Supreme Court

New South Wales

Case Title: Dial D v Kingston Building (Australia);Kingston Building (Australia) v Dial D

Medium Neutral Citation: [2014] NSWSC 1031

Hearing Date(s): 17/07/2014

Decision Date: 31 July 2014

Jurisdiction: Equity Division - Technology and Construction List

Before: McDougall J

Decision: Reasons for stay and other orders made on 17 July 2014.

Catchwords: PROCEDURE - application to stay proceedings under a construction contract and winding up proceedings pending outcome of arbitration application - where winding up proceedings involve the same parties and are based upon a Judgment debt between the parties - where undertaking given not to call on loans - whether overlap between winding up proceedings and arbitration - whether in public interest - whether additional order for security for costs ought be granted if winding up proceedings are stayed

Legislation Cited: Building and Construction Industry Security of Payment Act 1999 (NSW)

Civil Procedure Act 2005 (NSW)

Corporations Act 2001 (Cth)

Cases Cited: Australian Beverage Distributors Pty Ltd v Evans and Tate Premium Wines Pty Limited (2007) 61 ACSR 441

Teubner v Humble (1963) 108 CLR 491

Category: Procedural and other rulings

Parties: Dial D Pty Limited (as the trustee for the Smith Street Unit Trust) (Plaintiff) (2014/74787)

Kingston Building (Australia) Pty Ltd (Defendant)

Kingston Building (Australia) Pty Ltd (Plaintiff) (2014/80678)

Dial D Pty Limited (Defendant)

Representation

- Counsel: Counsel:

FF Corsaro SC / FG Kalyk (Plaintiff) (2014/74787)

JB Simpkins SC / FP Hicks (Defendant)

- Solicitors: Solicitors:

Keystone Lawyers (Plaintiff) (2014/74787)

Moray & Agnew Lawyers (Defendant)

File Number(s): 2014/74787 and 2014/80678

JUDGMENT

1 HIS HONOUR: On 31 March, the plaintiff (Kingston) and the defendant (Dial D) made a construction contract. Under that contract, Kingston as Contractor undertook to construct for Dial D as Principal a medical centre at Charlestown in this state. That contract has given rise to an excessive degree of litigation.

Progress claims and progress certificates

2 After practical completion had been achieved, and during the defects liability period for which the contract provided, Kingston served on the superintendent under the contract a document described as progress claim 25. The amount claimed was a little under $1.5 million, including GST.

3 On 14 January 2013, the superintendent issued what was said to be progress certificate 25 in response to that claim. The amount certified was negative, for a little under $1.1 million. That is to say, the certificate, if valid, would have required Kingston to pay Dial D the amount certified.

4 On 31 January 2013, the superintendent issued another progress certificate, numbered 26. It did so in the absence of any further progress claim from Kingston. It was to the same effect as the earlier, invalid, progress certificate 25.

5 On 2 August 2013, Kingston served on the superintendent a final payment claim, in which Kingston claimed an amount of a little in excess of $1.34 million. On 16 August 2013, the superintendent in response issued what purported to be a final certificate. The (purported) final certificate was in a negative amount a little under $1 million: that is to say, it required Kingston to pay the amount certified to Dial D.

Litigation to date

6 Kingston commenced proceedings to challenge the validity of progress certificates 25 and 26. Stevenson J concluded that progress certificate 25 had not been served within the time allowed by the contract. Accordingly, and as the terms of the contract provided, progress claim 25 itself took effect as a deemed progress certificate. The terms of the contract obliged Dial D to pay Kingston the amount deemed to be certified thereby. His Honour held that progress certificate 26 was invalid.

7 Dial D took the matter to the Court of Appeal. The Court of Appeal upheld Stevenson J's conclusion as to progress claim 25. However, it held that progress certificate 26 was valid.

8 The effect of the Court of Appeal's decision was that, under the terms of the contract, Dial D owed Kingston the amount deemed to have been certified in respect of progress claim 25, and Kingston owed Dial D the amount certified by progress certificate 26. Each of those debts was owed "on account", or pending a final resolution of the state of affairs under the contract.

9 In the meantime, Kingston had made application under the Building and Construction Industry Security of Payment Act 1999 (NSW) (the Security of Payment Act ) for adjudication of its progress claim 25, which claim was also expressed to be a payment claim for the purposes of the Security of Payment Act . The adjudicator determined that the amount payable was a little over $760,000.00.

