In the matter of Banksia Securities Limited (in liq) (recs and mgrs apptd)

By a Third Further Amended Interlocutory Process filed on 3 October 2025, Mr Lindholm as Special Purpose Receiver (“SPR”) of Banksia Securities Ltd (recs and mgrs apptd) (in liq) (“BSL”) seeks an order that he be discharged from appointment as SPR and discharged and released from liabilities in connection with that appointment, including liabilities arising out of certain proceedings in the Supreme Court of Victoria (“Banksia Proceedings”). That relief is sought subject to an exclusion to permit him to complete a final distribution to debenture holders of funds that he presently holds and any further funds that he may receive in connection with the receivership. Second, the SPR seeks an ancillary order that the requirement under r 26.5 of the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) for accounts be dispensed with. Third, the SPR seeks an order that he be appointed as receiver to any dividend or distribution from the liquidation of Lehman Brothers Australia Ltd (“Lehman”) for the purpose of getting in and distributing such funds to the debenture holders of BSL as part of any final distribution made by the SPR. Fourth, the SPR seeks orders approving his past and prospective remuneration in respect of the completion of the receivership.

By a Notice of Motion filed on 5 September 2025, Mrs Botsman and 28 other persons (“Victorian Applicants”) who are named in a schedule to an appearance filed by them in these proceedings on 30 July 2025 and are also named as Plaintiffs in a Summons dated 4 July 2025 filed in proceedings brought by them in the Supreme Court of Victoria (“Section 29 Proceeding”), seek the Court’s leave, nunc pro tunc, to continue the Section 29 Proceeding.

Three, or possibly four, substantial questions arise in respect of the application brought by the Victorian Applicants and the release sought by the SPR. The first question is whether, as the Victorian Applicants contend, they can bring the Section 29 Proceeding against the SPR, although he is a receiver appointed by this Court under s 283HB of the Corporations Act 2001 (Cth) (“Act”), without leave of the Court. Second, Dr Orow, who appears for the Victorian Applicants, identifies a related question whether the answer to the first question is different because of the nature of the Section 29 Proceeding, where that proceeding is brought by the Victorian Applicants under s 29 of the Civil Procedure Act (Vic) (“CPA”) or, as he seeks to re-characterise it, is an invitation to the Supreme Court of Victoria to make orders against the Respondents to that proceeding, including the SPR, of its own motion. I will conclude below that the answer to both those questions is no, for the reasons that I set out below. The third question is whether the Victorian Applicants should be granted leave to continue the Victorian proceedings. I will conclude, for the reasons set out below, that the Victorian Applicants should not be granted that leave. The fourth question is whether the SPR should now be released, which raises a contested question as to whether the Court has power to make such an order. That question is otherwise consequential on the answer to the first three questions where no other claims are pending or threatened against the SPR and the receivership is substantially complete.

The Court appointed a contradictor (“Contradictor”) in this application, Mr Izzo SC, with who Ms Trahanas appeared. They made helpful submissions as to relevant issues, outlining the Contradictor’s reasoning as to those issues. The Contradictor was largely supportive of the ultimate position taken by the SPR, which it considered was in the interests of debenture holders generally, although it took issue with one aspect of the SPR’s reasoning which I address below. I address the Contradictor’s submissions below.

I recognise that Dr Orow noted that the Contradictor’s submissions largely support the position and submissions made by the SPR. That position was only partly true, so far as the Contradictor departed from the SPR’s view as to, for example, abuse of process. Mr Izzo also made clear that, rightly, the Contradictor understood its role to be directed to protecting debenture holders’ interests, particularly as to any matter where there may be a potential conflict between the interest of the SPR and the interest of debenture holders. It is properly open to a contradictor, once it has considered available arguments to the contrary and concludes that a step is in the interests of the debenture holders or is legally justified, to advise the Court of its view. There can be no suggestion that the Contradictor did not properly undertake its role here.

I now turn to the factual background to the application, which I have drawn in part from the many earlier decisions in which this Court has addressed issues arising in the special purpose receivership of BSL, most recently my decision in Re Banksia Securities Ltd (in liq) (recs and mgrs apptd) [2025] NSWSC 697 (“BSL 2025”). BSL operated as a non-bank lender and raised monies from the public by issuing debentures to investors pursuant to prospectuses and product disclosure statements and advanced funds raised from debenture holders to third party borrowers for property investment and development purposes. BSL failed following a merger with another non-bank lender. Representative proceedings were then brought by Mr Laurence Bolitho against, inter alia, BSL (“Bolitho Proceedings”) which, inter alia, claimed damages in respect of misleading statements and omissions in various prospectuses issued by BSL and also claimed damages under s 283F of the Act for breach of BSL’s obligation, under s 283BB of the Act, to conduct its business in a proper and efficient manner in accordance with the trust deed. The receivers of BSL also brought proceedings (“BSL Proceedings”) against, inter alia, The Trust Company (Nominees) Limited (“TrustCo”) in the Supreme Court of Victoria. The outcome of the two proceedings, and any settlement of them, was obviously connected I will refer to them together as the “Banksia Proceedings.”

By orders made on 30 September 2015 and varied on 29 February 2016, this Court appointed Mr Lindholm and Mr McCluskey (who has since retired) as joint and several special purpose receivers of specified property of BSL, including BSL’s rights and entitlements in proceedings in the BSL Proceedings. Those orders were made pursuant to s 283HB of the Act, in the circumstances summarised in the judgments in Re Banksia Securities Ltd (in liq) (recs and mgrs apptd) [2015] NSWSC 1378 and Re Banksia Securities Ltd (in liq) (recs and mgrs apptd) [2016] NSWSC 357 (“BSL 2016”).

The Banksia Proceedings were subsequently settled as against TrustCo, subject to Court approval and later against other parties (“Banksia Settlement”). An application to approve the settlement was heard on 30 January 2018 (“Approval Hearing”) in the Supreme Court of Victoria where the Court made orders approving that settlement, for reasons set out in Re Banksia Securities Ltd (recs and mgrs apptd) (in liq) (No 2) [2018] VSC 47. Mrs Botsman, who was a debenture holder, appealed against that decision in the Court of Appeal of the Supreme Court of Victoria and sought orders setting aside the approval of that settlement. By its judgment in Botsman v Bolitho (2018) 57 VR 68; [2018] VSCA 278 (“Bolitho VSCA”), the Court of Appeal of the Supreme Court of Victoria declined to set aside the settlement but allowed Mrs Botsman’s appeal against a litigation funding commission payable to a company (“AFP”) associated with the late Mr Mark Elliott and the legal costs payable in the Bolitho Proceedings and remitted the proceedings as to that commission and legal costs and other matters (“Remitter”) to another judge of the Supreme Court of Victoria.

Two of the Counsel who appeared in the Bolitho Proceedings, Mr Norman O’Bryan and Mr Michael Symons; the solicitor who had represented Mr Bolitho and his firm, Mr Anthony Zita and Portfolio Law; Mr Alex Elliott, who is the late Mr Mark Elliott’s son; and a costs consultant, Mr Trimbos, were subsequently joined as defendants to the Remitter. By his judgment in Bolitho v Banksia Securities Ltd (No 18) (remitter) [2021] 69 VR 28 (in an abbreviated version); [2021] VSC 666 (in a longer version) (“Remitter Judgment”), Dixon J reviewed, inter alia, the Court’s earlier decision in Bolitho v Banksia Securities Ltd (No 4) [2014] VSC 582 (“Bolitho No 4”) relating to Mr Elliott’s attempt to act, broadly, as both solicitor in and funder to the Bolitho Proceedings; the initial partial settlement of the Banksia Proceedings and the subsequent TrustCo Settlement, including the approach taken by Mr Elliott in negotiating the relevant settlement deed (“TrustCo Settlement Deed”); the manner in which the Approval Hearing was conducted; and the appeal from the approval of the settlement, including the improper steps that had been taken by AFP and Mr Elliott in seeking to dissuade Mrs Botsman from pursuing that appeal. His Honour also observed (at [3]) and I keep firmly in mind that:

I also bear in mind that Dixon J recognised (at [2129]) that at least one matter, namely whether the legal representatives for some of the parties in the Remitter had appropriately discharged their obligations to the Court, went beyond the scope of the Remitter. It appears that matter is to be pursued in the Section 29 Proceeding in a manner which is not affected by the outcome of this application so far as it concerns the SPR. In the result, Dixon J held that the Defendants to the Remitter must jointly and severally pay compensation of $11,700,127, as to which post judgment interest of $713,625.65 had accrued as at 27 July 2022 and continued to accrue to the SPR for the benefit of BSL debenture holders and costs under various indemnity costs orders made in favour of the SPR. An appeal from that decision by one party was subsequently dismissed for want of prosecution.

