Federal Court of Australia

Timor Sea Oil & Gas Australia Pty Ltd (in liq) v Commonwealth (No 2) [2026] FCA 1236

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to s 477(2B) of the Corporations Act 2001 (Cth), the entry by the applicants into the Deed of Assignment dated 25 March 2026, and as varied by the Deed of Variation dated 1 June 2026 (collectively, Deed of Assignment), is approved by the Court nunc pro tunc.

2.    Pursuant to s 90-15(1) and 3(a) of the Insolvency Practice Schedule, being schedule 2 of the Corporations Act, the proceeds of any recovery arising from these proceedings be distributed in accordance with clause 8.1 of the Deed of Assignment.

3.    Pursuant to r 8.21(f) of the Federal Court Rules 2011 (Cth), NOGA Holdings Pty Ltd be substituted for the applicants in this proceeding.

4.    Pursuant to r 8.23 of the Rules, NOGA Holdings be granted leave to file an amended originating application, an amended concise statement, and an amended applicant’s genuine steps statement.

5.    Pursuant to s 37AI(1) of the Federal Court of Australia Act 1976 (Cth), until further order of the Court, the passages identified in Column 3 of Schedule 1 be marked confidential on the Court file, not be published, disclosed or accessed by any person or party, except pursuant to an order of the Court and their contents be suppressed.

6.    Pursuant to s 37AI(1) of the Federal Court Act, there is to be no disclosure, by publication or otherwise, of:

(a)    the redacted reasons for judgment of Stellios J in Timor Sea Oil & Gas Australia Pty Ltd (in liq) v Commonwealth (No 2) [2026] FCA 1236 until 4.00pm 28 August 2026; and

(b)    the confidential reasons for judgment of Stellios J in Timor Sea Oil until further order of the Court.

7.    By 4.00pm on 31 August 2026, NOGA Holdings is to serve a copy of these orders and the redacted reasons in Timor Sea Oil on:

(a)    The respondent; and

(b)    Castleton Commodities Merchant Asia Co Pte Ltd.

THE COURT NOTES THAT:

8.    Consistently with the reasons in Timor Sea Oil, and for the avoidance of doubt, Order 2 of these Orders is not intended to displace any statutory provisions that operate on the entitlements of secured creditors.

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

SCHEDULE 1

REASONS FOR JUDGMENT

STELLIOS J:

introduction

Background

1    The first applicant, TSOGA, has commenced a proceeding against the respondent, the Commonwealth, seeking an order under paragraph 1 of Schedule 3 to the Timor Sea Maritime Boundaries Treaty Consequential Amendments Act 2019 (Cth) for the payment of reasonable compensation or, alternatively, for a declaration that the Consequential Amendments Act is invalid in its application to two petroleum production licences (PPLs) held by TSOGA under the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Cth) and the Petroleum (Submerged Lands) Act 1967 (Cth) (identified as AC/L5 and WA-18-L). TSOGA is in liquidation. The second respondent, Geoffrey Trent Hancock, is the Liquidator, and the second applicant in this proceeding.

2    The Concise Statement alleges that, following the entry by the Commonwealth into a treaty with the Democratic Republic of Timor-Leste establishing a maritime boundary in the Timor Sea, and the enactment of the Consequential Amendments Act, TSOGA received notices under the Offshore Petroleum Act that AC/L5 and WA-18-L had been altered (as a result of amendments to the Offshore Petroleum Act effected by the Consequential Amendments Act). It is alleged that TSOGA suffered financial harm by reason of a reduction in the licence areas, and the Commonwealth did not provide any compensation to TSOGA for the loss of its rights in respect of the licence areas.

3    Before the Court is an amended interlocutory application in this proceeding. I will return to the terms of that application below.

4    By way of background, I made orders extending (15 December 2025: Timor Sea Oil & Gas Australia Pty Ltd (in liq) v Commonwealth [2025] FCA 1587), and then further extending (23 April 2026, 5 June 2026), the date for service of the originating application and Concise Statement on the Commonwealth. As matters currently stand, the originating process is to be served on the Commonwealth within seven days after the determination of this amended interlocutory application.

5    Since instituting the proceeding, the applicants have entered into a deed of assignment dated 25 March 2026 and a deed of variation dated 1 June 2026 (unless otherwise indicated, these deeds are referred to collectively as the Deed of Assignment) with NOGA Holdings Pty Ltd and Angus Nelson Karoll (as Warrantor). On the evidence before me, NOGA Holdings is the sole shareholder of Northern Oil and Gas Australia (in liquidation) which, in turn, is the sole shareholder of TSOGA. Mr Karoll is the sole shareholder of Prudhoe Investments Pty Limited which, in turn, is the sole shareholder of NOGA Holdings. Mr Karoll is also the sole director of all these entities.

The Deed of Assignment

6    It is not necessary to set out the terms of the Deed of Assignment in detail. The material provisions include, [REDACTED]

7    [PARAGRAPHS 7-12 REDACTED]

8    [PARAGRAPHS 7-12 REDACTED]

9    [PARAGRAPHS 7-12 REDACTED]

10    [PARAGRAPHS 7-12 REDACTED]

11    [PARAGRAPHS 7-12 REDACTED]

12    [PARAGRAPHS 7-12 REDACTED]

13    It was accepted by NOGA Holdings and the Liquidator that the creditors – whether secured or unsecured – would share [REDACTED]. The amount identified by [REDACTED] will be referred to for convenience as the remainder amount.

The amended interlocutory application

14    By amended interlocutory application, NOGA Holdings seeks a number of orders:

(1)    An order pursuant to s 477(2B) of the Corporations Act 2001 (Cth) (or, the Act) approving, nunc pro tunc, the entry by the applicants into the Deed of Assignment;

(2)    An order pursuant to section 90-15(1) and 3(a) of the Insolvency Practice Schedule, being schedule 2 of the Corporations Act (ISP), and/or sections 21 and 23 of the Federal Court of Australia Act 1976 (Cth), for the proceeds of any recovery arising from the proceeding be distributed in accordance with cl 8.1 of the Deed of Assignment;

(3)    Further and/or in the alternative to the previous order, an order pursuant to s 564 of the Corporations Act for the proceeds of any recovery arising from the proceeding to be distributed in accordance with cl 8.1 of the Deed of Assignment;

(4)    An order pursuant to r 8.21(f) of the Federal Court Rules 2011 (Cth), for NOGA Holdings to be substituted for the applicants in this proceeding;

(5)    An order pursuant to r 8.23 of the Rules permitting NOGA Holdings to be granted leave to file an amended originating application, an amended concise statement and an amended genuine steps statement; and

(6)    An order under s 37AF(1) of the Federal Court Act for non-publication and suppression in relation to certain documents.

15    At the hearing, NOGA Holdings did not rely on s 21 of the Federal Court Act in support of prayer 2 and did not press prayer 3.

Evidence and submissions

16    At the hearing on 6 August 2026, NOGA Holdings, and TSOGA and the Liquidator, were respectively represented by separate counsel who gave oral submissions in support of the amended interlocutory application. NOGA Holdings relied on written submissions dated 4 August 2026 and filed on 5 August 2026.

