Rohrt (liquidator), in the matter of My Shared Services Pty Ltd (in liq)
[2024] FCA 1146
•4 October 2024
FEDERAL COURT OF AUSTRALIA
Rohrt (liquidator), in the matter of My Shared Services Pty Ltd (in liq) [2024] FCA 1146
File number(s): VID 421 of 2024 Judgment of: O'BRYAN J Date of judgment: 4 October 2024 Catchwords: PRACTICE & PROCEDURE – application by liquidator for suppression or non-disclosure order of parts of an affidavit supporting an application for an extension of time under s 588FF(3)(b) of the Corporations Act 2001 (Cth) – whether order necessary to prevent prejudice to the proper administration of justice – relevant considerations – where the interests of the liquidator in seeking suppression conflict with the interests of persons who have a right to be heard on the application for an extension of time – where the proper administration of justice generally favours the disclosure of the evidence relied on by the liquidator over suppression of that evidence, absent some compelling and overriding consideration – limited suppression order made Legislation: Corporations Act 2001 (Cth) ss 91, 439C(c), 588FF(1), 588FF(3)
Federal Court of Australia Act 1976 (Cth) ss 37AE, 37AF, 37AG
Insolvency Practice Rules (Corporations) 2016 (Cth) r 70-40
Cases cited: Banerjee, in the matter of City Steel Pty Ltd (in liq) [2024] FCA 481
BP Australia Ltd v Brown (2003) 58 NSWLR 322
Chin, in the matter of Agatha Trading Pty Ltd (in liq) [2020] FCA 991
Country Care Group Pty Ltd v Commonwealth Director of Public Prosecutions (No 2) (2020) 275 FCR 377
Fletcher and anor as liquidators of Octaviar Administration Pty Ltd v Anderson [2014] NSWCA 450
Fortress Credit Corporation (Australia) II Pty Ltd v Fletcher (2015) 254 CLR 489
Hogan v Australian Crime Commission (2010) 240 CLR 651
In the matter of Jehovah Jireh Enterprises Pty Ltd (in liq) [2020] NSWSC 1784
Krejci, in the matter of Greatcell Solar Limited (in liq) [2022] FCA 67
Krejci, in the matter of Union Standard International Group Pty Limited (No 8) [2023] FCA 1054
Onefone Australia Pty Ltd v OneTel Ltd [2010] NSWSC 498
Parker, in the matter of Worldwide Specialty Property Services Pty Limited (in liq) v Worldwide Specialty Property Services Pty Limited (in liq) [2017] FCA 687
Pogroske, in the matter of Bower Projects Australia Pty Ltd (in liq) [2019] FCA 1688
Re Cohalan & Mitchell Roofing (in liq) [2020] VSC 222
Robinson, in the matter of Reed Constructions Australia Pty Ltd (in liq) [2017] FCA 594
Division: General Division Registry: Victoria National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Number of paragraphs: 49 Date of last submission/s: 18 September 2024 Date of hearing: Determined on the papers Counsel for the Plaintiff: S M Hooper Solicitors for the Plaintiff HWL Ebsworth Lawyers Solicitors for the Interested Persons: B Mavropoulos of Beharis & Co ORDERS
VID 421 of 2024 IN THE MATTER OF MY SHARED SERVICES PTY LTD (IN LIQUIDATION) ACN 153 043 746
BETWEEN: RICHARD TRYGVE ROHRT IN HIS CAPACITY AS LIQUIDATOR OF MY SHARED SERVICES PTY LTD (IN LIQUIDATION) ACN 153 043 746
Plaintiff
AND: AYTUNC TEZAY and others named in the schedule
Interested Persons
ORDER MADE BY:
O'BRYAN J
DATE OF ORDER:
4 OCTOBER 2024
THE COURT ORDERS THAT:
1.Pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth) and subject to further order, the following parts of the affidavit of Richard Trygve Rohrt sworn on 17 May 2024 and exhibit RR-1 to that affidavit not be disclosed to any person other than the plaintiff, except with the consent of the plaintiff, until the conclusion of the liquidation of My Shared Services Pty Ltd (in liquidation) ACN 153 043 746 (the Company):
(a)in the contents section, the descriptions of the documents numbered 23 and 24;
(b)paragraphs 46 to 49 (inclusive);
(c)the contents of the table appearing below paragraph 55, save for the information concerning the month and year of each transaction;
(d)the balance of paragraph 57 after the words “appear to be voidable”; and
(e)documents 23, 24, 27, 28 and 29 within exhibit RR-1 (comprising pages 332, 333 to 336 and 619 to 625 of that exhibit).
