In the Matter of Interchase Corp Ltd In the Matter of an application by Richard Anthony Barber & Anor, Liquidators of Interchase Corp Ltd
[1996] FCA 665
•2 AUGUST 1996
CATCHWORDS
CORPORATIONS - liquidation - applications to set aside summons issued for examination of persons suspected of possessing information - liquidator reasonably requiring information to assess prudence of continuing litigation for recovery - information required relating to whether insurers will deny indemnity - information “about” a corporation’s examinable affairs - application of legal professional privilege - whether any useful purpose will be served by the examinations - discretion to require examination when insurer has not decided whether to indemnify
EVIDENCE - application of Evidence Act to examinations under Part 5.9 Corporations Law - whether an examination is a “proceeding”.
Corporations Law ss9, 53A(a) 596B, 596F, 597, 597(4)
Evidence Act 1995 ss4(1), 118, 119, 199
Federal Court of Australia Act 1976 s 4
Federal Court Rules O71 r81(6)
Grosvenor Hill (Qld) Pty Ltd v Barber (1994) 48 FCR 301 Foll
Massey v Allen (1878) 9 Ch D 164 Refd
Gerah Imports Pty Ltd v Duke Group Ltd (in Liq) (1993) 61 SASR 557 Cons
Re Duke Group Ltd (in Liq) and the Corporations Law (SA) (1994) 68 ALJR 196 Refd
Re Compass Airlines Pty Ltd (1992) 35 FCR 447 Refd
In the matter of the Socket Screw & Fastener Distributors (NSW) Pty Limited (In Provisional Liquidation) unreported decision of the Full Federal Court 29 July 1994 Refd
JN Taylor Holdings Limited (in Liq) v Bond (1993) 59 SASR 432 Refd
Re Highgrade Traders Ltd [1984] BCLC 151 Cons
In the Matter of Interchase Corporation Limited and In the Matter of an application by Richard Anthony Barber and Gregory Paul Kelly, Liquidators of Interchase Corporation Limited
No NG 3018 of 1991
Kiefel J
Brisbane
2 August 1996
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
No NG 3018 of 1991
IN THE MATTER of INTERCHASE CORPORATION LIMITED
and:
IN THE MATTER of an application by RICHARD ANTHONY BARBER and GREGORY PAUL KELLY, Liquidators of INTERCHASE CORPORATION LIMITED
JUDGE MAKING ORDER: Kiefel J
DATE OF ORDER: 2 August 1996
WHERE MADE: Brisbane
MINUTES OF ORDERS
THE COURT ORDERS THAT:
The summons issued to William John Ballhausen and Dennis John Cronin be discharged.
The terms of the summons to Ron J Shorter (Ronald John Shorter) ordered on 6 June 1996 be varied by deleting paragraphs 1(a) and (b) and inserting in lieu thereof:
(a)the bases for FAI General Insurance Co Ltd’s (“FAI”) investigation/s into the claim made by Colliers Jardine (Qld) Pty Ltd and Michael John Tidbold in relation to any liability they may have to Interchase Corporation and for any present withholding of an assurance of indemnity including but not limited to any late notification, non-disclosure or conduct on the part of Mr Tidbold;
(b)the results of any investigations conducted by FAI or on its behalf;
(c)whether FAI has a present view as to whether indemnity will likely be extended and the basis therefor or as to when or in what circumstances a decision is likely to be reached;
subject to any valid claim to privilege.
AND further by adding to paragraph (ii) on page two and three of the summons the words:
“including any communications between FAI and its insured and the excess insurer HIH Casual & General Insurance Limited (formerly CE Heath Casual & General Insurance Limited)”.
The Order of 6 June 1996 be further varied by adding an Order that the examination of Mr Shorter be held in private.
Each of Colliers Jardine Holdings (Qld) Pty Limited and Michael George Tidbold be at liberty to apply to the Court to vary this Order so far as it relates to the production of documents passing between them and FAI or to have further directions made with respect to the production and use of those documents, within seven (7) days from the date of this Order.
