to be paid on 22 July 2011 and the balance by 31 October 2011, a further lump sum payment of $800,000 and the payments of the balance by instalments. The Share Sale Agreements provided that control of the bank accounts of Wingaway, Heron and Avtex would pass to AT Air or its nominee. The shares in Wingaway, Heron and Avtex were transferred to AT Air on that date and Mr Ross Seller became the sole director of each of the companies. 4It appears that Mr Seller sought to arrange finance secured over the companies' debts in order to make the lump sum payment due to the Siewarts under the Main Share Sale Agreement and discussions also took place as to, in the alternative, further vendor finance from the Siewarts. Mr Seller claims that Mr Siewart informed him that $110,000 had been transferred by the Siewarts from the companies' accounts to them since 22 July 2011, and was to be treated as part payment for the shares transferred under the Main Share Sale Agreement. The Plaintiffs contend that, in fact, $554,428 had been transferred from the bank accounts of Wingaway and Heron to the Siewarts by 13 October 2011. It appears that the Siewarts will contend that those transfers were known to Mr Seller and no objection was taken to them. 5An arrangement for further vendor finance rather than debtor finance proceeded, and a Security Agreement dated 13 October 2011 ("Security Agreement") was executed between Aquatic, Wingaway, Heron, AT Air and the Siewarts. The Security Agreement contained an acknowledgement that $310,000 had been received from AT Air on account of the purchase price for the shares in Wingaway and Heron, reflecting a deposit of $200,000 and the amount of $110,000 to which I referred above; provided for payment of the balance by instalments; and acknowledged that, as at 13 October 2011, $1,190,300 was owed in respect of the purchase of the Wingaway and Heron shares. This amount was substantially less than the balance of the purchase price less the monies received. AT Air granted a share option over its shares in Wingaway and Heron in favour of the Siewarts and Aquatic granted a call option over a property situated at Mosman ("Mosman Property"), the option price being an amount nominated by the Siewarts that was sufficient to discharge the bank loan secured by mortgage over the Mosman Property. It appears that an amount of $700,000 credited against the purchase price reflecting the value attributed to the call option granted to the Siewarts by Aquatic over the Mosman Property. 6Mr Seller contends, in these proceedings, that he relied on the representation made by Mr Siewart as to the amount that had been withdrawn from the companies' bank accounts in entering into these arrangements, including AT Air granting a share option over its shares in Wingaway and Heron and Aquatic granting a call option over the Mosman Property and, had he known that additional monies had been withdrawn from the companies' bank accounts, he would not have entered into those arrangements and would instead have taken up debtor finance from a third party. Mr Seller contends that he first became aware of the amounts paid to the Siewarts from the bank accounts of Wingaway, Heron and Avtex on 26 October 2011. 7The Siewarts rely on the judgment of Brereton J in Re AT Air Group Pty Ltd [2012] NSWSC 774, where his Honour varied, but declined to set aside, a statutory demand issued by the Siewarts. However, his Honour there declined to find that the representational claims made by Mr Seller in the proceedings were not arguable, and instead proceeded on the basis that, if the Security Agreement was set aside for misrepresentation, that would result in the parties being restored to the position under the Main Share Sale Agreement, under which AT Air was indebted to the Siewarts for the sum of $800,000 and some further amounts. 8A dispute subsequently arose between the parties. It is not necessary to trace its complex history at length. In summary, it appears that the Siewarts, purportedly exercising rights under the relevant arrangements, transferred the shares in Wingaway and Heron from AT Air to themselves and Mr Siewart was appointed director of those companies in place of Mr Seller; an administrator was subsequently appointed to Wingaway and Heron under Pt 5.3A of the Corporations Act; and the Siewarts served a statutory demand on AT Air Group on 14 February 2012. 9The proceedings the subject of this application were commenced by Summons on 28 May 2012 and a Statement of Claim was filed on 12 June 2012. AT Air and Aquatic relevantly claim declaratory and other relief to set aside the Security Agreement and associated securities, including the call option over the Mosman Property. 10On 25 June 2012, the Court made an order by consent restraining dealings with the Mosman Property and the Plaintiffs (including AT Air, Aquatic and the Sellers) gave the Undertakings so as to preserve the Siewarts' claimed rights to that property under the call option, namely: "Not to transfer or deal with the property including entry into any Residential Tenancy Agreement or use it or allow the property to be used as security and will not encumber or draw on any present encumbrance or security in relation to the property in any way." By this application, the Plaintiffs seek to be released from Undertakings to the extent necessary to give security over the Mosman Property to the Liquidator for the obligations under the proposed Deed of Assignment. 