Commissioner of Fair Trading v Live At Home, Goulburn & Districts Incorporated [2007] NSWSC 408

New South Wales Supreme Court

CITATION : Commissioner of Fair Trading v Live At Home, Goulburn & Districts Incorporated [2007] NSWSC 408

HEARING DATE(S) : 26/04/07

JUDGMENT DATE : 26 April 2007

JURISDICTION : Equity Division Corporations List

JUDGMENT OF : Barrett J

EX TEMPORE JUDGMENT DATE : 26 April 2007

DECISION : Examinations adjourned

CATCHWORDS : CORPORATIONS - winding up - examination of officers and others - where proceedings commenced by liquidator against examinees - examinees' solicitor given copy of statement of claim an hour or so before examinations due to begin - whether examinations should be adjourned

LEGISLATION CITED : Associations Incorporation Act 1984 Corporations Act 2001 (Cth), s.596B

CASES CITED : Godfrey (as liquidator of Pobjie Agencies Pty Ltd [2007] NSWSC 138 Re Hugh J Roberts Pty Ltd (1970) 91 WN (NSW) 537

PARTIES : Commissioner of Fair Trading - Plaintiff Live At Home, Goulburn & Districts Incorporated (In Liquidation)

FILE NUMBER(S) : SC 1608/04

COUNSEL : Mr S. Golledge - Liquidator Mr G. Lancaster, Solicitor - Examinees

SOLICITORS : Gordon & Johnstone - Liquidator Access Business Lawyers - Examinees

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

BARRETT J

THURSDAY 26 APRIL 2007

1608/04 - COMMISSIONER OF FAIR TRADING v LIVE AT HOME, GOULBURN & DISTRICTS INCORPORATED (IN LIQUIDATION)

JUDGMENT

1 I am dealing with a question that has arisen in relation to examinations under s.596B of the Corporations Act 2001 (Cth) as applied to the winding up of associations under the Associations Incorporation Act 1984. 2 The liquidator of Live At Home Goulburn and Districts Incorporated obtained the issue of summonses for examination in respect of Mr Hutchins and Mrs Hutchins. I have been informed of the history of the examinations to this point. The matter relevant for present purposes, I think, is that both examinations were due to recommence this morning, but when Mr Lancaster, the examinees' solicitor, came to court this morning he was informed that proceedings had been commenced against them by the liquidator by a statement of claim filed on 23 April, that is to say three days ago. 3 Mr Lancaster was given the copy of the statement of claim at court this morning. It is his contention that the examinations scheduled to take place today should be adjourned for two purposes: first, so that consideration may be given to the question whether initiation of the proceedings has created a ground upon which an application for discharge of the examination summonses may be made; and second, in order for consideration to be given to the precise scope and nature of the proceedings so that proper steps may be taken in the course of the examinations, if they in due course proceed. 4 The liquidator resists such an adjournment, essentially on the basis that the statement of claim contains nothing that will come as a surprise and that Mr Lancaster will be able, by objections taken and submissions made to the Registrar, to keep the examinations within proper bounds if they proceed in the new environment. 5 I have been referred to statements in the cases, particularly that of Street J in Re Hugh J Roberts Pty Ltd (1970) 91 WN (NSW) 537, to the effect that pendency of proceedings against an examinee is, in general, not itself a ground for setting aside an examination summons and that legitimate purposes of an examination may be pursued, despite the existence of such proceedings. But the case law makes it clear that the examination process must not be used in order to conduct a dress rehearsal of cross-examination in litigation: see, for example, the recent discussion in Godfrey (as liquidator of Pobjie Agencies Pty Ltd [2007] NSWSC 138 at [70] ff. Another impermissible purpose is attempting to destroy the credibility of a party to litigation. Those purposes are improper purposes, having regard to the reasons for the existence of the examination facility. 6 I accept that the fact that the examinees are legally represented will mean that their interest in these latter respects will be capable of appropriate protection if and when the examinations continue. But in circumstances where the statement of claim has come to Mr Lancaster's notice only in the last hour or so, it would not be right to allow the examinations to continue today. He must at least have an opportunity to consider and digest the content of the statement of claim, in order to understand the parameters of the claims so that he may form views about what would or would not be within the impermissible concept of a dress rehearsal for cross-examination. It would be unfair to the examinees for their lawyer to have to make judgments about that matter on the run and without the opportunity for proper reflection, especially when no particular prejudice is suggested by reason of further adjournment. I note in that respect that Mrs Hutchins has not attended today and Mr Lancaster has told me from the bar table that there is a medical certificate to say that she is ill. 7 Mr Lancaster's further consideration of the statement of claim will also put him in a position to judge whether this may be one of the perhaps unusual cases in which this pendency of the litigation against the examinee would ground an application for discharge of the examination summonses. 8 In all the circumstances, the examinations should not continue today but should, subject to any application of the kind I have just mentioned, continue at an early opportunity. 9 I direct that each examination summonses be stood over generally with liberty to the liquidator to approach the Registry, with a view to obtaining a future date before the Registrar. **********