In the matter of Kurmond Industries Pty Ltd (in liquidation)

[2021] NSWSC 147

Supreme Court

New South Wales

Medium Neutral Citation:

In the matter of Kurmond Industries Pty Ltd (in liquidation) [2021] NSWSC 147

Hearing dates:

19 February 2021

Date of orders:

19 February 2021

Decision date:

19 February 2021

Jurisdiction:

Equity - Corporations List

Before:

Black J

Decision:

Extension of time for application to set aside examination summons declined

Catchwords:

CORPORATIONS – examinations relating to insolvency – whether time for application to set aside examination summons should be extended

Legislation Cited:

- Corporations Act 2001 (Cth)

- Supreme Court (Corporations) Rules 1999 (NSW)

- Supreme Court Act 1970 (NSW)

- Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

- Re Bridgeport - Advisors and Asset Managers Pty Ltd [2005] NSWSC 757

- Re Cunningham, Australasian Liquid Storage Pty Ltd (in liq) [2017] FCA 559; (2017) 121 ACSR 119

- Re Ji Woo International Education Centre Pty Ltd [2019] NSWSC 93

- Re Newtel Ltd (in liq); Evans v Wainter Pty Ltd [2005] FCAFC 114; (2005) 145 FCR 176

Category:

Procedural rulings

Parties:

Sarkis Nassif (First Applicant)
Holdmark Property Group Pty Ltd (Second Applicant)
Upright Builders Pty Ltd (Third Applicant)
Peter Hillig in his capacity as liquidator of Kurmond Industries Pty Ltd (in liquidation) (Respondent)

Representation:

Counsel:
F Assaf SC (Applicants)
A Narayan (Solicitor) (Respondent)

Solicitors:
Fortis Law Group (Applicants)
Craddock Murray Neumann (Respondent)

File Number(s):

2020/328709 (002)

Judgment – ex tempore (Revised 19 February 2021)

Nature of the application and background

1. By Interlocutory Process filed on 29 January 2021, the Applicants, Mr Nassif, Holdmark Property Group Pty Ltd ("Holdmark") and Upright Builders Pty Ltd (“Upright Builders”) sought a range of relief in respect of a summons to attend a liquidator’s examination issued to Mr Nassif and orders for production issued to Holdmark and Upright Builders at the request of the liquidator (“Liquidator”) of Kurmond Industries Pty Ltd (in liq) (“Kurmond”). Initially, interim orders were sought that the summons for examination issued to Mr Nassif be stayed, that compliance with the orders for production be stayed, and that the Applicants be granted access to the confidential affidavit filed by the Liquidator with the Court in support of the application that the examination summons be issued. Ultimately, applications for stays of the examination summons and orders for production were not pressed, although the application to set aside the examination summons is pressed, if Mr Nassif is successful in seeking an extension of time to pursue that application. The application to set aside the orders for production to Holdmark and Upright are not pressed and evidence has been led that the documents will be produced in the subpoena list on Tuesday. I will make orders below to deal with a suggestion that a confidentiality claim will be made in respect of the documents that are produced.

2. It is common ground that the examination summons directed to Mr Nassif had been served on his solicitor who had accepted service, no later than 21 or 22 December 2020 and the application to set aside the examination summons was not brought until some five or so weeks later, on 29 January 2021. Rule 11.5 of the Supreme Court (Corporations) Rules relevantly provides that any application for an order discharging an examination summons is to be filed within three days after the person is served with that examination summons. It is plain that that did not occur in this case. A question then arises as to whether the Court should extend the time for Mr Nassif to bring the application to set aside the examination summons under r 1.12 of the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”), and I dispensed with the need for Mr Nassif to amend his Interlocutory Process to seek that extension of time. I will deal with the applicable principles in respect of that question below.

The chronology of events and the evidence

3. I should first refer to the chronology of events and the relevant evidence, then to the parties' submissions, before referring to the case law and reaching a conclusion.

