FEDERAL COURT OF AUSTRALIA

Leslie, in the matter of the Aboriginal Councils and Associations Act 1976

v Hennessy [2000] FCA 1532

CORPORATIONS LAW - standing to seek relief under s 536(1)(b) the Corporations Law and s 67 the Aboriginal Councils and Associations Act 1976 (Cth) - whether or not a prima facie case has been made out for an enquiry into the quantum of fees charged by the liquidator - whether amounts paid by liquidator to his solicitors excessive - procurement of oral examinations pursuant to Part 5.9 of Chapter 5 of the Corporations Law, whether or not for an ulterior purpose

Aboriginal Councils and Associations Act 1976 (Cth) ss 49, 67, 71, 73(c), 247A

Corporations Law ss 9, 247A, 436A, 473, 477(2A), 477(2B), 533, 536(1)(b), Part 5.9 of Chapter 5

Kazar v Duus (1998) 88 FCR 218 discussed

Burns Philp Investments Pty Ltd v Dickens (No 2) (1993) 10 ACSR 626 cited

Re Solfire Pty Ltd (in liq) (No 2) [1999] 2 Qd R 182 referred to

IN THE MATTER OF THE ABORIGINAL COUNCILS AND ASSOCIATIONS ACT 1976

QUEENSLAND ABORIGINAL AND ISLANDERS LEGAL SERVICES SECRETARIAT ABORIGINAL CORPORATION AND OTHERS; JOHN WILLIAM LESLIE v PHILIP ARTHUR HENNESSY

AG 69 of 1998

IN THE MATTER OF THE ABORIGINAL COUNCILS AND ASSOCIATIONS ACT 1976

NATIONAL ABORIGINAL AND ISLANDERS LEGAL SERVICES SECRETARIAT ABORIGINAL CORPORATION AND OTHERS; JOHN WILLIAM LESLIE v PHILIP ARTHUR HENNESSY

AG 70 of 1998

DRUMMOND J

27 OCTOBER 2000

BRISBANE

IN THE MATTER OF THE ABORIGINAL COUNCILS AND ASSOCIATIONS ACT 1976

THE COURT ORDERS THAT:

1.                  The notice of motion filed 16 May 2000 be dismissed, with costs.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE MATTER OF THE ABORIGINAL COUNCILS AND ASSOCIATIONS ACT 1976

THE COURT ORDERS THAT:

1.                  The notice of motion filed 16 May 2000 be dismissed, with costs.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE MATTER OF THE ABORIGINAL COUNCILS AND ASSOCIATIONS ACT 1976

IN THE MATTER OF THE ABORIGINAL COUNCILS AND ASSOCIATIONS ACT 1976

REASONS FOR JUDGMENT

1                     By notices of motion, Mr Leslie, a member of the National Aboriginal and Islanders Legal Services Secretariat Aboriginal Corporation (“NAILSS”) and Queensland Aboriginal and Torres Strait Islanders Corporation for Legal Services Secretariat Aboriginal Corporation (“QAILSS”), seeks a range of orders challenging the conduct of Mr Hennessy, the liquidator of both Corporations, including an inquiry by the Court into his conduct.  The orders sought include orders for Mr Hennessy’s examination and the examination of Mr Bouhafs.  The latter was, at all relevant times, Registrar of Aboriginal Corporations under the Aboriginal Councils and Associations Act 1976 (Cth) (“the ACA Act”) under which both NAILSS and QAILSS were incorporated.  It was on Mr Bouhafs’ applications that the corporations were wound-up and Mr Hennessy appointed their liquidator.

2                     It would be wrong to assume that Mr Hennessy’s administrations were concerned with straightforward windings up of the two Corporations.  It is not possible to understand the issues raised for determination by the motions without looking in a little detail at the background out of which the present applications arise.  A company with a similar name to NAILSS called the National Aboriginal and Islanders Legal Services Secretariat Limited was formed by a Mr Paul Coe in 1982 under the New South Wales Corporations Law.  It ceased to exist as a result of Mr Coe’s failure to lodge returns and was deregistered some time prior to 17 April 1993.  Each of the two Corporations of which Mr Hennessy is now liquidator were incorporated on 4 October 1994 under the ACA Act to provide a limited range of legal and associated services to advance the claims of various Aboriginal interests.  The applicant is a member of both NAILSS and QAILSS.  Mr R Robinson and Mr S Watson were involved in arranging for their incorporation and became members of their governing committees. They also had an involvement with Mr Coe’s company.

