ANZ Executors & Trustee Co Ltd v Qintex Ltd & Anor [1990] QSC 198

. ·I . (,-. . ·1· .. ~ \ '. 1 , L°', : i.x✓ 0 10 30 40 50 60 BEFORE MR. JUSTICE BYRNE BRISBANE, 27 JUNE 1990 (Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Chief Court Reporter,Court Reporting Bureau.) BETWEEN: ANZ EXECUTORS AND TRUSTEE COMPANY LIMITED -and- QINTEX LIMITED -and- Plaintiff First Defendant QINTEX AUSTRALIA LIMITED (Receivers and Managers Appointed) Second Defendant JUDGMENT HIS HONOUR: So far as it relates to the second defendant, the action is dismissed. I publish my reasons. I have heard submissions in relation to the question of costs of this application. As my reasons for judgment reveal, the second defendant has ultimately succeeded on the ground which was not distinctly pleaded, and which was taken late in the trial. However, the cos,s incurred in the litigation were not, in my view, affected by the circumstance that I mentioned. The second defendant's pleading did distinctly assert that , 1 10 20 30 40 50 60 -- 1 of 19 -- 10 20 30 40 50 60 the giving of the guarantees would involve a breach by a general meeting of members of the subsidiary of a duty to creditors. The evidence would, I have no doubt, have been the same ~:nd the litigation conducted in -:the · same fashion _J.f ::the al)egation had ·been of a misuse of'< :co:ir:-p-6.r-a:-te~ pOwe r. In these circumstances/ in my opinion, no sufficient reason has been shown for departing from the general rule that the costs should follow the event. There will therefore be a further order that the plaintiff pay the second defendant's costs of the action, including reserved, costs, if any, to be taxed .. · .----c::,.::--"~"t. Printer; Qld. 2 10 .(1 I\ , 20 ,..,---1 r l; I I (~ , ,, !i I I I 30 40 L 50 60 -- 2 of 19 -- C) Sc IN THE SUPREME COURT OF QUEENSLAND No. 3996 of 1989 Before Mr Justice Byrne BETWEEN: ANZ EXECUTORS & TRUSTEE COMPANY LIMITED Plaintiff OINTEX LIMITED First Defendant AND: OINTEX AUSTRALIA LIMITED (RECEIVERS AND MANAGERS APPOINTED) Second Defendant JUDGMENT - BYRNE J. Delivered the 28th day of June, 1990. CATCHWORDS: Companies - execution of guarantees by subsidiaries of debts of parent company in circumstances of insolvency - misuse of corporate power which will not be compelled by specific performance. Counsel: Solicitors: P.A. Keane Q.C. with him R.G. Bain for plaintiff W. Sofronof f Q. C. with him D. J. S. Jackson for second defendant Clarke and Kann for plaintiff Blakes for second defendant Hearing dates: 4th, 5th, 6th and 7th June, 1990 -- 3 of 19 -- IN THE SUPREME COURT OF QUEENSLAND BETWEEN: No. 3996 of 1989 ANZ EXECUTORS & TRUSTEE COMPANY LIMITED Plaintiff AND: OINTEX LIMITED First Defendant AND: //\/ ~. OINTEX AUSTRALIA LIMITED (RECEIVERS AND MANAGERS APPOINTED) C) C Second Defendant JUDGMENT - BYRNE J. Delivered the 28th day of June, 1990. The plaintiff ( 11 ANZ 11 ) is a trustee company. The second defendant ( 11 QAL 11 ) is a subsidiary of the first defendant and the intermediate holding company for a group of about 170 companies involved in a diverse range of business activities in Australia and the United States. More than 90 of the members of the Qintex group are wholly owned Australian subsidiaries of QAL. ANZ is the trustee for holders of unsecured notes issued by QAL in 1988 and 1989. The notes were issued to selected investors to acquire "working capital for the requirements of the group", as the borrowings were described by Mr Putland, QAL' s secretary arid Mr Capps, the Qintex Group's treasurer. -- 4 of 19 -- () C) 0 2 The borrowings amounted to slightly less than M$100 and were pursuant to three trust deeds to which QAL and ANZ are parties. The first two deeds are dated 1st July, 1988. One relates to an issue of unsecured, convertible notes to the value of M$85; the second to unsecured notes for a further M$85. Neither issue was fully subscribed. M$69.36 was raised under the convertible note deed. M$15. 6 was the value of notes issued pursuant to the other. The third trust deed is dated 15th February, 1989. An additional M$15. 5 was advanced in accordance with its conditions. In all three deeds QAL acknowledged an indebtedness to ANZ for the principal and interest payable. Eventually QAL defaulted in the performance of obligations assumed under the deeds. As a result, on 23rd March, 1990 ANZ established by judgment an entitlement to more than M$100, comprising the principal and accrued interest. Nothing has been paid in satisfaction of the judgment debt. An attempt at execution on 2nd April, 1990 met with a response from Mr Allpass that QAL "would not be paying this amount now". Allpass is an accountant. He and Mr Crawford were appointed on 21st November, 1989 by the Supreme Court of Victoria (Cummins J.) to be the receivers and managers of QAL