FEDERAL COURT OF AUSTRALIA

Heard, in the matter of GEBIE Services Pty Ltd (in liq) [2017] FCA 323

ORDERS

THE COURT ORDERS THAT:

1.    The term “to date” which appears in paragraphs 3, 4, 5 and 8 of Schedule 1 of the summonses to Ms Kassiou and Mr Mitchell and in paragraphs 3, 4, 5 and 8 of Annexure D to the Orders made 6 February 2017 in relation to Industries Services Training Pty Ltd be removed and replaced with the term “to 29 February 2016”.

2.    The term “or its related entities” appearing in paragraphs 1 and 2 of the summons to the Australia and New Zealand Banking Group is deleted.

3.    Save for those modifications the interlocutory process of 16 February 2017 is dismissed.

4.    The Applicants in the interlocutory process are to pay the Plaintiffs’ costs of and incidental to the interlocutory process of 16 February 2017 with those costs to be taxed if not agreed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

WHITE J:

1    On 29 June 2016, this Court made an order that GEBIE Services Pty Ltd (GEBIE) be wound up. The plaintiffs, Mr Heard and Mr Phillips, were appointed as joint and several liquidators.

2    On 6 February 2017, a Registrar issued summonses requiring three individuals (Ms Kassiou, Mr Mitchell and Mr Gordge) to attend for examination and requiring the proper officer of four entities (Industry Services Training Pty Ltd (IST), RSM Australia Pty Ltd (RSM), National Australia Bank Limited (NAB) and Australia and New Zealand Banking Group Limited (ANZ)) to produce “books” in their possession “relating to the examinable affairs of [GEBIE]”. In the case of Ms Kassiou and Mr Mitchell, the summonses were issued pursuant to s 596A of the Corporations Act 2001 (Cth) as they are former directors of GEBIE; in the case of Mr Gordge, who is a member or RSM (a firm of accountants), pursuant to s 596B; and in the case of the corporate entities pursuant to s 597(9).

3    By an interlocutory process filed on 16 February 2017, Ms Kassiou, Mr Mitchell and IST (collectively the Applicants) sought directions with respect to the examinations, which may be summarised as follows:

(a)    the plaintiffs be confined to enquiring into “matters related to the examinable affairs” of GEBIE;

(b)    the plaintiffs not be permitted to enquire into “the personal assets, liabilities and finances” of any of the Applicants;

(c)    any documents produced pursuant to any summons which relate to the personal assets, liabilities and finances of any of the Applicants be delivered up to them or, alternatively, be destroyed;

(d)    the affidavits filed by the plaintiffs in support of their application for the issue of the summonses be provided to the Applicants;

(e)    the summonses issued to NAB, ANZ and RSM be discharged;

(f)    the lists of documents which the Registrar’s order requires the Applicants, NAB, ANZ and RSM to produce at the examinations be varied so as to exclude any requirement that they must produce documents about the Applicants’ “personal assets, liabilities and finances” or about any matter which “could not fairly be described as being part of the examinable affairs of [GEBIE]”.

4    At the conclusion of the hearing of the interlocutory process on 14 March 2017, I reserved judgment. There was a need for judgment to be delivered quickly, given that the examinations were scheduled for 23 March 2017. Accordingly, on 20 March 2017, I delivered judgment which, other than in minor respects, amounted to a dismissal of the interlocutory process and said that I would publish reasons later. What follows are my reasons.

Factual setting

5    The matters which I record in this section of the reasons are, for the most part, drawn from the affidavit of Mr Phillips. Ms Kassiou has disputed the accuracy or completeness of some of the matters to which Mr Phillips has deposed and has provided explanations for other matters. I have had regard to the contents of Ms Kassiou’s affidavits but have not considered it necessary or appropriate for the Court on an application of the present kind to seek to resolve disputed issues of fact. There is a sufficient basis in the objective material provided by the parties for the factual setting which I now recount.

6    The Groote Eylandt and Bickerton Island Enterprises Aboriginal Corporation ICN 3897 (GEBIEAC) is an entity engaged in the administration of an island area in the Gulf of Carpentaria. That area encompasses the Groote Eylandt Archipelago and Bickerton Island. It is about 750 km east of Darwin and populated in the main by the Anindilyakwa people.

