Re Clutha Limited (In Liquidation) - [2003] NSWSC 235

Reported Decision:
(2003) 44 ACSR 734
(2003) 21 ACLC 1232

Supreme Court

CITATION: Re Clutha Limited (In Liquidation) [2003] NSWSC 235

HEARING DATE(S): 28/03/03

JUDGMENT DATE:
31 March 2003

JUDGMENT OF: Gzell J

DECISION: Directions limiting scope of examination and covering up material said to be privileged or confidential in documents produced. Interlocutory process otherwise dismissed.

CATCHWORDS: CORPORATIONS - Winding up - Application to set aside summons for examination and order for production - Inquiry as to remaining level of indemnity under policy indemnifying officers of the corporation - Proceedings by liquidator against officers - Whether inquiry oppressive - Order for production issued to insurer and summons for examination to its officer - Whether inquiry limited to defendants or potential defendants - A creditor funding liquidator and acquiring debts from other creditors - Whether inquiry in aid of third party - Whether abuse of process - Directions as to matters to be inquired into at examination. - PROCEDURE - Discovery - Whether access to affidavit in support of summons for examination should be granted - Covering up portions of documents said to be privileged or confidential

LEGISLATION CITED: Corporations Act 2001 (Cth)
Partnership Act 1892
Evidence Act 1995
Supreme Court Rules 1970

CASES CITED: Grosvenor Hill (Qld) Pty Ltd v Barber (1994) 48 FCR 301
Re BPTC Ltd (in liquidation) (1993) 10 ACSR 756
Kelly v Murphy (1993) 12 ASCR 365
Re Interchase Corp Ltd (in liquidation) (No 2) (1993) 47 FCR 253
Gerah Imports Pty Ltd v The Duke Group Ltd (in liquidation) (1993) 12 ASCR 513
Gerah Imports Pty Ltd v The Duke Group Ltd (in liquidation) (1994) 12 ASCR 600
Re BPTC Pty Ltd (in liquidation) (1994) 14 ASCR 460
Flanders v Beatty (1995) 16 ACSR 324
Boys v Quigley [2002] WASCA 99
Re Laurie Cottier Productions Pty Ltd (In Liquidation) (1992) 9 ACSR 513
Re BPTC Ltd (in liquidation), unreported, 16 March 1995

PARTIES :
Timothy James Cuming as Liquidator of Clutha Limited (In Liquidation) - Plaintiff/Respondents
David abbey and Pacific Indemnity Underwriting Agency Pty Ltd - Applicants

FILE NUMBER(S): SC 1834/03

COUNSEL: Mr RC Newlinds - For the Plaintiff/Respondent
Mr SD Rares SC/ Mr G Lucarelli - Defendant/Applicant

SOLICITORS: Piper Alderman Lawyers - Plaintiff/Respondent
Minter Ellison - Applicant/Defendant

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

GZELL J

MONDAY 31 MARCH 2003

1834/03 Re Clutha Ltd (In Liquidation)

JUDGMENT

1 The liquidator obtained a summons for the examination of David Abbey under the Corporations Act 2001 (Cth), s 596B. The liquidator also obtained under s 597(9) an order for production directed to Pacific Indemnity Underwriting Agency Pty Ltd to produce records concerning all costs charged against a directors’ and officers’ liability corporate reimbursement insurance policy issued by it in favour of the former officers of Clutha Ltd (in liquidation).

2 The policy was issued by Pacific Indemnity as agent for CGU Insurance Ltd. Mr Abbey is the manager, claims systems at CGU Professional Risks, a division of CGU. The liquidator and Clutha…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Re Clutha Limited (In Liquidation)

Details

AGLC: Re Clutha Limited (In Liquidation) [2003] NSWSC 235
Case: [2003] NSWSC 235
Decision Date: 31 March 2003

CaseChat Overview and Summary

The case of Re Clutha Limited (In Liquidation) involved the liquidator of Clutha Limited, the plaintiff, and the defendant, an insurance company. The liquidator sought to investigate the remaining level of indemnity under a policy that indemnified the corporation's officers. The liquidator was funded by a creditor and had acquired debts from other creditors, which raised questions about the scope of the inquiry. The insurer and its officer were ordered to produce documents and attend an examination, but the defendants challenged the summons and order. They argued that the inquiry was oppressive, extended beyond the defendants, was in aid of a third party, and constituted an abuse of process. The case required the court to determine whether the liquidator's actions were appropriate and whether the summons and order should be set aside.

The central legal issues were whether the liquidator's examination of the insurer and its officer was limited to the defendants or extended to potential defendants, whether the inquiry was in aid of a third party, and whether the process constituted an abuse of process. The court had to consider the scope of the inquiry and the rights of the defendants, as well as the liquidator's funding and the acquisition of debts from other creditors. The defendants argued that the liquidator's actions were oppressive and constituted an abuse of process, and that the inquiry should be limited to the defendants. The insurer and its officer also challenged the summons and order on the grounds that the inquiry was in aid of a third party and that the liquidator had not provided access to an affidavit in support of the summons for examination.

The court found that the liquidator's actions were not oppressive or an abuse of process, and that the inquiry was not in aid of a third party. The court noted that the liquidator was acting in the interests of the creditors and that the acquisition of debts from other creditors did not change the scope of the inquiry. The court also found that the defendants were not entitled to access to the affidavit in support of the summons for examination, as it contained privileged or confidential information. The court ordered that the summons for examination and order for production be set aside, but only to the extent that they related to the defendants. The court also made directions as to the matters to be inquired into at the examination, which were limited to the defendants.

The final orders of the court were that the summons for examination and order for production be set aside, but only to the extent that they related to the defendants. The court also made directions as to the matters to be inquired into at the examination, which were limited to the defendants. The court found that the liquidator's actions were not oppressive or an abuse of process, and that the inquiry was not in aid of a third party. The court also found that the defendants were not entitled to access to the affidavit in support of the summons for examination, as it contained privileged or confidential information. The liquidator was permitted to continue with the examination of the insurer and its officer, but only in relation to the defendants.

Orders