Oswal, in the matter of Burrup Fertilisers Pty Ltd (Receivers and Managers Appointed) v Carson, McEvoy and Theobald (Receivers and Managers) (No 4)

[2013] FCA 398

FEDERAL COURT OF AUSTRALIA

Oswal, in the matter of Burrup Fertilisers Pty Ltd (Receivers and Managers Appointed) v Carson, McEvoy and Theobald (Receivers and Managers) (No 4) [2013] FCA 398

Citation:		Oswal, in the matter of Burrup Fertilisers Pty Ltd (Receivers and Managers Appointed) v Carson, McEvoy and Theobald (Receivers and Managers) (No 4) [2013] FCA 398
Parties:		PANKAJ OSWAL v IAN MENZIES CARSON, DAVID LAWRENCE MCEVOY AND SIMON GUY THEOBALD (IN THEIR CAPACITIES AS RECEIVERS AND MANAGERS OF BURRUP FERTILISERS PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (ACN 095 441 151))
File number:		WAD 370 of 2011
Judge:		SIOPIS J
Date of judgment:		26 April 2013
Date of hearing:	26 April 2013
Place:	Perth
Division:	GENERAL DIVISION
Category:	No Catchwords
Number of paragraphs:	6
Counsel for the Plaintiff:	Mr M Goldblatt
Solicitor for the Plaintiff:	Murcia Pestell Hillard
Counsel for the Defendants:	Mr K De Kerloy
Solicitor for the Defendants:	Herbert Smith Freehills

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION	WAD 370 of 2011

IN THE MATTER OF BURRUP FERTILISERS PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (ACN 095 441 151)

PANKAJ OSWAL
Plaintiff

IAN MENZIES CARSON, DAVID LAWRENCE MCEVOY AND SIMON GUY THEOBALD (IN THEIR CAPACITIES AS RECEIVERS AND MANAGERS OF BURRUP FERTILISERS PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (ACN 095 441 151))
Defendants

JUDGE:	SIOPIS J
DATE OF ORDER:	26 APRIL 2013
WHERE MADE:	PERTH

THE COURT ORDERS THAT:

1.There be an inquiry under s 423 of the Corporations Act 2001 (Cth) into the following matters:

a.the level of the fees and expenses charged by the defendants during the last six weeks of the receivership of Burrup Fertilisers Pty Ltd between 17 December 2011 and 1 February 2012;

b.the propriety of the defendants’ conduct in accepting the appointment to act as the receivers and managers of Burrup Fertilisers Pty Ltd;

c.the extent to which the defendants, in respect of the whole period of the receivership of Burrup Fertilisers Pty Ltd, charged:

i.fees for the professional time that Melbourne based partners and staff spent in travelling; and

ii.the expenses and disbursements incurred by Melbourne based partners and staff in respect of travel, accommodation and related activities; and

d.the extent to which the fact that the persons who worked on the receivership of Burrup Fertilisers Pty Ltd were based in Melbourne, increased the fees, expenses and disbursements which were charged by the defendants in respect of the receivership.

2.The inquiry be conducted by Siopis J at a date to be fixed.

3.By 7 June 2013, each of the defendants give discovery in accordance with Form 38 of all documents relevant to the matters referred to in Order 1 of these orders.

4.By 14 June 2013, the plaintiff is to conclude inspection of the discovered documents.

5.The matter be adjourned to a directions hearing at 10.15 am on 18 June 2013.

6.The plaintiff is to pay 80% of the defendants’ costs of the plaintiff’s application for the holding of an inquiry under s 423 of the Corporations Act 2001 determined by the orders made today, including reserved costs, to be taxed if not agreed.

7.The payment by the plaintiff of the costs referred to in Order 6 is stayed until further order or until to the conclusion of the inquiry.

Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION	WAD 370 of 2011

IN THE MATTER OF BURRUP FERTILISERS PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (ACN 095 441 151)

PANKAJ OSWAL
Plaintiff

IAN MENZIES CARSON, DAVID LAWRENCE MCEVOY AND SIMON GUY THEOBALD (IN THEIR CAPACITIES AS RECEIVERS AND MANAGERS OF BURRUP FERTILISERS PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (ACN 095 441 151))
Defendants

JUDGE:	SIOPIS J
DATE:	26 APRIL 2013
PLACE:	PERTH

REASONS FOR JUDGMENT

1. On 19 April 2013, I published reasons for judgment in this matter and asked the parties to make submissions as to the form of the orders and costs.  The following issues were raised by the parties.

2. The first issue is the formulation of the terms of the inquiry.  I am minded to accept the minute which has been put forward by Mr Oswal.  However, I understand the criticism which has been made by Mr De Kerloy that Order 1(a) is formulated simply by reference to a time period of six weeks and does not refer to the capacity in which the defendants charged the fees and expenses.  However, I am mindful that the inquiry will be concerned, as the reasons for judgment show, with the fees and expenses rendered by the defendants as receivers and managers of Burrup Fertilisers Pty Ltd, and invoiced as such.

3. The second issue between the parties was whether there should be discovery given before the filing of evidence; or whether the defendants should have a further opportunity to put on evidence in relation to the matters the subject of the inquiry.  The authorities say that the inquiry is to be conducted on an adversarial basis.  The usual adversarial process is for discovery to be given before the filing of evidence.  I do not see any good reason why one should depart from the usual process.

4. I will, therefore, order that the defendants give discovery in respect of the matters which are the subject of the inquiry.  Because the inquiry is limited in scope, I do not anticipate that the giving of that discovery would be particularly burdensome.  I will hear from the parties as to the appropriate timeframe for the giving of discovery.

5. As to the question of costs, my view is that Mr Oswal’s application for an order for an inquiry under s 423 of the Corporations Act 2001 (Cth) should be treated as a separate application in respect of the question of costs and that orders for costs in respect of that application should be made now. As is evident from my judgment, the defendants were substantially successful. In general, I found that Mr Oswal’s application was an inappropriate means by which to deal with the complexity of the matters which were raised in his application, and that many of these same matters are the subject of parallel proceedings. I also found that the Court did not have jurisdiction in relation to one of the matters. In my view, Mr Oswal should pay 80% of the defendants’ costs to be taxed or agreed. However, the payment of those costs be stayed until after the conclusion of the inquiry, or further order.

6. I will also hear from the parties in relation to a further directions hearing.

I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis.

Associate:

Dated:       2 May 2013