It is not clear that the Victorian Applicants go so far, in this application or in the Section 29 Proceeding, as to assert that the SPR, rather than AFP, Mr Elliott and Counsel and the solicitor acting for Mr Bolitho in those proceedings, all of which were Defendants in the Remitter Proceedings, were party to the attempted “division of the spoils” or to the dishonourable conduct or obfuscation or concealment to which Dixon J referred, or had “stood by” in the manner to which his Honour also referred. Generally, Dr Orow was conscious of his professional obligations and refrained from directly making such an allegation. I should record that the minimal evidence led by the Victorian Applicants in this application provided no basis for such an allegation.

Subsequently, in Re Banksia Securities Ltd (recs and mgrs apptd) (in liq) [2022] NSWSC 1106 (“BSL 2022”), I directed the SPR that he was then justified in not accepting a global settlement proposal put by the judgment debtors in respect of the Remitter Judgment. In my further judgment in BSL 2025, I made orders directing the SPR that, as events had developed, he was now justified in settling the remaining proceedings.

As I will note below, Mrs Botsman and her son had expressed discontent as to aspects of the special purpose receivership for a significant time. Mr Botsman provided a lengthy draft of the claims to be made in the Section 29 Proceeding to the SPR, presumably on Mrs Botsman’s behalf, on 3 December 2024, although that draft advanced wider claims than were later brought. As I noted above, Mrs Botsman and the other Victorian Applicants have now commenced those proceedings against, inter alia, the SPR, and I will address the relief they seek in those proceedings below. The issue raised in this application, as to the status of those proceedings, will determine whether a final distribution can now be made to BSL’s debenture holders or whether that distribution will be further delayed, in whole or in part, likely for a substantial further period.

The SPR reads detailed affidavit evidence and tenders several exhibits in this application, with some of those affidavits and some of those exhibits being read or tendered subject to orders made under the Court Suppression and Non-Publication Orders Act 2010 (NSW). I will now refer to those affidavits and relevant exhibits, although I will only deal with the affidavits and exhibits that are the subject of suppression orders in relatively general terms

By an affidavit dated 4 December 2024, Mr Kingston, a solicitor acting for the SPR, exhibited correspondence with, inter alia, the Australian Securities and Investments Commission (“ASIC”) and with Mr Botsman in respect of the then proposed form of the Section 29 Proceeding. By his further affidavit dated 18 December 2024, Mr Kingston addressed further correspondence with Mr Botsman, which included Mr Botsman’s contention that this application should be determined in the Supreme Court of Victoria rather than in this Court, and with ASIC.

By his affidavit dated 14 February 2025, the SPR referred to the then foreshadowed Section 29 Proceeding, which has since been narrowed. Mr Lindholm (14.2.25 [10]) there observed that:

Mr Lindholm also there addressed the consequences of the Section 29 Proceeding for the special purpose receivership, most significantly, the likelihood that, if the SPR is required to defend the Section 29 Proceeding, he will need to hold back funds from a final distribution to debenture holders to support his indemnity towards the costs of any such defence and that will further delay or reduce the distribution to debenture holders. Mr Lindholm also referred to several suggested factual errors in the then proposed Section 29 Proceeding and addressed the circumstances in which issues raised in that application had previously been considered in Dixon J’s judgment in the Remitter and by this Court in giving directions to the SPR, including in a previous remuneration application in which Mr Izzo acted as contradictor, in Re Banksia Securities Ltd (in liq) (recs and mgrs apptd) [2019] NSWSC 136 (“Banksia 2019”) where I reviewed the circumstances of the TrustCo Settlement Deed. Mr Lindholm also there addressed the position in respect of alternative proceedings against TrustCo filed but not served by Mr McKenzie (“McKenzie Proceeding”), which is now raised in the Section 29 Proceeding, and which I address below.

By his affidavit dated 14 February 2025, Mr Kingston addressed the then status of the Section 29 Proceeding; provided a detailed account of the conduct of the Remitter proceedings; and addressed the potential costs of the Section 29 Proceeding, which were then in a wider form than their present form. By his affidavit dated 11 April 2025, Mr Kingston addressed further correspondence with Mr Botsman and his solicitor. By his further affidavit dated 26 May 2025, Mr Gashi, a solicitor acting for the SPR, addressed further correspondence with the Victorian Applicants and ASIC in the course of these proceedings.

By his affidavit dated 11 July 2025, Mr Lindholm addressed the steps which were being taken to finalise the receivership, the impact of the Section 29 Proceeding on the cost and duration of the receivership, and the extent to which it has delayed a further distribution to debenture holders of a final distribution. He also provided a detailed factual response to the claims made in then wider version of the Section 29 Proceeding. Mr Lindholm also there led evidence in respect of his claim for remuneration. By a confidential affidavit dated 11 July 2025, Mr Lindholm also addressed allegations that were made in the then version of the Section 29 Proceeding relating to a decision not to pursue claims against the solicitors that had acted for AFP in the Remitter. I need not address that evidence further, where Mrs Botsman does not pursue a claim against the SPR as to that matter in the current version of the Section 29 Proceeding, although she pursues a claim against those solicitors.

By his further affidavit dated 10 September 2025, Mr Lindholm addressed further developments since I made orders approving settlements with several third parties in July 2025, and he identified four remaining issues in the receivership, namely receiving a dividend from the liquidation of Lehman; his remuneration claims; the making of a final distribution to debenture holders, subject to resolution of the Section 29 Proceeding; and resolving the Section 29 Proceeding. He also there addressed a further communication with debenture holders in respect of the Section 29 Proceeding and responses from debenture holders. Some of the Victorian Applicants have responded to that communication by opposing the release of the SPR that is sought in this application and other debenture holders have recognised the adverse effects of a continuing delay in the final distribution which, as I have noted above, is likely to result from the Section 29 Proceeding.

By a further affidavit dated 30 September 2025, Mr Kingston addressed further correspondence with ASIC. The SPR also tendered an email dated 1 October 2025 (Ex R14) from a debenture holder, which expresses the view of some debenture holders of the difficulties arising from the Section 29 Proceeding.

The Victorian Applicants read the affidavit dated 22 August 2025 of Ms Peiros, their solicitor, which attached a bundle of documents relevant to the Section 29 Proceeding. The Summons filed in those proceedings identified Ms Botsman and the 28 other Victorian Applicants as applicants in the proceedings. The Summons seeks relief against, relevantly, Ferrier Hodgson, a firm with which the SPR was previously associated, Mr Lindholm as the SPR, Mr McCluskey who was formerly the SPR together with Mr Lindholm and KPMG which acquired Ferrier Hodgson. The relief sought is, first, a direction that all matters related to recoveries and distribution following from the TrustCo settlement must be heard and determined by the Supreme Court of Victoria. I think it unlikely that the Supreme Court of Victoria could or would make such a direction, where the SPR was appointed by this Court in accordance with its statutory jurisdiction under s 283HB of the Act, and this Court has a continuing role in supervising the SPR, as it has done throughout the special purpose receivership.

