FEDERAL COURT OF AUSTRALIA

Trevor, in the matter of Bell Group NV (in liq) (No 2) [2017] FCA 927

ORDERS

THE COURT ORDERS THAT:

1.    The summons and order for production to each of Rod Whithear, Bruce Meredith, Paul Evans, David Hargreaves, Michael Stiassny and Alan Garrett be set aside.

2.    Garry Trevor in his capacity as liquidator of Bell Group NV (in liq) pay the costs of Rod Whithear, Bruce Meredith, Paul Evans, David Hargreaves, Michael Stiassny and Alan Garrett in connection with each such summons and order for production, as agreed or taxed.

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

REASONS FOR JUDGMENT

JAGOT J:

1    These reasons for judgment explain why I have concluded that certain examinations summonses and order to produce documents under ss 596B and 596D(2) of the Corporations Act 2001 (Cth) (the Corporations Act) should be set aside.

Background

2    For present purposes it is sufficient to record the following. Bell Group NV (BGNV) is a member of the Bell Group of companies. Mr Trevor, who applied for the issue of the summonses, was appointed as BGNV’s liquidator in July 1996. The liquidation has continued since that time.

3    Matters relating to the Bell Group have been the subject of numerous Court actions, mostly in the Supreme Court of Western Australia (the WA Supreme Court). What is sometimes referred to as the Main Bell Proceedings were ultimately settled as a result of which the liquidator of The Bell Group Ltd (TBGL) and other companies within the group received and holds approximately $1.8 billion by or on trust for, various Bell Group companies. The Insurance Commission of Western Australia (ICWA), a statutory corporation constituted under the Insurance Commission of Western Australia Act 1986 (WA), advanced approximately $200 million to the liquidators of TBGL and Bell Group Finance Ltd (BGF) in order to finance the Main Bell Proceedings and other actions.

4    Subsequently, further litigation was commenced in October 2014 concerning the distribution of the settlement proceeds from the Main Bell Proceedings, including proceedings COR 208 of 2014 commenced by ICWA against various parties including Mr Trevor in his capacity as liquidator of BGNV (the WASC Proceedings). By paragraph 13 of the originating process in the WASC Proceedings, ICWA seeks a declaration that BGNV and Mr Trevor as liquidator of BGNV may not take any step to delay, oppose, hinder or resist the amendment of certain trust deeds (which need not be identified here) that may have relevance to the distribution of the settlement proceeds from the Main Bell Proceedings. This declaration is founded on BGNV’s contractual obligations in an agreement dated 4 July 1997 between various parties including the State Government Insurance Commission (a predecessor to the ICWA) and BGNV known as the Reconfirmation Agreement.

5    The WASC Proceedings were prompted by Mr Trevor evincing an intention to act contrary to the terms of the Reconfirmation Agreement, amongst other things, by obtaining ex parte orders from the WASC to the effect that he would be justified as liquidator of BGNV in opposing any step to amend the trust deeds.

6    On 5 May 2015 in the Legislative Assembly for Western Australia a notice was given to introduce the Bell Group Companies (Finalisation of Matters and Distribution of Proceeds) Bill 2015 (WA) (the Bell Bill).

7    The Bell Bill was passed by the Parliament of Western Australia (constituted under s 2 of the Constitution Act 1889 (WA)) and assented to by the Governor in November 2015, with the Bell Bill enacted as the Bell Group Companies (Finalisation of Matters and Distribution of Proceeds) Act 2015 (WA) (the Bell Act).

8    The objects of the Bell Act, as set out in s 4, include “to provide a mechanism, that avoids litigation, for the distribution of funds (the Bell litigation funds ) received by the liquidator of TBGL and certain of its subsidiaries (the Bell group of companies ) as a consequence of the Bell litigation and the settlement of it in 2013” and “to distribute the Bell litigation funds generally in accordance with the commercial substance of the agreements between the liquidator and the creditors who funded the Bell litigation, as made before the enactment of this Act”, as well as “to avoid further litigation that will waste the resources of the State and other persons and consume the Bell litigation funds”. By s 7 of the Bell Act the WA Bell Companies Administrator Authority (the Bell Authority) is established. By force of the Bell Act the Authority became the administrator of the companies within the Bell Group, to which all property of each nominated company (not including BGNV), including property held on trust, was transferred for the purposes of the Authority determining the property and liabilities of the companies and claims of creditors. By s 36, the Authority was required to seek submissions from creditors and to prepare a document (a draft report) that sets out its preliminary determination of the property and liabilities of each WA Bell Company and the recommendations that it is proposing to make to the Minister. The Authority was also required to provide the draft report to each creditor. ICWA lodged a submission in February 2016.

