FEDERAL COURT OF AUSTRALIA

Sutherland v Pascoe; in the matter of Matrix Group Limited as Trustee for the Matrix Group Unit Trust (in liq) ACN 061 549 371 [2013] FCAFC 15

THE COURT ORDERS THAT:

1.    The interlocutory application is dismissed.

2.    The applicants are to pay the respondents’ costs.

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

REASONS FOR JUDGMENT

Introduction

1    The applicants seek leave to appeal an interlocutory decision handed down on 28 November 2012 by a judge of the Court. The primary judge dismissed the applicants’ application to set aside various examination summonses and notices for the production of documents as ordered by a registrar of the Court on 9 March 2012.

2    For convenience, an order was made that the application for leave to appeal and the appeal be heard together. That is what occurred. For reasons which follow we consider that leave to appeal should not be granted.

Summary of background matters

3    The applicants are former directors of Matrix Group Limited (Matrix) and persons said by the liquidator to be associated with them by virtue of their knowledge of certain transactions and matters concerning Matrix’s examinable affairs.

4    Until 2002, Matrix carried on the business of designing and managing complex tax-driven financial transactions. The second applicant (Mr Hawkins) was a director of Matrix, as also were Mr Scott Tyne and Mr Tom Oates. It is common ground that Matrix only ever implemented one transaction, which involved a transaction concerning the car fleets for the Western Australian government and related public authorities (WA Car Transaction). A mandate to implement another similar transaction concerning buses in Western Australian was never carried out (WA Bus Transaction).

5    There is a long history of proceedings involving Matrix and its former directors. In 2005, Mr Oates brought proceedings in the District Court of NSW against Matrix alleging that he had not been paid his entitlement to a percentage share of the profits from the WA Bus Transaction. Default judgment was entered, but the judgment debt was never paid.

6    On 8 February 2008, Mr Scott Pascoe was appointed the liquidator of Matrix. In accordance with s 588FF(3) of the Corporations Act 2001 (Cth) (the Act), Mr Pascoe had three years in which to commence any liquidator’s proceeding under that section, or seek an extension of time. Neither event occurred.

7    In 2009, Mr Oates commenced proceedings in the Supreme Court of New South Wales against Messrs Hawkins and Tyne and others (which included the third and fourth applicants in the proceedings here). In brief terms, Mr Oates relevantly alleged that Messrs Hawkins and Tyne had caused certain money which was due to be paid by Matrix in settlement or resolution of the WA Car and WA Bus Transactions to be transferred instead overseas and to various persons, including family members or related companies. It was said that this occurred with the fraudulent intention of causing Matrix not to pay its creditors, which included Mr Oates.

8    Mr Oates made these claims under s 37A of the Conveyancing Act 1919 (NSW) and s 1324 of the Act. As will emerge further below, Mr Oates’s action under s 1324 of the Act related to alleged breaches by Messrs Hawkins and Tyne of their directors’ duties under ss 181 and 182 of the Act.

9    On 25 May 2010, Bergin CJ in Equity determined a strike-out motion brought by the then defendants in the Supreme Court proceedings (which did not then include Matrix). Her Honour found that Mr Oates had standing under s 1324 but she directed that consideration be given by him to joining Matrix as an additional party. This duly occurred and Matrix became the tenth defendant in those proceedings.

10    The Supreme Court proceedings were listed to be heard before Ball J commencing on Monday, 5 September 2011. Unbeknownst to all the defendants in those proceedings (apart from Matrix), on 6 September 2011, while the trial before Ball J was in opening, the liquidator sought and obtained approval under s 477(2B) of the Act from Jacobson J in this Court of a proposed funding agreement with Mr Oates. The agreement provided for funding for examinations in relation to the examinable affairs of Matrix and also carried with it potential litigation funding. Mr Oates stood to receive some premiums if any amount was recovered by settlement or litigation. Justice Jacobson delivered an ex tempore judgment on 6 September 2011 approving the proposed funding agreement. A direction was issued under s 479 of the Act to the effect that the liquidator would be justified in entering into the proposed funding agreement (see Pascoe; in the matter of Matrix Group Ltd (in liq) [2011] FCA 1117). The applicants did not challenge that interlocutory decision.

11    On 7 September 2011, Mr Oates and all the defendants in the Supreme Court proceedings (except Matrix) agreed that those proceedings should be dismissed. Mr Oates and Matrix agreed that the proceeding as it related to Matrix should be discontinued. Final orders to that effect were made by Ball J (by consent) on 8 September 2011.

