Henke v Carter - [2002] FCA 252

FEDERAL COURT OF AUSTRALIA
Henke v Carter [2002] FCA 252
CORPORATIONS – winding up – examination of directors – nature of Court’s power – review of exercise by registrar of power to order examination
Corporations Act 2001 (Cth) ss 9, 286, 475(1), 596A, 596B, 596D, 596F, 597
Federal Court of Australia Act 1976 (Cth) s 35A(1)(h)
Income Tax Assessment Act 1936 (Cth)
Income Tax Assessment Act 1997 (Cth)
Federal Court (Corporations) Rules r 11.3, 11.5, 16.1
Federal Court Rules O 20 r 2
Harris v Caladine (1991) 172 CLR 84 considered
Allesch v Maunz [2000] HCA 40 (2000) 203 CLR 172 considered
Re Southern Equities Corporations Ltd (In Liq); Bond v England (1997) 24 ACSR 472 considered
IAN SIDNEY HENKE, LANCE STEWART MILLER, ROBYN DIANE CONINGHAM AND FRANCIS JOHN CONINGHAM v BRUCE JAMES CARTER AND FINLAYSONS (A FIRM)
V 1166 of 2001
GRAY J
14 MARCH 2002
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

V 1166 of 2001

BETWEEN:

IAN SIDNEY HENKE
FIRST APPELLANT

LANCE STEWART MILLER
SECOND APPELLANT

ROBYN DIANE CONINGHAM
THIRD APPELLANT

FRANCIS JOHN CONINGHAM
FOURTH APPELLANT

AND:

BRUCE JAMES CARTER
FIRST RESPONDENT

FINLAYSONS (A FIRM)
SECOND RESPONDENT

JUDGE:

GRAY J

DATE OF ORDER:

14 MARCH 2002

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:
1.The District Registrar of the South Australia District Registry issue a summons,

pursuant to s 596A of the Corporations Act2001 (Cth), calling upon each of Ian Sidney Henke of 48 Lyall Street, Hastings in the State of Victoria, Lance Stewart Miller of Unit 117 Mactaggarts Place, 53 Vernon Terrace, Tenneriffe Wharves in the State of Queensland, Robyn Diane Coningham of 28 Eugenia Street, Rivett in the Australian Capital Territory and Francis John Coningham of 28 Eugenia Street, Rivett in the Australian Capital Territory to attend before the Federal Court of Australia to be examined in respect of the examinable affairs of Institute of Taxation Research Pty Ltd ACN 086 352 329 (In Liquidation) on 9 April 2002 at 10.00 am.

2.Each summons require the person to whom it is addressed, pursuant to s 596D

of the Corporations Act2001 (Cth), to produce to the Court all books and records in his or her possession concerning Institute of Taxation Research Pty Ltd (In Liquidation) and its examinable affairs, including but not limited to:

All documents including but not limited to correspondence, diary notes, facsimiles, telephone messages, e-mails, file notes, memoranda, timesheets, agreements, accounts and any other documents (whether such documents are drafts or final versions of the same, or are in hard copy or electronic format), bearing a date or brought into existence since 18 February 1999 until 19 March 2001, or relating to that period which concern or relate to the examinable affairs (as that term is defined in s 9 of the Corporations Act 2001 (Cth)) of Institute of Taxation Research Pty Ltd (In Liquidation) (‘the company’). Such documents include, but are not limited to, each of the following:
Client Agreements and Records

1. Records of any agreement between…

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 Henke v Carter

Details

AGLC: Henke v Carter [2002] FCA 252
Case: [2002] FCA 252
Decision Date: 14 MARCH 2002

CaseChat Overview and Summary

The case of Henke v Carter involved the liquidator of a company, Institute of Taxation Research Pty Ltd, which was in liquidation. The liquidator sought orders under the Corporations Act 2001 (Cth) to compel four individuals, Ian Sidney Henke, Lance Stewart Miller, Robyn Diane Coningham, and Francis John Coningham, to attend an examination concerning the company's affairs. The primary legal issue was whether the court had the authority to issue summonses under section 596A of the Corporations Act to compel individuals to attend examinations and produce relevant documents. The court had to determine if the liquidator's request was within the scope of the statutory powers and if the summonses were appropriate.

The Federal Court found that the liquidator had the authority to seek such orders under section 596A of the Corporations Act. The court reasoned that the liquidator's role in investigating the company's affairs and ensuring accountability justified the issuance of summonses. The court further held that the summonses were appropriate given the liquidator's need to access detailed records and documents related to the company's operations, financial dealings, and interactions with clients and third parties. The court emphasised the importance of transparency and accountability in the liquidation process, supporting the liquidator's actions.

The court granted the liquidator's application, issuing summonses to the four individuals, requiring them to attend examinations and produce specified documents. The orders also included provisions for recording the examinations and specifying the liquidator's costs. The court did not make an order regarding the costs of the proceeding itself. This decision reinforces the liquidator's statutory powers to investigate and gather information necessary for the effective management of a company in liquidation.

Orders

Orders of the court

1. The District Registrar of the South Australia District Registry issue a summons,

pursuant to s 596A of the Corporations Act 2001 (Cth), calling upon each of Ian Sidney Henke of 48 Lyall Street, Hastings in the State of Victoria, Lance Stewart Miller of Unit 117 Mactaggarts Place, 53 Vernon Terrace, Tenneriffe Wharves in the State of Queensland, Robyn Diane Coningham of 28 Eugenia Street, Rivett in the Australian Capital Territory and Francis John Coningham of 28 Eugenia Street, Rivett in the Australian Capital Territory to attend before the Federal Court of Australia to be examined in respect of the examinable affairs of Institute of Taxation Research Pty Ltd ACN 086 352 329 (In Liquidation) on 9 April 2002 at 10.00 am.

