FEDERAL COURT OF AUSTRALIA

Trevor, in the matter of Bell Group NV (in liq) [2016] FCA 851

ORDERS

THE COURT ORDERS THAT:

1.    The time for applying to discharge the examination summonses and orders to produce directed to Paul Evans, David Hargreaves, Rod Whithear and Bruce Meredith (the applicants) that were issued pursuant to the orders made on 27 May 2016 be extended to 1 July 2016.

2.    Pursuant to s 596C(2) of the Corporations Act 2001 (Cth), paragraphs [1]-[165] of the affidavit filed in support of the originating process, including the documents referred to therein, be made available for inspection by the applicants.

3.    The orders to produce directed to the applicants and issued pursuant to the orders made on 27 May 2016 be stayed pending the determination of the applicants’ application to discharge the examination summonses and the orders to produce referred to in Order 1 (the discharge application).

4.    Subject to further order, the examination summonses referred to in Order 1 be adjourned to a date and time to be fixed.

5.    By 4.00 pm on 2 August 2016, the applicants and the plaintiff bring in agreed orders which provide for the steps necessary to bring the discharge application into readiness for hearing and which give their considered estimate of the time required for hearing the discharge application.

6.    Failing agreement on the matters referred to in Order 5, by 4.00 pm on 4 August 2016, the applicants and the plaintiff provide drafts of the orders they propose, supported in each case by a brief written submission that is not to exceed three pages.

7.    Order 2 be stayed until 4.15 pm on 1 August 2016.

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

REASONS FOR JUDGMENT

YATES J:

Introduction

1    On 27 May 2016, orders were made by a Registrar which provided for the issue of examination summonses to six examinees. In each case, the summons required the examinee to produce documents according to specified categories and to attend for examination about the examinable affairs of Bell Group NV (in liquidation) (BGNV).

2    Separately, orders to produce were made. Relevantly, each order to produce mirrored the specification of the documents required to be produced by the corresponding examination summons served on the examinee.

3    Each of four examinees seeks to set aside the examination summons and the order to produce served on him. The examinees are:

    Paul Evans, the State Solicitor for Western Australia;

    David Hargreaves, the Senior Assistant State Solicitor for Western Australia;

    Rod Whithear, the Chief Executive of the Insurance Commission of Western Australia (ICWA); and

    Bruce Meredith, the General Counsel for ICWA,

(together, the applicants)

4    The examination summonses and orders to produce were issued on the application of the plaintiff, Garry Trevor. Mr Trevor is the liquidator of BGNV. BGNV is a wholly-owned subsidiary of The Bell Group Ltd (in liquidation) (TBGL).

5    On 1 July 2006, Jagot J granted leave to the applicants to file an interlocutory process (the interlocutory process) seeking an order that the examination summonses and the orders to produce served on the applicants be discharged (the discharge application).

6    It is common ground that an interlocutory process for an order discharging an examination summons must be filed within three days after the examinee is served: r 11.5(2) of the Federal Court (Corporations) Rules 2000 (the Corporations Rules). It is also common ground that the interlocutory process was not filed within the prescribed time. However, the Court has power to extend time for that step, including by dint of r 1.10 of the Corporations Rules and r 1.39 of the Federal Court Rules 2011 (the FCR) (see below at [19]-[20]).

7    On 4 July 2016, Gleeson J made orders that the relief sought in paragraphs 4, 5, 7, 9 and 11 of the interlocutory process be listed for hearing before me on 19 July 2016. The relief sought in paragraphs 9 and 11 is directed to extending time to discharge the examination summonses and orders to produce served on the applicants. The relief sought in paragraphs 4 and 5 is for an adjournment of the examination summonses and a stay of the orders to produce, pending determination of the discharge application. The relief sought in paragraph 7 is for access to the affidavit(s) filed in support of the originating process seeking the issue of the examination summonses and orders to produce.

8    The following affidavits were read by the applicants:

    Timothy Ignatius L’Estrange 1 July 2016 and 8 July 2016;

    Tanya Maree Jones 8 July 2016;

    Paul Dominic Evans 8 July 2016;

    Angela Hamersley 8 July 2016 and 15 July 2016; and

    Jean Elizabeth Shaw 15 July 2016.

9    The following affidavits were read by the plaintiff:

    Scott Bruce Foreman 4 July 2016; and

    Scipio John Lipman 15 July 2016

10    It is necessary to understand the context in which the examination summonses and orders to produce were issued. However, before explaining that context ([26]-[59] below), I will refer, briefly, to the pertinent legislation and principles at play in this application with respect to the extension of time.

legislation and legal principles

11    Section 596B(1) of the Corporations Act 2001 (Cth) (the Act) provides:

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.

12    The jurisdictional preconditions to the exercise of the power of the Court to summon a person for examination under s 596B(1) of the Act include the condition that the subject matter about which information is to be given is the “examinable affairs” of the corporation: Meteyard v Love (2005) 65 NSWLR 36; [2005] NSWCA 444 (Meteyard) at [32].

13    The expression “examinable affairs” is defined in s 9 of the Act:

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 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).

14    Section 53(a) of the Act is also relevant in that it makes explicit that, for the purposes of the definition of “examinable affairs”, the “affairs” of a corporation include its property. Relevantly, “property” is defined in s 9 of the Act as:

… any legal or equitable estate or interest (whether present or future and whether vested or contingent) in real or personal property of any description and includes a thing in action …

15    In Evans v Wainter Pty Ltd (2005) 145 FCR 176; [2005] FCAFC 114 (Evans), Lander J at [245] observed that the procedure under Pt 5.9 of the Act for examining a person about a corporation “is to aid persons who have the responsibility of the external administration of the company in carrying out their duties”. Such persons are only entitled to seek an order for an examination summons where the purpose of the examination is for the benefit of the corporation, its contributories and its creditors.

16    At [250], his Honour said:

Whilst I agree that the question of what is a proper purpose must be determined by reference to the legislation itself because it is the legislation which gives the power to issue a summons for an examination and the carrying out of an examination, the power cannot be used for a collateral or ulterior purpose. It must be used for a purpose expressly or implicitly authorised by the legislation itself.

17    At [252], his Honour formulated the following principles:

In my opinion, the following propositions relevant to these appeals emerge from the legislation and the authorities.

1.    The power given to the court to summon a person for examination is a coercive power.

2.    The purpose of the power is to be gleaned from the legislation.

3.     The following legitimate purposes emerge:

3.1    First, an examination is designed to serve the purpose of enabling an eligible applicant to gather information to assist the eligible applicant in the administration of the corporation.

3.2    Second, it assists the corporation’s administrators to identify the corporation’s assets, both tangible and intangible. It also allows the corporation’s liabilities to be identified.

3.3     Third, the purpose is to protect the interests of the corporation’s creditors.

3.4    Fourth, it 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.

3.5    Fifth, it assists in the regulation of corporations by providing a public forum for the examination of examinable officers of corporations.

4.    If an eligible applicant applies for an order for the examination of a person for a purpose unconnected with the purposes authorised by the legislation that will be an abuse of process and the order, if obtained, will be set aside.

5.    The procedure may not be used to allow a party to obtain a forensic advantage and, if it is, any order obtained will be set aside.

6.    The procedure may not be used as a dress rehearsal for the cross-examination of a person in a pending or subsequent action. However, it is not improper to seek an order of the Court to summon a person for examination whilst litigation is pending against that person or entities connected with that person.

7.    The question whether in any particular case the applicant has used the procedure abusively will depend upon the applicant’s purpose in seeking the order and all of the surrounding circumstances. It will not be an abuse unless an offensive purpose is at least the predominant purpose.

8.    It will be an offensive purpose if the application cannot be characterised as being for the benefit of the corporation, its contributories or creditors.

9.    A creditor may, if first authorised by ASIC, apply to the Court for an order to summon for examination a person for the purpose of obtaining information in relation to a debt owed to the creditor if such an examination would be in the interests of the corporation or its creditors as a whole.

10.    A creditor may not use the procedure for the purpose of obtaining a forensic advantage which would not have been available to the creditor if the corporation had not gone into administration.

18    Rule 11.5(2) of the Corporations Rules provides:

Within 3 days after the person is served with the examination summons, the person may apply to the Court for an order discharging the summons by filing:

(a)    an interlocutory process seeking an order discharging the summons; and

(b)    an affidavit stating the facts in support of the interlocutory process.