12    On 23 February 2012, the liquidator filed in the Federal Court an application for the issue of examination summonses against various people (some of whom were defendants in the Supreme Court proceedings) and orders for the production of documents, relying on ss 596B and 596D of the Act. The liquidator swore an affidavit dated 23 February 2012 in support of his application (the Pascoe Affidavit).

13    On 9 March 2012, a registrar of the Court granted the liquidator’s application. Examination summonses and notices for the production of documents were served on or around that date.

14    The Pascoe Affidavit comprised 16 pages of text and 46 exhibits. Two of the exhibits have assumed particular significance in these proceedings. They are the second further amended statement of claim (SFASC) and confidential exhibit SDP-2.

15    Relevant features of the Pascoe Affidavit (including those two exhibits) can be summarised as follows:

    [12] contained a non-exhaustive description of the proposed examinations to be conducted as part of the liquidator’s investigation into the examinable affairs of Matrix, including (without limitation) such matters as the business and financial affairs of Matrix and arrangements entered into by Matrix with third parties. Another stated purpose was to identify what claims were available to Matrix against the directors, former directors and other parties in relation to the affairs of the company;

    [42] described some practical difficulties experienced by the liquidator in gaining access to information and records;

    [44] to [60] described in broad terms the proceedings instituted by Mr Oates in the Supreme Court. The liquidator stated that the relief sought by Mr Oates included a claim for a declaration that the transfer of certain monies which were paid by Matrix to third parties were voidable pursuant to s 37A of the Conveyancing Act 1999 (NSW). Although there was no reference in the text of the Pascoe Affidavit to Mr Oates’s claims for relief in respect of ss 181 and 182 of the Act, a full copy of the SFASC was exhibited to the Pascoe Affidavit. The SFASC comprised 51 pages and 208 paragraphs. Paragraph 102 of that document contained an allegation that Messrs Hawkins and Tyne had breached their obligations as directors in transferring certain money from Matrix to companies and persons associated with Messrs Hawkins and Tyne. The particulars to that pleading identified the relevant statutory duties as those arising under ss 181 and 182 of the Act;

    in [55], [57] and [59], the liquidator drew attention to the overlap between his investigations and the transactions at issue in the Supreme Court proceedings;

    confidential exhibit SDP-2 described the matters which the liquidator wished to investigate (which matters were also relevant to the Supreme Court proceedings) and identified some “potential claims” which might arise from such investigations as including;

a.    claims against directors or former directors of Matrix for breaches of directors duties;

b.    claims with respect to unreasonable director-related transactions;

c.    claims with respect to uncommercial transactions.

16    It was common ground that the first of those potential claims by Matrix related to breaches of ss 181 and 182 of the Act; the second potential claim related to a liquidator-initiated action under s 588FDA of the Act; while the third potential claim related to a liquidator initiated action under s 588FB of the Act.

17    As noted above, on 9 March 2012 a registrar of the Court issued examination summonses and notices for production of documents as sought by the liquidator. We were told that currently the orders for production were in the process of being satisfied and that the examinations had been deferred, but were now due to commence on 22 April 2013.

18    After the examination summonses and orders for production were served on the applicants, they commenced proceedings in the Court seeking leave to have access to the Pascoe Affidavit in accordance with s 596C of the Act. The following day, the primary judge delivered a second interlocutory judgment in which he granted the access sought (see Sutherland v Pascoe, in the matter of Matrix Group Limited as Trustee for the Matrix Group Unit Trust (in liq) [2012] FCA 453). In the course of providing reasons for making orders giving the applicants access to the Pascoe Affidavit, the primary judge made reference in [12] to the background of the Supreme Court proceedings as being “extraordinary”. His Honour also found that it was apparent that he had been misled as to the nature of the proceedings in the Supreme Court when he determined to approve the proposed funding agreement. He found as follows at [23]:

It is now quite apparent that at least in one important respect, I was misled as to the nature of the proceedings in Supreme Court. I was told by counsel who then appeared that the claim in the Supreme Court proceeding was bought under s 37A of the Conveyancing Act but I was not informed that breaches ss 181 and 182 of the Corporations Act were also alleged in the Supreme Court statement of claim.

19    Although his Honour did not suggest that there had been any deliberate non-disclosure, he described the non-disclosure to him as part of the background against which he considered and granted the application to grant access to the Pascoe Affidavit under s 596C of the Act (see at [24]).