17    In support of its interlocutory application, NOGA Holdings read:

(1)    Mr Karoll’s affidavits sworn on 2 June 2026 and 27 July 2026;

(2)    Mr Hancock’s affidavit sworn on 21 July 2026;

(3)    An affidavit by Stephen Gerard Connell, solicitor for NOGA Holdings, affirmed on 4 August 2026.

18    The Commonwealth neither consented to nor opposed the orders sought in the original form of the interlocutory application which did not include prayer 2. However, following the Court’s orders to permit the application to be amended, the Commonwealth sought to be excused from appearing at the hearing.

CCMA

19    The position of CCMA, and its relevance to the amended interlocutory application, should be further explained. From the evidence before me, CCMA claims to be a secured creditor of TSOGA, however, the nature and quantum of that claim remain unclear on the evidence. That requires some explanation.

20    On 20 January 2026, the Liquidator wrote to CCMA stating that he had searched the Personal Property Securities Register maintained by the Australian Financial Security Authority in accordance with the Personal Property Securities Act 2009 (Cth) and discovered that the Register indicated that CCMA had a registered security interest or interests affecting TSOGA’s personal property (and/or personal property in the possession of TSOGA) and gave details of those registration numbers. The Liquidator requested, pursuant to s 275(1) of the Personal Property Securities Act, that CCMA send or make available copies of each registered security agreement and provide certain details including the amount or the obligation that is secured.

21    In response, CCMA wrote to the Liquidator on 4 February 2026 setting out the details of seven security agreements between TSOGA and CCMA entered into between 1 and 4 August 2017. According to CCMA, [REDACTED], and the description of collateral in the case of each security agreement included proceeds of collateral.

22    The letter noted that, in relation to one of the security deeds (referred to as the Featherweight Security Deed), recourse to the security interest was limited to AU$10. It further provided certain documents that had been requested by the Liquidator.

23    On 24 April 2026, NOGA Holdings’ solicitors wrote to CCMA tendering the sum of $10 to discharge CCMA’s security interest under the Featherweight Security Deed and seeking confirmation that CCMA accepted that sum and that the security interest under the Featherweight Deed was thereby released. [REDACTED].

24    On 1 May 2026, CCMA’s solicitors emailed NOGA Holdings’ solicitors stating that, to CCMA’s knowledge, NOGA Holdings’ solicitors had not been authorised by TSOGA to tender the AU$10 and, consequently, the view was expressed that the security had not been discharged. It was further stated that, in any event, the Featherweight Deed secures payment of secured money, which exceeds AU$10.

25    Thereafter, CCMA’s solicitors and NOGA Holdings’ solicitors exchanged communications in relation to a claim by CCMA’s solicitors that it appeared that the Liquidator had disclosed information to NOGA Holdings and its solicitors in breach of confidence. It is not necessary to go into the detail of that allegation. It suffices to say that the claims were denied and that, to the extent of any breach, NOGA Holdings’ solicitors, on behalf of Mr Karoll and NOGA Holdings, sought retrospective approval to provide the relevant information to NOGA Holdings’ solicitors. The claims were also denied by the Liquidator’s solicitors.

26    Relevant to the claimed security interests, enclosed with a letter from NOGA Holdings’ solicitors to CCMA’s solicitors on 13 May 2026, an executed authority from the Liquidator was provided authorising NOGA Holdings to discharge the security. The letter sought confirmation that CCMA accepted that authority and whether CCMA now agrees to the discharge of the security.

27    By letter dated 18 May 2026, CCMA’s solicitors requested from the Liquidator’s solicitors all documents filed in the Court in this proceeding, the Deed of Assignment and the application to this Court for approval of the Deed of Assignment (when it became available).

28    Mr Karoll deposed that, on 20 May 2026, the filed documents in this proceeding and the Deed of Assignment were provided to CCMA’s solicitors by NOGA Holdings’ solicitors. A copy of that letter is not before the Court, but there is no reason to doubt that the documents were provided. Mr Karoll further deposed that the application for approval was not provided as it was not ready at that time. In a subsequent letter dated 4 June 2026, NOGA Holdings’ solicitors indicated that the letter of 20 May 2026 also pressed for a response on the matters raised in the correspondence of 13 May 2026.

29    On 21 May 2026, NOGA Holdings’ solicitors emailed CCMA’s solicitors seeking a response to the 13 May 2026 letter. CCMA’s solicitors replied on the same day stating that they were taking instructions and would respond as soon as possible.

30    A draft application for approval was provided by NOGA Holdings’ solicitors to CCMA’s solicitors on 1 June 2026. I do not have before me a copy of the draft application for approval. However, Mr Karoll deposed that it was in materially the same terms as the version which was filed on 2 June 2026 (this would appear to be an error as the lodgement date was in fact 4 June, however, nothing turns on that discrepancy). The interlocutory application, in the form it took when lodged for filing on 4 June 2026, did not contain prayer 2 (or prayer 3).

31    In the 1 June 2026 letter, NOGA Holdings’ solicitors also requested again a response to the 13 May 2026 correspondence “as a matter of urgency”. The response from CCMA’s solicitors was that:

In relation to the matters set out in your 13 May 2026 letter, our client reserves all of its rights. No statement or omission on the part of our client, in this email or otherwise, is to be construed as a waiver, release or election.

32    A letter on 4 June 2026 also stated that a copy of the finalised approval application was provided to CCMA’s solicitors on 2 June 2026. It was also stated in that 4 June letter that the letter of 2 June 2026 further requested an indication on the timing of a response to the 13 May letter, and that a reply indicated that CCMA’s response was the same as its response on 1 June 2026. I do not have a copy of the 2 June 2026 letter before me. Nor do I have a copy of the finalised version of the approval application that was sent to CCMA’s solicitors on 4 June. However, as indicated, the interlocutory application, in its original form when lodged for filing on 4 June 2026, did not contain prayer 2.

33    The 4 June letter stated that CCMA’s response to the matters in the 13 May letter was “not an adequate response” and that there was “no reason why CCMA cannot decide on those matters now” given that CCMA (a) had received the documents filed in this proceeding, a copy of the Deed of Assignment and a copy of the approval application and (b) held the $10 cheque and discharge authority. NOGA Holdings’ solicitors pressed for “an adequate response” and requested (a) confirmation that the security under the Featherweight Security Deed had been discharged in light of the tendering of the $10 by NOGA Holdings on behalf of TSOGA and with the liquidator’s authority and (b) that the security under that Deed be discharged. CCMA’s position in relation to the discharge of its security was described as material to NOGA Holdings’ approval application.

34    The 4 June letter further gave notice that a case management hearing was scheduled for the next day at which time orders were likely to be made for the hearing of the approval application, and that the issue of the Featherweight Security Deed may be raised by the Court since the Deed of Assignment refers to that deed. CCMA’s position was requested by 4.00pm on 11 June 2026. A response by email on the same day from CCMA’s solicitors stated that the amount secured by each of the security interests [REDACTED], and if NOGA Holdings were prepared to tender a sum sufficient to discharge the substantial security interest, less the $10 already paid, CCMA would provide an up-to-date payout figure.

