FEDERAL COURT OF AUSTRALIA

Pozzebon (Trustee) v Australian Gaming and Entertainment Ltd, in the matter of Australian Gaming and Entertainment Ltd (in liq) [2014] FCA 1034

FEDERAL COURT OF AUSTRALIA

Pozzebon (Trustee) v Australian Gaming and Entertainment Ltd, in the matter of Australian Gaming and Entertainment Ltd (in liq) [2014] FCA 1034

CORRIGENDUM

1    In paragraph 17 of the Reasons for Judgment, “Pt5.7B” should read “Pt5.3A”.

Associate:

Dated:    29 September 2014

THE COURT DECLARES THAT:

The written security agreement between the applicant and the respondent dated 24 December 2013 is a security interest within the meaning of that term as it is defined in the Personal Property Securities Act 2009 (Cth).

THE COURT ORDERS THAT:

1.    Pursuant to s 500(2) of the Corporations Act 2001 (Cth) the applicant be granted leave, nunc pro tunc, to proceed.

2.    Otherwise the amended originated application filed 19 June 2014 be dismissed with costs.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1    This is an application made pursuant to s 500(2) of the Corporations Act 2001 (Cth) (“Corporations Act”) and s 207 of the Personal Property Securities Act 2009 (Cth) (“PPSA”) in which the applicant seeks the following relief:

1.    An order that, pursuant to section 500 (2) of the Corporations Act, the applicant be granted leave, nunc pro tunc, to proceed;

2.    A declaration that the written Security Agreement between the applicant and the respondent dated 24 December 2013 (“the Security Agreement”) is a security interest within the meaning of that term as it is defined in the PPSA

3.    A declaration that the Security Agreement is a security interest which is valid and enforceable against Australian Gaming and Entertainment Ltd (in liquidation) ACN 149057741 (“the company”)

4.    A declaration that the security interest granted to the applicant by the Security Agreement has not vested, and/or does not vest, in the company

5.    An order that the respondent pays the applicants costs of and incidental to this application, to be agreed or assessed on an indemnity basis.

2    The applicant relied on three affidavits filed in this proceeding, namely the affidavits of Kyle James Kimball filed on 19 June 2014 and 2 July 2014, and the affidavit of Luigi Louis Pozzebon filed on 19 August 2014. Mr Kimball is the solicitor of the applicant. The respondent filed no material in this proceeding.

3    There is a great deal of common ground between the parties. No facts are in dispute, and indeed there is agreement on much of the relevant applicable law. The only question in dispute is a narrow one, namely whether in this case the relevant security interest, which has attached to relevant collateral and is enforceable, has nonetheless been perfected only by registration within the meaning of s 21(1)(b) of the PPSA.

4    In order to appreciate the importance of this question, it is useful to set out the relevant legislation and summarise the background facts to the current claim before turning to the issue before the Court.

Relevant legislation

5    The case before me turns on an interpretation of s 588FL(2) of the Corporations Act and s 21(1) of the PPSA.

6    In relation to s 588FL(2) it is useful to not only set out that subsection, but material surrounding legislation, as follows:

588FL    Vesting of PPSA security interests if collateral not registered within time

Scope

(1)    This section applies if:

(a)    any of the following events occurs:

(i)    an order is made, or a resolution is passed, for the winding up of a company;

(ii)    an administrator of a company is appointed under section 436A, 436B or 436C;

(iii)    a company executes a deed of company arrangement under Part 5.3A; and

(b)    a PPSA security interest granted by the company in collateral is covered by subsection (2).

Note:    A security interest granted by a company in relation to which paragraph (a) applies that is unperfected at the critical time may vest in the company under section 267 or 267A of the Personal Property Securities Act 2009.

(2)    This subsection covers a PPSA security interest if:

(a)    at the critical time, or, if the security interest arises after the critical time, when the security interest arises:

(i)    the security interest is enforceable against third parties under the law of Australia; and

(ii)    the security interest is perfected by registration, and by no other means; and

(b)    the registration time for the collateral is after the latest of the following times:

(i)    6 months before the critical time;

(ii)    the time that is the end of 20 business days after the security agreement that gave rise to the security interest came into force, or the time that is the critical time, whichever time is earlier;

(iii)    if the security agreement giving rise to the security interest came into force under the law of a foreign jurisdiction, but the security interest first became enforceable against third parties under the law of Australia after the time that is 6 months before the critical time—the time that is the end of 56 days after the security interest became so enforceable, or the time that is the critical time, whichever time is earlier;

(iv)    a later time ordered by the Court under section 588FM.

