89 Burswood Road Pty Ltd v William James Harris and Robert Michael Kirman as joint and several liquidators of GH1 Pty Ltd (in Liquidation) (ACN 099 191 714) - [2021] WASCA 178

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT :   THE COURT OF APPEAL (WA)
CITATION:   89 BURSWOOD ROAD PTY LTD -v- WILLIAM JAMES HARRIS AND ROBERT MICHAEL KIRMAN as joint and several liquidators of GH1 PTY LTD (IN LIQUIDATION) (ACN 099 191 714) [2021] WASCA 178
CORAM:   BUSS P
MITCHELL JA
TOTTLE J

HEARD:   13 AUGUST 2021
DELIVERED          :   8 OCTOBER 2021
FILE NO/S:   CACV 57 of 2020
BETWEEN:   89 BURSWOOD ROAD PTY LTD
First Appellant
115 CAMBRIDGE STREET PTY LTD
Second Appellant
AND
WILLIAM JAMES HARRIS AND ROBERT MICHAEL KIRMAN as joint and several liquidators of GH1 PTY LTD (IN LIQUIDATION) (ACN 099 191 714)
First Respondent
WILLIAM JAMES HARRIS AND ROBERT MICHAEL KIRMAN as joint and several liquidators of MNWA PTY LTD (IN LIQUIDATION) (ACN 101 717 177)
Second Respondent
ROBERT MICHAEL KIRMAN as liquidator of ACN 142 745 337 (IN LIQUIDATION) (ACN 142 745 337)
Third Respondent
WILLIAM JAMES HARRIS AND ROBERT MICHAEL KIRMAN as joint and several liquidators of STOCKHOLM DEVELOPMENTS PTY LTD (IN LIQUIDATION) (ACN 165 977 257)
Fourth Respondent
WILLIAM JAMES HARRIS AND ROBERT MICHAEL KIRMAN as joint and several liquidators of 293 NICHOLSON ROAD PTY LTD (IN LIQUIDATION) (ACN 620 674 268)
Fifth Respondent

FILE NO/S: CACV 58 of 2020
BETWEEN: 89 BURSWOOD ROAD PTY LTD
First Appellant
115 CAMBRIDGE STREET PTY LTD
Second Appellant
AND
ROBERT MICHAEL KIRMAN AND WILLIAM JAMES HARRIS as joint and several liquidators of WHITBY LAND COMPANY PTY LTD (IN LIQUIDATION) (ACN 115 233 193)
Respondent

ON APPEAL FROM:
Jurisdiction              :   SUPREME COURT OF WESTERN AUSTRALIA
Coram:   MASTER SANDERSON
Citation: ROBERT MICHAEL KIRMAN as liquidator of ACN 142 745 337 (in liq) [2020] WASC 129
File Number            :   COR 248 of 2019 & COR 2 of 2020

Catchwords:

Winding up - Voidable transactions - Applications pursuant to s 588FF(3)(b) of the Corporations Act 2001 (Cth) for an extension of time for the making of applications under s 588FF(1) - Confidentiality order in respect of a liquidator's affidavit in support of the applications for an extension of time - Procedural fairness - Whether the appellants as interested persons in relation to the applications for an extension of time were misled by information relied upon by the liquidators - Whether counsel for the liquidators conceded that the liquidators were in a position to commence proceedings under s 588FF(1) before the expiry of the limitation dates - The significance of any concession - Whether it was necessary for the liquidators to satisfy the court that funding would be available for the commencement and prosecution of any proceedings that might be brought under s 588FF(1)

Legislation:

Corporations Act 2001 (Cth), s 588FF(1), s 588FF(3)(b)

Result:

CACV 57 of 2020
Application for an extension of time within which to appeal granted
Appeal dismissed

CACV 58 of 2020
Application for an extension of time within which to appeal granted
Appeal dismissed

Category: B

Representation:

CACV 57 of 2020

Counsel:

First Appellant	:	Mr A P Rumsley
Second Appellant	:	Mr A P Rumsley
First Respondent	:	Mr S Vandongen SC
Second Respondent	:	Mr S Vandongen SC
Third Respondent	:	Mr S Vandongen SC
Fourth Respondent	:	Mr S Vandongen SC
Fifth Respondent	:	Mr S Vandongen SC

Solicitors:

First Appellant	:	Alan Rumsley Commercial Disputes Lawyer
Second Appellant	:	Alan Rumsley Commercial Disputes Lawyer
First Respondent	:	HWL Ebsworth Lawyers (Perth)
Second Respondent	:	HWL Ebsworth Lawyers (Perth)
Third Respondent	:	HWL Ebsworth Lawyers (Perth)
Fourth Respondent	:	HWL Ebsworth Lawyers (Perth)
Fifth Respondent	:	HWL Ebsworth Lawyer (Perth)

CACV 58 of 2020

Counsel:

First Appellant	:	Mr A P Rumsley
Second Appellant	:	Mr A P Rumsley
Respondent	:	Mr S Vandongen SC

Solicitors:

First Appellant	:	Alan Rumsley Commercial Disputes Lawyer
Second Appellant	:	Alan Rumsley Commercial Disputes Lawyer
Respondent	:	Allens

Case(s) referred to in decision(s):

Australian Securities and Investments Commission v Karl Suleman Enterprizes Pty Ltd (in liq) [2004] NSWSC 1244; (2004) 52 ACSR 103
BP Australia Ltd v Brown [2003] NSWCA 216; (2003) 58 NSWLR 322
Chin, in the matter of Agatha Trading Pty Ltd (in liq) [2020] FCA 991
Greig v Stramit Corporation Pty Ltd [2003] QCA 298; [2004] 2 Qd R 17
Hird (Liquidator), in the matter of Allmine Group Limited (in liq) [2018] FCA 781
HT v The Queen [2019] HCA 40; (2019) 93 ALJR 1307
Marsden (liquidator) v CVS Lane PV Pty Ltd, in the matter of Pentridge Village Pty Ltd (in liq) (receivers and managers appointed) (controller appointed) [2018] FCA 102; (2018) 124 ACSR 100
Pogroske, in the matter of Bower Projects Australia Pty Ltd (in liq) [2019] FCA 1688

JUDGMENT OF THE COURT:

These are appeals against orders made by Master Sanderson on 30 March 2020, pursuant to s 588FF(3)(b) of the Corporations Act 2001 (Cth) (the Act), extending to 31 October 2021 the time for the making of any application under s 588FF(1) of the Act in respect of five corporations.
The corporations are GH1 Pty Ltd (In Liquidation), MNWA Pty Ltd (In Liquidation), ACN 142 745 337 Pty Ltd (In Liquidation), Stockholm Developments Pty Ltd (In Liquidation) and 293 Nicholson Road Pty Ltd (In Liquidation) (collectively the Liquidation Entities).
The Master made the orders on 30 March 2020 upon the application of:
(a)Robert Michael Kirman as liquidator of ACN 142 745 337 Pty Ltd (in liq); and
(b)William James Harris and Mr Kirman as joint and several liquidators of the other Liquidation Entities.
The appellants were not parties to the primary proceedings. The respondents served on the appellants notice of the respondents' applications. The appellants sought and were granted leave to appear and be heard in the primary proceedings on the basis that the orders sought by the respondents affected the appellants' rights and interests. Pursuant to a grant of leave, the appellants appeared by counsel in the primary proceedings and made submissions in opposition to the respondents' applications.
The respondents contended before this court that the appellants, as non‑parties to the primary proceedings, did not have standing to appeal against the Master's orders. We will proceed, favourably to the appellants, on the assumption (and without deciding) that they have standing and the appeals are not incompetent. However, as we will explain, none of the grounds of appeal has been made out, and each of the appeals must be dismissed.

Overview of the primary proceedings

On 16 January 2020, the Master made orders requiring the respondents in these appeals to serve notice of their applications, pursuant to s 588FF(3)(b) of the Act, on 'any person or entity [the respondents] consider may be affected' by the orders sought.
The respondents served notice of the applications on Allan Caratti and Tina Bazzo and entities associated with them, including the first appellant and the second appellant in these appeals. The appellants indicated that they would seek to be heard in relation to the orders sought.
On 13 February 2020, Acting Master Whitby made orders directing, relevantly, the appellants to file and serve any affidavits in opposition to the respondents' applications by 27 February 2020 and any submissions in opposition to those applications by 5 March 2020. The respondents and the appellants were represented by counsel at the hearing.
The appellants filed an affidavit sworn by their solicitor, Alan Phillip Rumsley, and written submissions in opposition to the respondents' applications.
On 16 March 2020, Master Sanderson heard the respondents' applications. The respondents and the appellants were represented by counsel at the hearing.
On 30 March 2020, the Master made the orders, pursuant to s 588FF(3)(b), extending to 31 October 2021 the time for the making of any application under s 588FF(1) in respect of each of the Liquidation Entities.

The disposition of the appeals

The appellants require an extension of time within which to appeal. The last date for appealing was 20 April 2020. The appellants did not file their appeal notices until 14 May 2020. The applications for an extension of time are supported by an affidavit of Mr Rumsley sworn 14 May 2020. Although the Master made the relevant orders on 30 March 2020, the Master did not publish his reasons for making those orders until 23 April 2020. The respondents neither consented to nor opposed the applications for an extension of time. In the circumstances, we would grant the appellants an extension of time within which to appeal.
However, as we have mentioned, none of the grounds of appeal has been made out, and each of the appeals must be dismissed.