4. Mr Assaf, who appears for Mr Nassif, has drawn attention to early correspondence between the Liquidator and Holdmark and their respective legal representatives, which identified the claim which has ultimately prompted the issue of the examination summons. By letter dated 28 June 2019, the solicitors acting for the Liquidator wrote to Holdmark indicating that the records in the Liquidator's possession indicated that Holdmark was a debtor of Kurmond in the amount of $225,176.80 and demanded payment of that amount. Mr Assaf points out that that letter contemplated the matter may be referred to a debt collector for further action if the money was not paid, and it was not. By a further letter dated 12 August 2019, the solicitors acting for Holdmark raised a question as to which entity within the Holdmark Group owed the debt, asking the Liquidator to clarify whether the claim was made against Upright Builders or Holdmark. I pause to note that, ordinarily, one might have expected that Holdmark and Upright Builders would know which of them had dealt with Kurmond, but they plainly did not consider it appropriate to provide that information to the Liquidator at that stage. In the course of the hearing today, Mr Assaf has indicated that their position is that Kurmond dealt with Upright Builders, and that Holdmark is merely an administration company although it had paid some monies due to Kurmond. That letter also raised the possibility of an offsetting claim or set off against Kurmond’s claim.

5. Further correspondence followed, including a letter dated 27 September 2019 from the solicitors for the Liquidator which indicated that conflicting information available to the Liquidator had caused uncertainty as to whether Kurmond had dealt with Holdmark or Upright Builders and expressed the view that both Holdmark and Upright Builders had ongoing relationships with Kurmond. That letter also identified the invoices which were the subject of a claim for money due by one or other of the companies. Mr Assaf points out that that letter contemplated that, if the demand for payment was not complied with, which it was not, court proceedings may be commenced against one or other of the companies.

6. Mr Assaf also draws attention to a report dated 11 September 2019 by the Liquidator to creditors of Kurmond which referred to information provided by Kurmond's director which indicated that a debt was owed to Kurmond in the amount of $248,118.20; noted that further retention moneys were payable by Holdmark in the amount of $48,354.60, and also noted that the invoices provided by the director to the Liquidator had been made out to Upright Builders, again indicating a degree of uncertainty on the Liquidator’s part as to the identity of the contracting parties. By a further report to creditors dated 3 December 2019, the Liquidator noted that he had previously highlighted potential recoveries including a claim of $236,472.80 owed to Kurmond, again implicitly by Holdmark or Upright Builders, and noted that he proposed to conduct public examinations of persons including Mr Nassif, in his capacity as a director of Upright Builders. He there observed that:

“Conducting these public examinations should allow me to better understand the strength of the potential recovery actions identified by me as Liquidator, as well as allowing me to better understand the financial position of the debtor … to meet any potential judgments ordered against them.”

7. That report also confirmed the Liquidator’s intention to conduct a public examination of Mr Nassif "in order to better understand the recoverability of the amount owed by the debtor", presumably either Holdmark or Upright Builders or both. I will refer below to a submission made by Mr Assaf that these matters indicate that the Liquidator has sufficient information to commence proceedings on Kurmond’s behalf without the need for a Liquidator's examination.

8. Turning now to the issue and service of the examination summons directed to Mr Nassif, there is evidence, in the affidavit of Ms Campos dated 10 February 2021 on which the Liquidator relies, of attempts made to serve the examination summons on Mr Nassif on two occasions, on 7 and 16 December 2020. On the first occasion a receptionist at the Holdmark Group’s offices advised the process server that Mr Nassif was not then in attendance. On the second occasion, on 16 December 2020, the process server spoke with Mr Nassif's personal assistant who advised that he was in a meeting at the time; the Holdmark Group's general counsel then spoke to the process server, requested to see the examination summons and was handed that document and was asked to confirm she was authorised to accept service of it on behalf of Mr Nassif. She subsequently asked the process server to speak to the company's solicitor, Mr Nehme, on the telephone, and Mr Nehme advised the process server that Mr Nassif would not accept service of the examination summons and that Mr Nehme would contact the Liquidator's solicitors to arrange for the proceedings (presumably, the examination summons) to be withdrawn. The process server was then "ordered" to leave the premises, notwithstanding that he had been properly engaged in attempting service of compulsory process issued by this Court upon Mr Nassif.

9. I pause to note several findings that I reach from this evidence. The first is the fact that an examination summons had been issued to Mr Nassif, and the contents of that examination summons, became known to the general counsel of Holdmark and its associated companies on 16 December 2020. The second is that the attempted service of the examination summons became known to Mr Nehme and likely became known to Mr Nassif on that date. I can readily draw that inference where Mr Nehme communicated Mr Nassif’s position that he would not accept service of the examination summons to the process server, and could not have properly done so without instructions to that effect. I can more readily draw those inferences where neither Holdmark Group’s general counsel nor Mr Nassif gave evidence to seek to establish the contrary, and where Mr Nehme, who gave evidence in the application, also did not give evidence to the contrary.