Note 1:    For the meaning of critical time, see subsection (7).

Note 2:    For when a security interest is enforceable against third parties under the law of Australia, see section 20 of the Personal Property Securities Act 2009.

Note 3:    A security interest may become perfected at a particular time by a registration that is made earlier than that time, if the security interest attaches to the collateral at the later time (after registration). See section 21 of the Personal Property Securities Act 2009.

Note 4:    The Personal Property Securities Act 2009 provides for perfection by registration, possession or control, or by force of that Act (see section 21 of that Act).

Vesting of security interest in company

(4)    The PPSA security interest vests in the company at the following time, unless the security interest is unaffected by this section because of section 588FN:

(a)    if the security interest first becomes enforceable against third parties at or before the critical time—immediately before the event mentioned in paragraph (1)(a);

(b)    if the security interest first becomes enforceable against third parties after the critical time—at the time it first becomes so enforceable.

Note:    For the meaning of critical time, see subsection (7).

…

(7)    In this section:

critical time, in relation to a company, means:

(a)    if the company is being wound up—when, on a day, the event occurs by virtue of which the winding up is taken to have begun or commenced on that day under section 513A or 513B; or

(b)    in any other case—when, on a day, the event occurs by virtue of which the day is the section 513C day for the company.

7    Materially s 21 of the PPSA provides:

Perfection--main rule

(1)    A security interest in particular collateral is perfected if:

(a)    the security interest is temporarily perfected, or otherwise perfected, by force of this Act; or

(b)    all of the following apply:

(i)    the security interest is attached to the collateral;

(ii)    the security interest is enforceable against a third party;

(iii)    subsection (2) applies.

(2)    This subsection applies if:

(a)    for any collateral, a registration is effective with respect to the collateral; or

(b)    for any collateral, the secured party has possession of the collateral (other than possession as a result of seizure or repossession); or

(c)    for the following kinds of collateral, the secured party has control of the collateral:

(i)    an ADI account;

(ii)    an intermediated security;

(iii)    an investment instrument;

(iv)    a negotiable instrument that is not evidenced by a certificate;

(v)    a right evidenced by a letter of credit that states that the letter of credit must be presented on claiming payment or requiring the performance of an obligation;

(vi)    satellites and other space objects.

Note:    For what constitutes possession and control of collateral, see Part 2.3.

(3)    A security interest may be perfected regardless of the order in which attachment and any step mentioned in subsection (2) occur.

(4)    …

8    Also of relevance is s 267 of the PPSA which provides:

267    Vesting of unperfected security interests in the grantor upon the grantor’s winding up or bankruptcy etc.

Scope

(1)    This section applies if:

(a)    any of the following events occurs:

(i)    an order is made, or a resolution is passed, for the winding up of a company or a body corporate;

(ii)    an administrator of a company or a body corporate is appointed (whether under section 436A, 436B or 436C of the Corporations Act 2001, under that section as it is applied by force of a law of a State or Territory, or otherwise);

(iii)    a company or a body corporate executes a deed of company arrangement (whether under Division 10 of Part 5.3A of the Corporations Act 2001, under that Division as it is applied by force of a law of a State or Territory, or otherwise);

(iv)    a sequestration order is made against a person (the bankrupt) under the Bankruptcy Act 1966;

(v)    a person (the bankrupt) becomes a bankrupt by force of section 55, 56E or 57 of the Bankruptcy Act 1966; and

(b)    a security interest granted by the body corporate, company or bankrupt is unperfected at whichever of the following times applies:

(i)    in the case of a company or body corporate that is being wound up—when, on a day, the event occurs by virtue of which the winding up is taken to have begun or commenced on that day (whether under section 513A or 513B of the Corporations Act 2001, under either section as applied by force of a law of a State or Territory, or otherwise);

(ii)    in the case of any other company or body corporate—when, on a day, the event occurs by virtue of which the day is the section 513C day for the company or body, within the meaning of the Corporations Act 2001 (including that Act as it is applied by force of a law of a State or Territory, or otherwise);

(iii)    in the case of a bankrupt—when a sequestration order is made against the bankrupt under the Bankruptcy Act 1966, or when he or she becomes a bankrupt by force of section 55, 56E or 57 of that Act.

