Bufalo Corporation Pty Ltd - [2002] VSC 107

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 8005 of 2001

In the Matter of Bufalo Corporation Pty Ltd (Receiver And Manager Appointed) (In Liquidation)
Gregory Stuart Andrews	Plaintiff

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JUDGE:	Hansen J
WHERE HELD:	Melbourne
DATE OF HEARING:	25 & 26 February 2002
DATE OF JUDGMENT:	11 April 2002
CASE MAY BE CITED AS:	Bufalo Corporation Pty Ltd
MEDIUM NEUTRAL CITATION:	[2002] VSC 107

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Liquidator – Examination – Pending litigation – Whether examination for improper purposes – Liquidator funded by third party - Funding for examination – Subpoena to liquidator for production of documents as to funding – Corporations Act s 596B - Corporations Law Rules R 11.5

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APPEARANCES:	Counsel	Solicitors
For the Applicants	Mr G.H. Garde Q.C. with Mr M.G. Roberts	Russell Kennedy
For the Liquidator	Mr J.R. Dixon	Tress Cocks & Maddox

HIS HONOUR:

Introduction

This application is made under Rule 11.5 of the Corporations Law Rules (“the Rules”) for the discharge of three examination summonses served pursuant to an order made by Byrne J on 8 November 2001 under s 596B of the Corporations Act (“the Act”). The three examinees in question are Edward Christiaan Sent, Anthony De Luca and Sandra Joy Porter. The order pursuant to which the examination summonses were served on them was made on the application of Gregory Stuart Andrews as liquidator of Bufalo Corporation Pty Ltd (“the company”).

Andrews was appointed administrator of the company on 27 June 2001. His appointment was confirmed at the first meeting of creditors held on 4 July 2001. At the second meeting of creditors held on 24 July 2001 it was resolved that the company be wound up and Andrews was appointed liquidator. He determined that he wished to have nine persons examined under s 596A and s 596B respectively and accordingly made the application which Byrne J heard on 8 November 2001. The application was heard ex parte in the usual way. In addition to the three above examinees, Byrne J made orders providing for the examination of four persons under s 596A and for the examination of two other persons under s 596B. All nine examinees have been served with summonses. It is only Sent, De Luca and Porter who have sought the discharge of the examination summonses served on them.

The summonses served on Sent, De Luca and Porter required them both to produce documents and to attend for examination. Production of documents was scheduled for 4 March 2002. I was informed that they would comply with the requirement to produce documents. However, they object to their proposed oral examination.

It remains to mention at this point that on 10 August 2000, prior to Andrews appointment as administrator, Primelife Corporation Ltd (“Primelife”) appointed Gideon Rathner as receiver and manager of the company pursuant to a debenture charge dated 21 December 1998 (“the debenture”). Sent has been a director of Primelife since 30 October 1997, with the exception of three days in November 1997.…

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 Bufalo Corporation Pty Ltd

Details

AGLC: Bufalo Corporation Pty Ltd [2002] VSC 107
Case: [2002] VSC 107
Decision Date: 11 April 2002

CaseChat Overview and Summary

In the case of Bufalo Corporation Pty Ltd, the liquidator of the company sought an examination of a former director of the corporation under section 596 of the Corporations Act. The former director contested the examination, arguing it was for an improper purpose. Additionally, the liquidator's funding by a third party and the use of that funding to fund the examination was challenged. The primary dispute centred on the validity and appropriateness of the examination as well as the liquidator's funding arrangements.

The court was required to determine whether the examination was conducted for a proper purpose as mandated by the Corporations Act and whether the liquidator's funding from a third party was appropriate and lawful. The court also needed to consider whether the subpoena issued to the liquidator for the production of documents regarding the funding was justified under the relevant provisions of the Corporations Law Rules.

The court found that the liquidator's examination was not for an improper purpose and was validly conducted under section 596 of the Corporations Act. It was determined that the liquidator's funding by a third party was appropriate and did not invalidate the examination. The court also held that the subpoena for the production of documents regarding the funding was justified under the relevant rules. Consequently, the liquidator's actions were upheld, and the examination was allowed to proceed.

Orders