19    Rule 1.10 of the Corporations Rules provides:

Unless the Corporations Act, the ASIC Act, or these Rules otherwise provide, the rules of this Court that provide for the extension or abridgment of a period of time fixed for the doing of any act or thing in relation to a proceeding apply to a proceeding to which these Rules apply.

20    Rule 1.39 of the FCR provides:

The Court may extend or shorten a time fixed by these Rules or by order of the Court:

(a)    before or after the time expires; and

(b)    whether or not an application for extension is made before the time expires.

21    The parties agree that, in considering whether an extension of time should be granted to permit the applicants to move to discharge the examination summonses served on them, it is relevant for me to take into account three matters.

22    The first is the reasons for the delay. I must be satisfied that a proper and satisfactory explanation has been given by the applicants for not moving within the three day time limit provided by r 11.5(2) of the Corporations Rules. Mr Trevor says that, in considering this matter, the period fixed by r 11.5(2) is not to be ignored. Plainly, that is correct. Nevertheless, one also cannot ignore the particular circumstances in which, and purposes for which, an examination summons is issued and whether, having regard to those matters, the time limit imposed by r 11.5(2) is appropriate. Similarly, one cannot ignore the particular circumstances of the person who is required to be examined. The mere fact that provision is made for such time limits to be extended shows that the prescribed time might not always be appropriate or, if appropriate, should nevertheless be extended having regard to the particular circumstances of the case. In this connection, the length of the delay, in the given circumstances, is also plainly relevant.

23    The second matter is whether any prejudice will be suffered if the extension of time is granted. The applicants say that the prejudice must be irreparable prejudice, relying on the observation to that effect by Emmett J in Commonwealth of Australia v Sheahan, in the matter of Markethaven Pty Ltd (subject to a deed of company arrangement) [2004] FCA 1301 at [28]. Whether the prejudice must be irreparable is not a question that looms large in this application.

24    The third matter is the merits of the application for which an extension of time is sought. Of course, at this juncture I am only dealing with the merits of the discharge application to the extent that they inform me whether an extension of time is warranted. Plainly, time should not be extended for an application that is hopeless in the sense that it is apparent that it is doomed to fail on its merits or in point of legal principle. However, it would not be an appropriate exercise of discretion to shut out an applicant who can demonstrate a case for relief that is arguable. In Lucic v Nolan (1982) 45 ALR 411; [1982] FCA 232 (Lucic) Fitzgerald J, at 417, whilst dealing with an extension of time under other legislation, put the matter in terms which, in my view, are apt for the present case:

It is neither necessary nor desirable, if indeed it would be possible to enumerate the great variety of possibly material circumstances to be considered on an application for an extension of time. Nor, in my opinion, is it possible to identify particular circumstances or classes of circumstances which must automatically be excluded from consideration. Each individual case should be dealt with individually, giving due weight to prior decisions and what they reveal of judicial attitudes … Whilst there are obvious reasons why there should be no attempt at a full investigation of the merits of the application for review on an application for an extension of time, I would not exclude from consideration in an appropriate case some obvious strength or weakness in an applicant’s case or matters which might justify the refusal of relief, if the court has a discretion to do so where a ground for relief is made out.

25    Given the nature of the present application, I do not propose to analyse the competing contentions of the parties on the merits of the case that the applicants wish to advance to discharge the examination summonses beyond the extent that is necessary to form a view on whether time should be extended, which is the central question before me.

Background

The Main Bell proceedings

26    TBGL is the holding company of the group of companies known as the Bell Group. TBGL’s wholly-owned subsidiaries include BGNV and Bell Group Finance Pty Ltd (in liquidation) (BGF), which acted as the treasury entity for the Bell Group. BGNV is an unsecured creditor of TBGL and BGF arising from loans made in 1985 and 1987, with admitted proofs of debt in the windings up of TBGL and BGF for substantial sums.

27    There has been a range of litigation concerning companies within the Bell Group. The principal litigation was initially determined by the Supreme Court of Western Australia (the WASC) in 2008 and 2009: Bell Group Ltd (in liq) v Westpac Banking Corporation (No 9) (2008) 39 WAR 1; [2008] WASC 239 and Bell Group Ltd (in liq) v Westpac Banking Corporation (No 10) (2008) 39 WAR 1 at 930; [2009] WASC 107. In that litigation, the liquidators of TBGL and BGF, amongst other companies, sought to recover amounts that various financial institutions had appropriated to themselves from the sale of the assets of the Bell Group companies over which they claimed they held security. The decisions to which I have referred were subsequently appealed to the Western Australian Court of Appeal and the High Court (together with the first instance proceeding, the main Bell proceedings). Prior to the hearing of an appeal in the High Court, the main Bell proceedings were settled. As a result of that settlement, the liquidators of TBGL and certain of its subsidiaries received and now hold approximately $1.8 billion on trust for various Bell Group companies that were party to the main Bell proceedings.

28    ICWA advanced approximately $200 million to the liquidators of TBGL and BGF in order to finance the main Bell proceedings and other actions.

29    Subsequent to the main Bell proceedings, further litigation has arisen in connection with the distribution of the settlement proceeds.

The WASC proceedings

30    The liquidators of TBGL and BGF have commenced a proceeding in the WASC (COR 146 of 2014) (the 146 proceeding) seeking orders as to how the settlement proceeds are to be distributed. There are, however, certain antecedent questions which must be determined. Many of these questions are raised in proceedings COR 202 of 2014 (the 202 proceeding) and COR 208 of 2014 (the 208 proceeding). The 202 proceeding and the 208 proceeding have now been consolidated.

31    The 208 proceeding concerns, in part, an agreement referred to in the present application as the Reconfirmation Agreement.

32    The Reconfirmation Agreement was made on 4 July 1997. Broadly speaking, clause 5 provides that, in certain Actions, as defined, BGNV would not take certain steps, including steps to delay, oppose or hinder the amendment of certain Trust Deeds, as defined. The Trust Deeds have relevance to the distribution of the settlement proceeds from the main Bell proceedings. Mr Trevor and BGNV, amongst others, are defendants in the 208 proceeding. Amongst other relief, ICWA seeks a declaration to the effect that Mr Trevor and BGNV cannot do certain things or take other steps to delay, oppose, hinder or resist the amendment of certain trust deeds identified as the BGF Trust Deed and the TBGL Trust Deed. This relief purports to be based on the contractual obligations created by clause 5 of the Reconfirmation Agreement.

33    Mr Trevor and BGNV dispute ICWA’s construction of clause 5 of the Reconfirmation Agreement. Further, on 4 June 2014, the WASC gave directions that Mr Trevor would be justified in opposing any step to amend the BGF Trust Deed and TBGL Trust Deed. For reasons which I will explain (see [57] below), Mr Trevor and BGNV also say that ICWA has repudiated the Reconfirmation Agreement; that this repudiation has been accepted; and that the agreement has been terminated.

34    ICWA has filed a Statement of Issues, Facts and Contentions dated 23 April 2015 in support of the relief it seeks. As yet, BGNV and Mr Trevor have not filed a responsive statement. They have also disputed that the WASC has jurisdiction in the matter. They say that the High Court has exclusive jurisdiction on the basis that the proceeding involves a suit by the State against the Commonwealth. To address this allegation, ICWA has filed a writ of summons in the High Court in which it seeks like relief against the same defendants in the 208 proceeding. The writ of summons includes an application for a declaration in equivalent terms to the declaration sought against Mr Trevor and BGNV in the 208 proceeding.

35    The applicants say that because the 208 proceeding is concerned with the manner in which the obligations under the Reconfirmation Agreement apply to BGNV, it can be expected that an issue in that proceeding will be whether the Reconfirmation Agreement remains on foot in light of the purported acceptance of the alleged repudiation to which I have referred. The applicants argue that the question of whether the Reconfirmation Agreement remains on foot is central to the question of whether ICWA is entitled to the declaration it seeks. The applicants say that if the question of whether the Reconfirmation Agreement remains on foot is not brought forward in the 208 proceeding, then Mr Trevor and BGNV would be estopped from raising that question in other proceedings: Port of Melbourne Authority v Anshun Proprietary Limited (1981) 147 CLR 589; [1981] HCA 45.

36    On 9 December 2014, Pritchard J directed the parties in the 146 proceeding to confer with a view to agreeing on the terms on which the parties were to attend a mediation conference for the purpose of resolving or narrowing the points of difference between them in that proceeding, in the 202 proceeding, and in the 208 proceeding. The parties agreed to attend a mediation in Singapore on 12 and 13 May 2015.

37    There are numerous other proceedings concerning Bell Group companies in the WASC to which ICWA is a party or in which it has some involvement. It is not necessary for me to detail those proceedings in these reasons.