Relevant provisions of the Act

Section 588FF(1) of the Act provides that where, on the application of a company's liquidator, a court is satisfied that a transaction of the company is voidable because of s 588FE, the court may make one or more of the orders specified in par (a) to par (j) of s 588FF(1).
By s 588FF(3), an application under s 588FF(1) may only be made during the period specified in par (a) of s 588FF(3) or within such longer period as the court orders on an application under par (b) of s 588FF(3) made by the liquidator during the par (a) period.

The general approach in exercising the discretion under s 588FF(3)(b) of the Act

It is well established that the general approach of a court in exercising the discretion under s 588FF(3)(b) of the Act is to examine what is fair and just in all of the circumstances. See BP Australia Ltd v Brown.[1]
[1] BP Australia Ltd v Brown [2003] NSWCA 216; (2003) 58 NSWLR 322 [187] (Spigelman CJ; Mason P agreeing & Handley JA relevantly agreeing).
The liquidator must satisfy the court positively that the extension of time sought should be granted. See BP Australia [183].

The Master's reasons

The Master noted in his reasons that the respondents relied upon an affidavit of Mr Kirman sworn on 9 December 2019 (the First Kirman Affidavit) and a supplementary affidavit of Mr Kirman also sworn on 9 December 2019 (the Second Kirman Affidavit).
A copy of the First Kirman Affidavit (but not the Second Kirman Affidavit) was served on the appellants, Mr Caratti and Ms Bazzo. The Second Kirman Affidavit was not served because on 16 January 2020 the Master made an order (the Confidentiality Order) that the Second Kirman Affidavit:
(a) is to be presented for filing at the Registry and not filed on [ICMS];
(b)will not be made available for inspection by any person unless the Court orders otherwise;
(c)may be relied upon by [the respondents] at any hearing of this application; and
(d)be classified as a document to which access is restricted pursuant to Order 67A rule 10(6) of the Rules of the Supreme Court 1971 (WA).
The Master made the Confidentiality Order because the Second Kirman Affidavit set out in some detail the nature of the claims made by the respondents against the appellants, Mr Caratti and Ms Bazzo. None of the appellants, Mr Caratti and Ms Bazzo made an application for access to the Second Kirman Affidavit [3].
The Master made these observations about the Second Kirman Affidavit and the Confidentiality Order [3]:
In the course of his submissions counsel for the interested parties made the point that he was, because of the confidentiality orders, operating under some difficulty. He did not know with any precision what claims were actually foreshadowed against the interested parties. While this situation is unfortunate, it is also unavoidable. Moreover it is not appropriate for me in these reasons to canvas in any detail the claims foreshadowed by the [respondents]. I will have some general comments about the nature of these claims and the test the plaintiffs are required to meet. The evidence provided in the Second Kirman affidavit is very extensive. The affidavit itself runs to 1,565 pages. The bulk of the material is made up of annexures. But there are 43 pages devoted to the evidence. The material is well organised, logically consistent and, with limitations, extremely thorough. I have, of course, had regard to the Second Kirman affidavit when compiling these reasons.
The Master's reference to the 'interested parties' was to Mr Caratti, Ms Bazzo and entities associated with them, including the appellants.
The Master said that the Liquidation Entities went into voluntary administration or liquidation after 5 April 2017. The limitation date under s 588FF(3)(a) was 4 April 2020 in relation to GH1 Pty Ltd and after that date in relation to the other Liquidation Entities. The respondents' applications were made before the limitation dates expired [4].
The Master recorded the respondents' contention that there were numerous grounds that made it fair and just for the limitation dates to be extended. The Master reproduced the following passage from the respondents' written submissions which set out the grounds [11]:
(a)the complexity of the corporate group of which the Liquidation Entities form part;
(b)the number and scale of the transactions that the Liquidation Entities [entered] into prior to the appointment of the [respondents] as administrators and liquidators;
(c)the significant delays encountered in relation to the proposed section 596A public examinations of Mr Alan Caratti and Ms Tina Bazzo by reason of their respective appeals (most recently to the Supreme Court of Western Australia Court of Appeal) of orders obtained by the [respondents] that such examinations should, as is typically the case, proceed as public examinations;
(d)the extensive document production endeavours and investigations that the [respondents] have undertaken demonstrate that the need for extension is not a product of delay or inaction by the [respondents];
(e)the limited books and records that have been made available to the [respondents] by the directors and officers (and former directors and officers) of the Liquidation Entities;
(f)the lengths to which certain of the directors and officers (and former directors and officers) of the Liquidation Entities have gone to deny the [respondents] unfettered access to the books and records of the Liquidation Entities and documents relating to those entities;
(g)the various Court proceedings that the [respondents] have been required to participate in over a number of years with a view to facilitating access to the books and records of the Liquidation Entities and documents relating to those entities; and
(h)the [respondents'] confidence that they may be able to identify, investigate and make decisions on whether to prosecute claims for relief under section 588FF(1) of the Act once they have obtained access to the books and records of the Liquidation Entities and documents relating to those entities (and had an opportunity to consider and take advice on those materials).
The Master accepted the respondents' submission that the respondents had difficulty in investigating 'the pre-liquidation conduct and affairs of the [Liquidation Entities]' [12].
The difficulty was due in part to the complexity and scale of the broader group of which the Liquidation Entities form part. The Master explained [12], [14], [15]:
The liquidation entities form part of a much larger group of corporate entities and trusts of which Mr Caratti and Ms Bazzo are either the director, former director, shareholder, beneficiary or otherwise related. The broader Caratti/Bazzo group consists of an aggregation of proprietary companies, family trusts and bare trusts involved in real estate in Western Australia [primarily] in the business of the development of lots for residential, commercial and industrial purposes in addition to investment in commercial and farming properties leased to third parties.
…
The fact is the [respondents] are dealing with a very complex business or businesses. They have been appointed only over eight entities of a potential of one hundred or more entities involved in the business. For reasons which I will come to below [the] liquidators have so far had access in the course of their employment to a very limited range of books and records. It is clear from the affidavit evidence the liquidators have not as yet been able to identify, investigate and assess potential voidable transactions arising from the dealings of the liquidation entities.
As matters stand at present, the liquidators calculate the liabilities of the liquidation entities at over $310 million. Of that amount just under $150 million is claimed by the Australian Tax Office. The extent of the insolvency gives some indication of the size and complexity of the business. (footnotes omitted)
On that basis, the Master was satisfied that items (a) and (b) of the respondents' written submissions, reproduced at [23] above, had been made out.
Next, the Master said that, on the evidence adduced by the respondents, it was apparent that the respondents had conducted 'extensive information collection activities' with a view to informing themselves better in relation to the business, property and affairs of the Liquidation Entities. The Master summarised the investigations that had been undertaken by the respondents. On the basis of those summaries, the Master was satisfied that item (d) of the respondents' written submissions, reproduced at [23] above, had been made out.
The Master noted that, at [44] of the First Kirman Affidavit, Mr Kirman listed the books and records he would ordinarily expect to receive upon appointment as a liquidator of a company. However, in the present case, no such books or records exist or, if they do, they have not been provided by the directors to the respondents. According to Mr Kirman, the volume of documents produced by the directors and officers of the Liquidation Entities has been minimal, especially having regard to the extent of the commercial activities and revenues that the Liquidation Entities generated. That contention was disputed by Mr Caratti, Ms Bazzo and the appellants. However, the Master accepted the respondents' contention on this issue. The Master was satisfied that item (e) of the respondents' written submissions, reproduced at [23] above, had been made out [18].
The Master then dealt with items (c), (f) and (g) of the respondents' written submissions, reproduced at [23] above, as follows [19]:
It is sufficient if I say that numerous court actions are, or have been, taken by both the [respondents] and the interested parties in relation to production of books and records. The tone of the evidence filed on behalf of the [respondents] is to the effect that the actions taken by the interested parties are designed to delay the process of the liquidation and in some way frustrate the efforts of the [respondents]. As was submitted on behalf of the interested parties, every person who has rights, be they rights which accrue under the Corporations Act or Common Law rights, is entitled to access to the courts to protect those rights. In my view, it would be inappropriate to view the actions of the interested parties as in some way improper and designed to frustrate the [respondents]. The fact is the litigation which has taken place and which is currently on foot has delayed the progress of the liquidation. That delay is it seems unavoidable ‑ it is a necessary concomitant of the litigation. While it would be inappropriate to blame the interested parties in any way for this delay, the fact is the delay has occurred. The fact of the delay consequent upon litigation is a reason why time ought to be extended. On that basis I am satisfied that items [(c)] and (g) have been made out. However, item (f) is in pejorative terms and does not I think do the interested parties justice. But, nonetheless the delay which has occurred is sufficient to warrant an extension of time.