and several of its Australian subsidiaries. Apprehensive that the judgment debt will remain unsatisfied, ANZ has brought this action to enforce a particular promise in the trust deeds. QAL was incorporated in Victoria in June, 1949 as a public company with the name Industrial and Pastoral Holdings Limited. The name was changed in October, 1987, but the company retained its public company status. Its shares are listed on the Australian Stock Exchange. Conformably with the Stock Exchange' s rules for -- 5 of 19 -- 3 unsecured note issues, the trust deeds contained a covenant by QAL that: "It will so long as any Notes remain outstanding ... on the request of the Trustee in writing procure any one or more wholly-owned Subsidiary of the Company incorporated in Australia ... to become a guarantor in respect of the payment of the Moneys Owing Pursuant to this Deed or intended so to be and the performance and observance by the Company of all of its obligations hereunder such guarantee to be in favour of the Trustee in a form to the Trustee's satisfaction." In mid-November, 1989 ANZ sought from QAL the execution by its Australian wholly owned subsidiaries of a form of guarantee of QAL's indebtedness to ANZ. QAL's continuing unwillingness () to cause any of the subsidiaries to execute such a document has prompted these proceedings for specific performance of QAL' s obligations under the trust deeds. ANZ's concern is to obtain orders requiring QAL to exercise its powers as the effective controller of its wholly owned Australian subsidiaries, both CJ intermediate and ultimate, to procure the promised guarantees. As QAL received the investor's funds subscribed for the notes, the obligation to obtain the subsidiaries' guarantees is (_J a promise of such a nature that any legally binding obligation in QAL to obtain the guarantees may be ordered to be specifically performed: see Lamont v. Osborn [1902] V.L.R. 434; Wight v. Haberdan Pty. Ltd. [1984] 2 N.S.W.L.R. 260; Meagher Gummow & Lehane Egui ty Doctrines & Remedies 2nd ed. ( 1984) para. 2010. QAL, incidentally, concedes that damages are an insufficient remedy for its failure to take the steps necessary to obtain the subsidiaries' guarantees. ANZ's claim is resisted on two distinct grounds. One is a denial that the promise is -- 6 of 19 -- () C 4 legally binding. The other advances considerations said to require that, in the exercise of a discretion, the equitable remedy of specific performance should be withheld. QAL's contention that the promise to get in the guarantees cannot be enforced is founded on the nature of the promise. The guarantee is to be "in a form to the trustee's satisfaction". This, QAL argues, accords an impermissible latitude of choice to the trustee to decide upon the precise words of the guarantee required - a matter said to be fundamental to QAL's obligations. Broadly, two matters were relied on by QAL as exposing reasons justifying refusal of specific enforcement on discretionary grounds. One may be described as hardship. It is the financial detriment to subsidiaries existing unsecured creditors of the and to the subsidiaries themselves affected which the guarantees would cause. The other may be shortly stated as an abuse of corporate power. QAL maintains that now to compel its subsidiaries to give the guarantees must involve QAL and all the intermediate subsidiaries in such an abuse. The unlawful conduct would be, according to QAL, participation in a resolution of a general meeting to grant a guarantee when no arguable advantage to the subsidiary immediately concerned may be perceived through giving of the guarantee. As specific performance should be refused on discretionary grounds, it is not necessary to consider the unappealing proposition that the freedom QAL conceded to ANZ to determine the language of the guarantee meant that QAL' s promise is not binding. Before discussing the points decisive against ANZ, aspects of the conduct of the trial should be mentioned. -- 7 of 19 -- n 5 By its defence, and as QAL's case was first developed in argument, QAL relied on considerations other than that specific performance would oblige a general meeting to commit an unlawful abuse of its power to control the subsidiary. The guarantees would, it was at first said, mean a breach of duty by those responsible for a subsidiary's management - in some cases the receivers; and, where receivers are not yet in control, the directors. The breach of duty identified was the incurring of the liability without the prospect of any corresponding advantage to the subsidiary. Other defences were pleaded, including that the guarantees would ( i) be a breach by the directors of the subsidiary of a duty to its creditors; (ii) involve a contravention of S. 229 of the uniform Companies Code; and (iii) "be a breach by a general meeting of members of the subsidiary of their duty to creditors". At trial, QAL did not suggest that directors or shareholders owed a duty to creditors () of the nature implicit in the pleading. This case therefore is L no occasion to discuss that controversial issue (see McPherson, "Duties of Directors to Shareholders and Creditors", New Zealand Legal Research Foundation, 1989). Before the trial ended, however, recognising that a general meeting might purport to commit a subsidiary to a guarantee without any participation by a director or receiver, QAL' s position shifted. The main objection became that, in today's circumstances, a commitment by a general meeting of any subsidiary to a guarantee of QAL' s obligations to ANZ could not advantage the subsidiary and was, for that reason, an abuse of the shareholder's power: an unlawful act the Court would not compel by specific performance. -- 8 of 19 -- 6 It was not objected for ANZ that this basis of opposition to the decree was not open on QAL' s case as pleaded: cf. Banque Commerciale SA v. Akhil Holdings Ltd. (1990) 64 A.L.J.R. 244, 248. Nor was it suggested that specific performance should be ordered if the implementation of the remedy would indeed involve an abuse of the general meeting's power to cause the subsidiary concerned to give the guarantee. ANZ was content to meet the new case. Its stance was that QAL should fail in its attempt to (; defeat the decree on discretionary grounds because it had not proved the facts needed to sustain a conclusion that specific C) () enforcement inevitably involves such an abuse of power. The facts were established without oral testimony. Admissions on the pleadings and in response to Notices were supplemented by written statements from Allpass and other witnesses and by extracts from affidavits first used in other cases. There was no cross-examination. This procedure was time-efficient. However, its effectiveness in revealing the extent of the factual disputes and in facilitating their resolution was called into question by the course the trial took in addresses. More will be said of this shortly. The Qintex group is a diversified conglomerate. Through a complex corporate structure the group conducts a wide range of business activities. Mr Burden and Mr Skase are directors of QAL. One or other of them is also a director of all the Australian subsidiaries. The group's major Australian business ventures are the Channel 7 television network and the Mirage Resorts. The great bulk of the assets of those businesses {s -- 9 of 19 -- 7 held or controlled by subsidiaries placed in receivership with QAL last November. Inter-company indebtedness is high. By 31st July, 1989 20 subsidiaries owed to QAL an aggregate debt of almost M$1,700. There are substantial external liabilities. Mr Sofronoff Q.C. said that the total indebtedness of the Qintex group to other lenders exceeds M$1,750. Many of the subsidiaries have borrowed externally or else charged their assets to secure the discharge of liabilities assumed by others in the group to financiers. Some of the charges were granted in May, 1989 when syndicates of financial institutions lent more than M$900 to Qintex Australian Finance Limited. The object of these advances was to repay existing group debts, the syndicates taking securities and guarantees from group members. Part of the new borrowings was due for repayment on 18th November, 1989. The debt could not be met. The next day, the boards of QAL and several of its U subsidiaries convened to consider a "contractual moratorium" to creditors. The reason, as Burden describes the idea, was to enable "the continuing operation of the QAL group pending an orderly realisation of assets on a going concern basis". The companies proposed the court appointment of Allpass and Crawford as their receivers and managers. The initiative was motivated by a concern that creditors might seek the appointment of provisional liquidators or take other action to recover their debts and to realise on their securities. Precipitate action of that kind was thought likely to be to the ultimate disadvantage of the general body of creditors. It was anticipated, according to Burden, that the receivers' appointment would enable the -- 10 of 19 -- (~) 8 assets of QAL and the affected subsidiaries "to be disposed of in an orderly fashion". It remains the receivers' intention to sell group assets to pay credi tars. The businesses of the subsidiaries in receivership are being conducted to facilitate sales. Assets probably will fetch more if disposed of on a going concern basis. The television operating companies have the most valuable assets. When the receivers were appointed, those subsidiaries were experiencing financial difficulty. A M$20 overdraft