This proceeding concerned the liquidation of a company that was incorporated for the purpose of developing and operating a private hospital in Townsville. The company was placed into external administration owing creditors about AUD2.4m.
A creditor of the company (Capital Options) in its capacity as an ‘eligible applicant’ authorised by ASIC, applied for an order that public examination summonses be issued to people including the company’s directors, the company’s former solicitor, a consultant to the company’s board, and the company’s former administrator (then liquidator).
The examinees applied to the Federal Court for an order that the examination summonses be set aside, and Sarah C Derrington J granted the orders sought.
Her Honour rejected the scope of the applicants’ complaints of non-disclosure, but held that there was still material non-disclosure to the court on the hearing of the ex parte application for public examination summonses:
- The creditor failed to raise facts which would justify the refusal of leave being granted to Capital Options’ director (a struck off solicitor) to represent the creditor company.
- The company’s liquidator did not think the company had viable claims concerning the transfer of its asset to a related entity.
Her Honour also held that the examination was an abuse of process because it lacked utility. This was on the grounds that the examination was being conducted to pursue Capital Options’ private interests rather than the interests of the creditors or the winding up generally.
Anthony Messina appeared for the plaintiff, instructed by Senior Legal.
The judgment is published here.