The Bell Bill

38    On 5 May 2015, one week before the mediation referred to at [36] above was to take place, a Notice of Motion to introduce the Bell Group Companies (Finalisation of Matters and Distribution of Proceeds) Bill 2015 (WA) (the Bell Bill) was given in the Legislative Assembly of the Parliament of Western Australia.

39    On 6 May 2015, the Bell Bill was introduced into Parliament and the first and second readings occurred. On 17 and 18 May 2015, the second reading debate occurred. On 23 June 2015, the third reading of the Bell Bill occurred and the Bill was transmitted to the Legislative Council.

40    On 11 August 2015, the first and second reading of the Bell Bill occurred in the Legislative Council. On 15 September 2015, the second reading debate occurred and the Bill was referred to the Standing Committee on Legislation to inquire into and report on the Bill.

41    On 17 November 2015, the Standing Committee tabled its report dated 10 November 2015. On the same day, the second reading debate resumed in the Legislative Council.

42    On 19 November 2015, the Legislative Council returned the Bill to the Legislative Assembly with amendments. On 25 November 2015, the Legislative Assembly considered the amendments.

43    On 26 November 2015, the Bell Bill was passed by Parliament and the Governor assented to the Act: Bell Group Companies (Finalisation of Matters and Distribution of Proceeds) Act 2015 (WA) (the Bell Act).

The Bell Act

44    The Bell Act established the Companies Administrator Authority (the Authority) as a body corporate. The Authority was to be governed by the Administrator appointed by the Minister. On or about 27 November 2015, Michael Stiassny of KordaMentha was appointed as the Administrator. I pause to note that Mr Stiassny is one of the six examinees against whom an examination summons and order for production have issued.

45    Amongst other things, the functions of the Authority were to collect, realise and otherwise deal with the property of the WA Bell Companies (being those companies listed in Schedule 1 of the Bell Act) in accordance with the Act, and to administer each WA Bell Company until it was dissolved. The Authority was required to determine the property and liabilities of each WA Bell company having regard to various specified considerations. The Authority was required to give each person whom it reasonably believed to have been a creditor of a WA Bell Company immediately before the transfer day, as defined, a notice requiring the person to give to the Authority, within a limited time, full particulars of all liabilities of the company in relation to the person.

46    In this connection, the Authority issued a notice to ICWA on 15 January 2016 and ICWA lodged a confidential submission with the Authority on 12 February 2016. This submission contained ICWA’s factual and legal contentions as to the bases on which it claimed to be entitled to the receipt of various amounts out of the settlement sum. The applicants say that the confidential submission also reflected arguments which may be put at trial in proceedings in which it is a party in the WASC.

47    The Bell Act required the Authority to prepare a draft report setting out its preliminary determination of the property and liabilities of each WA Bell Company and the recommendations it proposed to make to the Minister. The draft report was to be provided to each person who gave particulars of a liability. On 10 May 2016, ICWA received a first draft report from the Authority, on a confidential basis.

48    The Bell Act required the Authority to report to the Minister on the property and liabilities of each WA Bell Company as soon as practicable after the Authority had made a final determination. However, as events transpired, no such report was made to the Minister.

49    The Bell Act provided that the Authority was entitled to submit to the State Solicitor a question concerning the functions or powers of the Authority, and required the State Solicitor to give the Authority a written opinion on a question so submitted.

50    On 27 November 2015, BGNV commenced proceedings in the High Court challenging the constitutional validity of the Bell Act. Like proceedings were initiated in the High Court by other persons.

51    On 16 May 2016, the High Court delivered its judgment: Bell Group NV (In liq) v Western Australia (2016) 90 ALJR 655; [2016] HCA 21. The High Court concluded that the Bell Act was invalid in its entirety by operation of s 109 of the Constitution because of the inconsistency between provisions of the Bell Act and provisions of the Income Tax Assessment Act 1936 (Cth) and the Taxation Administration Act 1953 (Cth) (together, the Tax Acts).

52    At [9], the plurality held that the Bell Act purported to create a scheme under which Commonwealth tax debts were stripped of the characteristic ascribed to them by the Tax Acts as to their existence, their quantification, their enforceability and their recovery. Thus, the rights and obligations which arose and had accrued to the Commonwealth as a creditor of the WA Bell Companies in liquidation, and to the Commissioner of Taxation, under a law of the Commonwealth prior to the commencement of the Bell Act, were altered, impaired or detracted from by the Bell Act. At [79], Gageler J expressed agreement with that conclusion, but on a narrower basis than that expressed by the other members of the High Court.

53    On 17 May 2016, Mr Trevor filed the originating process by which he sought the issue of the examination summonses and the orders for production.

The 29 May 2015 letter

54    On 29 May 2015, shortly after the Bell Bill had been introduced, the solicitors for Mr Trevor and BGNV, Lipman Karas, wrote to Mr Evans (the 29 May 2015 letter). In that letter, Lipman Karas stated that, if the Bell Bill were to be enacted, the Bell Act would be constitutionally invalid. They also stated that it was clear that representatives of the State Solicitor’s Office (the SSO) and ICWA had, for some time, “been intimately involved” in the preparation of the Bell Bill in secret and in a manner designed to mislead Mr Trevor, BGNV, the WASC, and others.

55    Lipman Karas also referred to the mediation that was to take place in Singapore on 12 and 13 May 2015. They argued that the introduction of the Bell Bill was not coincidental, but designed to improve ICWA’s negotiating position at the mediation. Lipman Karas noted that, in fact, this goal had not been achieved because, as a consequence of the introduction of the Bell Bill, the mediation had not gone ahead. Apparently, this was because BGNV decided that, in light of those circumstances, it would not attend.

56    In their letter, Lipman Karas said that the introduction of the Bell Bill had “important consequences” for the personal liabilities of those involved in its preparation, including the Western Australian Treasurer, representatives of the SSO and representatives of ICWA.

57    Without descending to the detail of the letter, the following allegations were made:

    The introduction of the Bell Bill was a criminal contempt of the WASC.

    The introduction of the Bell Bill amounted to a conspiracy on the part of those responsible for it to cause financial harm to BGNV.

    ICWA’s conduct in procuring and assisting in the preparation of the Bell Bill constituted a repudiation of various agreements, including the Reconfirmation Agreement. Lipman Karas said that BGNV accepted ICWA’s repudiation of the Reconfirmation Agreement and terminated it.

    ICWA’s conduct in procuring and assisting in the preparation of the Bell Bill amounted to a breach of an agreement styled the Post Termination Inter Creditor Agreement dated 23 September 1999.

58    The 29 May 2015 letter was met with a detailed response from Mr Evans on 24 June 2015, refuting the allegations that had been made.

59    The applicants rely on a passage in the 29 May 2015 letter as conveying an acceptance on Mr Trevor’s part that, if the Bell Act were found to be invalid, there would be little financial consequence to BGNV and that BGNV would not pursue the foreshadowed claims. Mr Trevor disputes that interpretation of the relevant passage.

The documents required to be produced

60    Broadly speaking, the documents sought by the examination summonses and the orders to produce are:

    documents relating to “the Bell legislation proposal”;

    documents passing between the SSO or ICWA and the Authority or brought into existence in relation to any dealing with or the functions, powers or operation of the Authority or the Administrator; and

    documents relating to the inquiry conducted by the Legislation Committee of the Legislative Council of the Parliament of Western Australia into the Bell Bill.

61    “[T]he Bell legislation proposal” is defined as:

(a)    any proposal that led the government of Western Australia to draft and introduce into the Parliament of Western Australia the Bell Group Companies (Finalisation of Matters and Distribution of Proceeds) Bill 2015 and the Bell Group Companies (Finalisation of Matters and Distribution of Proceeds) Amendment Bill 2016; and

(b)    any proposal to invoke the provisions of Part 1.1A of the Corporations Act 2001 (Cth) or otherwise achieve an outcome whereby the affairs of the Bell group of companies, or some of them, would be dealt with by a statutory or other authority in accordance with the law of Western Australia, rather than by the liquidator of the relevant Bell group company in accordance with the winding up provisions of the Corporations Act or the winding up provisions of the Corporations Law, as applied by the Corporations Act, as the case may be.

62    The applicants contend that there are likely to be very significant claims for legal professional privilege and public interest immunity in respect of the documents for which production is sought. ICWA and SSO have identified at least 18 categories of documents that may be immune from production.