10. Mr Assaf submits, and I accept, that a refusal to accept service is not necessarily a matter of impropriety, although it is not a particularly constructive approach. However, it seems to me that the significance of this matter is not in establishing any impropriety on the part of Mr Nassif, but in establishing that Mr Nassif, and Mr Nehme as his solicitor, were both aware of the examination summons and its content at least from 16 December 2020, prior to the commencement of the Court vacation, and the issues which arise below in respect of their lack of response to the examination summons during the Court vacation period are to be understood in that context. It also seems to me that much less weight can be given to any suggestion that it was difficult to deal with an examination summons in the Court vacation, where Mr Nassif's decision not to accept service on 16 December, before the court vacation commenced, significantly contributed to the fact that service was only effected on his solicitor during the Court vacation.

11. Turning now to the evidence, Mr Nassif reads an affidavit dated 28 January 2021 of his solicitor, Mr Nehme. Mr Nehme there helpfully recognises that Mr Nassif is the sole director and company secretary of Holdmark, and is one of the three directors and the company secretary of Upright Builders. He notes that those companies are entities within the Holdmark Group and that Mr Nassif is the founder of that Group. He refers to circumstances of the claims by Kurmond, by its Liquidator, for payment and to correspondence in that respect, and refers to the receipt of an email from the solicitors for the Liquidator on 21 December 2020, after the attempted personal service of the examination summons on Mr Nassif had twice failed, which enclosed the summons for examination directed to Mr Nassif as well as orders for production directed to the companies. He then refers to his email sent on 22 December 2020 confirming his instructions to accept service so that, on any view, service had been effected by that date. He refers to further emails, which are also addressed in his second affidavit, to the closure of his office for the Christmas and New Year break from 18 December 2020 to 11 January 2021, and indicates that he had "limited" access to his emails and "limited" ability to confer with Mr Nassif and the companies in that period. It is important to note that there is no suggestion that he had no such ability in that period. Mr Nehme also refers to subsequent correspondence, which included his request for production of the Liquidator's confidential affidavit in support of the examination, which was declined by the Liquidator's solicitors on 15 January 2021, and further correspondence debating the relevant issues. While that debate was taking place, Mr Nassif did not bring an application to set aside the examination summons during January 2021. Had that application then been brought, it could have been listed before a vacation judge which, in 2021 as in several previous years, included one of the Corporations judges sitting as vacation judge for a week.

12. By Mr Nehme’s second affidavit dated 18 February 2021, he elaborated on issues raised in the earlier evidence, and provided what he described as an explanation for the delay in bringing the application to set aside the examination summons. That explanation began on 21 December 2020 and did not address the earlier occasions on which Mr Nassif had not been present to accept, or had declined to accept, service of the examination summons. Mr Nehme again returned to the email correspondence between the parties and to his “limited” access to emails and capacity to confer with his clients in the vacation period.

13. Mr Nehme also there indicated that his firm "has been in the process of preparing further affidavit evidence". That was surprising, because the Court had previously been informed on 15 February 2021, when this matter was set down for hearing, that all of the evidence on which Mr Nassif relied in respect of the application had already been filed and served. Putting aside the change in that approach that appears to have occurred between 15 and 18 February 2021, Mr Nehme then set out something of the nature of that further evidence. He noted that preparation of that evidence had "taken more time than initially anticipated", again a proposition which did not sit particularly comfortably with the information provided to the Court three days before that all evidence had been served, unless it was a reference to the fact that preparation of that evidence had taken more than the three days since that confirmation had been provided to the Court. Mr Nehme observed that:

“Fortis Law has identified three individuals from which affidavit evidence will be adduced. Two of these three individuals are not readily available given that they are usually working full-time on construction sites. However, steps have been taken to ensure that they are available to give affidavit evidence in the following days.”

14. That affidavit in turn foreshadowed an application, which has not yet been determined, to adjourn the hearing of the application to set aside the examination summonses for a further month. That issue will not need to be determined, unless Mr Nassif is successful in his application to extend the time in which the application to set aside the examination summons may be brought.