20    That then brings us in the chronology to the proceedings before the primary judge which are the subject of the application for leave to appeal.

21    The applicants sought to have the examination summonses and notices for production of documents set aside (the Challenged Orders). Their interlocutory application was heard by the primary judge on 22 November 2012. His Honour delivered judgment on 28 November 2012 dismissing the application. The applicants now seek leave to appeal against some, but not all of the primary judge’s findings in dismissing their interlocutory application concerning the Challenged Orders.

22    Before summarising the learned primary judge’s reasons for dismissing the application, it is convenient to outline the relevant statutory provisions concerning examination summonses and some related matters.

Summary of relevant statutory provisions

23    Part 5.9 of the Act provides for examination of persons about a corporation’s examinable affairs.

24    Relevantly, s 596B provides:

596B    Discretionary examination

(1)    The Court may summon a person for examination about a corporation’s examinable affairs if:

        (a)    an eligible applicant applies for the summons; and

        (b)    the Court is satisfied that the person:

(i)    has taken part or been concerned in examinable affairs of the corporation and has been, or may have been, guilty of misconduct in relation to the corporation; or

    (ii)    may be able to give information about examinable affairs of the corporation.

    (2)    This section has effect subject to section 596A.

25    Some of the terms referred to in s 596B are defined in s 9 of the Act. The concept of a corporation’s “examinable affairs” is defined there as follows:

examinable affairs, in relation to a corporation means:

(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 s 53); or

(c)    the business affairs of a connected entity of the corporation insofar 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).

26    The term “misconduct” is also defined in s 9 as including “fraud, negligence, default, breach of trust and breach of duty”.

27    The liquidator of Matrix is an eligible applicant for the purposes of s 596B(1) (s 9).

28    Section 596C imposes an obligation on a person who applies under s 596B to file an affidavit that supports the applicant and complies with the rules. Subsection 596C(2) provides that such an affidavit is not available for inspection except so far as the Court orders (noting that the applicants successfully availed themselves of this course, as noted in [18] and [19] above).

29    Rule 11.3 of the Federal Court (Corporations Rules) 2000 specifies additional requirements concerning the making of an application for an examination summons. It is made clear in r 11.3(2) that an application may be made ex parte. Sub-rule 11.3(3) requires any such application to be supported “by an affidavit stating the facts in support of the process” and also to be accompanied by a draft examination summons. Sub-rule 11.3(8) provides that an examination summons has to be in accordance with Form 17.

30    Section 596D of the Act stipulates the required content of an examination summons, including such matters as specifying the place, time and day of an examination. Subsection 596D(2) also provides that a summons to a person under s 596B may require the person to produce at the examination specified books that are in the person’s possession and relate to the corporation or to any of its examinable affairs.

31    It is further provided that an examination is to be held in public unless the Court considers that, by reason of special circumstances, it is desirable to hold an examination in private (s 597(4)).

32    The Court is empowered to give directions about an examination, including on such matters as the procedure to be followed; the persons who may be present if the examination is held in private; the exclusion of persons from a public examination; access to records of the examination; as well as non-disclosure and destruction of documents (s 596F).

33    There are various other provisions in Part 5.9 which deal with such matters as the conduct of examinations (s 597) and the Court’s power to require a person to file an affidavit about a corporation’s examinable affairs (s 597A).

34    It can be appreciated that a liquidator’s right to seek and obtain approval to issue examination summonses is a powerful weapon in the liquidator’s investigation of a corporation’s examinable affairs. We respectfully agree with the following general observations by Lander J in Re Southern Equities 25 ASCR 394 at 401 relating to the significance of s 596B:

In short, s 596B places the liquidator in a privileged position for the purpose of providing the liquidator with sufficient powers to obtain information by obtaining books and documents or by enquiring orally of persons who may be able to give information about the examinable affairs of the corporation. The legislative scheme ensures that the liquidator is given power to obtain as much information as possible to assist with the winding up so as to determine the assets of the corporation and the recoverability of those assets, particularly in relation to transactions which may have involved misconduct of some kind.