2.By 4.00pm on 8 October 2024, the plaintiff file and serve a copy of the affidavit of Richard Trygve Rohrt sworn on 17 May 2024 and exhibit RR-1 to that affidavit containing redactions to the parts referred to in Order 1.
3.The plaintiff’s costs of the application for a suppression or non-disclosure order be costs in the winding up of the Company.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
O’BRYAN J:
Introduction
This judgment concerns an application for non-disclosures orders under s 37AF of the Federal Court of Australia Act 1976 (Cth) (FCA Act).
By originating process dated 17 May 2024 (and lodged for filing with the Court on that date), the plaintiff (whom I will refer to as the Liquidator), in his capacity as liquidator of My Shared Services Pty Ltd (in liquidation) ACN 153 043 746 (the Company), brought an application under s 588FF(3)(b) of the Corporations Act 2001 (Cth) (Act) seeking the following orders:
1. An order pursuant to section 588FF(3)(b) of the Act that the time for making an application under section 588FF(1) of the Act is extended up to and including to 30 June 2025, with respect to any voidable transactions involving My Shared Services Pty Ltd (in liquidation) (ACN 153 043 746) (the Company).
2. The plaintiff’s costs of this application be costs in the winding up of the Company.
3. An order pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth), on the ground that it is necessary to prevent prejudice to the proper administration of justice, that the affidavit of Richard Trygve Rohrt sworn on 17 May 2024 be marked confidential on the Court file, and not be published, disclosed or accessed except with the consent of the plaintiff, until the conclusion of the liquidation of the Company or further other.
The originating process was supported by the affidavit of the Liquidator sworn 17 May 2024 (supporting affidavit). The application for a suppression or non-disclosure order concerns the supporting affidavit.
The originating process stated that the Liquidator intended to serve a copy of the originating process on each of the following:
(a)Mr Aytunc Tezay;
(b)Mr Leigh Colin Penberthy;
(c)LeasePlus Pty Ltd ACN 155 287 442 (LeasePlus); and
(d)LeasePlus Holdings Pty Ltd ACN 154 926 833 (LeasePlus Holdings).
The application for a “shelf order” under s 588FF(3)(b) of the Act to extend the time to commence a proceeding under s 588FF(1) of the Act is to enable the Liquidator to investigate potential voidable transaction claims against at least those persons and entities.
On 20 June 2024, Beharis & Co filed notices of acting with respect to Mr Penberthy, LeasePlus and LeasePlus Holdings as interested persons.
On 21 June 2024, the Court made orders for substituted service on Mr Tezay.
On 29 August 2024, Beharis & Co also filed a notice of acting with respect Mr Tezay as an interested person.
At the case management hearing conducted on 30 August 2024, the interested persons informed the Court that they opposed the shelf order sought by the Liquidator under s 588FF(3)(b). The Liquidator informed the Court that he wished to narrow the scope of the suppression order sought in respect of the supporting affidavit and that the Liquidator had served on the interested persons a copy of the supporting affidavit with redactions to the parts that the Liquidator wished to keep confidential. The interested persons informed the Court that they opposed the application for a suppression order, submitting that any such order would prejudice their ability to respond to the Liquidator’s application to extend time and be procedurally unfair.
Following the case management hearing, I made the following orders with respect to the Liquidator’s suppression application:
1. By 4.00pm on 6 September 2024, the plaintiff file and serve any affidavit, and an outline submission of no more than 4 pages, in support of his application, by originating process, that certain parts of the affidavit of the plaintiff sworn on 17 May 2024 be suppressed (Suppression Application).