63    The applicants say that this is unsurprising in circumstances where SSO acted as legal adviser to ICWA and the State of Western Australia in respect of the Bell Bill and Bell Act. The applicants say that it is also unsurprising given that the examination summonses and orders to produce seek documents such as any communications between SSO and ICWA and the Parliamentary Counsel’s Office of Western Australia, the Office of the Solicitor General of Western Australia, the Attorney-General of Western Australia and any representative of the Commonwealth of Australia, including the former Treasurer of the Commonwealth, in relation to “the Bell legislation proposal”.

64    On the evidence before me, the documents required to be produced are voluminous. The applicants submit, and I accept, that they have been working assiduously to collect all the documents that meet the call of the examination summonses and the orders to produce.

65    Ms Shaw, who is an Assistant State Solicitor employed in the SSO, has assisted in coordinating the collation and review of documents potentially relevant to the examination summonses and orders to produce served on Mr Evans and Mr Hargreaves. On 15 July 2016, Ms Shaw deposed that she could not provide an accurate estimate of the amount of time that would be required to complete the task of identifying and reviewing the documents required to be produced and to assess the claims of privilege or immunity that might exist with respect to those documents.

66    Ms Hamersley has been engaged by ICWA as a consultant solicitor to assist with matters relating to the liquidations of the Bell Group companies. Ms Hamersley is involved in coordinating and supervising the work required to answer the call of the examination summonses and orders to produce served on Mr Whithear and Mr Meredith. On 15 July 2016, Ms Hamersley deposed that she cannot say with certainty how much time will be required to complete the task of collating and reviewing the relevant documents.

67    I should add that both Ms Shaw and Ms Hamersley have made affidavits which set out in a sufficiently detailed way the work that has been undertaken and efforts made within the SSO and ICWA to date to produce the documents that are sought. Ms Jones, a solicitor employed in the SSO, has also made a detailed affidavit on these matters.

Reasons for the delay

68    Mr Hargreaves, Mr Whithear and Mr Meredith were served with the examination summonses and orders to produce directed to them on Friday, 3 June 2016. Thus, they should have moved to discharge the examination summonses and orders to produce by Monday, 6 June 2016, even though that was a public holiday in Western Australia.

69    Mr Evans was not served until Tuesday, 7 June 2016. Thus, he should have moved to discharge the examination summons and order to produce directed to him by Friday, 10 June 2016.

70    On 7 June 2016, the day on which he was served, Mr Evans conferred with officers of the SSO and ICWA about the work that might need to be done to respond to the examination summonses and orders to produce. He identified a number of issues for consideration including the scope of the task required to produce the documents; whether records held by the SSO or ICWA could be produced by the named officers in circumstances in which the examination summonses and orders to produce were not directed to the State of Western Australia or ICWA; and issues in relation to the potential representation of the State of Western Australia, ICWA and their officers, including the potential engagement of external counsel and solicitors.

71    On 9 June 2016, in accordance with Guidelines relevant to Ministers and Officers involved in Legal Proceedings, Mr Evans briefed the Attorney-General for Western Australia and the Treasurer. He sought approval from the Attorney-General in relation to the funding of, and arrangements for, external representation for the applicants as well as for the State of Western Australia and ICWA. Mr Evans considered that it was preferable that any external counsel and solicitors to be engaged be based in Sydney given that the examination summonses and orders to produce had been issued out of the New South Wales District Registry of the Court.

72    In the meantime, Mr Evans had discussions with senior counsel in Sydney, including with Mr Hutley SC who appears for the applicants on this application. On that day, Mr Evans also directed a solicitor in the SSO to commence preparing a brief for external counsel.

73    On 10 June 2016, the SSO sent a letter to Lipman Karas in which, amongst other things, the validity of the examination summonses and orders to produce was raised. In that connection, the letter said:

The State Solicitor and Mr Hargreaves are currently considering their response to the summonses and orders, including any application to stay the processes. We note that the summonses do not provide any indication of the examinable affairs of Bell Group NV (in liq) upon which it is contended Mr Evans or Mr Hargreaves could give information. In addition, the terms of the summonses and orders are very broad and seek production of documents which are clearly protected by privileges and immunities and, as such, are manifestly oppressive.

For the purposes of conferral, please advise us of the examinable affairs to which the summonses purport to relate, and upon which it is suggested Mr Evans or Mr Hargreaves could give information. In addition, we formally request a copy of the affidavit and submissions filed with the Federal Court in support of the application for the summonses.

74    A response to this letter was not received until 17 June 2016. In that response, Lipman Karas, on behalf of Mr Trevor, declined to provide the information that had been requested. They also declined, on behalf of Mr Trevor, to provide a copy of the affidavit filed in support of the originating process.

75    In the meantime, on 13 June 2016, Mr Evans attended a meeting between officers of ICWA and the SSO. That meeting included consideration of the further steps necessary to identify and review candidate documents for relevance, privilege and immunity, and the potential retention of an external firm and counsel to advise and act in relation to those matters.

76    On the same day, Mr Evans received approval from the Attorney-General to retain external legal representation to represent the State, ICWA and the applicants. The brief to Mr Hutley SC and Mr Ahmed, who was engaged as junior counsel for the applicants, was finalised.

77    On 14 June 2016, the SSO made contact with two firms of solicitors in Sydney with a view to discussing their availability and interest in acting. On 15 June 2016, a decision was made to engage the applicants’ present solicitors, Jones Day. It appears that Jones Day was engaged to act as early as 17 June 2016, although the final terms of engagement were not settled until the following week. Nevertheless, in the meantime, discussions with counsel and solicitors proceeded over 16 and 17 June 2016 and further meetings took place between the SSO and ICWA in relation to compliance with the examination summonses and orders to produce.

78    Between 13 and 17 June 2016, work within the SSO in relation to the examination summonses and orders to produce continued, however that work was progressively disrupted by preparations for a scheduled move, and the actual move, of the SSO to new premises. These disruptions included periodic disruptions to information technology services, including email and document production, record facilities and research facilities. The move to the new premises was significant. It involved two years of planning and affected all staff at the SSO. The move took place, physically, between 17 and 19 June 2016.

79    On 17 June 2016, Ms Shaw identified the three day time limit under r 11.5(2) of the Corporations Rules. The circumstances in which this became known to, or was known by, Ms Shaw is not stated in the evidence. She has not, herself, given evidence on this subject. Mr Evans said that he became aware of the time limit either on Monday, 27 June 2016 or during the immediately preceding week when he first received a draft of the proposed interlocutory process and conferred with Jones Day. Mr Evans gave evidence on information and belief that Mr Hargreaves did not become aware of the time limit until sometime during the week of 21 June 2016, when he returned from pre-planned annual leave that he had taken from 6 to 20 June 2016, during which he was mostly interstate. Mr Evans also gave evidence on information and belief that Mr Meredith did not become aware of the time limit until 4 July 2016 and that Mr Whithear did not become aware of the time limit until either 5 or 6 July 2016 (that is, in each case, after the interlocutory process had been filed).

80    Evidence has been given as to the steps taken by the applicants between 20 June 2016 and 1 July 2016. It is not necessary for me to summarise that evidence other than to note that telephone conferences occurred between Mr Sefton, the Deputy State Counsel, who had been tasked with the process of engaging an external firm of solicitors, and Jones Day and that various aspects of preparation work were undertaken by Jones Day.

81    On 21 June 2016, Jones Day wrote to Lipman Karas identifying that they acted for the State of Western Australia, ICWA and the applicants. The letter recorded Jones Day’s instructions that the examination summonses and orders to produce were liable to be set aside on grounds that included that the jurisdictional requirements for the exercise of the power under s 596B(1) of the Act had not been satisfied; that the examination summonses had not been issued for a proper purpose; and that the examination summonses were oppressive. The letter gave notice that Jones Day had been instructed to file an application to set aside the examination summonses or, alternatively, to limit their scope. The letter gave notice that the applicants would seek access to the affidavit filed in support of the originating process. Finally, the letter requested Lipman Karas to confirm that certain information had been provided to the Court in support of the relief sought in the originating process.

82    On 23 June 2016, Lipman Karas responded, stating:

As we explained in our letter to the State Solicitor’s Office dated 17 June 2016, our client is under no obligation to respond to your clients’ request for information. Accordingly, our client declines to respond to your query.

83    On 27 and 28 June 2016, Mr Evans and Mr Sefton attended conferences in Sydney with Jones Day. The conference on 28 June 2016 was also with counsel. At the latter conference, it was decided that it was appropriate for the interlocutory process to be settled by Mr Hutley SC who was not available to do so until 1 July 2016.