Summary of primary judge’s reasons for not setting aside the Challenged Orders

35    The applicants sought to have the Challenged Orders set aside on the following grounds:

(a)    those orders relate to the investigation of matters which had been finally determined in the Supreme Court proceedings brought by Mr Oates. Thus, by reference to the principles of res judicata and Anshun estoppel, they amounted to an abuse of process or improper purpose;

(b)    the orders were obtained as a result of serious and material non-disclosures, namely failures to disclose:

(i)    to the Registrar, that the liquidator’s proposed causes of action in respect of alleged breaches of ss 588FB and 588FDA were statute-barred because of the lapse of time limits imposed by s 588FF(3) of the Act;

(ii)    to the Registrar, that all of the matters proposed to be investigated by the liquidator had been raised in the Oates’s proceedings; and

(iii)    to both the Supreme Court and the Federal Court relating to various matters concerning Mr Oates funding the liquidator.

36    The primary judge dismissed each of those grounds of challenge. It is important to note that the applicants only seek leave to appeal in respect of the primary judge’s findings concerning non-disclosures to the Registrar. Significantly, no challenge is made to the primary judge’s rejection of the applicants’ other arguments as outlined in [35] above.

37    It is convenient if we now set out in more detail the primary judge’s reasons for rejecting the applicants’ interlocutory application.

38    The primary judge summarised the background, including the Supreme Court proceeding and their finalisation by the making of consent orders on 8 September 2011. His Honour also briefly outlined the relevant parts of the Pascoe Affidavit, including the liquidator’s statement that, based on his investigations to date (which included reviewing the allegations made in the statement of claim in the Supreme Court), he believed it likely that either Matrix or himself as liquidator would be able to pursue claims which, if successful, would raise significant funds in the winding-up for the benefit of creditors. His Honour noted the liquidator’s summary of some of the potential claims and his acknowledgement that the matters included allegations which were the subject of the Supreme Court proceedings. His Honour also noted at [18] that the liquidator now conceded that any claims he may have had under ss 588FB and 588FDA were time-barred.

39    As to the specific issue of the alleged non-disclosures to the Registrar, the primary judge set out his reasons at [58] to [61] for rejecting the applicants’ complaint. Briefly stated, those reasons were as follows:

    the primary judge accepted that there was “a heavy obligation” on a person seeking an examination summons (which, of course, is made ex parte) to make full and frank disclosure of all matters which may impact upon the decision to summon a person for examination. Citing decisions such as Southern Equities Corp Ltd (In Liq); re Bond and Caboche v England (1997) 25 ACSR 394 at 422-423 per Lander J and In the matter of Idoport Pty Limited (in liq) [2011] NSWSC 322; (2011) 83 ACSR 164 at [147] per Ward J, the primary judge described the obligation of frankness and candour in terms of bringing to the court’s attention “all material including that which might lead the court to refuse the application”;

    the primary judge described the relevant question as whether the matters which were not disclosed to the Registrar were “material to the Registrar’s decision to issue the summonses”. Citing Idoport at [151], his Honour acknowledged that it was not for the Court to decide whether the summonses would nevertheless have issued if the matters had been disclosed;

    the primary judge noted that there was no suggestion that the non-disclosure of the limitation period was deliberate, but noted that the applicants contended that it was a material matter which might have affected the Registrar’s decision; and

    the primary judge then set out in [61] some further observations before stating his reasons for rejecting the applicants’ argument. Because of their importance to the applicants’ application for leave to appeal, that paragraph is now set out in its entirety:

The failure to disclose the limitation period was unfortunate and there is some force in [the applicants’] submissions. However, I have come to the view, although not without reservations, that the limitation periods were not material. This is because on the view I have reached, the claims which Mr Pascoe wishes to pursue of breach of duties under ss 181 and 182 and their relationship with the claims made by Mr Oates in the Supreme Court proceedings were fully disclosed so that the nondisclosure of a time limit which may have affected Mr Pascoe’s causes of action (rather than those of Matrix) was not material.

Application for leave to appeal

40    The applicants seek leave to appeal in respect of six proposed grounds of appeal. We shall deal with each of those proposed grounds of appeal shortly but beforehand we will briefly describe the relevant principles guiding the Court’s discretion in this matter.

41    Some of the relevant principles are identified in the Full Court’s decision in Décor Corporation Pty Limited v Dart Industries Inc (1991) 33 FCR 397. The following principles are of particular relevance here:

(a)    whether, in all the circumstances, the primary judge’s decision is attended with sufficient doubt to warrant its being reconsidered by the Full Court;

(b)    if leave were refused, would substantial injustice occur supposing the decision to be wrong;

(c)    a distinction may be drawn between an interlocutory decision on a point of practice or procedure as opposed to an interlocutory decision determining a substantive right; and

(d)    given the breadth of the discretion in determining whether or not to grant leave to appeal, allowance also needs to be made for cases raising special considerations.