Each of Colliers Jardine Holdings (Qld) Pty Limited and Michael George Tidbold be advised forthwith by letter from the solicitors of the Liquidators of the Orders made with respect to the production of documents between those parties and FAI and that they are at liberty to apply in terms of the Order in paragraph 4.
With respect to Mr Cronin the Liquidators pay the costs of and incidental to the Motion and of the attendance of his legal representative on 30 May 1996 to be taxed forthwith.
With respect to Mr Ballhausen the Liquidators pay the costs of and incidental to the Motion to be taxed forthwith.
With respect to the application brought on behalf of Mr Shorter FAI General Insurance Co Ltd pay the Liquidators’ costs of the Motion.
THE COURT DIRECTS THAT:
Directions regarding the examination of Mr Shorter be adjourned to 9.30 am on 6 August 1996.
NOTE:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
No NG 3018 of 1991
IN THE MATTER of INTERCHASE CORPORATION LIMITED
and:
IN THE MATTER of an application by RICHARD ANTHONY BARBER and GREGORY PAUL KELLY, Liquidators of INTERCHASE CORPORATION LIMITED
CORAM:Kiefel J
DATE:2 August 1996
PLACE:Brisbane
REASONS FOR JUDGMENT
On 6 June 1996 I ordered that three persons be summoned for examination under s596B Corporations Law. The intended focus of those examinations was as to whether the insurers of the defendants in Supreme Court proceedings brought by the liquidators of Interchase Corporation Limited would provide indemnity in the event that judgment was entered against the defendants. The matter had been complicated by the fact that the primary insurers had advised of a “reservation” of their position with respect to indemnification.
Background to the making of the Orders
In 1994 proceedings were commenced by the liquidators of Interchase in the Supreme Court of Queensland against two companies and two individuals: Colliers Jardine
Holdings (Qld) Pty Limited and Mr Tidbold; and Grosvenor Hill (Qld) Pty Limited (formerly Hillier Parker (Qld) Pty Ltd) and Mr Waghorn. They had produced valuations of the Myer Retail Centre then being developed. It was said that Interchase acted upon those valuations in outlaying monies for the centre. The claim against the valuers is in the order of $62.5M together with a substantial claim for interest. It has been ascertained that each of the companies hold, or may be able to have resort to, a policy of professional indemnity insurance. Claims for indemnity have been notified to the insurers. The primary insurer of Colliers Jardine is FAI General Insurance Company Ltd. The excess insurer is HIH Casual & General Insurance Limited (formerly CE Heath Casual and General Insurance Limited). The primary professional indemnity insurer upon whom Grosvenor Hill has made claim is a Lloyds’ syndicate.
The Supreme Court proceedings are close to readiness for trial. There seems little doubt about the enormous costs which will be incurred by the parties if the trial proceeds. The trial will be a substantial one extending over many weeks. The liquidators have been required to provide $750,000 by way of security for the costs of the third and fourth defendants and will be required to provide a sum equal to $7,500 for each day of hearing.
Examinations were conducted prior to those proceedings being commenced in April 1994. The purpose of those examinations was to provide information to the liquidators to permit them to decide whether it was in the interests of creditors that substantial litigation be embarked upon. Those examinations are now of little relevance. Where however an opportunity was then given to pursue a topic, as it was with respect to the defendants’ financial position, I have declined to make Orders requiring further examination. And the decision of the Full Court which considered
whether the examinations then proposed were within the purview of s596B remains relevant to these applications: Grosvenor Hill (Qld) Pty Ltd v Barber (1994) 48 FCR 301.The persons I ordered to be summoned were: Mr Shorter, the claims officer for FAI and Mr Ballhausen of the excess insurance company; and with respect to the Lloyds’ syndicate, Mr Cronin, a solicitor. Mr Cronin’s firm acted for Grosvenor Hill and Mr Waghorn in the Supreme Court proceedings and he had at one point advised that he acted on behalf of the excess insurer. In the course of correspondence Mr Cronin had also advised of the position taken by Lloyds with respect to the claim. Each of those parties now seeks to have those summons discharged, a course which is open to them under O71 r81(6).