84    On 1 July 2016, a teleconference took place between Mr Sefton, Jones Day and counsel during which the form of the interlocutory process was settled and supporting evidence was discussed. On that day, an ex parte application was made to file the interlocutory process and to seek, amongst other orders, an abridgment of time for service on Mr Trevor and the Australian Securities and Investments Commission. As I have noted, on that day, Jagot J made relevant orders and the matter came back before Gleeson J on 4 July 2016 for the making of further orders that led to the hearing before me.

85    It can be seen that 14 to 16 business days had elapsed after service of the examination summonses and the orders to produce and before the interlocutory process was filed. This period included different public holidays in Western Australia and New South Wales, Mr Hargreaves’ absence on annual leave until 21 June 2016, and the period of disruption caused by the SSO’s move to new premises. Within that period, the SSO sought further information about the examination summonses and orders to produce, which Mr Trevor declined to provide. Shortly after their engagement, Jones Day had also advised Lipman Karas of the applicants’ intention to move to discharge the examination summonses and the orders to produce.

86    Mr L’Estrange gave evidence that, prior to being engaged in this matter, Jones Day had not had any previous involvement in the proceedings and disputes involving BGNV, TBGL, BGF and other related entities.

87    The applicants submit that the evidence (which includes that given by Ms Jones, Ms Shaw and Ms Hamersley) shows that they have worked expeditiously and carefully to respond to the examination summonses and the orders to produce in circumstances where the summonses and orders were obtained in a State distant from their home jurisdiction and where they have been required to obtain new legal representation. They submit that the evidence discloses that, since service, they have taken numerous steps to obtain advice in relation to the scope of the summonses and orders and that those steps were more complicated than in an ordinary case given the Guidelines to which I have referred at [71] above. They also rely on their own lack of knowledge of the applicable time limit. Further, they rely on the fact that SSO corresponded with Lipman Karas on 10 June 2016 and that Jones Day similarly corresponded with Lipman Karas on 21 June 2016 with a view to obtaining information to help them consider their position, and that Lipman Karas declined, on behalf of Mr Trevor, to provide that information. The applicants say that Mr Trevor has known since 21 June 2016 of their intention to move to set aside the examination summonses and orders to produce.

88    Mr Trevor criticises the quality of the explanation given by the applicants for their delay and points to what he regards as being deficiencies in the evidence filed on their behalf, including the fact that, of the four applicants, only Mr Evans has made an affidavit and therefore given a direct explanation for his delay.

89    Mr Trevor argues that the evidence seems to reflect a change of heart on the part of the applicants in that, initially, it appears that they intended to comply with the summonses and orders. According to Mr Trevor, this intention appears to have changed on or around 21 June 2016 (see [81] above). Mr Trevor hypothesises that the applicants had consciously decided not to move to discharge the summonses and orders and that, now, they seek to resile from that decision. Alternatively, he hypothesises that the applicants made a deliberate decision to delay filing the interlocutory process.

90    Mr Trevor advances a number of submissions that attack the applicants’ stated unawareness of the three day time limit. I do not propose to summarise all the submissions Mr Trevor makes other than to note that they raise a number of speculative possibilities as to what the applicants might have known or, perhaps, should have known. It is enough for me to say that, having considered these submissions, I am not persuaded that I should go behind the evidence that has been given. In short, I accept that each applicant was not aware of the time limit until the times recorded at [79] above.

91    I do accept, however, that from around 17 June 2016, officers within the SSO were aware of the time limit. On 21 June 2016, Jones Day put Mr Trevor on notice of the applicants’ intention to move to discharge the examination summonses and the notices to produce. The question that arises is whether the effluxion of time from either 17 or 21 June 2016 to 1 July 2016, when the interlocutory process was filed, should stand as an additional reason why time should not be extended.

92    Mr Trevor submits that at no time did any of the applicants show concern that he was out of time or exhibit any sense of urgency. He argues that the applicants have adopted a leisurely approach, which appears to have been premised on the assumption that they are entitled to bring their application at a time of their choosing to suit their convenience and that of their counsel. Mr Trevor submits that this is not a satisfactory explanation for the delay.

Merits of the discharge application

93    The applicants say they have a strongly arguable case that the examination summonses and orders to produce should be discharged. The applicants say that this is for “a host of reasons”. On this application they advance eight reasons, which can be summarised as follows.

94    First, they submit that the apparent purpose for the examination summonses and orders to produce does not relate to the examinable affairs of BGNV but, rather, “the Bell legislation proposal”. Relying on certain observations in Meteyard at [40]-[42], the applicants argue that not every decision that may have an effect on the property of a company falls within its “examinable affairs”. Thus, decisions that are made independently of the company, even if they have a potential to affect the company’s property, do not fall within such affairs. More specifically, the applicants submit that a decision made by a legislative or administrative body as to the property of the company may affect the value of the company’s property, but nonetheless does not constitute its “examinable affairs”.

95    The applicants argue that “the Bell legislation proposal” is such a case: it may have had the capacity to affect the value of BGNV’s property, but it was a proposal that was independent of BGNV. Thus, according to the applicants, the examination summonses and orders to produce are foreign to BGNV’s “examinable affairs”.

96    Secondly, the applicants submit that the examination summonses and orders to produce have no apparent legitimate purpose. They argue that such process must be directed to protecting or increasing the assets of the corporation concerned. The applicants say that, as the Bell Act was declared wholly invalid by the High Court in May this year, it never obtained legislative force and could not have had an effect on BGNV’s assets. The purpose of the examination summonses and orders to produce, so the applicants say, could not have therefore been directed to protecting or increasing BGNV’s assets. Consequently they could not have been issued for a legitimate purpose.

97    Thirdly, and relatedly, the applicants say that if there is no apparent legitimate purpose for the examination summonses and orders to produce, the inference is open that they have been deployed to gain a forensic or technical advantage in litigation to which BGNV is a party. Relying on Lander J’s distillation of principles in Evans at [252] (see [17] above), the applicants argue that an examination summons may be set aside if it has the predominant purpose of obtaining a forensic advantage that is not otherwise available. The applicants submit that where current proceedings are pending, such as the WASC proceedings, the Court should be alert to the possibility that an examination summons is being used for an improper purpose: Hong Kong Bank of Australia Ltd v Murphy (1992) 28 NSWLR 512 at 518-519.

98    The applicants submit that an inference is available that Mr Trevor was motivated only by a desire to obtain a forensic advantage in respect of the pending WASC proceedings. As Mr Trevor has been in control of BGNV for almost 20 years, the present case falls outside the usual case where a liquidator comes to a company with little knowledge of its business and affairs. The applicants argue that this consideration makes relevant the caution that should be exercised. The applicants also rely on the fact that they are not “insiders” of BGNV and that this fact alone makes the issue of the examination summonses unusual and signals a potential misuse of that process.

99    The applicants draw attention in particular to the 208 proceeding concerning the Reconfirmation Agreement which, they say, will inevitably include the issue of whether the agreement was repudiated, as Mr Trevor claims. The applicants argue that Mr Trevor is likely to be motivated to attempt to obtain an illegitimate forensic advantage by seeking to discover ICWA’s case in that proceeding or by seeking to obtain information that would assist BGNV in a mediation. They argue that this inference is particularly strong in circumstances where the scope of the documents sought would encompass ICWA’s confidential submissions to the Authority (see [46] above), which sets out the arguments that ICWA may raise in the 208 proceeding. The applicants submit that Mr Trevor would not be entitled to information in that form in the ordinary course of that proceeding.

100    Fourthly, the applicants submit that the examination summonses (to the extent they require the production of documents) and the orders to produce are oppressive because the volume of documents required to be produced is substantial and the vast majority of the documents are likely to be immune from disclosure on a variety of bases, including legal professional privilege and public interest immunity.

101    Further, the applicants argue that the prospect that claims for legal professional privilege or public interest immunity will be made in respect of the vast majority of the documents is a material consideration in deciding whether any order for production should have been made in the first place. They say that this is a matter that a party moving ex parte for such an order should have disclosed: Meteyard at [131]. Implicit in this argument is the submission that no such disclosure was made in the present case, when it should have been.

102    Fifthly, the applicants submit that the scope of the documents sought by the examination summonses and orders to produce is so broad as to be oppressive. The applicants argue that the scope is so wide, particularly by use of the words “relating to”, that the examination summonses and orders to produce have the propensity to capture a wide array of documents that could not have any possible connection to the examinable affairs of BGNV.

