Supreme Court New South Wales Medium Neutral Citation: In the matter of S.C.W. Pty Ltd [2017] NSWSC 1314 Hearing dates: 7 and 8 September 2017 Decision date: 28 September 2017 Jurisdiction: Equity - Corporations List Before: Black J Decision: The Court makes findings as to the documents in dispute and stands the matter over for 7 days. Catchwords: CORPORATIONS — Winding up — Liquidators — where former liquidator ordered to deliver company's books and records to company – whether documents belong to company or former liquidator Legislation Cited: - Corporations Act 2001 (Cth), ss 461(1)(k), 482, 533, 542, Sch 2 s 70-35 - Insolvency Law Reform Act 2016 (Cth) Cases Cited: - Australian Securities and Investments Commission v Edge [2007] VSC 170; (2007) 211 FLR 137 - Australian Securities and Investments Commission v Rich [2005] NSWSC 417; (2005) 216 ALR 320; 53 ACSR 752 - Breen v Williams [1996] HCA 57; (1996) 186 CLR 71 - Chantrey Martin (a firm) v Martin [1953] 2 QB 286 - Gomba Holdings (UK) Ltd v Minories Finance Ltd [1988] 1 WLR 1231 - Kennards Hire Pty Ltd v RMGA Pty Ltd [2010] NSWSC 1387 - O'Brien v Tanning Research Laboratories Inc (1988) 14 NSWLR 601 - Sydlow Pty Ltd (in liq) v TG Kotselas Pty Ltd (1996) 65 FCR 234; 144 ALR 159; 20 ACSR 47 - Tanning Research Laboratories Inc v O'Brien [1990] HCA 8; (1990) 169 CLR 332 - Tanning Research Laboratories v O'Brien (1987) 11 ACLR 778 - Wentworth v De Montfort (1988) 15 NSWLR 348 Texts Cited: - S Barc and N Bowen (eds), Tolley's Company Law (2nd ed, 1988) - G E Dal Pont, Law of Agency (3rd ed, 2014) - B Nosworthy and C Symes, 'The liquidator: A hybrid of agent, fiduciary and officer' (2016) 31 AJCL 65 Category: Procedural and other rulings Parties: Leslie John Schirato (First Plaintiff) Schirato Pty Ltd (Second Plaintiff) S.C.W. Pty Ltd (First Defendant) Clelia Winton (Second Defendant) Canwin (Aust) Pty Ltd (Third Defendant) Representation: Counsel: A S Bell SC/J S Burnett (Plaintiffs/Applicants) S A Wells (Respondents) Solicitors: King & Wood Mallesons (Plaintiffs/Applicants) Gillis Delaney (Respondents) File Number(s): 2011/75149 Judgment 1. By Interlocutory Application filed on 26 May 2017, the Applicants, SCW Pty Limited ("SCW"), Mr Leslie Schirato and Schirato Pty Limited ("SPL") applied, under s 482(3) of the Corporations Act 2001 (Cth) and the Court's inherent jurisdiction for an order that Mr Jamieson Louttit, formerly the liquidator of SCW, deliver all SCW's remaining books and records to SCW. Section 482(3) of the Corporations Act, on which the Applicants rely, provides that the Court has power, on termination of a winding up, to give such directions as it thinks fit for the resumption of the management and control of the company by its officers. It seems to me that it is not necessary for the Applicants to rely on that section, because Gleeson JA had already made an order for the return of the relevant documents, and the only question in issue at this stage is which documents are properly returned to SCW in accordance with that order. 2. Before turning to the substance of the application, I should note that the Corporations Judge, Brereton J, had reminded the parties, before listing this application before me, and I also reminded the parties at the commencement of the application, that I had acted for Mr Schirato and SPL in aspects of the dispute between the shareholders in SCW, before it was placed in liquidation and prior to my appointment to the Court in July 2011. I did not act for Mr Schirato or SPL in any matters involving Mr Louttit or during the period of SCW's liquidation. The parties took no objection to my hearing the application and I do not consider that there was any matter that prevented me from doing so. Background to the application 1. I will first briefly set out the background to the application, before turning to the categories of documents that remain in dispute between the Applicants and Mr Louttit. On 11 April 2011, SCW, which was then solvent and the owner of substantial assets, was wound up on the just and equitable ground pursuant to s 461(1)(k) of the Corporations Act, in circumstances of disagreement and deadlock between its two shareholders and directors, and Mr Louttit was appointed as its liquidator. SCW was then in liquidation and under Mr Louttit's control for a period of about six years. On 29 March 2017, Mr Schirato and SPL filed an application seeking orders for termination of the winding up of SCW. On 10 April 2017, Gleeson JA (then sitting in the Corporations List) made orders that the winding up be terminated under s 482 of the Corporations Act, with effect from 11 April 2017; that Mr Louttit deliver SCW's books and records to Mr Schirato, no later than 24 April 2017; and that an amount of $157,000 be retained by Mr Louttit on trust, pending determination of his application to the Court for approval of his further and final remuneration. 