Oswal, in the matter of Burrup Fertilisers Pty Ltd (Receivers and Managers Appointed) v Carson, McEvoy and Theobald (Receivers and Managers) (No 7)
[2015] FCA 236
•17 March 2015
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 7) [2015] FCA 236
Citation: Oswal, in the matter of Burrup Fertilisers Pty Ltd (Receivers and Managers Appointed) v Carson, McEvoy and Theobald (Receivers and Managers) (No 7) [2015] FCA 236 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(s): WAD 370 of 2011 Judge(s): SIOPIS J Date of judgment: 17 March 2015 Catchwords: CORPORATIONS – inquiry into the conduct of receivers and managers under s 423(1) of the Corporations Act 2001 (Cth) – whether the scope of the inquiry should be expanded. Legislation: Corporations Act 2001 (Cth) s 423(1) Cases cited: Oswal, in the matter of Burrup Fertilisers Pty Ltd (Receivers and Managers Appointed) v Carson, McEvoy and Theobald (Receivers and Managers) (No 6) [2014] FCA 1435 Date of hearing: Determined on the papers. Date of last submissions: 13 March 2015 Place: Perth Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 9 Solicitor for the Plaintiff: Murcia Pestell Hillard 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)
BETWEEN: PANKAJ OSWAL
PlaintiffAND: 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:
17 MARCH 2015
WHERE MADE:
PERTH
THE COURT ORDERS THAT:
1.The scope of the inquiry ordered on 26 April 2013 be expanded to include an inquiry into:
(a)the propriety of the Defendants’ conduct in charging BFPL, and causing it to pay to PPB, professional fees and expenses for professional services allegedly provided by the Defendants to Australia and New Zealand Banking Group Limited during the period 19 November 2010 to 17 December 2010; and
(b)the amount which the Defendants charged BFPL, and caused it to pay to PPB, for professional fees and expenses for professional services allegedly provided to Australia and New Zealand Banking Group Limited during the period 19 November 2010 to 17 December 2010.
2.The plaintiff pay 40% of the defendants’ costs of the defendants’ interlocutory application dated 3 October 2014 in any event.
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)
BETWEEN: PANKAJ OSWAL
PlaintiffAND: 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:
17 MARCH 2015
PLACE:
PERTH
REASONS FOR JUDGMENT
In Oswal, in the matter of Burrup Fertilisers Pty Ltd (Receivers and Managers Appointed) v Carson, McEvoy and Theobald (Receivers and Managers) (No 6) [2014] FCA 1435 (Oswal (No 6)), I gave directions in aid of determining the question of whether the scope of the inquiry should be expanded to include an inquiry into whether the defendants acted properly in charging, and causing, Burrup Fertilisers Pty Ltd (the company) to pay for work which the defendants had carried out prior to their appointment as receivers and managers of the company at the instance of, and pursuant to the instructions of, their subsequent appointors, the Australia and New Zealand Banking Group Limited (ANZ bank) and ANZ Fiduciary Services Pty Ltd (ANZFS).
The plaintiff has filed an amended minute of proposed orders (the amended minute) which identifies the terms of the expanded inquiry for which he contends. The amended minute relevantly provides:
1.An inquiry, under s 423(1) of the Corporations Act 2001 (Cth), be held into:
(a)the propriety of the Defendants’ conduct in charging BFPL, and causing it to pay to PPB, professional fees and expenses for professional services allegedly provided by the Defendants to Australia and New Zealand Banking Group Limited during the period 19 November 2010 to 17 December 2010; and
(b)the amount which the Defendants charged BFPL, and caused it to pay to PPB, for professional fees and expenses for professional services allegedly provided to Australia and New Zealand Banking Group Limited during the period 19 November 2010 to 17 December 2010.
The plaintiff relied on the affidavit of Mr Montgomery Vallve, a legal practitioner acting for the plaintiff, which was sworn on 29 January 2015, in support of his application to expand the scope of the inquiry. The defendants relied on an affidavit of Mr Derreck Goh, a legal practitioner acting for the defendants, sworn on 19 February 2015.
The plaintiff’s original minute of proposed orders had proposed an inquiry of a wider scope – one addressing whether the pre-appointment work undertaken by the defendants and their staff was performed in an efficient and effective manner and in accordance with their professional duties.
In their written submissions, the defendants contended that s 423(1) of the Corporations Act 2001 (Cth) only empowers the Court to inquire into the conduct of controllers in relation to the performance of their powers and duties as controllers. The defendants went on to contend that the work, the subject of the impugned invoice 800511, was carried out prior to the appointment of the receivership and, therefore, the Court has no power to inquire into the conduct of the defendants in respect of work carried out prior to their appointment. It was in response to that contention by the defendants, that the plaintiff filed his amended minute, referred to at [2] above.
On 13 March 2015, the defendants filed a written response to the amendments made in the plaintiff’s amended minute. Importantly, the defendants’ written response stated at para 2 and para 3:
2.…the matter which the plaintiff now seeks to introduce into the inquiry is limited to the act or fact of charging and causing BFPL to pay PPB Invoice 800511 after the defendants were appointed as receivers of BFPL. As the defendants understand the position, this is sought to be encapsulated by paragraph 1(a) of the plaintiff’s amended minute of proposed orders dated 3 March 2015, with paragraph 1(b) of the amended minute (formerly paragraph 1(d)) remaining only so as to enable the court to determine the total amount which the defendants in fact charged and caused BFPL to pay for Invoice 800511.
3.On the basis that the additional matter sought to be introduced into the inquiry is limited in this way, if the court is minded to inquire into this matter then the defendants will not oppose orders in the terms set out in the plaintiff’s amended minute of proposed orders dated 3 March 2015. (Original emphasis.)
By an email dated 13 March 2015 to my associate, the plaintiff’s solicitors stated:
The Plaintiff confirms that the Defendants’ understanding of the Plaintiff’s amended minute of proposed orders, dated 3 March 2015, is correct. The Defendants have indicated that, if that is the position, they do not oppose orders being made in terms of the Plaintiff’s amended minute and that such orders can be made on the papers, if the Court is otherwise minded to expand the inquiry in this limited way.
The parties are now content for his Honour to make orders on the papers.
On the evidence and the submissions, I am satisfied that there is a sufficient basis for the Court to order an inquiry into the matters identified at paras 1(a) and (b) of the amended minute and I will so order. I will deal with the plaintiff’s proposed orders for discovery in the forthcoming case management conference.
I have also considered the parties’ submissions in respect of costs relating to the strike out application in Oswal (No 6). Each party enjoyed a measure of success in that strike out application. In my view, it is not possible to say that either party was substantially successful so as to entitle that party to any order for costs in their favour. However, in my view, an appropriate exercise of the discretion is that the plaintiff is to pay 40% of the defendants’ costs of the strike out application in any event.
I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis. Associate:
Dated: 17 March 2015
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