7    Until 1 July 2014, GEBIE was a wholly owned subsidiary of GEBIEAC. GEBIE was engaged in delivering indigenous training programs designed and funded by the Commonwealth Government through various of its departments. A principal program was the Remote Jobs and Community Program (RJCP) which was funded pursuant to a funding agreement with the Department of Prime Minister and Cabinet (DPC). This program is now known as the Community Development Program (CDP). The object of the CDP is to provide training and education to indigenous groups and to assist community development and job opportunities.

8    Until June 2014, GEBIE subcontracted the delivery of the CDP to IST, which is a registered training organisation. Ms Kassiou is the sole director and shareholder of IST.

9    On 26 February 2014, GEBIEAC entered into a joint venture agreement (JVA) with IST in relation to GEBIE. The stated purpose of the joint venture was to “transform” the existing sub-contracting arrangement into an “equity share arrangement” (cl 2.1). The JVA provided (relevantly) as follows:

(a)    for GEBIEAC on 1 July 2014 to transfer 60% of the shares in GEBIE to IST and to retain 40% of the shares for itself;

(b)    the Board of GEBIE to comprise two directors, with GEBIEAC and IST entitled to nominate one director each (cl 7.1);

(c)    the business of GEBIE to be the delivery, in the area for which GEBIEAC has responsibility, of services pursuant to Commonwealth funded programs, in particular, the CDP;

(d)    subject to the direction of the Board, IST to manage, operate and conduct GEBIE’s business (cl 10.1);

(e)    IST to be paid an amount in the nature of a management fee, which amount was “unless otherwise agreed in writing by both shareholders”, to be 2% of the total revenue “generated by” GEBIE. This management fee was to be addition to other payments, including the salary and wages of IST’s employees directly engaged in the business of GEBIE;

(f)    GEBIE’s funds were to be held in its bank account, with the amounts required to fund GEBIE’s business disbursed to IST each quarter in accordance with estimates which IST was to provide at least 14 days in advance.

10    The JVA also contained detailed budgeting, accounting and reporting requirements.

11    Ms Kassiou became a director of GEBIE on 1 July 2014, that is, when IST commenced as manager of GEBIE and continued as such until 20 February 2016. She deposes, however, that she ceased to be involved in the day to day affairs of GEBIE from on or about 27 November 2015.

12    Mr Mitchell became a director of GEBIE on 27 March 2013 and, according to the records of the Australian Securities and Investments Commission (ASIC), ceased to hold that office on 14 May 2015 (although Ms Kassiou has deposed that it was on 28 July 2014). On the same day that Mr Mitchell ceased as a director (14 May 2015), Mr Alfred Mamarika was appointed a director. The records of ASIC show that, from the date Ms Kassiou ceased as a director (20 February 2016) until the order for the winding up of GEBIE, Mr Mamarika was its sole director.

13    Both the plaintiffs and Ms Kassiou adduced evidence of a resolution of the directors of GEBIE (Ms Kassiou and Mr Mitchell) on 28 July 2014 increasing the management fee of 2% to 4.5%. The resolution was as follows:

Resolved that the management fee for manager of the contract (IS Australia) listed at Item 17.2(i) of the “Joint Venture Agreement” be amended so [IST] receive management fee of 4.5% of total revenue and [GEBIEAC] receive management fee of 2% calculated on the same basis.

Mr Phillips has deposed to being unaware of any antecedent agreement by the shareholders in GEBIE to an increase in the management fee, as contemplated by cl 17.2(i) of the JVA.

14    Both Mr Phillips and Ms Kassiou have also deposed to a resolution passed by the directors of GEBIE (Ms Kassiou and Mr Mitchell) on 4 July 2014 concerning the way in which GEBIE’s funds were to be held. The resolution was as follows:

Resolved that funds received by [GEBIE] can be advanced to [IST] as required by IST to properly manage and conduct the business referred to in the joint venture agreement. IST will properly need to acquit any advance with invoices in due course and ensure funds are available for dividends declared or reserves required in accordance with the joint venture agreement.

