In the matter of Nielsen & Moller Autoglass (NSW) Pty Limited (in liq): Geoffrey James Rankine & Anor v John Frederick Lord & Anor - [2008] NSWSC 1197

No judgment structure available for this case.

CITATION: In the matter of Nielsen & Moller Autoglass (NSW) Pty Limited (in liq) ; Geoffrey James Rankine & Anor v John Frederick Lord & Anor [2008] NSWSC 1197

HEARING DATE(S): 19 September 2008 and subsequent written submissions

JUDGMENT DATE :
14 November 2008

JUDGMENT OF: Hammerschlag J

DECISION: Orders for production set aside. Liquidators to pay the Rankines’ costs of the application.

CATCHWORDS: CORPORATIONS - PRACTICE AND PROCEDURE – Orders for production – setting aside for oppression – respondents appointed special purpose liquidators (“the liquidators”) of first defendant company with specific powers and functions (“the appointment order”) – orders for production made, ancillary to summonses for examination issued pursuant to ss 596A and 596B of the Corporations Act 2001 (Cth), on ex parte application of liquidators (“the Orders”) – applicants seek to set aside Orders in whole on the basis of oppression, or in part either on the basis that the Orders go beyond the authority given to the liquidators by the appointment order or on the basis that they compel production of privileged documents – procedure for claiming privilege where orders for production made ancillary to summonses for examination issued pursuant to ss 596A and 596B of the Corporations Act 2001 – Uniform Civil Procedure Rules 2005 (NSW) Pt 1 rr 1.8 and 1.9 considered – Meteyard v Love as Receivers and Managers of Southland Coal Pty Ltd (2005) 65 NSWLR 36 applied – Orders set aside

LEGISLATION CITED: Corporations Act 2001 (Cth)
Civil Procedure Act 2005 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)
Supreme Court Rules 1970 (NSW)
Evidence Act 1995 (NSW)

CASES CITED: Lo v Nielsen & Moller (Autoglass) (NSW) Pty Ltd [2008] NSWSC 407
Re BPTC Ltd (in liq) (No 5) (1993) 10 ACSR 756
Re Clutha Ltd (2000) 34 ACSR 685
Southern Pacific Hotel Services Inc v Southern Pacific Hotel Corporation Ltd; Kirby v Southern Pacific Hotel Corporation Ltd [1984] 1 NSWLR 710
Re Southland Coal Pty Ltd (recs and mngrs appt) (in liq) (2006) 58 ACSR 113
Re BPTC (In Liq) (No 2) (1992) 29 NSWLR 713
Esso Australia Resources Ltd v Commissioner of Taxation of the Commonwealth of Australia (1999) 201 CLR 49
Meteyard & Ors v Love & Ors as Receivers and Managers of Southland Coal Pty Ltd (2005) 65 NSWLR 36
Carbotech-Australia Pty Ltd v Yates [2008] NSWSC 1151
Hypec Electronics Pty Ltd (In Liq) [2006] NSWSC 704

PARTIES: Geoffrey James Rankine
Karin Elke Rankine
John Frederick Lord & Atle Crowe-Maxwell in their capacities as joint Special Purpose Liquidators of Nielsen & Moller Autoglass (NSW) Pty Limited (in liquidation) ACN 107 933 184

FILE NUMBER(S): SC 2490/2008

COUNSEL: S. Golledge (Applicants)
J. Svehla with J. Baird (Respondents)

SOLICITORS: Yates Beaggi Lawyers (Applicants)
McInnes Attorneys (Respondents)

- 46 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

HAMMERSCHLAG J

14 NOVEMBER 2008

2490/2008 IN THE MATTER OF NIELSEN & MOLLER AUTOGLASS (NSW) PTY LIMITED (IN LIQ) ACN 107 933 184; GEOFFREY JAMES RANKINE & ANOR -v- JOHN FREDERICK LORD & ANOR

JUDGMENT

BACKGROUND

1 HIS HONOUR: On 2 May 2008 the Court ordered that Messrs John Frederick Lord and Atle Crowe-Maxwell be appointed additional liquidators (“the liquidators”) of the first defendant company (“the Company”) with specific powers and functions relating to the investigation of certain financial dealings between the Company and Mr Geoffrey James Rankine, alone or together with his wife, Mrs Karin Elke Rankine (together “the Rankines”), and a Mr Moller.

2 The factual background against which the order was made appears from the judgment of Barrett J: see Lo v Nielsen & Moller (Autoglass) (NSW) Pty Ltd [2008] NSWSC 407.

3 The specific powers and functions which were conferred on the liquidators in the order appointing them are set out in paragraph 3 of his Honour’s judgment and are as follows:

“1. Investigate the creation and registration of the fixed and floating charge (“ Rankine Charge ”) by the First Defendant to Geoffrey James Rankine and Karin Elke Rankine as trustees for the Rankine Family Superannuation Fund (the “ Rankines ”).

2. Investigate loans made by the Rankines to the First Defendant, and the subsequent application of those funds prior to and after creation and registration of the Rankine Charge.

3. Investigate the solvency of the First Defendant prior to and after creation and registration of the Charge, up to and including the date of entry into Liquidation.

4. Investigate whether Geoffrey James Rankine and Karin Elke Rankine were shadow or de facto directors and otherwise involved in the management and control of the First Defendant and, if so, for what periods of time.

5. Investigate whether the First Defendant was trading whilst insolvent for any period of time and if so whether Carl Christian Moller (“ Moller ”) and Geoffrey James Rankine as directors of the First Defendant and Geoffrey James Rankine and Karin Elke Rankine as de facto or shadow directors and otherwise involved in the management and control of the First Defendant were relevantly aware of such insolvent trading.

6. Investigate whether any unfair preferences or uncommercial transactions were entered into by the First Defendant and if so whether Moller and Geoffrey James Rankine as directors of the First Defendant and Geoffrey James Rankine and Karin Elke Rankine as de facto or shadow directors and otherwise involved in the management and control of the First Defendant were relevantly aware of such matters.

7. Investigate the extent to which any debt secured by the Rankine Charge remains outstanding.

8. Investigate the manner of exercise of the Rankine Charge.

9. Investigate the appointment and conduct of Geoffrey James Rankine as controller of the First Defendant on or about 31 December 2007.

10. Investigate the circumstances in which the Second Defendant was requested to become and was appointed administrator of the First Defendant in or about 31 January 2008.

11. Investigate the circumstances in which Southern Cross Autoglass Pty Ltd (“ Southern Cross ”) was registered on or about 21 December 2007 being the date when a petition to wind up the First Defendant was lodged in the Supreme Court of New South Wales by one of the First Defendant’s creditors.

12. Investigate the circumstances in which Geoffrey James Rankine became the sole director and shareholder of Southern Cross at that time.

13. Investigate the circumstances in which the entire assets and undertaking of the First Defendant was transferred to Southern Cross in or about late December 2007 or January 2008 and prior to the appointment of the Second Defendant as administrator of the First Defendant, and in circumstances where no money may have been received by the First Defendant or the Rankines from Southern Cross and where only some of the creditors of the First Defendant were assumed by Southern Cross, leaving behind unsecured creditors of the First Defendant in circumstances where the First Defendant had no assets or ability to pay those creditors.

14. Investigate the conduct, involvement and knowledge of Southern Cross concerning its acquisition of the assets and undertaking of the First Defendant.

15. Investigate whether Southern Cross holds the assets and undertaking of the First Defendant on a trust for it and their value and whether they are being dissipated.

16. Investigate the degree of control which Geoffrey James Rankine and Karin Elke Rankine had over the First Defendant including through the 80 ordinary shares in the First Defendant registered in the name of GDF Nominees Pty Ltd (“ Nominees ”).

17. Investigate any breaches of duty, whether under the Corporations Act 2001 , at common law or in equity, by Moller and Geoffrey James Rankine as directors or officers of the First Defendant and by Geoffrey James Rankine and Karin Elke Rankine as de facto or shadow directors of or as persons involved in the management and control of the First Defendant.

18. Investigate the conduct and knowledge of Gabriel & Partners and the directors of Nominees in relation to some or all of the above matters.

19. Investigate the conduct and knowledge of Geoffrey James Rankine and Karin Elke Rankine as trustees for the Rankine Family Superannuation Fund or otherwise in relation to some or all of the above matters.

20. Prepare with instructing solicitors and counsel a draft Application for Examination and supporting Affidavit of Reasons of the Liquidators under Sections 596A and 596B of the Corporations Act 2001 , subject to legal clearance of supporting grounds, so as to make an application to this court to conduct examinations into some or all of the matters in paragraphs 1 to 19 above and for that purpose to issue summonses or orders to attend and be examined to persons and orders for the production of documents to persons and entities.