Note 1:    For the meaning of company, see section 10.

Note 2:    See also Division 2A of Part 5.7B of the Corporations Act 2001.

Security interest vested in grantor

(2)    The security interest held by the secured party vests in the grantor immediately before the event mentioned in paragraph (1)(a) occurs.

Note:    This subsection does not apply to certain security interests (see section 268).

Title of person acquired for new value without knowledge

(3)    …

Relevant facts

9    Mr and Mrs Pozzebon are the joint trustees of the Pozzebon Family Superannuation Fund which is a self-managed superannuation fund within the meaning of the Superannuation Industry (Supervision) Act 1993 (Cth). Together they comprise the applicant in this proceeding. The respondent is a public company based in Perth.

10    On or about 24 December 2013 the applicant and the respondent entered into a transaction by which the applicant agreed to lend and the respondent agreed to borrow the sum of $250,000 (“the loan”). The terms of the loan were documented and comprised:

    A convertible loan agreement dated 24 December 2013 between and executed by, the applicant and the respondent.

    A security agreement dated 24 December 2013 between and executed by the applicant and the respondent.

    A document entitled “Equal Ranking Deed” between and executed by the applicant, the respondent and three other lenders who entered into similar transactions with the respondent at or about the same time.

    A deed of variation by which the parties agreed to vary the terms of the convertible loan agreement.

(“the transaction documents”)

11    It is not in dispute that a valid security agreement existed in favour of the applicant.

12    Pursuant to the security agreement the respondent agreed to, inter alia, mortgage personal property and land and other property to the applicant and other parties described as “charges” in the schedule to the security agreement. In the security agreement the respondent was defined as the “Mortgagor”. “Personal property” was defined as meaning:

… all present and after-acquired property which is legally or beneficially owned by the Mortgagor, or in which the Mortgagor has rights under the PPSA that allow it to grant a Security Interest in that property (including the Securities), other than Land and Other Property.

13    “Land and Other Property” was defined as meaning:

… all property or rights of any kind of the Mortgagor that are not “personal property” as defined in the PPSA, or are interests to which the PPSA does not apply, including without limitation:

(a)    Interests in land, buildings and fixtures; and

(b)    The right to receive rent, revenue and other income derived from any real property owned by the Mortgagor, to the extent that it is not personal property.

14    “Secured Money” was defined as any money which at any time the Mortgagor was liable to pay the Mortgagee under the convertible loan agreement.

15    On or about 24 December 2013 Mr Pozzebon caused the advance of $250,000 to the respondent on behalf of the applicant.

16    On 19 May 2014 the applicant caused to be registered on the Personal Property Securities Register (“PPSR”) the applicant’s security interest granted by the transaction documents. Verification statements in respect of this registration were issued by the Registrar pursuant to s 156 of the PPSA on 19 May 2014.

17    On or about 26 May 2014 the company was placed into voluntary administration under Pt 5.7B of the Corporations Act. The company has one relevant asset, being funds standing to its credit in the sum of $860,000 in a bank account.

18    The first meeting of creditors was held on 6 June 2014. On that day the applicant’s solicitor sent a notice of default to the respondent in respect of its default under the transaction documents. In a formal proof of debt lodged with the administrators the applicant claimed the sum of $348,713.37.

19    Lawyers for the respondent subsequently informed the applicant that they were of the view that the applicant’s security interest was unenforceable against the company, and moreover the security interest had vested in the company pursuant to the Corporations Act and the PPSA.

20    On 1 July 2014 the company entered liquidation.

The position of the respondent

21    It is convenient to first consider the position taken by the respondent, which the applicant is seeking to challenge by instituting this proceeding.