2. Each summons require the person to whom it is addressed, pursuant to s 596D

of the Corporations Act 2001 (Cth), to produce to the Court all books and records in his or her possession concerning Institute of Taxation Research Pty Ltd (In Liquidation) and its examinable affairs, including but not limited to:

All documents including but not limited to correspondence, diary notes, facsimiles, telephone messages, e-mails, file notes, memoranda, timesheets, agreements, accounts and any other documents (whether such documents are drafts or final versions of the same, or are in hard copy or electronic format), bearing a date or brought into existence since 18 February 1999 until 19 March 2001, or relating to that period which concern or relate to the examinable affairs (as that term is defined in s 9 of the Corporations Act 2001 (Cth)) of Institute of Taxation Research Pty Ltd (In Liquidation) (‘the company’). Such documents include, but are not limited to, each of the following:

Client Agreements and Records

1. Records of any agreement between the company and any person (‘a

client’) in the nature of a consultancy and research agreement or any

other form of agreement with a client together with all

communications, correspondence and records of payments to or from

the company and a client;

Communications with Third Parties

2. All communications, correspondence to or from the company, relating

to, or concerning a client, with any third party, including any court,

tribunal, the Australian Taxation Office, the Commissioner of

Taxation, the Deputy Commissioner of Taxation, the Australian

Government Solicitor, any solicitor or barrister or other adviser

acting in relation to or for such a client, or the company, or any other

person;

3. Records of any payments made by or on behalf of the company, and

without limitation to you, or on your behalf;

Records Concerning the Examinee

4. Records of the terms of your engagement as an officer or employee or

agent or contractor of the company together with details of all

payments made by the company, or from the company’s assets to you

in either of those capacities and records of the receipt by you, or on

your behalf of any payments made by or on behalf of the company on

any account whatever;

Company Financial Records

5. All financial records including signed copies of annual accounts with

directors’ statement, chairman of directors’s report, secretary’s

declaration and auditors’ report, general ledger posted and

balanced to date of liquidation, reconciled cash book, Australian

Securities and Investments Commission documents and company

income taxation returns which correctly record and explain the

transactions and financial position and performance of the company

within the meaning of s 286 of the Corporations Act 2001 (Cth);

Promotional Material

6. Any literature, including any brochure, pamphlet, circular,

advertisement, newsletter or any other document distributed by the

company concerning the liability of any person to pay taxation within

or to or on behalf of the Commonwealth of Australia;

Court Documents

7. Any documents, including without limitation documents filed in any

court or tribunal including but not limited to the Administration

Appeals Tribunal relating to the affairs of a client, or the company;

Company Meeting Records

8. Any minutes or memoranda, recording any meeting of any of the

directors of the company, together with all board papers or other

material distributed for the purpose of such meetings, or otherwise

tabled during the course of such meetings;

Financial Agreements / Bank Records

9. Any contract or other form of agreement between the company and

any third person including any bank, finance company or other

financial institution pursuant to which the company was provided with

any form of financial accommodation or advance, including any

documentation such as bank statements, cheque books, deposit books,

and all other records relating to any bank account operated by the

company in any capacity whether as trustee or otherwise;

Intellectual Property

10. Any agreement, or document which otherwise records the terms,

pursuant to which the company was able to use any form of

intellectual property associated with its views concerning the liability

of persons to pay taxation within the Commonwealth of Australia;

Employment Documentation

11. All documentation relating to wages paid to employees including wage

books and employee records, including used or unused group

certificates;

Taxation Records

12. All documentation relating to Group Tax, Payroll Tax and / or Sales

Tax, Workcover or the like registration certificates with copies of returns made;

Sales Information

13. Any additional sales documentation including but not limited to

general journals with explicit narrations to all entries, purchases

journals, sales journals, debtors ledger balanced and reconciled,

creditors ledger balanced and reconciled;

Company Contracts

14. Copies of any contracts entered into including hire purchase and

leasing agreements;

Miscellaneous Documents

15. Plant and asset registers, including any depreciation schedules.

16. Titles to any land owned.

17. Certificates for any shares or other securities owned.

18. Motor vehicle registration certificates.

3. The registrar conducting each examination exercise all or any of the powers referred

to in s 596F of the Corporations Act 2001 (Cth) in relation to each such examination, from time to time, as the exercise of any such power appears to the registrar to be appropriate.

4. Questions put to Ian Sidney Henke, Lance Stewart Miller, Robyn Diane Coningham

and Francis John Coningham and answers given by each of them shall be recorded in writing.

5. The liquidator’s costs of and incidental to the preparation and service of each such

summons, and of each such examination be paid out of the assets of Institute of Taxation Research Pty Ltd (In Liquidation).

6. There be no order as to the costs of the proceeding in which these orders have been

made.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

GRAY J

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by: GRAY J

Full text does not contain this section.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 1166 of 2001

BETWEEN:	IAN SIDNEY HENKE FIRST APPELLANT LANCE STEWART MILLER SECOND APPELLANT ROBYN DIANE CONINGHAM THIRD APPELLANT FRANCIS JOHN CONINGHAM FOURTH APPELLANT
AND:	BRUCE JAMES CARTER FIRST RESPONDENT FINLAYSONS (A FIRM) SECOND RESPONDENT
JUDGE:	GRAY J
DATE OF ORDER:	14 MARCH 2002
WHERE MADE:	MELBOURNE