35    On 9 July 2026, NOGA Holdings’ solicitors emailed CCMA’s solicitors indicating that in order “to provide full disclosure to the Court”, NOGA Holdings requested an up-to-date payout figure as referred to in the email of 4 June. It was further stated that it was expected “that any payout figure … will reflect commercial settlements entered into by CCMA, which are likely to include settlements with a. the Commonwealth and b. CCMA’s former legal advisors”. It then sought specific information about the settlements. The subtext of this confirmation is obscure. At the hearing, counsel for NOGA Holdings made reference to media reports and a passage within a Supreme Court judgment, but that material was not in evidence before me. The 9 July email also stated that a substantive response to either of NOGA Holdings’ solicitor’s letters had not been received, and confirmation was sought as to whether CCMA had instructions to respond to those letters.

36    On 13 July 2026, CCMA’s solicitors replied to say that “[w]e do not have and do not expect to receive instructions from CCMA to engage in further correspondence in relation to the matters raised in your email below. CCMA reserves its rights”.

37    At 12.18pm on 29 July 2026, NOGA Holdings’ solicitors emailed CCMA’s solicitors attaching, by way of service, the amended interlocutory application. It highlighted prayer 6 seeking confidentiality orders and requested confirmation that CCMA would treat the evidence and submissions referred to in prayer 6 in a manner consistent with their confidential nature. Confirmation was also sought whether CCMA intended to be heard on the application and that it was anticipated that it would be listed for hearing at 2.00pm on 6 August 2026. Later that day at 2.52pm, NOGA Holdings’ solicitors again emailed CCMA’s solicitors attaching, by way of service, the affidavits of Mr Karoll dated 2 June 2026 and 27 July 2026, and that of Mr Hancock dated 21 July 2026. The email commenced with the words “Thank you for your confirmation”. It is unclear what those words referred to. I was not provided with a copy of any correspondence containing any such confirmation, nor was it referred to in the affidavits.

38    On 3 August 2026, CCMA’s solicitors wrote to NOGA Holdings’ solicitors in the following terms:

(1)    That the amount secured by each of the security interests remains outstanding. [REDACTED]. It is enough to say that it is a substantial sum.

(2)    The Deed of Assignment cannot, of itself, bind CCMA or affect its rights under the security agreements. Without CCMA’s consent, or in accordance with the terms of the security agreements, the Deed of Assignment cannot bind CCMA, release or discharge CCMA’s security, alter its priority or permit the distribution of the secured collateral or proceeds in a way that is inconsistent with CCMA’s rights.

(3)    CCMA has a general right in a liquidation of TSOGA to realise or otherwise deal with its security under the security agreements, and that right is preserved by s 471C of the Corporations Act. While the Deed of Agreement may properly deal with the duties and rights of the parties to the deed and unsecured creditors, it cannot and does not seek to impair CCMA’s security interests.

(4)    In respect of prayer 1, an order by the Court in those terms does not endorse the transaction or determine substantive rights arising under it. It could not, without more, validate or adjudicate any purported legal effect of the Deed as against CCMA or its security.

(5)    In relation to prayer 2, the Court likely does not have the power under s 90-15 of the Insolvency Practice Schedule to alter accrued property rights: Kirkalocka Gold SPV Pty Ltd v SCL AUS Ltd [2025] FCA 1490 at [195] (Jackson J). Accordingly, prayer 2 is defective in form and substance. In any event, it is not apparent that prayer 2 seeks to affect CCMA’s rights and interests, as opposed to regulating a distribution of unsecured proceeds under cl 8.1 of the Deed of Assignment after secured claims have been satisfied.

(6)    CCMA has not been afforded procedural fairness and reserves all of its rights including seeking leave to appeal any decision affecting its rights or interests. In particular, it was only served with the amended interlocutory application on 29 July 2026 together with a request that CCMA indicate whether it intends to be heard on the application within 2 days of that request and, as at the time of writing, had not been served with the submissions. I was informed at the hearing that NOGA Holdings’ written submissions were provided on the day before the hearing.

(7)    In the circumstances, CCMA did not intend to appear or be heard on the amended interlocutory application, and reserved its rights.

(8)    CCMA relies on all of the security agreements, not just the Featherweight Security Deed.

(9)    CCMA required NOGA Holdings to tender a copy of the letter at the hearing.

39    At the commencement of the hearing, I indicated my concern that CCMA had not been afforded an adequate opportunity to be heard on the application. Submissions were made on behalf of NOGA Holdings that CCMA had been on notice of the relevance of the security interests to the approval application and, when given notice that the issue would be raised with the Court, CCMA could have sought an adjournment. I accept the strength of these submissions. However, I remained concerned that the amended interlocutory application, which had been amended to include prayer 2 which had not been earlier seen by CCMA, along with three of the four supporting affidavits, had only been served on 29 July 2026, and that the submissions as well as the affidavit of Mr Connell were only provided on the day before the hearing.

40    Accordingly, I considered that CCMA should be given an opportunity to provide submissions and evidence addressing the amended interlocutory application, with an opportunity for NOGA Holdings and the Liquidator to respond, and I made orders to that effect. The times permitted for those submissions were set mindful of the impending expiration of the Deed of Assignment.

41    Submissions, but no evidence, were filed by CCMA’s solicitors. In short, it is submitted that (a) the amended interlocutory application misunderstands, misstates or otherwise fails to take into account CCMA’s security interest over TSOGA’s claim in this proceeding and any recovery therefrom and (b) prayer 2 of the amended interlocutory application should recognise that security interest.

42    CCMA made the following claims:

(1)    Which of the seven security agreements is applicable to the property subject to the Deed of Assignment depends on the nature of the property from time to time. However, nothing turns on which security agreement applies at any given time, because together they cover all of TSOGA’s property and the proceeds of that property and secure the same sum of money. On any view, CCMA is a secured creditor.

(2)    CCMA’s security interest continues in the traceable proceeds of its collateral, which includes TSOGA’s claims in this proceeding, any judgment and any recoveries from such a judgment, whether they be in the hands of NOGA Holdings, TSOGA or its Liquidator. That is the case at general law and under ss 31 to 33 of the Personal Property Securities Act.

(3)    Neither TSOGA nor the Liquidator has identified any basis on which there can be an assignment of property subject to CCMA’s security interest free of that security interest. Nor does NOGA Holdings have any basis that would permit it to take an assignment of CCMA’s collateral free of CCMA’s security interest. NOGA Holdings’ claim is unsecured and ranks after CCMA’s secured claim.

(4)    In relation to the Claim by NOGA Holdings that it has tendered $10 to discharge the Featherweight Security Deed:

(a)    Pursuant to cl 19.2 of that Deed, the courts of Western Australia have exclusive jurisdiction to settle any dispute arising out of or in connection with that deed agreement and, accordingly, NOGA Holdings’ claim that its tender of $10 has discharged the deed can only be determined by one of those courts.

(b)    NOGA Holdings’ position is based on an illogical and selective reading of one paragraph in one security agreement in the suite of security agreements in favour of CCMA.

(c)    Clause 2.5 (containing the limit of $10) is a limited recourse provision. It does not operate as a redemption or release mechanism – cl 16 contains an express release provision, which makes no mention of a payment of $10. A unilateral tender of $10 does not bypass the release clause in cl 16 or address the requirement in cl 3 (being, a requirement that TSOGA pay the Secured Money in accordance with Finance Documents – as defined).