22    For the purposes of s 21(1)(b) of the PPSA the respondent accepts that the security interest created by the transaction documents is attached to the company’s interest in the bank account, and further that the security interest is enforceable. The respondent submits that s 21(2)(a) of the PPSA applies because the security interest was registered. It follows that the security interest has been perfected and the manner of perfection involved registration alone. As a matter of fact the criteria stipulated in s 21(2)(b) and (c) are not applicable.

23    In the circumstances, this means that for the purposes of s 588FL(2)(a)(ii) of the Corporations Act, “the security interest is perfected by registration, and by no other means”.

The position of the applicant

24    In summary, the applicant submits that while there had been attachment, enforceability and perfection of the security interest, that perfection was not by registration alone as contemplated by s 21(2)(a) of the PPSA. Primarily, this is because:

    A security interest can be perfected in ways other than registration.

    Section 588FL(2) does not apply to the relevant PPSA security interest.

    In the circumstances it is uncontroversial that the security interest is enforceable against third parties under Australian law.

    The perfection of the security interest in this case has been by attachment and enforceability and effective registration, and accordingly s 588FL(2)(a) requirements are not met.

    It follows that there is no vesting in terms of s 588FL(4).

25    Further, the applicant seeks leave of the Court to proceed on the basis that the applicant will be severely prejudiced if its security interest is not perfected, and further that the applicant here is asserting a property right and not merely the right of an unsecured creditor.

Leave to proceed

26    Section 500(2) of the Corporations Act provides:

After the passing of the resolution for voluntary winding up, no action or other civil proceeding is to be proceeded with or commenced against the company except by leave of the Court and subject to such terms as the Court imposes.

27    As recently observed by Foster J in Richardson v Lo Pilato (Liquidator); In the Matter of Trojan Hospitality (ACT) Pty Limited (In Liq) [2014] FCA 888, leave will readily be granted for a proprietary claim because such a claim cannot be accommodated appropriately within the proof of debt procedure. The applicant submits, correctly in my view, that its claim is of a proprietary nature, because its claim relates to a security interest over property of the company. Certainly courts have permitted proceedings to be taken by a mortgagee in comparable circumstances (Re David Lloyd & Co (1877) 6 Ch D 339).

28    Further, the amount and seriousness of the applicant’s claim supports a finding that leave ought be granted. The applicant advanced the sum of sizeable sum of $250,000 pursuant to its agreement with the respondent. The seriousness of this claim is underscored by the fact that, if the applicant is unsuccessful in this claim and is thus deemed to be an unsecured creditor, there is a real question whether any assets will remain to satisfy the debt owing to the applicant.

29    Finally, at the hearing of the proceeding the respondents, while not consenting to an order being made to grant leave, did not oppose it.

30    In my view leave to proceed should be granted to the applicant in the terms sought.

Was the security interest perfected by registration and by no other means?

31    Reviewing the background facts in light of the relevant legislation, the reason for the parties’ concern in this case is clear. The applicant’s security interest in respect of assets of the company was created on or about 24 December 2013 and registered on 19 May 2014, almost five months later. It follows that the security interest was registered more than 20 days after the agreement was made giving rise to the security interest (as contemplated by s 588FL(2)(b)(ii) Corporations Act).

32    Further, the company entered voluntary administration on 26 May 2014, almost exactly five months after the security interest was created. This was the date on which date the administration began within the meaning of s 513C of the Corporations Act (and which was also the “critical time” within the meaning of s 588FL(7)). The appointment of the administrator was an event contemplated by s 588 FL(1)(a)(ii) of the Corporations Act (as well as s 267(1)(a)(ii) PPSA). It was certainly registered within six months before commencement of the administration and the “critical time” (as contemplated by s 588FL(2)(b)(i) Corporations Act). No later time for registration was ordered by the Court under s 588FM of the Corporations Act.

33    It follows that the applicant’s security interest is potentially subject to s 588FL(2) and s 588FL(4) of the Corporations Act.

34    Because of the time at which the security interest was registered relative to the commencement of the voluntary administration of the company, unless the applicant can establish that the security interest was not perfected only by means of registration, the security interest will vest in the company and the applicant will be an unsecured creditor by operation of s 588FL of the Corporations Act (potentially s 267A(1) PPSA is also relevant, however I note that the submissions have focussed on s 588FL and it is this section to which I will turn).