42    In our view, leave to appeal should not be granted for the following reasons.

43    First, we consider that the relevant findings of the primary judge which are sought to be appealed are not attended with sufficient doubt. Our reasons for coming to that conclusion in respect of each of the six proposed grounds of appeal are set out below at [45] to [58].

44    Secondly, we are mindful that the subject matter of the proposed appeal (i.e. whether the Challenged Orders should be set aside) involves practice and procedure. While no doubt the applicants will be subjected to practical inconvenience and costs in complying with the summonses and document production orders, we do not consider that their substantive legal rights are adversely affected by their obligation to comply with the Challenged Orders. Moreover, and for similar reasons, even if it be supposed that the primary judge erred, we do not accept that the applicants would suffer any substantial injustice.

45    It is appropriate if we now express in general terms why we consider that the primary judge’s relevant findings are not attended by sufficient doubt. We shall do so by reference to each of the six proposed grounds of appeal. We would wish to emphasise at the outset, however, that in our view the applicants are effectively seeking leave to appeal against findings of the primary judge which are properly characterised as findings of fact. Although the proposed grounds of appeal adopt different language in describing the alleged errors, they essentially boil down to challenges to the primary judge’s factual findings that:

(a)    the overlap with the Supreme Court proceedings had been fully disclosed; and

(b)    the failure to disclose the limitation barrier period was not a material non-disclosure.

46    We shall now address each of the six proposed grounds of appeal. It is convenient to deal with them under two broad categories.

(a)    Breach of directors’ duties and whether overlap with Supreme Court proceedings was “fully disclosed” – proposed grounds 1, 2, 4(a), 4(b), 5 and 6

47    As noted above, these proposed grounds relate to the applicants’ central complaint that the primary judge erred in concluding that the overlap with the Supreme Court proceedings had been “fully disclosed” in the Pascoe Affidavit. In our view, the primary judge’s finding of fact was one which was plainly open to him to make. We do not consider that the finding is attended by sufficient doubt as to warrant the grant of leave to appeal. Briefly stated, that is because of the following considerations.

48    First, the fact that the Supreme Court proceedings included a claim of breach of directors’ duties under ss 181 and 182 of the Act was disclosed in the Pascoe Affidavit. That is because the liquidator attached to his affidavit a full copy of the SFASC, in which the claims were explicitly pleaded.

49    Secondly, we do not think that it is reasonably arguable that the primary judge erred in his identification or application of the appropriate principles relating to the high standard of frankness and candour required of a liquidator in making such an application. On the contrary, we consider that the relevant principles were accurately expressed by the primary judge in [58] and [59] of his reasons for judgment and his Honour did not diverge from those principles in applying them to the particular circumstances of the case.

50    We should emphasise that we do not doubt the correctness of certain observations of Allsop J in Walter Rau Neusser Oel Und Fett AG v Cross Pacific Trading Ltd [2005] FCA 955 at [38], upon which the applicants place heavy reliance. His Honour said:

In an ex parte hearing, it is the obligation of the party seeking orders, through its representatives, to take the place of the absent party to the extent of bringing forward all the material facts which that party would have brought forward in defence of the application: Thomas A Edison Ltd v Bullock (1912) 15 CLR 678 at 681-82 per Isaacs J. That does not mean stating matters obliquely, including documents in voluminous exhibits, and merely not mis-stating the position. It means squarely putting the other side’s case, if there is one, by coherently expressing the known facts in a way such that the Court can understand, in the urgent context in which the application is brought forward, what might be said against the making of the orders. It is not for the Court to search out, organise and bring together what can be said on the respondents’ behalf. That is the responsibility of the applicant, through its representatives.

Although Allsop J’s remarks were not directed to the position of a liquidator applying for an examination summons under s 596B of the Act, we consider that the standard of frankness and candour expected of a liquidator is at least as high as that of an applicant seeking an ex parte order in other contexts. Indeed, we think there is much to be said for the view expressed by Lander J in Southern Equities at page 422-423, that the obligation of frankness and candour may be even greater where a liquidator makes an application for an examination summons because:

… unlike on the return of an interlocutory injunction obtained ex parte, on the return of an examination summons the material supporting the application is not ordinarily made available to the proposed examinee.

