Re Southland Coal Pty Ltd - [2005] NSWSC 259

CITATION:
Re Southland Coal Pty Ltd [2005] NSWSC 259

HEARING DATE(S): 21 February 2005

JUDGMENT DATE :

31 March 2005

JURISDICTION:
Equity Division
Corporations List

JUDGMENT OF:
Young CJ in Eq

DECISION:
Application to set aside summonses for examination dismissed.

CATCHWORDS:
CORPORATIONS [319]- Examination- Examination of officers of and experts retained by solicitors for company's insurer- Whether oppressive or abuse of process. EVIDENCE [72]- Privilege- Insurer's solicitors retain experts after disaster but before claim made- Whether reports privileged.

LEGISLATION CITED:
Corporations Act 2001 (Cth) s 596B
Evidence Act 1995, ss 118, 119

CASES CITED:
DSE (Holdings) Pty Ltd v InterTan Inc (2003) 135 FCR 151
Gerah Imports Pty Ltd v Duke Group Pty Ltd (1993) 116 FLR 479; 12 ACSR 513
Grosvenor Hill v Barber (1994) 12 ACSR 646
Hamilton v Oades (1989) 166 CLR 486
Hong Kong Bank of Australia Ltd v Murphy (1992) 28 NSWLR 512
Kelly v Murphy (1993) 12 ACSR 365
Mitsubishi Electric Australia Pty Ltd v Victorian Workcover Authority (2002) 4 VR 332
Nickmar Pty Ltd v Preservatrice Skandia Insurance Ltd (1985) 3 NSWLR 44
Pratt Holdings Pty Ltd v Commissioner of Taxation (2004) 207 ALR 217
Re Allstate Explorations NL (2003) 46 ACSR 379
Re BPTC Ltd (1993) 10 ACSR 756
Re Global Medical Imaging Management Ltd [2001] NSWSC 481
Re GPI Leisure Corporation Ltd (1994) 12 ACLC 815
Re Highgrade Traders Ltd [1984] BCLC 151
Re Hugh J Roberts Pty Ltd (1970) 91 WN (NSW) 537
Re Interchase Corporation Ltd (1996) 21 ACSR 375
Re Spedley Securities Ltd; Ex parte Potts (1990) 2 ACSR 152
Sherlock v Permanent Trustee of Australia Ltd (1996) 22 ACSR 16
Sydney Airports Corporation Ltd v Qantas Airways Ltd [2005] NSWCA 47
Vardas v South British Insurance Co Ltd [1984] 2 NSWLR 652
Wheeler v Le Marchant (1881) 17 Ch D 675

PARTIES:
Alan Meteyard (1st Applicant), Lawrence Holland (2nd Applicant) Andrew Bart (3rd Applicant), Guy Raynal (4th Applicant), Bruce McKensey (5th Applicant), Crawford & Company (Australia) Pty Limited (6th Applicant), McKensey Mining Services Pty Limited (7th Applicant), QBE Insurance (Australia) Limited (8th Applicant)
Andrew John Love, Peter Ivan Felix Geroff and Alan Edward Lewis in their capacity as Receivers and Managers of Southland Coal Pty Limited (Receivers and Managers Appointed) (In Liquidation) (Opponents)

FILE NUMBER(S):
SC 1091/05

COUNSEL:
Dr A S Bell and P Kulevski (Applicants)
R G Forster SC and Ms J A Soars (Opponents)

SOLICITORS:
Wotton & Kearney (Applicants)
Henry Davis York (Opponents)

LOWER COURT JURISDICTION:

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

YOUNG CJ in EQ

Thursday 31 March 2005

1091/05 – RE SOUTHLAND COAL PTY LIMITED

JUDGMENT

1 HIS HONOUR: I am dealing with a series of applications to set aside a series of summonses for examination under s 596B of the Corporations Act 2001 (Cth) which were served on various officers of the QBE insurance group and expert consultants retained by them including a loss assessor.

2 The summonses were issued by a Deputy Registrar on application…

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.

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Details

Case: [2005] NSWSC 259
Decision Date: 31 March 2005

CaseChat Overview and Summary

The matter of Re Southland Coal Pty Ltd involved the liquidators of the company seeking an examination order under section 319 of the Corporations Act 2001. The liquidators, acting on behalf of the company, sought to examine the officers of and experts retained by the solicitors for the company’s insurer. The dispute centred on whether the liquidators' application constituted an oppressive or an abuse of process, and if the reports of the experts were privileged. The case was heard in the Federal Court of Australia.

The primary legal issues before the court were whether the liquidators' application to examine the officers of and experts retained by the insurer’s solicitors was oppressive or constituted an abuse of process, and whether the reports prepared by these experts were protected by legal professional privilege. The liquidators argued that the examination was necessary to uncover the insurer's potential liability, while the insurer contended that the application was oppressive and an abuse of process as the experts were retained before any claim was made against the insurer. Furthermore, the insurer asserted that the experts’ reports were privileged.

The court held that the liquidators' application did not constitute an abuse of process or an oppressive act. It was noted that the liquidators had a legitimate interest in investigating the insurer's potential liability. The court further ruled that the reports of the experts were not privileged because they were prepared before any claim was made against the insurer. The court reasoned that the privilege only applied to communications between a client and their legal advisor made for the dominant purpose of seeking or giving legal advice. Since the experts were engaged before any claim, their reports were not prepared for the dominant purpose of giving legal advice.

In conclusion, the court dismissed the insurer's application and ordered the examination of the officers of and experts retained by the insurer's solicitors to proceed. The court found that the liquidators' application was not oppressive or an abuse of process and that the experts’ reports were not privileged. The liquidators were thus allowed to proceed with their investigation into the insurer's potential liability.

Orders