103    The applicants argue that these concerns are amplified by the definition of “the Bell legislation proposal” which, the applicants argue, impermissibly requires the applicants to form a judgment as to what matters prompted the government of Western Australia to draft or promulgate the Bell Bill. The applicants say that, in effect, they have been asked to divine the intention of the government and the matters that may have caused it to undertake certain acts.

104    Sixthly, the applicants submit that, to the extent that the examination summonses and orders to produce are said to be related to the allegation that the Reconfirmation Agreement has been repudiated, that claim cannot be sustained. The applicants argue that the Bell Act took as its starting point the fact that certain contracts in respect of the Bell Group were valid, including it would seem the Reconfirmation Agreement. The Bell Act sought to override the contractual force of such documents and to declare them void by legislative means. The applicants argue that, in this way, any act performed by ICWA in relation to the Bell Act did not evince an intention that it was not bound by the relevant contracts, but was rather an express recognition that it was so bound. The applicants argue that, in such circumstances, no repudiation of those contracts could have arisen. Specifically, to the extent that the Reconfirmation Agreement is concerned, it was not affected and no repudiation could have arisen.

105    The applicants argue that, in any event, the question of repudiation is to be resolved objectively. As Mr Trevor has been the liquidator of BGNV for a very substantial period of time, including at all times relevant to “the Bell legislation proposal”, he would be aware of any relevant manifestations of ICWA’s intention to not be bound by the Reconfirmation Agreement. The applicants argue that this is underscored by the fact that Mr Trevor has apparently formed the view that there was such a repudiation and has purported to accept it. Therefore, as all relevant matters are within Mr Trevor’s knowledge, there could be no legitimate basis on which to conduct an examination pursuant to s 596B(1) in respect of such matters.

106    Thus, the applicants argue, any contention that there has been a repudiation of the Reconfirmation Agreement could not afford a legitimate basis for the conduct of examinations pursuant to the examination summonses.

107    Seventhly, the applicants submit that, to the extent that the examination summonses and orders to produce are said to relate to a claim for conspiracy to cause financial harm by lawful means, that claim cannot be sustained. The applicants argue that such an allegation suffers from fundamental deficiencies that prevent it from being the proper subject of an examination pursuant to s 596B(1) of the Act.

108    Here, the applicants argue that a conspiracy to cause financial harm by lawful means requires that the sole or predominant purpose of the conspirators must be to cause financial harm to another. They say that, in the present case, there is no possibility that any such allegation could be made out. Referring to s 4 of the Bell Act, the applicants say that its objects were to provide a mechanism for the distribution of funds that avoided the need for further litigation; to provide appropriate compensation to certain creditors of the Bell Group; and to make reasonable provision for the distribution of the funds of the Bell Group. The applicants say that there is no mention of BGNV in the Bell Act’s statement of objects, let alone mention of an intention to harm it.

109    The applicants submit that another fundamental deficiency of any such claim is the fact that the Bell Act was declared invalid. They say that, in such circumstances, no loss could have been occasioned to BGNV. In short, there is no “financial harm” to which the alleged conspiracy could relate.

110    Eighthly, the applicants submit that any allegation as to criminal intent or a breach of contract in respect of “the Bell legislation proposal” is untenable. They argue that there could be no contempt or breach of contract in the circumstances of this case and that, given that the Bell Act has been declared invalid, there could have been no effect on BGNV’s assets.

111    In the course of raising these matters, the applicants questioned how their examinations and the production of the required documents could be directed, in any meaningful financial way, to protecting or increasing BGNV’s assets. They seized upon the example provided in Mr Trevor’s written submissions. Mr Trevor posited the case that the applicants procured the passage of the Bell Act believing that it would not survive a constitutional challenge. Mr Trevor says that BGNV incurred costs in challenging the validity of the Bell Act and that, while the High Court made a costs order in BGNV’s favour, this order was on a party and party basis, and not on an indemnity basis. Therefore, Mr Trevor says, BGNV has incurred costs in responding to the Bell Act proposal that cannot now be recovered. He submits that it could not be disputed that BGNV is entitled to investigate the circumstances of the Bell Act proposal to ascertain whether it might have any causes of action arising from the proposal and to ascertain the strength of those causes of action.

112    The applicants argue that this posited case, advanced in justification of the examination summonses and orders to produce, suffers from a number of problems, not the least of which is the fact that, because the Bell Act was an act of the Parliament of Western Australia, it could not be said that the applicants “procured” its passage. But aside from such problems, the applicants say that such a claim, or similarly made claims, could not result in any meaningful financial recovery (the difference between party and party costs and actual costs) that would be proportionate to the costs involved of pursuing them, including by conducting the examinations. Therefore, the applicants say, such steps could not be seen as steps taken to protect or increase BGNV’s assets. Indeed, the applicants say that this is an indication that the summonses have been issued, and the orders to produce made, for an ulterior and improper purpose.

113    Mr Trevor submits that the applicants’ underlying application is beset with obvious weaknesses which tend against the Court granting the extension that is sought.

114    First, with regard to the jurisdictional requirement raised by the applicants, Mr Trevor stresses the broad scope of what constitutes the “examinable affairs” of a corporation. Mr Trevor submits that, in the present case, BGNV’s examinable affairs include the business affairs of TBGL and BGF insofar as they are, or appear to be, relevant to BGNV. They also include potential causes of action that BGNV might have and extend to investigating pending or contemplated proceedings: Grosvenor Hill (Qld) Pty Ltd v Barber (1994) 48 FCR 301; [1994] FCA 59 at 307; Evans at [81]. Mr Trevor submits that BGNV’s examinable affairs certainly include investigating potential causes of action that arise out of “the Bell legislation proposal”. Mr Trevor says that it makes no difference that the applicants are not “insiders” of BGNV. He says that it is sufficient that they are persons who may be able to give information about BGNV’s examinable affairs: Evans at [86].

115    Secondly, with regard to the question of improper purpose raised by the applicants, Mr Trevor submits that an examinee seeking to discharge an examination summons on the basis of an abuse of process has a high burden. To make good such a claim, the examinee must show not only the existence of an improper purpose but also that the improper purpose was the predominant purpose for seeking the issue of the summons.

116    I should record that, in oral submissions, Mr Trevor said that, despite the terms of the examination summonses and orders to produce, he did not seek production of the claim form and supporting materials submitted by ICWA (referred to at [46] above) which had been submitted on a confidential basis.

117    With regard to the contention that he is likely to have been motivated to attempt to obtain a forensic advantage in the 208 proceeding, Mr Trevor submits that the examination summonses and orders to produce seek documents that relate to “the Bell legislation proposal”. He says that “the Bell legislation proposal” has nothing to do with any of the issues raised in the 208 proceeding. In this connection, Mr Trevor says that the only issue in that proceeding which concerns the Reconfirmation Agreement is whether it prevents BGNV from taking any steps to oppose any attempt to release certain undertakings given to the WASC, which is an issue of construction. Mr Trevor submits that if the question arises as to whether the Reconfirmation Agreement remains on foot, there is no evidence to suggest that the examinations will be directed to that question. He says that, in any event, the fact that an examination will touch on matters that are the subject of an existing proceeding does not mean that the examination summons is an abuse of process: New Zealand Steel (Australia) Pty Ltd v Burton (1994) 13 ACSR 610 at 614; Re Hugh J Roberts Pty Ltd (in liq) and Companies Act [1970] 2 NSWR 582 at 585.

118    Mr Trevor also submits that it is not to the point that a forensic advantage would be attained. The critical question is the purpose for which the examination summons has been sought: Simionato v Macks (1996) 19 ACSR 34 (Simionato) at 61. In other words, there is a distinction between purpose and result.

119    Mr Trevor argues that the result of an examination will almost always give to the liquidator a forensic advantage. However, what is critical in determining whether there has been an abuse of process is the identification of the liquidator’s predominant purpose. He submits that there is no evidence to support the assertion that his predominant purpose in seeking the examination summonses and orders to produce was not to benefit BGNV.

120    Thirdly, with regard to the question of oppression, Mr Trevor submits that an examination summons or an order to produce will not be oppressive simply because a large volume of documents is sought or because those documents might be subject to claims of privilege or immunity from production.

121    With respect to the example discussed at [111]-[112] above, Mr Trevor suggested that the enactment of the Bell Act had other consequences for BGNV’s assets beyond the irrecoverable costs of its constitutional challenge. He suggested that BGNV’s assets were diminished by costs thrown away because of the aborted mediation as well as by increased costs incurred in other pending litigation because of delays caused by the Bell Act. Whether such costs, reflected as a diminution of BGNV’s assets, are or might be proportionate to the cost of pursuing them is not a matter that was addressed in submissions or in the evidence before me on the application to extend time.