facility was arranged on 20th November. The lender, the State Bank of New South Wales, subsequently increased the facility to M$50 to ensure availability of funds for continuing operating network requirements. These companies still carry on business. Their financial circumstances were the subject of some evidence and considerable attention in the addresses. They are the asset rich entities and the subsidiaries most likely to be able to Q contribute funds in response to a demand by ANZ if ANZ can (j secure guarantees of QAL's liability. The impact of an additional liability of M$100 is considered by Allpass. The figures disclosed by the balance sheets indicate that a few subsidiaries have such a significant surplus of assets over liabilities that an additional debt of more than M$100 might not adversely affect unsecured creditors. For example, the balance sheets show substantial net worth in the companies operating the capital city television stations. Amalgamated Television Services Pty Ltd. holds the Channel 7 licence in Sydney. Its accounts reveal a surplus of more than M.$4'66. ·H. S. V. Channel 7 Pty. Ltd. operates the Melbourne -- 11 of 19 -- C) (_) l) 9 station. If its assets have the value disclosed in the company's books, a further liability of M$100 would still leave a substantial surplus: almost M$250. And there are a number of other Qintex subsidiaries with balance sheets suggesting healthy net worth positions, again assuming the liabilities are not underestimated and that asset sales would achieve book values. Allpass doubts that an orderly realisation will yield the amounts attributed to the assets in the balance sheets. There are two reasons for his pessimism: the recoverability of inter-company loans is problematic; and the amounts likely to be recovered from sales, particularly those relating to subsidiaries holding the broadcasting licences, is much less than the balance sheets portend. Allpass's exercise with the accounts identifies only five corporations where, even assuming the balance sheets are an accurate reflex of assets and liabilities, an assumption of an additional M$100 liability would not prejudice existing creditors. All five are broadcasting licensees. It is the book value of the licences which sustains the possibility that another M$100 debt would still leave an excess of assets over liabilities. The licence held by Amalgamated Television Services - the company with a notional net worth of M$466 - is disclosed at M$420. The H.S.V. Channel 7 licence is brought to account at M$350. But, according to Allpass, the licences "are clearly not realisable for the values shown in the balance sheets". The predicament of many others in the group emerges plainly enough. About 30 of the wholly owned Australian subsidiaries are now unable to pay their debts and are shown to be -- 12 of 19 -- 10 financially insolvent in the sense that liabilities exceed assets: see McPherson The Law of Company Liquidation 3rd ed. (1987) p. 54. In describing the circumstances of the remaining 60 or so wholly owned Australian subsidiaries, including broadcasting licencees, Allpass, in his statement dated 29th May concludes: "In my view while some of the subsidiary companies may according to the book values shown for assets have an excess of assets over liabilities these companies do not have the resources necessary to meet debts as and when they fall due." This is a concise assertion of commercial insolvency: In re Capital Annuities Limited [1979] 1 W.L.R. 170, 187; London and Counties Assets Company Limited v. Brighton Grand Concert Hall and Picture Palace Limited [1915] 2 K.B. 493, 501-2; cf. Hymix v. Garrity (1977) 13 A.L.R. 321. It was not challenged by any evidence adduced for ANZ, and Allpass was not cross-examined. Nevertheless, in his address, Mr Keane Q.C. tried to show that () an analysis of the subsidiaries' accounts, particularly those with substantial net worth positions on balance sheet figures, discloses an ability to satisfy or at least contribute towards ANZ's claims against QAL without prejudicing existing creditors. The exercise was relied on in part to support a submission that QAL had not proved the accuracy of the facts as Allpass had so succinctly described them: a conclusion of present commercial insolvency, even without an additional M$100 liability. No doubt convenience and efficiency in the conduct of this commercial litigation account for All pass' s views concerning capacity to meet current demands passing into evidence unswor·n and unsupported by identification of primary facts that could -- 13 of 19 -- C) lJ L 1 1 sustain the inference. Presumably, those same considerations, and perhaps others, explain why the assertion was untested by cross-examination and unchallenged by ANZ's evidence. The mere fact that evidence is not questioned by cross-examination does not require its acceptance: Ellis v. Wallsend District Hospital (1989) 17 N.S.W.L.R. 553, 586-9; !L.. v. Costi (1987) 48 S.A.S.R. 269. But in this case there is no justification for rejecting Allpass's assertion. Nor should it be understood restrictively. It means, as I read it, that all those wholly owned Australian subsidiaries showing in their accounts a surplus of assets over liabilities cannot meet ~heir debts as they become due. When its case closed QAL was not on notice that Allpass's view was in contest: cf. Cross on Evidence 3rd Aust. ed. (1986) paras. 