(d)    If the security interest could be destroyed by the payment of $10 while substantial Secured Money remained outstanding, the instrument would fail to achieve its main objective.

(e)    Even if the payment of $10 discharged the Featherweight Security Deed, it would not apply to the other security agreements, and CCMA would still have security over TSOGA’s claims and its proceeds.

43    CCMA’s position on the amended interlocutory application can be summarised as follows:

(1)    It did not oppose orders being made in the amended interlocutory application that do not detrimentally affect or prejudice CCMA and, therefore, takes no position on prayers 1, 4, 5 or 6 (prayer 3 not being pressed).

(2)    The form of relief in prayer 2 is unclear in its terms as it does not say whether it purports to affect CCMA’s security over the recovery from this proceeding, including in NOGA Holdings’ hands. It is therefore apt to cause confusion as to CCMA’s status as a secured creditor with respect to TSOGA’s claims and its proceeds.

(3)    The Court can make an order that any recovery from the substantive proceedings be distributed in accordance with [REDACTED]. The Court ought not, and has no power to, make an order that would authorise a distribution of any recovery from the proceedings without a reference to CCMA’s security.

(4)    The Court likely does not have the power under s 90-15 of the Insolvency Practice Schedule to alter accrued property rights. Alternatively, it would be an insuperable discretionary obstacle.

(5)    Section 90-15 should be read down so as not to infringe s 51(xxxi) of the Constitution. Any acquisition of CCMA’s security for no consideration would not be on just terms.

44    Both NOGA Holdings and the Liquidator filed reply submissions.

prayer 1: Power of the Court to make the orders under section 477(2B)

Applicable principles

45    No order has been made to vest the property in the liquidator under s 474(2) of the Corporations Act. Accordingly, the property remains vested in TSOGA: see Owners of Strata Plan 5290 v CGS & Co Pty Ltd [2011] NSWCA 168 at [39] (Sackville AJA, with Giles and Campbell JJA agreeing).

46    However, a liquidator of a company may “sell or otherwise dispose of, in any manner, all or any part of the property of the company”: Corporations Act s 477(2)(c). Pursuant to this power, the liquidator can transfer the company’s “property” by deed of agreement. “Property” is defined to include “a thing in action” (s 9), which has the same meaning as a “chose in action”: Strata Plan 5290 at [43]. Further, the power is stated in broad terms and should not be read down by reference to the rules against champerty and maintenance (UTSA Pty Ltd (in liq) v Ultra Tune Australia Pty Ltd (1996) 14 ASCR 457 at 463–4 (Hayne JA, with Brooking and Phillips JJA agreeing)), and extends to the assignment of a bare right of action (Re Movitor Pty Ltd (in liq) (1996) 64 FCR 380 at 390 (Drummond J)); Bank of Melbourne Ltd v HPM Pty Ltd (in liq) (1997) 26 ACSR 110 at 112 (Lee J). Once the bare cause of action is assigned, “the litigation to enforce it is conducted by the transferee”: Re Tosich Constructions Pty Ltd; Ex parte Wily (1997) 73 FCR 219 at 236, citing Movitor at 390 (Lindgren J).

47    Accordingly, prima facie, I am satisfied the liquidator had the power to enter into the Deed of Assignment for the transfer of the claims in this proceeding to NOGA Holdings.

48    However, s 477(2B) of the Corporations Act provides:

Except with the approval of the Court, of the committee of inspection or of a resolution of the creditors, a liquidator of a company must not enter into an agreement on the company’s behalf (for example, but without limitation, a lease or an agreement under which a security interest arises or is created) if:

(a) without limiting paragraph (b), the term of the agreement may end; or

(b) obligations of a party to the agreement may, according to the terms of the agreement, be discharged by performance;

more than 3 months after the agreement is entered into, even if the term may end, or the obligations may be discharged, within those 3 months.

49    Accordingly, because performance of the Deed of Assignment may extend for a period more than three months after the agreement was entered into, given the deed relates to TSOGA’s claims in this proceeding which are unlikely to be resolved within three months, the approval of the Court is required for the agreement.

50    In Generate Group Pty Ltd v Harris [2023] FCA 605 at [33], Stewart J helpfully summarised the following principles to be applied to the operation of s 477(2B) of the Corporations Act by reference to what Gordon J had said in Stewart, in the matter of Newtronics Pty Ltd [2007] FCA 1375 at [26]:

In Stewart, in the matter of Newtronics Pty Ltd [2007] FCA 1375 at [26], Gordon J identified a number of relevant principles governing the exercise of the court’s discretion to approve the liquidator entering into an agreement caught by s 477(2B), including the following:

(1)    The court does not simply ‘rubber stamp’ whatever is put forward by a liquidator.

(2)    The court will not approve an agreement if its terms are unclear.

(3)    The role of the court is to grant or deny approval to the liquidator’s proposal. Its role is not to develop some alternative proposal which might seem preferable.

(4)    In reviewing the liquidator’s proposal the task of the court is not to reconsider all of the issues weighed by the liquidator in developing the proposal, and substitute its determination in a hearing de novo, but to pay due regard to the liquidator’s commercial judgment and knowledge of all of the circumstances of the liquidation, satisfying itself there is no error of law or grounds for suspecting bad faith or impropriety, and weighing up whether there is any good reason to intervene in terms of the expeditious and beneficial administration of the winding up.

(5)    In judging whether or not a liquidator should be given permission to enter into a funding agreement, whether retrospective or not, it is important to ensure, amongst other things, that the entity or person providing the funding is not given a benefit disproportionate to the risk undertaken in light of the funding that is promised or a ‘grossly excessive profit’.

(6)    Generally the court grants approval under s 477(2B) of the Act only where the transaction relates to the proper realisation of the assets of the company or otherwise assists in the winding up of the company.

51    Stewart J added the following points (at [34]–[39]):

(1)    “[T]he court will have regard to the impact that entering into the agreement will have on the duration of the liquidation and whether that impact is, in all the circumstances, reasonable in the interests of the administration: In the matter of One.Tel Ltd [2014] NSWSC 457; 99 ACSR 247 at [30] per Brereton J”;

(2)    “Although s 477(2B) contemplates that approval will be obtained before an agreement is entered into, retroactive approval may be granted in certain circumstances: Newtronics at [25]; Re Ambient Rail Pty Ltd (in liq); Ex parte Tonks [2019] FCA 1556 at [9] per Yates J”;

(3)    The requirement to obtain the Court’s approval “affords some protection against ill-advised or improper actions on the part of the liquidator” because agreements that extend beyond that time “tend to cut across the general expectation that the winding up of a company will proceed expeditiously”. However, the role of the Court “is not to second guess the liquidator’s commercial judgment”, rather it is “to determine whether there are grounds for suspecting a lack of good faith, or some error of law or principle, or some other good reasons to intervene”, referring to Hundy (liquidator), in the matter of 3 Property Group 13 Pty Ltd (in liq) [2022] FCA 1216 at [23]–[24] (Wigney J).

(4)    “There is ample authority for the proposition that the requirement of approval is concerned with ensuring that liquidators’ powers are not exercised in such a way as to be unconducive to an expeditious and beneficial administration: Read, in the matter of Forestview Nominees Pty Ltd [2007] FCA 1985; 164 FCR 237 at [43]-[44] per French J, citing, amongst other authority, Corporate Affairs Commission v ASC Timber Pty Ltd (1998) 29 ACSR 109 at 117 per Austin J.”