3                     The genesis of the dispute out of which the motions before me arise is the requirement of s 49 of the ACA Act that only certain natural persons, viz, Aboriginals or their spouses, are entitled to become members of an association incorporated under the ACA Act.  The governing committees of NAILSS and QAILSS proposed changes to the membership requirements of the rules that may have conflicted with s 49.  They discussed their intentions with a subordinate member of the Registrar’s staff in the Sydney office in early 1998.  The Registrar who is based in Canberra only became aware of the proposed changes relatively late in the piece.  He sought legal advice, which confirmed his concerns.  He told the governing committees that he would not approve the rule changes because he considered, inter alia, that they would disenfranchise current members and permit control of NAILSS and QAILSS by “an outside organisation”.  The committees alleged that, in making this decision, the Registrar lacked objectivity because he changed his mind about the acceptability of the proposed rule changes only after receiving approaches from a legal service hostile to Mr Robinson, then also ATSIC Deputy Chairman.  Conflicts developed because of the fact that the Registrar himself is an officer of ATSIC and his operations are funded by ATSIC, yet the Act vests in the Registrar important statutory powers to be exercised at his discretion and without any requirement for consultation with ATSIC.

4                     The response of the committees of NAILSS and QAILSS to what they believed to be the Registrar’s improper refusal to approve the rule changes was to set in train processes that led to the establishment of two new companies incorporated under the Corporations Law, ie, not subject to the Registrar’s supervision, so that they could achieve the corporate structures that NAILSS and QAILSS sought but were denied, by the Registrar’s refusal to approve the rule changes.  Part of this process involved the appointment on 3 July 1998 of Mr Kazar as provisional liquidator of each of NAILSS and QAILSS, on application by each’s governing committee.  The Registrar’s response was to appoint a Mr Dennis to be administrator of each company pursuant to s 71 the ACA Act on 10 July 1998 and to apply to the Supreme Court for the winding up of both corporations and the setting aside of Mr Kazar’s appointment.  Mr Dennis’ appointment, if valid, operated to vacate the offices of all members of the governing committee of both Corporations (s 73(c) the ACA Act) and to confer on him as administrator responsibility for the conduct of the affairs of each Corporation in place of its governing committee (s 71 the ACA Act).  When the Registrar appointed Mr Dennis administrator, he expected the administrator to be able to maintain both Corporations as properly representative bodies with continued funding from ATSIC.  As Mr Blick noted, with the benefit of hindsight, that was an unrealistic expectation given the course of action that the two Corporations had then already set upon.  ATSIC refused to continue grants payments to NAILSS and QAILSS and to Mr Dennis and he could not carry on their operations.

5                     Mr Dennis’ appointments also provoked a challenge by those previously in control of NAILSS and QAILSS to their legality.  On 6 August 1998, applications were brought in the name of each Corporation, no doubt on the instructions of their former governing committees, for judicial review of the Registrar’s decisions to appoint Mr Dennis.  Discussions then took place between the warring parties and, as an interim measure, Mr Kazar and Mr Hennessy were appointed by order of Merkel J on 14 September 1998 joint provisional liquidators of both Corporations.  Mr Dennis’ appointment as administrator was terminated the following day.

6                     During all this, there was also litigation between the Goolburri Aboriginal Corporation Land Council, of which Mr Robinson was an officer, and the Registrar.  On 30 October 1998, Merkel J gave judgment.  See Kazar v Duus (1998) 88 FCR 218.  His Honour held that the appointment of Mr Kazar to be administrator under s 436A the Corporations Law of the Goolburri Land Council by the governing committee of the Land Council was made for the improper purpose of preventing the Registrar implementing foreshadowed action to appoint an administrator under s 71 the ACA Act to the Land Council.  I was told at the hearing that this judgment played a part in the governing committees of NAILSS and QAILSS withdrawing from the field of their dispute with the Registrar, with the result that on 30 October 1998, on the application of the Registrar, Merkel J appointed Mr Hennessy sole liquidator of both NAILSS and QAILSS.  Mr Kazar’s appointment as joint provisional liquidator thereupon terminated.  On 11 November 1998, ATSIC indicated that it would meet Mr Hennessy’s reasonable fees as liquidator of both NAILSS and QAILSS.