What appears to have provoked the application by the liquidators was the withdrawal of the then solicitors for Colliers Jardine and Mr Tidbold from the Supreme Court proceedings. Although another firm was said to be in receipt of instructions from FAI to take over the conduct of the litigation (about which however there appears to have been some dispute) FAI had advised that it nevertheless reserved its position with respect to payment under the policy in the event of a judgment being entered against those defendants. The reservation was said to have three possible bases: non-disclosure, late notification, and “conduct on the part of Mr Tidbold more serious than negligence”. The excess insurer had not advised of its position and it now appears that it is unlikely to have one until FAI determines the course it will take upon the conclusion of its investigations.
With respect to the Lloyds’ syndicate, Mr Cronin had advised that:
“Insurers have confirmed indemnity for Hillier Parker (Qld) Pty Ltd and BM Waghorn subject to a reservation of rights in consequence of the nature and extent of the allegations contained in the statement of claim. The terms of the reservation are confidential but we are able to advise that the reservation applies until all investigations into the claim have been completed and all relevant circumstances are known.”
The question which arose for the liquidators was whether indemnity was likely to be extended by the insurers. Given the size of the claim, it is not difficult to appreciate that there would be little purpose in pursuing the claim to judgment if that were not the case. The situation they faced was not however one where the insurers had made and communicated a decision to refuse indemnity, in which case the bases for it might be required and evaluated. The position adopted to “reserve” their rights, for some unspecified period, obviously renders any enquiry more problematical.
The matter came before me ex parte as is usual in these matters, although with hindsight it seems to me that it was a matter which could more efficiently have been disposed of on notice. It was not one which was attended with any real degree of secrecy. The insurers were always likely to challenge any summons for examination and they are in a different position from the defendants in the Supreme Court proceeding or persons or corporations having had a more direct connection with the financial affairs of Interchase Corporation itself. At that time I declined orders for the examination of the defendants in the Supreme Court proceedings. I was concerned that they may be prejudiced in their defences of that action if they were required to provide information with respect to the circumstances in which the valuations came about, and their conduct in that connexion. And, it seemed to me, the real question was in any event whether the judgment could be satisfied. Even if this required the production of documents passing as between insurer
and insured, this could be obtained through the insurers. The terms of the summons made have been the subject of submissions and if the examinations are still to be held it seems clear enough that they require some clarification. The terms with respect to the time for production and the costs associated with it have also been the subject of some concession by counsel for the liquidators.
Whether the subject of the examination is within s596B
Section 596B(1) provides:
“596B (1)[Grounds for discretionary examination] The Court may summon a person for examination about a corporation’s examinable affairs if:
(a)an eligible applicant applies for the summons; and
(b)the Court is satisfied that the person:
(i)has taken part or been concerned in examinable affairs of the corporation and has been, or may have been, guilty of misconduct in relation to the corporation; or
(ii)may be able to give information about examinable affairs of the corporation.”
With respect to “examinable affairs” see the definition section s9 and s53A(a) which extends the term to include the property of the company in liquidation. It is property in the sense of a chose in action with which I am here concerned.
Mr Hampson QC for Mr Shorter (FAI) submitted that the examinations proposed amount to an unwarranted extension of what has previously been held to be examinable. The information here sought to be obtained is not, it was submitted, “about” the property in the chose in action but “about” a contract of insurance held by one party to the litigation and as to any dispute
between it and its insurer as to whether it is effective. And, it is submitted, it could not have been intended that insurance companies having no direct connection with the company in liquidation or its assets, were to be the subject of examination. At a practical level, Mr Hampson QC pointed out, the approach the liquidators contend for could result in a long chain of enquiries of persons remote from the company in question and its financial transactions. These submissions, seeking to limit the operation of the section, were largely adopted by the other applicants.The submissions, it seems to me, have two aspects to them: the relationship of the information to the property of the company, that is to say the subject matter of the examination; and those whom the section considers ought be subjected to examination. Both matters have however in my view been addressed by the Courts before.