2. From 20 or 21 April 2017, Mr Louttit began to deliver SCW's documents to its company secretary. The documents originally delivered, on 20 or 21 April 2017, largely comprised documents provided by SCW to Mr Louttit when he was appointed in 2011, SCW's statutory register and minutes as delivered to Mr Louttit in 2011 and development approvals dated before 2011 for a property previously owned by SCW. Mr Louttit's solicitors then advised SCW's solicitors that: "We are instructed you should now have all company books and records." As will emerge below, any instruction to that effect was plainly incorrect. SCW's solicitors' then responded, correctly, that the documents not returned to SCW included SCW's financial accounts, income tax returns, paid invoices, bank statements and correspondence from April 2011 to date. 1. By letter dated 26 April 2017, implicitly resiling from the statement that all SCW's books and records had previously been returned, to which I referred above, Mr Louttit's solicitors advised SCW's solicitors that: "We confirm that [Mr Louttit] will provide to [SCW] the financial accounts, income tax returns, all paid invoices and bank statements post April 2011 to date. [Mr Louttit] does not agree to give to [SCW] correspondence relating to the liquidation. However, that said [Mr Louttit] is willing to consider any request for specific correspondence." It seems to me that the position taken in that letter did not have a proper basis, since Mr Louttit was then subject to the order made by Gleeson JA requiring the return of SCW's books and records and he was not at liberty to determine which categories of those books and records he would not return. SCW's solicitors in turn responded to Mr Louttit's solicitors by letter dated 28 April 2017 stating that: "In relation to [Mr Louttit's] refusal to provide correspondence relating to the liquidation, noting that at all times [Mr Louttit] acted in his capacity as an officer of [SCW], we do not understand how it could be said, now that the liquidation of [SCW] has been terminated, that these documents do not belong to [SCW]. Accordingly, please advise within 7 days, the basis on which [Mr Louttit] considers that these documents do not belong to [SCW] and do not need to be provided to [SCW]. This explanation should identify the particular categories of documents which [Mr Louttit] proposes to withhold and should encompass all documents which [Mr Louttit] has relating to [SCW]." 1. In early May 2017, nearly a month after Gleeson JA had ordered that SCW's documents be returned to Mr Schirato, Mr Louttit delivered two boxes of further documents to SCW, which it appears still did not include general ledgers for the period in which SCW was in liquidation and various other financial documents. By 9 May 2017 Mr Louttit's solicitors had advised that some categories of documents, relating to financial transactions of SCW through the liquidation, had been sent to SCW's accountant and, apparently, other documents were yet to be returned. 2. This correspondence, which had now continued for a considerable period without Mr Louttit having fully complied with Gleeson JA's order for the return of SCW's books and records, continued, with SCW's solicitors advising categories of documents which had not yet been returned, and further documents were returned by Mr Louttit in mid-May 2017. On 18 May 2017, Mr Louttit's solicitors advised that: "[Mr Louttit] is also concerned that [SCW and Mr Schirato] are embarking on a fishing expedition which will be of no benefit to either of our respective clients. The documents in the possession of [SCW's] accountant clearly explain and set out in detail all the relevant transactions of [SCW] throughout the liquidation period." Again, that position seems to me not to have had a proper basis, where the Court's order had required the return of SCW's books and records, and it was not a matter for Mr Louttit to determine which documents did not need to be returned on the basis that he considered that SCW already had other information explaining relevant financial transactions. 1. This application was commenced, as I noted above, on 26 May 2017. As will emerge below, wide objections to the production of numerous documents were initially asserted then not pressed, until only a small number of documents remained in issue at the hearing. The difficulty with that course was not that those objections were not pressed, but that they were made and continued over a long period before that ultimately occurred. 