15    Mr Phillips has deposed to having evidence that this resolution was acted upon, with the effect that funds advanced by the Commonwealth were transferred by GEBIE to IST within days of the receipt of those funds and to there being little available documentation in relation to the transactions concerning the transfers and the use of these funds. The sums involved were substantial as the DPC has informed the plaintiffs that GEBIE received funds totalling $8,280,853.06 pursuant to various funding agreements in the period from 1 July 2014 to 29 June 2016. Mr Phillips has also deposed that the DPC has filed a proof of debt in the winding up of GEBIE in the amount of $5,030,053.35.

16    Next, Mr Phillips has deposed that the documents presently available to the plaintiffs indicate that, in the five month period from 1 July 2015 to 27 November 2015, IST appears to have charged GEBIE over $4.26 million for its services. He says that there is no explanation or individually itemised description in the financial accounts of GEBIE for these charges other than the following brief descriptions:

(a)    $2,104,559.55 for “engagement expenses”;

(b)    $1,342,856.47 for “operation expenses”;

(c)    $516,791.42 for “transition expenses”; and

(d)    $291,210.63 for “Management Fee”.

17    Mr Phillips deposes that the plaintiffs wish to conduct examinations of Ms Kassiou and Mr Mitchell and to obtain relevant documentary evidence for the purpose of enquiring into the following matters:

(a)    the existence and whereabouts of the books and records of [GEBIE], specifically … the “acquittal records”, being the records of the use and expenditure of the millions of dollars of Commonwealth Government grant funds paid to [GEBIE] prior to its winding-up;

(b)    the circumstances in which those grant funds were transferred from [GEBIE] … to IST … including when Ms Kassiou and/or Mr Mitchell were directors of [GEBIE];

(c)    the purpose and basis for specific transactions of [GEBIE] and the way in which those transactions were recorded in the financial accounts by Ms Kassiou and/or Mr Mitchell, or at their direction;

(d)    whether causes of action exist in the name of [GEBIE] against Ms Kassiou, Mr Mitchell and/or IST; and

(e)    whether Ms Kassiou, Mr Mitchell and IST have sufficient financial capacity to satisfy any potential judgment that may be made against them should [GEBIE] successfully bring an action against them.

18    Although the interlocutory process is brought by Ms Kassiou, Mr Mitchell and IST, Mr Mitchell has not provided any affidavit in support of it. The Applicants relied instead on two affidavits from Ms Kassiou. I consider it appropriate to say, in fairness to Ms Kassiou, that she has by her affidavits strenuously denied any wrongdoing, misconduct or misappropriation of funds in relation to the business of GEBIE. As I have said, it is not necessary for the Court presently to make findings on these topics in order to determine the application.

The Applicants’ grounds

19    At the heart of Ms Kassiou’s application is her desire that neither she nor others should be required to disclose information and documents concerning their personal financial affairs. The documents which the plaintiffs seek to have the ANZ produce are wholly in this category, as GEBIE did not use ANZ as its banker. IST banked with NAB and the documents which the summons to it requires to be produced include documents bearing on Ms Kassiou’s personal affairs. In particular, the summonses to Ms Kassiou and Mr Mitchell and the orders made by the Registrar with respect to IST will require production of:

[10]    Documents which concern, record or evidence the current assets and liabilities of:

[10.1]    IST;

[10.2]    Themelina Kassiou; and/or

[10.3]    Gregory Francis Mitchell.

[11]    Documents which concern, record or evidence any policy of professional indemnity insurance held by any of IST, Themelina Kassiou or Gregory Francis Mitchell.

20    In addition, the Applicants contend that the summonses are too wide and that compliance with them will involve oppression.

21    A passage in Ms Kassiou’s affidavit of 16 February 2017 appeared, on its face, to attribute an improper purpose to the plaintiffs. However, counsel for the Applicants confirmed at the hearing that such an allegation was not being made. Likewise, counsel confirmed that the Applicants did not pursue a contention raised by Ms Kassiou in her first affidavit to the effect that compliance with the summons would result in commercial harm to the Applicants.