The answer to the question as to who might be examined, and whether some closeness of connection with the company in liquidation is required, is furnished by the section itself, which is concerned not about the personality of the examinee or their relationship with the company but whether that person “may be able to give information about the examinable affairs of the corporation”: see Grosvenor Hill (308) and Massey v Allen (1878) 9 Ch D 164 there referred to.
There can be no doubt that, as outlined above, the “examinable affairs” of a corporation extend to its choses in action: see Grosvenor Hill(305). It would seem to follow that to seek information concerning the prospect of successfully litigating it to judgment is clearly enough “about” the corporation’s property. The information in one sense allows some estimation
of the value of the chose and, as a result, assists the liquidators to decide whether to prosecute the action. Logically I cannot see why information about whether the judgment resulting has any worth, by reason that it will or will not likely be met by payment, is not also then “about” that property. And whilst it may also be said to be “about” the contract of insurance between insurer and insured, this does not prevent it from having the necessary connection with the company’s property and then coming within the scope of an examination under s596B. The examinations proposed in Grosvenor Hill were not concerned with the possibility of non-payment under the policies of insurance. Nevertheless the question whether success in the action was likely to be fruitful, having regard to the means of the defendants, a matter which might be the subject of examination was, and is apposite to these applications. Their Honours said (307):“The question is whether the Court is limited by the section to ordering an examination the purpose of which is to go no wider than to determine whether or not there are reasonable grounds, including evidence, to litigate a case to a successful judgment, or whether, the Court has power to order an examination, the purpose of which is to ascertain the likelihood of any judgment being satisfied; that is, whether it is a permitted purpose to inquire as to the worth of a potential defendant so as to be able to make a practical assessment as to the likelihood of a return to the company of the fruits of any favourable judgment and the necessary legal costs expended in obtaining it. Is the Court empowered under the section to order an examination or the production of documents to test the likelihood of the creditors in the winding up receiving a tangible benefit from the satisfaction of any judgment obtained and to enable the liquidator to determine whether it is prudent to commence or maintain litigation with knowledge as to the real likelihood of obtaining any tangible benefit beyond a mere judgment, including a judgment for costs, at the conclusion of the litigation?
In our view, the Court has such a broad power. Additionally, it is a power of long standing.”
And as their Honours went on to explain, the power has been exercised to allow examinations about
the financial position for example of a contributory of a company and those who might be liable to pay or indemnify the contributory:
“Likewise, where a contributory claimed a right of indemnity from a third party in respect of a call, made on the contributory by a liquidator, the power to order an examination under s115 of the Companies Act 1862 (UK) extended to order the examination of the person against whom the indemnity was claimed, to ascertain whether or not the indemnity existed. In Massey v Allen (1878) 9 Ch D 164, the company was the assignee of the contributory’s alleged right of indemnity as trustee against Allen, whom the contributory alleged was the person for whom the shares were beneficially held. Allen himself had had no dealings with the company, nor was it suggested that he had any information relating to the affairs and dealings of the company, or that he held any property of the company. Rather, the issue was whether or not the contributory had any right of indemnity. That the existence of the indemnity was disputed was the factual question which required investigation.” (308).