11AT Air was placed into provisional liquidation on 29 June 2012, shortly after the Court varied that statutory demand, in an application made by Aquatic to the Federal Court of Australia and was placed in liquidation on 25 July 2012. Wingaway was also placed in liquidation and a Deed of Company Arrangement was entered into in respect of Heron. Whether entry into the Deed of Assignment should be approved 12It is convenient to deal first with the question of approval for entry into the Deed of Assignment, and then with the question of release of the Plaintiffs from the Undertakings. 13The proposed Deed of Assignment provides for assignment of AT Air's causes of action against the Siewarts to Aquatic, in consideration of an immediate non-refundable payment of $10,000 to be paid by Aquatic to the Liquidator; the waiver of Aquatic's entitlement to recover costs of $11,400 against AT Air; and payment to AT Air of 10% of any damages, judgment or compensation awarded in respect of AT Air's causes of action (subject to a credit to the Siewarts in respect of a specified claim, to which I refer below) ("Damages Proportion"), with Aquatic's obligations to be secured by a personal guarantee given by Mr Seller and by security. 14Clause 6.2 of the proposed Deed of Assignment provides for Aquatic to indemnify AT Air and the Liquidator against actions, claims etc relating to or arising in respect of the prosecution by Aquatic of the proceedings. Clause 8.1 requires Aquatic to pay to AT Air, inter alia, the Damages Proportion (as defined) within 14 days of receipt of any portion of the Damages (as defined). The term "Damages Proportion" is defined as 10% of the Damages recovered after "Giving Credit". The term "Giving Credit" refers to clause 4.1 of the Deed of Assignment, which provides that Aquatic will only enforce a judgment against the Siewarts in respect of AT Air's relevant causes of action to the extent that it exceeds any money judgment obtained against AT Air in proceedings brought by the Siewarts in respect of AT Air's alleged default under the Main Share Sale Agreement. Clause 4.2 also requires Aquatic to give any appropriate undertakings to the Court to ensure that the credit contemplated by clause 4.1 is given and the Siewarts are not prejudiced by being unable to claim a set-off under s 553 of the Corporations Act for the Siewarts' verdict had AT Air successfully prosecuted its claim. I will address an issue arising in respect of the treatment of that section below. 15By clause 11.2 of the proposed Deed of Assignment, Aquatic charges the Collateral to AT Air and the Liquidator to secure payment of all monies owed by it under the Deed. The term "Collateral" is defined as: "All present and after acquired property, interest, rights and proceeds in respect of which [Aquatic] has at any time sufficient rights to grant a Security Interest or Charge, including all of the following: (a) The assets and undertakings of [Aquatic]; (b) The goodwill of the business of [Aquatic]; and (c) The uncalled and called but unpaid capital of [Aquatic]." It is at least arguable that the Collateral would include Aquatic's interest in the Mosman Property, dealings with which are presently constrained by the Undertakings. 16Aquatic's application is supported by the Liquidator, whose affidavit in support of the application was read by Aquatic. By that affidavit, the Liquidator expresses the view that the assignment is in the best interests of AT Air's creditors because AT Air is itself unable to fund the prosecution of the relevant causes of action; the assignment is the only proposal made to AT Air which will allow it to realise value for those causes of action; and that step will give AT Air a right to a proportion of the damages obtained without further expense being incurred by it. Approval for the Deed of Assignment is required under s 477(2B) of the Corporations Act because, in the Liquidator's view, it will take longer than 3 months to prosecute the proceedings referred to in that affidavit to final judgment and recover any available damages. 17Section 477(2B) of the Corporations Act provides that, except with the Court's approval or the approval of a committee of inspection or a resolution of creditors, a Liquidator must not enter into an agreement on a company's behalf if the term of that agreement may end, or obligations of a party to the agreement may be discharged by performance, more than three months after entry into the agreement. In granting approval for the entry into such an agreement, the Court is not concerned with matters of commercial judgment but is concerned to be satisfied that the entry into the agreement is a proper exercise of power and not ill advised or improper on the part of the Liquidator: Empire (Aust) Nominees Pty Ltd v Vince [2000] VSC 324; (2000) 35 ACSR 167; Re McGrath & Anor (in their capacity as liquidators of HIH Insurance Ltd) [2010] NSWSC 404; (2010) 78 ACSR 405. 