35    The substance of the applicant’s case is that because the relevant security interest was perfected by attachment and enforceability and effective registration, the circumstances have taken the method of perfection outside the parameters of s 588FL(2)(a)(ii). They support this contention by submitting that attachment and enforceability are not always necessary for perfection, and that an example of this is in respect of temporary perfection of which attachment and enforceability are not necessarily elements.

36    In my view the position adopted by the applicant in this proceeding is misconceived and misapprehends the meaning and purpose of both s 21(1) of the PPSA and s 588FL(2) of the Corporations Act. That this is so becomes obvious once the sections are examined carefully.

37    It is clear that unless the perfection is of a temporary nature or by effect of a provision other than s 21 of the PPSA as contemplated by s 21(1)(a) of the PPSA, attachment and enforceability (as described in s 21(1)(b)(i) and (ii)) are mandatory prerequisites to perfection of a security interest. Section 21(1)(b) specifically states that all of the elements therein must be satisfied, namely the security interest must be:

    attached to the collateral (s 21(1)(b)(i)), and

    enforceable against a third party (s 21(1)(b)(ii)), and

    section 21(2) applies (s 21(1)(b)(iii)).

38    Section 21(2) sets out alternative options of means of perfection of the security interest referable to registration, or possession, or control but only once s 21(1)(b)(i) and (ii) are satisfied.

39    To the extent that the applicant’s submission contemplates that attachment and enforceability are not fundamental pre-conditions to perfecting a security interest in all cases other than cases of temporary perfection, and that the perfection of a security interest by attachment, enforceability and registration is somehow a process out of the ordinary such that s 588FL(2) and (4) are irrelevant in this case, it is wrong.

40    As is made clear by s 21(1)(b) and s 21(2) of the PPSA, once a security interest has attached to and is enforceable against collateral, the means by which perfection of the security interest is completed may vary. One means is by registration of the security interest. Another means is by possession of the collateral by the secured party. A third means of perfection is by control (but only in relation to certain types of collateral).

41    It follows that when s 588FL(2)(a)(ii) refers to “the security interest [being] perfected by registration, and by no other means” that section is distinguishing “registration” as a means of perfection from “possession” and/or “control”. Section 588FL(2)(a)(ii) is not distinguishing “registration” from “attachment” and/or enforceability”. Indeed Note 4 to s 588FL(2) specifically states that the PPSA provides for “perfection by registration, possession or control, or by force of that Act (see s 21 of that Act)”.

42    In relation to the applicant’s submissions concerning temporary perfection, I note that the PPSA allows “temporary” perfection in limited circumstances where the security interest is not registered, or the collateral is not in the possession or control of the secured party. As explained in detail by Professor Duggan and Associate Professor Brown in Australian Personal Property Securities Law (LexisNexis, 2012) at 108-109 provisions in the PPSA providing for temporary perfection include:

    Section 22(2)-(4) which apply where a secured party takes a security interest in goods in the possession of a bailee. The security interest is temporarily perfected for up to five days from the date the bailee issues a negotiable document of title to the goods until the secured party takes possession of the document.

    Section 33 which gives a secured party a grace period to perfect its security interest in proceeds of the collateral.

    Section 34 which applies where collateral is transferred from one grantor to another.

    Section 35 which applies where a security interest in goods or the document of title to goods was perfected by possession but the secured party returns the collateral to the grantor so that the goods can be sold.

    Section 36 which applies where a security interest in a negotiable instrument or investment instrument was perfected by possession or control, and allows a secured party to give up possession or control for up to five business days to permit certain dealings with the instrument.

    Section 38 which applies where goods are returned or repossessed and gives a transferee of accounts or chattel paper a deemed security interest for up to five days after the goods are returned or repossessed.

    Section 39 which gives a secured party a grace period to perfect its security interest in Australia where tangible collateral subject to a foreign security interest is moved to Australia.

    Section 40 which gives a secured party a grace period to perfect its security interest in Australia where intangible or financial property is subject to a foreign security interest and the grantor relocates to Australia.