Next, the Master recorded that the respondents were of the view that, given more time, they could 'frame actions together with supporting evidence which will allow them to properly bring proceedings' [20]. The Master accepted that the respondents' view was based upon the extensive evidence in the affidavit material. The Master added that the view represented 'the professional judgment of liquidators who have undertaken extensive investigation and who are best placed to make a judgment about these matters' [20].
The Master emphasised that the orders he intended to make 'do not factor in any fault or blame on the part of the interested parties' [22]. The Master said that what was important was 'the fact of the actions and the delay consequent upon those actions' [22]. The Master added that the fact of the delay supported 'an extension of the limitation period; motive for the actions is irrelevant' [22].
The Master then observed that counsel for Mr Caratti, Ms Bazzo and the appellants had submitted that there was no utility in making an order extending the time limit if the respondents did not have funding to bring any action. That funding would necessarily include 'funding to cover adverse costs orders' [23]. The Master dealt with counsel's submission as follows [23]:
In this case the volume of evidentiary material and the investigations still to be undertaken in my view make it impractical for any party to take a final decision as to whether or not proceedings should be issued. As counsel for the interested parties pointed out the length of the extension is unusual – [effectively] 18 months when the limitation period itself is only three years. But what is clear from the evidence in this case is that much further work is needed before any final decision to institute proceedings is taken. To refuse an extension of time at this stage because funding in all its aspects is not guaranteed is not appropriate.
The Master concluded by stating that, for the reasons he had given, he was satisfied on 30 March 2020 that the orders in question should be made.