2. By 4.00pm on 18 September 2024, Aytunc Tezay, Leigh Colin Penberthy, Leaseplus Pty Ltd (ACN 155 287 442) and Leaseplus Holdings Pty Ltd (ACN 154 926 833) (together, Interested Persons) file and serve any affidavits, and an outline submission of no more than 4 pages, on which they, or any of them, wish to rely in opposition to the Suppression Application.
3. Unless the plaintiff or any of the Interested Persons inform the Court by 4.00pm on 20 September 2024 that they wish to be heard, the Suppression Application be determined on the papers.
The parties filed material in accordance with those orders.
I have determined the Liquidator’s suppression application on the papers. For the reasons that follow, a suppression or non-disclosure order will only be made in respect of limited aspects of the supporting affidavit and exhibit RR-1 to that affidavit. The order will continue until the conclusion of the liquidation of the Company.
Background facts
The following background facts are drawn from the supporting affidavit and are not the subject of the suppression application.
The Company was part of the “LeasePLUS” group of companies, which had common directors and shareholders. The Company was the operating company within the group, conducting a labour hire and professional contract services business, and employed a number of employees.
From 1 December 2017 onwards, the Company rented and occupied premises at Level 6, 464 St Kilda Road, Melbourne as a sub-tenant. It began to experience financial difficulties during the COVID-19 pandemic and failed to pay rent due to its landlord under the sub-lease.
The Company has one director, Mr Penberthy. Mr Tezay was a director of the Company until 6 November 2020.
On 18 May 2021, the Liquidator was appointed administrator of the Company.
On 23 June 2021, the creditors of the Company resolved that the Company be wound up pursuant to s 439C(c) of the Act and the Liquidator became the liquidator of the Company.
In the Liquidator’s view, the Company was insolvent from at least 30 June 2020 onwards.
The current claims of creditors against the Company totals $679,182.51 based on formal proofs of debt provided to the Liquidator.
For the purpose of s 91 of the Act, the relation-back day for the Company is 18 May 2021, being the day that the Liquidator was appointed administrator of the Company.
On 22 September 2021, the Liquidator circulated a report to the Company's creditors pursuant to r 70-40 of the Insolvency Practice Rules (Corporations) 2016 (Cth). The report indicated that, based on current information, a dividend to creditors was unlikely and that, as at the date of the report, the Liquidator was effectively without funding. The report disclosed that the Liquidator had raised with the creditors of the Company the prospect of funding further investigations or recovery proceedings, however the Liquidator had not identified any potentially voidable transactions at that time and did not receive any proposals from any creditors to fund further investigations.
The Liquidator deposed that:
… until a funding arrangement was agreed on 15 May 2024, I have been unable to conduct further investigations and, in the time available, have not been any [sic] prosecute (nor determine the merits and commerciality of prosecuting) any voidable transaction proceedings pursuant to s 588FF(1) of the Act before the Limitation Date.
…
I have subsequently negotiated and entered into a funding agreement between myself in my capacity of liquidator of the Company and [redacted] to fund further investigation of the conduct surrounding the Company.
The delay in undertaking these steps sooner is a product of the lack of resources within the Company for me and a lack of earlier funding to utilise to conduct my investigations.
The extension of time will allow me to conduct further investigations into potential phoenix activities, creditor-defeating dispositions, unreasonable director-related transactions and insolvent trading claims [redacted].
The Liquidator’s evidence and submissions
The Liquidator filed and served a further affidavit sworn 6 September 2024 which:
(a)identified those parts of the supporting affidavit in respect of which the Liquidator pressed his application for a suppression or non-disclosure order;
(b)annexed a copy of the supporting affidavit with redactions reflecting the narrowed scope of the Liquidator’s application for a suppression or non-disclosure order; and
(c)deposed that the redacted affidavit had been served on the interested persons.