10 Kingston obtained an adjudication certificate. It filed that certificate in this court and recovered judgment accordingly, pursuant to s 25 of the Security of Payment Act . Dial D sought a stay of that judgment. Kingston opposed the stay. I dealt with the application for a stay, and refused it with costs.

11 Next, Dial D sought judgment for the amount certified in its favour under the final certificate. I heard the matter, and for reasons that do not need to be repeated or summarised, concluded that the final certificate was not effective to make the amount certified payable by Kingston to Dial D. Accordingly, Dial D's claim failed.

12 Dial D has been ordered to pay costs in respect of the various hearings (including before the Court of Appeal) to which I have referred. Kingston says that the total amount of those costs (although yet to be assessed ) exceeds $300,000.00.

13 Kingston sought to enforce the judgment that Stevenson J had directed in its favour. Among other things, it garnisheed amounts owing to Dial D. Although some recovery was made, the great bulk of the judgment remains unsatisfied.

14 Accordingly, Kingston commenced proceedings for the winding up of Dial D. It claims to be a creditor, by virtue of the judgment (to the extent that it is unsatisfied) and of the costs orders. It says that, because execution has been issued and the judgment has not been satisfied, Dial D is presumed to be insolvent (see s 459C(2)(b) of the Corporations Act 2001 (Cth)).

15 The winding up proceedings were set down for hearing for two days, 2 and 3 September 2014.

16 Further, and as the contract provides, the parties have commenced an arbitration. Mr Malcolm Gracie of Counsel has been appointed as Arbitrator. The arbitration has been fixed for hearing for three weeks commencing 24 November 2014. Obviously enough, the award (subject to any challenge) will establish on a final basis the true state of affairs between the parties, as to the monetary obligations of each to the other under the contract.

17 I should note that the bulk of Kingston's claims are for variations. Dial D denies that it has any liability for those variations. It relies, among other things, on the relevant terms of the contract. This aspect of Dial D's defence appears to have some substance. Another matter in dispute is Kingston's entitlement to extensions of time, and Dial D's correlative entitlement to liquidated damages for delay. It is perhaps the case (I neither know nor need to know) that the extension of time case will depend in some way on the outcome of the variations case.

18 For present purposes, the following matters appear from the sorry state of affairs to which I have referred:

(1) Kingston has a judgment, which on the terms of the contract is for an interim or "on account" amount pending a final adjustment of liabilities, in respect of the deemed progress certificate for its progress claim 25: a little under $1.2 million.

(2) One superintendent has certified, on the same interim basis, that Kingston in fact owes Dial D a little under $1.1 million.

(3) Another superintendent has certified, purportedly on a final basis, that Kingston owes Dial D a little under $1 million.

(4) The Adjudicator determined that Kingston's entitlement under payment claim 25 should be assessed at $760,000.00. It is not in dispute that the adjudicated amount relates to the very same claim that is embodied in progress claim 25, the deemed certification thereof and the judgment thereon.

The current proceedings

19 Dial D commenced proceedings against Kingston, seeking payment of the amount certified by the (then) superintendent in progress certificate 26: the certificate, the validity of which was upheld by the Court of Appeal. Dial D claimed that the certificate had not been in any way superceded by the later and purported final certificate, and thus that i was entitled to judgment for the amount certified, although on an interim basis pending the final resolution of the parties' rights and obligations.

20 Those proceedings came on for hearing before me. They had also occupied the attention of Hammerschlag J on 21 March 2014, because Dial D had sought summary judgment for the claim, based on what it said was the proper construction of the contract. Hammerschlag J declined to entertain the application for summary judgment. Although his Honour did not give formal reasons, it is clear, from what passed between his Honour and Counsel on that occasion, that his Honour was of the view, taking into account among other things s 56 of the Civil Procedure Act 2005 (NSW), that the appropriate course was for the parties to take their dispute to arbitration so that, subject to any challenge to the award, there could be a final resolution of rights and liabilities.

21 When the hearing commenced before me, and after Counsel for each side had opened his client's case, I expressed the tentative view that both these proceedings and the winding up proceedings should be stayed so that the arbitration could proceed. Dial D supported this proposal. Kingston opposed it. I adjourned the matter to allow the parties to put on evidence, and then heard submissions on the stay application.