7                     This is an outline only of highly contentious events and extensive legal manoeuvring by the Registrar and the governing committees of NAILSS and QAILSS, with ATSIC also being drawn into their disputation because of its funding role.  I have taken much of it from the report by Mr Bill Blick to the Minister for Aboriginal and Torres Strait Islander Affairs about the relationship between ATSIC and the Registrar of Aboriginal Corporations.  The Minister commissioned this report on 10 November 1998 and Mr Blick delivered it on 3 February 1999.  It was the disputes between the Registrar and NAILSS and QAILSS and between him and Goolburri Land Council that caused the Minister to take this action, though he subsequently asked Mr Blick to report on a dispute between the Registrar and another Land Council.

8                     Mr Blick exculpated the Registrar from the charge made by those associated with NAILSS and QAILSS, which was picked up by ATSIC, that he had refused to approve the rule changes proposed by NAILSS and QAILSS for an improper motive and Mr Blick criticised the response of the Corporations’ governing committees to this refusal.  As Mr Blick noted, the Registrar ultimately agreed with ATSIC’s further complaint that his appointment of Mr Dennis involved a waste of resources ($130,000 in all) essentially because of the action that the governing committees of the two Corporations had set in train immediately following that appointment, which resulted in Mr Dennis’ administration terminating after approximately two months, with the ultimate appointment of Mr Hennessy as liquidator on 30 October 1998.  Of ATSIC’s complaint that the litigation which the Registrar instigated and persisted with in respect of NAILSS and QAILSS  was expensive and unnecessary, Mr Blick agreed that it had been unproductive and expensive and concluded that, while ATSIC was the innocent and injured party in relation to the litigation, “both the Registrar and NAILSS and QAILSS … failed to give adequate consideration to the probable consequences of their various actions and the litigation arose largely as a result of this”.

9                     After the appointment of Mr Hennessy as sole liquidator, his administrations proceeded without any apparent further disputation until he took action to have Mr Robinson and Mr Watson publicly examined under the Corporations Law.  It was that action that led directly to Mr Leslie’s motions.  It was apparently instigated by Mr Hennessy in November 1999, and provoked allegations by Mr Robinson and Mr Watson that Mr Hennessy was using his powers as liquidator to seek their public examination for improper purposes.  These allegations have been taken up by Mr Leslie in the present proceedings.

10                  The first point to be dealt with is Mr Hennessy’s challenge to Mr Leslie’s standing to seek any of the relief sought.

11                  I consider that, by force of s 536(1)(b) the Corporations Law and s 67 the ACA Act that I have jurisdiction to inquire into the conduct of Mr Hennessy which is the subject of Mr Leslie’s complaints.  Given that the liquidator performs public duties as well as duties affecting private rights only, a matter made clear, eg, by s 533 the Corporations Law, I see no reason to read down the expression “any person” in s 536(1)(b) to limit complainants to persons with an interest in the particular liquidation over and above that of any member of the public.  See also Burns Philp Investments Pty Ltd v Dickens (No 2) (1993) 10 ACSR 626 at 630 - 631.  The section confers a wide power of inquiry on the Court.  In Dickens (No 2) it was treated as including power to inquire into complaints about the liquidator’s remuneration and the propriety of the quantum of his costs and disbursements.  The respondent accepted that s 536 had this reach and that, in effect, s 473(5) and (6) the Corporations Law did not provide the exclusive avenues for challenging the liquidator’s remuneration, costs and disbursements.  In Dickens (No 2), Young J said, of how the Court should exercise its power under s 536(1)(b), at 633:

“Mr Campbell QC for the plaintiffs, put that the barrier over which the plaintiff should be made to pass to have an inquiry mounted [under s 536] should not be a very high one and that all that was necessary for his clients to show was that there was a prima facie case that something needed to be investigated.  In my view this is correct.  The court at this stage should not make any finding on the reasonableness or otherwise of the liquidator’s conduct, but if there are sufficient matters prima facie calling for further investigation then, subject to proper safeguards as to the scope of the inquiry, an inquiry should be permitted.”

