In the matter of Iconic Constructions Australia (NSW) Pty Ltd (in liquidation)

[2020] NSWSC 1400

Supreme Court

New South Wales

Medium Neutral Citation:

In the matter of Iconic Constructions Australia (NSW) Pty Ltd (in liquidation) [2020] NSWSC 1400

Hearing dates:

12 October 2020

Date of orders:

12 October 2020

Decision date:

12 October 2020

Jurisdiction:

Equity

Before:

Ward CJ in Eq

Decision:

1. Order pursuant to rule 11.10 of the Supreme Court (Corporations) Rules 1999 (NSW) that a warrant issue addressed to the Sheriff to arrest Mr Khalid El-Sheikh and to bring that person before the court for the purposes of these proceedings detaining that person in custody in the meantime.

2.   Direct that the warrant be in the form annexed to the interlocutory process filed 25 September 2020.

3.   Reserve leave to Mr Khalid El-Sheikh to apply on reasonable notice to the Corporations List Judge for the dissolution of order 1.

4.   Note the applicant’s solicitors to use their best endeavours to serve notice of these orders and notice of the warrant on Mr Khalid El-Sheikh.

5.   Order that execution of the warrant be stayed until 4pm, 2 November 2020 and that the warrant not be executed unless Mr Khalid El-Sheikh fails to attend for examination pursuant to the Summons for Examination dated 6 December 2019 on 2 November 2020.

6.   Costs of the application be reserved.

7.   Order that these orders be entered forthwith.

Catchwords:

CORPORATIONS — Winding up — Public examination of directors, officers and others — Summons to attend court and be examined — Failure to attend at the examination — Whether an arrest warrant should be issued

Legislation Cited:

Supreme Court (Corporations) Rules 1999 (NSW), r 11.10

Cases Cited:

In the matter of Asheville Pacific Pty Limited [2016] NSWSC 1969

In the matter of Fleurie Pty Ltd [2016] VSC 430

Mensink v Parbery (2018) 264 FCR 265; [2018] FCAFC 101

Struthers (in his capacity as liquidator) of PACI Pty Ltd [2005] NSWSC 864

Category:

Procedural and other rulings

Parties:

Michael John Morris Smith in his capacity as Liquidator of Iconic Constructions Australia (NSW) Pty Ltd (in liquidation) (ACN 613 137 474) (Plaintiff)

Moustapha Omar El-Sheikh (First Defendant)
Omar El-Chiekh (Second Defendant)
Khalid El-Sheikh (Third Defendant)
Mark Bartolo (Fourth Defendant)
Anthony Spinosa (Fifth Defendant)

Representation:

Counsel:
J Tomaras (Plaintiff)
No appearance for the defendants

Solicitors:
William Roberts Lawyers (Plaintiff)
No appearance for the defendants

File Number(s):

2019/00380685

Publication restriction:

Nil

Judgment

1. HER HONOUR: This is an application by interlocutory process, filed on 25 September 2020, by the liquidator of Iconic Constructions Australia (NSW) Pty Ltd (in liquidation) seeking interlocutory relief by way of the issue of a warrant for the arrest of the third defendant, Khalid El-Sheikh. That application is made pursuant to r 11.10 of the Supreme Court (Corporations) Rules 1999 (NSW) (Supreme Court (Corporations) Rules).

2. The basis on which the application is sought is set out in the affidavit, sworn 25 September 2020, of the solicitor for the plaintiff, Mr John Tomaras. In that affidavit Mr Tomaras deposes to the circumstances in which the order for examination of Mr El-Sheikh was served on Mr El-Sheikh on 9 July 2020 by a process server. On that occasion, the process server has deposed (in his affidavit sworn 13 July 2020) that Mr El-Sheikh acknowledged that he was indeed Khalid El-Sheikh, that he was handed some documents, and that Mr El-Sheikh then threw the papers on the ground, entered his vehicle and drove off, leaving the documents on the ground. Those documents included, by way of service, the original summons for examination dated 6 December 2019 (which was returnable on 4 and 5 March 2020) together with an order for production of documents dated 6 December 2019, and correspondence dated 2 July 2020 in which Mr El‑Sheikh was notified of the service of those documents. There has been further correspondence dated 26 August 2020 to Mr El-Sheikh at the address in question setting out that the examination hearing had been relisted on 1 September 2020 at 11am and would be conducted virtually; and subsequently (on 8 September 2020) the details for the further re-listing of the examination hearing at 11am on 2 November 2020, again to be conducted virtually.

