In the matter of Mendarma Pty Ltd (in liq)

In the Federal Court of Australia, the matter of Mendarma Pty Ltd (in liquidation) was considered, involving an application by the liquidators to set aside summonses issued for the examination of the applicants, who had previously loaned money to the company now in liquidation. The applicants' company had secured the loan by a mortgage over the assets of the company in liquidation. After the company in liquidation defaulted, the applicants gave notice under the mortgage and initiated proceedings in the Equity Division of the Court. The directors of the company in liquidation subsequently brought a cross-claim against the applicants and their company. Following the appointment of liquidators to the company in liquidation, the liquidators issued summonses to the applicants under section 596B of the Corporations Act 2001 (Cth), seeking information about the "examinable affairs" of the company in liquidation. The applicants sought to set aside these summonses on several grounds, including that they were unable to provide information about the "examinable affairs" of the company in liquidation, and that the summonses were issued for an improper purpose, namely to conduct a dress-rehearsal of cross-examination that was likely to occur in the Equity Division proceedings. The applicants further contended that the liquidators failed to disclose all material matters in their affidavit in support of the application.

The Court examined the scope of the term "examinable affairs" in sections 9 and 53 of the Corporations Act, concluding that it encompassed matters relevant to the affairs of the company in liquidation. The Court found that the applicants could not provide information about the "examinable affairs" due to the ongoing proceedings in the Equity Division, which had not yet been stayed. Regarding the alleged improper purpose, the Court held that the liquidators had not acted improperly in issuing the summonses, as they were within their statutory powers. However, the Court emphasised the importance of full disclosure in affidavits supporting applications, and found that the liquidators had failed to disclose the pendency of the Equity Division proceedings, which was a material matter. Consequently, the Court granted the application to set aside the summonses.

In light of the Court's findings, the liquidators' application to set aside the summonses was successful. The Court held that the liquidators had not fully disclosed all material matters in their affidavit, which was a significant oversight. The Court emphasised the importance of full disclosure in legal proceedings, and noted that the pendency of the Equity Division proceedings was a material fact that should have been disclosed. The Court concluded that the failure to disclose this material matter was sufficient to warrant setting aside the summonses. As a result, the applicants' application was granted, and the summonses issued by the liquidators were set aside.