The Victorian Applicants also seek an order that they have sufficient interest in the Bolitho proceedings and the Remitter to allow them standing to bring the Section 29 Proceeding and there was no controversy as to that question in this hearing. They also seek an order under s 30 of the CPA that the application was made prior to finalisation of the Bolitho Proceedings and the Remitter, or alternatively an order under s 31 of the CPA that they be granted an extension of time for making the application under s 29 of the CPA. I will address that question below, because it is plainly relevant to an assessment of their prospects of success against the SPR in the Section 29 Proceeding.

The Victorian Applicants then seek an order that, on the basis of the Remitter Judgment:

The exhibit to Ms Peiros’ affidavit included an affidavit dated 1 July 2025 of Ms Botsman, filed in the Section 29 Proceeding, which referred to the Remitter Judgment and indicated that:

I should now address the Victorian Applicants’ proposed List of Issues in the Section 29 Proceeding in some detail, because it makes clear that the Victorian Applicants are not merely posing questions for the Supreme Court of Victoria to consider if so inclined, but advancing specific allegations against the SPR.

Paragraph 6 of that List of Issues indicates that the Victorian Applicants seek compensation from the Respondents, which there include the SPR, for a shortfall in recoveries under the Remitter plus costs on an indemnity basis for the benefit of debenture holders, including debenture holders other than the Victorian Applicants. Paragraph 7 of the List of Issues indicates that it is appropriate or necessary for the Court to order that the Respondents, again including the SPR, pay compensation for the Shortfall (as defined) by reason of a breach by the Respondents, again including the SPR, of the paramount duty and overarching obligations under the CPA and the common law. The Victorian Applicants there contend that the Respondents, again including the SPR:

I pause to note that it is not apparent that there is any causative connection between the allegations made against the SPR in the Section 29 Proceeding and a loss of that character, where the SPR’s inability to recover the full amount of the Remitter Judgment reflects the impecuniosity of some defendants in the Remitter and the manner in which other had structured their affairs, and that position does not result from any conduct of the SPR. However, I put that matter aside where the SPR did not rely on it in opposition to the application for leave brought by the Victorian Applicants

The Victorian Applicants repeat, in paragraph 19 of the List of Issues, allegations of breach of the paramount duty and obligations under the CPA as allegations put against, relevantly, the SPR rather than merely as matters as to which the Supreme Court of Victoria might inquire. Lengthy claims are then made against the ABL Respondents, which the Victorian Applicants do not need leave of this Court to pursue. Paragraphs 63ff of the List of Issues then articulates a claim against the SPR, which refers to the Banksia Proceedings and the terms of the Banksia Settlement. The Statement of Issues refers to observations of the Court of Appeal in the Bolitho VSCA judgment and then identifies, at paragraph 99 of the List of Issues, eleven allegations against the SPR which turn upon the impact of certain terms of the Banksia Settlement on the manner in which the Approval Application was conducted at first instance in the Supreme Court of Victoria.

Paragraph 101 of the List of Issues then alleges that the SPR was “derelict in its duties to the debenture holders” in entering into the Banksia Settlement and was “in breach of its overarching obligations and duties under the CPA and general law” in taking certain steps and, in paragraph 102, alleges that:

Annexure B to that document is headed “Outline of issues concerning the SPR Respondents” and includes further allegations that the SPR Respondents (as defined) helped Mr Elliott exert “significant control” over the Banksia litigation, notwithstanding the earlier judgment of the Supreme Court of Victoria in Bolitho No 4 which required that a separate solicitor be appointed in those proceedings. The Victorian Applicants then contend that:

It is plain enough here that the Victorian Applicants seek relief against the SPR in the Section 29 Proceeding, since they commenced those proceedings and the SPR is one of the named Respondents to those proceedings. It is also plain enough that they do so by reference to the allegations made against the SPR in the List of Issues, which I have addressed above, and that they seek to have the Supreme Court of Victoria grant the relief sought in the List of Issues. I do not accept Dr Orow’s submission before me that the Section 29 Proceeding could be characterised as proceedings commenced by the Supreme Court of Victoria of its own motion, which is untenable as a matter of fact.

As I noted above, the first issue that arises in these proceedings is whether, as the Victorian Applicants contend, they can bring the Section 29 Proceeding against the SPR in the Supreme Court of Victoria, although he is a receiver appointed by this Court under s 283HB of the Act, without leave of this Court. That question is resolved by the case law.

In Re Siromath Pty Ltd (No 1) (1991) 9 ACLC 1580 (“Siromath”), McLelland J observed that:

In Mamone v Pantzer (2001) 36 ACSR 743; [2001] NSWSC 26 at [4]–[5] (“Mamone”), in the context of proceedings against a Court-appointed liquidator, Santow J summarised the effect of Siromath and also adopted the reasoning of Tamberlin J in Sydlow Pty Ltd (in liq) v TG Kotselas Pty Ltd (1996) 65 FCR 234 at 241–242 as follows:

Subsequently, in Eighty Second Agenda Pty Ltd v Handberg (2014) 32 ACLC 14081; [2014] VSC 665 (“Eighty Second Agenda”), which again deals with the position of a court-appointed liquidator, Croft J observed at [18]–[22] that:

Dr Orow also refers to the observations of Rees J in Aardwolf Industries LLC v Tayeh [2020] NSWSC 299 at [81]ff (“Aardwolf”) recognising the position that leave of the Court is required to bring proceedings against a Court-appointed liquidator. Several of these decisions were also cited by Leeming JA on appeal in Aardwolf Industries LLC v Tayeh [2020] NSWCA 301 at [89]–[90], where his Honour observed that:

The question of the rationale for the leave requirement, where a claim is brought against a Court-appointed liquidator in the Court which had appointed that liquidator, does not arise here. This application falls within the area in which the requirement for leave is well established, including in respect of a Court-appointed receiver, where the Section 29 Proceeding are brought in a Court other than the Court which appointed the SPR.

In his text Forum Shopping and Venue in Transnational Litigation, Dr Bell (as the Chief Justice then was) also refers to Siromath at [4.134] and points (at [4.135]) to the policies which support protection of a Court’s jurisdiction. He also notes (at [4.230]), in the context of dealing with anti-suit relief, that:

Mr Redwood points out that the leave requirement has been recognised at least since Aston v Herron (1834) 2 MY&K 390 and has been consistently applied in Australia since Siromath. While I am not bound to follow decisions of other judges of coordinate jurisdiction, I would do so as a matter of comity, unless I was convinced that such a judgment was wrong: Segal v Waverley Council (2005) 64 NSWLR 177; [2005] NSWCA 310 at [57]. Here, to the contrary, I am comfortably satisfied that the decision in Re Siromath is correct, and reflects an important public interest in the Court protecting its officers from unjustified litigation which might interfere with or hinder the performance of their duties or erode assets which they would otherwise recover for the benefit of interested persons or delay or increase the costs of a receivership: Eighty Second Agenda; Aardwolf at [86]. Here, the proposed Section 29 Proceeding would have all of those results. I would follow that and subsequent decisions to the same effect for that reason and to promote predictability in judicial decision-making.

Mr Izzo also responds to the Victorian Applicants’ submission that they do not require the Court’s leave to proceed with the application under CPA s 29, as follows:

I accept these admirable submissions in their entirety.

As I noted above, Dr Orow also identifies a second question whether the answer to this question is different because of the nature of the Section 29 Proceeding, where they are brought by the Victorian Applicants under s 29 of the CPA or, as he seeks to re-characterise them, are an invitation to the Supreme Court of Victoria to make orders against the Respondents to those proceedings, including the SPR, of its own motion. Dr Orow also took me through and I have regard to the terms of the CPA and particularly s 7 which sets out the overarching purpose; s 8 which requires the Court to give effect to the overarching purpose; s 10 which applies the overarching obligations which apply, inter alia, to a party to proceedings and legal practitioners acting for or on behalf of a party and a funder of proceedings; s 11 which deals with the application of overarching obligations in civil proceedings; and Part 2.3 which sets out the content of the overarching obligations, including the paramount duty in s 16 of the CPA.

