Nash v Timbercorp Finance Pty Ltd (in liq), in the matter of the bankrupt estate of Nash [2019] FCA 957

FEDERAL COURT OF AUSTRALIA

Nash v Timbercorp Finance Pty Ltd (in liq), in the matter of the bankrupt estate of Nash [2019] FCA 957 File number(s): VID 750 of 2018

Judge(s): ANDERSON J

Date of judgment: 21 June 2019

Catchwords: PRACTICE AND PROCEDURE – application by examinee in public examination under s 81 of the Bankruptcy Act 1966 (Cth) (Act) to restrain law firm acting for and advising the examination applicants – where law firm previously acted for examinee – whether examinee in examination has standing to seek injunctive relief to restrain law firm – inherent jurisdiction to control conduct of solicitors as officers of the court LEGAL PRACTITIONERS – whether real and sensible risk of misuse by the law firm of confidential information of former client – whether breach of duty of loyalty owed by law firm to former client – whether a perception of conflict contrary to the proper administration of justice – delay of examinee in seeking restraint of law firm BANKRUPTCY AND INSOLVENCY – application by examinee for access to affidavit in support of application for issue of examination summons (supporting affidavit) – whether arguable case for setting aside the examination – whether material breach of obligation to make full and frank disclosure upon seeking issue of summons – whether disclosure of supporting affidavit would frustrate examination process Held: examinee has standing to seek injunctive relief to restrain law firm – law firm may continue acting for examination application for remainder of examination on conditions – restraint of five members of law firm – information barrier and undertakings – application for access to supporting affidavit rejected

Legislation: Bankruptcy Act 1966 (Cth) ss 5(1), 77(2)(a), 81, 81(1), 81(1B), 81(7), 81(8), 81(10), 81(11), 81(11AA), 81(11A) Corporations Act 2001 (Cth) ss 596A, 596B