9    BGNV commenced proceedings in the High Court of Australia in November 2015 challenging the validity of the Bell Act on the basis of inconsistency with laws of the Commonwealth as provided for in s 109 of the Commonwealth of Australia Constitution Act (the Constitution). The High Court held that the Bell Act in its entirety was invalid by reason of inconsistency with Commonwealth’s taxation legislation (Bell Group NV v Western Australia [2016] HCA 21; (2016) 331 ALR 408).

10    By an originating application dated 16 May 2016 Mr Trevor applied for ex parte orders under ss 596B and 597 of the Corporations Act to issue examination summonses and summonses for production of documents. Those summonses were subsequently issued pursuant to orders made by a Registrar of the Court on 27 May 2016 to Mr Evans, who was the State Solicitor for Western Australia, Mr Hargreaves a Senior Assistant State Solicitor of the State Solicitor’s Office (the SSO), Mr Whithear the Chief Executive of ICWA, Mr Meredith the General Counsel for ICWA, Mr Stiassny who was appointed as Administrator under the Bell Act on 27 November 2015, and Mr Garrett who was assisting Mr Stiassny. Mr Stiassny and Mr Garrett are referred to as the KordaMentha examinees as they are a partner and manager respectively of KordaMentha, New Zealand.

11    The summons for production to each of the non-KordaMentha examinees are in the same terms requiring production of all documents sent or received by any representative of ICWA and the SSO to or from those bodies, and to or from the office of the Solicitor-General, the Parliamentary Counsel’s Office of Western Australia, the board of commissioners of ICWA, the Premier, Treasurer or Attorney General of Western Australia or any of their representatives, any representative of the Commonwealth government, and Mr Stiassny or any other person considered for the position of Administrator of the Authority relating to the Bell legislation proposal (being any proposal that led to the Bell Bill and Bell Act). The summons for production of the KordaMentha examinees requires production of any document sent or received by each examinee or any representative to or from ICWA or any representatives of ICWA, the SSO or any of its representatives, the Premier, Treasurer or Attorney General of Western Australia or any of their representatives and any representative of KordaMentha and any document brought into existence, received or sent in relation to Mr Stiassny’s appointment as Administrator, his dealings as Administrator, the operations of the Authority, the “discussions with certain creditors” and “resolution initiative” referred to in the letter dated 26 April 2016 from the Authority to BGNV, and the preparation of the draft report by the authority dated 10 May 2016.

12    Subsequently, on 9 June 2016, and to avoid the effect of a jurisdictional argument about the WASC proceedings, ICWA commenced proceedings in the High Court seeking the same relief in substance as the WASC proceedings. The High Court remitted these proceedings to the WA Supreme Court on 2 September 2016 and those proceedings, CIV 2666, are commenced in the WA Supreme Court. In substance, CIV 2666 is now the WASC proceedings as it seeks the same relief as in COR 208.

13    On 28 July 2016 Yates J granted extensions of time for the filing of interlocutory applications by the prospective examinees to set aside the summonses and orders for production. Justice Yates also granted the prospective examinees access to certain parts of the affidavit of Mr Trevor in support of the issues of the summonses (Trevor, in the matter of Bell Group NV [2016] FCA 851).

14    On 4 October 2016 BGNV sought to strike out the WASC proceedings. Judgment remains reserved.

15    Insofar as other facts are relevant, they may be dealt with as part of resolution of the issues in dispute.

The current applications

16    Section 596B of the Corporations Act provides that:

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

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

(b) the Court is satisfied that the person:

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

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

17    The examinable affairs of a corporation are defined in s 9, which refers in turn to s 53. Under s 53 the examinable affairs of a corporation include the property and liabilities of the corporation.

18    Section 596B is to be contrasted with s 596A under which the Court is to issue an examination summons at the request of an eligible applicant to a person who is or was an officer or provisional liquidator of the corporation at certain specified times.