51    The difficulty relates not so much to the formulation of that very high standard, but rather to its application to particular facts. In our view, the standard cannot be applied in a vacuum and careful consideration has to be given to the relevant surrounding circumstances in which a non-disclosure has occurred. The point may be illustrated this way. Allsop J’s comments as set out in [38] of Walter Rau reflect the context in which his Honour found that there had been a material non-disclosure before him. His Honour was dealing with an urgent ex parte application seeking orders in the nature of freezing orders. The orders were made at the completion of an urgent ex parte hearing in which senior counsel for the applicant had made certain submissions which created an erroneous impression on his Honour’s part as to the facts bearing upon a serious allegation that the respondents had engaged in fraudulent conduct in respect of a cargo of copra. In particular, his Honour was critical of the fact that senior counsel had failed to identify, at the forefront of his address, certain facts which were inconsistent with the serious allegations of fraud. His Honour described at [47] how certain facts were identified, “but not in a fashion which illuminated with any clarity the known facts and not in a coherent and ordered way as plainly would have been done by the absent party”.

52    Without diminishing the very high standard of frankness and candour required of a liquidator in making an application under s 596B of the Act, we consider that it was open to the primary judge to conclude that the overlap with the Supreme Court proceedings was fully disclosed by the liquidator by exhibiting the entire SFASC. That is so even though no express reference was made in the body of the Pascoe Affidavit to the bringing of the ss 181 and 182 claims in the Supreme Court proceedings.

53    In our view, it is significant to note that, unlike Walter Rau (where Allsop J was involved in an urgent ex parte hearing and was heavily reliant on what was put to him by senior counsel), the Registrar dealt with the liquidator’s application on the papers. There was no oral hearing before the Registrar. Instead, the Registrar had an opportunity over a two week period to review the application and the Pascoe Affidavit. It can reasonably be presumed that that is what occurred.

54    Each case must necessarily turn on its own facts. In the particular circumstances here, we consider that the primary judge’s finding of fact that there had been full disclosure was one which was open to be made on the basis of all the materials before him.

(b)    Limitation period barrier – proposed grounds of appeal 2, 3, 4(c), 5

55    The applicants argue that even if, contrary to the above, the primary judge did not err in finding that the Supreme Court proceedings had been fully disclosed, his Honour erred in concluding that non-disclosure of the limitation period bar was not material. They contend that the primary judge left unstated why he considered that disclosure of the overlap concerning the ss 181-182 claims affected the materiality of the non-disclosure of the time limit. They contend that:

(a)    the liquidator’s s 588FF actions were not agitated in the Supreme Court proceedings;

(b)    the s 588FF actions could not have been affected by any overlap, since the liquidator was not even a party to the Supreme Court proceedings; and

(c)    the s 588FF actions did not depend on making good many of the factual elements in the ss 181 and 182 Supreme Court proceedings – it was said that they involve further and other factual and legal issues.

56    The applicants also argue that the primary judge’s conclusion that the non-disclosures to the Registrar were not material could have involved one or other of the following two errors of law:

(a)    erroneously applying a test of materiality which focused on the question whether the summonses would have issued anyway; or

(b)    the question of the materiality of the non-disclosure in relation to the time bar was raised to a level which was at least equivalent with such a test.

57    In our view, none of these claims warrants a grant of leave to appeal. At the heart of the matter is the question whether his Honour erred in finding, as a matter of fact, that the liquidator’s failure to disclose that the two potential liquidator initiated proceedings were time-barred was not material. In our view, that finding was plainly open to the primary judge having regard to the fact that the same transactions and essential facts underpinning the potential claims by the liquidator (i.e. in respect of breaches of ss 588FB and 588FDA) also underpinned the potential cause of action by the company alleging breaches of ss 181 and 182 of the Act. In other words, the basis for the liquidator’s desire to examine the relevant persons and compel them to produce relevant documents going to Matrix’s examinable affairs was common to all three potential claims. Although we agree that the liquidator ought to have disclosed the limitation bar to the prosecution of two of these potential claims, the third potential claim was unaffected by that non-disclosure. It provided a sufficient basis in its own right for issuing the summonses and orders for production of documents. All the more so in circumstances where the applicants did not contest the primary judge’s rejection of their claims of res judicata and Anshun estoppel. In our view, that is what the primary judge intended by his concluding statements in [61] regarding materiality.

58    Finally, having regard to those matters and to our view that the primary judge correctly stated the relevant legal principles, we do not consider that the applicants’ claims of error of law are reasonably arguable.

59    For all these reasons, the interlocutory applications for leave to appeal should be dismissed and the applicants ordered to pay the respondent’s costs.

Associate:

Dated:    18 February 2013