The redactions made to the supporting affidavit fall into two categories. The first category concerns communications between a creditor of the Company and the Liquidator by which the creditor sought certain information from the Liquidator in order to determine whether to provide funding to the Liquidator for the purpose of conducting further investigations in respect of voidable transactions. It is relevant to note that the supporting affidavit provides no information concerning the terms of the funding arrangements agreed between the Liquidator and the creditor. The second category concerns the transactions that the Liquidator proposes to investigate further, which includes certain transfers from the Company’s bank accounts.
The Liquidator deposed that, if the application to extend time is successful, the Liquidator intends to:
(a)conduct further investigations into potential phoenix activities, creditor-defeating dispositions, unreasonable director-related transactions and insolvent trading claims; and
(b)seek production of documents concerning, and to publicly examine various persons about, the affairs of the Company.
The Liquidator further deposed that he is concerned that, if the redacted content is revealed to the interested persons, or others, it would place him at a forensic disadvantage in his further investigations of the Company’s affairs and in his conduct of public examinations, including because the interested persons would be forewarned as to particular transactions of interest before the Liquidator has had the opportunity to investigate those transactions further, to the disadvantage of the Company’s creditors.
In his written submissions, the Liquidator submitted that considerations which may justify the making of suppression orders include:
(a)commercial sensitivity;
(b)the clear public interest in the due administration of the estates of insolvent companies for the benefit of creditors; and
(c)where disclosure of material would confer an unfair forensic advantage on an opposing party (and thereby prejudice the proper administration of justice).
The Liquidator further submitted that courts have made orders suppressing parts of affidavits in support of extension applications under s 588FF(3)(b) for these reasons in the past, and submitted that the making of such orders has been described as “routine” and “not unusual”.
The Liquidator argued that the redacted content reveals the detail of transactions of interest to the Liquidator, and of the content of communications between the Liquidator and a creditor concerning litigation funding matters. If the details of those transactions or communications are revealed to the interested persons, the Liquidator will be put at a forensic disadvantage and the due administration of the Company’s liquidation potentially compromised. The interested persons will be forewarned, at a time when the Liquidator’s investigations are ongoing and before any of them might be required to produce documents and/or be the subject of public examination, of the transactions of particular interest to the Liquidator. The Liquidator argued that the provision of such detail is unnecessary for the interested persons to respond to the application to extend time.
The interested persons’ submissions
In their written submissions, the interested persons first advanced a procedural issue. They submitted that, as the Liquidator had narrowed his application for a suppression or non-disclosure order (in comparison to the order sought in the originating process), the Liquidator was required to seek leave of the Court to amend the originating process to include a new or amended claim of relief. The interested persons further submitted that the Liquidator is now out of time to do so, as any such application would be after 17 May 2024 (which the interested persons contend is the last day on which an application under s 588FF(1) can be made).
On the substantive issue, the interested persons argued that the authorities cited by the Liquidator in support of the application can be distinguished from this proceeding as involving complex liquidations of multiple company groups with millions owed to creditors with extensive investigations by the liquidator, coupled with directors not providing unfettered access to information. The interested persons submitted that, in the context of complex groups of companies and detailed investigations over long periods of time with information not readily made available, it is understandable that suppression orders are usual or routine. The interested persons argued that, in contrast, suppression is not appropriate in this matter because:
(a)relevant records of the Company were provided promptly to the Liquidator culminating in the report to creditors dated 22 September 2021;
(b)the statutory report illustrates that the Liquidator was well funded, formed the view that recovery proceedings were not commercial and called for funding of litigation early, but creditors did not provide funding; and
(c)the Liquidator has not explained why it took until 15 May 2024 to secure funding.
The interested persons submitted that the Liquidator has failed to offer any explanation as to how he would suffer prejudice by disclosure of the redacted content of the supporting affidavit sufficient to set aside the public interest in open justice. In so far as the redacted content relates to funding arrangements, the interested persons submitted that that information may more fully explain the reason for delay by creditors.