2. Mr Louttit initially relied, in opposing the application, on his first affidavit dated 6 July 2017 which referred to the return of several categories of SCW's documents and also contained a schedule of a substantial number of documents that had not been provided to SCW on the basis that they were contended to be Mr Louttit's records, or subject to claims for commercial confidentiality, or subject to claims for legal professional privilege, or records that formed part of the books and records of the liquidation. That schedule identified claims for legal professional privilege over numerous documents, many of which could not have been privileged on their face, which have now been abandoned. It is also difficult to understand the basis on which Mr Louttit as SCW's former liquidator could have sustained a claim for "commercial confidentiality" or a claim for legal professional privilege, as against SCW, over SCW's own documents. These claims were also abandoned by the time this application reached a hearing. 3. By a further affidavit dated 23 August 2017, Mr Louttit set out a revised schedule of documents as to which he resisted production, which were substantially fewer than those identified in the previous schedule to his 6 July affidavit, but still contained a substantial number of documents. That schedule identified the basis on which production of the documents then in dispute was resisted. 4. Mr Louttit also relied on a further affidavit dated 6 September 2017, which recorded that, since his affidavit dated 23 August 2017, still further books and records have been provided to the solicitors for the Applicants. That affidavit contained a further schedule of documents prepared by Mr Louttit's staff, which again identified the basis on which the production of the documents that remained in dispute was resisted. I will address the explanation in respect of the smaller number of documents that remain in issue below. 5. By a further affidavit dated 7 September 2017, Mr Louttit referred to a schedule of documents prepared by the Applicants (MFI1) and addressed particular entries in that schedule on an individual basis, identifying the documents that then remained in dispute. I will refer further to Mr Louttit's evidence as to those particular documents below. The parties' submissions and the applicable legal principles 1. Dr Bell, who appears with Mr Burnett for the Applicants, submits that a liquidator acts as agent for a company when performing his or her functions and exercising his or her powers. Dr Bell refers to Australian Securities and Investments Commission v Rich [2005] NSWSC 417; (2005) 216 ALR 320; 53 ACSR 752 at [270]–[271], where Austin J observed that: "When performing their functions and exercising their powers as such, liquidators occupy the position of agent of the company: AR Keay, McPherson's Law of Company Liquidation (4th edition, 1999), p 288, and cases there cited. If, therefore, the liquidators take some authorised step in carrying on the business of the company, that step is binding on the company as principal, just as if it had been taken by or on behalf of the company's board of directors prior to commencement of the voluntary administration. It would have been a step taken by the company as principal. In my opinion the same consequences flow when the liquidators take a step in the administration of the affairs of the company, since in doing so they are acting as the company's agent. The liquidators' keeping of reports to creditors prepared by them in their capacity as liquidators or administrators, by retaining them, is conduct by them as agent for the company. It follows that the reports are kept by the body corporate, and therefore those documents are books kept by a body corporate for the purposes of s 1305. Clearly, they are books kept under requirements of the Act, namely the requirements set out above which oblige liquidators to keep and retain such documents." 1. Dr Bell also refers to Australian Securities and Investments Commission v Edge [2007] VSC 170; (2007) 211 FLR 137 at [42], where Dodds-Streeton J observed that: "The liquidator's functions, which are performed in the fiduciary capacity of agent of the company, necessitate the conferral of wide and extensive powers currently embodied in s 477 of the Act, including the power to carry on the company's business for the purpose of beneficial disposal or winding up, pay creditors, bring and defend proceedings in the company's name, enter agreements and (subject to some restrictions) compromise claims, sell and dispose of the company's property, make purchases and execute documents on its behalf. The company's books and records must be delivered to the liquidator, who has extensive powers to obtain information and is entitled to the assistance of the company's officers." 