Dr Orow also submits that the obligations imposed by the CPA are non-delegable and that it is not a defence for a person accused of breaches of the overarching obligations to say that he or she relied on legal advice: Re Zita (a solicitor) [2022] VSC 354 (“Zita”). I will assume, without deciding, the correctness of that proposition, but it does not assist the Victorian Applicants unless they have a sufficient factual basis to allege a breach of the overarching obligation against the SPR in the first place. Dr Orow submits that most of the issues in this application depend on the essential character of proceedings under s 29 of the CPA, and he places heavy reliance on submissions made by the SPR in the Remitter concerning that matter. It is not necessary to decide any wider question as to the nature of proceedings under s 29 of the CPA for the purposes of this application, which largely turns on the narrower questions whether the Section 29 Proceeding are within time and whether the Victorian Applicants have established a sufficient factual basis for their claims to warrant granting leave to them to pursue them, notwithstanding the detriment to debenture holders of a delay in a final distribution and a likely reduction in the amount of that distribution by reason of costs incurred by the SPR in defending the Section 29 Proceeding.

Part 2.4 of the CPA in turn sets out sanctions for contravening the overarching obligation and provides, in s 29, that a Court may make certain orders if it is satisfied, on the balance of probabilities, that a person has contravened any overarching obligation, including an order that the person compensate any person for any financial loss or other loss that was materially contributed to by the contravention of the overarching obligation, including specified matters. I have regard to Dixon J’s consideration of the scope of CPA s 29 in Hudspeth v Scholastic Cleaning and Consultancy Services Pty Ltd (No 4) [2013] VSC 14 and Daly AsJ’s observations in Vrantsidis v Milekovic [2025] VSC 255, including at [98]ff, to which Dr Orow drew my attention. Such an order may be made, under CPA s 29(2)(a), on the application of any party to the civil proceeding, or any other person who, in the Court’s opinion, has a sufficient interest in the proceeding or, under CPA s 20(b), on the Court’s own motion. It is not necessary to address the latter power here, where it is plain here (notwithstanding Dr Orow’s submission that I address below) that the Section 29 Proceeding is brought by the Victorian Applicants, on the express basis that they contend that they have sufficient interest to bring it and is not an application commenced by the Supreme Court of Victoria on its own motion.

Section 30 of the CPA provides that an application for an order under s 29 of the CPA is to be made in the Court in which the civil proceeding was or is being heard. Subsections 30(2)-(3) in turn provide that:

Section 31 in turn provides for an extension of time for such an application, but s 31(2) provides that:

Dr Orow submits that the application brought by the VSC Applicants is not a proceeding to vindicate a cause of action or a claim but rather “nothing more than a petition by an interested or affected person” asking the Court to “investigate” potential breaches of the overarching obligations. There are two difficulties with that submission. The first is that, as the review of the List of Issues which I have set out above demonstrates, the VSC Applicants advance specific factual allegations against the SPR which are said to give rise to a right of compensation against the SPR and associated persons. The second is that, in any event, the public interest in protecting a Court-appointed receiver, as an officer of the Court, extends to claims against the SPR in the broadest possible sense, including an inquiry into the SPR’s conduct which could otherwise be undertaken in this Court. I recognise, of course, that the Supreme Court of Victoria could commence an inquiry into the conduct of the SPR of its own motion, and would not require the leave of this Court to do so. As a matter of reality, that is not what has occurred here; instead, as occurs in any adversarial proceedings, the Victorian Applicants ask the Supreme Court of Victoria to reach findings against the SPR as to the allegations which they identify in the List of Issues and to grant relief, which they identify, against the SPR and that relief falls within the scope of the public interest in protecting a Court appointed receiver as its officer.

Dr Orow also refers, variously, to the scope of the orders which may be made by the Court under s 29 of the CPA and submits that proceeding under that section is analogous to a proceeding for contempt and “nothing should be done to deter a person from bringing a contempt to the notice of the Court”. I do not accept that submission, where contempt proceedings against a Court-appointed liquidator or Court-appointed receiver, brought in a Court other than that which made the appointment, would also require the leave of the appointing Court. I have not neglected, but it is not necessary to summarise, Dr Orow’s extensive further submissions as to other elements of proceedings under CPA s 29. I accept, as Dr Orow points out, that the Supreme Court of Victoria itself has power to conduct an inquiry under CPA s 29 and to take steps to protect itself from abuse of its processes. However, that position is not unique to an application under CPA s 29 nor does it displace the constraints that exist in respect of proceedings brought in another Court against a Court-appointed officer, without the leave of the appointing Court. Dr Orow also submits that an application brought under s 29 of the CPA is “nothing more than a petition by an interested or affected person asking the Court to investigate”. As I have noted above, it is plain that the Victorian Applicants have not approached the Section 29 Proceeding in that manner, as their formulation of their List of Issues demonstrates. Dr Orow’s further submission that the investigation would be conducted by the Victorian Supreme Court “act[ing] through the medium of the [Victorian] Applicants” seems to me to misstate the character of the proceedings, where it is plain that the Victorian Applicants advance a series of allegations, on their own behalf and not on behalf of the Supreme Court of Victoria, in the List of Issues; invite that Court to determine them in the Section 29 Proceeding; and contemplate that their claims will be pursued by, inter alia, “a list of questions for, amongst others, the SPR to answer, discovery of documents, filing of affidavits, viva voce examinations and submissions”, formulated on their own behalf and not on the Court’s behalf.

Dr Orow also submits that this Court does not have jurisdiction to restrain or prevent the Supreme Court of Victoria from undertaking an inquiry under relevant provisions of the CPA or to release the SPR from his obligations to the Supreme Court of Victoria. The SPR does not ask the Court to do so. Instead, as is ordinarily the case where a claim is brought against a Court-appointed receiver in another Court, the question of leave arises, not in respect of the other Court’s exercise of its functions but in respect of persons who invoke that Court’s jurisdiction. The question of release arises here only where leave is not granted to the Victorian Applicants to bring the Section 29 Proceeding and there are no other foreshadowed claims against the SPR.

Dr Orow submits, alternatively, that leave of this Court is only required where conduct of a Court-appointed receiver occurred in the same jurisdiction as the appointing Court. I do not accept that submission, where it seems to me that the leave requirement is directed to the nature of the defendant, namely an officer of the Court, rather than to any question of the jurisdiction in which particular conduct occurred. In further submissions, Dr Orow also points to the jurisdiction of the Victorian Supreme Court to, for example, stay proceedings which are an abuse of process, or dismiss proceedings by summary judgment. I accept, of course, such mechanisms are well-established but that also does not address the issues that arise from proceedings being brought, without leave, against a Court-appointed receiver as an officer of the Court.

I have not accepted Dr Orow’s characterisation of the Section 29 Proceeding here, but, in any event, the requirement for leave does not turn upon the nature of the Section 29 Proceeding or the scope of any liability that is sought to be established in that proceeding or whether it is investigative or has some other character, but upon the fact that the proceeding is brought against the SPR who is an officer of this Court and will interfere with the performance of the SPR’s remaining duties and the completion of the special purpose receivership, and these matters support applying the requirement for leave that applies in other proceedings to the Section 29 Proceeding. For these reasons, the Victorian Applicants cannot bring the Section 29 Proceeding against the SPR without leave of this Court.

As I noted above, the Victorian Applicants’ primary position was that they did not require leave to continue the Section 29 Proceeding. However, against the contingency that I did not accept (as I have not accepted) that proposition, they alternatively sought the Court’s leave, nunc pro tunc, to continue the Section 29 Proceeding.