Consideration
The Court’s power to make suppression and non-disclosure orders is governed by Part VAA of the FCA Act. In the present case, the Liquidator seeks a suppression or non-disclosure order under s 37AF(1)(b)(iv), which empowers the Court to make such an order in respect of information lodged or filed in the Court, and on the ground specified in s 37AG(1)(a), that the order is necessary to prevent prejudice to the proper administration of justice. Section 37AE of the FCA Act provides that, in deciding whether to make a suppression order, the Court must take into account that a primary objective of the administration of justice is to safeguard the public interest in open justice.
Two of the submissions advanced by the interested persons can be rejected at the outset. The first is that the Liquidator is required to amend his originating process in order to narrow his application for a suppression or non-disclosure order. That submission has no merit. The narrower order is within the ambit of the relief sought by the Liquidator in the originating process and no formal amendment is required. The second is that the authorities cited by the Liquidator in support of the application for a suppression or non-disclosure order can be distinguished from this proceeding because they involved complex liquidations of multiple company groups with millions owed to creditors with extensive investigations by the liquidator, coupled with directors not providing unfettered access to information. While those circumstances are relevant to the exercise of the Court’s discretion to extend time under s 588FF(3)(b), the circumstances are largely irrelevant to the exercise of power to make a suppression or non-disclosure order under s 37AF.
It is the case, however, that many of the authorities relied on by the Liquidator do not provide clear support for the Liquidator’s application. In particular, many of the authorities concerned the non-disclosure of funding arrangements secured by liquidators to pursue further investigations or to commence proceedings (see for example Robinson, in the matter of Reed Constructions Australia Pty Ltd (in liq) [2017] FCA 594; Pogroske, in the matter of Bower Projects Australia Pty Ltd (in liq) [2019] FCA 1688; and Krejci, in the matter of Greatcell Solar Limited (in liq) [2022] FCA 67). It is conventional to make a non-disclosure order to protect the terms of funding arrangements between liquidators and funders: Onefone Australia Pty Ltd v OneTel Ltd [2010] NSWSC 498; (2010) 78 ACSR 163 at [2]-[3]. However, as noted earlier, the Liquidator’s affidavit does not disclose any information concerning the funding arrangement entered into by it. Accordingly, the application for a suppression or non-disclosure order cannot be justified on that basis. Other cases relied on by the Liquidator concern the non-disclosure of legal advice in respect of extant proceedings or other privileged communications (Krejci, in the matter of Union Standard International Group Pty Limited (No 8) [2023] FCA 1054; and Banerjee, in the matter of City Steel Pty Ltd (in liq) [2024] FCA 481). Again, those cases do not assist the Liquidator because none of the redacted content discloses legal advice or privileged communications. In other cases relied on by the Liquidator, the categories of information for which a suppression or non-disclosure order was made was not clearly identified in the judgment (see for example Chin, in the matter of Agatha Trading Pty Ltd (in liq) [2020] FCA 991).
In the present matter, it is important to recognise that the Liquidator and the interested persons have competing interests in respect of the disclosure of the redacted content. On the one hand, the Liquidator wishes to maintain confidentiality with respect to the redacted content, as the Liquidator considers that disclosure may prejudice his further investigation of the transactions of interest. On the other hand, the interested persons wish to have access to all of the information relied on by the Liquidator in support of his application to extend time in order to contest that application. In that regard, it is well-established that persons who may be adversely affected by an order under s 588FF(3)(b) should be afforded procedural fairness: BP Australia Ltd v Brown (2003) 58 NSWLR 322 at [133]-[136] (Spigelman CJ, Mason P and Handley JA agreeing); Fletcher and anor as liquidators of Octaviar Administration Pty Ltd v Anderson [2014] NSWCA 450; (2014) 103 ACSR 236 at [99] (Barrett JA, Beazley P and McColl JA agreeing).