1. Dr Bell submits that, because Mr Louttit was acting as SCW's agent, then it is artificial to describe the documents he retains as books and records of the liquidation, as distinct from books and records of SCW, and that any right of Mr Louttit to retain SCW's books and records to the exclusion of others that arose, while the liquidation continued, has now ended. Dr Bell also emphasises that SCW paid for the preparation and production of the books and records, where Mr Louttit has received substantial remuneration in respect of his work on the liquidation (Kirby 26.5.17 [6]) and, as I also noted above, it is common ground that the costs of preparing the documents which he now claims are his property rather than SCW's property were charged to SCW. As I noted above, Mr Louttit's further claim that those documents were "commercial-in-confidence" or subject to legal professional privilege was abandoned. 2. In oral submissions, Dr Bell submits, and my review of the relevant documents below will demonstrate, that many of the remaining documents that have not been provided by Mr Louttit to the Applicants were received or prepared by him to discharge his obligations as an agent of SCW, and would properly be returned to SCW on termination of the winding up so that it has adequate knowledge and information as to the conduct of its affairs in the period in which it was in liquidation (T51). I put aside, for the purposes of addressing that question, the fact that the issues involved in this application might well have been addressed, and the need for the application and the significant costs likely to have been incurred in it avoided, if both parties had simply agreed to a regime by which one or other of them would retain the documents and make them, or copies of them, available to the other. I also recognise that, as Dr Bell pointed out, at least the Applicants had made clear that, although they sought the return of the documents, they did not object to Mr Louttit retaining copies of them (T52). 3. Dr Bell also submitted (T52) that there was no inconsistency between the propositions that a document was, in one sense, prepared for a liquidator's benefit, and that he did so in performing work which was part of the company's administration and conducted as its agent. Dr Bell also pointed out (T52) that, if such a document is: "[a]n analysis, for example, of the company's property, if it is an analysis of sale prices, if it is a record of communications or a summary of communications which have been made to potential purchasers in relation to the qualities of a property or a boat or something like that, the notion that that would be a liquidator's record and wouldn't be retained in the company as part of the company's body of documents and therefore corporate record would be surprising." 1. Dr Bell also submitted that the concept of a company's books and records would not be interpreted narrowly where a liquidator had been managing that company for several years (T52–53). Dr Bell also submitted that many of the documents which I will address below fall within the category of documents generated or received by a liquidator, pursuant to his duty to manage the company's business or dispose of its assets, and are property of the company, by analogy with the approach taken in the commentary and case law to which I will refer below. 2. Mr Wells, who appears for Mr Louttit, identifies the matter in issue in the application as whether documents retained by Mr Louttit are his documents rather than SCW's books and records. Mr Wells submits that not all decisions of a liquidator will be made in his or her capacity as agent of the company and refers to the observation of Cohen J at first instance in Tanning Research Laboratories Inc v O'Brien (1987) 11 ACLR 778 at 790–791 (reversed on other grounds in O'Brien v Tanning Research Laboratories Inc (1988) 14 NSWLR 601, further appeal dismissed in Tanning Research Laboratories Inc v O'Brien [1990] HCA 8; (1990) 169 CLR 332) that a liquidator's adjudication of a proof of debt is not conducted in his or her capacity as an agent of a company; see also B Nosworthy & C Symes, "The liquidator: A hybrid of agent, fiduciary and officer" (2016) 31 AJCL 65. While I accept that proposition, the performance of that function is distinct from the functions performed by Mr Louttit in receiving or preparing most of the documents at issue in this application. Mr Wells also refers to the observations of Professor Dal Pont in his text, Law of Agency, 3rd ed, 2014, paragraph 1.47, with reference to Tanning Research Laboratories Inc v O'Brien above that a liquidator may be an agent of the company for some activities, an officer of the Court in relation to other activities, and acting for the benefit of creditors in realising and distributing company property and that: "… in carrying out statutory duties to get in company property, and to apply it according to a defined order in satisfaction of the company's liabilities, a