21. To prepare and conduct such examinations as may be authorised by the Court with the assistance of instructing solicitors and counsel.

22. To give consideration to claims available to the First Defendant or its liquidator arising from the investigations and examinations in paragraphs 1 to 21 above and from an examination of the First Defendant’s books and records.

23. To commence and prosecute any legal proceedings in the name of the First Defendant or as liquidator of the First Defendant arising from the investigations and examinations in paragraphs 1 to 21 above and from an examination of the First Defendant’s books and records.

24. To take steps, including legal proceedings, to ensure preservation and protection of assets of the First Defendant, whether or not in the possession of the First Defendant, and `including against Geoffrey James Rankine, Karin Elke Rankine, Moller, and Southern Cross.

4 I shall refer to those paragraphs of the order appointing the liquidators which describe their powers and functions as “the appointment order”.

5 On 26 August 2008 the liquidators moved a Registrar of the Court, and obtained, ex parte, orders for production of documents by the Rankines by 12 September 2008 (“the Orders”).

6 The documents required to be produced under the Orders are described in a lengthy schedule to each of them which is reproduced as Appendix A to this judgment (personal details which have no bearing on the present application having been deleted).

7 References below to paragraphs of the Orders are references to paragraphs in Part 3 of the schedule to the Orders.

8 The Orders include a prefatory note (“the prefatory note”) in the following terms:

Note:

Points of privilege

(a) Documents brought into existence for the dominant purpose of enabling a solicitor to give and produce legal advice.

(b) The advice itself.

(c) Communication between a solicitor and his client for the dominant purpose of enabling the giving of advice.

(d) Settlement negotiations ‘without prejudice’ privilege.

(e) Communications from the client to a solicitor and vice versa for the dominant purpose of which is in the preparation and conduct of:

(i) anticipated proceedings;

(ii) contemplated proceedings;

(iii) existing proceedings.”

9 On 27 August 2008 summonses were issued under ss 596A and 596B of the Corporations Act 2001 (Cth) for the Rankines to attend before the Court on 13 October 2008 to be examined about the examinable affairs of the Company “insofar as those examinable affairs concern or relate to one or more of the 19 matters identified in paragraphs 1 to 19” of the appointment order.

10 Production of the documents as required by the Orders has not yet occurred and the proposed examinations have been adjourned until later in the year.

THE CHALLENGES BY THE RANKINES

11 By amended interlocutory process the Rankines move to set aside:

a the whole of the Orders on the basis that they are oppressive and an abuse of process;

b alternatively paragraphs 2, 4(b)(xii), 4(h), 4 (presumably where second appearing), 7, 8(c)-(e), 9(b)(ii)-(iii), 9(c), 14(a)(ii)-(vi), 14(b)(ii)-(vi), 14(c)(ii)-(vi), 14(d)(ii)-(vi), 15(d), 15(g), 15(h)(iv)-(v), 15(i)(iv)-(v), 15(j)(ii)-(iv), 15(k)(ii), 15(k)(iv)-(v), 15(l)(ii), 15(l)(iv), 15(l)(v), 16(a), 16(b)(iii) and 19 of the Orders on the basis that they seek production not authorised by the appointment order;

c alternatively paragraphs 5, 6, 7, 8, 9, 10 and 11 of the Orders on the basis that they call for production of material which is the subject of client legal privilege.

12 There was brief oral argument but the parties’ submissions were made primarily in writing.

13 The first and second grounds relied upon overlap to a significant extent.

14 I will deal firstly with the challenge to the whole of the Orders, secondly with what then remains to dealt with of the challenge based on the Orders going beyond what was authorised by the appointment order, and thirdly with the privilege challenge.

15 To begin with it is necessary to refer to the statutory provisions pertinent to the issue of orders for production where they are made ancillary to examinations under ss 596A and 596B of the Corporations Act 2001.

THE RELEVANT ENACTMENTS

16 The relevant jurisdiction in this State to order attendance at Court and production of documents is contained in s 68 of the Civil Procedure Act 2005 (NSW) (“CPA”) which is in the following terms:

“ 68 Attendance at court and production of documents and things to court
(cf Act No 9 1973, section 64; Act No 11 1970, section 72; SCR Part 36, rule 12)

Note.

Crimes (Administration of Sentences) Act 1999

Children (Detention Centres) Act 1987

17 The relevant rules of Court are Pt 1 rr 1.8 and 1.9 of the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) which are in the following terms:

“ 1.8 Determination of questions arising under these rules
(cf SCR Part 23, rule 4 (b) and (d))

1.9 Objections to production of documents and answering of questions founded on privilege
(cf SCR Part 36, rule 13; DCR Part 28, rule 16)

Evidence Act 1995

authorised officer

18 The Corporations Act 2001 contains provisions for mandatory examination and discretionary examination about a corporation’s examinable affairs.

19 Section 596A of the Corporations Act 2001 is in the following terms:

“596A Mandatory examination

20 Section 596B of the Corporations Act 2001 is in the following terms:

“596B Discretionary examination

21 Section 9 of the Corporations Act 2001 defines the “examinable affairs” in relation to a corporation to mean:

22 Section 53 of the Corporations Act 2001 provides as follows:

“53 Affairs of a body corporate

examinable affairs

(a) the promotion, formation, membership, control, business, trading, transactions and dealings (whether alone or jointly with any other person or persons and including transactions and dealings as agent, bailee or trustee), property (whether held alone or jointly with any other person or persons and including property held as agent, bailee or trustee), liabilities (including liabilities owed jointly with any other person or persons and liabilities as trustee), profits and other income, receipts, losses, outgoings and expenditure of the body; and

(i) a receiver, or a receiver and manager, is in possession of, or has control over, property of the body; or

and, without limiting the generality of the foregoing, any conduct of such a receiver or such a receiver and manager, of an administrator of the body, of an administrator of such a deed of company arrangement, of a person administering such a compromise or arrangement or of a liquidator or provisional liquidator of the body; and

23 There was no issue between the parties that the Orders were made under s 68 of the CPA ancillary to the summonses for the examination of the Rankines issued on 27 August 2008.

THE CHALLENGE TO THE WHOLE OF THE ORDERS

The arguments

24 The thrust of the challenge to the entirety of the Orders is that as a whole they are “utterly confusing” and create “a large number of obligations which are either entirely inconsistent or otherwise incomprehensible”. It was put that the vice arises from the repetitive form of many of the paragraphs and the cascading nature of paragraphs and subparagraphs within them.

25 More particularly the submission was put in the following terms:

“Paragraph 2 of the Order requires production of all Financial Documents ‘of and concerning Nielsen and Moller’. In light of the width of that Order, what is to be understood by the multiple subcategories of documents described in paragraphs 3 (given the definition of Rankine loan); 4(a); 4(b)(iii), (iv), (v), (vi), (vii) etc? Similarly, what is the recipient of the Order to make of the relationship between the documents sought in paragraphs 3 and 4(e) or 15(i)(i). This vice effects [sic] virtually every paragraph in the Order. The ordinary reader would assume that each paragraph of the Order is intended to convey some separate category of documents which are required to be produced. That lawyers might be able to understand the relationship between the various subparagraphs does not save the document which should clearly and unequivocally describe, in a way which is comprehensible to the ordinary reader, the obligation which it imposes.”

Spencer Motors Pty Ltd v LNC Industries Ltd

National Employers’ Mutual General Association Ltd v Dwain

and Hill; Dwain

v Hill

26 The liquidators submitted the following in answer:

a no evidence was led that Mr or Mrs Rankine did not understand or were confused by the terms of the Orders, and an affidavit of Mr Rankine sworn 16 September 2008 showed that he understood precisely what had to be produced;

b the mere fact that two or more of the paragraphs of the Orders may require the same document to be produced did not result in inconsistency or incomprehensibility, nor did it make the Orders excessively broad;

c the Orders were not too broad but, in any event, given that they were made ancillary to examinations under ss 596A and 596B of the Corporations Act 2001, whether they were too broad should be decided by determining whether the Orders require the production of documents that are beyond those relevant to the Company’s “examinable affairs” within the meaning of s 9 of the Corporations Act 2001.

The law

27 In Re BPTC Ltd (in liq) (No 5) (1993) 10 ACSR 756 at 763 Bryson J considered the relationship between the predecessor to s 68 of the CPA, Supreme Court Rules 1970 (NSW) (“SCR”) Pt 36 r 36.12, and the predecessor to ss 596A and 596B of the Corporations Act 2001, s 597 of the Corporations Law:

“In Re BPTC Ltd (in liq)(No 2) (1992) 8 ACSR 533; 10 ACLC 1431 McLelland J at a number of points referred to the width of the power to compel production of documents, and to the need for wide powers but at the same time also referred to the need to avoid oppressive operation. His Honour recognised the need for a relation between the order for production of documents and the purposes of examining persons under s 597; if information is to be obtained, it is obtained from that examination, and the production of documents is ancillary to the process of examination. See too Re BPTC Ltd (in liq) (No 3) (1993) 11 ACLC 365. An order for production of documents which had the effect of compelling a production of documents which were not required for the examination would in my opinion be oppressive; an order for production which had that purpose would in my opinion be made in excess of the power to make such order.

28 The power to issue an order for production under s 68 of the CPA is equivalent in many respects to the power of the Court to order production of documents under subpoena: see Re Clutha Ltd (2000) 34 ACSR 685 at [13].

29 In Southern Pacific Hotel Services Inc v Southern Pacific Hotel Corporation Ltd; Kirby v Southern Pacific Hotel Corporation Ltd [1984] 1 NSWLR 710 at 720-721 Clarke J said:

Consideration

30 The Orders plainly have extraordinary width. The vast majority of the categories of documents called for have no time limitation.

31 Paragraph 1 captures “All Documents of Nielsen & Moller”, without any time or subject limitation.

32 The Concise Macquarie Dictionary (4th Ed) defines “of” in the relevant sense as “belonging or possession, connection or association”.

33 Paragraph 1 covers all “Documents” as defined which are the property of the Company. It also covers, in my view, all “Documents”, even if not its property, which are in its possession, custody or control.

34 “Document” is defined in the Orders to include amongst others:

35 Paragraph 1 read with the definition of “Document” operates conceivably to capture every document which has been brought into existence by or on behalf of the Company during the course of its entire existence without any regard to subject matter.

36 It requires documents to be produced without there having to be any discernible connection with the specific powers and functions of the liquidators.

37 Paragraph 1 is oppressive because it is too wide. It is also beyond the powers conferred on the liquidators whose functions and powers are directed to specific subjects. No submission to the contrary was made.

38 Paragraph 2 of the Orders requires production of “All Financial Documents of or concerning Nielsen & Moller”, without any time or subject limitation.

39 “Financial Document” is defined very widely. Part of the definition is as follows:

“any record of financial information [including]: …

40 Self-evidently “All Documents of Nielsen & Moller” must comprehend and include the narrower category of “All Financial Documents of or concerning Nielsen & Moller”.

41 Paragraph 2 requires production of every document containing financial information which is presumably any document containing any reference to money. It too is oppressive because of its width and uncertainty. It too goes beyond the ambit of the liquidator’s powers and functions.

42 With respect to the width of the Orders in the context of the liquidators’ powers and functions, it was put on behalf of the liquidators that paragraphs 2-4, 5-7, 9, 13-18 and 21-23 of the appointment order justify the width of paragraph 2 of the Orders.

43 This submission overlooks the fact that those paragraphs of the appointment order have a subject matter limitation, whereas paragraph 2 of the Orders (like paragraph 1) does not.

44 The liquidators put further that the fact that the Court (by its Senior Deputy Registrar) had issued the Orders itself meant that the Court has, pursuant to paragraphs [21] and [25] of the Schedule, empowered the liquidators to obtain the documents in the terms of the Orders as ancillary to the examinations and that the Court had done so after giving consideration to the liquidators’ affidavit of reasons and documents exhibited to it.

45 This submission is unsound because:

a the summonses for examination on their face permit the Rankines to be examined about the examinable affairs of the Company “insofar as those examinable affairs concern or relate to one or more of the 19 matters identified in paragraphs 1 to 19”. The Orders are ancillary to the summonses and the scope to order production depends on the scope of the examination which is ordered: Re Southland Coal Pty Ltd (recs and mngrs appt) (in liq) (2006) 58 ACSR 113 (“Re Southland Coal”) at [38]; and

b paragraph 2 was (as was the whole of the Orders) wrongly made.

46 Together paragraphs 1 and 2 cover every document belonging to, in the possession of, under the custody and control of or having any connection with the Company, without it being possible to discern with any degree of certainty any distinct field of operation of either paragraph. They are clearly insupportable.

47 This difficulty plagues numerous other paragraphs in the Orders which refer to “all Documents and all Financial Documents” or “all Documents” or “all Financial Documents”.

48 Additionally given the width of paragraphs 1 and 2, the remaining paragraphs and dozens of subparagraphs have no field of operation which is otherwise not covered. This results in the recipient being faced with the impossible and fruitless task of attempting to discern the operation of a large number of paragraphs which are surplusage.

49 In my view it is neither possible nor appropriate to attempt to sever from the whole any limb which has meaningful and appropriate operation.

50 None of the submissions made by the liquidators meet these difficulties.

51 The Orders objectively construed are too wide and too uncertain to stand, irrespective of Mr Rankine’s subjective or perceived lack of difficulty with them. Even less is his subjective position relevant to their purported effect beyond the powers of the liquidators.

52 The width of the statutory definition of “examinable affairs” does not assist the liquidators. They have been given specific powers and functions which relate to matters which are within the examinable affairs of the Company. The fact that the statutory definition of examinable affairs is wider (as it must be) than the matters to which their specific powers and functions relate cannot expand their authority. In addition the Orders in their present form would be objectionable even if the liquidators’ powers and functions were not limited and applied to the examinable affairs of the Company to their fullest extent.

53 In my view the Orders should wholly be set aside.

54 Careful consideration should be given by the liquidators to the form of any further orders for production which are to be sought. I mention as an example subparagraph (f) of the definition of “Financial Document” which requires the recipient to determine what documents are:

needed to explain

55 This form of description (in my view impermissibly) requires the recipient to determine what is needed to explain to an unidentified explainee, presumably to a level enabling that hypothetical explainee to attain understanding. This is oppressive.

THE CHALLENGE TO PARTICULAR PARAGRAPHS AS GOING BEYOND THE APPOINTMENT ORDER

56 A separate attack was made on a number of specific paragraphs as not being authorised by the appointment order. The particular paragraphs were identified in submissions (being somewhat different to the paragraphs identified in the amended interlocutory process), as follows:

a paragraphs 4(b)(xii) and 4(h) on the grounds that the appointment order does not mention the Sylvania property and there is no apparent link between that topic (as defined in the dictionary section of the Orders) and the matters specified in the appointment order;

b paragraph 4 (presumably where it appears the second time) on the grounds that the Orders do not authorise an investigation or examination into the winding up “let alone require or authorise the production of the great wealth of documents actually or potentially caught”;

c paragraphs 8(c)-(e) and 9(b)(ii)-(iii) and, therefore, 9(c) on the grounds that they are not limited by reference either to time or subject matter to matters identified in the appointment order;

d paragraphs 14(a)(ii)-(vi) and the same subparagraphs in 14(b), (c), (d) and (e) “for the same reason as is 14(h)” (the reference to paragraph 14(h) appears to be in error – I have assumed it to be a reference to 4(h));

e paragraphs 15(d), (g), (h)(iv)-(v), (i)(iv)-(v), (j)(ii)-(iv), (k)(ii)-(iv), (l)(ii) and (v) “for the same reason”;

f paragraph 16(a) because of its timeframe and the lack of any relevant connection of the documents sought to the affairs of Nielsen & Moller or the transactions identified in the appointment order (Nielsen & Moller was not incorporated until early 2004);

g paragraph 16(b)(iii) because of the breadth of the definition of Documents and Financial Documents. They would, for instance, capture telephone bills, rates notices and all manner of documents sent to or received at the property which have nothing to do with the facts and circumstances identified in the appointment order; and

h paragraph 19 because according to its terms, it appears to require “production of every single document that Southern Cross has ever had anything to do with”.

57 It is not necessary to deal with those specific paragraphs having regard to my conclusion that the whole of the Orders should be set aside and that many of the particular paragraphs themselves contain the defect of requiring “All Documents” and “All Financial Documents” without any limitation as to time so that they should be set aside in any event.

58 Notwithstanding this, it is appropriate to comment on some of those paragraphs on the assumption that further properly framed orders for production will be sought seeking documents concerning the subject matter of those paragraphs.

59 I will deal with the particular paragraphs in the order in which they appear above:

a the nature and value of assets of the Company (including the Sylvania property) are conceivably relevant to the solvency of the Company which the liquidators are to investigate and could properly be the subject of an appropriately framed order.

b documents which are pertinent to the winding up proceeding may be appropriately sought provided they bear some specified relationship to the powers and functions of the liquidators. The unqualified request in the Orders does not meet this requirement.

c a appropriately framed request for all resolutions of Southern Cross and documents directly concerned with the meetings which passed them would not be too wide or beyond the subject matter of the powers and functions of the liquidators given that Southern Cross was only incorporated on or about 21 December 2007 and paragraphs 11, 12, 13, 14 and 15 of the appointment order. Similarly a properly framed request for all resolutions of GDF Nominees Pty Ltd would be sustainable given paragraph 16 of the appointment order.

d given the time limitation and paragraphs 1, 2, 3, 4, 5, 6, 7, 13, 14 and 15 of the appointment order an appropriately framed request for documents concerning the subject matters enumerated in paragraph 14 would be sustainable.

e in their present unqualified form I do not consider that these paragraphs are sustainable.

f given paragraph 19 of the appointment order a request for the documents enumerated in paragraph 16(a) of the Orders would, if limited to documents after the incorporation of the Company, be sustainable.

g an appropriately framed request for documents concerning the Sylvania property would be sustainable.

h paragraph 19 of the Orders in its present form is not sustainable because of its width and the absence of any specification of subject matter. There is force in the Rankines’ submission that it appears to require “production of every single document that Southern Cross has ever had anything to do with”.

THE PRIVILEGE CHALLENGE

60 It is not in issue that the Orders expressly call for documents which will be the subject of claims for legal privilege.

61 The predecessor to s 68 of the CPA, SCR Pt 36 r 36.12, was in the following terms:

“ 36.12 Attendance and production

62 That rule was commonly used (as is s 68 of the CPA now) in conjunction with examinations under the provisions of the Corporations Act 2001 (and its predecessors): see Re BPTC (In Liq) (No 2) (1992) 29 NSWLR 713.

63 The predecessor to UCPR Pt 1 r 1.9 was SCR Pt 36 r 36.13 which was in the following terms:

“ 36.13 Privilege

Evidence Act

64 There was no exact equivalent in the SCR to UCPR Pt 1 r 1.8. SCR Pt 23 (which concerned discovery and inspection of documents) contained rr 23.4(b) and (d) which were in the following terms:

“ Powers of Court

4

65 Under s 133 of the Evidence Act 1995 (NSW) the Court has power to inspect documents for the purpose of determining a contested privilege claim. That provision applies only to the adducing of evidence in the course of a hearing and not to ancillary processes such as discovery: see Esso Australia Resources Ltd v Commissioner of Taxation of the Commonwealth of Australia (1999) 201 CLR 49.

66 There has been some controversy in the authorities whether an examination under the corporations legislation is a proceeding for the purposes of the Evidence Act 1995 and whether it constitutes the adducing of evidence for the purposes of s 118, 119 and 122 of that Act: see Meteyard & Ors v Love & Orsas Receivers and Managers of Southland Coal Pty Ltd (2005) 65 NSWLR 36 (“Meteyard v Love”) at [73]-[75].

67 The UCPR defines “privileged document” with reference to the provisions of Pt 3.10 Div 1 of the Evidence Act 1995, which include ss 118, 119 and 122, so that there is now no longer content to the controversy: see Carbotech-Australia Pty Ltd v Yates [2008] NSWSC 1151 at [8]-[13].

68 The operation of SCR Pt 36 rr 36.12 and 36.13 in the context of orders for production which called for privileged documents was considered by the Court of Appeal in Meteyard v Love.

69 After concluding that client legal privilege was not excluded in relation to such production Basten JA, with whom Beazley and Santow JJA agreed, said the following:

“ [130] The consequences of that conclusion must be assessed by reference to the statutory scheme under which orders for production were made. Part 36, r 13 applies both to orders for production and production on notice under Pt 36, r 16. The latter rule provides that a party served with a notice “shall, unless the court otherwise orders, produce the document or thing in accordance with the notice”: r 16(1). The effect of r 13(2) is, it would appear, that no order relieving the party under r 16 is necessary: rather, where privilege is invoked, the rule “shall not require” production of the document, until the Court has directed that production “shall not be prevented” by subr 13(2). Whether a similar approach is to be adopted in relation to an order for production under r 12 is less clear. Subrule 13(3) does not say that in such a case the order “shall not require” production of a privileged document, but rather that the Court “shall not compel” such production, unless and until it directs that the production shall not be prevented. On one construction, the order is unenforceable, pending further consideration by the Court; on the other construction, an order should not be made in the first place seeking to compel production of documents the subject of privilege.

[131]

Re BPTC Ltd (In Liq) (No 5)

“… and further there will be instances where it is not appropriate to act ex parte but the registrar or other judicial officer should require notice of motion to be given to the party to be affected. More formal procedure would be appropriate where the call for documents is very extensive and compliance might be difficult. There would also be instances where it can be foreseen that there is likely to be some claim for public interest privilege or legal professional privilege, or other dispute.”

These comments are appropriate in the present case.

[132] Once it is understood that the operation of Pt 36, r 13, in relation to an order for production under r 12, precludes the Court from compelling production, even to itself, of a document subject to client legal privilege, an order having that effect should not have been made. Of course, it is not possible for this Court to say that particular documents are the subject of privilege: that issue has yet to be litigated. The mechanism for addressing these issues is by no means clear. In the present case the procedural issues have been blurred by the fact that each summons and order for production was made by the Deputy Registrar in the one, proceeding and each was challenged by way of “interlocutory process” prescribed with respect to an examination summons only. Given the importance of the issues raised by client legal privilege, and the absence of a clear procedure by which to raise the issues, in my view the preferable conclusion is that an order for production under Pt 36, r 12 should not be made ex parte where it may be anticipated that such questions will arise or, in the alternative, the order should make express exception for documents subject to privilege. The fact that a claim for privilege was likely to be raised in the present circumstances was known to the opponents when they sought the orders and should, in accordance with the obligations of a party seeking ex parte relief, have been disclosed to the Deputy Registrar. Whether or not those possibilities were disclosed is not known.

[133]

70 In Hypec Electronics Pty Ltd (In Liq) [2006] NSWSC 704 Barrett J had occasion to consider the conclusions reached in Meteyard v Love and at [4]-[6] said the following:

“ [4] In [ Meteyard v Love ], Basten JA, with whom Beazley JA agreed and Santow JA also agreed as to the relevant aspect, drew attention to the difficulties that arise where application is made for an order for production of documents that are potentially subject to privilege. Basten JA said at paras [130]–[133], referring to Pt 36 r 13 of the Supreme Court Rules 1970 (which was substantially similar to the present s 68):

[His Honour then quoted from Basten JA’s judgment in Meteyard v Love , which it is not necessary to repeat.]

[5] It is thus made clear that the court should not, in cases of apprehended claims for protection by way of legal professional privilege, simply make an order for production ex parte on the application of the liquidator. Rather, it must put in place some mechanism whereby privilege claims may be brought forward and examined before any compulsion is exerted by means of an order of the court.

[6]

Corporations Act

71 It follows that unless UCPR Pt 1 rr 1.8 and 1.9 have altered the position as it previously stood, the Orders should not have been made because they were made ex parte, and contrary to the holdings in Meteyard v Love and Hypec Electronics Pty Ltd (In Liq), they compel production to the Court of privileged material irrespective of whether there is objection.

72 Concomitantly the Orders do not provide a regime to enable any issue of privilege to be tested before production is required.

73 The liquidators put that the position under s 68 of the CPA and the UCPR is different to that which applied under the SCR and that the reasoning in Meteyard v Love no longer applies.

74 Attention was drawn to the difference in terminology between the present rule and the earlier one.

75 SCR Pt 36 r 36.13(2) provided that the Court “shall not compel … production of a document … until the Court directs that the production … shall not be prevented by this subrule …”

76 UCPR Pt 1 r 1.9(4) provides that a person objecting under subrule (3) “may not be compelled”. It was put that the earlier rule was mandatory whereas this one is in more expansive terms and accordingly allows compulsion in a way that the earlier rule did not.

77 It was also put that there is an independent power under UCPR Pt 1 r 1.8(b) to require the document to be produced to enable the Court to determine the question of privilege.

78 In further support of this submission I was referred to the decision of Austin J in Re Southland Coal in which his Honour said at paragraph 80:

[80]

Re Equiticorp Finance Ltd; Ex parte Brock

Meteyard

79 It was put that the procedure provided for in the prefatory note to the Orders was a permissible one under the UCPR, that it “constitutes adequate compliance with Austin J’s approach” in Re Southland Coal and that the fact that the Orders were made on an ex parte basis was not a relevant feature given that the prefatory note made provision for privilege to be protected.

80 In my view far from effecting a change so as to facilitate the making of an order for production which requires privileged documents to be produced before any question of privilege is tested UCPR Pt 1 rr 1.9(3) and (4) solidify the position as it stood under SCR Pt 36 r 36.13 and determined by the Court of Appeal in Meteyard v Love.

81 UCPR Pt 1 r 1.9(4) makes it clear that a person objecting may not be compelled to produce until any objection to production on the grounds that a document is privileged is overruled. This means that compulsion is not permitted until the objection is overruled.

82 The existence of the independent power to order production of a document to resolve a privilege question supports rather than undermines this conclusion. It would not be needed if the Court could in any event require production under the terms of the order for production before the privilege question was determined.

83 The Orders made here compel production of privileged material irrespective of whether there is an objection based on privilege and continue to do so even if there is an objection.

84 The prefatory note to the Orders has the specific object of facilitating production even though privilege is claimed, directly contrary to UCPR Pt 1 r 1.9(4).

85 The reasoning of Basten JA that orders for production such as the present Orders should not be made ex parte where it may be anticipated that questions of privilege will arise or there should be exception for documents subject to privilege applies with no less force to the present case than it did in the circumstances considered by his Honour.

86 Accordingly the Orders should not have been made.

87 It is not necessary to deal with the question of severability having regard to my conclusion that the whole of the Orders should be set aside.

88 So far as Re Southland Coal is concerned, Austin J was dealing with a situation clearly distinguishable from the present. His Honour had before him an inter partes opposed application for orders for production.

89 Moreover the Orders in the present case (by reason of the prefatory note) require production contrary to the operation of the presently applicable rules.

90 There is an additional difficulty with the terms of subparagraphs (a), (c) and (e) of the prefatory note which incorrectly limit privilege to communications with and advice from solicitors rather than legal practitioners.

91 I consider that the reasoning in Meteyard v Love, which binds me, requires there to be in the case of an ex parte application where it is plain (as it is here) that the Orders will require production of privileged documents that it is necessary for the Orders to make specific provision to allow objection to production to be taken, and if that occurs, for its determination before production is compelled.

92 Thereafter the Court may in determining any privilege issue require the documents to be produced for inspection by it.

93 An appropriate mechanism which meets the requirements of the reasoning of the Court of Appeal in Meteyard v Love was implemented by Barrett J in Hypec Electronics Pty Ltd (In Liq).

94 Another appropriate mechanism might be for the order for production to make it clear that if an objection is taken to the production of privileged documents they need not be produced until the objection is determined and for there to be a date before production upon which such an objection is to be notified specifying any particular document to which objection is taken and the grounds.

CONCLUSION

95 The order for production issued 26 August 2008 by Senior Deputy Registrar Musgrave to Mr Geoffrey James Rankine is set aside.

96 The order for production issued 26 August 2008 by Senior Deputy Registrar Musgrave to Mrs Karin Elke Rankine is set aside.

97 The liquidators are to pay the Rankines’ costs of the application.

“ SCHEDULE TO ORDER FOR PRODUCTION

Definitions

In this Schedule the following words have the following meanings

“Document” means:

(a) facsimiles, letters, emails, diary notes, file notes, reports, memoranda, deeds, agreements, contracts, guarantees, indemnities, mortgages, charges, debentures, legal costs agreement or legal disclosure notices, minutes or resolutions of directors meetings, minutes or resolutions of shareholders meetings, agendas;

(b) a share register or any other register;

(c) court applications, court pleadings, affidavits, statements, orders, judgments, statutory demands, demands;

(d) consents, notices of appointment;

(e) any other record of information including electronically maintained, whether in a hard drive, on a server or on a back up system, whether externally maintained or on a back up disk, where a hard copy can be printed out or recorded or reproduced on a disk; and

(f) anything from which writing can be reproduced with or without the aid of anything else.

Financial Document

(a) income tax returns, balance sheets, profit and loss accounts, cash flow projections or forecasts, management accounts, ledgers, journals, cashbooks, lists of creditors (including aged creditors), aged creditors anaylsis, lists of debtors (including aged debtors), aged debtors analysis, debtors ledgers, banking records (including cheques, deposit books and slips, payment advices and bank statements), invoices, tax invoices, statements including statements of account, delivery notes or delivery records, superannuation records or files, bills, memorandum of fees, accounts, depreciation schedules, lists of assets, fixed assets registers, including details of motor vehicles;

(b) valuations, market appraisals, stock takes, lists of stock or inventory, costings of stock;

(c) leases, hire purchase agreements, loans facility;

(d) terms of trade or supply;

(e) documents of prime entry;

(f) workings papers and other documents needed to explain:

(i) the methods by which financial statements are made up;

(ii) adjustments to be made in preparing financial statements; and

(iii) an annual financial report or a half yearly financial report;

(g) financial reports or half yearly financial reports, however compiled, recorded or stored;

(h) anything from which writing can be reproduced with or without the aid of anything else;

(i) any other record of financial information including electronically maintained, whether in a hard drive, on a server or on a back up system, whether externally maintained or on a back up disk, where a hard copy can be printed out or recorded or reproduced on a disk.

Part 2
“ Administrator ” means Wykes in his capacity as the administrator of Nielsen & Moller, appointed to that office on 31 January 2008 by Mr Rankine as the sole director of Nielsen & Moller

“ AMEX ” means American Express Australia Limited ACN 108 952 085

“ AMEX Officers ” means any officer or employee of AMEX who had dealings in relation to or concerning Nielsen & Moller, Southern Cross, Mr Rankine, Mrs Rankine and/or the Rankine Super Fund

“ Amirbeaggi ” means Farshad Amirbeaggi, a solicitor at Yates

“ ANZ ” means Australia and New Zealand Banking Group Limited

ANZ Account

(a) Nielsen & Moller with the ANZ and includes but is not limited to:

(b) Southern Cross with the ANZ.

“ ANZ Officers ” means any officer or employee of ANZ who had dealings in relation to or concerning Nielsen & Moller, Southern Cross, Mr Rankine, Mrs Rankine, the Rankines, the Rankine Super Fund

“ ASIC ” means the Australian Securities & Investment Commission

“ ATO Officers ” means any officer or employee of the Australian Taxation Office who had dealings in relation to or concerning Nielsen & Moller and/or Southern Cross

“ Commissioner ” means the Commissioner of Taxation or Deputy Commissioner of Taxation

“ Cooke ” means Oliver Cooke, an employee of Quest

“ Creditors ” means creditors of Nielsen & Moller

“ Crowe-Maxwell ” means Alte Crowe-Maxwell, being one of the joint and several special purpose liquidators of Nielsen & Moller

“ Famous ” means Famous Pacific Shipping Australia Pty Ltd, ACN 065 534 572

“ Federal Court Proceedings ” means proceedings in the Federal Court of Australia New South Wales District Registry at Sydney No. NSD 2596 of 2005 brought by National, Lo and Ouyang as applicants against Nielsen & Moller, Jack Moller and Moller as respondents

“ Furlong ” means Sarah Furlong, a solicitor at Yates

“ Gabriel ” means Christopher Ian Gabriel, a partner or principal of Gabriel & Partners

“ Gabriel & Partners ” means the accountants trading as Gabriel & Partners (ABN 6 644 194 497), located at 84 Cawarra Road, Caringbah, New South Wales, 2229

“ Gabriel Officers ” means Gabriel or any other partner or employee of Gabriel & Partners who had dealings with Nielsen & Moller, Southern Cross, Mr Rankine, Mrs Rankine, Moller, ANZ Officers, ATO Officers, Yates, Amirbeaggi, Furlong, White, Quest Officers, Wykes, Triglone or NAB Officers in relation to the 19 Matters

“ Goh ” means Frederick Goh, an officer of Famous

“ 19 Matters ” means one or more of the 19 matters which the SPLs have been empowered to investigate pursuant to order 2 of the Orders and paragraphs 1-19 of Schedule 1 to the Orders, a copy of which is attached

“ Lawler ” means Lawler Partners BR&I (a limited partnership) of which Wykes is a partner or principal

“ Lawyers and Advisors ” means any lawyer, including Mr Gary White of Whites Lawyers, Amirbeaggi and Furlong, or advisor of Nielsen & Moller, Southern Cross, Mr Rankine, Mrs Rankine or Moller who had dealings with any one or more of them or with Gabriel Officers, Quest Officers, ATO Officers, NAB Officers, Wykes, Triglone or ANZ Officers in relation to one or more of the 19 Matters

“ Liquidator ” mean Wykes in his capacity as the liquidator of Nielsen & Moller appointed to that office on 27 February 2008 when Nielsen & Moller was wound up voluntarily pursuant to a creditors voluntary winding up by reason of the interactive operation of sections 439C(c), 446A(1)(a), (2), (3), (4), 491, 494, 497 and 499(1) of the Act

“ Lo ” means Maggie Yeung Lo

“ Lord ” means John Frederick Lord, being one of the joint and several special purpose liquidators of Nielsen & Moller

“ McEntee ” means Lucas McEntee, the chief executive officer of Quest

“ Moller ” means Carl Christian Moller

“ Mr Rankine ” means Geoffrey James Rankine

Mr Rankine’s Guarantee

(a) any account in the name of Nielsen & Moller with the ANZ;

(b) any account in the name of Nielsen & Moller with the NAB;

(c) any account in the name of Nielsen & Moller with AMEX;

(d) any account in the name of Southern Cross with the ANZ;

(e) any account in the name of Southern Cross with the NAB;

(f) any account in the name of Southern Cross with AMEX.

“ Mrs Rankine ” means Karin Elke Rankine

Mrs Rankine’s Guarantee

(a) an account in the name of Nielsen & Moller with the ANZ being …;

(b) any other account in the name of Nielsen & Moller with the ANZ;

(c) any account in the name of Nielsen & Moller with the NAB;

(d) any account in the name of Nielsen & Moller with AMEX;

(e) any account in the name of Southern Cross with the ANZ;

(f) any account in the name of Southern Cross with the NAB;

(g) any account in the name of Southern Cross with AMEX.

“ NAB ” means National Australia Bank Limited

NAB Account

(a) Nielsen & Moller with the NAB;

(b) Southern Cross with the NAB.

“ NAB Officers ” means any officers or employees of NAB who had dealings in relation to Nielsen & Moller, Southern Cross, Mr Rankine, Mrs Rankine, the Rankines, Moller, the Rankine Super Fund and the Rankine Charge

“ National ” means National Autoglass Suppliers (Australia) Pty Ltd

“ Nielsen & Moller ” means Neilsen & Moller Autoglass (NSW) Pty Ltd, ACN 107 721 595, which is also the first defendant in this Proceeding

Nielsen & Moller Debt

(a) any supplier of goods, parts, or other materials to Nielsen & Moller used by it in its business;

(b) Famous;

(c) National;

(d) Lo;

(e) Ouyang;

(f) Paccon;

(g) ANZ;

(h) Commissioner;

(i) AMEX;

(j) the Rankines as trustees for the Rankine Super Fund;

(k) Moller;

(l) Quest;

(m) Gabriel & Partners;

(n) Southern Cross;

(o) Mr Rankine;

(p) Mrs Rankine;

(q) any company, trust or other entity related to or associated with any one more of the Rankines, Mr Rankine, Mrs Rankine, Moller, Quest, any Quest Officers, any Gabriel Officers;

(r) NAB;

(s) any other financial institution which had lent money to or provided a facility to Nielsen & Moller or which had leased or hired plant and equipment or other goods to Nielsen & Moller;

(t) other Creditors.

“ Nominees ” means GDF Nominees Pty Ltd, ACN 003 141 517

“ Orders ” means the orders made by Barrett J in the Proceeding on 28 May 2008 appointing Lord and Crowe-Maxwell the SPLs and making other orders in the terms set out therein, a copy of which are attached

“ Paccon ” means Paccon Logistics Pty Ltd, a creditor of Nielsen & Moller

“ Proceeding ” means Supreme Court of New South Wales Equity Division Corporations List Sydney Registry No. 2490 of 2008 between Lo, as the plaintiff, Nielsen & Moller, as the first defendant, and Wykes, as the second defendant

“ Quest ” means Quest Corporate Services Pty Ltd, ACN 122 082 517 trading as Quest Corporate Services located at St Martins Tower, Level 8, 31 Market Street, Sydney NSW 2000

“ Quest Officers ” means Cooke, McEntee, Rissman or any partner or employee of Quest who had dealings with Nielsen & Moller, Southern Cross, Mr Rankine, Mrs Rankine, Moller, the Rankines as trustees of the Rankine Super Fund, ANZ Officers, NAB Officers, ATO, Yates, Amirbeaggi, Furlong, White or Gabriel Officers

“ Rankine Charge ” means the fixed and floating charge given by Nielsen & Moller over its assets and undertaking to the Rankines as trustees of the Rankine Super Fund and dated 20 October 2006 and registered at ASIC on 1 December 2006

“ Rankine Loan ” means any loan or loans or the provision of money by the Rankines as trustees of the Rankine Super Fund to Nielsen & Moller

“ Rankine Super Fund ” means the Rankine Family Superannuation Fund of which the Rankines are trustees

“ Rankines ” means Mr Rankine and Mrs Rankine

“ Rissman ” means Matthew Rissman, an employee of Quest

“ Southern Cross ” means Southern Cross Autoglass Pty Ltd, ACN 129 010 019

“ Southern Cross Officers ” means Mr Rankine as the sole director of Southern Cross, and Mrs Rankine who was involved in the, at least in part, the day to day operations of Southern Cross and other officers or employees of Southern Cross who may be able to provide assistance or information in relation to the 19 Matters

“ SPLs ” means Lord and Crowe-Maxwell in their capacity as the special purpose liquidators of Nielsen & Moller

“ Sylvania Property ” means the purchase or sale by Mrs Rankine or the Rankines of a real property situated at … Sylvania in the State of New South Wales in or about September or October 2007.

“ White ” means Gary White of Whites Lawyers

“ Winding Up Proceeding ” means the application brought by Famous to wind up Nielsen & Moller filed on 21 December 2007 in the Supreme Court of New South Wales Equity Division Sydney Registry no. 6180 of 2007

“ Wykes ” means Christopher Thomas Wykes

“ Yates ” means Yates Beaggi Lawyers Pty Ltd ACN 111 804 383 acting for, at least, Mr Rankine

“ Ouyang ” means Harvey Hui Ouyang

Part 3

(i) the creation of or entry into the Rankine Charge;

(ii) the validity or enforceability of the Rankine Charge;

(iii) the exercise of rights under the Rankine Charge;

(iv) the appointment of a controller to Nielsen & Moller or any of its assets;

(v) the appointment of Mr Rankine as the controller to Nielsen & Moller, or any of its assets and exercise of rights and powers under the Rankine Charge;

(vi) the transfer, assignment or sale of some or all of the assets and undertaking and/or some or all of the liabilities and creditors of Nielsen & Moller to:

(vii) acts, conduct or other steps to effect the transfer, assignment or sale of some or all of the assets and undertaking and/or some or all of the liabilities and Creditors of Nielsen & Moller to Southern Cross (including assumption thereof) in about December 2007 – February 2008;

(viii) the value of any or all of the assets and undertaking of Nielsen & Moller in or about December 2007 - February 2008;

(ix) the value which should be attributed to February or all of the assets and undertaking of Nielsen & Moller to be the subject of the transfer, assignment or sale to Southern Cross in or about December 2007 - February 2008;

(x) Mr Rankine’s Guarantee;

(xi) Mrs Rankine’s Guarantee;

(xii) the Sylvania Property;

(xiii) the ANZ Account;

(xiv) the NAB Account;

(c) any market appraisal or valuation of, calculation or determination of the value, price or amount to be attributed to, any or all of the assets and undertaking, including goodwill, of Nielsen & Moller the subject of the transfer, assignment or sale to Southern Cross in or about December 2007 - February 2008;

(d) the transfer, assignment or sale of some or all of the assets and undertaking and/or some or all of the liabilities and creditors of Nielsen & Moller to Southern Cross (including assumption thereof) in or about December 2007 – February 2008;

(e) any demand made by the Rankines as trustees of the Rankine Super Fund for payment of any Rankine Loan;

(f) Mr Rankine’s Guarantee;

(g) Mrs Rankine’s Guarantee;

(h) the Sylvania Property;

(i) the ANZ Account;

(j) the NAB Account.

4. All Documents and all Financial Documents relating to or concerning the Winding Up Proceeding.

5. All Documents which record, evidence or concern any legal, financial, business or accounting advice relating to or concerning the Winding Up Proceeding.

6. All Documents and all Financial Documents which record, evidence or concern:

(a) any Nielsen & Moller Debt;

(b) the terms of any Nielsen & Moller Debt;

(c) any demand upon Nielsen & Moller for repayment of any Nielsen & Moller Debt;

(d) any default or failure by Nielsen & Moller to repay any Nielsen & Moller Debt;

(e) any request for, offer to or agreement to repay any Nielsen & Moller Debt over time or by instalments or to compromise the amount of such debt;

(f) any legal proceedings in respect of any Nielsen & Moller Debt;

(g) any legal, financial, business or accounting advice in relation to or concerning any of the matters in paragraphs (a)-(f) above.

7. All Documents and all Financial Documents which record, evidence or concern:

(a) the:

(b) any legal, financial, business or accounting advice in relation to or concerning any of the matters in (a) above.

8. All Documents which record, evidence or concern:

(a) any charge or debenture which Southern Cross has given to any person or entity and the terms thereof;

(b) all shares issued in and all shareholders (whether legal or beneficial) of Southern Cross;

(c) all meetings of and all resolutions of directors of Southern Cross;

(d) all meetings of and all resolutions of shareholders of Southern Cross;

(e) any legal, financial, business or accounting advice in relation to or concerning any of the matters in (a)-(c) above.

9. All Documents which record or evidence:

(a) the identity of any shareholder (whether legal or beneficial) and the number of shares held (whether legally or beneficially) at any time in:

(b) the holding of, discussion at and/or resolutions passed at any meeting of directors of or shareholders of:

(c) any legal, financial, business or accounting advice in relation to or concerning any of the matters in (a) and (b) above

10. All Documents and all Financial Documents which record, evidence or concern:

(a) the financial position, financial circumstances, solvency or insolvency of Nielsen & Moller from 1 July 2006 until the appointment of the Liquidator;

(b) any legal, financial, business or accounting advice in relation to the financial position, financial circumstances, solvency or insolvency of Nielsen & Moller, where such advice was given at any time on or after 1 July 2006 to or for the benefit of any one or more of:

(i) Nielsen & Moller;

(ii) Mr Rankine;

(iii) Mrs Rankine;

(iv) the Rankines as trustees of the Rankine Super Fund;

(v) Southern Cross;

(vi) Nominees.

11. All Documents and all Financial Documents which record, evidence or concern any legal, financial, business or accounting advice provided or given at any time on or after 1 July 2006 given to or for the benefit of any of:

(a) Mr Rankine;

(b) Mrs Rankine;

(c) Moller,

in relation to or concerning their duties as directors or officers (including as controller) of Nielsen & Moller and/or Southern Cross and/or the conduct or performance of those duties.

12. All Documents and all Financial Documents which record, evidence or concern any communications or dealings by or on behalf of Nielsen & Moller with the ATO in relation to or concerning:

(a) payment by Nielsen & Moller of its tax liabilities, including but not limited to, any request for, offer to or agreement or arrangement with, Nielsen & Moller to pay such tax liabilities over time or on an instalment term basis;

(b) any variation of any such agreement or arrangement referred to in (a) above;

(c) any default by Nielsen & Moller of the performance of and compliance with the terms of any such agreement or arrangement referred to in (a) above.

13. All Documents and all Financial Documents which record, evidence or concern any communications or dealings by or on behalf of Nielsen & Moller with any supplier of Nielsen & Moller or other Creditor in relation to or concerning any request for, offer to or agreement or arrangement with Nielsen & Moller to pay outstanding indebtedness to such suppliers or other Creditors over time or by instalments.

14. All Documents and all Financial Documents which record, evidence or concern any communications or dealings at any time on or after 1 July 2006 with the ANZ, the NAB or any other financial institution in relation to or concerning:

(a) any loan or facility to be provided to:

(i) Nielsen & Moller;

(ii) the Rankines as trustees of the Rankine Superannuation Fund;

(iii) Mr Rankine;

(iv) Mrs Rankine;

(v) Rankines;

(vi) Southern Cross;

(b) the terms of any loan or facility provided to:

(i) Nielsen & Moller;

(ii) the Rankines as trustees of the Rankine Superannuation Fund;

(iii) Mr Rankine;

(iv) Mrs Rankine;

(v) the Rankines;

(vi) Southern Cross;

(c) any request, offer or agreement or arrangement to vary the terms of any loan or facility provided to:

(i) Nielsen & Moller;

(ii) the Rankines as trustees of the Rankine Superannuation Fund;

(iii) Mr Rankine;

(iv) Mrs Rankine;

(v) the Rankines;

(vi) Southern Cross;

(d) the failure of, or default by:

(i) Nielsen & Moller;

(ii) the Rankines as trustees of the Rankine Superannuation Fund;

(iii) Mr Rankine;

(iv) Mrs Rankine;

(v) the Rankines;

(vi) Southern Cross,

to comply with the terms (including as varied) of any loan or facility;

(e) any demand for or request of:

(i) Nielsen & Moller;

(ii) the Rankines as trustees of the Rankine Superannuation Fund;

(iii) Mr Rankine;

(iv) Mrs Rankine;

(v) the Rankines;

(vi) Southern Cross,

for repayment of any such loan or facility;

(f) Mr Rankine’s Guarantee;

(g) Mrs Rankine’s Guarantee;

(h) the Sylvania Property;

(i) the ANZ Account;

(j) the NAB Account.

15. Any file, including an electronic file, created, held or maintained, in relation to or concerning any one or more of:

(a) Nielsen & Moller;

(b) the ANZ Account;

(c) the NAB Account;

(d) Southern Cross;

(e) Mr Rankine’s Guarantee;

(f) Mrs Rankine’s Guarantee;

(g) the Sylvania Property;

(h) the Rankines as trustees of the Rankine Superannuation Fund insofar as it relates to or concerns:

(i) the affairs of Nielsen & Moller including any Rankine Loan;

(ii) any equity in Nielsen & Moller;

(iii) the Rankine Charge;

(iv) superannuation contributions for and entitlements of the Rankines;

(v) the Sylvania Property;

(vi) Mr Rankine’s Guarantee;

(vii) Mrs Rankine’s Guarantee;

(viii) the ANZ Account;

(ix) the NAB Account;

(i) the Rankine Superannuation Fund insofar as it relates to or concerns:

(i) the affairs of Nielsen & Moller including any Rankine Loan;

(ii) any equity in Nielsen & Moller;

(iii) the Rankine Charge;

(iv) superannuation contributions for and entitlements of the Rankines;

(v) the Sylvania Property;

(vi) Mr Rankine’s Guarantee;

(vii) Mrs Rankine’s Guarantee;

(viii) the ANZ Account;

(ix) the NAB Account;

(j) Mr Rankine insofar as it relates to or concerns:

(i) the affairs of Nielsen & Moller;

(ii) the affairs of Southern Cross;

(iii) the Rankine Charge;

(iv) the Sylvania Property;

(v) Mr Rankine’s Guarantee;

(vi) Mrs Rankine’s Guarantee;

(vii) the ANZ Account;

(viii) the NAB Account;

(ix) any equity in Nielsen & Moller;

(k) Mrs Rankine insofar as it relates to or concerns:

(i) the affairs of Nielsen & Moller;

(ii) the affairs of Southern Cross;

(iii) the Rankine Charge;

(iv) the Sylvania Property;

(v) Mr Rankine’s Guarantee;

(vi) Mrs Rankine’s Guarantee;

(vii) the ANZ Account;

(viii) the NAB Account;

(ix) any equity in Nielsen & Moller;

(l) the Rankines insofar as it relates to or concerns:

(i) the affairs of Nielsen & Moller;

(ii) the affairs of Southern Cross;

(iii) the Rankine Charge;

(iv) the Sylvania Property;

(v) Mr Rankine’s Guarantee;

(vi) Mrs Rankine’s Guarantee;

(vii) the ANZ Account;

(viii) the NAB Account;

(ix) any equity in Nielsen & Moller;

(m) Moller insofar as it relates to or concerns the affairs of Nielsen & Moller or Southern Cross;

(n) the Rankine Charge.

16. In relation to the Rankine Superannuation Fund for the period 1 July 2003 to date:

(a) all financial reports or half yearly financial reports, however compiled, recorded or stored, balance sheets, profit and loss accounts, management accounts, cash flow projections or forecasts, income tax returns, ledgers, journals, directors reports or minutes, auditors reports or minutes, bank statements, deposit books, cheque books, schedules of beneficiaries’ entitlements;

(b) all Documents and all Financial Documents relating to or concerning:

(i) Mrs Rankine’s Guarantee;

(ii) Mr Rankine’s Guarantee;

(iii) the Sylvania Property;

(iv) the ANZ Account;

(v) the NAB Account.

17. All Documents and all Financial Documents relating to or concerning the performance by Mr Rankine of his duties in the performance of his office as the controller of Nielsen & Moller.