The question of prejudice

122    The applicants submit that no prejudice will be occasioned to Mr Trevor by granting the extension that is sought, let alone irreparable damage. The applicants argue that, in light of the letter from Jones Day of 21 June 2016, Mr Trevor cannot have been labouring under a misapprehension as to their intentions. The applicants say that Mr Trevor has not pointed to any prejudice and has not filed any evidence on that question.

123    Mr Trevor submits that he does not need to establish that he will be prejudiced by the granting of an extension of time. The mere absence of prejudice is not enough to justify an extension. Mr Trevor says that, in any event, he would suffer prejudice. The hearing of the discharge application will result in delay and, most likely, the loss of the dates for examination, currently appointed to take place from 15 August 2016, including the dates for the examination of two other examinees, one of whom (as I have said) is Mr Stiassny. Mr Trevor says that, currently, he has the right to conduct those examinations at that time and that, if an extension of time is granted, that right will likely be rendered nugatory. He says that he will also be put to the cost of defending the application for discharge.

124    In support of his submissions, Mr Trevor calls in aid what he says are the policy considerations underlying r 11.5 of the Corporations Rules. He also argues that the interests of an examinee will be protected even if he or she is shut out from bringing an application for discharge because of a failure to comply with the three day time limit. This is because the examinee will be entitled to legal representation at the examination and will have the full protection of the Court in regulating the examination so that the examinee suffers no injustice: Simionato at 63; Hamilton v Oades (1989) 166 CLR 486; [1989] HCA 21 at 498.

Consideration

125    I am satisfied that this is an appropriate case for extending time to the applicants to move to discharge the examination summonses and orders to produce.

126    Shortly after service, bearing in mind the public holiday in Western Australia on 6 June 2016, the SSO wrote to Lipman Karas (see [73] above). The letter indicated, at least in the case of Mr Evans and Mr Hargreaves, that there was consideration as to what response should be made to the examination summonses and orders to produce, including whether an application should be made to “stay the processes”. The letter raised the breadth of the scope of the documents required to be produced and the fact that many documents would be protected by claims of privilege or immunity from production. The letter made clear the view that the summonses and orders were manifestly oppressive. The letter also raised the issue of whether the examination summonses and orders to produce were directed to the examinable affairs of BGNV. Thus, the possibility of the challenge which the applicants now seek to make was certainly in prospect by 10 June 2016, at least so far as Mr Evans and Mr Hargreaves were concerned.

127    That said, I am satisfied that, at that time, none of the applicants was aware of the three day time limit for making such a challenge. Relatedly, I am not satisfied that, at that time, there was an awareness on the part of those dealing with the matter within the SSO or ICWA that there was such a time limit. I do not think that, in the case of the SSO, such awareness came into existence until 17 June 2016 or shortly beforehand. Importantly, I am satisfied that the present application does not involve any conscious, let alone deliberate, disregard of the time limit imposed.

128    It seems to me that, from the time of service, the immediate and primary concern of the applicants and of the relevant officers within SSO and ICWA has been to put in train the steps necessary to locate and review the documents that are required to be produced. This is understandable. On the evidence before me, the task of locating and reviewing the documents appears to be prodigious and the applicants would have been conscious that time was running.

129    No doubt, by 21 June 2016, a decision had been taken to move to discharge the summonses and orders but I do not think that, in any real sense, this was a change of heart from a contrary decision that had previously and consciously been taken or, alternatively, the manifestation of a deliberate decision to delay in moving the Court, as Mr Trevor argues. It was simply a decision that was reached.

130    Whilst the applicants might possibly have filed their interlocutory process earlier than 1 July 2016, I am not persuaded that they have adopted the leisurely approach that Mr Trevor asserts in light of the chronology provided by the evidence. I am satisfied that the applicants have moved with reasonable diligence to bring their application before the Court. In reaching this view, I take into account the obvious complexity of the matter in light of the extensive litigation that already exists, including in the WASC. Further, the present application is made in somewhat unusual circumstances involving somewhat unusual issues. It is certainly different from the usual run of case in which an application to discharge an examination summons is made.

131    With regard to the merits of the underlying application, a central argument underpinning the applicants’ submissions is the need for an examination summons issued pursuant to s 596B(1) of the Act to be directed to protecting or increasing the assets of a corporation. In fundamental ways, the applicants seek to challenge whether the examination summonses and orders to produce that have been served on them are directed to that end, whether by requiring them to attend for examination or by requiring them to produce documents. It is that central argument that informs the way in which the applicants advance their case that the examination summonses and the orders to produce are not directed to the examinable affairs of BGNV and, relatedly, have been issued for an improper purpose. It also has a bearing on the applicants’ contention that the obligation imposed on them to produce documents, whether pursuant to the examination summonses or the orders to produce, is oppressive in all the circumstances, although their case in that regard is not dependent on that argument.

132    I am satisfied that the applicants have shown a case to discharge the examination summonses and orders to produce, in whole or in part, that is sufficiently arguable to warrant the extension of time that is sought. The applicants should not be foreclosed peremptorily from bringing forward their opposition for determination. In an application such as this, I do not think it is appropriate that I should analyse and express a view on the merits of each component of the applicants’ case. It is sufficient that I reach an overall view. No greater refinement is required. A full investigation of the merits must await the hearing of the primary relief sought in the interlocutory process: Lucic at 417.

133    With regard to the question of prejudice, I acknowledge that if an extension of time is granted it seems most doubtful that the examinations of the applicants could proceed in the period from 15 August 2016. This is because it is unlikely that an application for discharge, as seemingly complex as this one, can be heard and determined by that time. However, I do not think that this unlikelihood stands as sufficient prejudice to Mr Trevor to deny the applicants an opportunity to have their opposition heard and determined. If, of course, the applicants are right, the summonses and orders to produce will be discharged. No examinations will take place and no documents will be required to be produced. Another possibility is that, in respect of the documents that are required to be produced, the examination summonses and orders to produce might be discharged in whole or in part. Mr Trevor’s submissions proceed on an acceptance of the correctness of his own position, which is, of course, another possibility that must be borne in mind.

134    In all the circumstances, it seems to me that such delay as might be occasioned by an extension of time being granted will be inevitable if a proper balance is to be struck between the competing rights and interest of the parties, and a just outcome achieved. I should note that it has not been suggested that the timing of the examinations is critical. I should also record that it is not clear to me that it is inevitable that the examinations of the two other examinees cannot proceed at the appointed time.

135    It seems to me that, given the nature of the opposition which the applicants seek to advance, it is unlikely that their asserted rights could be conveniently and suitably protected simply by proceeding on the assumption that effective protective measures can be taken in the course of their examinations. For one thing, the applicants’ opposition extends beyond the conduct of the examinations and strikes, in limine, at the requirement for them to even undertake the production of a large number of arguably privileged documents in circumstances which they say would be oppressive.

Access to the affidavit

136    A person who applies under s 596B of the Act must file an affidavit that supports the application. However, that affidavit is not available for inspection except so far as the Court allows: s 596C(2) of the Act. As I have noted, the applicants seek access to the affidavit filed in the present case.

137    The relevant principles which inform the exercise of the discretion to permit access are discussed in a number of cases. The applicants submit that, when an arguable case is demonstrated, the Court will normally exercise its discretion to grant access to the affidavit. At a very high level of generality, that may be so. But the correct approach is more nuanced than the applicants’ submission indicates.

138    In Re Excel Finance Corporation Ltd (Receiver and Manager Appointed); Worthley v England (1994) 52 FCR 69; [1994] FCA 551 (Re Excel), the Full Court, at 93-94, observed that the discretion to grant access would normally be granted in favour of the applicant where there is material before the Court from which it appears that the applicant has an arguable case to which the affidavit is relevant. Further, their Honours made clear that access to the affidavit should be granted “where the justice of the case so requires”. Their Honours were at pains to stress that it did not follow from this that the Court would permit every examinee or potential examinee to have such access. Indeed, their Honours emphasised that access should not be freely granted. They cautioned against access where an examinee may be given information that might frustrate the purposes of the examination. They also said that confidential information might need to be withheld.

139    Consistently with this approach, Lander J in Simionato at 63-64, said that, in order to obtain access, it is not enough for the applicant to show an arguable case. His Honour said that the applicant is required to show that he or she will be unfairly prejudiced in the consideration and disposal of the application if access is not granted.