22 Mr Corsaro of Senior Counsel, who appeared with Mr Kalyk of Counsel for Dial D, submitted in essence that the real dispute between the parties was who owed what to whom under the contract. That dispute, he submitted, would be resolved by the arbitration. Its resolution would effectively decide (among other things) whether his client was insolvent. Thus, he submitted, it was appropriate to stay both sets of proceedings and to allow the arbitration to proceed to finality.

23 Mr Simpkins of Senior Counsel, who appeared with Mr Hicks of Counsel for Kingston, did not oppose (indeed, he supported) the proposition that Dial D's proceedings should be stayed. However, Mr Simpkins opposed a stay of the winding up proceedings.

24 Mr Simpkins submitted that, not only was Dial D presumed to be insolvent (s 459C(2)(b) of the Corporations Act ), it was in fact, on the evidence, insolvent. He referred, rightly, to the public interest in ensuring that insolvent companies did not continue to trade.

25 Further, Mr Simpkins submitted, there was no overlap between the issues that would be raised in the winding up application and those that would be raised in the arbitration.

26 Fundamentally, however, Mr Simpkins' position was that nothing that happened in the arbitration could bear on the question of solvency, because Kingston had recovered a judgment that it was entitled to enforce.

27 Mr Corsaro submitted, in reply, that although there was a public interest in ensuring that insolvent companies should not continue to trade, there was equally a public interest that solvent companies should not be wound up. He submitted, further, that if there were no stay of the winding up proceedings, his client would seek to put on evidence as to the various claims between it and Kingston under the contract. Mr Corsaro said that his client had not done so, because it had taken the view that it was entitled to judgment on progress certificate 26, which judgment would effectively offset the judgment that had been given in favour of Kingston.

28 Each side - in particular, Kingston - favoured me with copious citation of authority. That calls to mind the practice deprecated by Windeyer J in Teubner v Humble (1963) 108 CLR 491 at 503. It is sufficient to say that I have considered, to the extent I think them relevant, the various cases to which Counsel referred. In the event, since most of them turned on their particular facts, they provide little by way of guidance to the exercise of the discretion to stay in this particular case.

29 Mr Simpkins also put submissions addressing the question of terms, in the event that I were minded to order that the winding up proceedings be stayed. I shall return to those submissions.

The stay orders

30 At the conclusion of submissions (on 17 July 2014), I made orders (which I will set out) staying both current sets of proceedings. I said that I would publish my reasons for doing so. The orders (so far as they are relevant) were:

(1) In 2014/80678 I note the undertaking given to the Court in the form of MFIA by the unit holders in the Smith Street Unit Trust and the directors of those unit holders.

(2) Pursuant to s 459R(2) of the Corporations Act 2001 (Cth) I order that the time for the determination of proceedings 2014/80678 be extended up until 31 March 2015 or such other date as the Court may order.

(3) Subject to orders 4 and 5 I order that proceedings 2014/80678 and 2014/74787 be stayed until the further order of the Court.

(4) I reserve liberty to apply on such notice as the Court may allow to vary order 2 or to discharge or vary order 3.

(5) I reserve all questions of costs without prejudice to any existing costs orders that may have been made.

31 The undertaking referred to at (1) above was to the effect that neither the unit holders nor their directors would call on any of the loans made to Dial D until publication of the Arbitrator's award.

Reasons for stay

32 Mr Simpkins relied on the decision of the Court of Appeal in Australian Beverage Distributors Pty Ltd v Evans and Tate Premium Wines Pty Limited (2007) 61 ACSR 441 as pointing to what, in his submission, were relevant considerations affecting the discretion to stay.

33 In that case, Beazley JA, with whom Hodgson and Santow JJA agreed, said at [70] to [72] (the paragraphs to which Mr Simpkins specifically referred):

[70] The question arises, therefore, whether there was evidence to support his Honour's finding at [74] that Mr James' purpose in bringing the winding-up application was to recover the disputed damages subject of the District Court proceedings and, if so, whether that was sufficient to find abuse of process. Having regard to what I have said about ABD's status as creditor, it had standing to bring the winding-up application. When Mr James gave his evidence that he believed that the Evans & Tate companies owed him the amount of costs subject of the costs certificate, he added a reference to the moneys that were claimed in the District Court proceedings. The indebtedness claimed in those proceedings is disputed. But he also added that he believed that the companies were hopelessly insolvent. His Honour did not refer to that part of Mr James' evidence.