Issues that will be relevant to the Court’s decision whether to extend time under s 588FF(3)(b), and correspondingly issues on which both the Liquidator and the interested persons would wish to be heard, include the adequacy of the Liquidator’s explanation for the delay in commencing proceedings, the merits of the proposed proceeding, and any prejudice to the prospective defendants that is likely to arise from granting the extension: see Parker, in the matter of Worldwide Specialty Property Services Pty Limited (in liq) v Worldwide Specialty Property Services Pty Limited (in liq) [2017] FCA 687 at [16]; Re Cohalan & Mitchell Roofing (in liq) [2020] VSC 222 at [30] to [33]. However, where a liquidator’s purpose in seeking the extension of time is simply to put themselves into a position where the liquidator can properly decide whether or not to bring proceedings, a preliminary inquiry into the merits of any consequent proceedings may not always be necessary: In the matter of Jehovah Jireh Enterprises Pty Ltd (in liq) [2020] NSWSC 1784 at [8].
The ground specified in s 37AG(1)(a) for the making of a suppression or non-disclosure order, that the order is necessary to prevent prejudice to the proper administration of justice, is not engaged lightly. The word “necessary” is a strong word: Hogan v Australian Crime Commission (2010) 240 CLR 651 at [30]. As observed by the Full Federal Court in Country Care Group Pty Ltd v Commonwealth Director of Public Prosecutions (No 2) (2020) 275 FCR 377 at [8], suppression or non-publication orders should only be made in exceptional circumstances; the paramount consideration is the need to do justice between the parties.
I am not persuaded that a suppression or non-disclosure order in respect of all of the redacted content of the supporting affidavit is necessary to prevent prejudice to the proper administration of justice. The Liquidator’s arguments focus solely on his own interests and ignores the interests of the interested persons. The present application is required because the Liquidator has not brought an application in respect of voidable transactions within (relevantly) the three year period from the relation-back day as required by s 588FF(3)(a). In those circumstances, the Liquidator requires the leave of the Court to extend time. The statutory time limit was introduced so as to balance the interests of unsecured creditors with the interests of those who have had past dealings with the company in liquidation. The purpose of s 588FF(3)(b) is to confer a discretion on the court to mitigate, in an appropriate case, the rigours of the time limits imposed by s 588FF(3)(a): Fortress Credit Corporation (Australia) II Pty Ltd v Fletcher (2015) 254 CLR 489 at [24]. Persons who may be adversely affected by the extension of time must be afforded procedural fairness which means, in general terms, a right to be heard on the application. The Liquidator’s interest in maintaining confidentiality over communications with the creditor who has agreed to fund further investigations and over the transactions of interest conflicts with the interests of the interested persons to contest the basis of the application. If the Liquidator considers that it is necessary to adduce evidence with respect to those matters to support his application for an extension of time, that evidence necessarily assumes some significance in the hearing and determination of the application. It is the Liquidator’s choice to adduce that evidence. The proper administration of justice in those circumstances generally favours the disclosure of the evidence relied on by the Liquidator over suppression of that evidence, absent some compelling and overriding consideration.
Nevertheless, I consider that a suppression or non-disclosure order is justified in respect of certain limited aspects of the redacted content in the supporting affidavit.
The first aspect concerns the evidence with respect to communications between the Liquidator and the creditor that has agreed to provide funding to the Liquidator. As stated earlier, it is conventional to make a non-disclosure order to protect the terms of funding arrangements between liquidators and funders. Disclosure of funding arrangements to a defendant may give the defendant an advantage in that the defendant is able to conduct the defence of the proceeding (including negotiating a resolution) with knowledge of the financial resources available to the liquidator. That advantage undermines the ability of a liquidator to pursue the proceeding on its merits, and for that reason the advantage is considered to be unfair and prejudicial to the proper administration of justice. In the present case, however, the supporting affidavit does not disclose the funding arrangements secured by the Liquidator. The supporting affidavit only discloses the identity of the creditor that has provided funding to the Liquidator, the identity of the lawyers acting for that creditor and certain communications between the creditor and the Liquidator that resulted in the provision of funding. In my view, a suppression or non-disclosure order is justified in respect of the content of the communications between the creditor and the Liquidator, but not the fact of the communications or the identity of the creditor (or, by extension, its lawyers). The content of the communications reveals (to some extent) the consideration that was given by the creditor and the Liquidator to the transactions of interest. That consideration is confidential to the creditor and the Liquidator and the disclosure of the consideration would confer an unfair advantage on a future defendant. The disclosure would unfairly prejudice the Liquidator in the performance of the Liquidator’s functions and powers under the Act, and thereby prejudice the administration of justice. Conversely, a suppression or non-disclosure order is not justified in respect of the identity of the creditor that has provided funding to the Liquidator, the identity of the lawyers acting for that creditor or the fact and timing of communications between the creditor and the Liquidator that resulted in the provision of funding. The creditor is already identified in the supporting affidavit as part of the evidentiary narrative that seeks to explain why the Liquidator did not commence a proceeding under s 588FF within the three year time limit. The narrative continues with more recent communications with the Liquidator. The narrative is relevant to the Liquidator’s application to extend time and, in my view, suppression of those parts of the supporting affidavit (apart from the content of the communications) would be procedurally unfair to the interested persons and thereby prejudice the administration of justice.
