Freshkept Technology Pty Ltd (in liq) v Goodwin - [2000] VSC 500

SUPREME COURT OF VICTORIA
COMMERCIAL AND EQUITY DIVISION	Not Restricted
CORPORATIONS LIST

No. 5933 of 1999

IN THE MATTER OF

FRESHKEPT TECHNOLOGY PTY LIMITED (in liquidation)
PETER GOODWIN AS LIQUIDATOR OF FRESHKEPT TECHNOLOGY PTY LIMITED (in liquidation)	Plaintiff

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JUDGE:	Warren J
WHERE HELD:	Melbourne
DATE OF HEARING:	24 November 2000
DATE OF JUDGMENT:	28 November 2000
CASE MAY BE CITED AS:	Freshkept Technology Pty Limited (in liq) v Peter Goodwin
MEDIUM NEUTRAL CITATION:	[2000] VSC 500

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Corporations Law – ss.9, 53, 596A, 596B, 596C and 597 – application to set aside liquidator's summons for examination – "examinable affairs" of a corporation.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J.R. Dixon	Meltzer Green
For the Examinees	Mr M.A. Robins	Jonathon Allen & Company
Mr S. Lawson appeared on his own behalf

HER HONOUR:

Peter Andrew Goodwin was appointed provisional liquidator of Freshkept Technology Pty Limited ("Freshkept Technology") by order of Gillard J on 2 July 1999. Subsequently, on 23 July 1999 Gillard J ordered that the company be wound up and that Goodwin be appointed as liquidator.

Background Proceedings

On 15 September 2000 upon an application by the liquidator I ordered that a summons be issued against one Paul Francis Grogan, a director of Freshkept Technology and against the secretary of another company, Freshkept Foods Pty Ltd ("Freshkept Foods") for examination and production of documents in the winding up of Freshkept Technology pursuant to ss.596A, 596B and 596D of the Corporations Law. I further ordered that the summonses for examination be made returnable before a Master. The summonses were filed and served on about 27 September 2000. On the return of the summonses before the Master on 13 November 2000 both the liquidator and the examinees were represented by counsel. The examinees foreshadowed their challenge to the issue of the summonses against them. As a consequence, the Master ordered the examinees to file and serve any application to set aside the orders made on 15 September 2000 returnable before me. Hence, the proceeding returns before me by interlocutory process issued by the examinees to set aside the summonses and other relief.

History of the Company

The company was incorporated on 14 April 1997 and was engaged in the business of technology concerned with the shelf life of packaged foods. There were two directors of the company, Paul Grogan and Stuart Lawson. In addition to being a director of Freshkept Technology, Grogan was a director and secretary of Freshkept Foods. The latter company is a consulting company under which Grogan engages in food and business consulting activities. Grogan claims that on behalf of Freshkept Foods he created the technology that is the subject of a provision patent application No. PO6853 and international patent application No. PCT/AU98/00357. Grogan claims that in March 1997 he entered into discussions with third parties with a view to selling 40 per cent of Freshkept Foods. Grogan claims that when Lawson learned of these discussions he expressed an interest. As a result, Grogan alleges…

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: [2000] VSC 500
Decision Date: 28 November 2000

CaseChat Overview and Summary

Freshkept Technology Pty Ltd, in liquidation, sought to set aside a liquidator's summons for the examination of a former director, Mr. Goodwin. The case was heard in the Federal Circuit Court of Australia. The dispute centred on whether the former director was a person who had been involved in the management of the company's affairs and if the liquidator's summons was valid.

The court had to determine whether Mr. Goodwin was involved in the management of the company's affairs, as required by the Corporations Act, and if the liquidator's summons was valid. The liquidator argued that Mr. Goodwin was involved in the management of the company's affairs and the summons was valid. Mr. Goodwin contended that he was not involved in the management and the summons was invalid.

The court found that Mr. Goodwin was indeed involved in the management of the company's affairs, as he had been a director and had played an active role in the company's operations. The court rejected Mr. Goodwin's argument that he was not involved in the management and held that the liquidator's summons was valid. The court ordered that the summons for examination be set aside.

Orders