liquidator's function is better viewed as an officer of the court than as an agent of the company." [citations omitted] While that proposition may be correct, for some purposes, it does not seem to me to support a view that documents prepared by a Court-appointed liquidator in managing most aspects of a company's business are not its property, to be returned to it if the Court so orders on termination of a winding up. 1. Mr Wells also draws attention to s 542 of the Corporations Act which refers to "books of the company and of the liquidator that are relevant to affairs of the company". Plainly, that section assumes the existence of a category of documents that may constitute books "of the liquidator" although it provides little assistance in determining what is in that category. I note, for completeness, that that section was repealed by the Insolvency Law Reform Act 2016 (Cth), from 1 September 2017, but s 70-35 of the Insolvency Practice Schedule (Corporations) similarly distinguishes between books of a company and books of the external administration of a company. 2. Mr Wells also refers to Kennards Hire Pty Ltd v RMGA Pty Ltd [2010] NSWSC 1387 at [60], [62]–[63] where Barrett J observed that that section recognised a distinction between the company's books and "books of the liquidator pertaining to his or her administration of the company". His Honour there also referred to the position of receivers, noting that their position was in many ways analogous with that of liquidators, as summarised in Tolley's Company Law (ed S Barc & N Bowen, 2nd ed, 1988), pp 903–904 as follows: "The point made here — and validly made — is that there is a distinction between books of the company and books of the liquidator pertaining to his or her administration of the company. The distinction is expressly recognised in s 542 of the Corporations Act which imposes a duty on a liquidator in relation to "all books of the company and of the liquidator that are relevant to the officers of the company". … … In relation to receivers (whose position is in many ways analogous with that of liquidators), the following is said at pp 903–4 of the second edition (1988) of "Tolley's Company Law" edited by S Barc and N Bowen: "On the termination of the receivership the company is entitled to the return of only those documents in the receiver's possession which belong to the company. Ownership depends on the capacity in which he acquired them. Documents generated or received by the receiver pursuant to duty to manage the company's business or to dispose of the assets belong to the company. Documents containing advice and information about the receivership or about the company brought into existence to enable the receiver to advise the holder of the charge belong to the holder. Notes, calculations and memoranda prepared by the receiver, not pursuant to any duty to prepare them but to better enable him to discharge his duties, belong to the receiver. The fact that the documents were prepared at the company's expense is not decisive (see Gomba Holdings UK Ltd v Minories Finance Ltd, Financial Times, 11 November 1987)." The decision thus referred to as having been reported in the Financial Times of 11 November 1987 went on appeal to the Court of Appeal: Gomba Holdings UK Ltd v Minories Finance Ltd [1988] 1 WLR 1231. The decision at first instance was affirmed, as were the principles reflected in the textbook extract." 1. Mr Wells submitted that the approach outlined in Tolley's Company Law and approved in Gomba Holdings UK Ltd v Minories Finance Ltd [1988] 1 WLR 1231 and Kennards Hire Pty Ltd v RMGA Pty Ltd above relates to a privately appointed receiver. In my view, the criterion referred to in that text and those cases, whether documents were generated or received by a receiver (or, here, a liquidator) pursuant to a duty to manage the company's business or to dispose of the assets belong to the company is appropriately applied in a Court-ordered winding up in determining whether those documents are a company's property. The application of that criterion largely does not support the approach adopted by Mr Louttit, as I will find below. 2. Mr Wells fairly acknowledges that there is a difference between the usual position of a professional and his or her client and that of a liquidator and a company, so far as the liquidator controls the company's action while in office: Sydlow Pty Ltd (in liq) v TG Kotselas Pty Ltd (1996) 65 FCR 234; 144 ALR 159; 20 ACSR 47 at 52. Nonetheless, Mr Wells refers to the acceptance, in the case law concerning solicitors, that internal records and memoranda of a solicitor can be property of the solicitor where created for the solicitor's own benefit and not the benefit of his or her client: Wentworth v De Montfort (1988) 15 NSWLR 348. Mr Wells also refers to the observation of Brennan CJ in Breen v Williams [1996] HCA 57; (1996) 186 CLR 71 at 80 that: "Documents prepared by a professional person to assist the professional person to perform his or her professional duties are not the property of the lay client; they remain the property of the professional." Mr Wells points out that the same view was taken in respect of an auditor's working papers in Chantrey Martin (a firm) v Martin [1953] 2 QB 286, to which Brennan CJ referred in Breen v Williams above. 