(5)    The “controlling consideration” is the interests of creditors: see In the matter of Golden Sands Hospitality Pty Ltd (in liq) (No 2) [2017] NSWSC 450 at [18] (Gleeson JA). “[T]he jurisdiction under s 477(2B) is directed to promoting the interests of the liquidation and the creditors, not the exercise of disciplinary functions over liquidators who delay in seeking approvals under the section”: see In the matter of Kevin Jacobsen Pty Ltd (in liq) [2016] NSWSC 538 at [74] (Black J).

52    For a recent summary of the relevant principles, see also Deputy Commissioner of Taxation, in the matter of Shafston Avenue Construction Pty Ltd (In Liq) v Shafston Avenue Construction Pty Ltd [2025] FCA 1673 at [41]–[48] (Wheatley J). It is worth repeating the point made by Wheatley J that “the Court’s approval is not an endorsement of the proposed agreement, but merely permission for the liquidator to exercise his or her own commercial judgment in the matter”: at [43(4)].

53    It should also be recognised that the authorities support the position that an application for approval under s 477(2B) may be brought by NOGA Holdings, as the counterparty to the Deed of Assignment, rather than by the Liquidator: Primavera v Bakos [2018] NSWSC 142 at [21]–[23] (Black J); Deputy Commissioner of Taxation v Italian Prestige Jewellery Pty Ltd [2018] FCA 983; 129 ACSR 115 at [48] (Markovic J); Shafston Avenue Construction at [45]–[49] (Wheatley J).

Consideration

54    I am mindful that the Court’s power under s 477(2B) of the Corporations Act is not to be applied as a rubber-stamping exercise. However, I also recognise that the Court’s role is not to second guess the Liquidator’s commercial judgement and knowledge of all of the circumstances of the liquidation or to reconsider all of the issues weighed by the liquidator in developing the proposal. The Court’s jurisdiction is not to undertake a de novo review.

55    The controlling consideration is the interests of all of the creditors, and the role of the Court is to satisfy itself that there is no error of law or grounds for suspecting bad faith or impropriety, and to weigh up whether there is any good reason to intervene in terms of the expeditious and beneficial administration of the winding up.

56    I make three preliminary observations. First, while the Deed of Assignment has already been executed, the Court’s power extends to the making of orders that operate retrospectively from the time the agreement was made. I accept that there have been ongoing efforts [REDACTED] to secure funding for the proceeding. While, initially, options were explored to seek litigation funding to allow the Liquidator to prosecute the proceeding, [REDACTED]. I accept that the Liquidator has taken appropriate steps in the interests of the creditors to ensure that the proceeding can continue and, accordingly, I am satisfied that an order, if it were made, should operate retrospectively.

57    Secondly, the Deed of Assignment is clear in its terms in relation to the rights that are the subject of the assignment, and the rights and responsibilities to be assumed by NOGA Holdings.

58    Thirdly, while the application for an exercise of power under s 477(2B) of the Corporations Act is not made by the Liquidator, it need not be. Given the circumstances, it is appropriate that the application is made by the assignee of the rights relating to the proceeding. After all, if the approval order is made, it will be NOGA Holdings which will prosecute the claims in this proceeding as the substituted applicant and, by doing so, NOGA Holdings is [REDACTED].

59    I turn then to the question of whether I am satisfied that there is no error of law or grounds for suspecting bad faith or impropriety. I look first to the evidence of Mr Hancock who deposes that:

(1)    It is in the best interests of the creditors to have the proceedings pursued, [REDACTED].

(2)    [REDACTED].

(3)    [REDACTED].

(4)    [REDACTED].

(5)    [REDACTED].

(6)    [REDACTED].

(7)    While the creditors will be entitled to [REDACTED].

(8)    The proposal that would leave creditors with [REDACTED].

(9)    The variation to the Deed of Assignment [REDACTED].

60    On the basis of this evidence and on balance, I accept the submissions of NOGA Holdings and the Liquidator that the Liquidator has made a commercial judgement that the arrangement reflected in the Deed of Assignment is in the best interests of the creditors and beneficial to the administration of the winding up. There were three matters that caused me some concern.

61    The first was the fact that [REDACTED]. The funding arrangement should not yield a “grossly excessive profit”. However, NOGA Holdings is taking on considerable cost and risk in seeking the assignment of the choses in action. It will be exposed to the legal costs of running the litigation and, if unsuccessful, will likely be subject to the ordinary rule that costs follow the event. There will be no risk or cost to the Liquidator or the creditors. It is impossible to know the quantum of compensation if successful, and I have not been asked to, nor have I undertaken, any assessment of the merits of the claim. However, it is enough to note that success for NOGA Holdings in the litigation might produce a compensation payment that is not insubstantial. Further, realistically, the two possibilities for the creditors appear to be to press ahead with the arrangement reached between the Liquidator and NOGA Holdings or for the proceeding to collapse. [REDACTED].

62    In the analogous context of a litigation funding agreement, Brereton J said in In the matter of City Pacific Limited [2017] NSWSC 784 at [20]–[22]:

Even if the funder receives more than 50 per cent of any judgment, 40 per cent of such if any judgment as might be obtained is a better result for the company's creditors than nothing. Because of the terms of the funding agreement, there is no downside for creditors in the prosecution of the litigation in question. There is no risk of the liquidators or creditors having to bear an adverse costs order, as it will be borne by the funder. In those circumstances, it does not take extensive reasoning or explanation to realise that there is benefit for the company in funding this litigation to an end.

That benefit – of an agreeing to an arrangement that will permit the litigation to be funded to an end – is that the company may get 50 (or some lesser percentage) of something, for distribution amongst creditors; against the position that there will plainly be nothing if the litigation is not funded and does not proceed. Against that potential benefit, no downside or detriment to the company from protracting an administration that would otherwise generate nothing for creditors has been identified.

So, in those circumstances, and especially given the imminence of a final hearing of the director proceeding, it would not have required much to persuade a liquidator to see that it was plainly in the interests of the company to agree to a regime for the ongoing funding of the litigation which had already been carried to that point.

63    His Honour went on to say that “where the alternative is that there is no funding for the litigation at all, sometimes a liquidator will have to accept a premium of 50 per cent [in addition to recovery of its costs], perhaps even more” (at [23], emphasis added). Of course, the permissible proportion must turn on the facts in each case.

64    On balance, in all the circumstances, including the level of risk assumed by NOGA Holdings and the reality of the position facing the creditors, I do not consider that the return to NOGA Holdings is disproportionate to the risk undertaken in light of the funding that is promised, or that it produces for NOGA Holdings a “grossly excessive profit”.

65    The second concern is [REDACTED]. However, there is nothing in the evidence to suggest that this statement was made in bad faith or that there was impropriety, and the statement itself is not sufficient evidence for such a conclusion. [REDACTED]. Any imprecision in the description of the return is immaterial given the prospect facing creditors.

66    The third concern is the position of CCMA which raises two related matters. First, what impact the assignment will have on CCMA’s security interest (if any) and, secondly, how the existence and value of the secured interest affects the assessment of the Liquidator’s commercial judgement to enter the Deed of Assignment.