The statutory provisions

22    The summonses to Ms Kassiou, Mr Mitchell and Mr Gordge require them to attend to be examined “in respect of the examinable affairs” of GEBIE. The summonses for the production of documents require the recipients of the summonses to produce the books (defined in the list) in their possession “relating to the examinable affairs” of GEBIE.

23    The term “examinable affairs” is defined in s 9 of the Corporations Act as:

(a)    the promotion, formation, management, administration or winding up of the corporation; or

(b)    any other affairs of the corporation (including anything that is included in the corporation's affairs because of section 53); or

(c)    the business affairs of a connected entity of the corporation, in so far as they are, or appear to be, relevant to the corporation or to anything that is included in the corporation's examinable affairs because of paragraph (a) or (b).

24    The scope of this definition is enlarged by the terms of s 53 (to which subpara (b) refers).

25    Section 596D(2) provides that a summons pursuant to ss 596A or 596B to a person to attend for examination about a company’s examinable affairs may require the person to produce at the examination specified books in the person’s possession which “relate to the corporation or to any of its examinable affairs”. In Re Bill Express Ltd (in liq) [2010] VSC 101; (2010) 238 FLR 329, Davies J said of this power:

[26]    … The legal limits of the power to make an order under s 596D are expressly defined in s 596D(2) in the requirement that the exercise of power be for the purposes of the examination. An examination may be confined by the order of the Court to particular matters and if so, the scope of documents that a court may order for production would similarly be confined. Where, as is the case here, no limitation is placed on the subject matter of the examination, other than that it must be about a corporation’s examinable affairs, an order for production in terms that the examinee must produce all books and records relating to the affairs of a corporation is within the power of the Court. … .

(Citations omitted)

26    Both counsel referred to the reasons of Lander J in Evans v Wainter Pty Ltd [2005] FCAFC 114, (2005) 145 FCR 176 at [252]. I have had regard to the statement of principles made by His Honour. It is not necessary to recite them presently.

The relevance of the Applicants’ personal affairs

27    It is well established that the examinable affairs of a company in liquidation include the ability of a third party to satisfy any judgment obtained against him or her in favour of the company. That is because such an enquiry is part of an investigation of the existence and worth of an asset of the company, namely, its chose in action. See Grosvenor Hill (Qld) Pty Ltd v Barber (1994) 48 FCR 301 at 311; Evans v Wainter at [82]; Gerah Imports Pty Ltd v The Duke Group Ltd (in liq) (1993) 61 SASR 557 at 564; and Meteyard v Love & Ors as Receivers and Managers of Southland Coal Pty Ltd [2005] NSWCA 444, (2005) 65 NSWLR 36 at [44]. Accordingly, documents concerning, recording or evidencing the current assets and liabilities of Ms Kassiou, Mr Mitchell or IST, or any policy of professional indemnity insurance held by them “relate to [GEBIE] or to any of its examinable affairs” (s 596D(2)) and “are relevant to matters to which the examination relates or will relate” (s 597(9)).

28    I am satisfied that the documents sought by the plaintiffs as described in [10] and [11] of the list quoted above are documents of this kind. So also are the documents which the plaintiff seeks to have ANZ produce. That is because the plaintiffs have evidence that IST entered into new financial arrangements with ANZ in about August 2014 and it is to be expected that, in the course of that refinancing, documents were generated which would evidence IST’s assets and liabilities and, accordingly, its financial capacity to meet any judgment which GEBIE may obtain against it.

29    Counsel for the Applicants sought to avoid that conclusion by a submission that it was necessary for the plaintiffs to assert that they are actually contemplating litigation against the Applicants and, in addition, to identify the particular proposed cause or causes of action. Counsel submitted that this was necessarily so because, until a cause of action has been identified, its value cannot be assessed.

30    Counsel also submitted that two authorities supported the view that litigation must be in specific contemplation concerning identified causes of action. The first was Grosvenor Hill in which the Full Court (Beaumont, Spender and Cooper JJ) held that information with respect to the probability of success in litigation contemplated by a corporation is information with respect to its “examinable affairs”. Counsel referred to passages in the judgment at 305-307 in which the Full Court referred to pending or “contemplated” litigation. The submission seemed to be that the Full Court had used the term “contemplated” in a limited way, so as to refer only to identified causes of action specifically contemplated by liquidators at the time that they seek the issue of an examination summons.