18The Siewarts advance several criticisms of the Liquidator's decision to enter into the proposed Deed of Assignment. First, the Siewarts contend it is inappropriate for the Liquidator to assign the causes of action where his evidence is that he cannot assess its value. I do not accept that submission. A substantial difficulty for the Liquidator assessing the value of the causes of action appears to reflect its character as a representational case depending on claims of oral representations made by Mr Seller, which a third party litigation funder has emphasised in declining to fund the claim. That difficulty cannot be resolved by further work on the Liquidator's part, and seems to me to support his decision to assign the causes of action for the best (and in this case, the only) offer available for it. Second, the Siewarts contend that the Liquidator should not assign the causes of action, but instead permit Aquatic to pursue its own causes of action and defer the commencement of any proceedings by AT Air until the outcome of Aquatic's claim is known. I also do not accept that submission. First, if AT Air's claims are not pursued in the proceedings brought by Aquatic, then neither it nor the Siewarts are likely to be bound by the result of the determination of those proceedings in respect of those claims, and the Liquidator may be no further advanced in predicting the outcome of proceedings brought by AT Air at the conclusion of the proceedings brought by Aquatic; second, the Liquidator would be at risk in respect of the limitations period in respect of the claims, as well as by the inevitable deterioration of the quality of evidence available as a result of delay in bringing the proceedings; third, there is no reason to think that third party litigation funders would be any more willing to fund the claim in several years time than they are now; and, fourth, that course would unreasonably prolong the liquidation for no obvious benefit. 19A question was also raised before me as to whether the Liquidator needs to be satisfied, in respect of the assignment, that mutual dealings had been properly set-off under s 553C of the Corporations Act. That section relevantly applies where there have been mutual debts or mutual dealings between an insolvent company that is being wound up and a person who seeks to have a debt or claim admitted against the company, and provides for an account to be taken of what is due between those parties, for set-off of the respective amounts due, and that only the balance of the account is admissible to proof against the company or is payable to the company, as the case may be. The set-off under s 553C operates at the commencement of the winding up: Gye v McIntyre [1991] HCA 60; (1991) 171 CLR 609; Barton v Atlantic 3 Financial (Australia) Pty Ltd [2004] QSC 376; (2004) 212 ALR 348 at [40]ff; (rev'd on another point, [2010] QCA 223); Pitt-Owen v Lenin [2006] NSWSC 748 at [11]. It follows that any assignment effected by the Deed of Assignment will, in any event, be for the balance due by the Siewarts to AT Air under the causes of action, after allowing for any sum due by AT Air to the Siewarts and set-off under s 553C of the Corporations Act, because the Deed of Assignment will have effect only after the winding up has begun. This is, as Mr Marshall points out, sufficient to dispose of any suggestion that the assignment can prejudice the Siewarts' position so far as s 553C of the Corporations Act is concerned. I am therefore unable to see any inconsistency between the proposed Deed of Assignment and the operation of s 553C of the Corporations Act, which will continue to have effect in accordance with its terms, quite apart from the additional provisions of the Deed of Assignment that are intended to preserve that effect. 20Generally, I can see no error of law in the Liquidator's reasoning in his decision to assign AT Air's causes of action, since it is well established that it is open to a Liquidator to assign a right of action. I can see no lack of good faith in the Liquidator's exercise of the relevant power and no good reason to decline to approve that exercise of power in the interests of the expeditious and beneficial winding up of the company. The Liquidator has separate legal representation in respect of the matter. There is evidence that AT Air's only substantial asset is the causes of action and that the Liquidator cannot fund the costs of the proceedings for AT Air; he has been unable to obtain funding for that causes of action from third party litigation lenders and has sought but not obtained a competing offer from the Siewarts for an assignment of the causes of action; and has sought to protect any right of set-off available to the Siewarts under the terms of the Deed of Assignment. I can also see no error or lack of good faith in the Liquidator's assessment that it is preferable for AT Air to assign the causes of action, on the best terms available, so as to realise some value from it for its creditors, rather than allow the causes of action to lapse because he cannot fund the proceedings. 21The Siewarts also contend that the application for approval under s 477(2B) of the Corporations Act cannot be brought by Aquatic and could only be brought by the Liquidator. As I noted above, the application in this case is brought by Aquatic although it is supported by an affidavit of the Liquidator. The parties have drawn my attention to an observation in Venetian Nominees Pty Ltd v Conlan (1999) 17 ACLC 301 at [8]-[9], where the applicants sought the appointment of an additional Liquidator for specified purposes and also sought approval for that additional Liquidator to enter into an indemnity agreement with the applicants. Master Sanderson indicated that he would make the appointment of the additional Liquidator and that, once appointed, the additional Liquidator could apply under s 477(2B) for leave to enter into the indemnity agreement. Master Sanderson observed that: "That is an application which must be considered on its merits and it is an application which can only be made by a properly appointed liquidator. ... It is only when the liquidator wishes to enter into an agreement of the nature specified in [s 477(2B)] that application is to be made to the Court. Then the Court can empower the liquidator to enter into the agreement. It cannot force him to do so - the sub-section is permissive, not mandatory. It therefore seems to be that it is the liquidator who must apply to the Court under s 477(2B). ..." 