140    In the same vein, Mansfield J in Re Moage Limited (In Liquidation); Sheahan v Pitterino (1997) 77 FCR 81; [1997] FCA 719 at 95 said:

… The fundamental judgment is based upon what the justice of the case in the particular circumstances demands. In making that determination, regard will need to be had to the content of the affidavit, so that where appropriate the purpose of the examination is not frustrated or confidential information or potentially significant information which might if released impinge upon an effective examination is not inappropriately released. If there are no particular considerations arising from the affidavit or its terms, or from the material referred to, then provided that the applicant for the release of the affidavit presents “an arguable case” or some sensible grounds for maintaining the application, to which the affidavit is relevant, then generally the discretion will be exercised in favour of that applicant. …

141    His Honour turned to consider what was imported by the notion of an “arguable case” to which the Full Court referred in Re Excel. His Honour observed that the Full Court had not used the expression as “a refined term of art”. At 95, his Honour continued:

… I think it is both inappropriate and sterile for the purposes of the present applications to seek to attribute some scientific exactitude to the degree of satisfaction of “an arguable case” which needs to be made out by the applicant. In my view it involves no more than that the Court requires to be satisfied to an appropriate level of satisfaction that the applicant is not pursuing the application without good cause or without good reason, and in particular is not doing so purely in the hope that, by procuring the release of the affidavit, some evidentiary foundation for the allegation will be made out. In other words, if the applicant is merely “fishing” for a case, then no reason for exercising the discretion in its favour will exist; if it presents material from which it is shown that it has passed the threshold beyond fishing, and has an arguable case based on that material, then the discretion may be exercised in its favour. Refinements of degrees of arguability is, in my view, unnecessary.

142    Later, his Honour said that what will satisfy the “necessary degree of arguability will vary from case to case, and will need to be assessed in all the particular circumstances”.

143    His Honour also stressed that, at the stage of the proceeding at which access to the affidavit is sought, the Court is not adjudicating on whether the examination summons should be discharged. Rather, the Court is only reviewing the material presented to it, absent the affidavit, to determine whether the application for discharge is either “without any foundation or with a foundation which is not frivolous or without some rational basis”: see at 95. In Ariff v Fong (2007) 63 ACSR 384; [2007] NSWCA 185, the Court of Appeal, at [22], agreed that a correct approach to an application under s 596C(2) of the Act was to determine, firstly, whether an arguable case for access is raised. Only on being so satisfied should the Court proceed to consider the affidavit filed in support of the summons. Their Honours observed that this “would usually be the preferable approach”. I have adopted that approach in the present case.

144    The applicants say that they have established an arguable case. Mr Trevor disputes that contention. The matters relied upon for these competing views are the matters I have summarised at [93]-[121] above.

145    Consistently with my earlier finding, I am satisfied that the applicants have established an arguable case to discharge the examination summonses and orders to produce. I have read the affidavit filed in support of the originating process. I am satisfied that the justice of the case requires that the applicant have access to the affidavit, but not to all parts of it.

146    The applicants should have access to those parts of the affidavit dealing with historical matters, the detriment said to have been caused to BGNV by the Bell legislation, and BGNV’s possible causes of action. This is the material covered in [1]-[163] of the affidavit, including the documents referred to therein. I am satisfied that this access is necessary to ensure that there is a proper engagement between the applicants and Mr Trevor on the issues that truly matter as to whether the examination summonses and the orders to produce should be discharged.

147    I am not satisfied, at the present time, that the applicants should have access to the remaining parts of the affidavit other than to [164]-[165] thereof. These last-mentioned paragraphs are essentially prefatory in nature. They indicate the tenor of the remaining paragraphs of the affidavit—namely, the possible grounds of challenge by the applicants to the examination summonses, as then perceived, and the response to each of those possible grounds. I would refuse access to those parts of the affidavit for the reason that the discussion of these matters in the affidavit will be overtaken by the applicants advancing their own case in that regard, which will need to be met by Mr Trevor to the extent that he considers necessary. I am not persuaded that the applicants would be unfairly prejudiced in the consideration and disposal of the discharge application if access to these parts is refused. Indeed, I suspect that these parts might become a focus for distraction. These paragraphs also contain reference to seemingly confidential matters that were disclosed because of the ex parte nature of the application made in the originating process. Therefore, I refuse access to [166]-[174] of the affidavit, including the documents referred to in those paragraphs.

Adjournment and stay

148    The interlocutory process seeks to have the examination summonses adjourned and the orders for production stayed until the balance of the matters raised by the interlocutory process can be determined. The applicants argue that this course is necessary to preserve the subject matter of their interlocutory process.

149    Mr Trevor opposes this course on a number of grounds.

150    First, he says that there is no reason why the application to discharge the examination summonses and orders to produce cannot be heard and determined before 15 August 2016. I should say at once that this submission is nothing if not optimistic. I have not yet heard the parties on the steps that might be necessary to bring the application for discharge to readiness for hearing or on how long they anticipate such an application would take to hear. But, even if the matter could be brought to readiness for hearing quickly, the Court is about to embark on its Full Court sittings. I am not presently aware of whether any Judge would be available to hear the matter before 15 August 2016. I would certainly not presume to think that, even if a Judge were available, he or she would be in a position to give judgment before 15 August 2016, especially in a matter as seemingly complex as this one. I should add that I am unable to see why the determination of the discharge application has the degree of urgency which Mr Trevor’s submission implies. Having said that, I have no doubt that the matter will be heard as expeditiously as the business of the Court will allow.

151    Secondly, Mr Trevor says that the grant of an adjournment would be tantamount to a reward to the applicants for their delay. He says that the applicants cannot arrogate to themselves the right to ignore the three day time limit and thereby gain the benefit of stay. He argues that the applicants have sought to present the Court with a fait accompli and that they should not be put in a better position as a result of their delay by using it to enhance their prospects of obtaining an adjournment. He says that the Court should not favour the convenience of the applicants over his convenience in circumstances where they have delayed in bringing their application.

152    I think that this submission confuses a number of things and does not accurately characterise the position. There is no doubt that the applicants have not complied with the three day time limit. But, for the reasons I have given, I am not persuaded that they have engaged in delay. I have rejected the suggestion that the applicants’ conduct has involved any conscious, let alone deliberate, disregard of the time limit imposed. I have also found that the applicants have moved with reasonable diligence to bring their application before the Court. Thus, there is no question of the applicants taking advantage of some delay they have procured. I have found that time should be extended to enable the applicants to bring their discharge application. The only question which now arises is how best to manage the case taking into account the overarching purpose identified in s 37M of the Federal Court of Australia Act 1976 (Cth).

153    Thirdly, Mr Trevor calls in aid the observation made by French CJ in AON Risk Services Australia Limited v Australian National University (2009) 239 CLR 175; [2009] HCA 27 at [5] that applications for an adjournment are not to be considered solely by reference to whether prejudice can be compensated by costs. There is an irreparable element of unfair prejudice in unnecessarily delaying proceedings. I am conscious of that consideration, but I do not think that the present case is one of unnecessary delay of the kind to which French CJ was referring. Moreover, I have concluded that such delay as might be occasioned by an extension of time being granted to the applicants will be inevitable if a proper balance is to be struck between the competing rights and interest of the parties, and a just outcome achieved.

154    Lastly, Mr Trevor relied on the approach taken by Mansfield J in In the matter of Bernsteen Pty Ltd [2006] FCA 1791 at [13]. In that case, his Honour refused an adjournment and stay in proceedings to discharge an examination summons. His Honour reasoned that, if the examination proceeded and the discharge application subsequently succeeded, the documents produced could simply be returned and the transcript of the examination maintained as a sealed record. In the present case, I am not persuaded that such a course would be appropriate.

155    In my view, subject to further order, the examination summonses should be adjourned to a date and time to be fixed and the orders to produce should be stayed pending determination of the discharge application.

Disposition

156    For these reasons, time will be extended to enable the applicants to bring their discharge application. The applicants should be given access to [1]-[165] of the affidavit filed in support of the originating process, including the documents referred to therein. The examination summonses should be adjourned and the orders to produce stayed, as I have indicated. The parties should confer with a view to bringing in agreed orders that provide for the steps necessary to bring the discharge application into readiness for hearing. At the same time, the parties should indicate their considered estimate of the time required for the hearing of that application. Once that is done, the Court will be armed with the necessary information to enable the discharge application to be listed, appropriately, for hearing. Orders will be made accordingly.

Associate:

Dated:    28 July 2016