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Bazzo v Kirman

Bazzo v Kirman

Case [2020] WASCA 43 7 April 2020

Bankruptcy and Insolvency

Examination by Liquidators

Procedural Fairness

Confidentiality in Legal Proceedings

Insolvency Law

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JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT :   THE COURT OF APPEAL (WA)
CITATION:   BAZZO -v- KIRMAN [2020] WASCA 43
CORAM:   BUSS P
MITCHELL JA
BEECH JA

HEARD:   3 MARCH 2020
DELIVERED          :   7 APRIL 2020
FILE NO/S:   CACV 38 of 2019
BETWEEN:   TINA MICHELLE BAZZO
Appellant
AND
ROBERT MICHAEL KIRMAN joint and several liquidators of GH1 PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) (ACN 099 191 714)
First Respondent
WILLIAM JAMES HARRIS joint and several liquidators of GH1 PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) (ACN 099 191 714)
Second Respondent

FILE NO/S: CACV 39 of 2019
BETWEEN: ALLEN BRUCE CARATTI
Appellant
AND
ROBERT MICHAEL KIRMAN as liquidator of ACN 142 745 337 PTY LTD (IN LIQUIDATION) ACN 142 745 337
Respondent

ON APPEAL FROM:
Jurisdiction              :   SUPREME COURT OF WESTERN AUSTRALIA
Coram:   KENNETH MARTIN J
Citation: ROBERT MICHAEL KIRMAN AND WILLIAM JAMES HARRIS JOINT AND SEVERAL LIQUIDATORS OF GH1 PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (IN LIQ) -v- BAZZO [2019] WASC 45
File Number            :   COR 104 of 2018
Jurisdiction              :   SUPREME COURT OF WESTERN AUSTRALIA
Coram:   KENNETH MARTIN J
Citation: ROBERT MICHAEL KIRMAN AND WILLIAM JAMES HARRIS JOINT AND SEVERAL LIQUIDATORS OF GH1 PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (IN LIQ) -v- BAZZO [2019] WASC 45
File Number            :   COR 111 of 2018

Catchwords:

Bankruptcy and insolvency - Examination by liquidators as to the examinable affairs of an insolvent corporation - Where directors summonsed for examination are the targets of an investigation by the Australian Federal Police and Australian Taxation Office and are suspected of having committed serious indictable offences - Where primary judge refused to order that the examinations be held in private on the ground that he did not consider that, by reason of special circumstances, it was desirable to hold the examinations in private - Whether it was open to the primary judge to fail to be satisfied that, by reason of special circumstances, it was desirable to hold the examinations in private

Legislation:

Corporations Act 2001 (Cth), s 596A, s 596B, s 596F, s 597

Result:

Leave to appeal refused
Appeals dismissed

Category: B

Representation:

CACV 38 of 2019

Counsel:

Appellant	:	JT Schoombee and AP Rumsley
First Respondent	:	JE Scovell and CM Guy
Second Respondent	:	JE Scovell and CM Guy

Solicitors:

Appellant	:	Alan Rumsley
First Respondent	:	HWL Ebsworth Lawyers
Second Respondent	:	HWL Ebsworth Lawyers

CACV 39 of 2019

Counsel:

Appellant	:	JT Schoombee and AP Rumsley
Respondent	:	JE Scovell and CM Guy

Solicitors:

Appellant	:	Alan Rumsley
Respondent	:	HWL Ebsworth Lawyers

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

Do Young Lee v The Queen [2014] HCA 20; (2014) 253 CLR 455.
Evans v Wainter Pty Ltd [2005] FCAFC 114; (2005) 145 FCR 176.
Friedrich v Herald and Weekly Times Ltd [1990] VR 995.
Hamilton v Oades (1989) 166 CLR 486.
In re Courtenay House Capital Trading Group Pty Ltd (in liq) [2018] NSWSC 604.
In re…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Bazzo v Kirman

Details

AGLC: Bazzo v Kirman [2020] WASCA 43
Case: [2020] WASCA 43
Decision Date: 7 APRIL 2020

CaseChat Overview and Summary

In the matter of Bazzo v Kirman, the primary focus of the dispute was the examination of two directors of an insolvent corporation by liquidators. The directors, who were the subjects of an investigation by the Australian Federal Police and the Australian Taxation Office, were suspected of having committed serious indictable offences. The liquidators sought to examine the directors to gather information about the company's affairs during a critical period. The directors, however, applied for the examinations to be conducted in private due to the sensitive nature of the investigation and the potential for public disclosure of details that could prejudice the ongoing investigation.

The central legal issue before the court was whether the primary judge had erred in refusing to order that the examinations be held in private. The directors argued that the circumstances warranted a private examination to protect the integrity of the criminal investigation and to avoid prejudicing the potential criminal proceedings against them. The liquidators, on the other hand, contended that the public interest in transparency and accountability in insolvency proceedings outweighed the potential prejudice to the criminal investigation.

The court held that it was open to the primary judge to decide whether special circumstances existed that made it desirable to hold the examinations in private. However, the court found that the primary judge had not erred in refusing to order private examinations. The court reasoned that the liquidators' need for information to discharge their duties effectively, and the public interest in the transparency of the insolvency process, were significant factors. While the potential prejudice to the criminal investigation was acknowledged, the court determined that it did not reach the threshold of special circumstances that would necessitate a private examination. The court concluded that the liquidators' need for information to discharge their duties effectively was a strong consideration in favour of a public examination.

Ultimately, the court upheld the primary judge's decision, affirming that the examinations should proceed publicly. The court's decision highlighted the balance between the interests of the insolvent corporation's creditors, the liquidators' investigative powers, and the potential impact on ongoing criminal investigations.

Orders