In Re St Gregory’s Armenian School (in liq) (2012) 92 ACSR 588; [2012] NSWSC 1215 at [112] (“St Gregory’s Armenian SchooI”), Brereton J observed, in respect of the approach to be applied in determining whether to grant leave to bring proceedings against a Court-appointed liquidator, that:

Dr Orow adopts, in the alternative, if leave is required, the test adopted by Rees J in Aardwolf at [83], requiring that discretionary power to grant leave be exercised having regard to the circumstances of the particular case; that it is not necessary for the applicant to demonstrate a prima facie case; but there must be more than an assertion. I recognise that, on appeal, Leeming JA recognised the understandable reluctance in the authorities to express a test for leave in absolute terms. I assume, without deciding, that the test proposed by Dr Orow is the appropriate test, where it has support in the case law and is likely the most favourable position for the Victorian Applicants.

Mr Izzo also submits that:

Mr Redwood submits that this Court, which appointed the SPR, is the appropriate forum for the Victorian Applicants to raise any complaint about the SPR’s conduct. The Victorian Applicants do not raise, or seek to raise, a complaint in this Court and they make clear that they seek to pursue the Section 29 Proceeding only in the Supreme Court of Victoria. I recognise that the fact that the Court which appoints a Court-appointed receiver has the power to supervise his or her conduct, including by disciplinary action, would in a proper case be sufficient basis to decline leave to commence proceedings in another Court against that receiver. I do not take that course here, where I recognise that CPA s 30(1)(a) requires that an order under CPA s 29 be brought in the Court in which the civil proceeding was heard, the Supreme Court of Victoria, and the Victorian Applicants may not be able to invoke the jurisdiction under CPA s 29 in proceedings brought in this Court. I therefore address the question of leave by reference, not to the availability of jurisdiction in this Court as an alternative to the Supreme Court of Victoria, but by reference to the merits of the Section 29 Proceeding.

The next question that arises in determining whether that leave should be granted is whether the Section 29 Proceeding is out of time. The applicable provisions in ss 30 and 31 of the CPA have been considered in the case law. In Kenny v Gippsreal Ltd [2015] VSC 284, Vickery J considered the concept of “finalisation” under s 30 of the CPA and noted (at [65]) that s 30(3) of the CPA did not defer the “finalisation” of proceedings to a date on which a party’s costs application was finally determined following the making of orders which otherwise result in the “finalisation” of proceedings. His Honour also observed (at [66]) that:

On appeal in Gippsreal Ltd v Kenny (2016) 52 VR 149, [2016] VSCA 319 at [106], the Court (Whelan, Priest and Kyrou JJA) observed that:

Mr Redwood submits that the Banksia Proceedings have long been finalised and the Section 29 Proceeding is not brought within the time for such an application permitted under s 30 of the CPA, relying on the decisions which I have noted above. Mr Izzo also submits that:

Dr Orow responds that the Section 29 Proceeding is not out of time because the Bolitho Proceeding or the Remitter is ongoing and has not been finalised. Dr Orow also submits that:

On 11 October 2021, Dixon J made final orders in the Remitter. The VSC Applicants refer to subsequent judgments were connected with the Remitter, including Zita; Lindholm v Elliott [2023] VSC 442 and Lindholm v Elliott (No 2) [2023] VSC 572. Assuming, without deciding, that the question of “finalisation” of the Banksia Proceedings and the Remitter may have reference to other associated proceedings, where that assumption is the most favourable position to the Victorian Applicants, that does not assist them here, because there is no suggestion that any associated proceeding extended beyond 2023. Dr Orow was also not able to identify any open issue in the Bolitho Proceedings, at the time the Section 29 Proceeding was brought, in response to my invitation to him to do so. In oral submissions, he retreated to the proposition that the Bolitho Proceedings and the Remitter were not finalised because the Section 29 Proceeding might be brought at some future date. However, that approach would render the time limit in s 30 of the CPA nugatory, if no proceeding were ever finalised while an application under s 29 of the CPA might in future be brought, months or years after orders were made that otherwise brought it to an end.

Dr Orow also submits that distributions to debenture holders in respect of BSL are not yet complete. However, this submission confuses two matters. First, in Bolitho v Banksia Securities Ltd (No 5) (2019) 60 VR 486; [2019] VSC 554, Dixon J approved an interim settlement distribution scheme, but there is no suggestion that the Remitter was not finalised by his Honour’s judgment in it and associated orders. There are issues that remain open in these proceedings in this Court, but they do not have the consequence that any aspect of the Banksia Proceedings or the Remitter was not finalised.

I am satisfied that the Section 29 Proceeding is out of time, unless the Supreme Court of Victoria could extend the time to bring that proceeding under CPA s 31. The Victorian Applicants made no real attempt to establish, and did not establish, that that Court had power to grant that extension where, as I noted above, that power is conditioned on the fact that the person making the application was not aware of the alleged contravention of the overarching obligations until after the end of the period specified in CPA s 30(2). Neither Mrs Botsman nor the other Victorian Applicants lead any evidence to establish any earlier lack of knowledge of the matters now asserted in the Section 29 Proceeding, where Mr Botsman had raised complaints as to those matters over an extended period. At least by 30 November 2018, long before the finalisation of the Bolitho Proceedings on Dr Orow’s account, Mr Botsman had contended that the SPR should not have agreed to the terms contained in the Banksia Settlement, and the debenture holders should not be required to bear the SPR’s costs of the appeal. That contention raised a significant aspect of the allegations now sought to be pursued in the Section 29 Proceeding.

After the Remitter, on 29 October 2021, but still prior to the finalisation of the proceedings associated with the Remitter on which Dr Orow relies, Mr Botsman wrote to the SPR contending that the SPR had “advance warning of potential wrongdoing” in respect of the Banksia Settlement, again advancing a core allegation now sought to be pursued in the Section 29 Proceeding. Since at least 23 February 2022, Mr Botsman has contended that any settlement with third parties arising from the Remitter should include specific payments to Mrs Botsman and Mr Pitman, who is also one of the Victorian Applicants, for conduct by Mr Elliott and his associated entities which involved “intimidation and bullying” against them. By 13 June 2022, Mr Botsman was raising a suggestion of criminal and disciplinary accountability of, inter alia, the SPR, if “financial accountability” was not established, implicitly by payment of further compensation to Mrs Botsman beyond the recoveries available to debenture holders generally. By letter dated 24 June 2022, Mr Botsman contended that the SPR was on notice of Mr Elliott’s “depravity”, because the SPR had approved payments to the SPR’s solicitors and Counsel who had done the very substantial part of the work that led to a successful resolution of the Banksia Proceedings. The correspondence with Mr Botsman continued thereafter, but it is not necessary to further summarise it. The significant matter here is not whether Mr Botsman or Mrs Botsman were or are justified or unjustified in their criticisms of the SPR; it is instead that those criticisms are longstanding and indicated that Mr Botsman has long been aware of the matters which Mrs Botsman now contends found significant parts of the Section 29 Proceeding.

Dr Orow did not contend that Mrs Botsman did not know what Mr Botsman knew, where he plainly corresponded with the SPR on her behalf (noting that he was not a debenture holder and had no personal interest in the matter). He also did not contend that an extension under CPA s 31 could be granted for proceedings in which Mrs Botsman was the lead applicant, if Mrs Botsman knew the relevant matters within the relevant time period, simply because other persons joined with her as applicants in the Section 29 Proceeding. This is sufficient basis, without more, to decline leave to bring the Section 29 Proceeding.

The second question that arises in determining whether that leave should be granted is whether the Section 29 Proceeding are an abuse of process, at least in seeking to relitigate matters previously addressed in the Remitter. I bear in mind that the concept of abuse of process includes at least the renewed litigation of a case that has already been disposed of by earlier proceedings: Reichel v MaGrath (1889) 14 App Cas 665 at 668.

In Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507; [2015] HCA 28 at [25]–[26], the plurality observed that:

In O’Shane v Harbour Radio Pty Ltd (2023) 85 NSWLR 698; [2013] NSWCA 315 at [99], Beazley P also noted that a matter may be found to be an abuse of process if it will bring the administration of justice into disrepute.