[71] It seems to me therefore that the relevant matters for his Honour's consideration were these: ABD had standing to bring the proceedings based on the costs order; there were District Court proceedings on foot in respect of a different debt; and there was Mr James' belief that the Evans & Tate companies were hopelessly insolvent. A question might properly be asked whether a person with an entitlement to bring an application to wind up should be required to desist from doing so, or be at risk of a finding of abuse of process, where there are other disputed claims between the parties. Thus, if it be assumed for the purposes of the argument that the Evans & Tate companies are insolvent, then, if that approach is taken, ABD would be required to prosecute the District Court proceedings, and incur costs in doing so, that may never be recovered by reason of the insolvency. Is it therefore an abuse of process for it to rely upon its admitted status as creditor, otherwise prove insolvency and lodge a proof of debt in respect of the disputed claim?

[72] The answer to that question would depend, at the least, upon the extent of insolvency. If proof of insolvency depended upon the disputed claim, then I am of the opinion that a court could exercise its discretion to stay or dismiss the winding-up application so as to allow the dispute in the other proceedings to be determined. If, however, the company was insolvent without taking the disputed debt into account, then the court would almost certainly be required to allow the winding-up application to proceed.

34 Mr Simpkins emphasised in particular what her Honour had said at [72]. He submitted that, in the present case, proof of insolvency did not depend on the disputed claim. For the reasons that I give at [45] to [50] below, I do not accept that aspect of Mr Simpkins' submissions, and I think that the present case is well removed from the facts under consideration by the Court of Appeal in Australian Beverage Distributors .

35 I turn now to the more general issues bound up in the parties' submissions, the resolution of which issues, in my view, justified the orders set out at [30] above.

36 So far, the disputes between the parties have occupied a judge of this division on four separate occasions. None of those disputes was capable of leading to a final resolution of the subject matter except in the practical sense that if one party or the other prevailed, it was likely to be able to bring about the winding up of the unsuccessful party, and thus effectively, perhaps, to stifle the arbitration. Indeed, on one view of things, that is precisely what Kingston has sought to achieve by its winding up application, and precisely what Dial D has sought to stave off by its claim based on progress certificate 26.

37 The position that has been reached demonstrates to my mind that each of the parties has been jockeying for procedural advantage ahead of any final resolution of the real disputes between them. It is in my view reasonably clear that Kingston is seeking to use the judgment in its favour, given in respect of the deemed progress certificate, to wind up Dial D, and thus effectively to bring the arbitration to an end.

38 As Mr Simpkins submitted, any administrator or liquidator of Dial D could continue with the arbitration. However, that would require, apart from anything else, a guarantee of funding. The reality is that if Dial D is ordered to be wound up before the arbitration commences, then the arbitration will not, at least for the time being, proceed.

39 I accept of course that Kingston has a judgment in its favour and that it is entitled to the fruits of that judgment. Such evidence as there is of Dial D's financial position suggests that the proposition that it is insolvent may have substance. Even taking Dial D's latest accounts at face value, it appears to have been trading at a loss, and to have a significant capital deficit.

40 However, an analysis of the strength of the claims, on a final basis, seems to indicate a somewhat different view. As I have said, Kingston valued its progress claim 25 at about $1.2 million, and by virtue of the deemed certification provisions of the contract, that became the amount of the deemed progress certificate. As against this, the superintendent at the time took the view that the true state of affairs was almost directly opposite: namely, that Kingston owed Dial D about $1.1 million.

41 Kingston sought to answer this by attacking, among other things, the impartiality of that superintendent and the process by which progress certificate 26 was issued. Although a full hearing on the merits of that claim has not occurred, for reasons that will become apparent, it does seem to me that this aspect of Kingston's case is not particularly strong. But even assuming it is strong, there are two other matters to take into account. One is that another superintendent, as to whose impartiality (or competence) no complaint has been made, certified, on basically the same subject matter, that the state of affairs was in fact that Kingston owed Dial D an amount of $1 million. Another is that the adjudicator seems to have concluded that Kingston's progress claim was worth about $440,000.00 less than Kingston claimed.

42 In short, one apparently impartial decision maker has decided that the position is basically the opposite of that for which Kingston contends, and another, and undoubtedly impartial, decision maker has concluded that Kingston's claim is substantially overvalued.