15. Mr Assaf further elaborated on the nature of the evidence which was sought to be led by Mr Nassif in submissions from the bar table which were not otherwise underpinned by affidavit evidence or other evidence. He submitted that the evidence which was sought to be led from those three persons included evidence from Holdmark Group’s general counsel and two persons involved with relevant sites which were intended to establish that Mr Nassif had no knowledge of the dealings between Upright Builders, the company of which he was a director, and Kurmond. Likely recognising, rightly, that there was a difficulty with submissions of that character unsupported by evidence, Mr Assaf in turn sought, and obtained, leave to lead further oral evidence of Mr Nehme, which indicated that Mr Nassif proposed to lead evidence from a contract administrator, and two persons associated with the relevant sites who it was said have dealt with Kurmond, and that the general counsel might also give evidence as to questions of contract administration.

16. I raised with Mr Assaf at that point, how the evidence that Mr Nassif proposed to lead from other persons could establish that Mr Nassif had no knowledge of relevant matters. Mr Assaf rightly recognised that this involved an attempt to establish a negative which is not straightforward. It also involved the difficulty that evidence was to be led from A, B and C as to the structure of the relevant companies in order to seek to establish a proposition that D, who was a director of a company with significant statutory responsibilities, had no knowledge of particular matters. The difficulty with that proposition, it seemed to me, is that even if all of the matters which Mr Nassif sought to establish through evidence of the contract administrator, site personnel and general counsel, in respect of the distribution of duties within the companies and as to who dealt with Kurmond at the relevant sites, were established, that would not exclude the possibility or probability that, and certainly would not exclude a reasonable hypothesis that, Mr Nassif in his capacity as a director of the companies had knowledge of their dealings with Kurmond.

17. I should also pause to note two other difficulties with Mr Nassif’s proposed approach to the application to set aside the examination summons, if the time to bring that application is extended. The first is that, so far as the use of the Court's and the Liquidator’s time and resources is concerned, it does not seem to be a particularly efficient way to seek to prove the fact that Mr Nassif does not have knowledge of a particular matter to call three or four other persons to seek to lead evidence as to the structure of the relevant companies, from which a doubtful inference to that effect could be drawn, as distinct from Mr Nassif denying that he has such knowledge. Mr Assaf accepted, in oral submissions, that it would possibly also be necessary to call Mr Nassif to lead evidence of his lack of knowledge, given the difficulty in drawing that inference from other persons’ evidence. That, however, led to the extraordinary result that, in order to set aside an examination summons, which would require Mr Nassif to attend an examination where he would be asked about his knowledge of the matter, not only would three or four other persons give evidence as to the structure of the companies, but Mr Nassif would then himself give the very evidence that he would otherwise be asked to give if the examination went ahead. That was, to say the least, a surprising proposition.

The applicable principles

18. Turning now to the relevant principles, as I have noted above, r 11.5 of the Corporations Rules deals with applications to set aside examination summonses and provides a short time frame within which such an application may be brought. The scope of that rule has been considered in a number of cases, and should be understood in the context of the statutory regime for liquidators’ examinations. As Mr Assaf points out, Mr Nassif is a person who would fall within the scope of s 596B of the Corporations Act 2001 (Cth) (the “Act”) and the Court may summon him for examination, as it has done, where an eligible applicant applies for the summons, as has occurred here, and the Court is satisfied, as the Registrar has been, that Mr Nassif may be able to give information about examinable affairs of Kurmond. I will return below to case law, to which Mr Assaf refers, which considers the scope of that section.

18. The public purpose of a liquidator's examination was in turn emphasised by the Full Court of the Federal Court in Re Newtel Ltd (in liq); Evans v Wainter Pty Ltd [2005] FCAFC 114; (2005) 145 FCR 176 at [252], where the Full Court pointed to legitimate purposes of an examination, including enabling evidence and information to be obtained to support the bringing of proceedings in connection with a corporation’s examinable affairs. The Full Court also noted limitations to the proper purpose of an examination. Mr Assaf fairly conceded here that there is no suggestion of an improper purpose on the part of the liquidator, at the time the examination was sought (although that proposition had previously been raised by Mr Nehme), and that instead it is contended that the examination should be set aside, inter alia, because its going ahead would be oppressive or unfair to Mr Nassif.