In Gerah Imports Pty Ltd v The Duke Group Ltd (in Liq) (1993) 61 SASR 557 (12 ASCR 513) the Full Court of South Australia held that a liquidator might seek information as to the nature and extent of the relevant professional indemnity insurance cover with a view to making a judgment as to potential ultimate recovery (560, 564). The court considered that the examination of a corporation’s rights of action need not be confined to the existence of those rights but might also be with respect to “their extent and value” - matters of considerable importance to a liquidator as Dawson J explained when refusing leave to appeal (Re Duke Group Ltd (in Liq) and the Corporations Law (SA) (1994) 68 ALJR 196, 198). I also observe that the argument advanced before his Honour - that the examination did not in reality concern the affairs of the corporation in liquidation but the affairs of another - was not persuasive.
The cases, including Grosvenor Hill, have explained the basis for the special position of liquidators and why, historically, the privilege of such an inquiry was deemed necessary. An
examination as to whether a judgment sum will likely be met is a practical and realistic one for liquidators facing the outlay of very substantial funds, which might otherwise be used to pay the company’s creditors. It was not suggested in submissions that information gleaned might not prove useful to the liquidators or that there were, in any event, no alternative courses open to them if they discovered that the insurers would refuse payment. This would touch upon the utility of any order for examination, but in a sense different from that to which I shall later refer. Rather, it was submitted, it is unlikely that useful information can be obtained by the examination process, largely because the insurers are still undertaking investigations and receiving advice. That is however a matter for consideration as one affecting the discretion to be exercised.
There is in my view power to order an examination as to whether payment is likely to be made under policies of insurance to meet any judgment entered in favour of the company in question.
Mr Shorter/FAI
Mr Hampson QC informed the Court that legal professional privilege will be claimed on any examination. A party is entitled to do so on an examination under s596B. The protection afforded by that privilege is not abrogated by s597 Corporations Law: Re Compass Airlines Pty Ltd (1992) 35 FCR 447. It was also pointed out that here the privilege is likely to cover most communications, for the reason that the solicitors for FAI were retained early and themselves conducted the investigations. The affidavit material suggests that FAI has not conducted its own, separate, investigation. To emphasise the extent of the enquiries likely to be subject to the privilege Mr Hampson QC also pointed out that in such proceedings the test will now be whether the
provision of legal advice was the “dominant” and not the “sole” purpose of the communication: ss118, 119 Evidence Act 1995. Counsel for the liquidators did at one point suggest that the Evidence Act might not apply, because an examination was not a “proceeding” in a Federal Court: see s4(1) Evidence Act. But I do not think that is a correct statement of position. The examinations referred to in Division 1, Part 5.9 Corporations Law are conducted by the Court upon application to it, whether that be by a Judge or by Registrars acting under delegation (as to the validity of which see In the matter of the Socket Screw & Fastener Distributors (NSW) Pty Limited (In Provisional Liquidation) unreported decision of the Full Federal Court 29 July 1994). Whilst it is not like usual court proceedings and is in the nature of a facilitated investigation by one party, s4 of the Federal Court of Australia Act in its definition of “proceeding” does not require that all proceedings be inter partes.
It is necessary I think to make some general observations concerning the exercise of the discretion to require examination when an insurer has not decided whether to indemnify. Where a decision has been made a liquidator may be able to challenge the correctness of the decision litigated, and join the insurer to the proceedings for that purpose: see for example JN Taylor Holdings Limited (in Liq) v Bond (1993) 59 SASR 432. Whilst that course might yet be open to the liquidator, at least where sufficient information as to the insurer’s present stance is available, that is not a question which requires determination here. It was not suggested that that was a course which ought be undertaken by the liquidators as an alternative to these investigations. If it were, an answer would likely be that the examinations were required to weigh the prospect of that course as well.
Were the Court faced with a position where an insurer had had little time to investigate a claim or was able to indicate when a decision would be forthcoming, it would doubtless be obliged to conclude that an application for examination was premature. Here, however, even if one accepts that the insurers did not commence investigations until late in 1994, they have had more than 18 months to come to a view. The fact that they are yet unable, apparently, to say when a decision might issue suggests to me that there may be good reason, subject to other matters to which I shall refer, to permit an examination into the matters which are of concern to the insurer. There is little incentive for FAI to make a decision and there remains the possibility that it may assert the right to withhold a decision until after the trial and indeed after judgment is entered. And, whilst I do not suggest FAI intends to pursue this course, it is a relevant consideration that a dispute as to indemnity between insurer and insured may be resolved by agreement involving a lesser payment, without notice to the liquidators.