18. All lists of suppliers to Nielsen & Moller for the period 1 July 2007 to the appointment of the Liquidator.

19. In relation to Southern Cross, all income tax returns, balance sheets, profit and loss accounts, cash flow projections or forecasts, management accounts, trading accounts, ledgers, cashbooks, lists of creditors (including aged creditors), aged creditor analysis, lists of debtors (including aged debtors), aged debtor analysis, lists of suppliers, bank statements, cheque books and butts, deposit books, terms of trade or supply, lists of stock or inventory, stock takes, stock costings, lists of assets, fixed asset register, depreciation schedules, leases, hire purchase agreements, loan or facility agreements or deeds, guarantees and indemnities, charges, debentures and directors and officers insurance policies.

20. Professional indemnity insurance policies and cover notes covering the period 1 July 2006 to date.

21. From 1 July 2006 to date:

(a) your income tax returns;

(b) your financial reports and half yearly financial reports;

(c) your balance sheets;

(d) your profit and loss statements;

(e) All Documents and Financial Records which record or evidence any trust of which you are or were:

(i) an appointor of such trust;

(ii) a director or a shareholder (including beneficially) of a company that is or was an appointor of such trust;

(iii) a trustee of such trust;

(iv) a director or shareholder (including beneficially) of a company that is or was a trustee of such trust;

(v) a beneficiary or unit holder of such trust; or

(vi) a director or shareholder (including beneficially) of a company that is or was a beneficiary or a unitholder of such trust;

(f) All Documents and Financial Documents which record or evidence any interest, whether legal or beneficial, which you have or had in any real property;

(g) All Documents and Financial Documents which record or evidence any interest, whether legal or beneficial, in any real property which any company has or had where you are or were a director or a shareholder (including beneficially) of such a company;

(h) All Documents and Financial Documents which record or evidence any interest, whether legal or beneficial, in any real property which any trustee of a trust had or has where you are or were:

(i) an appointor of such trust;

(ii) a director or a shareholder (including beneficially) of a company that is or was an appointor of such trust;

(iii) a trustee of such trust;

(iv) a director or shareholder (including beneficially) of a company that is or was a trustee of such trust;

(v) a beneficiary or unit holder of such trust; or

(vi) a director or shareholder (including beneficially) of a company that is or was a beneficiary or a unitholder of such trust;

(i) All Documents and Financial Documents which record or evidence any interest, whether legal or beneficial, which you have or had in any personal property or other asset not being real property which cost, or if not purchased, has a value of, $10,000 or more;

(j) All Documents and Financial Documents which record or evidence any interest, whether legal or beneficial, in any personal property or other asset not being real property which cost, or if not purchased, has a value of, $10,000 or more, which any company has or had, where you are or were, a director or a shareholder (including beneficially) of such a company;

(k) All Documents and Financial Documents which record or evidence any interest, whether legal or beneficial, in any personal property or other asset not being real property which cost, or if not purchased, has a value of, $10,000 or more, which any trustee of a trust had or has, where you are or were:

(i) an appointor of such trust;

(ii) a director or a shareholder (including beneficially) of a company that is or was an appointor of such trust;

(iii) a trustee of such trust;

(iv) a director or shareholder (including beneficially) of a company that is or was a trustee of such trust;

(v) a beneficiary or unit holder of such trust; or

(vi) a director or shareholder (including beneficially) of a company that is or was a beneficiary or a unitholder of such trust;

(l) bank statements for any bank account in which you have or had a legal or beneficial interest;

(m) bank statements for any bank account in which any company has or had a legal or beneficial interest, where you are or were a director or a shareholder (including beneficially);

(n) bank statements for any bank account in which any trustee, has or had a legal or beneficial interest, where you are or were:

(i) an appointor of such trust;

(ii) a director or a shareholder (including beneficially) of a company that is or was an appointor of such trust;

(iii) a trustee of such trust;

(iv) a director or shareholder (including beneficially) of a company that is or was a trustee of such trust;

(v) a beneficiary or unit holder of such trust; or

(vi) a director or shareholder (including beneficially) of a company that is or was a beneficiary or a unitholder of such trust;

(o) the trust deed and any amendments thereof of any trust encompassed within (e), (h), (k) or (n) above;

(p) the financial reports, half yearly financial reports, balance sheets, profit and loss accounts, and tax returns of any trust encompassed within (e), (h), (k) or (n) above;

(q) the financial reports, half yearly reports, balance sheets, profit and loss accounts and tax returns of any company encompassed within (e), (g), (h), (j), (k), (m) or (n) above.”

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Citations

In the matter of Nielsen & Moller Autoglass (NSW) Pty Limited (in liq): Geoffrey James Rankine & Anor v John Frederick Lord & Anor [2008] NSWSC 1197

Most Recent Citation

Re Bill Express Limited (No. 1) [2010] VSC 651

Cases Citing This Decision

5

In the Matter of Triflex Electrical Pty Ltd (In Liq) [2012] NSWSC 1206

In the matter of Nielsen & Moller Autoglass (NSW) Pty Limited (in liquidation); Maggie Yeung Lo -v- Nielsen & Moller Autoglass (NSW) Pty Limited (in liq) [2008] NSWSC 1068

Lord v Rankine [2010] FMCA 668

Cases Cited

9

Statutory Material Cited

5

Lo v Nielsen & Moller (Autoglass) (NSW) Pty Ltd [2008] NSWSC 407

Onefone Australia Pty Ltd v One.Tel Ltd [2007] NSWSC 1188

Meteyard v Love [2005] NSWCA 444

CITATION:	In the matter of Nielsen & Moller Autoglass (NSW) Pty Limited (in liq) ; Geoffrey James Rankine & Anor v John Frederick Lord & Anor [2008] NSWSC 1197
HEARING DATE(S):	19 September 2008 and subsequent written submissions
JUDGMENT DATE :	14 November 2008
JUDGMENT OF:	Hammerschlag J
DECISION:	Orders for production set aside. Liquidators to pay the Rankines’ costs of the application.
CATCHWORDS:	CORPORATIONS - PRACTICE AND PROCEDURE – Orders for production – setting aside for oppression – respondents appointed special purpose liquidators (“the liquidators”) of first defendant company with specific powers and functions (“the appointment order”) – orders for production made, ancillary to summonses for examination issued pursuant to ss 596A and 596B of the Corporations Act 2001 (Cth), on ex parte application of liquidators (“the Orders”) – applicants seek to set aside Orders in whole on the basis of oppression, or in part either on the basis that the Orders go beyond the authority given to the liquidators by the appointment order or on the basis that they compel production of privileged documents – procedure for claiming privilege where orders for production made ancillary to summonses for examination issued pursuant to ss 596A and 596B of the Corporations Act 2001 – Uniform Civil Procedure Rules 2005 (NSW) Pt 1 rr 1.8 and 1.9 considered – Meteyard v Love as Receivers and Managers of Southland Coal Pty Ltd (2005) 65 NSWLR 36 applied – Orders set aside
LEGISLATION CITED:	Corporations Act 2001 (Cth) Civil Procedure Act 2005 (NSW) Uniform Civil Procedure Rules 2005 (NSW) Supreme Court Rules 1970 (NSW) Evidence Act 1995 (NSW)
CASES CITED:	Lo v Nielsen & Moller (Autoglass) (NSW) Pty Ltd [2008] NSWSC 407 Re BPTC Ltd (in liq) (No 5) (1993) 10 ACSR 756 Re Clutha Ltd (2000) 34 ACSR 685 Southern Pacific Hotel Services Inc v Southern Pacific Hotel Corporation Ltd; Kirby v Southern Pacific Hotel Corporation Ltd [1984] 1 NSWLR 710 Re Southland Coal Pty Ltd (recs and mngrs appt) (in liq) (2006) 58 ACSR 113 Re BPTC (In Liq) (No 2) (1992) 29 NSWLR 713 Esso Australia Resources Ltd v Commissioner of Taxation of the Commonwealth of Australia (1999) 201 CLR 49 Meteyard & Ors v Love & Ors as Receivers and Managers of Southland Coal Pty Ltd (2005) 65 NSWLR 36 Carbotech-Australia Pty Ltd v Yates [2008] NSWSC 1151 Hypec Electronics Pty Ltd (In Liq) [2006] NSWSC 704
PARTIES:	Geoffrey James Rankine Karin Elke Rankine John Frederick Lord & Atle Crowe-Maxwell in their capacities as joint Special Purpose Liquidators of Nielsen & Moller Autoglass (NSW) Pty Limited (in liquidation) ACN 107 933 184
FILE NUMBER(S):	SC 2490/2008
COUNSEL:	S. Golledge (Applicants) J. Svehla with J. Baird (Respondents)
SOLICITORS:	Yates Beaggi Lawyers (Applicants) McInnes Attorneys (Respondents)