1. Mr Wells submits that those principles have the consequence that document numbers 176 (property checklist and decision sheet), 189 (schedule analysis of offers) and 270 (schedule summary of valuation), to which I will refer further below, were prepared by Mr Louttit for his benefit to enable him to conduct the winding up of SCW. I do not accept that conclusion follows. While those documents were prepared during the winding up of SCW, it seems to me that they were prepared for the purposes of the conduct of SCW's business and not for any personal or private purpose of Mr Louttit and, had they not been prepared by Mr Louttit or his staff where SCW was in liquidation, they would likely have been prepared by a director, employee or adviser to SCW in conducting a careful sale of its property. That matter supports a characterisation of those documents as SCW's property rather than Mr Louttit's property, and distinguishes them from a document prepared by Mr Louttit in performing his statutory functions as a liquidator or for his or her personal benefit, which would not have been prepared by a company officer, employee or adviser in the ordinary course. 2. In oral submissions, Mr Wells also submitted that there was a distinction between SCW's books and records and Mr Louttit's books and records in his capacity as former liquidator of SCW. Mr Wells submitted that Mr Louttit as liquidator was not agent of SCW for all purposes and the question of agency was also not determinative of whether certain documents were SCW's books and records or Mr Louttit's books and records. Mr Wells also submitted that the determination whether particular documents are SCW's books and records or Mr Louttit's books and records is assisted by reference to case law concerning whether files are the property of other professionals, such as doctors and solicitors, and involves a determination of why a document was created and whether that was primarily for the benefit of the principal or agent (T17). Mr Wells also submitted that the fact that a professional may have charged the client for preparing such a document is not decisive of the issue (T18). It was common ground between the parties that, to the extent documents were prepared by Mr Louttit or his staff "for his benefit" during the liquidation, the time incurred by Mr Louttit or his staff in preparing such documents was charged to SCW (T21). The documents that remain in dispute 1. By the second day of the hearing on 8 September 2017, the range of documents in dispute had narrowed to 17 documents, and several valuations of property, being documents numbered 38, 175 (also marked as Ex R3), 176, 371 and 372 in Exhibit JL-1 to Mr Louttit's affidavit dated 6 September 2017 (Ex R1) and documents numbered 34, 190, 209, 216, 235, 270, 279, 286, 294, 302, 316, 328, 330, 334, 338, 383 and 384 in two folders of documents tendered on that date (Ex R2). I will deal with those documents in turn. 2. Document 34 includes a letter dated 13 May 2014 from the Australian Securities and Investments Commission ("ASIC") addressed to SCW. Although that letter is addressed to SCW, it relates to Mr Louttit's statutory duties as to reporting under s 533 of the Corporations Act. It seems to me that a communication with ASIC in respect of a liquidator's statutory obligations under s 533 of the Corporations Act is the liquidator's property, and I am reinforced in that view by the risk that a liquidator's willingness to communicate frankly and directly with ASIC, in respect of matters subject of such reports, might well be impaired if he or she had to be concerned that a director or shareholder who was the subject of such a report would later have access to it. (I should note that there is no suggestion that the Applicants were the subject of such a report in this matter.) Although that letter seems to me to be wholly uncontroversial, and it could not make any real difference to either the Applicants or Mr Louttit whether it was or was not produced to the Applicants, it seems to me that Mr Louttit was not acting in any agency capacity for SCW when it was received and it is not SCW's property. 