The second aspect concerns the evidence with respect to the transactions of interest. I accept that the Liquidator has a legitimate interest in maintaining confidentiality over the details of the transactions of particular interest, including specific factual matters that the Liquidator considers are relevant to the overall consideration of the transactions of interest. Disclosure of those details and matters may prejudice the Liquidator’s future investigation of the transactions of interest and thereby prejudice the interests of creditors. However, the redacted content includes evidence that is merely a high level description of the transactions of interest in circumstances where the high level description is already the subject of disclosure by the Liquidator. In particular, the supporting affidavit already discloses that the Liquidator wishes to investigate possible phoenix activity, and states (without redaction) that:
Any transfer or purported transfer of the business of the Company to one or more other entities in the Group - including entities associated with Mr Penberthy as director and Mr Tezay as former director - appear to me to have had little or no benefit to the Company and may constitute an unreasonable director-related transaction and or a creditor-defeating disposition under the Act.
Some of the redacted content is merely to the same effect and suppression cannot be justified. However, some of the redacted content includes additional factual matters that the Liquidator relies upon for the overall assessment of the transactions of interest. Suppression of those additional factual matters can be justified because disclosure of those details and matters may prejudice the Liquidator’s future investigation of the transactions of interest. As to the specific transfers from the Company’s bank accounts, I am persuaded that disclosure of all of the details of the transactions may prejudice the Liquidator’s future investigations. However, I consider that procedural fairness requires that the broad date range of the specific transactions be disclosed to the interested persons so that they can participate properly in the hearing of the Liquidator’s substantive application.
For those reasons, a suppression or non-disclosure order will only be made in respect of the following parts of the supporting affidavit:
(a)in the contents section, the descriptions of the documents numbered 23 and 24;
(b)paragraphs 46 to 49 (inclusive);
(c)the contents of the table appearing below paragraph 55, save for the information concerning the month and year of each transaction;
(d)the balance of paragraph 57 after the words “appear to be voidable”;
(e)documents 23, 24, 27, 28 and 29 within exhibit RR-1 (comprising pages 332, 333 to 336 and 619 to 625 of that exhibit).
Such an order should continue only for so long as is necessary to prevent prejudice to the proper administration of justice. In my view, the order should continue until the conclusion of the liquidation of the Company.
Conclusion
In conclusion, I will make a suppression or non-disclosure order in the limited terms identified above.
I consider that the Liquidator’s costs of the application for a suppression or non-disclosure order should be costs in the winding up of the Company and I will make an order to that effect.
With respect to the Liquidator’s substantive application seeking an extension of time under s 588FF(3)(b), timetabling orders were made on 30 August 2024 for the filing of evidence and further submissions following the making of orders on the suppression application, with the substantive application to be determined on the papers unless a party indicates that they wish to be heard orally.
I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice O'Bryan. Associate:
Dated: 4 October 2024
SCHEDULE OF PARTIES
VID421 of 2024 Interested Person
LEIGH COLIN PENBERTHY
Interested Person
LEASEPLUS PTY LTD (ACN 155 287 442)
Interested Person
LEASEPLUS HOLDINGS PTY LTD (ACN 154 926 833)
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