The grounds of appeal

In each of the appeals, the appellants rely upon three grounds of appeal.
Ground 1 alleges, in essence, that the Master erred in finding that the orders sought by the respondents should be made and that it was unavoidable that the Second Kirman Affidavit was not provided to the interested parties, in circumstances where:
(a)the Master found that the Second Kirman Affidavit set out in some detail the nature of the claims made against but not disclosed to the interested parties;
(b)the Master found that 'shelf orders' were sought; and
(c)the respondents submitted that they '[had] been unable to investigate, identify and pursue potential voidable transaction claims'.
Ground 2 alleges, in essence, that the Master erred in finding that the orders sought by the respondents ought to be made and that the respondents were not in possession of books and records that would allow them to commence proceedings, in circumstances where counsel for the respondents had conceded that the respondents would be in a position to commence any proceedings before the expiry of the limitation dates.
Ground 3 alleges, in essence, that the Master erred in finding that 'shelf orders' ought to be made, in circumstances where:
(a)the basis for the shelf orders sought by the respondents, namely that they '[had] been unable to investigate, identify and pursue potential voidable transaction claims', was directly inconsistent with the evidence in the Second Kirman Affidavit which the Master found identified claims foreshadowed by the respondents and provided evidence that was very extensive, well organised, logically consistent and extremely thorough;
(b)the Master found that the respondents had undertaken extensive investigation; and
(c)the Master found that the respondents did not have funding to commence proceedings.