12                  I respectfully accept this as identifying the proper approach.  (I should record that counsel for Mr Hennessy objected to his being cross-examined unless and until the applicant had established a prima facie case for investigation.  In the event, in the interests of expediting the hearing, cross-examination, not protracted, proceeded and I think I should take Mr Hennessy’s oral evidence into account in deciding whether to permit an inquiry of the kind sought by the applicant.)

13                  The applicant has identified the areas of inquiry and the bases upon which investigation into them should be permitted in a statement of contentions filed by direction.

14                  The first point raised is that the liquidator conducted the windings up in a manner which gave no proper regard to the purpose of the windings up.  This was said to be to facilitate the transfer of the assets, undertaking and employees of NAILSS and QAILSS to the two companies newly formed by the Corporations’ governing committees under the Corporations Law after the Registrar refused to approve the rule changes.  The argument must be rejected.  The factual background to Mr Hennessy’s appointments shows that they were not made to facilitate any such object but were made over the opposition of those controlling NAILSS and QAILSS, at the behest of the Registrar, because he considered it appropriate to wind both Corporations up for non-compliance with the ACA Act.  It is therefore unnecessary to consider whether, if the applicants’ factual case here had been made good, it would, in any event, be proper for a liquidator appointed under the Corporations Law to wind up a corporation compulsorily, including a corporation established under the ACA Act, to conduct his administration so as to give effect to such an objective.

15                  The next complaint concerns what is said to be the excessive fees charged by Mr Hennessy as joint provisional liquidator from 14 September to 30 October 1998 and as liquidator thereafter.  The applicant submits that both were very simple liquidations, that NAILSS and QAILSS were not trading companies and their assets and liabilities were immediately ascertainable.  That submission reflects very inaccurately what was involved in Mr Hennessy’s administrations.

16                  When Mr Hennessy became liquidator, neither Corporation had any funds available as the Registrar of Aboriginal Corporations and Mr Kazar, as initial provisional liquidator, were asserting statutory charges and liens over each’s property.  Mr Hennessy had discussions with ATSIC in order to obtain funding from it for his future operations.  This was complicated by the Registrar contending that his charge also extended to any future property or funds that might become available to the Corporations.  Mr Hennessy was faced, because of the imbroglio involving contentions being made by the Registrar, Mr Kazar and those formerly in control of NAILSS and QAILSS, who were challenging the legality of the appointment of the administrator, with a range of quite complex legal issues which had to be resolved before he could finalise his administration.

17                  Both Mr Hennessy’s remuneration and Mr Kazar’s remuneration, in their capacities as joint provisional liquidators for the period 14 September 1998 to 30 October 1998, was determined in respect of both Corporations in amounts totalling $31,587.70 and $40,356.20 respectively, by orders of this Court on 18 August 1999.  Attention was directed at the hearing to concern by the applicant about the reasonableness and propriety of the amounts received by Mr Hennessy and Mr Kazar as joint provisional liquidators.  But those amounts having been ordered to be paid by orders of this Court, I do not consider it open to a single judge to reopen the question (at least where there is no evidence to suggest those orders were obtained by fraud).  This is consistent with s 473(6) the Corporations Law which is framed on the basis that no application can be made under it to challenge a liquidator’s remuneration that has been fixed by the Court.

18                  A very large part of the moneys that have been under Mr Hennessy’s control in respect of both liquidations have been expended on remuneration, costs and disbursements of Mr Hennessy as liquidator, of himself and Mr Kazar as joint provisional liquidators, of Mr Kazar as the initial provisional liquidator and of Mr Dennis as administrator.  Of the total of very nearly $400,000 that passed through Mr Hennessy’s control, nearly $327,000 has been paid out or is held earmarked for such purposes.  A total of $49,052 of the balance has been paid to unsecured creditors, all of whom have received payment in full of the debts owing them.  I was told at the hearing that the balance of about $20,000 is retained by Mr Hennessy in respect of an unresolved claim by Mr Kazar as initial provisional liquidator in the period 3 July to 10 July 1998.

