Fetzer v Irving (as liq of Mawson KLM Holdings Pty Ltd (in liq))

In this case, the appellant, Fetzer, appealed against an order made by the Master of the Supreme Court of South Australia, which refused to grant Fetzer access to an affidavit relied upon by the respondent, Irving, the liquidator of Mawson KLM Holdings Pty Ltd, in support of his application for examination orders. Irving sought the orders to examine Fetzer as to the affairs of Mawson, pursuant to sections 596B and 596D of the Corporations Act 2001. Fetzer argued that Irving's motivation for seeking the examination orders was improper, and that he was acting at the behest of a third party litigation funder, which had recently obtained funding for the action against Starmaker, a company of which Fetzer is the sole director and shareholder. Fetzer sought access to Irving's affidavit to support his claim that Irving was acting with an improper purpose.

The court was required to determine whether it was arguable that Irving was motivated by an improper purpose in seeking the examination orders, and whether Fetzer had demonstrated an arguable case that Irving was acting with an improper purpose before access to the affidavit would be granted. The court had to consider whether Irving's recent acquisition of funding from a third party for the action against Starmaker amounted to an improper purpose, and whether it was arguable that Irving's purpose was to conduct a dress rehearsal for cross-examination of Fetzer or to destroy Fetzer's credit.

The court held that it was sufficiently arguable that Irving was motivated by an improper purpose to justify an order that his affidavit be disclosed to Fetzer. The court found that it was arguable that Irving's purpose in seeking the examination orders was to benefit a third party, the litigation funder, and to assist that party in determining whether or not to fund or continue to fund the action against Starmaker. The court held that there were no discretionary reasons why it should not make such an order, and that the appeal must be allowed and an order made that Irving's affidavit be disclosed to Fetzer. The court will hear the parties as to the precise form of the order and any other orders.