43 Further, it cannot be denied that there are strong contractual arguments in Dial D's favour as to a substantial component of Kingston's claim for variations. If those matters are resolved Dial D's way, it is likely that there will be a flow-on into the extension of time case, which in turn will lead to an increase in the amount of liquidated damages payable by Kingston to Dial D.

44 In short, it seems to me, there is a real basis for thinking that Dial D's position on the arbitration has some considerable degree of merit.

45 The debate before me appeared to proceed on the basis in effect that one claim would offset the other. However, on reflection, I do not think that that analysis is correct. On the contrary, as it seems to me, the position is as follows. If Kingston were paid the amount of its judgment, and if Dial D succeeded entirely in recovering the amount certified on 16 August 2013, the outcome would be this:

(1) Kingston would have been overpaid (on this scenario) about $1.2 million;

(2) Kingston would be obliged to refund that overpayment to Dial D; and

(3) In addition, Dial D would be entitled to an award of a little under $1 million.

46 To put it another way: each side's claim takes, as its starting point, the amount actually paid by Dial D to Kingston. Kingston says that it is entitled to be paid a further $1.2 million. Dial D says that it has overpaid, and is entitled to claw back, $1 million. The parties are $2.3 million apart, around the total amount actually paid by Dial D to Kingston.

47 In circumstances where the judgment debt has not been paid, it will be necessary for any award in favour of Dial D to take into account, in some way, the undoubted of liability that Dial D has to Kingston under the judgment. It is not simply a matter of setting off judgment against judgment, or award against judgment. It is a matter of ascertaining what is the true state of affairs under the contract.

48 That will require a consideration of what has actually been paid to Kingston, a consideration of what (if any) valid further claims Kingston has and the value of those claims, and a consideration of what (if any) valid claims or set-offs Dial D has, and the valuation of those claims or set-offs. Once that is done, a notional balance can be struck. To the extent that any balance is in Dial D's favour - that is to say, that, taking into account the amount already paid, Kingston owes Dial D money - then the adjustment will need in some way to deal as well with the liability that Dial D has to Kingston under the judgment.

49 On this analysis (which, as I have indicated, the parties did not attempt in their submissions), Dial D's case for a stay becomes stronger. In effect, its case is that it has overpaid a little under $1 million. If that is upheld by the Arbitrator - and I do not express any view on the prospect that this may occur - one consequence would be that, in effect, and even leaving aside the judgment, Dial D has paid out almost $1 million more than it should have for the work actually done by Kingston.

50 If that hypothetical overpayment were taken into account, on the question of solvency, a very different picture would emerge compared to what appears from the latest financial statements. On that analysis, the hypothetical overpayment (the hypothetical result of hypothetically defective and tardy work by Kingston) would be a significant contributing factor to what appears to be Dial D's parlous financial position.

51 Put shortly, a determination of the final balance owing, as between Dial D and Kingston, is fundamental to the question of the solvency of the former. And for the reasons I have given, there are indicators that Dial D's case has some substance.

52 It seems to me to be inevitable that Dial D would have sought to raise these issues on the hearing of the application for its winding up. Whether or not it would be permitted to do so, in circumstances where the evidence has closed, would be a matter for the judge hearing that application. However, given that the hearing was still six or seven weeks off (at the time I made the orders set out at [30] above), it is at least conceivable that the judge would permit the evidence to be adduced.

53 That in turn would lead to the situation of both a Judge of this court and an Arbitrator considering, in effect, the same subject matter based on the same or similar evidence. That is manifestly undesirable.

54 Thus, and contrary to Mr Simpkin's submission, I do not accept that there is no possibility of overlap between the winding up proceedings and the arbitration. That could only arise if, for whatever reason, the judge hearing the winding up application were to exclude evidence relating to the state of indebtedness between Kingston and Dial D under the contract.

55 I accept that as the evidence stands, there is a strong case that Dial D is insolvent. First, as I have said, it is presumed to be insolvent. Secondly, and leaving aside the presumption, there is a substantial body of evidence that, uncontradicted and unexplained, could lead to the same conclusion. Thus, the public interest comes into play, in a real and direct way.

56 Dial D is not actively trading. It is the trustee of a unit trust. In that capacity, it owns, and receives rents for, two strata title units in the development. It is liable to pay outgoings in respect of those units.

