New South Wales Supreme Court CITATION : Re: Eurostar Pty Ltd (In Liquidation) (Receivers and Managers Appointed) & Ors [2004] NSWSC 462 HEARING DATE(S) : 21 May 2004 JUDGMENT DATE : 21 May 2004 JURISDICTION: Equity JUDGMENT OF : Campbell J DECISION : Order refused CATCHWORDS : CORPORATIONS - miscellaneous cases - examination of person connected with corporate collapse - application for order prohibiting mass media from publishing changed surname of examinee and her children - factors relevant to whether discretion to make such an order should be exercised LEGISLATION CITED : Corporations Act 2001 (Cth) Suzanne King - Applicant David John Winterbottom - Plaintiff - As Receiver of: Eurostar Pty Limited (In Liq) (Receivers and Managers Appointed) King Bros Bus Service Aldavilla Pty Limited (In Liq) (Receivers and Managers Appointed) King Bros Bus Service Bellbrook Pty Limited (In Liq) (Receivers and Managers Appointed) King Bros Bus Service Coffs Harbour Pty Limited (In Liq) (Receivers and Managers Appointed) King Bros Bus Service Crescent Head Pty Limited (In Liq) (Receivers and Managers Appointed) King Bros Bus Service Grafton Pty Limited (In Liq) (Receivers and Managers Appointed) King Bros Bus Service Great Lakes Pty Limited (In Liq) (Receivers and Managers Appointed) PARTIES : King Bros Bus Service Iluka Pty Limited (In Liq) (Receivers and Managers Appointed) King Bros Bus Service Kempsey Pty Limited (In Liq) (Receivers and Managers Appointed) King Bros Bus Service Nambucca Valley Pty Limited (In Liq) (Receivers and Managers Appointed) King Bros Bus Service Port Macquarie Pty Limited (In Liq) (Receivers and Managers Appointed) King Bros Bus Service South West Rocks Pty Limited (In Liq) (Receivers and Managers Appointed) King Bros Bus Service Taree Pty Limited (In Liq) (Receivers and Managers Appointed) King Bros Bus Service Wagga Wagga Pty Limited (In Liq) (Receivers and Managers Appointed) King Bros Bus Service Yamba Pty Limited (In Liq) (Receivers and Managers Appointed) M B Sales Australia Pty Limited (In Liq) (Receivers and Managers Appointed) AP & PJ King Pty Limited (In Liq) (Receives and Managers Appointed) FILE NUMBER(S) : SC 2390/03 COUNSEL : J Stoljar - Plaintiff I Wallach - Applicant SOLICITORS : Mallesons Stephen Jaques - Plaintiff Prider & Co - Applicant IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION EQUITY LIST CAMPBELL J FRIDAY 21 MAY 2004 2390/03 IN THE MATTER OF EUROSTAR PTY LIMITED (IN LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED) & ORS JUDGMENT – Ex Tempore (Revised 26 May 2004) 1 HIS HONOUR: This matter has come to me as duty judge on a reference from the Registrar. The Registrar is today conducting public examinations under section 597 Corporations Act 2001 (Cth) concerning the affairs of the companies in the Eurostar Group. Those companies are ones which were connected with the King brothers of Port Macquarie, who ran a bus business. The companies have collapsed, with large deficiencies. Today, Mrs Suzanne King is being examined under section 596B of the Corporations Act. She is the wife of Mr Anthony King, who had been a director of various of the companies in the group. 2 The examination is being conducted by counsel instructed by the receiver of companies in the Eurostar Group. That receiver is an eligible applicant within the meaning of section 9 of the Corporations Act, being a person authorised in writing by ASIC to make the application for examination. 3 The application arises from the fact that since the collapse of the Eurostar group of companies, the family of Mr Anthony King has moved to Perth. There, Mrs King and their three children have adopted a different surname. The children concerned are possibly aged about eleven and a half, nine and a half and a little over two. 4 Today, counsel for Mrs King made an application to the Registrar under section 596F(1)(f) of the Corporations Act, seeking a direction prohibiting the mass media from publishing the surname by which Mrs King and the children are currently known in Perth. That order is one to which the receiver was prepared to consent. The Registrar, however, declined to make such an order save for a very short period of time to enable the matter to be considered by a judge. 5 Mrs King was employed by the companies in the group over the period from 1997 to late 2001, performing duties of a general secretarial nature, including the payment of invoices and the preparation of the returns for a Government Schools Student Transport Scheme. She took no part in the preparation of the financial accounts of the companies and was not a director. She has never been an officer or director of the companies. 6 Mr Wallach, counsel for Mrs King informs me that the present application is made so that the privacy of the children can be preserved. 