19                  However, of this $400,000 overall, Mr Hennessy obtained access to $257,666.50 because ATSIC, which had made those moneys available by way of grants to the two Corporations to be expended on particular designated purposes, agreed to make all those moneys available to Mr Hennessy instead, to fund his administrations.  Mr Hennessy was appointed liquidator against the background of an ongoing dispute between the Registrar and ATSIC over the responsibilities of the Registrar to account for his activities to ATSIC and for ATSIC to fund the Registrar in his activities, including his supervisory activities over corporations formed under the ACA Act.  I accept, particularly in view of Mr Blick’s report, that in large part, the total of $326,831.66 paid out by Mr Hennessy in respect of his own, Mr Kazar and Mr Dennis’ remuneration, costs and disbursements was expended because of the tripartite dispute between the Registrar, ATSIC and those previously controlling NAILSS and QAILSS.  Much of this expenditure was unproductive in that it achieved little of worth to the public in return for the public moneys so spent, as Mr Blick observed.  The amounts which Mr Hennessy received for remuneration in the period after his appointment as liquidator from 30 October 1998 to 10 September 1999 appear high.  But it has to be remembered that, in addition to attending to the straightforward work of identifying and processing the quite small number of creditors’ claims, much of his time was taken up in dealing with the claims by both Mr Kazar and Mr Dennis in respect of their own remuneration and other issues that arose in the course of the tripartite dispute to which I have referred.  When the very large sums which Mr Hennessy (and Messrs Kazar and Dennis) received by way of remuneration are considered against this background, I am not prepared to accept that a prima facie case has been made for an inquiry into the quantum of Mr Hennessy’s remuneration as liquidator, ie, since 30 October 1998.

20                  Further, it is apparent that practically all the moneys of QAILSS which came under Mr Hennessy’s control, including the special grants moneys of $177,943.50, were provided to QAILSS by ATSIC.  ATSIC lifted the grant conditions in respect of the $177,943.50 and agreed to make those moneys available to Mr Hennessy, along with the other moneys available to QAILSS which had also been received from ATSIC to pay both the companies’ secured creditors and almost the whole of the “priority creditors”.  These covered the claims by Mr Kazar (in  his two capacities), Mr Dennis (in respect of whose fees and costs the Registrar had issued charges over the Corporations’ assets), as well as Mr Hennessy’s own fees and costs in his two capacities.  It also appears that the moneys available to NAILSS when Mr Hennessy took over, at least in the number 1, number 3 and KPMG trust accounts, were moneys provided by ATSIC by way of operating funds or for specific purpose grants and that Mr Hennessy obtained ATSIC’s approval to disperse those moneys and a special additional grant of $79,723 made available to him by ATSIC to ensure that not only were NAILSS’ unsecured creditors paid in full, but the fees and expenses of Mr Kazar in both capacities, Mr Dennis and Mr Hennessy himself in both capacities could be paid.  In large part, all amounts disbursed by way of remuneration, costs and disbursements by Mr Hennessy were made from moneys either specifically provided by ATSIC to Mr Hennessy for the purposes of his administration or from moneys provided to QAILSS and NAILSS by ATSIC.  Mr Hennessy only disbursed these moneys after seeking ATSIC’s express approval.  In so far as it is said that his decision to pay Mr Kazar’s fees should be reviewed, the evidence before me is that everything that Mr Hennessy has disbursed in respect of his claims as joint provisional liquidator has been disbursed to meet fees determined to be payable to him by orders of this Court, the payment of which by Mr Hennessy was expressly approved by ATSIC, the provider of the moneys.  The amounts of $98,000 disbursed by Mr Hennessy to the administrator, Mr Dennis, and $32,000 to Mr Dennis’ legal advisers, again were paid essentially from moneys provided by ATSIC with ATSIC’s approval and after Mr Hennessy had obtained a certificate from the Registrar that the claims by both Messrs Minter Ellison and Mr Dennis exceeded the amount he actually paid each under the so-called “secret agreement” and after he had obtained legal advice from his own solicitors, Messrs Corrs Chambers Westgarth, as to it being appropriate to settle the claims of both by paying the amounts the subject of that agreement.  In the context of this case, this, I think, is a powerful consideration against the Court too readily finding that the quantum of Mr Hennessy’s remuneration is open to question so that the question of his remuneration should become the subject of the inquiry sought.