3. The plaintiff has previously examined a number of defendants in the proceedings. There is an outstanding arrest warrant for the first defendant in relation to an examination for the first defendant. The application here made is in circumstances where there has been no explanation as to why Mr El-Sheikh did not attend the virtual hearing on 1 September 2020. Mr Tomaras has deposed that he knows of no reasonable excuse for Mr El-Sheikh not attending on 1 September 2020, on the occasion when the examination summons was listed (see Mr Tomaras’ affidavit sworn 25 September 2020 at [9]). Having regard to the circumstances in which Mr El-Sheikh responded to service of the documents on him there is, it would seem to me, a reasonable apprehension that he will not attend for examination without compulsion.

4. Rule 11.10 of the Supreme Court (Corporations) Rules provides that:

11.10   Default in relation to examination

(1)   This rule applies if a person is summoned or ordered by the Court to attend for examination, and:

(a)   without reasonable cause, the person:

(i)   fails to attend at the time and place appointed, or

(ii)   fails to attend from day to day until the conclusion of the examination, or

(iii)   refuses or fails to take an oath or make an affirmation, or

(iv)   refuses or fails to answer a question that the Court directs the person to answer, or

(v)   refuses or fails to produce books that the summons requires the person to produce, or

(vi)   fails to comply with a requirement by the Court to sign a written record of the examination, or

(b)   before the day fixed for the examination, the person who applied for the summons or order satisfies the Court that there is reason to believe that the person summoned or ordered to attend for examination has absconded or is about to abscond.

(2)   The Court may:

(a)   issue a warrant for the arrest of the person summoned or ordered to attend for examination, and

(b)   make any other orders that the Court thinks just or necessary.

5. In Struthers (in his capacity as liquidator) of PACI Pty Ltd [2005] NSWSC 864, Brereton J, as his Honour then was, observed in relation to r 11.10 of the Supreme Court (Corporations) Rules (at [34] that):

[34]   From that rule, it is apparent that the authority to issue a warrant for the arrest of the person summoned conferred by subrule (2)(a) depends on proof: first, that the person has been summoned or ordered by the court to attend for examination; secondly, that the person has (relevantly) failed to attend at the time and place appointed, or failed to attend from day to day until the conclusion of the examination; and, thirdly, has done so without reasonable cause.

6. See also in: Mensink v Parbery (2018) 264 FCR 265; [2018] FCAFC 101 at [149]-[153], per Bromwich J, Besanko J agreeing; In the matter of Fleurie Pty Ltd [2016] VSC 430 at [14], per Elliott J; and In the matter of Asheville Pacific Pty Limited [2016] NSWSC 1969 at [8].

7. I am satisfied in the present instance that Mr El-Sheikh has been ordered to attend for examination; that he has been notified of the attendance requirements for his examination; that he failed to attend on 1 September 2020 at the examination; and that no reasonable cause for his non-attendance has been disclosed.

8. I am satisfied that there is an appropriate basis to make the orders for the arrest warrant in the terms sought; namely that the arrest warrant will not be executed unless and until Mr El-Sheikh fails to attend at the examination summons on 2 November 2020. This will give Mr El-Sheikh opportunity to attend voluntarily at the return of the examination summons on the next occasion, or to make an application for variation of the orders to that effect.

9. I therefore make the orders sought in relation to the execution of the arrest warrant. The arrest warrant will not be executed unless and until Mr El-Sheikh fails to attend at the examination summons on 2 November 2020.

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Decision last updated: 13 October 2020