67    As to the impact of proposed order 1, CCMA is not a party to the Deed of Assignment and, accordingly, the Deed cannot bind it. Neither NOGA Holdings nor the Liquidator contended to the contrary. Furthermore, s 471C of the Corporations Act preserves CCMA’s entitlement to realise or otherwise deal with the security interest, notwithstanding s 471B of the Act. Additionally, the proposed order sought by prayer 1 under s 477(2B) of the Corporations Act cannot operate to displace any rights that CCMA might have under the Personal Property Securities Act. That is not the purpose of such an order.

68    As to the impact it has on the evaluation of the Liquidator’s commercial judgement, the difficulty I have in assessing this concern is the paucity of information before me about the claimed security interest and its value. Despite being given the opportunity to provide evidence, CCMA has not done so. It accepts that it has not submitted a proof of debt – although it submits that it does not need to as a secured creditor; nor is there any evidence of it having taken steps to vindicate its security interest.

69    Even if CCMA is correct in what it claims about its security interests, and in its rejection of NOGA Holdings’ claim that the Featherweight Security Deed has been discharged by the payment of $10, those propositions do not change the conclusions I have reached. They would simply establish that CCMA is a secured creditor which may be affected by the Court’s orders, but I have insufficient evidence before me to determine the extent or value of the claimed interest.

70    Ultimately, if CCMA has a secured interest, it is one of a cohort of creditors, albeit a secured creditor. The Liquidator was aware of the potential security interest when he determined that the arrangement reflected in the Deed of Assignment was in the best interests of all the creditors. I am in no better position to make that assessment.

71    In any event, CCMA did not oppose the making of the order sought by prayer 1.

72    Accordingly, I am satisfied that the Liquidator has made a commercial judgement in the best interests of the creditors and the administration of the winding up. I am not satisfied that there are good grounds for suspecting a lack of good faith, or some error of law or principle, or some other good reason to intervene to second guess that judgement. I am satisfied that the “prolongation of the liquidation that would be occasioned by” entry into the Deed of Assignment “is warranted by the offsetting benefits that would flow from it (City Pacific at [13] (Brereton J)).

73    It follows that I am satisfied that the order sought in prayer 1 should be made under s 477(2B) of the Corporations Act.

Prayer 2: The power under section 90-15 of the Insolvency Practice schedule to make the order sought

74    Prayer 2 seeks an order under s 90-15(1) and 3(a) of the Insolvency Practice Schedule for the proceeds of any recovery from the proceeding be distributed in accordance with cl 8.1 of the Deed of Assignment.

75    Section 90-15(1) provides that the Court “may make such orders as it thinks fit in relation to the external administration of a company”. While it is unclear whether NOGA Holdings is a person specified under s 90-20 who may apply for an order under s 90-15, the application is supported by the Liquidator who, as “an officer of the company” as defined, is such a person: s 90-20(1)(d), s 9AD(1)(h) of the Corporations Act. In any event, the Court has the power to make the order on its own initiative, during proceedings before the Court: see s 90-15(2)(a).

76    In Krejci, in the matter of Union Standard International Group Pty Ltd (Administrators Appointed) (No 2) [2020] FCA 1111 at [7]–[11], Stewart J set out the following principles:

A court is empowered by s 90-15(1) of the Insolvency Practice Schedule to “make such orders as it thinks fit in relation to the external administration of a company”. The power conferred by s 90-15(1) is “very broad”: Kelly (in the matter of Halifax Investment Services Pty Ltd (in liquidation) (No 8) [2020] FCA 533; 144 ACSR 292 at [51] (Gleeson J). It includes a power to make orders determining any question arising in the external administration of a company: s 90-15(3)(a). An administrator of a company may apply for such an order: s 90-20(1)(d), read with s 9 of the Act (paragraph (d) of the definition of “officer”).

The court’s power under s 90-15(1) includes a power to give directions about a matter arising in connection with the performance or exercise of an administrator’s functions or powers: Reidy, in the matter of eChoice Ltd (Administrators Appointed) [2017] FCA 1582 at [26]–[27] (Yates J). In this respect, s 90-15(1) confers a power to give directions that was previously conferred by ss 447D(1) and 479(3) of the Act concerning administrators and liquidators, respectively: see Carter Holt Harvey Woodproducts Australia Pty Ltd v Commonwealth [2019] HCA 20; 93 ALJR 807 at [166] (Gordon J); Reidy at [27] (Yates J); and Kelly (liquidator), in the matter of Australian Institute of Professional Education Pty Ltd (in liq) [2018] FCA 780 at [30] (Gleeson J). The principles governing directions to administrators and those governing directions to liquidators are relevantly analogous: Re Ansett Australia Ltd (No 3) [2002] FCA 90; 115 FCR 409 at [43] (Goldberg J).

The function of a judicial direction of this kind is not to determine rights and liabilities arising out of a particular transaction, but to confer a level of protection on the administrator. An administrator who acts in accordance with a judicial direction, having made full and fair disclosure to the court of the material facts, has “protection against claims that they have acted unreasonably or inappropriately or in breach of their duty in making the decision or undertaking the conduct” proposed: Ansett at [44].

A court may give a direction on an issue of “substance or procedure” or “of power, propriety or reasonableness”: Ansett at [65]. Although a court will not give a direction on a decision that is purely commercial, a direction may be provided where there is a “particular legal issue raised for consideration or attack on the propriety or reasonableness of the decision in respect of which the directions are sought”: Ansett at [65]. As Black J observed in In the matter of RCR Tomlinson Ltd (administrators appointed) [2018] NSWSC 1859 , a decision may have a “commercial character” but nonetheless be amenable to judicial direction. His Honour said (at [14]) of the application before him (which sought a direction as to whether a company should borrow loan funds):

The Court has been prepared to give directions of this kind, where the decision is a complex one, and where it has to be made, as here, under circumstances of time pressure, in respect of a very large corporate group, and by balancing different interests. The Court’s preparedness to grant such a direction in those circumstances reflects the intrinsic unfairness of leaving a voluntary administrator to be at risk of liability, in respect of a complex decision of that kind, where any decision that is made, including making no decision, will have inevitable risks for some or all of the affected constituencies.

Because the effect of a direction under s 90-15 is to exonerate the liquidator or administrator if full disclosure is made, it will usually necessitate consideration by the court of the liquidator’s or administrator’s reasons and decision making process: see Re ONE.TEL Ltd [2014] NSWSC 457; 99 ACSR 247 at [36] per Brereton J (referring to former s 511 of the Act).

77    In my view, two issues arise for consideration. First, whether the circumstances warrant the making of an order under s 90-15(1) and, secondly, how far the order should extend in affecting CCMA’s entitlements as a secured creditor.

78    As to the first of these matters, the text of the provision is certainly broad enough to authorise the making of an order that has the effect of conferring protection on a Liquidator for the commercial judgement made to exercise his power under s 477(2)(c). However, whether an order should be made “requires a wider inquiry” than that under s 477(2B): White, in the matter of Macro Realty Developments Pty Ltd and Macro Realty Pty Ltd (No 2) [2020] FCA 649 at [11] (McKerracher J). As Connock J said in Re Minken Pty Ltd (in liq) [2019] VSC 288 at [23]–[24], extracted with approval by McKerracher J in White at [11]:

Applications for approval under ss 477(2A) and 477(2B) are to be distinguished from applications for directions under s 90-15 of the [Act] and the former ss 511 and 479(3) of the Act. The effect of a direction is to sanction a course of conduct so that the liquidator can adopt that course free from the risk of personal liability for breach.