The merits of ground 1

The substance of the appellants' complaints, in the context of ground 1, is as follows:
(a)the appellants were denied procedural fairness at the hearing before the Master because they were not given access to the Second Kirman Affidavit;
(b)the appellants were misled, by the First Kirman Affidavit and the respondents' written submissions in support of their applications, into believing that the respondents had not identified any specific claims that might be brought in proceedings under s 588FF(1), whereas [3] of the Master's reasons indicates that the Second Kirman Affidavit did in fact identify specific claims that could be brought in proceedings under that provision; and
(c)the Confidentiality Order which restricted access to the Second Kirman Affidavit should be set aside.
We are satisfied, for the following reasons, that the Master did not fail to accord procedural fairness to the appellants in the course of deciding that the orders sought by the respondents should be made without the appellants having been given access to the Second Kirman Affidavit.
First, it is, of course, fundamental that all courts are required to accord procedural fairness to parties to a proceeding. In general, a party to a proceeding must know the case which the opposite party makes and how that party seeks to advance its case. In general, this requires that a party to a proceeding be in a position to test and respond to the evidence on which the opposite party relies. However, the content of the rules of procedural fairness is not fixed. In particular, the content may vary according to the circumstances of the particular case. It is well established that procedural fairness is not abstract in character. Its object is the avoidance of practical injustice. See HT v The Queen.[2]
[2] HT v The Queen [2019] HCA 40; (2019) 93 ALJR 1307 [17] ‑ [18] (Kiefel CJ, Bell & Keane JJ).
Secondly, in the present case, the appellants were not parties to the respondents' applications for an extension of time. They were interested persons. The appellants were, however, entitled to procedural fairness because their rights and interests were affected by the orders sought by the respondents in their applications. See BP Australia [133] ‑ [136]; Australian Securities and Investments Commission v Karl Suleman Enterprizes Pty Ltd (in liq).[3] In the present case, the critical issue is the content of the entitlement.
[3] Australian Securities and Investments Commission v Karl Suleman Enterprizes Pty Ltd (in liq) [2004] NSWSC 1244; (2004) 52 ACSR 103 [7] (Barrett J).
Thirdly, the appellants appeared and were heard by their lawyer, Mr Rumsley, at the interlocutory hearing before Acting Master Whitby on 13 February 2020 (when the Acting Master made programming orders) and at the substantive hearing of the respondents' applications before the Master on 16 March 2020. On 13 March 2020, Mr Rumsley filed a written outline of submissions in opposition to the respondents' applications.
Fourthly, the appellants by their lawyer, Mr Rumsley, were aware at and prior to the substantive hearing on 16 March 2020 that the respondents relied upon the Second Kirman Affidavit and that the Confidentiality Order had been made. The appellants were put on notice of the respondents' reliance upon the Second Kirman Affidavit and the confidential nature of the affidavit by [3] of the respondents' written submissions that were filed on 5 March 2020.
Fifthly, the appellants did not at or prior to the substantive hearing on 16 March 2020 (or later before the Master made orders on 30 March 2020 determining the respondents' applications) apply for access, either by themselves or by Mr Rumsley, to the Second Kirman Affidavit. Further, the appellants did not at or prior to the substantive hearing on 16 March 2020 (or later before the Master made the orders determining the respondents' applications) apply for the variation or discharge of the Confidentiality Order.
Sixthly, Mr Rumsley did not make any submissions to the Master at the substantive hearing of the respondents' applications on 16 March 2020 to the effect that the appellants had been denied procedural fairness because the appellants did not, either by themselves or by Mr Rumsley, have access to the Second Kirman Affidavit.
Seventhly, the proper inference, on an objective appraisal of the circumstances up to and including the substantive hearing of the respondents' applications before the Master on 16 March 2020, is that Mr Rumsley made a rational forensic decision not to seek access to the Second Kirman Affidavit. If the appellants had been given access to the Second Kirman Affidavit, that access may have foreclosed Mr Rumsley's submission to the Master that the respondents should not be granted an extension of time because they had sufficient information, before the expiry of the limitation dates, to make a final decision as to whether proceedings under s 588FF(1) should be commenced.
We are satisfied, having regard to the matters set out at [40] ‑ [46] above, that the appellants elected to appear and make submissions at the substantive hearing in the knowledge that the respondents relied upon the Second Kirman Affidavit and without seeking access to the affidavit. Further, we are satisfied, having regard to the matters set out at [40] ‑ [46] above, that the appellants were not denied procedural fairness.
We are also satisfied, for the following reasons, that the appellants were not misled, by the First Kirman Affidavit and the respondents' written submissions in support of their applications, into believing that the respondents had not identified any specific claims that might be brought in proceedings under s 588FF(1), whereas [3] of the Master's reasons indicates that the Second Kirman Affidavit did in fact identify specific claims that could be brought in proceedings under that provision.
First, the Master made a number of findings of fact that have not been challenged in the appeals. Those findings of fact include, relevantly:
(a)The respondents have had difficulty in investigating the pre‑liquidation conduct and affairs of the Liquidation Entities and that difficulty has been due in part to the complexity and scale of the broader group of entities of which the Liquidation Entities form part [12].
(b)The respondents have thus far had access to a very limited range of books and records [14].
(c)The respondents have not as yet been able to identify, investigate and assess potential voidable transactions arising from the dealings of the Liquidation Entities [14].
(d)The respondents have demonstrated the need for an extension of the limitation dates was not a product of delay or inaction by the respondents [17].
(e)As at the date on which the respondents' filed their applications for an extension of time, the respondents were not in possession of books and records that would have enabled them to commence proceedings under s 588FF(1) [18].
(f)The liquidation of the Liquidation Entities had been delayed by litigation and that delay was sufficient to warrant an extension of time [19].
(g)The respondents' view that 'given more time they can frame actions together with supporting evidence which will allow them to properly bring proceedings' should be accepted [20]. The volume of evidentiary material and the investigation still to be undertaken by the respondents made it impractical for a final decision to be taken as to whether or not the respondents should commence proceedings [23].
Secondly, the Master's statements at [3] that 'the Second Kirman [A]ffidavit set out in some detail the nature of the claims against the interested parties' and that the material in the affidavit 'is well organised, logically consistent and, with limitations, extremely thorough' must be evaluated in the context of the unchallenged findings of fact later in the Master's reasons which we have set out at [49] above. When the Master's statements at [3] are evaluated in that context it is apparent that the Master did not find that the Second Kirman Affidavit identified specific claims that could be brought in proceedings under s 588FF(1). To the contrary, it is apparent, upon a fair reading of the Master's reasons as a whole, that the Master was satisfied that the respondents required an extension of time to enable the respondents to carry out further investigations and obtain additional information before making a final decision about whether to commence proceedings under s 588FF(1) in respect of the Liquidation Entities.
We are therefore satisfied that an essential premise of the appellants' contention that they were misled by the First Kirman Affidavit, and the respondents' written submissions in support of their applications, has not been made out.
We are also satisfied, for the following reasons, that the Confidentiality Order which restricted access to the Second Kirman Affidavit should not be set aside.
The appellants' written submissions in support of this complaint assert [23] ‑ [24]:
In circumstances where the [respondents] chose to file the Second Kirman affidavit and seek orders to prevent the interested parties having access and then chose to make submissions, on their face inconsistent with that undisclosed evidence, the orders should be set aside.
To the extent that the material was not disclosed because of confidentiality orders made in the proceedings, the interlocutory order may be challenged as it was relevant to the final result.
The making of a confidentiality order where a liquidator has applied for an extension of time, pursuant to s 588FF(3)(b), is not unusual. See, for example, Chin, in the matter of Agatha Trading Pty Ltd (in liq).[4] See also, in analogous circumstances, Hird (Liquidator), in the matter of Allmine Group Limited (in liq);[5] Pogroske, in the matter of Bower Projects Australia Pty Ltd (in liq).[6]
[4] Chin, in the matter of Agatha Trading Pty Ltd (in liq) [2020] FCA 991 [5] ‑ [8] (Markovic J).
[5] Hird (Liquidator), in the matter of Allmine Group Limited (in liq) [2018] FCA 781 [47] (Gleeson J).
[6] Pogroske, in the matter of Bower Projects Australia Pty Ltd (in liq) [2019] FCA 1688 [22] (Markovic J).
A confidentiality order is ordinarily made where the order supports the public interest in the due and beneficial administration of the estate of the insolvent company for the benefit of creditors. See Hird (Liquidator) [48]; Pogroske [22]; Chin [8].
In the present case, the appellants appealed against the orders of the Master granting the extensions of time. The appellants did not appeal against the Confidentiality Order.
In any event, as we have explained, the appellants were not denied procedural fairness at the hearing before the Master because they were not given access to the Second Kirman Affidavit.
Also, the appellants' written and oral submissions do not establish any basis for concluding that the Master made any material error of law or fact in deciding to make the Confidentiality Order.
Further, the Master's decision to make the Confidentiality Order did not relevantly affect the Master's decision to grant the extensions of time. Although the Second Kirman Affidavit was taken into account by the Master in arriving at the decision to grant the extensions, it was the content of the Second Kirman Affidavit and not its confidential character which informed the Master's decision.
Ground 1 fails.

