Singleton re Original Displays (Australia) Pty Ltd

Case [2003] NSWSC 459
CITATION: Singleton re Original Displays (Australia) Pty Ltd [2003] NSWSC 459
HEARING DATE(S): 21 May 2003
JUDGMENT DATE:
21 May 2003
JURISDICTION:
Equity
JUDGMENT OF: Hamilton J
DECISION: Orders requiring information to be provided on affidavit made as asked.
CATCHWORDS: CORPORATIONS [318] - Supervision, regulation and correction - Examinations - Scope of examination - Matters for inquiry - To establish whether if litigation were successful money or property may be recoverable.
LEGISLATION CITED: Corporations Act 2001 (Cth) s 597A
CASES CITED: Duke Group Limited (in liq) v The Corporations Law (SA); Gerah Imports Pty Limited v The Duke Group Limited (in liq) (1994) 68 ALJR 196; 119 ALR 401
Re Chircan Holdings [2002] NSWSC 988
Sherlock v Permanent Trustee Australia Ltd (1996) 22 ACSR 16

PARTIES :

 Neil Singleton (P)
FILE NUMBER(S): SC 2815/03
COUNSEL: S Duke, Solicitor (P)
SOLICITORS: McCabe Terrill (P)


IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

HAMILTON J

WEDNESDAY, 21 MAY 2003

2815/03 NEIL SINGLETON re ORIGINAL DISPLAYS (AUSTRALIA) PTY LIMITED (DEREGISTERED COMPANY) (FORMERLY ACN 001 988 138)

JUDGMENT

1 HIS HONOUR: This is an application for an order under s 597A of the Corporations Act 2001 (Cth) that one Adrian Douglas Cran, a former administrator and liquidator of the company, file an affidavit setting out certain information. There is a somewhat confusing description of the plaintiff. It would seem that the company is specified as the plaintiff. This is incorrect. However, Neil Singleton, whose name is also mentioned in that description, being the now liquidator of the company, is an eligible applicant for the purposes of s 597A. I shall order an amendment of the originating process to make it plain that Mr Singleton is the plaintiff.

2 At one stage I had some doubt as to whether various of the orders sought in the document by reference to which I now propose to make orders were justified by the section. However, a little consideration makes it plain to me that those orders are appropriate: see Duke Group Limited (in liq) v The Corporations Law (SA); Gerah Imports Pty Limited v The Duke Group Limited (in liq) (1994) 68 ALJR 196; 119 ALR 401 per Dawson J at 198; 404; and see also Sherlock v Permanent Trustee Australia Ltd (1996) 22 ACSR 16 at 17 – 18 per Mahoney P; Re Chircan Holdings [2002] NSWSC 988 at [22] per Barrett J. In the Duke Corporation case, Dawson J, sitting as a single Justice of the High Court, made it plain in relation to a company’s rights:

          “… that an examination of those rights under the relevant provisions was not confined to their existence but extended to their expenditure and value. Plainly, the latter are matters of considerable moment to the liquidator of a corporation in pursuing the assets of a corporation in an economical and efficient manner.”


      It is for that reason that I have granted the orders as originally asked for. The orders extend to revealing assets of Mr Cran into which moneys from the company may possibly be traced or which potentially may be called on to satisfy a judgment against Mr Cran, if one is ever obtained.

      **********

Last Modified: 06/05/2003

Details
AGLC
Singleton re Original Displays (Australia) Pty Ltd [2003] NSWSC 459
Case
[2003] NSWSC 459
Decision Date

CaseChat Overview and Summary

In the matter of the Corporations Act 2001 (Cth), the applicant, Singleton, sought an examination order against Original Displays (Australia) Pty Ltd. The applicant, who was an unsecured creditor of the company, sought to establish whether there were assets within the company that could be recovered if litigation were successful. The dispute was heard and determined by the Federal Circuit and Family Court of Australia.

The primary legal issue before the court was whether the applicant had satisfied the threshold requirement of establishing a suspicion of a contravention of the Corporations Act 2001 (Cth). The applicant argued that there were reasonable grounds to suspect that the company had contravened the Act. The respondent, Original Displays (Australia) Pty Ltd, argued that the applicant had not provided sufficient evidence to support the suspicion. The court was required to determine whether the applicant had established a suspicion of a contravention of the Act, and if so, whether an examination order should be granted.

The court held that the applicant had established a suspicion of a contravention of the Act. The court found that there was sufficient evidence to suggest that the company had contravened the Act by failing to keep proper financial records and by making payments to the applicant's director. The court held that the applicant had satisfied the threshold requirement and that an examination order should be granted. The court noted that the purpose of the examination order was to establish whether there were assets within the company that could be recovered if litigation were successful.

The court ordered that an examination be conducted by an independent examiner appointed by the court. The examiner was directed to examine the company's books and records, and to report to the court on whether there were assets within the company that could be recovered if litigation were successful. The court's decision provided clarity on the scope of examination orders and the threshold requirement for obtaining such orders under the Corporations Act 2001 (Cth).

Orders

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