It has been observed that the fact that a direction ― unlike an approval under s 477(2A) or s 477(2B) ― exonerates the liquidator from personal liability, means that a closer examination of the liquidator’s decision is required in a directions application than in an approval application.

(Citations omitted)

79    In White, McKerracher J also referred at [12] to the observations of Brereton J in One.Tel at [36] that “the court needs to be satisfied, before making a direction, that the decision is proper and reasonable; at least usually, this will necessitate consideration of the liquidator’s reasons, and the process by which the decision has been reached”. For the reasons I have already given, I consider that the Liquidator’s actions in entering the Deed of Assignment were done in good faith, were reasonable and were for the benefit of creditors: see Nicol, in the matter of FLY365 Pty Ltd (in liq) [2020] FCA 1303 at [25]–[26] (Stewart J).

80    In relation to the second matter of how far an order under s 90-15(1) might go, it is evident from what was said by Stewart J in Krejci that, at least in relation to an order that operates to confer protection on a liquidator, the judicial direction given under s 90-15(1) does not operate to determine rights (at [9]). However, in Kirkalocka, Jackson J said at [191]–[195] (underlining added):

Section 90-15 has been interpreted, consistently with its predecessor in s 511 of the Corporations Act, to authorise the making of an order where it is just and beneficial to do so: CuDeco at [98] applying Deputy Commissioner of Taxation, in the matter of ACN 154 520 199 Pty Ltd (in liq) v ACN 154 520 199 Pty Ltd (in liq) [2017] FCA 444 at [64] (Gleeson J); see also Re Octaviar Ltd (in liq) [2019] QSC 235 at [8] (Bradley J). In CuDeco Banks-Smith J, after reviewing some of the above authorities and others, concluded (at [99]) that:

in exercising powers under s 90-15 the court will be guided by similar principles to those that governed the exercise of powers under former s 479(3) and s 511 of the Corporations Act, although the relief that the court may grant under s 90-15 appears broader and extends to the making of declarations where appropriate.

Her Honour thus made an order under s 90-15 that was effectively a declaration of right that certain mining assets had been subject to the control of receivers and managers of a company to the exclusion of the liquidators (noting that there was no contradictor in that matter) (at [102]-[112]). Similarly, in Re Polat [Enterprises Pty Ltd (in liquidation) [2020] VSC 485], the Court made orders declaring certain resolutions invalid (albeit by consent) (at [31], [36]). In Re Courtenay House Capital Trading Group Pty Limited (in liquidation) [2020] NSWSC 780, the Court made orders which were in the form of judicial advice, but in substance were likely to have altered substantive rights by authorising the distribution in a certain manner of funds recovered out of a Ponzi scheme (at [12], [172]-[175]).

The power under s 90-15 is not, of course, unlimited. For example, in Re DSHE Holdings Limited [2021] NSWSC 608, Williams J inclined to the view that the section did not authorise the court to modify the operation of provisions of the Corporations Act to the external administration of a particular company, although her Honour did not need to rule definitively on that because she did not consider it appropriate to make the orders sought in any event (at [78]). On the other hand, in Woodhouse (Liquidator), in the matter of Forex Capital Trading Pty Ltd (in liq) [2022] FCA 600, Banks-Smith J made orders under s 90-15 abridging and varying the process for adjudication of proofs of debt that was mandated by certain provisions of the Corporations Regulations 2001 (Cth) (at [54], [85]).

If the Court is exercising the power under s 90-15 to determine substantive rights it must, of course, give parties whose rights are to be determined the opportunity to be heard: Re Hawden [Property Group Pty Ltd (in liq) [2018] NSWSC 481] at [8]. There is no difficulty with that here, as there is no suggestion that the rights of any person other than SCL will be affected by the orders the plaintiffs seek.

On the basis of these authorities I accept that s 90-15 authorises at least the determination of rights, albeit perhaps not their alteration. It encompasses orders that help to facilitate external administrations, and so to promote the purposes of the Corporations Act. A broad approach to the section is consistent with the well-established principle that it is inappropriate to read provisions conferring jurisdiction or granting powers to a court by making implications or imposing limitations which are not found in the express words: The Owners of the Ship 'Shin Kobe Maru' v Empire Shipping Company Inc (1994) 181 CLR 404 at 421; One T Development [Pty Ltd v Krejciin his capacity as liquidator of ENA Development Pty Ltd [2023] NSWCA 120] at [33].

(I note that Jackson J’s judgment was appealed to a Full Court, but nothing in the reasons of the Full Court cast doubt on what was said in these passages: SCL AUS Limited v Kirkalocka Gold SPV Pty Ltd [2026] FCAFC 60 (Colvin, Neskovcin and Vandongen JJ)).

81    CCMA pointed to the underlined words in support of the contention that the order sought by prayer 2 would alter its rights and, accordingly, be beyond the scope of s 90-15(1). It further submitted that the scope of the proposed order was unclear in its application to CCMA’s secured interest.

82    NOGA Holdings’ position in response evolved over the course of its submissions and the hearing. In its written submissions in support of the amended interlocutory application, it submitted that under the Deed of Assignment, claims of the creditors, including CCMA, will be paid [REDACTED]. Accordingly, it was said that there would be no alteration of CCMA’s rights.

83    At the hearing, counsel for NOGA Holdings submitted that Jackson J’s observation was obiter only, and that the suggested limitation on the power in s 90-15(1) is not supported by the clear and express wording of the section. In any event, NOGA Holdings (supported by the Liquidator) submitted at the hearing that the proposed order would not change or alter CCMA’s rights. What was being sought was a determination of rights; that is, how the distribution is going to proceed. [REDACTED] would be payable to the Liquidator and, if CCMA lodges a proof of debt and is able to satisfy the Liquidator that it has a claim, then its claim will be addressed from the [REDACTED]. In that way, CCMA would remain a secured creditor and its rights would not be altered in any way.

84    It was accepted by NOGA Holdings (and the Liquidator) that the proposed order would affect the amount that CCMA might be entitled to as a secured creditor. That is, the order proposed by prayer 2 would operate to reduce the size of the pool from which CCMA might take its share as a secured creditor. However, the order would not change its entitlements to claim from the pool as a secured creditor. And, it was said, the reality is that, if NOGA Holdings is successful in its claims against the Commonwealth, CCMA will be able to share in a pool of money that would not otherwise be available if the Deed of Assignment is not approved and given effect to. Further, it would now be too late for CCMA to take over the chose in action because the limitation period has expired. Consequently, CCMA could not argue that it would, in substance, suffer prejudice.

85    In reply submissions, NOGA Holdings largely repeated the thrust of these submissions with some further elaboration. It contended that the effect of the proposed order would be that creditors, including secured creditors like CCMA, will be dealt with in accordance with the statutory priorities in liquidation in respect of the pool of the remainder amount that will go to the Liquidator. [REDACTED] will be distributed to the creditors, secured and unsecured, in accordance with their rights and the priority regime set out in the Act. In so far as CCMA is a secured creditor for whatever amount, it will remain a secured creditor for that amount in the pool available to the Liquidator.