Mr Redwood submits that the Section 29 Proceeding are an “impermissible attempt to revive and expand the Remitter long after it has concluded”, that they seek to “relitigate matters that have already been the subject of extensive judicial consideration and determination” and that they offend principles of finality essential to the administration of justice. That proposition is contested by the Victorian Applicants. Mr Redwood also makes detailed submissions as to the extent to which the SPR’s conduct was investigated under the Remitter. I do not address those submissions at length, where it is not necessary to do so in order to determine this application. I will assume, without deciding, favourably to the Victorian Applicants, that the review of the SPR’s conduct in the course of the Remitter was at least not central to the Remitter.

Mr Izzo as Contradictor in turn submits:

Dr Orow responds, and I accept, that the primary focus of the Remitter was on the conduct of persons other than the SPR. Having said that, I also recognise that Dixon J, in the Remitter, directed his attention to the conduct of the SPR. His Honour there found (at [205]) that, in negotiating the resolution of the relevant proceedings, the then SPRs were “focused on maximising the return to debenture holders from any settlement”. His Honour also addressed (at [256], [269], [1482] and [1486]) the circumstances of the Bolitho Settlement, observing that terms of that settlement were presented by Mr Elliott to the SPR on a “take it or leave it basis”; that (at [1886]) the SPRs had resisted the impugned settlement terms and sought conventional and appropriate terms; and that the SPRs ultimately accepted the Bolitho Settlement for “pragmatic and commercial reasons”. His Honour also addressed the SPRs’ consideration of the commission that AFP claimed under relevant commission arrangements. For completeness, I should also recognise that his Honour found that the SPR was deceived by Mr Elliott, and persons associated with him, in respect of the entry into that settlement, and that is plainly a matter that is relevant to the SPR’s conduct, even if intention is a requirement for contravention of s 29 of the CPA. His Honour also observed at [2042] that:

Where Mrs Botsman and other Victorian Applicants were not party to the Remitter or the proceedings in this Court, there is at least a question whether principles of abuse of process would prevent them pursuing allegations which they personally have not pursued in the Remitter or in the proceedings in this Court. I do not determine the application for leave by reference to any question of abuse of process, and I instead have regard to whether the Section 29 Proceedings was commenced within time, or the time to commence that proceeding could be extended, and the substance of the allegations brought in that proceeding.

The third question that arises in determining whether leave should be granted for the Section 29 Proceeding is whether they have sufficient merit to support the grant of leave, where they will plainly delay the final distribution to debenture holders in whole or in part. Mr Redwood submits that, as I have noted above:

Mr Redwood also submits that the Victorian Proceedings rely on a “flawed construction” of the overarching obligations enumerated in the CPA. It is not necessary to determine that proposition, in general terms, although I will note one aspect of those allegations which does not seem to me to be supportable below.

Mr Izzo also indicates that the Contradictor does not consider that the Victorian Applicants’ application for leave to bring the Section 29 Proceeding should be granted. He submits that:

The first aspect of the claims raised in the Section 29 Proceeding relates to the SPL’s entry into the TrustCo Settlement and the impact of the terms of that settlement to limit his participation in the Approval Application. Mr Redwood submits that the Victorian Applicants’ allegations of breach of s 29 of the CPA, by reason of the SPL’s agreement to the terms of the TrustCo Settlement, are wrong and directly inconsistent with Dixon J’s findings in the Remitter and with this Court’s findings in its supervisory jurisdiction in respect of the SPR. I recognise that Dr Orow refers to a number of matters addressed in the Remitter to suggest improper conduct on the part of the SPR. I note, but need not address, any question whether those matters are admissible in these proceedings as evidence of the fact, by reason of s 91 of the Evidence Act. I note that the Victorian Applicants raise specific allegations in the Section 29 Proceeding, which I address below. I also note that, as to the critical question of the Banksia Settlement, Dixon J had held in the Remitter that the SPR had acted pragmatically and commercially, as I have noted elsewhere in this judgment.

I will assume, without deciding, that a decision whether or not to enter a settlement of proceedings can fall within the scope CPA s 29, although it seems to me that it would be rare that a Court would second-guess a party’s decision whether or not to continue or settle proceedings so as to reach the remarkable result that to do so was a contravention of that section, and the party was obliged to incur further costs and take the risk that the proceedings would fail to avoid a contravention of that section. Even making that assumption, I am not satisfied that the claims made by the Victorian Applicants in the Section 29 Proceeding in respect of the entry into the Banksia Settlement have sufficient prospect of success to support a grant of leave. First, as I noted above, the Victorian Applicants led no substantive evidence in the proceedings to seek to prove that they have any real prospect of success as to those claims although they refer to judgments in other proceedings. I note, but need not further address, s 91 of the Evidence Act in that regard. Second, recognising that (as Dr Orow emphasised) the Court of Appeal of the Supreme Court of Victoria had criticised the effect of the Banksia Settlement in Bolitho VSCA, so far as it constrained the SPR from scrutinising the costs incurred by Mr Bolitho in the Bolitho proceedings, and limited the SPR’s role in the application to approve that settlement, that was the necessary consequence of the SPR accepting then only terms on which a very favourable settlement of the Banksia Proceedings was available to debenture holders. Importantly, the Victorian Applicants do not come to grips with the necessary implication of their claim, that the SPR should have left debenture holders to the risk that the Banksia Settlement would fail and lost the opportunity for the settlement which has since funded substantial distributions to debenture holders. There is no evidentiary basis to find that there is any real prospect that a Victorian Court would reach that view in the Section 29 Proceeding, and two experienced judges have both reached the contrary result in proceedings where that issue was squarely raised.

I have referred to Dixon J’s exhaustive judgment in the Remitter, including his finding that that the SPR had acted commercially and pragmatically in entering the settlement, above. In Banksia 2019 at [22]ff, I addressed the issue at length, in not accepting comprehensive submissions then put by Mr Izzo as contradictor that exposed the alternative position. I set out those submissions, and my reasoning, at length, where it indicates the extreme difficulty in the Victorian Applicants now establishing the contrary:

I do not assume that the Victorian Applicants are bound by the decisions in either the Remitter or Banksia 2019. I recognise that they were not party to the Remitter, although Ms Botsman at one point appeared by leave in it, and Banksia 2019 was a remuneration determination. Nonetheless, the Victorian Applicants lead no evidence, still less any new evidence, to suggest that there is any real prospect that a third judicial review of the issue will lead to a different result. They also identify no reason to think that new evidence will emerge in the Section 29 Proceeding, although they there seek discovery and interrogatories, that did not emerge in the Contradictor’s investigations in the Remitter or the hearing of the Remitter, and that seems highly unlikely given the scale of the Remitter, the passage of time and the death of Mr Elliott.

Second, the Victorian Applicants contend that the SPR misled the Court by deposing to his belief that the TrustCo settlement was reasonable and represented a good commercial outcome for debenture holders and represented the best possible outcome that could be achieved in all the circumstances. Mr Redwood submits that allegation is also wrong and is inconsistent with previous findings in the Remitter and this Court. The Victorian Applicants lead no evidence which is capable of supporting it in this application, and there is no reason to think that it could be established in the Section 29 Proceeding, where the opinion expressed by the SPR was consistent with the findings of Dixon J in the Remitter judgment that the settlement was reached on pragmatic and commercial grounds, and with the observations of this Court in Banksia 2019 to which I have referred above.

Third, the Victorian Applicants rely on a 15 April 2019 notice to debenture holders as giving rise to the alleged breach of CPA s 29 on the part of the SPR. Mr Redwood submits that this allegation is “wholly misconceived”. This allegation seems to me to be untenable, where the relevant notice was drafted by AFP and the contradictor appointed by the Court in the Remitter; it was reviewed by Dixon J in the Remitter before it was sent; and it was issued before the full range of issues as to AFP’s and Mr Elliott’s conduct had emerged in the Remitter. The Victorian Applicants lead no evidence to establish that the SPR had any role in that notice, still less an improper role, beyond dispatching it to debenture holders after it was settled by others and reviewed by the Court in the Remitter. It seems to me that that allegation does not have sufficient prospect of success, alone or combined with other allegations, to support the grant of leave, given the real disadvantage to debenture holders of granting leave for the Section 29 Proceeding to be pursued.