21                  It is convenient to deal now with the applicant’s complaint that Mr Hennessy entered into a “secret agreement” pursuant to which he paid out moneys totalling $130,000 to Mr Dennis and to Mr Dennis’ solicitors, in breach of duty to obtain the sanction of the Court.  He was under no obligation to obtain the Court’s approval under s 477(2A) the Corporations Law as was contended, because payment under the agreement did not involve the compromise of any debt due to either company.  Nor is there any reason to think that the settlement agreement was one which required the approval of the Court under s 477(2B) the Corporations Law, as was also contended.  Mr Hennessy deposes to having entered into this agreement because he had no funds available to him to pay the claims in respect of Mr Dennis’ administration, the Registrar having issued statutory charges on all moneys of the Corporations.  By this agreement, Mr Hennessy was able to resolve, with ATSIC’s approval, the issue of the Registrar’s charges and the claims made in respect of Mr Dennis’ administration by making payments to which I have referred less than the amounts claimed because he was put in funds to do that by ATSIC.

22                  Another complaint is that the liquidator obtained approval, by resolution at a meeting of creditors held on 1 November 1999, of his fees in the NAILSS liquidation from 30 October 1998 to 10 September 1999 in an amount of $35,358.33 and in respect of the QAILSS liquidation for the period 30 October 1998 to 10 September 1999 in the sum of $32,275.82, by improper means.  The gravamen of the complaint is that only one creditor, the Deputy Commissioner of Taxation, attended these meetings and Mr Hennessy as Chairman held a special proxy from Mr Kazar.  But it is apparent from the minutes of the meetings that Mr Hennessy did not rely on Mr Kazar’s proxy.  There is no reason to doubt Mr Hennessy’s evidence that the meetings were properly convened and nothing to support an inference that Mr Hennessy adopted this procedure to obtain approval for payment of his remuneration in order to avoid subjecting his claims to scrutiny by the Court.  The circumstances of the case were unusual in that, because ATSIC had accepted responsibility to meet the debts of all creditors, those who attended had the assurance of being paid in full and so might be thought not to be overly concerned with the liquidator’s remuneration.  But as against the background of the scrutiny and approval of Mr Hennessy’s own remuneration claims by the effective paymaster, ATSIC, I do not think there is any basis for an inquiry into his remuneration.

23                  I reject the contention that there is ground for inquiry in respect of the allegedly excessive amounts paid out by Mr Hennessy to his solicitors, Messrs Corrs Chambers Westgarth, which total $26,509 for legal advice.  The applicant relies upon evidence from a costs assessor, Ms Stevens.  She refers to Corrs’ hourly rate of between $320 and $350 as “grossly excessive” and to the extent of “advices” claimed and the rates charged for them being “to say the least ‘mind-boggling’ …”.  But she qualifies these very harsh criticisms strongly herself by saying that “it is extremely difficult and it would be most unfair to criticise the costs too strongly in circumstances where we have absolutely nothing to assist us”.  She refers to having very little information available to her and it does not appear, in any event, that she was aware of the background to Mr Hennessy’s administrations and the complicated legal issues with which he had to deal by reason of the dispute involving the Registrar, ATSIC and those controlling NAILSS and QAILSS, to which I have referred.  Mr Hennessy has a discretion to decide whether to require his solicitors to tax their fees:  Re Solfire Pty Ltd (in liq) (No 2) [1999] 2 Qd R 182 at 198.  Before determining to pay them, he insisted that they provide fairly extensive detail of what they had done.  It was only after the solicitors had done this, though they did not provide a bill in taxable form, that Mr Hennessy determined to pay the fees.  I am not satisfied that any grounds have been established to show that he improperly exercised this discretion or that it otherwise miscarried so as to warrant an inquiry, subject as he was to obtaining ATSIC’s approval to pay these fees from moneys largely provided by ATSIC.

24                  As to Mr Kazar’s fees, he was, of course, appointed both as initial provisional liquidator and then as joint provisional liquidator at the behest of various members of the two Corporations, including the applicant.  I have already mentioned the fact that Mr Kazar’s fees as joint provisional liquidator are the subject of Court approval.  Mr Hennessy also deposes to the fees claimed by him in respect of the seven days that he was sole provisional liquidator to 10 July 1998 have also been approved by this Court.  That may be an error, in view of what I was told about $20,000 being held back by Mr Hennessy pending resolution of Mr Kazar’s claim here.  Counsel submits that, in relation to this particular lot of fees, the question is still unresolved.  If that is so, it is premature for the Court’s jurisdiction to be invoked.