It was submitted that the Court ought respect the need for privacy and confidentiality of communications between insurer and insured. And, whilst on the one hand not conceding that any useful information would survive the claims to privilege, reference was made to the possibility that the insurer’s ongoing investigations might be prejudiced. Putting to one side for the moment any effects on the insured in the litigation it seems to me, absent more detailed explanation by the insurer, that these concerns can be accommodated by requiring that, in these particular circumstances, any examination ought be held in private: s597(4). In light of the importance of the matter I cannot however conclude that the concerns expressed are such as to weigh against any examination. The question remains as to what might likely be achieved by the examinations. That, it seems to me, is the real focus of these applications.
In support of the submission that, given the wide area of questions in which claims to privilege will operate, there will be no useful purpose served by the examinations, reliance was placed on the decision in Re Highgrade Traders Ltd [1984] BCLC 151. But the position there was that the documents required to be produced, reports of investigations, were not only subject to a proper claim for privilege they were the only significant source of information (177-8). Whilst I am prepared to infer that some communications may be subject to legal professional privilege I am not prepared to assume that all, or even a great number of, relevant documents are likely to be found to have been prepared for the dominant purpose of the provision of legal advices to the client (see s199 Evidence Act) merely because they were obtained by solicitors. It seems to me that it will only be in the clearest of cases, an example of which is the decision in Highgate Traders, that a court would withhold an examination on this ground where otherwise there is shown to be a real practical purpose in, if not a need for, the examination.
As to the potential areas for examination, one may observe that examination may be conducted as to communications between the insured and the insurer regarding the claim without questions of privilege being raised. My concern here however would be with respect to the position of the insured. It seems unlikely that any admission has been made by the insured and that this has given rise to the position now adopted by the insurer. An appropriate safeguard however would be provided by permitting the insured to make submissions to the Court, in a short time, with respect to any particular directions which ought be given under s596F with respect to the documents.
Another area is of course the bases for the reservation. There are likely to be documents relating to notification on particular dates and Mr Shorter can produce them and answer
questions with respect to the insurer’s position. It is more difficult to have a concluded view about the ground of non-disclosure, given that there is not even a hint in the material as to what it relates. As a result however I am not prepared to assume that privilege will cover this area and consider the matter best left to a challenge at the time of examination. Similarly, the reference to Mr Tidbold’s conduct, so far as it affects the policy, is unclear. And whilst I held concerns that such an enquiry might unfairly operate against Mr Tidbold and Colliers Jardine in the litigation it is to be noted that we are not here speaking of any admission made by them.At some point in the examination proposed questions would likely be put, not only as to the reasons for the investigations but as to what has resulted from them and when any decision is likely to be made. Whilst recognising, as I said earlier, the need to express more clearly in the orders the areas for examination, I am unable to infer that enquiries would not be productive or that, with respect to advices or reports received that the test of the privilege will in all cases be satisfied.
Mr Ballhausen/The Excess Insurer
The utility of the examination of Mr Ballhausen, for the excess insurer, is put on a rather different basis. The evidence adduced by Mr Ballhausen discloses that that insurer has made no investigations of its own at all. Indeed it has not been asked to confirm the availability of excess cover. It will not make a decision or carry out any investigation until after FAI decides.
It seems to me that good ground has been shown why an examination is likely to be pointless and that the true focus of any enquiry at present is FAI. In terms of the section I am unable to hold that Mr Ballhausen may be able to provide the information sought. It may be that there are communications between FAI and the excess insurer which are relevant to the liquidators’ enquiries, but these may be ascertained from FAI. That leaves the possibility that the excess insurer may have received oral advices from FAI, but one is now in the realm of speculation.