Fourth, the Victorian Applicants rely on matters relating to Bolitho No 4 as giving rise to the alleged breach of s 29 of the CPA on the part of the SPR. As I noted above, the “Outline of issues concerning the SPR Respondents” that is Annexure B to their List of Issues in the Section 29 Proceeding includes allegations that the SPR Respondents (as defined) helped Mr Elliott exert “significant control” over the Banksia litigation, notwithstanding the judgment in Bolitho No 4 which required that a separate solicitor be appointed in those proceedings. As I noted above, the Victorian Applicants then contend that:

Mr Redwood responds that the alleged breaches in respect of Bolitho No 4 “proceed upon a grave misunderstanding of the facts”. Again, no evidence is led by the Victorian Applicants to seek to establish the factual basis of these allegations in order to show that they have any prospect of success in the section 29 Proceeding. It seems to me that these allegations have the obvious difficulty that, as Mr Redwood points out, the judgment in Bolitho No 4 did not prevent AFP acting as funder of the Bolitho proceedings, under Mr Ellott’s control. The basis of any expectation that the SPR could have avoided AFP’s or Mr Elliott’s involvement in a negotiation of the settlement of the Bolitho proceedings, where AFP was funding those proceedings, is neither apparent nor established by evidence led by the Victorian Applicants in this application. For the SPR to simply decline to settle the Banksia Proceedings, by reason of AFP’s or Mr Elliott’s involvement in the Bolitho proceedings, would likely have resulted in the loss of that settlement with the adverse consequences for the debenture holders to which I have referred above.

Fifth, the Victorian Applicants allege that the SPR ought to have terminated the Bolitho Proceeding and instead pursued the McKenzie Proceeding. Mr Redmond responds that the allegations in respect of the conduct of the McKenzie Proceedings are “wrong and misconceived”. Again, the Victorian Applicants lead no evidence to establish the basis for this allegation. In his affidavit evidence, Mr Lindholm sets out his reasoning process for not seeking to pursue the McKenzie Proceeding and instead pursuing the BSL Proceedings in parallel to the Bolitho Proceedings. It seems to me that that evidence is likely to be accepted by the Supreme Court of Victoria, not least because the pursuit of the McKenzie Proceeding would have disadvantaged the significant number of debenture holders who would likely not receive any recovery under them. However, this allegation may be dealt with more briefly, because the McKenzie Proceeding was filed but not served and it seems to me that there is no conceivable basis on which a party’s decision not to serve proceedings could amount to a contravention of CPA s 29. It is an essential element of the autonomy of a party, prior to the service of proceedings before a Court, that that party has the choice whether to serve the proceedings or not and a decision not to serve proceedings could not be attacked on that basis.

I have found that the Section 29 Proceeding are out of time and the Victorian Applicants also have little prospect of success in them on the merits and these matters tend strongly against the grant of leave to pursue them. I also have regard to the real disadvantages to debenture holders generally which would follow from the continuance of those proceedings. In oral submissions, Mr Redwood responds that the receivership is practically complete, with a recovery of over $100 million which has amounted to substantial recovery of principal for debenture holders, although they have not recovered interest on funds as to which debenture holders have been out of pocket for a substantial time. He points out that the Section 29 Proceeding are now the only obstacle to finalising the special purpose receivership and distributing all outstanding funds, subject to the need to resolve the costs of these proceedings and the SPR’s modest claim to remuneration which I address below. I also recognise that, as Mr Izzo also submitted:

I recognise that the continuance of the Section 29 Proceeding would not necessarily prevent a partial distribution to debenture holders, because the SPR would likely not insist on withholding all the remaining funds to protect his right of indemnity, but that is not an answer to the delay in distribution of those funds that are withheld to elderly debenture holders. The Victorian Applicants also raise a faint submission that a right of indemnity might not be available by reason of the nature of the claim in the Section 29 Proceeding. There seems to me to be no basis for that submission, where there has been no finding of wrongdoing by the SPR in that application and two Courts have, as I noted above, previously scrutinised his conduct in respect of the Banksia Settlement and found that it was respectively commercial and pragmatic and not such as to disentitle him to any part of his remuneration. I also have regard to circumstances and timing in which the leave is sought: Mamone at [4]; St Gregory’s Armenian at [112]. That matter is particularly significant here, where the application for leave is brought in the last stages of the special purpose receivership, when a final distribution to debenture holders is pending and could be made but for the continuance of the Section 29 Proceeding.

For completeness, Dr Orow also suggests that the Court should order the SPR to distribute the balance of debenture holder funds in whole or in part and to retain an amount to fund the defence of the Section 29 Proceeding. That question does not arise, where I have held that leave should not be granted for the Victorian Applicants to bring the Section 29 Proceeding. In any event, the Court does not exercise, in respect of a Court-appointed liquidator or Court-appointed receiver, jurisdiction by making orders as to matters which are properly questions for the exercise of the liquidator’s or receiver’s judgment in the first instance.

Given the conclusions that I have reached above as to the allegations raised by the Victorian Applicants in the Section 29 Proceeding, there does not seem to me to be sufficient basis further to delay a final distribution to debenture holders and leave the SPR to incur further costs in defending the Section 29 Proceeding at the expense of debenture holders generally, so to allow the Victorian Applicants to pursue this claim where they do not show it has any real prospect of success. I decline to grant leave to the Victorian Applicants to bring, nunc pro tunc, or continue the Section 29 Proceeding against the SPR.

As I noted above, the SPR seeks is an order that he be discharged from appointment as SPR and discharged and released from liabilities in connection with that appointment, including liabilities arising out of the Bolitho Proceedings. As I also noted above, that relief is sought subject to an exclusion to permit him to complete a final distribution of funds to debenture holders of funds that he presently holds and any further funds that he may receive in connection with the receivership.

Dr Orow submits that the Court does not have power to release and discharge the SPR from liability under s 283HB of the Act and that, had Parliament intended to authorise Courts to make such orders, it would have enacted specific provisions equivalent to ss 480 and 481 of the Act. The parties accept that that question is to be approached having regard to settled principles of statutory construction, and I have regard to the authorities to which they have drawn my attention in that respect. It seems to me that that submission is wrong, for the reasons noted below. Dr Orow also points to the possibility of a conflict between the interests of debenture holders and the interests of a receiver as to whether the receiver should be released. I accept that conflict may arise in a particular case, but that does not assist as to the scope of the Court’s power to release the receiver under s 283HB of the Act. Such a conflict does not arise here, where, as a matter of fact, it is in the interests of debenture holders that the SPR be released where that is a necessary step in allowing a final distribution to debenture holders, a substantial amount of which would otherwise likely need to be set aside by the SPR to support his indemnity against the costs of defending the Section 29 Proceeding.

Section 283HB of the Act expressly confers on the Court, in its terms, the power to make an order appointing a receiver of property constituting security for a debenture and the power to appoint necessarily implies a power to order that that appointment will end and the consequences of its ending. Second, that section expressly confers a power to make any other order that the Court considers appropriate to protect the interests of existing or prospective debenture holders and, as a matter of fact, that power is sufficient to support the order that is here sought.