9.63, 9.66. Had a challenge been made or foreshadowed, there is no reason to suppose that QAL could not have established the detail supporting Allpass' s conclusion. An across-the-board inability to satisfy current debts is not implausible. And Allpass, who has acted since late November as receiver of the subsidiaries owning or, through their subsidiaries, controlling the major ventures has had ample time . to assess the subsidiaries. Ageing balance sheets are not a satisfactory basis for declining to accept Allpass's conclusion that all QAL' s wholly owned Australian subsidiaries are now either financially or else commercially insolvent. QAL contends that, in the subsidiaries' present circumstances, it cannot be to the advantage of any of them to grant the guarantees sought by ANZ. To this ANZ makes two -- 14 of 19 -- (") () (_) 12 responses. ANZ emphasises that QAL bears the burden of establishing facts to enliven a discretion to refuse specific performance. QAL accepted the onus . Next, it is said the evidence does not show that a subsidiary could not perceive advantage to itself in executing such a guarantee. ANZ does not suggest that a subsidiary has the slightest prospect of net gain on a comparison of the real costs and potential benefits inherent in a guarantee. But there is, ANZ argues, some prospect of advantage to a subsidiary in promising to pay QAL's creditor: enough that a resolution to grant the guarantee cannot be characterised as a misuse of power. requires elaboration. This proposition A subsidiary paying ANZ in response to a demand upon the guarantee would acquire rights against QAL. That is because a payment on a guarantee obtained at the principal debtor's request entitles the guarantor to be indemnified by the principal debtor for the amount actually paid: Chitty On Contracts 26th ed. (1989) para. 5056; Birks An Introduction to the Law of Restitution pp. 187-9, 311; Goff & Jones The Law of Restitution 3rd ed. (1986) p. 316. Were specific performance to be ordered, QAL could be required formally to request the guarantees. So, by payment, the subsidiary can acquire a right of indemnity against QAL. This right may assist the subsidiary. In respect of those subsidiaries which are QAL' s debtors, in principle the indemnity would not be worthless. It would facilitate a claim to set-off against the subsidiary's debt to QAL the amount paid by that subsidiary to ANZ. For those subsidiaries not indebted to QAL, the indemnity against QAL is, -- 15 of 19 -- 0 13 ANZ contends, an assignable chose in action. Perhaps others in the group might purchase it. No other attraction in meeting QAL's debt was relied on, and I shall not digress to explore possibilities not canvassed at the trial. The suggested benefit to a subsidiary depends not just on executing the guarantee and thereby assuming an obligation to pay ANZ more than M$100. The advantage - the right of indemnity against QAL - is not available without actual payment to ANZ. Moreover, the right' s maximum value cannot exceed the subsidiary's disbursement to ANZ. If the subsidiary were to pay only M$1, M$1 is all it can claim from QAL. That is true even though the guarantee would expose the subsidiary to a liability to pay more than M$100. Accordingly, as the case was argued, there is no chance that the guarantee sought by ANZ might promote the interests of any subsidiary providing it. A subsidiary wishing to reduce its debt to QAL can do so by the () simpler, and certain, expedient of direct payment to QAL. Instead to assume QAL's liability to ANZ as a prelude to paying L;' part of QAL' s debt cannot be to the subsidiary's advantage. To express the conclusion in this way concentrates attention on two matters. One is that whether the assumption of a liability to ANZ could be advantageous must be assessed from the perspective of the subsidiary concerned and with its particular interests exclusively in mind: Walker v. Wimborne ( 1976) 137 C. L. R. 1, 6-7; Pennington' s Company Law 5th ed. (1985) p. 806; Commonwealth of Australia v. O'Reilly [1984] V.R. 931, 939; Rolled Steel Products (Holdings) Ltd. v. British Steel Corporation [1986] Ch. 246, 279-81, 