25                  It is also contended that the liquidator procured the oral examination of Mr Robinson and Mr Watson pursuant to Part 5.9 of Chapter 5 of the Corporations Law for purposes unrelated to the liquidation and for an ulterior purpose, viz, to advance the interests of third parties, or rather a third party, the Registrar.  The applicant criticises both the decision of Mr Hennessy to conduct these examinations and the manner in which Mr Robinson was served and the timing of the examinations which coincided with ATSIC board elections, for which Mr Robinson was a candidate.

26                  The applicant does not seek any relief in respect of the public examination as such.  Rather does it appear that he relies upon the evidence relating to this matter as supporting his other claims of improper conduct by the liquidator sufficient to warrant inquiry.

27                  Mr Hennessy only arranged for the public examination after discussing his concerns with the Registrar and obtaining the Registrar’s agreement to fund the examination.  His reasons, disclosed to the applicant in his letter of 9 June 2000 and repeated in Court, included concerns he developed in respect of the formation of NAILSS and QAILSS.  In particular, he was concerned to investigate irregularities in the obtaining of funding at about the time of incorporation of these two entities in October 1998.  Under s 533 the Corporations Law, the liquidator has an obligation, if it appears to him in the course of a winding up, that a past or present officer or member of the company may have been guilty of an offence under a law of the Commonwealth or a State in relation to the company to make a report dealing with such matters.  The evidence available to Mr Hennessy when he arranged for their examination was capable of suggesting that Messrs Robinson and Watson, in seeking a grant of $500,000 from ATSIC for NAILSS and in later obtaining access to about $114,000 of that grant for the purposes of NAILSS and then in reporting to ATSIC in respect of the expenditure of the $114,000, may have made false statements about the existence, at those times, of NAILSS.  These events all occurred prior to its incorporation in October 1994.  If such false statements had, in fact, been made by Messrs Robinson and Watson, that could expose both to criminal prosecution.  Mr Hennessy thus had material available to him suggesting that offences may have been committed by those involved in the formation and subsequent operation of NAILSS.  His decision to seek the public examination can be justified as relating to the “examinable affairs” of NAILSS within the meaning of that term in s 9 the Corporations Law and going to matters which he was required to consider and investigate as part of his public duties as liquidator.

28                  It should be said that there is no evidence before me that either Mr Robinson or Mr Watson, in making these statements to ATSIC, sought to make or in fact received any personal financial gain.  But the material obtained by the applicant from Mr Hennessy and put before the Court by him shows that, whatever be the true position and whether, even if a prima facie case of unlawful conduct might be ultimately able to be made out against Mr Robinson and Mr Watson, and even if the discretion to prosecute might nevertheless not be exercised against them, Mr Hennessy was, in my opinion, entitled to have both gentlemen publicly examined.  I am not prepared to accept that Mr Hennessy’s decision to conduct the examination should be the subject of inquiry.

29                  The complaint by the applicant that Mr Hennessy so acted as to entitle him to an order for access to the books of either QAILSS or NAILSS under s 247A the Corporations Law is unsustainable.  That provision is not incorporated by force of s 67 the ACA Act so as to be available to the applicant.  Moreover, Mr Hennessy says, and it is not disputed, that he has offered to produce the books and records of both Corporations to Mr Leslie.  A major complaint is denial by the liquidator of access to his own working papers.  The applicant has not identified any legal entitlement to access to such materials.  In any event, he has provided the applicant with considerable information and, in particular, has made arrangements for one of his senior assistants to confer with Mr Sparks, of Simms Lockwood, to discuss the amount of fees charged by Mr Hennessy.  It emerged from what was said at the bar table that the applicant was, at one stage, intending to retain an accountant and liquidator, Mr Sparks, in connection with this litigation and it was against this expectation that it appears Mr Hennessy made his arrangement with Mr Sparks.  The applicant did not, however, pursue his retainer of Mr Sparks.  But Mr Hennessy’s willingness to disclose his private papers to the applicant’s nominated expert is not irrelevant in evaluating the merit of the complaints made here by the applicant.

30                  The motions in both matters will be dismissed.

Associate:

Dated:              31 October 2000