31    I do not uphold this submission. In the first place, the reasons of the Full Court are not to be construed as though they are a statute. Secondly, there is no indication that the Full Court used the term “contemplated” in the limited way for which counsel contends. Instead, there are indications to the contrary as, at 311, the Full Court said:

Senior counsel on behalf of Grosvenor submitted that to adopt a construction which would permit the making of an order for production of the policy of professional indemnity insurance would open the floodgates to permit the examination of all persons against whom the company in liquidation had a personal claim as to their personal financial details, on the basis of ascertaining the proposed examinee’s ability to satisfy any judgment obtained against him or her. In our view, the ambit of the power is sufficiently wide to enable information to be sought from a defendant or potential defendant as to the ability of that person to satisfy any reasonable judgment which may be obtained in litigation instituted by the liquidator.

(Emphasis added)

32    The limitation for which counsel for the present Applicants contends would be inconsistent with the breadth of the power discussed by the Full Court in this passage. Further still, the Full Court emphasised at 311 that it may be by an exercise of the Court’s discretion, in an appropriate case, to refuse to exercise the power or to make its exercise subject to stringent conditions by which the Court may ensure that a summons is confined to its statutory purpose.

33    The second authority on which counsel relied was Evans v Wainter. He referred to the principles stated by Lander J and, as I understood it, particularly to the stated principle that the power to summons a person for examination “serves the purpose of enabling evidence and information to be obtained to support the bringing of proceedings against examinable officers and other persons in connection with the examinable affairs of the corporation.” (Emphasis added). With respect to counsel, I do not see any support in that principle for the limitation for which the Applicants contend.

34    If the Applicants’ submission was accepted, it would have the potential to produce inconvenient and expensive consequences. Liquidators may have to engage in examinations in two stages: the first to examine whether or not viable causes of action do or may exist; and the second, to ascertain whether, in the event that judgment is obtained on such a cause of action, the prospective defendants will have the ability to satisfy the judgment. Counsel conceded that there is no support in the authorities for such a two stage process.

35    It is true, as counsel emphasised, that the examinations are a coercive process which involves an intrusion into matters which the Applicants are otherwise entitled to keep private. However, that is an incident of the scheme for compulsory examination. As the Full Court noted in Grosvenor Hill at 306, the scheme of the legislation is to put liquidators in a privileged position to obtain information relevant to and necessary for the proper discharge of their statutory functions.

36    As already noted, Mr Phillips has deposed that the plaintiffs wish to ascertain whether causes of action exist in the name of GEBIE against Ms Kassiou, Mr Mitchell and/or IST and, if so, whether they will have the financial capacity to satisfy any potential judgment which may be obtained against them. Mr Phillips has also deposed that, should it appear that there is a potential cause of action available to GEBIE, the plaintiffs wish to ensure that there will be some prospect of Ms Kassiou, Mr Mitchell and/or IST being able to satisfy any judgment it obtains. I observe that the Applicants did not challenge Mr Phillips on his statement that the plaintiffs have this purpose, nor (other than as outlined above) did they contend that such a purpose is not a legitimate purpose.

37    Accordingly, I conclude that the scope of the examination and the scope of the documents required to be produced in answer to the summonses should not be confined in the way for which the Applicants contended in this submission. The matters about which the plaintiffs wish to enquire, and the documents which they seek to have produced, do relate to the examinable affairs of GEBIE.

38    This conclusion affects a number of the submissions made on the Applicants’ behalf.

The width of the summonses

39    Counsel for the Applicants made a number of submissions to the effect that the summonses are expressed too broadly. For example, he submitted that Ms Kassiou and Mr Mitchell will be required to produce documents and answer questions about “intimate details of their private lives such as their grocery shopping, Medicare receipts and so on”. Counsel also referred to those parts of the summonses which require Ms Kassiou, Mr Mitchell and IST to produce bank statements for any account into which the monies transferred by GEBIE to IST had in turn been transferred from IST and bank accounts that received monies directly from GEBIE. He submitted that this was too wide because it could, for example, require them to produce the bank statements for “a bank account of a supplier of petrol for the vehicles that were used in the enterprise”.

