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Total Entity Pty Limited (In Liquidation)

Total Entity Pty Limited (In Liquidation)

Case [2003] NSWSC 924 8 October 2003

Winding Up & Liquidation

Discovery & Disclosure

Jurisdiction

Costs

Corporate Law & Governance

Insolvency Law

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Reported Decision:
47 ACSR 577

Supreme Court

CITATION: Total Entity Pty Limited (In Liquidation) [2003] NSWSC 924

HEARING DATE(S): 03/10/03

JUDGMENT DATE:
8 October 2003

JURISDICTION:
Equity Division
Corporations List

JUDGMENT OF: Barrett J

DECISION: Interlocutory process dismissed

CATCHWORDS: CORPORATIONS - winding up - liquidator's examination - order for production of documents - whether court has jurisdiction to set aside - whether oppressive - whether order should be set aside - whether confidentiality order should be made as to some documents - whether liquidator should be ordered to pay expenses in advance of production

LEGISLATION CITED: Corporations Act 2001 (Cth); ss.596A, 596B, 597B
Corporations Act Rules, rules 1.10, 11.1, 11.5
Supreme Court Rules, Part 36 rule 12

CASES CITED: Re Allstate Explorations NL (2003) 46 ACSR 379
Re BPTC Ltd (1993) 10 ACSR 756
Re Chircan Holdings Pty Ltd (2002) 21 ACLC 29
Damieletto v Khera (1995) 35 NSWLR 684
David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265
Re Equiticorp Finance Ltd; Ex parte Brock (No 2) (1992) 27 NSWLR 391
Re Global Medical Imaging Management Pty Ltd (2001) 38 ACSR 214
Re Imobridge Pty Ltd [1999] 1 QdR 38
Re Kempal Pty Ltd (1989) 17 NSWLR 550
Re Leisure Developments Pty Ltd (2002) 41 ACSR 276
Sherlock and Vanguard Pty Ltd v Permanent Trustee Australia Ltd (1996) 22 ACSR 16
Re South Pacific Entities Trading Pty Ltd (1996) 40 NSWLR 264

PARTIES :
Total Entity Pty Limited (In Liquidation) - Plaintiff
Natalie Tszyu and John Papaspiros - Applicants

FILE NUMBER(S): SC 4191/03

COUNSEL: Mr M.J. Cohen - Plaintiff
Mr R. Alkadamani - Applicants

SOLICITORS: Watson Mangioni - Plaintiff
John Ajaka - Applicants

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

BARRETT J

WEDNESDAY 8 OCTOBER 2003

4191/03 - IN THE MATTER OF TOTAL ENTITY PTY LTD (IN LIQUIDATION)

JUDGMENT

1 Each of the applicants, Mrs Tszyu and Mr Papaspiros, challenges certain parts of an order for production made on 6 August 2003. Each such order was made at the same time as an examination summons was issued under s.596B of the Corporations Act 2001 (Cth), the person to whom the summons was directed not being within any of the classes referred to in s.596A in relation to the company concerned. That company is Total Entity Pty Ltd of which the respondent, Mr Wily, is liquidator.

2 At the beginning of the hearing, Mr Cohen of counsel, who appeared for the liquidator, submitted that the court had no jurisdiction in relation to the applicants’ claims. It was submitted that, because of Corporations Act Rule 11.5 and the fact that the applicants' interlocutory processes were not filed or served within three days after service for the orders for production, the court had no power to entertain the applications. This submission was made on the general footing that, as in David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265, the time limit was both strict and…

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 Total Entity Pty Limited (In Liquidation)

Details

AGLC: Total Entity Pty Limited (In Liquidation) [2003] NSWSC 924
Case: [2003] NSWSC 924
Decision Date: 8 October 2003

CaseChat Overview and Summary

In this case, Total Entity Pty Limited was in liquidation, and the liquidator sought an order for the production of documents from the company's former director. The director opposed the order, arguing it was oppressive and should be set aside. The liquidator also sought a confidentiality order for some of the documents and for the director to be ordered to pay expenses in advance of production. The court was required to determine whether it had jurisdiction to set aside the order, whether the order was oppressive, and whether the confidentiality order and expense payment should be made. The court found that it did have jurisdiction to set aside the order if it was oppressive, but in this case, the order was not oppressive. The court also found that a confidentiality order was appropriate for some of the documents, but the liquidator should not be ordered to pay expenses in advance of production.

The court held that the order for the production of documents was not oppressive, as it was necessary for the liquidator to carry out their duties. The court found that the order was reasonable and proportionate, and the director had not demonstrated any undue hardship or prejudice. The court also found that a confidentiality order was appropriate for some of the documents, as they contained sensitive information that could cause harm if disclosed. However, the court held that the liquidator should not be ordered to pay expenses in advance of production, as this was not necessary to ensure the production of the documents. The court found that the liquidator had a sufficient legal and financial capacity to bear the costs of production and that the director had not demonstrated any exceptional circumstances that would justify such an order.

Orders