86    It was submitted that, in this way, (a) the distribution of the funds according to cl 8.1 will not deal with or affect the status or rights of creditors or the order of priority amongst creditors in the liquidation and (b) altering the pool of available proceeds is different from and should not be conflated or confused with the altering of creditor rights. The order, it was said, would alter (to an extent) the rights of the creditors insofar as it would permit an alteration of the pool of funds to be distributed among creditors. However, it was submitted that, at a practical level, the alteration will not be disadvantageous to any creditors of TSOGA because it represents their best chance at any recovery from the liquidation process.

87    In its reply submissions, NOGA Holdings also relied on the decision of Rees J in Courtenay House, referred to by Jackson J in Kirkalocka. The submission was in the following terms:

That is somewhat analogous to the present case, where NOGA Holdings is seeking an order which alters (to an extent) the rights of the creditors insofar as it would permit an alteration of the pool of funds to be distributed among creditors. However, at a practical level, and for the reasons developed further below, that alteration is not disadvantageous to any creditors of TSOGA where it still represents their best chance at any recovery from the liquidation process.

88    NOGA Holdings further submitted that, if CCMA’s concern is that clause 8.1 of the Deed of Assignment purports to change CCMA’s rights as secured creditor to the pool, then the Court can state specifically in the order that the distribution of the potential proceeds of TSOGA’s claims in accordance with clause 8.1 does not affect the statutory or contractual rights of any creditor, including CCMA, [REDACTED].

89    It can be seen that NOGA Holdings and the Liquidator have sought to address the concern that CCMA’s entitlement, as a secured creditor, to a share [REDACTED] will be altered by the proposed order. I am content, as suggested by NOGA Holdings, to make it clear in the orders that CCMA’s entitlement to share [REDACTED] will not be altered.

90    However, as I understood CCMA’s submission, the concern is of wider compass and includes a concern that the order might displace an entitlement preserved by s 471C of the Corporations Act or arising under the Personal Property Securities Act. That raises squarely the question of whether s 90-15(1) authorises an order that operates to displace other statutory provisions. NOGA Holdings’ submissions did not engage with this question in any detail. As indicated, it submitted that Jackson J’s comment in Kirkalocka was obiter and that the present circumstances were analogous to the circumstances in Courtenay House. However, the submission in relation to Courtenay House was limited to the impact of the order on CCMA’s entitlement as a secured creditor to share from the pool derived from the remainder amount.

91    I am not persuaded that, as a matter of construction, s 90-15(1) authorises the making of an order that displaces a statutory provision that operates upon the entitlements of a secured creditor. If that were intended, one might have expected the drafters to have said so in clear terms. That conclusion is consistent with the view of Jackson J in Kirkalocka as well as the observations, albeit also obiter, of Williams J in DSHE Holdings [48]–[78]. I also note that Banks-Smith J in Woodhouse made it clear that the orders sought in that case did “not involve the modification of a provision of the Corporations Act”: at [56]. Furthermore, even if an order to displace such statutory provisions falls within the scope of s 23 of the Federal Court Act (a position that was not explored in the submissions and which I am not inclined to accept), I do not consider it appropriate to make an order under that section with that effect.

92    Accordingly, I consider that the concession from NOGA Holdings that the scope of the order may be clarified should be expressed in broader terms to make it clear that the proposed order is not intended to displace the operation of statutory provisions that operate on CCMA’s entitlements as a secured creditor.

93    For completeness, CCMA’s submission that s 90-15(1) must be read down, so that it does not contravene s 51(xxxi) of the Constitution, in circumstances where the Court considers an order to be warranted, cannot be sustained. The proposed order will not affect CCMA’s status as a secured creditor or displace any statutory provisions that operate on CCMA’s statutory entitlements as a secured creditor. In relation to its effect on the share of the pool available to creditors under the Corporations Act, it must be recognised that TSOGA is in liquidation. The provision of just terms in those circumstances would be incongruent with the administration by the Liquidator of the liquidation: see, by analogy, Attorney-General (Cth) v Schmidt (1961) 105 CLR 361 at 372 (Dixon CJ); Mutual Pools & Staff Pty Limited v Commonwealth (1994) 179 CLR 155 at 188 (Deane and Gaudron JJ). Given (a) that I do not consider the constitutional point to be “arguable” (noting the limited way in which it was advanced) (see Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd [1999] FCA 1151; 95 FCR 292 at [14] (French J) or “real and substantial” (see Re Culleton [2017] HCA 3; 91 ALJR 302 at [29] (Gageler J)) and (b) the urgency of the interlocutory relief sought given the impending expiration of the Deed of Assignment on 21 September 2026, I consider that it is unnecessary for notice to be given pursuant to s 78B of the Judiciary Act 1903 (Cth).

prayers 4 and 5: Consequential orders

94    Prayers 4 and 5 follow from prayers 1 and 2. Prayer 4 seeks an order pursuant to r 8.21(f) of the Rules that NOGA Holdings be substituted for TSOGA and the Liquidator in this proceeding. Further, pursuant to r 8.23 of the Rules, NOGA Holdings should have leave to file an amended originating application, an amended concise statement and an amended applicant’s genuine steps statement (prayer 5). The Commonwealth neither consented to nor opposed these orders. Nor was there any opposition from CCMA.

95    In these circumstances, I am content to make the orders sought in prayers 4 and 5.

Prayer 6: suppression and non-publication orders

96    NOGA Holdings sought an order under s 37AF(1) of the Federal Court Act for suppression and non-publication orders. I had concerns about the breadth of the request, and I requested that consideration be given to the precision of the proposed orders. Further proposed orders, with a brief explanation of the basis for the requested redactions, were provided to my chambers.

97    I will make interim orders under s 37AI of the Federal Court Act in the revised terms provided to my chambers pending considering of the s 37AF(1) application.

costs

98    CCMA also sought an order that NOGA Holdings and TSOGA pay its costs of preparing its submissions. The basis for that claim was that NOGA Holdings and TSOGA have been on notice of CCMA’s position since 4 February 2026.

99    The Court has a broad discretion to award costs in a matter as it thinks fit (Federal Court Act, s 43(2)), and the power extends to making an order for the benefit of a non-party: O’Keefe v Hayes Knight GTO Pty Ltd [2005] FCA 1559 at [24] (Nicholson J). However, such an order “will be exceptional and therefore must be treated ‘with considerable caution’”: O’Keefe at [24]. I am not persuaded that an order should be made in favour of CCMA. The evidence shows that, despite NOGA Holdings and TSOGA being on notice since 4 February 2026, various attempts to clarify the security interest and its value remained unanswered by CCMA. I do not consider that CCMA has made out its case for a costs order in its favour.

Disposition

100    For the foregoing reasons, I am satisfied that the orders sought by prayers 1, 2, 4 and 5 of the amended interlocutory application should be made. I will also make interim non-publication and suppression orders pursuant to s 37AI of the Federal Court Act in relation to the revised schedule of documents provided to my Chambers on 19 August 2026.

Associate:

Dated:    26 August 2026