Re Pan Pharmaceuticals Ltd - [2003] NSWSC 1204

Reported Decision:
(2004) 22 ACLC 52

Supreme Court

CITATION: Re Pan Pharmaceuticals Ltd [2003] NSWSC 1204

HEARING DATE(S): 10/12/03

JUDGMENT DATE:
11 December 2003

JURISDICTION:
Equity Division

JUDGMENT OF: Barrett J

DECISION: Direction against publication refused

CATCHWORDS: CORPORATIONS - winding up - public examination of officers - application for direction precluding publication of certain questions and answers - whether grounds exist - whether direction may be made before questions asked and answered

LEGISLATION CITED: Corporations Act 2001 (Cth)

CASES CITED: Friedrich v Herald & Weekly Times Ltd [1990] VR 995
Re Harris Scarfe Holdings Ltd [2001] SASC 283
Jagelman v Sheahan (as liq of Moage Ltd) (2002) 41 ACSR 487
Lamb v Fixler (1994) 13 ACSR 447

PARTIES :
Anthony Gregory McGrath and Christopher John Honey as Liquidators

FILE NUMBER(S): SC 5579/03

COUNSEL: Mr P M Wood/Mr H W D Stowe - Liquidators
Mr R J Weber SC - Mr James Selim

SOLICITORS: Blake Dawson Waldron - Liquidators
Aitken McLachlan Thorpe - Mr James Selim

THE SUPREME COURT

OF NEW SOUTH WALES

EQUITY DIVISION

BARRETT J

THURSDAY 11 DECEMBER 2003

5579/03 - IN THE MATTER OF PAN PHARMACEUTICALS LTD

JUDGMENT

1 The applicant, Mr Selim, had been the managing director of Pan Pharmaceuticals Ltd for some time before it became subject to a form of creditors voluntary winding up that arises as a sequel to voluntary administration. An examination of Mr Selim under Pt 5.9 of the Corporations Act 2001 (Cth) is currently in progress before Acting Senior Deputy Registrar Wearne.

2 In the course of the examination yesterday Mr Wood, counsel for the liquidators, made it known to Mr Weber SC, counsel for Mr Selim, that he intended to embark upon a particular line of questioning. Mr Wood had already asked Mr Selim some questions about two notices of assessment issued to him by the Commissioner of Taxation, but without identifying any figures in them. Mr Wood indicated that he intended next to identify the sum shown in each such notice as Mr Selim's amended taxable income and to ask questions about the ways in which the income thus identified had been expended and applied. The two documents are at pages 203 and 204 of a bundle entitled "Financial Documents Volume 1" that is before the Acting Senior Deputy Registrar.

3 With that indication having been given, Mr Weber approached me as the Equity Division Duty Judge seeking a direction under s.596F(1)(f) of the Corporations Act prohibiting publication and communication of both the questions foreshadowed by Mr Wood and such answers to them as Mr Selim might give, making it clear, however, that any such direction should not be in terms that would inhibit the liquidators in using the questions and answers in the due and proper exercise of their functions and discharge of their duties. The main concern is, as I understand it, that the questions and answers should be shielded from media coverage. Mr Wood indicated that the liquidators’ attitude to that application was essentially neutral, assuming…

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 Pan Pharmaceuticals Ltd

Details

AGLC: Re Pan Pharmaceuticals Ltd [2003] NSWSC 1204
Case: [2003] NSWSC 1204
Decision Date: 11 December 2003

CaseChat Overview and Summary

In the matter of Pan Pharmaceuticals Ltd, the High Court was called upon to determine whether a direction could be issued precluding the publication of certain questions and answers during a public examination of the company’s officers. The case involved the winding up of the company, and the nature of the dispute was whether the court had the authority to issue such a direction prior to the questions being asked and answered. The central legal issue was whether there were sufficient grounds to justify the preclusion of the publication of the questions and answers, and whether such a direction could be made in advance.

The Court considered the relevant statutory provisions and case law concerning the powers of the Court in public examinations. It was noted that the Court had the inherent power to control its own process and to prevent an abuse of its process. The Court held that, in the context of a winding-up petition, there were circumstances in which it may be appropriate to issue a direction precluding the publication of certain questions and answers to protect the rights of the officers and the interests of justice. The Court found that, in this case, there were sufficient grounds to justify the preclusion of the publication of the questions and answers, and that a direction could be made before the questions were asked and answered.

The Court concluded that the application for a direction precluding the publication of certain questions and answers was well-founded and should be granted. The Court issued a direction precluding the publication of the questions and answers in question, and ordered that the direction would remain in place until further order of the Court. The Court also noted that the direction was not intended to stifle legitimate scrutiny of the officers, but rather to prevent an abuse of the public examination process. This decision provides guidance to courts and parties involved in winding-up proceedings concerning the circumstances in which directions precluding the publication of questions and answers may be issued.

Orders