Bloc (ACT) Pty Ltd v Crafted Capitol Pty Ltd (No 3) - [2021] ACTSC 178

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:	Bloc (ACT) Pty Ltd v Crafted Capitol Pty Ltd (No 3)
Citation:	[2021] ACTSC 178
Hearing Date:	23 July 2021
Decision Date:	5 August 2021
Before:	McWilliam AsJ
Decision:	See [35]
Catchwords:	PRACTICE AND PROCEDURE – SUBPOENAS – Application to set aside subpoena – whether legitimate forensic purpose –
whether oppressive
Legislation Cited:	Building and Construction Industry (Security of Payment) Act
2009 (ACT) Court Procedures Rules (2006) (ACT) rr 6604, 1728 Corporations Act 2001 (Cth) s 482
Cases Cited:	Alister v R (1984) 154 CLR 404 A Pty Ltd v Z [2007] NSWSC 999 Bloc (ACT) Pty Ltd v Crafted Capitol Pty Ltd [2021] ACTSC 81 Re Warbler Pty Ltd (1982) 6 ACLR 526
Ryan v Commercial and Residential Developments (SA) Pty
Ltd [2013] FCA 656
Sahore v Ahmad [2021] ACTSC 30
Secretary of the Department of Planning, Industry and
Environment v Blacktown City Council [2021] NSWCA 145
Parties:	Crafted Holdings Pty Ltd (ACN 168 210 624) (First Applicant)
Crafted Central Pty Ltd (ACN 605 053 709) (Second Applicant) Crafted Capitol Pty Ltd (in liquidation) (ACN 605 053 763) (First Respondent)
Henry Joseph Kazar in his capacity as joint and several liquidator of Crafted Capitol Pty Ltd (in liquidation) (Second Respondent)
Lachlan Macarthur Abbott in his capacity as joint and several liquidator of Crafted Capitol Pty Ltd (in liquidation) (Third Respondent)
Bloc (ACT) Pty Ltd (ACN 149 091 592) (Fourth Respondent)
Representation:	Counsel
Dr A J Greinke (Fourth Respondent)
K Petch (Applicants)
Solicitors
Mills Oakley (Fourth Respondent)
Terracon Legal (Applicants)
File Number:	SC 79 of 2021
McWilliam AsJ:

1. Before the Court is an application to set aside a subpoena issued to a non-party, namely the proper officer of PKS Kapital Pty Ltd (ACN 605 835 596) (PKS). For reasons that follow, I have determined effectively that the subpoena should be set aside in part. It is appropriate to limit both the categories and the scope of what is required to be produced under the existing subpoena.

Background context to the present application

2.       On 29 April 2021, upon the application of Bloc (ACT) Pty Ltd (Bloc) as petitioning creditor, Mossop J ordered that Crafted Capitol Pty Ltd (Capitol) be wound up in insolvency: Bloc (ACT) Pty Ltd v Crafted Capitol Pty Ltd [2021] ACTSC 81 (Winding Up Judgment) at [74].
3.       As set out in the Winding Up Judgment, the genesis of the application to wind up Capitol was the failure by Capitol to pay a judgment debt. That judgment debt was the product of an adjudication award under the Building and Construction Industry (Security of Payment) Act 2009 (ACT). Bloc was the builder of a development project on London Circuit. Capitol was the developer for that project.
4.       On 1 June 2021, two further creditors of Capitol, namely Crafted Central Pty Ltd (Central) and Crafted Holdings Pty Ltd (Holdings), applied to this Court seeking an order pursuant…

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.

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Details

Case: [2021] ACTSC 178
Decision Date

CaseChat Overview and Summary

Bloc (ACT) Pty Ltd sought to wind up Crafted Capitol Pty Ltd after the latter failed to pay a judgment debt. On 1 June 2021, Bloc issued a subpoena to PKS Kapital Pty Ltd, a non-party, seeking various documents to assess PKS's solvency and the authority given by PKS to loan money to Crafted Central Pty Ltd. Crafted Central and Crafted Holdings Pty Ltd, creditors of Crafted Capitol, sought to set aside the subpoena. They argued that the subpoena lacked a legitimate forensic purpose and was oppressive.

The court examined the subpoena's relevance and whether it was oppressive. The subpoena's legitimacy was assessed based on whether it could materially assist in the s 482 Application. The court found that the subpoena did not have a legitimate forensic purpose for most of the documents sought, as they were not relevant to the s 482 Application. However, some documents related to the financial relationship between PKS and Crafted Central were deemed relevant, as the solvency of Crafted Capitol depended on financial support from Crafted Central, which in turn relied on debts owed to PKS.

The court amended the subpoena to limit the scope of the documents required to be produced, including tax returns, financial statements, loan agreements, and minutes of meetings regarding the payment of monies to Bloc. The court found that the subpoena was not oppressive as it was limited to the payment of monies to Bloc. The costs of the application were reserved to be determined as part of the costs of the s 482 Application.

In conclusion, the court set aside the subpoena in part and limited the scope of the documents required to be produced. The subpoena was amended to require production of specific documents related to the financial relationship between PKS and Crafted Central. The costs of the application were reserved to be determined as part of the costs of the s 482 Application.

Orders