40    Another submission to like effect was that the orders made with respect to IST would require it to produce documents concerning its expenditure on “wages, stationery and so on”, matters which it was said did not relate to the examinable affairs of GEBIE.

41    In support of these submissions, counsel referred to HP Mercantile Pty Ltd v Crouch; in the matter of Tumut River Orchard Management Ltd (in liq) ACN 003 501 611 [2009] FCA 1492 and to Godfrey as Liquidator of Pobje Agencies Pty Ltd (in liq) ACN 000 859 405 [2007] NSWSC 138 as examples of cases in which examination summonses had been found to be too wide.

42    In my view, the Applicants’ submissions were themselves too widely stated. Paragraphs [10] and [11] cannot reasonably be understood as requiring the production of grocery, shopping and Medicare receipts. Counsel did not refer to any other part of the summons which would have the effect for which he contended. Nor, subject to one matter concerning the period to which the summonses relate, are the other aspects of the summons to Ms Kassiou and Mr Mitchell framed too broadly. Further still, understood sensibly, the summonses do not require the Applicants to produce the bank statements for those third party entities with which IST contracted, such as petrol suppliers. Instead, the Applicants are required to produce only those documents in their own “possession, custody or control” and there is no basis on which to suppose that the bank statements of third suppliers will be in that category.

43    The submission concerning IST’s wages and miscellaneous expenditure seems to proceed on a misapprehension. While read by itself, para 6 of the list of documents which IST is required to produce may be capable of encompassing documents concerning expenditure of this kind, that paragraph is subject to para 5 which confines the documents to those concerning transfers of GEBIE’s funds which exceeded $5,000. It is not reasonable to suppose that expenditure on stationery or the other miscellaneous expenditure of IST will be in this category.

44    I add that there is good reason for the plaintiffs to wish to know the fate of GEBIE’s funds, that is, so as to determine the availability of any tracing remedy.

45    The summons to Ms Kassiou, Mr Mitchell and IST sought documents in various categories for the period 1 January 2014 “to date”. Counsel for the plaintiffs acknowledged that this was too broad, especially given that Ms Kassiou ceased as a director of GEBIE on 20 February 2016. I will amend the summonses to Ms Kassiou, Mr Mitchell and the orders with respect to IST so as to confine the period “to 29 February 2016”. There is, however, no proper basis on which to confine the starting date of 1 January 2014, as there is evidence that IST had an involvement in GEBIE’s affairs dating at least back to early 2014.

46    Save for the matters mentioned, the Applicants have not made good their submission that the summonses are too wide.

Oppression

47    Ms Kassiou asserted in her first affidavit that the production of all the material sought by the plaintiffs would be oppressive and would “involve the review and copying of many thousands of pages of material”. In addition, she said that some of the material is “likely” not to be located in Australia. Counsel for the Applicants made a submission to the same effect.

48    However, neither the affidavit nor the submission rose above the level of assertion. Ms Kassiou did not depose to any facts on the basis of which the Court could conclude that compliance with the summons will involve oppression. Nor is such a conclusion readily apparent from the terms of the summonses.

49    This ground of complaint does not succeed.

Lack of necessity

50    Some of Ms Kassiou’s affidavits seemed to be directed to establishing that there was an absence of necessity for the summonses. For example, Ms Kassiou deposed (in effect) that she does not hold any further documents of GEBIE, as she has previously provided them to GEBIEAC. Some of the submissions were to the effect that the contents of Ms Kassiou’s affidavit meant that there was “no issue” outstanding and “no need [for the plaintiffs] to enquire” further.

51    These submissions cannot be regarded as conclusive of the position. Mr Phillips has deposed to have been told by GEBIEAC that it does not hold several of the classes of documents sought by the plaintiffs. It is understandable the plaintiffs would wish to examine the directors of GEBIE and, in particular, Ms Kassiou about the documents which were brought into existence during their directorship and the current whereabouts of those documents.