The merits of ground 2

The substance of the appellants' complaints, in the context of ground 2, is that the Master should not have made the orders extending time because counsel for the respondents had conceded that the respondents would be in a position to commence proceedings under s 588FF(1) of the Act before the expiry of the limitation dates.
We are satisfied, for the following reasons, that an essential premise on which ground 2 is based, namely that counsel for the respondent made a concession as alleged by the appellants, is fallacious.
On 13 February 2020, at the interlocutory hearing before Acting Master Whitby, counsel for the respondents said (ts 3):
In terms of the actual hearing, we're anticipating that it won't take more than half a day, and I do have my friend and I's combined unavailable dates between 12 March and 29 March. If the court was able to accommodate it, it would be appreciated if it was in the earlier portion of that, only because, obviously, if we were to hear it at the back end, [and] we weren't to obtain the extension of time, we would then not have any time left to then commence proceedings if we, indeed, needed to.
On 16 March 2020, at the substantive hearing before the Master, counsel for the respondents said (ts 9 ‑ 10):
And [at the hearing on 13 February 2020] I also indicated that we had brought the application within time and we had sought to have [the court] try and determine that matter before any of those relevant [limitation] dates expired, simply because then if necessary we could commence proceedings prior to any of those dates passing.
The appellants assert that counsel for the respondents' alleged concession is embodied in that passage.
In Marsden (liquidator) v CVS Lane PV Pty Ltd, in the matter of Pentridge Village Pty Ltd (in liq) (receivers and managers appointed) (controller appointed),[7] Gleeson J enumerated three matters that will ordinarily inform the exercise of the discretionary power conferred on the court by s 588FF(3)(b). It is unnecessary to reproduce them.
[7] Marsden (liquidator) v CVS Lane PV Pty Ltd, in the matter of Pentridge Village Pty Ltd (in liq) (receivers and managers appointed) (controller appointed) [2018] FCA 102; (2018) 124 ACSR 100 [54] ‑ [55].

Section 588FF(3)(b) does not specify any factors or considerations which confine the court's discretionary power to extend time. In particular, the provision does not state that an extension of time should not be granted unless the extension is required to enable a liquidator to decide whether to commence proceedings under s 588FF(1).
However, where a liquidator is in a position to commence proceedings immediately under s 588FF(1) against a known defendant in respect of known transactions before the expiry of the limitation date, those factors will ordinarily, as a matter of fact, be significant in the court's evaluation of whether it should exercise its discretion to extend time under s 588FF(3)(b). See, generally, Greig v Stramit Corporation Pty Ltd.[8]
[8] Greig v Stramit Corporation Pty Ltd [2003] QCA 298; [2004] 2 Qd R 17 [100] (Williams JA).
In the present case, counsel for the respondents did not, in substance, make any relevant concession on 13 February 2020 or 16 March 2020.
On 13 February 2020, counsel for the respondents requested Acting Master Whitby, in effect, to list the respondents' applications so that they could be heard and determined before the expiration of the limitation dates. Further, counsel informed the Acting Master, in effect, that if the applications were to be dismissed, then the respondents wanted some time to consider whether proceedings could (no doubt, properly) be commenced under s 588FF(1) on the basis of the investigations already made by the respondents and the information already available to them about the Liquidation Entities.
On 16 March 2020, counsel for the respondents informed the Master, in effect, that he had previously sought to have the applications heard and determined before the expiration of the limitation dates because, if the applications were dismissed, the respondents could, 'if necessary', commence proceedings. When that statement is read, in the context of what counsel told Acting Master Whitby on 13 February 2020, it is apparent that counsel did not concede that the respondents were in a position to commence proceedings immediately under s 588FF(1). The appropriate characterisation of what counsel said on 13 February 2020 and 16 March 2020 is that, in the event the respondents' applications failed, the respondents wanted an opportunity to consider whether proceedings could properly be commenced under s 588FF(1) on the basis of the investigations they had already made and the information they had already obtained. That proposed course of action by the respondents was, in the circumstances, appropriate.