43    These are clearly very limited circumstances, usually of limited duration, pending steps taken by the grantor and the secured party to ensure perfection of the security interest by registration, possession or control within the meaning of s 21 of the PPSA. There is no suggestion that these exceptional forms of perfection are applicable in this case, or any reason why the provisions for temporary perfection should influence the interpretation of s 21(1) of the PPSA or s 588FL of the Corporations Act.

44    I note that the learned authors of Austin RP and Black AJ, Annotations to the Corporations Act (LexisNexis, subscription service) state at 83,615:

Section 588FL(4) applies if a security interest is perfected at the relevant time by registration, and not to the perfection of the security interest by possession, control or temporary perfection which are unaffected by the section by reason of s 588FL(2)(a)(ii).

45    In my view this statement clearly and correctly states the law.

46    Finally the applicant has referred me to a number of cases relating to interpretation of legislation including Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; Certain Lloyd’s Underwriters Subscribing to Contract No IH00AAQS v Cross (2012) 248 CLR 378; Rail Corporation New South Wales v Brown (2012) 82 NSWLR 318. In Project Blue Sky McHugh, Gummow, Kirby and Hayne JJ said:

69.    The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined “by reference to the language of the instrument viewed as a whole”. In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that “the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed”. Thus, the process of construction must always begin by examining the context of the provision that is being construed.

70.    A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals. Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions. Reconciling conflicting provisions will often require the court “to determine which is the leading provision and which the subordinate provision, and which must give way to the other”. Only by determining the hierarchy of the provisions will it be possible in many cases to give each provision the meaning which best gives effect to its purpose and language while maintaining the unity of the statutory scheme.

71.    Furthermore, a court construing a statutory provision must strive to give meaning to every word of the provision. In The Commonwealth v Baume Griffith CJ cited R v Berchet to support the proposition that it was “a known rule in the interpretation of Statutes that such a sense is to be made upon the whole as that no clause, sentence, or word shall prove superfluous, void, or insignificant, if by any other construction they may all be made useful and pertinent”.

(Footnotes omitted.)

47    In this case however it is the interpretation urged by the applicant in this case which is contrary to the plain words of s 588FL of the Corporations Law and s 21 of the PPSA. There is no conflict between these or any other provisions of either statute requiring reconciliation such that it is necessary for the Court to embark upon a statutory construction exercise of the kind explained in Project Blue Sky. Rather, an examination of the relevant legislation and its purpose militates against the interpretation advanced by the applicant, because the applicant’s interpretation robs s 588(2) and (4) of the Corporations Law of their natural meaning or indeed any practical effect where no example was advanced of perfection being achieved by registration alone in the absence of attachment and enforceability.

48    The purpose of the provisions in contention is clear. Section 588FL was inserted into the Corporations Act to prevent security interests being granted fraudulently by corporations with knowledge of an imminent administration, liquidation or deed of company arrangement, and to avoid property falling into the estate of a trustee or administrator or otherwise being claimed by unsecured creditors (Explanatory Memorandum, Personal Property Securities (Corporations and Other Amendments) Bill (Cth) 2010 cl 6.2).

49    Similarly the terms of s 21(1)(b) of the PPSA are unambiguous – attachment and enforceability plus one of the final means set out in s 21(2) of the PPSA (namely registration or possession or control) are necessary requirements for perfection of a security interest. This is apparent from the Outline of the Replacement Explanatory Memorandum, Personal Property Securities Bill (Cth) 2009 which states:

Perfection would occur when a security interest attaches to personal property and the secured party takes possession and/or control of the property or registers it on the PPS Register. The Bill would also provide short term ‘temporary perfection’ following certain events involving the collateral.

50    Similarly clause 2.25 of the Replacement Explanatory Memorandum states:

Possession and control of personal property would be important as two of the four ways of perfecting a security interest.

51    The applicant has not attempted to make a case that the relevant security interest in this case has been perfected by possession of the collateral or control of collateral identified in s 21(2). The claimed perfection is not temporary. The only means by which the security interest was perfected in this case was by registration.

52    It follows that, in the circumstances, the security interest is not valid and enforceable against the respondent.

Conclusion

53    The appropriate order is to grant leave to proceed, but to otherwise dismiss the application. The respondent’s costs of the application should be paid by the applicant.

Associate:

Dated:    23 September 2014