3. Other correspondence within document 34 includes correspondence between ASIC and SCW relating to corporate key information, and relating to the publication of advertisements and declarations of dividends, which seem to me to be undertaken in the management of SCW and to be its property. Those documents must be returned to SCW pursuant to the order made by Gleeson JA. 4. Mr Louttit's evidence (Louttit 6.9.17 [6]) is that document 38 comprises payment/receipt vouchers prepared by his staff for his benefit during the liquidation in accordance with his normal business practice to enable him to authorise payments being made. He noted that payment/receipt vouchers were attached to bank transaction reports recording the bank balance at the relevant time and a cash book recording receipts and payments and he referred to the fact that underlying documents, to the extent they existed, have been provided to the Applicants. It seems to me that, irrespective of whether the cost of preparing the payment/receipt vouchers has been paid for by SCW, they are internal records prepared for the purposes of Mr Louttit and his firm and are not SCW's property and need not be produced to SCW pursuant to the orders previously made by Gleeson JA. The attached documents, to the extent that are primary financial records of SCW, are SCW's documents and must be provided to SCW if that has not already occurred. 5. Documents 175, 176, 190, 216, 270, 279, 286 and 302 seem to me to raise the same issue. Mr Louttit's evidence (Louttit 6.9.17 [10]) is that document 175 is a summary of valuations for properties owned by SCW prepared for his benefit to enable him to consider the value of those properties by reference to one document, as part of the sale process of SCW's assets conducted under his supervision. Dr Bell submits that the document (and similar documents) was prepared for the purposes of managing SCW's business and is properly SCW's property, by reference to Kennards Hire Pty Ltd v RMGA Pty Ltd above at [62]. Mr Louttit's evidence is that document 176 is a checklist and decision sheet prepared by his staff for his benefit to allow him to determine whether insurance and leasing arrangements were in place and whether a selling agent had been appointed in respect of properties. Mr Louttit's evidence is that document 190 is a file note prepared by his staff for his benefit during the sale process to keep a record of the acceptance of offers made for property located in New South Wales; document 216 is a schedule prepared by his staff to record various offers that had been made to assist him in assessing those offers in respect of New South Wales properties; document 270 is a schedule of valuations prepared by his staff during the liquidation to enable him to assess the offers made on the Queensland property; document 279 is a schedule of valuations prepared by his staff during the liquidation to assist him in making a decision as to the appointment of a real estate agent; and document 302 is a schedule of property agents prepared by his staff during the liquidation to assist him in making a decision as to which agent he should appoint to market the properties for sale. Document 286 is of the same nature, being a summary of offers made to acquire a particular property. These documents and, where applicable, their attachments, seem to me to be records prepared in the management of SCW's business and to be its property and must be returned to SCW pursuant to the orders made by Gleeson JA. 6. Mr Louttit's evidence is that document 328 is a schedule and file note prepared by his staff to assist him in determining the sale value of a substantial motor yacht and document 330 is a schedule and file note prepared by his staff to assist him as part of the process of selling the boat. Mr Louttit's evidence is that document 338 is a schedule of offers made in respect of the boat prepared by his staff during the liquidation to assist him in making a decision as to its sale and value and is the same document as document 330. These schedules and file notes seem to me to be of a similar character to the documents to which I referred in paragraph 30 above, to be prepared for the management of SCW's business and to be its property, and must be returned to SCW pursuant to the orders made by Gleeson JA. 7. Documents 371 and 372 seem to me to be of a similar character to each other. Mr Louttit's evidence (Louttit 6.9.17 [21]) is that document 371 is a file note prepared by an employee recording part of the outcome of an application for directions which he made to the Court in connection with the sale of a cause of action of SCW. It is difficult to see that the content of that file note is controversial or that it could make any real difference to either the Applicants or Mr Louttit whether it was or was not produced to the Applicants. Mr Louttit's evidence (Louttit 6.9.17 [22]) is that document 372 is a file note prepared by his staff concerning the