Mr Cronin/Lloyds’ Syndicate
The principal submission put was that, similarly, it had not been shown that Mr Cronin may be able to provide relevant information. It was also submitted that a factor which I ought take into account was that it had not been drawn to my attention on the ex parte application that the position of the Lloyds’ syndicate had remained the same throughout. It had, since 1994, consistently reserved its position until the completion of investigations. I do not consider any such non-disclosure fatal and I did not understand this to be the submission made. It was apparent to me at all times on the hearing of the ex parte application that the real catalyst for the application by the liquidators was the change of circumstances with respect to FAI’s insured. And it seems to me the submission overlooks the nature of the advices, set out above, provided only recently by Mr Cronin to the solicitors for the liquidators. Relevantly he informed them that the reservation now claimed was the result of “the nature and extent of the allegations contained in the statement of claim”. Just what is the basis of the reservation having regard to the pleading was not gone into, save that I was referred to some allegations in the statement of claim where it was suggested that Mr Waghorn, in the process of preparing a valuation, had been influenced by persons who had an interest in a valuation at a particular figure. This of course may extend beyond negligence to impropriety akin to fraud.
But more importantly, for present purposes, is what connection Mr Cronin in fact
has with the primary insurers. At the time the orders were made Mr Cronin’s firm were the solicitors on the record for Grosvenor Hill and Mr Waghorn. And, in correspondence, it had been disclosed that the firm also acted for the excess insurers. Nowhere however was it suggested that he acted for the primary insurers. Although reference was made to him acting in this connection at some points during submissions, the material filed on Mr Cronin’s behalf does not suggest this. I take it then that Mr Cronin was merely passing on information received by the excess insurers when he wrote to the solicitors for the liquidator on 29 May. There is however a person who may well fall into the category of a person who may be able to give the information about the indemnity to be given or referred. A Mr Kopczynski is apparently the claims manager for the Lloyds’ syndicate and has recently been present in Australia. In late May 1996, whilst in Brisbane he advised the solicitors for the liquidators:The underwriters are dealing with the case under reservation of rights and are currently taking advice, and given the FAI decision to withdraw indemnity from Colliers, we intend to make a decision in the near future.”
I ought add that the letter containing this information was in the material before me when I heard the ex parte application. In the event that the liquidators wish to pursue that course I consider that it ought to be made on notice to Mr Kopczynski. Prior to making such an application no doubt the solicitors for the liquidators will enquire as to when the decision will be made. If the application is proceeded with, the effect of any examination upon Grosvenor Hill and Mr Waghorn, given the issues raised on the pleadings, can also be gone into. It may be, depending on the course taken by the insurer, that those parties ought to be heard, at least as to this issue. If necessary the liquidators may seek directions as to this.
I will hear submissions as to any orders which may be necessary consequent upon those I shall make as to the topics to be pursued on the examinations and the documents produced and in particular as to any other means to assist in the maintenance of a necessary level of confidentiality. I shall also hear argument as to costs.
I certify that this and the preceding 15 pages are a true copy of the reasons for judgment herein of the Honourable Justice Kiefel.
Associate:
Date: 2 August 1996
Counsel for Mr Shorter: Mr C Hampson QC and Mr T North
Solicitors for Mr Shorter: Minter Ellison
Counsel for Mr Ballhausen: Mr S Couper QC
Solicitors for Mr Ballhausen: Gadens Ridgeway
Counsel for Mr Cronin: Mr H Fraser QC and Mr T Quinn
Solicitors for Mr Cronin: Ebsworth & Ebsworth
Counsel for the Liquidators: Mr R Chesterman QC and Mr P O’Shea
Solicitors for the Liquidators: Feez Ruthning
Date of Hearing: 23 July 1996
Place of Hearing: Brisbane
Place of Judgment: Brisbane
Date of Judgment: 2 August 1996
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