22In my view, Master Sanderson's decision in that case is plainly correct, because no occasion could arise for the grant of approval for an indemnity agreement by the additional Liquidator under s 477(2B) until the additional Liquidator had in fact been appointed, and, as Master Sanderson noted, such approval could only be granted if the additional Liquidator in fact sought to enter into that indemnity agreement and wished to obtain the Court's approval to do so. I do not think that it follows from these propositions, however, that only the additional Liquidator could have made the relevant application. I can see no reason, in principle or practice, why such an application could not have been made by the other parties to the agreement, after the additional Liquidator had been appointed and in circumstances that he or she had reached a decision to enter into the indemnity agreement and indicated that he or she sought approval from the Court to do so, for example by filing an affidavit in support of the application before the Court. 23Section 477(2B) of the Corporations Act does not specify who has standing to make an application for the approval contemplated by the section; it is, instead, a prohibition on the Liquidator taking a particular step unless that approval had been obtained. Plainly, such an application may be brought by the Liquidator and applications of that kind are commonplace. I can see no reason, in principle, why another interested party, including at least a party to the proposed agreement, could not bring such an application. In my view, the limitation on the circumstances in which an application may be brought under that section depends less on the identity of the applicant than on the fact that the Court's approval can only be obtained for an agreement that a Liquidator in fact proposes to enter into, if the relevant approval is given. It would not, for example, be open to a creditor or party to an agreement to bring an application under that section for approval of an agreement that it contends that a Liquidator should enter into, where the Liquidator does not wish to enter into that agreement. Whether the Plaintiffs should be released from the Undertakings 24The release from the Undertakings is sought because, as I noted above, the terms of the proposed Deed of Assignment provide in clause 11.2 for the giving of security over the Collateral in favour of the Liquidator, to support an indemnity contained in clause 6.2 of the Deed of Assignment and the obligation to pay the proportion of damages in clause 8.2 of the Deed of Assignment. The Siewarts point out that the grant of the proposed security to the Liquidator would also be in breach of a term of the Security Agreement providing that Aquatic would create no further interests in the Mosman Property. 25The Court has power to release a party from an undertaking given in support of an interlocutory order, notwithstanding the absence of the other party's consent, because it remains in control of its interlocutory orders, but such a release is typically only appropriate where "new facts come into existence or are discovered which render its enforcement unjust": Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc [1981] HCA 39; (1981) 148 CLR 170 at 177-178. Aquatic contends, and I accept, that there has been a material change of circumstances since the Undertakings were given, since AT Air was then under the control of Mr Seller and is now in liquidation, and it is now apparent that the Liquidator appointed to AT Air does not have funds to prosecute the causes of action and wishes to assign that causes of action in a manner which was not contemplated at the time the Undertakings were given. 26However, the questions whether the continuance of the Undertakings is unjust and whether the release of the Plaintiffs from the Undertakings is appropriate on its merits raise greater difficulty. The critical step in Aquatic's argument in favour of relief from the Undertakings is set out in their written submissions as follows: "The security granted by Aquatic in respect of the Mosman Property only becomes effective if Aquatic obtains an award of damages against the Siewarts in these proceedings in prosecuting AT Air Group's cause of action against the Siewarts. In order for that to occur, Aquatic must have won (on both its own claim and on AT Air's claim) and the Siewarts must have lost. It is an 'all or nothing' case for Aquatic in its own right and as assignee of AT Air's case. If the Siewarts lose, they lose any interest in the Mosman Property, as the securities of 13 October 2012 would be set aside. In that event, there will be no harm to the Siewarts in AT Air (and [the liquidator]) having an interest in the Mosman Property to secure payment by Aquatic of the relevant percentage of the damages payable to Aquatic by the Siewarts." This submission was elaborated by Mr Marshall, who appears for Aquatic, in oral submissions. 