FEDERAL COURT OF AUSTRALIA

Elderslie Finance Corporation Limited v Newpage Pty Ltd (No 5)

[2007] FCA 961

CORPORATIONS – Winding up – letter of request to the court of a foreign country asking it to act in aid of, and to be auxiliary to, the Court in a winding up of a company, by summoning persons to be examined – High Court of Malaya – considerations relevant to exercise of discretion – form of letter of request

Corporations Act 2001 (Cth) s 581

ELDERSLIE FINANCE CORPORATION LIMITED (ACN 008 678 233)

AND ANOR v NEWPAGE PTY LTD (ACN 087 645 216) (RECEIVER AND MANAGER APPOINTED) (IN LIQUIDATION)

NSD 4OF 2007

LINDGREN J

20 JUNE 2007

SYDNEY

THE COURT ORDERS THAT:

1.      A letter of request in the form annexed be issued by the Court to:

The Chief Justice of the Federal Court of Malaysia

The Right Honourable Tun Dato’ Sri Ahmad Fairuz bin Dato’ Sheikh Abdul Halim

(as Acting Chief Justice of the High Court of Malaya)

Office of the Chief Registrar

Federal Court of Malaysia

Palace of Justice

Precinct 3

62506 PUTRAJAYA

MALAYSIA

requesting that Court to act in aid of and to be auxiliary to this Court in respect of the winding up of Newpage Pty Limited (Receiver and Manager Appointed) (in liquidation) ACN 087 645 216.

LETTER OF REQUEST

To the Chief Justice of the Federal Court of Malaysia

The Right Honourable Tun Dato’ Sri Ahmad Fairuz bin Dato’ Sheikh Abdul Halim

(as Acting Chief Judge of the High Court of Malaya)

Office of the Chief Registrar

Federal Court of Malaysia

Palace of Justice

Precinct 3

62506 PUTRAJAYA

MALAYSIA

The Federal Court of Australia hereby requests the High Court of Malaya to assist this Court and to act in aid of and to be auxiliary to this Court in respect of the winding up of Newpage Pty Limited (Receiver and Manager Appointed) (In Liquidation) ACN 087 645 216 (“Newpage”) by making orders, to the extent it has jurisdiction to do so, as follows:

1.                Orders recognising and giving effect to the attached Orders made by the Federal Court of Australia pursuant to section 459A of the Corporations Act, 2001 (Cth) on 25 January 2007:

“(1)             That Newpage be wound up.

(2)              That Barry Kenneth Hamilton of Level 2, 171 Macquarie Street, Hobart in the State of Tasmania, Chartered Accountant (“the Liquidator”), be appointed Liquidator of Newpage.”

2.                Such orders as it would be open to:

·        the Federal Court of Australia to make if the persons referred to in para 3 below had been within the territorial jurisdiction of the Federal Court of Australia; and

·        the High Court of Malaya to make if Newpage had been a company formed and incorporated under the Companies Act 1965 (Malaysia) and was being wound up by the High Court of Malaya under that Act,

by way of assisting the Liquidator in the exercise of his powers and the discharge of his duties and functions as liquidator of Newpage.

3.                Without limiting the generality of the above, orders pursuant to Section 249 of the Companies Act, 1965 (Malaysia) for the examination before the High Court of Malaya, of the following persons concerning the trade dealings, affairs and property of Newpage on the grounds appearing in the affidavit of Barry Kenneth Hamilton sworn 18 May 2007 (a copy of which accompanies this letter of request):

(a)               Muhamad Sobri Bin Din

No 301C, 2nd FLR

PKNS APR JLN SS 6/1

KELAN JAYA; 47301 P.J.;

(b)               Sorahimi Bin Sidek

Lot 2249, LRG HAJI ISMAIL

KG DELEK KIRI

41250 KLANG, SELANGOR.

4.                Such further orders pursuant to section 249 of the Companies Act 1965 (Malaysia) or otherwise as the High Court of Malaya may consider just and appropriate.

