ASIC v Karl Suleman Enterprizes Pty Ltd (in liq) [2003] NSWSC 278

New South Wales Supreme Court

CITATION : ASIC v Karl Suleman Enterprizes Pty Ltd (in liq) [2003] NSWSC 278 HEARING DATE(S) : 27 March 2003 JUDGMENT DATE : 27 March 2003 JURISDICTION: Equity JUDGMENT OF : Campbell J DECISION : No order as to costs made

CATCHWORDS : CORPORATIONS - winding up - liquidator's examination - failure of witness to attend when summoned - "reasonable cause" - costs of liquidator's application for bench warrant LEGISLATION CITED : Corporations Law Australian Securities and Investments Commission - (P) Karl Suleman Enterprizes Pty Ltd (in liq) - (D1) Suleman Investments Ltd - (D2) Karl Suleman - (D3) Vivian Suleman - (D4) Paul G Weston & Neil R Cussen (as liquidators of Karl Suleman Enterprizes Pty Ltd, and Suleman Investments Ltd) - (D5) PARTIES : PAL Holdings Pty Ltd - (D6) Froggy Holdings Pty Ltd - (D7) Foggy Music Pty Ltd - (D8) Froggy Mobiles Pty Ltd - (D9) Froggy Mobiles (Western Sydney) Pty Ltd - (D10) Froggy Mobiles (Eastern Sydney) Pty Ltd - (D11) Capital Finance Australia Limited - (D12) Jessie George - (D13) FILE NUMBER(S) : SC 5415/01 COUNSEL : K Burke; C Wood - (D5/Applicant) SOLICITORS : Coudert Brothers - (D5/Applicant)

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

CAMPBELL J

THURSDAY 27 MARCH 2003

5415/01 ASIC v KARL SULEMAN ENTERPRIZES PTY LIMITED JUDGMENT – Ex tempore 1 HIS HONOUR: Yesterday I ordered that a bench warrant be issued to bring Mr Tailo to court, because he had not attended a liquidator's examination. I ordered, because the time the order was made yesterday was late in the afternoon, that that order not be executed until 8 am this morning. Before the order was executed, Mr Tailo came to court voluntarily. He has been examined this morning. His examination has been stood over generally, and it is only if he is notified within the next six months that he is required for further examination that any further examination of him will be required. 2 Today the liquidator appeared, by his counsel, and sought the discharge of the arrest warrant. There is no issue that, in the circumstances, that is appropriate. As well, the liquidator sought an order for costs against Mr Tailo, concerning his non-attendance yesterday. 3 Mr Tailo represented himself before me today. He has tendered a doctor's certificate to the effect that he was ill yesterday. He has also given oral evidence to that effect and not been cross-examined on it. 4 Corporations Law Rules number 11.10 says: "(1) This rule applies if a person is summoned ... by the court to attend for examination, and: (a) without reasonable cause, the person: (i) fails to attend at the time and place appointed ... (2) The court may: (a) issue a warrant for the arrest of the person ... ordered to attend for examination." 5 It was under that power that the order was made yesterday. Necessarily, yesterday's order was made on an ex parte basis. 6 The evidence before me today satisfies me that Mr Tailo had reasonable cause for not attending, namely, his illness. 7 Counsel for the liquidator put that there has been an unsatisfactory attitude shown by Mr Tailo consisting in not only his failure to attend yesterday but also his arriving late at court for examination on Tuesday of this week. Evidence admitted yesterday shows that, while he had been summoned to attend for examination at 10 o'clock on Tuesday, he arrived at about 11.30 am. As well, counsel for the liquidator says that, even concerning yesterday's failure to attend, he could have telephoned the liquidator about it as soon as he knew he would not be able to attend, so as to allow the liquidator to arrange the hearing time to be used for other examinees. As well, it is submitted that the circumstances of service of the summons on Mr Tailo show a contemptuous attitude on his part. 8 The question of whether costs should be ordered for yesterday's application does not depend upon general considerations of the attitude of Mr Tailo. Rather they depend upon whether the circumstances in which the order was made was such that Mr Tailo ought bear those costs. There was no challenge to the evidence that he was ill. There was no cross-examination of him, about the practicality of the suggestion that he might have been able to contact the liquidator, so as to allow the liquidator better arrange the time available. 9 In these circumstances, while on the evidence before me yesterday the making of the order was justified, Mr Tailo, in fact, on the evidence now before me, had reasonable cause not to attend. In these circumstances, I am not minded to make any order as to costs. 10 I discharge the warrant issued yesterday. **********