Our characterisation of what counsel for the respondent said on 13 February 2020 and 16 March 2020 is supported by the Master's unchallenged findings of fact, which we have set out at [49] above, in relation to the substantive merits of the respondents' applications. In particular, the Master found that the respondents had not as yet been able to identify, investigate and assess potential voidable transactions arising from the dealings of the Liquidation Entities [14]; the respondents were not in possession of books and records that would have enabled them to commence proceedings under s 588FF(1) [18]; and the volume of evidentiary material and the investigation still to be undertaken by the respondents made it impractical for a final decision to be taken as to whether or not the respondents should commence proceedings [23].
In any event, any relevant concession made by counsel for the respondents on 13 February 2020 and 16 March 2020 did not, in the circumstances, preclude the Master from making those unchallenged findings of fact and, on the basis of those findings, granting the extensions of time. Section 588FF(3)(b) conferred on the Master a broad discretion. The factors which the Master was entitled or bound to consider were confined only by the subject matter, scope and apparent purpose of the discretionary power in the context of the Act as a whole. In our opinion, the Master was entitled, in the circumstances, to grant the extensions of time having regard to his unchallenged findings of fact and despite any relevant concession.
Ground 2 has not been made out.

The merits of ground 3

The substance of the appellants' complaints, in the context of ground 3, is that the Master erred in making the orders extending time, in circumstances where:
(a)the basis on which the respondents sought the orders, namely that they had been unable to investigate, identify and pursue voidable transaction claims, was inconsistent with the Master's finding at [3] that the Second Kirman Affidavit 'set out in some detail the nature of the claims made against the interested parties' and the material in the Second Kirman Affidavit was 'well organised, logically consistent and, with limitations, extremely thorough';
(b)the Master found at [20] that the respondents had 'undertaken extensive investigation'; and
(c)it was not apparent that the respondents had the funding required to commence proceedings.
At the hearing of the appeal, counsel for the appellants acknowledged that the complaints which we have summarised at [73(a) and (b)] above overlapped with the complaints made by the appellants in the context of ground 1 (appeal ts 28).
We are satisfied that there is no merit in the appellants' complaints which we have summarised at [73(a) and (b)] above. As we have mentioned at [50] above, in the course of dealing with ground 1, when the Master's statements at [3] are evaluated in the context of the unchallenged findings of fact later in the Master's reasons which we have set out at [49] above, it is apparent that the Master did not find that the Second Kirman Affidavit identified specific claims that could be brought in proceedings under s 588FF(1). To the contrary, it is apparent, as we have mentioned at [50] above, that upon a fair reading of the Master's reasons as a whole, the Master was satisfied that the respondents required extensions of time to enable the respondents to carry out further investigations and obtain additional information before making a final decision about whether to commence proceedings under s 588FF(1) in respect of the Liquidation Entities.
We are also satisfied that the appellants' complaint which we have summarised at [73(c)] above is without merit.
Counsel for the appellants asserted that this complaint was 'a utility point' in that 'without funding there [will not] be any proceedings, so there is no need to grant an extension for proceedings that [will not] be commenced' (appeal ts 29). Counsel said that the Australian Taxation Office had contributed about $2,400,000 to fund the investigations that the respondents had already carried out. Counsel asserted that there was no suggestion that the Australian Taxation Office would be willing to contribute any additional funding to enable proceedings under s 588FF(1) to be commenced and litigated to a conclusion.
Those submissions are flawed. The respondents sought an extension of time because they needed to conduct further investigations and obtain additional information before making a final decision as to whether to commence proceedings under s 588FF(1). In those circumstances, the respondents could not know, at the time of the substantive hearing before the Master, whether any proceedings would in fact be commenced. It would be unreasonable to expect the respondents to secure additional funding for the commencement and prosecution of what would be lengthy and complex litigation under s 588FF(1) before the respondents have made a final decision in relation to any such proceedings, based on their prospects of success and the overall costs. Any litigation funder would require advice as to prospects of success and overall costs before agreeing to finance lengthy and complex litigation.

Conclusion

The appeals must be dismissed.
Finally, we note that it has been unnecessary to read the Second Kirman Affidavit for the purpose of determining the appeals. We have not read the affidavit.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
TW
Associate to the Honourable President Buss
8 OCTOBER 2021