19. Returning to the scope of r 11.5 of the Corporations Rules, and the purpose that it serves , I observed in Re Ji Woo International Education Centre Pty Ltd [2019] NSWSC 93 at [19] that there is an obvious public policy in requiring an applicant to bring an application to set aside an examination summons promptly, reflecting the public role of liquidators' examinations and the need to bring insolvency administrations to a close as quickly as possible. I also observed (at [19]) that:

“That time limit also mitigates the substantial difficulties for the parties, the Court and the community...if an application to set aside examination summonses is not promptly brought, so that a Court may have to displace other hearings for other parties in order to determine that application, or defer an examination which has already been set down before a Registrar where the basis for doing so has not been established on the merits and may never be established, or leave the application to set aside the examination to become mute if the examination proceeds before it is determined".

21. This case is illustrative of these difficulties. Here, an application to set aside the examination was not brought during the vacation period; it was made returnable today, and it has now emerged that Mr Nassif seeks to adjourn that application, so that a further hearing day would need to be allocated. While the Court could accommodate that request, its doing would take up a further hearing day, close to the date of the examination, which would otherwise be available to other litigants. If an appeal were to be brought from the Court's decision, then the examination date would in turn be under threat or an appellate court would be required to deal with that appeal within a very short time frame.

22. With this background, I recognise that the Court has power to extend the time to bring an application to set aside an examination summons under UCPR r 1.12. Applications of that kind are frequently made and Mr Nassif now invokes the Court's power to extend the time to bring this application. For example, in Re Bridgeport - Advisors and Asset Managers Pty Ltd [2005] NSWSC 757, Barrett J extended the time to bring such an application, although ultimately dismissing that application on the particular facts. On the other hand, in Re Ji Woo International Education Centre Pty Ltd [2019] NSWSC 93, I did not extend the time to bring such an application, on the merits in that case.

23. Mr Assaf recognises, rightly, that the question whether to extend the time to bring the application to set aside Mr Nassif’s examination in this case should be determined by reference to sections 56-58 of the Civil Procedure Act 2005 (NSW) including the overriding purpose in s 56 to facilitate the just, quick and cheap resolution of the real issues in dispute in the proceedings. Section 58 in turn provides that the Court, in deciding whether to make any order or direction for the management of proceedings, must act in accordance with the dictates of justice. I also recognise that, in determining what are the dictates of justice in a particular case, I must have regard to the provisions of ss 56 and 57, and to specific matters, including the degree of expedition with which the relevant parties have approached the proceedings, the degree to which they have been timely in their interlocutory activities, and the use which they have made, or could have made, of any opportunity available to them in the course of the proceedings, and the degree of injustice which will be suffered by the respective parties as a consequence of any order or direction. The first three of those matters do not assist Mr Nassif and I will address them further below.

The parties’ submissions

24. Turning now to the parties' submissions, Mr Assaf emphasises that s 596B(1)(b) of the Act is a statutory precondition to the exercise of the Court's discretion to make an order for examination, and refers, in some detail, to the observations of Derrington J Re Cunningham, Australasian Liquid Storage Pty Ltd (in liq) [2017] FCA 559; (2017) 121 ACSR 119 at [13] in that respect. Mr Assaf also submits, by reference to that decision, and I accept that, the more removed a proposed examinee is from the operation of the relevant company, the more difficult it may be to satisfy the statutory prerequisite to an examination under s 596B(1) of the Act.

25. The relevant company here, is, of course, Kurmond, and the statutory question set by s 596B(1)(b) of the Act is whether the Court is satisfied that Mr Nassif may be able to give information about examinable affairs of Kurmond, in circumstances that those examinable affairs are, relevantly, Kurmond's dealings with Holdmark and Upright Builders and any debts which those companies may owe to Kurmond or cross-claims which those companies may have against Kurmond, and the recoverability of those debts. It seems to me, however, that that is not a particularly distant relationship from Kurmond, so far as Mr Nassif is a director of Upright Builders, the sole director of Holdmark and the founder of the Holdmark Group; there has been uncertainty as to which of the Holdmark companies is the contracting entity to Kurmond; there is an issue, identified by the Liquidator, as to the relevant companies’ capacity to meet judgments against them; and one would expect, in the ordinary course, that the sole director of one company and one of three directors and the founder of the other would be in a position to give information as to matters of that kind. Mr Assaf does not dispute that proposition, as a starting point, although he indicates that Mr Nassif seeks to displace it by the evidence to which I referred above, by negativing his knowledge of these matters.