7 Mrs King was called to give oral evidence intended to lay the factual basis for the order sought. She has given evidence that when the collapse of the group of companies occurred, she and the children simply stayed in their home unit with the children not attending school for some days, so as to keep them from potential publicity. She was asked whether before the collapse of the companies there had been any attempts on the part of the media to go to the children's school to photograph them; she could not recall any such events happening. She was not able to recall any events of harassment of the children at the school because of what happened in their father's business. She recalls that on occasions the children had some difficulties at school arising from their father being involved in running the local bus line, when children would ask them, for example, why their father could not put an air-conditioned bus on to a particular run, but none of that seems to arise from the circumstances of the collapse of the group. 8 Mrs King says that she has sought to protect the children, so they have only a limited knowledge even to this day of what has happened concerning the family's business. She says that the approach she has taken is one of prevention rather than cure and that she wishes that situation to continue. 9 Section 597(4) of the Corporations Act states: "An examination is to be held in public, except to such extent (if any) as the Court considers that, by reason of special circumstances, it is desirable to hold the examination in private." 10 What is now sought is not to hold the examination in private but, as I have earlier said, a limitation on the publicity which can be given to one aspect of the proceedings. 11 Even so, the "special circumstances" test set out in section 597(4) is one which seems to me to be appropriate to take into account in deciding whether to give a direction of the type now sought. A limitation on publicity has, to some extent, effects of the same type as if the examination were held in private. Further, section 596F(1) says: "Subject to section 597, the Court may at any time give one or more of the following: … (f) a direction prohibiting publication or communication of information about the examination (including questions asked, and answers given, at the examination". 12 When the power to give a direction under section 596F(1)(f) is expressly made subject to section 597, that is a clear indication that the purpose underlying section 597 can be taken into account in making a decision whether to give a direction under section 596F(1)(f). However, the decision whether to give a direction under section 596F(1)(f) depends on all the circumstances, of which the existence or otherwise of "special circumstances" is just one. 13 Part of the purpose of conducting examinations in public is that there is a public interest in all aspects of the circumstances which led to a corporate collapse being available to all those who might be interested. Incorporation is a privilege which is made available because there is seen to be public benefit in it, but there is a public interest in that privilege not being abused. The privilege of incorporation is given on terms that, if the company collapses, its affairs can be examined, and that examination will ordinarily be in public. In at least some instances, publicity of information given in examinations can cause information which was otherwise not available to be brought to the attention of those investigating the circumstances of the corporate collapse. There needs to be a good reason before full openness to public scrutiny of what is said in such examinations should be removed. 14 I am not persuaded that there is sufficient reason in the present case to make the order which is sought. While I accept that Mrs King is fearful that there might be some media interference with her children, there has been no practical example in the past of such interference occurring. Even if there had been, that might not have been enough to justify the order sought. 15 Also, it is fairly common for people who are being examined in public examinations under the Corporations Act to be people who have children. It is a perfectly predictable consequence of Parliament's decision that examinations should ordinarily be conducted in public that the identity of people involved in corporate collapses might become known, as a result of publicity given to the examination, to people who know their children. It is also an ordinary consequence of Parliament's decision that such people might identify those children as the children of someone who has been involved in a corporate collapse. There is nothing in the situation of Mrs King or her children which takes them outside the ambit of what Parliament must have intended as an ordinary consequence of requiring examinations to be held in public. For these reasons, I decline to make an order of the kind which is sought. 16 The order which the Registrar made on an interim basis was that there be no publication in the mass media of the other surname that Mrs King used until 5pm on 24 May 2004 or until the question of suppression has been considered by a judge. Now that the time has come where that question has been considered by a judge, I revoke the Registrar's interim order. ********** Last Modified: 06/07/2004 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.