52    Further, it is understandable that, in the discharge of their functions, the plaintiffs would wish to examine Ms Kassiou and Mr Mitchell about their conduct of the business of GEBIE. It is also understandable that they are not prepared to accept, without further enquiry, the accuracy of the matters to which Ms Kassiou has deposed, let alone that they constitute a complete account of the conduct of the affairs of GEBIE. The summonses should not be set aside nor varied on account of these matters.

The summonses issued to NAB, ANZ and RSM

53    The summons issued to NAB requires it to produce “the books” in its possession “relating to the examinable affairs” of GEBIE specified in Annexure F, namely:

[1]    Bank account statements in the period 1 January 2014 to date for any bank account held in the name of [IST], including but not limited to [account details omitted].

[2]    Communications in the period 1 January 2014 to date between any bank officer or employee of [NAB] and:

[2.1]    any director or former director of [GEBIE]; or

[2.2]    Matthew Gordge and/or any employee of [RSM].

[3]    Documents which concern, record or evidence the transfer of mon[ies] from any bank account held in the name of [GEBIE] to any other person or entity during the period 1 January 2014 to date.

[4]    …

54    Counsel for the Applicants submitted that the scope of the documents which NAB was required to produce were so wide as to be “nonsensical”. He particularised that submission by saying that the summons required NAB to produce “conversations Mr Gordge or other employees of RSM may have had regarding their own personal bank accounts” and to produce documents concerning the Applicants’ “personal credit facilities and loan applications”.

55    I do not accept that submission. It overlooks the opening words of the summons which limit the specified documents to those which relate to the examinable affairs of GEBIE. There is no reason to suppose that, despite those words of limitation, NAB would regard itself as obliged to produce “conversations” its officers or employees may have had with Mr Gordge or other employees of RSM regarding their own personal bank accounts. As previously noted, documents evidencing or recording the Applicants’ personal credit facilities and loan applications, if they are held by NAB, may relate to the examinable affairs of GEBIE if they concern or evidence the assets and liabilities of the Applicants and, accordingly, their ability to satisfy any judgment which GEBIE obtains against them. I decline to set aside the summons directed to NAB.

56    The summons to ANZ requires it to produce “the books” in its possession “relating to the examinable affairs” of GEBIE as follows:

[1]    Documents which concern, record or evidence the granting of credit or other finance facilities to [IST] or its related entities or IST’s director Themelina Kassiou by [ANZ] which relate to Australian Government Personal Property Securities Register registration number [omitted].

[2]    Any document recording or evidencing the asset or financial position of IST or its related entities or IST’s Themelina Kassiou.

[3]    …

57    For the reasons given earlier, it is not to the point that GEBIE did not use ANZ as its banker. The documents sought concern the asset and liability position of Ms Kassiou and IST. Documents of that kind do relate to the examinable affairs of GEBIE.

58    I accept, however, that the summons to ANZ should be revised so as to remove the term in [1] and [2] “or its related entities”. There is no basis at present of which to conclude that the conduct of affairs of entities related to IST do relate to the examinable affairs of GEBIE.

59    The Applicants seek the setting aside of the summons addressed to RSM on three bases: first, that the summons seeks information and documents which do not relate to the Company or its affairs; secondly, that the plaintiffs already have access to the bank accounts and bank statements of the Company with the consequence that RSM (and for that matter ANZ and NAB) cannot provide any information relevant to the examinable affairs of GEBIE which is not already known to the plaintiffs; and, thirdly, information which may affect the value of property is not an examinable affair. These submissions were directed to the following aspects of the summons to RSM:

[4]    Communications in the period 1 January 2014 to date concerning [GEBIE], its business or its operations between Mr Gordge and/or any employee of [RSM] and any one or more of the following:

[4.1]    any director or former director of [GEBIE];

[4.2]    [IST], or any director, employee or agent of IST;

[4.3]    [GEBIEAC], or any director, employee or agent of GEBIEAC; and

[4.4]    any auditor of [GEBIE].

[5]    Any retainer or other agreement between [RSM] and either of [GEBIE] or IST which was in place at any time during the period 1 January 2014 to date.

[6]    Invoices and/or fee notes issued by Mr Gordge and/or [RSM] to [GEBIE] or IST during the period 1 January 2014 to date.