27I am not satisfied that I can accept that submission. Mr DeBuse, who appears for the Siewarts, points out that AT Air seeks to recover loss allegedly suffered by AT Air as a result of the allegedly unauthorised transfers from the bank account of Wingaway, Heron and Avtex in its claim against the Siewarts, and the claim extends to those transfers severally. A proposed Amended Statement of Claim, which Aquatic seeks leave to file if this application is determined in its favour, was in evidence before me. The proposed Amended Statement of Claim pleads the transfers from accounts of Wingaway, Heron and Avtex to Mr Siewart's bank account between 8 July 2011 and 25 October 2011 and the relief sought includes a claim for damages in that regard. 28While the Plaintiffs' case is that none of those payments were authorised, and the Siewarts' case is that all of them were authorised or at least known and accepted by Mr Seller, the possibility must exist that the Court might find that, for example, some earlier payments were known and accepted and some later payments were not. The Plaintiffs have not suggested that they would not put that proposition as an alternative case. Mr Marshall put at one point that AT Air had no basis to recover loss suffered by reason of monies withdrawn from bank accounts of its subsidiaries, which would be "reflexive" of the loss suffered by the subsidiaries. That proposition has force, although it is odd that it should be put by the proponent of the causes of action: Johnson v Gore Wood & Co (2000) UKHL 65; [2002] 2 AC 1; [2001] 2 WLR 72 at 121; Chen v Karandaris [2002] NSWCA 412 at [34]-[53]; Ballard v Multiplex Ltd [2008] NSWSC 1019; (2001) 68 ACSR 208; VPlus Holdings Pty Ltd v Bank of Western Australia Ltd [2012] NSWSC 1327. However, I do not think that I should proceed on that basis in this application while AT Air (and Aquatic as its proposed assignee) maintains a pleading to recover such loss, which necessarily implies that it contends that it has a reasonably arguable basis for that pleading. 29A risk therefore exists that Aquatic would recover damages against the Siewarts in respect of the causes of action assigned by AT Air in respect of the allegedly unauthorised payments, and that the Liquidator would be entitled to a share of those proceeds which would be secured under the Deed of Assignment, notwithstanding that the Security Agreement and associated securities had not been set aside. Mr DeBuse submits, and I accept, that the Siewarts should not be exposed to the risk that the Security Agreement and the securities, although not set aside, are exposed to a competition with later created securities, contrary to the undertaking given by the Plaintiffs. Mr Marshall responds that, in that situation, the security granted to the Liquidators would rank behind the security granted to the Siewarts in any event. However, if that is the case, then that should be made clear in the terms of the Deed of Assignment rather than left as a matter for a future controversy. 30I am not satisfied that I should vary the undertaking in the manner presently proposed, which seems to me to have a potential for adverse effects on the Siewarts in circumstances beyond those identified by the Plaintiffs as the rationale for the variation. The course for which the Plaintiffs contend has the difficulty, to which Mr DeBuse referred, that it would potentially deprive the Siewarts of the benefit of the undertakings not to grant further security which they have under the Security Agreements, and the Undertakings given to the Court in support of the injunction, without any finding having been made on the merits as to whether the Security Agreement and associated securities could be set aside as Aquatic contends. I should note, however, that these adverse effects could potentially be addressed by an amendment to the security proposed to be granted under the Deed of Assignment to make clear that it is only effective if the Security Agreement and associated securities are set aside by the Court, or to make express that the Liquidator's claim under that security would be subordinated to the Siewarts' claim if the Security Agreement and associated securities are not set aside. I will afford the Plaintiffs an opportunity to indicate whether that course is sought to be pursued. 31The Siewarts contend that, if there has been a material change of position, it should result in the discharge of the injunction granted which the Undertakings were given to support. I do not consider that it is appropriate to deal with any application to set aside the injunction which was not squarely raised in this application. If the Siewarts seek to set aside the injunction, then the proper course will be for a separate application in that regard to be filed and determined. Summary 32In summary, I would grant approval, under s 477(2B) of the Corporations Act 2001 (Cth) for the Liquidator to enter into the Deed of Assignment. I would not, however, release the Plaintiffs from the Undertakings to permit the Plaintiffs to give the security contemplated by clause 11.2 of the Deed of Assignment in its present form. I will hear the Plaintiffs as to whether they seek to amend the Deed of Assignment in the manner noted in paragraph 30 above and the Liquidator as to whether he seeks approval for entry into the Deed of Assignment in that amended form. If the Plaintiffs and Liquidator seek to pursue that course, I will also hear any submissions by the Defendants as to that matter. ********** 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: 18 December 2012