57 Dial D has a substantial secured loan. There is some evidence that it is having difficulty in meeting its commitments under that loan. If that state of affairs continues, it may safely be presumed that the secured creditor will take steps to protect its position. However, until that happens, there does not seem to me to be any real risk of third party creditors who deal with Dial D suffering because it may in fact be insolvent.

58 Further, the unit holders in the unit trust have effectively propped up Dial D by loans. It is open to infer that it is the making and extension of those loans that has enabled Dial D to continue to operate. It may be inferred, also, that those unit holders are likely to fund the arbitration, should it proceed.

59 I referred at [31] above to the undertaking given by the unit holders and their directors. I proceed on the basis that the unit holders will observe or honour their undertaking. On that basis, one immediate threat to the continued operations of Dial D is removed. It may be inferred that the unit holders are prepared to take that position because they hope to ameliorate their position through a successful outcome in the arbitration.

60 Mr Simpkins pointed to s 459R of the Corporations Act . That can be dealt with (as I did, at the conclusion of the hearing of the application for a stay) under s 459R(2), by extending the time within which the application to wind up Dial D should be determined for an appropriate length of time.

61 Mr Simpkins submitted that if (contrary to his principal position) the Court were minded to grant a stay, it should be on terms that:

(1) "Kingston's position at least insofar as the estimated costs of the arbitration" were concerned, is secured; and

(2) Dial D should pay into a controlled account, to abide assessment, the amount at which Kingston has quantified the costs owing to it under the earlier orders of the Court (including the Court of Appeal).

62 Mr Simpkins submitted that if such terms were not granted, then Dial D would get "a free kick at arbitration while Kingston simultaneously incurs substantial costs that are most likely never to be recovered", and that Kingston would in addition remain at risk for costs already ordered to be paid to it.

63 Mr Simpkins submitted further, that Kingston would wish to adduce evidence of its likely costs "and be further heard". I should say straight away, in respect of this submission, that it typifies what to my mind is the unreasonable attitude taken by to the parties to their disputes. That there should be yet another hearing, taking up time and involving further costs, in respect of the question of a stay, is inconsistent with the philosophy underlying s 56 of the Civil Procedure Act . As I have noted at [21] above, the proceedings were adjourned for the very purpose of permitting the parties to put on evidence and make submissions.

64 I return to the substance of the terms proposed by Mr Simpkins. I accept that it is unsatisfactory that his client should be kept out of its money. However, to a large extent, that is a function of the way in which the parties have chosen to litigate their disputes. And as against that consideration, there is the reality that the claims that have been agitated hitherto are claims on account, and that it is the process of arbitration that will determine the final balance.

65 Further, to the extent that Mr Simpkins appeared to submit that the arbitration would not achieve anything of substance from Dial D's perspective, I do not agree. The analysis set out at [45] to [50] above suggests that the difference between the parties is somewhat more substantial than his submissions appeared to recognise.

66 There have been independent assessments of the position which could indicate that Dial D's position is not without merit. Establishment of a balance in favour of Dial D (for example, as certified in the purported final certificate) would have the effect of undoing the "on account" entitlement of Kingston under progress claim 25 and the judgment founded thereon. Taking those considerations into account, I do not think it appropriate to impose conditions of the kind for which Mr Simpkins contended.

67 Mr Simpkins did not in terms contend for a condition that Dial D should prosecute the arbitration expeditiously. In any event, there is no need for such a term. If Kingston forms the view that Dial D is stalling, it is open to it to take advantage of the liberty to apply, and to move to discharge or vary the stay.

Conclusion

68 Before I conclude these reasons, I return to the application before Hammerschlag J on 21 March 2013. At the conclusion of that hearing, his Honour said that following (T9.20-.25):

A winding up application is not a vehicle for the determination of disputed claims. And I suppose if he has to, he will put on evidence that he is solvent and that will be the end of that. Maybe he isn't going to put on evidence that he is solvent, I don't know, and part of his case will be that if he is insolvent it is because you have put him there. So this is going to be a huge imbroglio. Whoever came up with that bright idea tell them to rethink it.

69 I agree entirely with his Honour's observation. Mr Simpkins said, although I am sure without intending any disrespect, that Hammerschlag J was doing no more than thinking aloud. That may be so; but if that is the proper way to describe his Honour's observations, those thought processes were, if I may say so, entirely correct.

70 It was for the reasons set out above that, on 17 July 2014, I made the orders set out at [30] above.

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