308-9. The separate legal -- 16 of 19 -- () l) 14 personality of group members demands no less (but cf. Wedderburn "Multinationals and the Antiquities of Company Law" ( 1984) 4 7 Mod.L.Rev. 87). Secondly, the propriety of giving the guarantees is not to be considered by reference to circumstances prevailing earlier: for example, when the trust deeds were executed or the consequential borrowings made by QAL. Perhaps in different days a subsidiary might have detected a sufficient prospect of separate benefit that a commitment to a guarantee could be seen as genuinely for that company's business purposes; something to advance its own welfare: see Miles v. The Sydney Meat-Preservative Company (Limited) (1913) 16 C.L.R. SO, affd (1913) 17 C.L.R. 639; Charterbridge Corporation Ltd. v. Lloyds Bank Ltd. [1970] Ch. 62, 74-5. If so, those times are past. The precarious condition of the subsidiaries and that their businesses are operated to facilitate asset sales have already been mentioned. It is in these circumstances that ANZ seeks the guarantees. To give them now is not even possibly to the companies' advantage and to do so would prejudice existing unsecured creditors. Of course, the subsidiaries all have the power, one a general meeting may exercise, to give the guarantees: see S. 68 of the Companies Code. The litigation, however, is not about the subsidiaries' capacity. Rather it concerns whether the guarantees would involve an impropriety. This brings me to the applicable legal principles. As, in Advance Bank Australia Ltd. v. F.A.I. Insurances Ltd. (1987) 9 N.S.W.L.R. 464, Mahoney J.A. said (at p. 493): "The essential principle is that the powers, and the funds, of a company may be used only for the purposes of the company." -- 17 of 19 -- C 15 See also Ngurli v. Mccann (1953) 90 C.L.R. 425, 438-9; Ford Principles of Company Law 5th ed. (1990) pp. 151, 491; and the illuminating discussion by McPherson J. op cit at p. 7 ff. Hutton v. West Cork Railway Company (1883) 23 Ch. D. 654 is an old illustration. There the Court of Appeal held it beyond the power of the shareholders of a railway company about to be wound up to compensate retiring officials for past services. Cotton L.J. thought the proposal unlawful because it was "without any prospect of its in any way reasonably conducing to the benefit of the company": at p. 666. saying (at p. 671): Bowen L.J. agreed, "They can only spend money which is ... the company's if they are spending it for the purposes which are reasonably incidental to the carrying on of the business of the company. That is the general doctrine. Bona fides cannot be the sole test, otherwise you might have a lunatic conducting the affairs of the company, and paying away its money with both hands in a manner perfectly bona fides yet perfectly irrational. The test must be what is reasonably incidental to, and within the reasonable scope of carrying on, the business of the company." More recent cases have considered the notion that corporate powers must be used for corporate purposes in the particular context of guarantees of the obligations of others in a group of companies. In Reid Murray Holdings Limited (in liquidation) v. David Murray Holdings Pty. Ltd. (1972) 5 S.A.S.R. 386 a subsidiary guaranteed the repayment of advances to other subsidiaries. Having concluded that the directors of the guarantor did not believe that the guarantee was in its interest and that it was not incidental to that subsidiary's business, Mitchell J. held the guarantee beyond the power of both the directors and the shareholders. In Rolled Steel Products, which -- 18 of 19 -- ·~. ' - ,. 16 seems to herald a retreat from English company law's preoccupation with the narrow issue whether a corporate power exists as distinct from the legality of its exercise, a guarantee of the obligations of an associated company which did not accord any potential. advantage to the guarantor was said to be beyond the directors' authority because the transaction was "not effected for the purposes of the company": per Slade L.J. at p. 292: cf. the insolvency cases, Kinsela v. Russell Kinsela (', t Pty. Ltd. (1986) 4 N.S.W.L.R. 722; West Mercia Safetywear Ltd. () v. Dodd [1988] B.C.L.C. 250, 252-3; and Hilton International Ltd. v. Hilton [1989] 1 N.Z.L.R. 442, 469 ff. As I have said, a future guarantee of QAL's debt to ANZ could not possibly be to the advantage of any subsidiary. QAL has shown that for any of its wholly owned Australian subsidiaries now to execute the guarantee ANZ seeks would, in present circumstances, involve misuse of corporate power. \.__,. Accordingly, specific performance of QAL' s promise to procure the guarantees, the only remedy claimed against QAL should be refused. So far as it relates to QAL, the action is dismissed. -- 19 of 19 --