DATED 20 JUNE 2007

Justice Kevin Edmund Lindgren

A Judge of the Federal Court of Australia

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

REASONS FOR JUDGMENT (No 5)
(Application for letter of request)

1                                             Section 581 of the Corporations Act 2001 (Cth) (the Act) provides in subs (4) that the Court may request a court of a country other than Australia that has jurisdiction in external administration matters, to act in aid of, and be auxiliary to, it (the Court) in an external administration matter.  The expression “external administration matter” is defined in s 580 to mean, inter alia, the winding up, under Ch 5 of the Act, of a company.

2                                             The defendant, Newpage Pty Ltd (Newpage), is a “company” because it is a company registered under the Act (see the definition of “company” in s 9 of the Act).  It is being wound up pursuant to an order for winding up that was made in this proceeding on 25 January 2007.  Therefore, the Court’s power under s 581(4) is enlivened. 

3                                             By interlocutory process filed in Court on 21 May 2007, the applicant, Mr Hamilton in his capacity as Official Liquidator of Newpage, sought the issue of a Letter of Request addressed to the High Court of Malaya requesting that Court to act in aid of, and to be auxiliary to, this Court in respect of the winding up of Newpage.  Specifically, Mr Hamilton’s objective was to obtain orders from the High Court of Malaya for the purpose of conducting an examination of Muhamad Sobri Bin Din and Sorahimi Bin Sidek who are residents of Malaysia.

4                                             On 20 June 2007 I made the orders sought for the following reasons.

5                                             Mr Hamilton had already conducted certain examinations pursuant to ss 596A and 596B of the Act.  On 4 April 2007 in Melbourne, he conducted examinations of each of Mr Yii and Mr Parsons, who are respondents to other interlocutory processes filed in this proceeding.  Mr Yii is the sole director of Newpage.  Those examinations, and the examinations of other persons, are continuing.

6                                               Documents obtained by Mr Hamilton in the course of his inquiries refer to a transfer of $100,000.00 to KRI Development Sdn Bhd (KRI) from Newpage on 25 January 2006 and a “Put Option Agreement” between Mr Yii and KRI, executed by KRI under its common seal and witnessed by “Muhamad Sobri Din”.  A Deed of Variation was signed on behalf of KRI by Sorahimi Bin Sidek.  Muhumad Sobri Bin Din and Sorahimi Bin Sidek are directors of KRI, a company formed and registered in Malaysia.  Mr Hamilton states that “[w]ere each of Muhumad Sobri Bin Din and Sorahimi Bin Sidek in Australia, I would wish to examine each of them under Section 596B of the Corporations Act” regarding their dealings with Newpage.

7                                             Section 249 of the Companies Act 1965 (Malaysia) provides, relevantly, for a procedure for the summoning of any person whom the Court deems capable of giving information concerning the promotion, formation, trade dealings, affairs or property of a company.  This section is similar to s 596B of the Act which permits this Court to summon a person for examination about a corporation’s “examinable affairs” if the Court is satisfied that the person 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 may be able to give information about “examinable affairs” of the corporation.  The term “examinable affairs” is defined in s 9 of the Act to include “the promotion, formation, management, administration or winding up of the corporation”.

8                                             The High Court of Malaya has jurisdiction in the winding up of companies formed and incorporated in Malaysia under the Companies Act 1965 (Malaysia): see s 4(1) of that Act.

9                                             It was my view that this Court should issue a Letter of Request to the High Court of Malaya as sought by Mr Hamilton because the two individuals mentioned may be able to give information about the examinable affairs of Newpage, and this Court would have summoned them for examination about Newpage’s examinable affairs if they had resided in Australia. 

10                                          The Letter of Request was framed so as to ask the High Court of Malaya to make only orders that it would be open:

·                    to this Court to make if the two individuals were within the territorial jurisdiction of this Court; and

·                    to the High Court of Malaya to make if Newpage had been a company formed and incorporated under the Companies Act 1965 (Malaysia) and was being wound up by that Court under that Act. 

A limitation of the former kind (as well as of the latter) is a common feature of letters of request issued by overseas courts to Australian courts and vice versa.  The reason why I thought a constraint of the former kind appropriate is one of broad principle and of general application.  It is that it is conceivable that it may be open to the courts of some foreign countries (I have no particular countries in mind and certainly do not have Malaysia in mind) to make orders that would not be acceptable in Australia in the light of Australian public and legislative policy.  

Associate:

Dated: 27 June 2007