26. Mr Assaf in turn submits, as I noted above, that Mr Nassif will seek to establish that he has no involvement with Kurmond and has no direct knowledge of the works performed by Kurmond or any matters relating to those works, and he will seek to establish that he will not be able to give information about any of the matters about which the Liquidator is concerned, namely the strength of Kurmond's claim against and the recovery of any debt from Holdmark or Upright Builders, to which I would add the issue as to which entity is the relevant contracting party. Mr Assaf submits that there is at least an arguable case that he will able to establish his lack of knowledge of those matters, and that that is all that Mr Nassif needs to establish. It does not seem to me that is the relevant test. This is not an exercise where there is a defined threshold, the existence of an arguable case, and an extension of time to bring an examination summons necessarily follows once that threshold is met. The Court must instead have regard to ss 56-58 of the Civil Procedure Act, the public purposes of an examination regime, all the relevant circumstances, and the extent and explanation of the relevant delay and the merits of the proceedings, and then exercise a judicial discretion whether to extend the time for the application to be brought. It seems to me that Mr Nassif’s establishing an arguable case that, for example, by calling four witnesses (and possibly also Mr Nassif), he could possibly establish his lack of knowledge, with the same effect as if he alone was examined, would not necessarily be enough to establish that it is a proper exercise of the Court's discretion to extend the time for the application to set aside the examination.

27. Mr Assaf also submits that the Liquidator does not require further information and refers to the correspondence to which I have referred above, which foreshadows the commencement of proceedings. I can deal with that submission briefly. It is in part based on propositions as to what will emerge from documents yet to be produced by Holdmark and Upright Builders, so far as they may, for example, demonstrate the capacity of those companies to meet a judgment against them, or, indeed, to the instructions given to Mr Assaf as to the content and significance of the documents that have not yet been produced, since there seems to be no suggestion that Mr Assaf has reviewed them personally. I can give little weight, I am afraid, to Mr Nassif’s assessment of what the documents Holdmark and Upright Builders propose to produce will establish for the Liquidator. I do, however, readily assume that the Liquidator will not expend funds in pursuing an unnecessary examination which would otherwise be available for creditors, if the documents, once ultimately produced, mean that it is not necessary to conduct such an examination. It is not necessary to set aside the Liquidator’s examination to achieve that result. It also seems to me that there is at least a degree of complexity in these issues, although they may have been somewhat simplified by the concession today that Upright Builders is the counterparty to the relevant contract, and that the Liquidator might properly be concerned that these proceedings should not be brought until he has a better understanding of the structure of the relevant dealings, given the difficulties which he appears to have had in obtaining such information from Kurmond’s director.

28. Mr Assaf also submits that the examination summons will operate oppressively and unfairly against Mr Nassif. Again, it seems to me that that submission can be dealt with relatively briefly, because it turns on the proposition that the evidence which will in future be adduced will establish, not only that the Liquidator knows all that he needs to know, but that Mr Nassif does not have any ability to give any relevant information about Kurmond's examinable affairs. As to the first of those propositions, I have noted that whether the documents to be produced are or may be sufficient for the Liquidator's purpose will only be known when they are produced, and that has not occurred. As to the second, I have referred above to my difficulty in accepting that the state of Mr Nassif's knowledge can be reasonably deduced from other persons giving evidence about the structure of the relevant companies. Mr Assaf also submits that considerable inconvenience and stress is involved in a public examination. I can accept that proposition, although it is true for all examinees, and it does not seem to me that it gives sufficient weight to the public purpose which the examination regime involves.

29. Mr Assaf also addresses the applicable principles in respect of an application for an extension of time to set aside an examination summons and refers to my decision in Re Ji Woo International Education Centre Pty Ltd above in that respect. He refers to the explanation for the delay given by Mr Nehme and he submits that that explanation is sufficient having regard to the Court vacation. It seems to me that, as matters stand, there is some explanation of delay and I accept that it would ordinarily be a little more difficult to bring such an application in the Court vacation, than it would be to bring such an application in the Court term. I also recognise, however, as any observation of the Court's vacation list would establish, that applications with a degree of urgency about them are often brought by litigants and their solicitors during that period. It seems to me that this explanation has limited weight, and less weight where the matter has passed into the Court vacation period because, as I noted above, Mr Nassif made a choice not to accept the service of the documents upon him prior to that period.