The scope of the Court’s power under s 283HB of the Act generally were considered in Australian Executor Trustees Ltd v Provident Capital Ltd (2012) 203 FCR 461 at [72], [77]–[78] as follows:

I am satisfied that s 283HB of the Act empowers the Court to make an order for the release and discharge of the SPR as a necessary incident of its power to appoint a receiver. Although Dr Orow addressed this question at length, and Mr Redwood also spent some time on it, I regard this question as straightforward, and it can be resolved by analogy with the many cases dealing with the termination of the appointment of, and release of, a liquidator appointed to a managed investment scheme under s 601EE of the Act, to whom ss 480–481 of the Act does not apply. In Re Idylic Solutions Pty Ltd [2018] NSWSC 700 at [3], I observed that, where the Court had power to appoint a liquidator to the relevant managed investment scheme under s 601EE of the Act, then it also had the power to order their release under that section, and would have regard, by way of analogy, to matters that would ordinarily be relevant to an application for release under ss 480 and 481 of the Act and r 7.5 of the Supreme Court (Corporations) Rules 1999 (NSW). That approach has since been approved in later cases including Australian Securities and Investments Commission v Letten (No 28) [2020] FCA 892 at [9]; Australian Securities and Investments Commission v Piggott Wood & Baker (a firm) (No 7) [2023] FCA 193 at [10] and Australian Securities and Investments Commission v Letten (No 29) [2023] FCA 315 at [29]. The Court also has power to make that order under s 283HB(1)(g), which allows it to make such order as is necessary to protect debenture holders. That order is here necessary to protect debenture holders against further delay in a final distribution and the risk of further erosion of that distribution by costs incurred by the SPR in defending the Section 29 Proceeding.

For completeness, Mr Redwood also submits that the SPR’s decision not to bring further claims against legal representatives acting for other parties was open to him and is not a reason to refuse the release orders. I do not understand the Victorian Applicants to pursue any suggestion to the contrary, although they seek to pursue allegations against the legal representatives that acted for AFP in the Remitter in the Section 29 Proceeding.

Mr Izzo indicates that the Contradictor does not take issue with the SPR’s application for release. The Contradictor in turn submits in respect of the question whether a release should be granted:

I am satisfied that the release sought should be granted for all these reasons and where I have not granted leave to continue the Section 29 Proceeding and there are no other foreshadowed claims against the SPR.

Turning now to the effect of the release that is sought, the case law relating to the release of liquidators, which has been applied in other contexts such as liquidators of managed investment schemes, indicates that a release will absolve the SPR of any liabilities and “wipe the slate clean”: Wayland as Liquidator of ABC Container Line NV (in liq) (2005) 52 ACSR 750; [2005] NSWSC 1 at [26]–[29]. I recognise that both Dr Orow and Mr Redwood also addressed a question whether, if (as I have held) s 283HB of the Act empowered the Court to make an order for the discharge and release of the SPR, and the Court were to make orders in the form sought by the SPR, that would have the effect of releasing the SPR from any liability in the Section 29 Proceeding. It is not necessary to address that question, because it does not arise here. I make an order under s 283HB of the Act because I have found that the Victorian Applicants require the leave of this Court to bring or continue the Section 29 Proceeding against the SPR and that leave should not be granted. In those circumstances, the Section 29 Proceeding cannot be maintained by the Victorian Applicants against the SPR and no liability will arise in them. Dr Orow also identifies a question whether any release of the SPR should extend to the Section 29 Proceeding. That question also does not arise, because I only grant that release where I have found that leave should not be granted to bring the Section 29 Proceeding against the SPR and associated entities, and they therefore cannot proceed; and there are no other claims or threatened claims against the SPR to prevent the grant of the release in the ordinary course.

As I noted above, the SPR also seeks an associated order that the requirement under r 26.5 of the UCPR for accounts be dispensed with. I am satisfied there would be no utility in preparing such accounts where the SPR has reported to the committee of debenture holders as to the conduct of the special purpose receivership and issues arising in it have been the subject of Court oversight, and the costs involved in preparing accounts over a long period would be to the detriment of debenture holders. I will make that order.

The SPR, responsibly, did not seek to raise or have the Court determine any question whether the commencement of the Section 29 Proceeding against a Court appointed receiver, without leave, amounted to a contempt of Court, in accordance with the principles reviewed in Australasian Barrister Chambers Pty Ltd (in liq) [2017] NSWSC 245 at [7]–[13] and Re Australasian Barrister Chambers Pty Ltd (in liq) [2017] NSWSC 597. I do not address that question further. Dr Orow submits that, if it were necessary to determine the question of an anti-suit injunction, the power to grant such an injunction in respect of a proceeding in another State should be exercised with caution. He also refers to the power to transfer proceedings under the Act; however, that submission does not engage with the question that arises here, where proceedings are brought in another Court against an officer of this Court.

It is not presently necessary to address the question of what relief might be granted by the Court if, notwithstanding this judgment, the Victorian Applicants, who are bound by this judgment, sought to continue the Section 29 Proceeding where I have held that they could only do so with leave and have declined to grant that leave. First, there is no suggestion that they are anything other than law-abiding citizens, who had the double misfortune to suffer loss in their dealings with Banksia, and then suffer further loss as a result of the misconduct of Mr Elliott and others exposed in the Remitter. There is no reason to think that they will not act in accordance with this decision, unless it is set aside on appeal by the Court of Appeal of this Court; and there is every reason to think that they will act in accordance with this decision, where Dr Orow fairly recognised that, if it was adverse to them, the Section 29 Proceeding would need to be amended to limit that proceeding to exclude the claims against the SPR and his associated parties. Third, the SPR did not presently seek injunctive or other relief at this point, where he accepted it was likely not required for these reasons. Fourth, in the unlikely event that the Victorian Applicants or their privies took a different approach, there is no reason to think that the Court does not have ample powers to protect the SPR (who remains an officer of the Court while the remaining steps in the receivership are completed) and the integrity of the administration of justice. I will reserve liberty to the SPR to apply, while I am confident that it will not need to be exercised in this respect.

The SPR also seeks an order that he separately be appointed as receiver to any dividend or distribution from the liquidation of Lehman for the purpose of getting in and distributing such funds to the debenture holders of Banksia as part of any final distribution made by the SPR. This order was not contested and is plainly appropriate.

As I noted above, the SPR seeks an order approving his remuneration to 30 June 2025 in a specified amount, which has been approved by the committee of debenture holders, and which is supported by a detailed remuneration report exhibited to Mr Lindholm’s 22 July affidavit. I have addressed the principles applicable to the determination of the receiver’s remuneration in earlier judgments in this matter, including BSL 2025 at [48], which I adopt without repeating. I accept that the evidence is sufficient to support the SPR’s remuneration claim, and I bear in mind its quantum is modest, given the complexity of the proceedings, and continued issues arising in respect of this application.

The SPR also seeks an order fixing future remuneration, for the period after his discharge and release, where he will be performing specific tasks including receiving any Distribution from Lehman and completing the final distribution to debenture holders. The Court has power to prospectively approve that remuneration by analogy with the approach that is regularly taken in respect of liquidator’s remuneration. I am satisfied that the Court should here do so, where this has the advantage, common in such applications, of avoiding the need for and costs of an additional application for approval of remuneration, at the point the receivership is complete. I accept that the amount remaining to be done in the receivership, within the area of the qualifications to the release, are in narrow scope and I am satisfied that the evidence led sufficiently supports the amount of that future remuneration which I will also approve.

I recognise that some remaining issues in the receivership will remain to be determined after the delivery of this judgment, including orders relating to the making of a final distribution to debenture holders and orders in relation to the treatment of unpresented payments, a matter which was considered in Banksia 2025. It was also common ground between the parties and the Contradictor that the costs of the application should be determined after delivery of this judgment. It also seems to me to be preferable to allow the Victorian Applicants an opportunity to give effect to the result of this judgment by amending the Section 29 Proceedings to delete the claims against the SPR, as Mr Orow foreshadowed they would do. Plainly, their conduct in that respect will likely be relevant to whether, and on what basis, an order for costs may be made against them in this application and whether the Court should now make orders of the kind made in Sheridan v Colin Biggers & Paisley [2019] NSWSC 621 in respect of the costs of these proceedings. I will therefore set a timetable for dealing with the question of costs that allows the Victorian Applicants an opportunity to address these matters before costs are determined.

I make the following orders, consequential on the findings that I have reached above: