Onefone Australia Pty Ltd v One.Tel Ltd

[2007] NSWSC 1476

CITATION:	Onefone Australia Pty Ltd v One.Tel Ltd [2007] NSWSC 1476 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	14/12/07
JUDGMENT DATE :	14 December 2007
JURISDICTION:	Equity Division Corporations List
JUDGMENT OF:	Barrett J
EX TEMPORE JUDGMENT DATE:	14 December 2007
DECISION:	Orders that documents be produced to the court by ASIC and that special purpose liquidator have access to them
CATCHWORDS:	CORPORATIONS - winding up - special purpose liquidator appointed by court in voluntary winding up - application by special purpose liquidator for order compelling third party to produce documents - where documents required in connection with adjourned Part 5.9 examinations - documents related to examinable affairs of company
LEGISLATION CITED:	Civil Procedure Act 2005, s 68 Corporations Act 2001 (Cth), Part 5.9
CASES CITED:	Onefone Australia Pty Ltd v One.Tel Ltd [2007) NSWSC 1188
PARTIES:	Onefone Australia Pty Limited - First Plaintiff DCA Resources Australia Pty Limited - Second Plaintiff Pacific Finance Group Pty Limited - Third Plaintiff Talent2 Works Pty Ltd - Fourth Plaintiff One.Tel Limited - First Defendant Steven Sherman - Second Defendant Peter Walker - Third Defendant Paul Gerard Weston - Special Purpose Liquidator Australian Securities and Investments Commission - Respondent Consolidated Media Holdings - Non-party
FILE NUMBER(S):	SC 5291/03
COUNSEL:	Mr N A Cotman SC - Applicant - Special Purpose Liquidator Mr D R Stack - Respondent - Australian Securities and Investments Commission Dr A S Bell SC - Non-party - Consolidated Media Holdings
SOLICITORS:	NOT Lawyers - Special Purpose Liquidator Georgina Hayden - Respondent - Solicitor for Australian Securities and Investments Commission Atanaskovic Hartnell - Non-party

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

BARRETT J

FRIDAY 14 DECEMBER 2007

5291/03 ONEFONE AUSTRALIA PTY LTD & 3 OTHERS v ONE.TEL LTD (IN LIQUIDATION) & 2 OTHERS

JUDGMENT

1 I grant leave to the special purpose liquidator to file in court the interlocutory process which I initial and date, together with the affidavit of Paul Gerard Weston sworn today and exhibit PGW 1 thereto.

2 I direct that the interlocutory process be returnable instanter.

3 The special purpose liquidator of One.Tel seeks an order under s 68 of the Civil Procedure Act 2005 requiring production of certain documents to the court by the Australian Securities and Investments Commission. The special purpose liquidator also seeks an order that he have access to the material so produced.

4 Four questions have been agitated on this application. The first question refers back to my judgment of 23 October 2007 (Onefone Australia Pty Ltd v One.Tel Ltd [2007) NSWSC 1188) and the need there discussed for some proper basis for an order under s 68. In this instance, the basis is that concerned with the conduct of examinations under Part 5.9 of the Corporations Act 2001 (Cth). The special purpose liquidator has given evidence of steps taken to reactivate the adjourned examinations of Mr Miller and Mr Green. The material sought pursuant to s 68 relates directly to Mr Miller, in that it is material (or, at least, copies on disks that ASIC holds of material) derived from Mr Miller's laptop and Mr Miller's palm pilot.

5 The use of s 68 as an adjunct to the conduct of Part 5.9 examinations is thus shown, with the result that, as I have said, a proper basis for the exercise of the s 68 power exists. I refer in that connection to the observations at [15] to [20] of the judgment of 23 October 2007.

6 The second matter agitated is whether the functions of the special purpose liquidator as prescribed by orders of the court extend to enable him to conduct the reactivated examinations in relation to which the material in the hands of ASIC is sought. I am satisfied that Order 1(iv)(d) made on 15 November 2007 causes that action to be within the proper province of the special purpose liquidator as prescribed by the orders of the court.

7 The third matter is the need for the material to be connected to the examinable affairs of One.Tel. That connection is assured because of the specific reference, in the order the special purpose liquidator seeks, to material relevant to One.Tel.

8 The fourth matter that was agitated is the fact that, as is made clear by the special purpose liquidator's affidavit, and indeed by Order 1(iv)(d) to which I have referred, that the special purpose liquidator has in contemplation in seeking these documents is decision-making by him concerning the already commenced but unserved proceedings initiated by him against various parties.

9 There have been suggestions that because those proceedings have been commenced, the scope for abuse of process is greater than it would be if the proceedings were only in contemplation – in other words, investigations about the viability or desirability of continuing extant proceedings may stand in a different light from investigations about the viability or desirability of commencing proceedings in the first place.

10 I did observe in the judgment of 23 October 2007 that resort to s 68 as a indirect form of third party discovery in existing inter partes proceedings ran the risk of being an abuse of process. That comment was made in relation to the possibility that s 68 may have been activated by reference solely to the commenced proceedings. That is not the case now before me. As I have said, the foundation for the resort to s 68 in this instance is the progressing of the Part 5.9 examinations which is a firm foundation.

11 The degree of sensitivity to the possibility of abuse of process must, virtually by definition, be greater once proceedings have been commenced. But I do not think that the particular application now before me shows distinct hallmarks of abuse of process on that basis. Examinees and their advisors are always alive to the possibility that the proper bounds of examination will be overstepped, and no doubt the examinees in this case would make an appropriate application to the court if it should appear that the continuation of the examinations, either with or without the ASIC material the subject of the application with which I am presently concerned, was somehow beyond the proper purpose of such examinations.

12 As things now stand, the special purpose liquidator has shown a proper basis for the making of the orders he seeks, and those orders will be made, although submissions made by ASIC suggest that there may be some fine tuning necessary. I will now hear counsel on that.

[Counsel addressed further and short minutes were handed up]

13 I make the orders in the short minutes of order which I initial and date.

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17/12/2007	-	Solicitors' details omitted - Paragraph(s) Front sheet
17/12/2007	-	Typo - Paragraph(s) Solicitors' details on front sheet