sale of a cause of action of SCW. Again, it is difficult to see that that document could reasonably have particular significance for either party. It seems to me that both documents are properly characterised as Mr Louttit's property rather SCW's property, having been prepared for the internal purposes of his firm. Mr Louttit's evidence is that document 383 is a series of file notes made by his staff and himself during the liquidation to assist him in the general conduct of the liquidation. Although some of the issues addressed in those file notes appear to be day-to-day management issues, it seems to me that handwritten contemporaneous file notes of day-to-day activities are documents prepared by the liquidator and his staff for his own purposes, rather than in the management of SCW's affairs, and are not SCW's property. 8. Mr Wells indicated in submissions that the four folders constituting document 384 would be provided to the Applicants and all that remained in dispute was a covering file note (T47). Mr Louttit's evidence is that those documents concern an Australian Taxation Office comprehensive risk review. It seems to me that typewritten schedule headed "File Note" which appears within that category was also prepared in the management of SCW's business and is SCW's property and must be returned to SCW pursuant to the orders made by Gleeson JA. 9. Mr Louttit also seeks a determination as to whether valuations obtained by him during the liquidation, identified by document numbers 209, 235, 268, 294, 316 and 334, are SCW's documents and must be returned to it. Mr Wells acknowledged in the course of oral submissions (T43) that it was difficult to see any real difference between a valuation obtained by a liquidator and a pathology report obtained by a doctor, at the patient's expense and for the purpose of the doctor performing his or her functions, which was an example of a document that was the patient's property given in Breen v Williams above. Assuming these documents, which were not tendered, have that character, it seems to me that they were also obtained by Mr Louttit in the management of SCW's affairs, are SCW's property and must be returned to SCW pursuant to the orders made by Gleeson JA. Orders and costs 1. I have therefore found that the substantial majority of the documents that remained in dispute at the time of the hearing, which were in turn a small portion of the documents originally withheld from production by Mr Louttit but subsequently produced to SCW, are SCW's property and fall within the scope of the orders previously made by Gleeson JA for the return of those documents to SCW. It seems to me there is no utility in making the further order that the Applicants seek, requiring Mr Louttit to return SCW's books and records, since an order to that effect was previously made by Gleeson JA. The matter in dispute between the parties was whether a number of documents fall within that category and this judgment resolves that dispute. That dispute has now been determined and Mr Louttit must comply with the order made by Gleeson JA and his obligation to do so does not depend upon that order being made again. The preferable course is that I now stand the matter over for 7 days, to allow Mr Louttit an opportunity to remedy his non-compliance with Gleeson JA's previous order. If he does so, the only further order that may be needed in this application may be in respect of costs. 2. Dr Bell foreshadowed that an application for indemnity costs would be made in respect of this application, and an order that Mr Louttit not be entitled to any remuneration as a liquidator for any work done in or incidental to this application or to recover any costs of or incidental to this application from SCW's monies that he still holds. My preliminary view is that the Applicants have a strong case for such an order, given the number of SCW's documents that Mr Louttit had withheld in breach of Gleeson JA's order for their return to SCW, at the time this application was commenced; the fact that many of those documents were only returned while the application was pending; the fact that claims for commercial confidentiality and legal professional privilege were made by Mr Louttit over numerous documents and then not pressed at the hearing; and the fact that the Applicants have also substantially succeeded in respect of the relatively small category of documents that remained in dispute at that hearing. I will, of course, hear Mr Louttit if he seeks to be heard further as to that question, when the matter is relisted before me in 7 days. ********** Amendments 08 July 2019 - Paragraph 22 - Delete sentence containing transcription error which was not necessary to result. 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. Decision last updated: 08 July 2019