30. Mr Assaf also submits that there will be no prejudice to the Liquidator from an extension of the time period to bring the application. I do not accept that proposition, where the consequence of extending the time period will be, first, to expose the Liquidator to the process of some three or four witnesses giving evidence as to the structure of the relevant companies and their dealings with Kurmond in order to promote a doubtful inference of the absence of Mr Nassif's knowledge, which could be more efficiently established by Mr Nassif’s evidence that he knows nothing of the relevant matters. It also seems to me that there is prejudice from delay, including the delay arising from a further adjournment, and the possibility of an appeal brought at a later date, which increases the risk that examination dates will be lost and would ordinarily not be able to be reallocated for a considerable time.

31. Mr Narayan, who appeared for the Liquidator, responded to Mr Assaf's submissions by addressing each of the propositions he put as to Mr Nassif's suggested inability to give relevant information, or the Court's suggested inability to be satisfied that he can give such information, and as to the proposition that the Liquidator has all the information that is required. As to the former, Mr Narayan makes the obvious point, to which I have referred above, that there are difficulties in inferring the state of Mr Nassif's knowledge from evidence given by other persons as to the structure of the relevant companies and their dealings with Kurmond. He also refers to the issues which have remained open in the correspondence as to the merits of the relevant claim, which, on the face of it, are matters that the Liquidator would properly examine.

32. As to the delay, he points to the circumstances that orders for production were initially served by post, as early as 1 December 2020; he points to the fact that Mr Nassif and Mr Nehme were aware of the examination summons from 16 December 2020, drawing the inference that I also draw for the reasons that I have noted above; and he points to the fact that the examination summons was served on 21 December 2020, and submits that there is no evidence to explain the subsequent delay, including two weeks’ delay after Mr Nehme had returned to work. I do not accept that that proposition can be put as high as there being no evidence to explain those matters, where Mr Nehme has referred to the fact that his ability to deal with the matters was limited, although not non-existent, and has referred to the correspondence that he was sending and to his decision to pursue that correspondence rather than immediately commence the application. That is an explanation of the delay, and I bear it in mind in exercising the discretion whether to extend the time period in respect of the application to set aside the examination summons.

Determination

33. I am not persuaded that Mr Nassif has established a sufficient basis to extend the period of time in which to bring an application to set aside the examination summons. It seems to me that the delay which has been involved is significant, and would put significant pressure upon the Court and the parties in dealing with the application which would not have arisen had the application been brought promptly, particularly when combined with the number of witnesses who Mr Nassif now seeks to call, the possibility that they will need to be cross-examined, and the proximity of the examination dates. It also seems to me that the process which Mr Nassif seeks to adopt, namely to call other persons to seek to establish matters as to Holdmark’s and Upright Builders’ structure, from which an inference of his lack of knowledge can be drawn, is fundamentally flawed, because a lack of direct involvement by Mr Nassif in the relevant dealings with Kurmond will not in fact displace a reasonable hypothesis that he has knowledge of those matters, as the sole director of Holdmark and one of three directors of the Upright Builders. If, as Mr Assaf foreshadowed, the application develops so that not only three or four other persons are called, but Mr Nassif is also called to deny his knowledge of the relevant matters, then the application becomes perverse, because it involves calling the witness who would be examined by the Liquidator to address the matters as to which he would be examined, as well as three or four other witnesses, imposing additional costs on all parties including Mr Nassif and the Liquidator and wasting scarce resources of the Court that are funded by the community. I am also not satisfied, in the relevant circumstances, that there is sufficient basis for establishing that the Liquidator already has the information he needs, which ultimately involves no more than an assertion based on Mr Assaf's instructions of what the Liquidator should conclude from documents that are yet to be provided to him, so as to grant the relevant extension.

34. For these reasons, the application for an extension of time to set aside the examination summons is dismissed. I will also make orders for dismissal of the balance of the Interlocutory Process, costs and other matters.

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Decision last updated: 02 March 2021