NRMA Limited (Application of) NRMA Insurance Limited (Application of)

[2000] NSWSC 33

CITATION:	NRMA Limited (Application of) NRMA Insurance Limited (Application of) [2000] NSWSC 33 revised - 10/02/2000
CURRENT JURISDICTION:	Equity
FILE NUMBER(S):	SC 5131/99; 5132/99
HEARING DATE(S):	08/02/2000
JUDGMENT DATE:	8 February 2000
PARTIES :	NRMA Limited (ACN 000 010 506) (Plaintiff) NRMA Insurance Limited (ACN 000 016 722) (Plaintiff)
JUDGMENT OF:	Santow J

COUNSEL :	N O’Bryan/A G Bell (NRMA Limited) P M Wood/L McCallum (NRMA Insurance Limited) T D Castle (ASIC) David Lewis Parker: in person
SOLICITORS:	Corrs Chambers Westgarth (NRMA Limited) Freehill Hollingdale & Page (NRMA Insurance Limited) K Cuneo (ASIC)
CATCHWORDS:	CORPORATIONS — Procedure — Scheme of Arrangement — Court hearing under s411(1) for orders to convene meeting of members — Allegation by member of fraud levelled against directors — Requirement not satisfied to properly plead, particularise and substantiate by affidavit evidence — Leave declined to member to cross-examine managing director who had earlier filed affidavits — Relevance of time estimates.
LEGISLATION CITED:	Corporations Law, s411(1)
DECISION:	Declined to grant leave to cross-examine .

REVISED — 10 February, 2000
IN THE SUPREME COURT
OF NEW SOUTH WALES
IN EQUITY

SANTOW J

No. 5131/99
In the matter of NRMA LIMITED ACN 000 010 506 and the Corporations Law

NRMA LIMITED ACN 000 010 506
Plaintiff

No. 5132/99
In the matter of NRMA INSURANCE LIMITED ACN 000 016 722 and the Corporations Law

NRMA INSURANCE LIMITED ACN 000 016 722
Plaintiff

JUDGMENT — ex tempore

8 February 2000 1 HIS HONOUR: Mr Parker has put before the Court, as a member of the Association and Insurance, the matters set out in a memorandum dated 4 February 2000. That memorandum followed his seeking to appear in the present hearing. This is for an application by NRMA Limited (“Association”) and NRMA Insurance Limited (“Insurance”) to obtain the leave of the Court to convene meetings of the members of those respective companies pursuant to s411(1) of the Corporations Law for purposes of voting on schemes of arrangement. 2    I made it clear, when he sought to appear, that in order to provide a clear understanding of the matters that he wished to raise, those matters should be expressed in written submissions in which he identified any relevant issues with precision. 3    The submission received deals inter alia with material under the heading "The Proposal is Fraudulent". That part of the submission essentially contends that ASX listing would be impossible to obtain, contrary to the statements made in the scheme’s information memorandum, to the effect that application for listing will be made. 4    The information memorandum is at pains to point out that there is no certainty that listing approval will be obtained. Any indications in support of that possibility are contained in a letter from the ASX which is one of the documents referred to in the information memorandum; see the letter of 2 February 2000 appearing under tab 27 of the Judge's Issues folder provided by the Association and Insurance. 5    The basis for that contention, as I understand from the written submission of Mr Parker, is that such listing would not be available because Insurance is known to the directors as having "no real prospect of paying dividends" and that in those circumstances such a listing "would constitute a public fraud". 6    In making the submission that he has, Mr Parker appears without legal representation. That, of course, is his right but it bears upon his knowledge of forensic procedure in relation to allegations of fraud. 7    The requirement invariably applied by courts in relation to allegations of fraud, with their self-evident seriousness and capacity to injure if not well-based, is that they must be properly pleaded, fully particularised and supported by adequate affidavit evidence. Mr Parker has done none of these things, quite possibly because as a layperson he does not appreciate that requirement. I should add that neither do written submissions before me provide that material, even in informal fashion, such as would justify an assertion of fraud against members of the relevant boards. 8    Mr Parker has just now sought leave without prior notice to cross-examine Mr Whitlam as President of the Association and Chairman of the Insurance Board and Mr Dodd as Chief Executive, both of whom have earlier provided affidavit evidence. That evidence does not go to the issue of the capacity of Insurance to pay dividends but rather to the processes followed and the steps taken in promulgating the present proposals embodied in the two sets of the schemes. That affidavit evidence has been given, as is the usual practice in this Division, in affidavit form rather than orally. 9    In the present circumstances, I would not give leave to Mr Parker to cross-examine either Mr Whitlam or Mr Dodd. I should add that his application to do so is made in circumstances where previously he understood and agreed that his submissions would take place within approximately one hour. This was in order to accommodate the matters which have necessarily had to be dealt with in this Court, so that all aspects of these complex schemes requiring to be considered prior to any orders for convening of the hearing be dealt with in coherent fashion. 10    The principal reason for my declining such leave is that it is for the party making the allegation of fraud first properly to plead it, particularise it, and support it with such evidence as can fairly be brought and that has not taken place. A fishing expedition designed to elicit what should have first been particularised would be both unfair and unjust. 11    In those circumstances it would be an abuse of the Court's process to permit cross-examination. It would furthermore unduly prolong the hearing of the submissions, completely disrupting the time limit for submissions to which Mr Parker had given his assent and indeed had himself estimated. However, the substantive reason is the first of these two.

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Last Modified: 09/25/2000