60    It is immediately apparent that the submission that these paragraphs seek information and documents which do not relate to GEBIE or its affairs is not sound. Paragraph [4] expressly confines the documents sought to those concerning GEBIE, its business or its operations. Likewise, the document sought in [5] and [6] are limited to those relating to GEBIE and its affairs.

61    The circumstance that the plaintiffs may already have access to the bank accounts and bank statements of GEBIE is not to the point. The documents sought by the plaintiffs from RSM (and for that matter from ANZ and NAB) go beyond the bank accounts and bank statements.

62    Finally, the third proposition on which the Applicants rely is not supported by the authority to which they refer, namely, Meteyard v Love. In that case, Basten JA expressed the view at [42] that the internal operations or activities of another person or corporation will not fall within the examinable affairs of the corporation simply because they have the potential to affect the value of the assets of the corporation. The documents which the plaintiffs seek from RSM are directed to the conduct of the affairs of GEBIE itself and do therefore relate to its “examinable affairs”. So also are the documents which the plaintiffs seek from NAB, it being apparent that the plaintiffs are concerned to trace the monies transferred from GEBIE to the account of IST.

Access to the application for the issue of the summonses and affidavits in support

63    Section 596C of the Corporations Act provides that the affidavits filed in support of an application under s 596B are not available for inspection “except so far as the Court orders”.

64    The Applicants seek an order that they be provided with the affidavits filed in support of the plaintiffs’ underlying application. The submissions in support of that part of the application are as follows:

[66]    In its correspondence the Plaintiff appears to submit that documents sought in the summons are sought to obtain evidence of the Applicants’ ability to meet a judgment.

[67]    The Applicants are not aware of any litigation or contemplated litigation involving the Applicants. In the circumstances, the Applicants should be entitled to inspect the affidavits propounded by the Respondents as providing a foundation for examining the Applicants.

[68]    Furthermore, there is no evidence before the Court to establish the basis for the summonses to NAB, ANZ and RSM Australia Pty Ltd.

65    The principles on which the Court acts when considering whether to order that the affidavits filed by liquidators in support of an application for the issue of examination summonses be available for inspection are established. An applicant cannot “fish” for a case. Before he or she may be permitted to examine a confidential affidavit, there must be material before the Court from which it appears that the applicant has an arguable case to which the material is relevant. Once such an arguable case is evident, the discretion is normally exercised so as to grant the application. See Re Normans Wines Ltd (Receivers and Managers Appointed) (in liq); Harvey v Burfield [2004] SASC 171; (2004) 88 SASR 541 at [58] and the cases cited therein.

66    In my opinion, the present Applicants have not established an arguable case of the requisite kind. The mere fact that the Applicants are “not aware of any litigation or contemplated litigation” involving themselves, even if taken at face value, does not give rise to such an arguable case. This is not a case in which it is difficult to discern causes of action which may be available to the plaintiffs. Section 182 of the Corporations Act provides one such cause of action which may be available to the plaintiffs.

67    Contrary to the Applicants’ submissions, there is, for the reasons already given, a basis in the evidence for the summonses which have been issued to NAB, ANZ and RSM.

68    This aspect of the application fails.

Conclusion

69    So far, I have not mentioned the first direction sought by the Applicants. Such a direction is unnecessary as the summonses relate, on their own terms, only to the examinable affairs of GEBIE.

70    As I noted during the course of the reasons, there are some respects in which the summonses are too wide. The term “to date” which appears in paragraphs 3, 4, 5 and 8 of Sch 1 to the summonses to Ms Kassiou and Mr Mitchell and in paragraphs 3, 4, 5 and 8 of Annexure D to the orders made by the Registrar on 6 February 2017 in relation to IST should be deleted and replaced with the term “to 29 February 2016”. These were the aspects of the summonses which counsel agreed in submissions should be altered if the Court decided to confine the period to 29 February 2016.

71    Further, the terms “or its related entities” appearing in paragraphs 1 and 2 of the summons directed to ANZ should be deleted.

72    Save for those modifications, the interlocutory process of 16 February 2017 is dismissed.

73    These are my reasons for the orders made on 20 March 2017.

Associate:

Dated:    29 March 2017