19    Under the Federal Court (Corporations) Rules 2000 (Cth), r 11.3(2), a notice for issue of an examination summons may be made without notice to any person. Rule 11.3(7) provides that unless the Court otherwise orders, an affidavit in support of an application for an examination summons is not available for inspection by any person. This reflects the terms of s 596C(2) of the Corporations Act. Under r 11.5 a person may apply for an order discharging an examination summons. If, as in the present case, the examination summons was issued pursuant to an order of a Registrar, then s 35A(5) of the Federal Court of Australia Act 1976 (Cth) (the Court Act) is also necessarily applicable. Section 35A(5) provides that:

The Court may, on application under subsection (5) or of its own motion, review an exercise of power by a Registrar pursuant to this section and may make such order or orders as it thinks fit with respect to the matter with respect to which the power was exercised.

20    There is no debate between the parties about the nature of a review under s 35A(5) of the Court Act. Under s 35A(1) certain powers of the Court may be exercised by a Registrar. By s 35A(1)(h) these include the power to make an order for the issue an examination summons. Such an order involves an exercise of judicial power (Palmer v Ayres [2017] HCA 5; (2017) 91 ALJR 325 at [31]). It is a necessary Constitutional concomitant of this that there is a full right of review by a Judge of this Court, for which s 35A(5) of the Court Act provides. As explained by Kenny J in Deputy Commissioner of Taxation v Australian Securities and Investments Commission [2013] FCA 623; (2013) 304 ALR 319 the right of review under s 35A(5) is “by way of a hearing de novo in the sense that the parties may adduce fresh evidence as of right”, “is a complete rehearing; and the judge is not fettered by the Registrar’s decision” (at [36]), so that the “court must determine the facts on the evidence that is adduced at the hearing before it, whether or not that evidence, and the facts to which they relate, were in existence at the time the Registrar made the decision under review” (at [38]).

21    There was some debate about the interaction between the review under s 35A(5) and the fact that an application for the issue of a summons for examination may be made ex parte, the orthodox position being that the proposed examinee has no right to be heard. It seems to me that the debate, insofar as it arose, is answered by the approach summarised in In the matter of Mendarma Pty Ltd (in liq) [2006] NSWSC 1306; (2006) 24 ACLC 1611 in which White J, having found that there had been material non-disclosure to the Registrar, said at [58]:

The matters may have affected that decision. It does not follow that the summonses should necessarily be set aside. However, as Lander J said in Re Southern Equities Corporation, in the passage I have quoted [Re Southern Equities Corporation (1997) 25 ACSR 394], the Court regards a breach of the obligation to make full disclosure seriously. There is no basis to infer in this case that the non-disclosure came about through an error of judgment as to the materiality of the matters not disclosed. Nor am I in a position to decide whether, had those matters been disclosed, the decision would have been the same. Whether, on a fresh application, either the Registrar or a Judge would make an order for the issue of a summons could well depend upon the further enquiries to which I have referred. Of course, the discharge of the examination summonses is not a bar to the liquidators’ applying afresh on an affidavit which makes full disclosure of all material matters.

22    In other words, if there has been a material non-disclosure, and having regard to the facts not disclosed and the circumstances of the non-disclosure, and if the Court on review considers that an examination summons should be set aside, then the summons is to be set aside. The Court does not attempt to re-exercise the discretion on what it considers to be a proper basis. If a properly based application is open to be made for the issue of another summons, then such an application may be made. As such, I do not accept the contention for Mr Trevor that, if all of his arguments are rejected, then there was nevertheless sufficient material before the Registrar to properly found the order for issue of the summonses so that, as an exercise of discretion, the summonses ought not to be set aside. This would involve an attempted re-exercise of the discretion when it cannot be known what the Registrar would have done.

23    Otherwise some statements of principle about an examination summons will assist in explaining the competing arguments.

24    The most convenient recent summary of the relevant principles is in Kimberley Diamonds Ltd v Arnautovic [2017] FCAFC 91 in which Foster, Wigney and Markovic JJ said:

•    …in the case of a s 596B summons, even if the Court is satisfied that the two criteria have been made out, the Court is not required to issue the summons. It retains a discretion whether or not to do so. The Court could, in such circumstances, decline to exercise the discretion if it was not satisfied, for example, that the proposed examination was sufficiently justified, or would have any practical utility (at [24]).

•    …the examinable affairs of the corporation, about which the examinee may be questioned, include acts done by or on behalf of the relevant corporation, or to or in relation to the corporation or its business or property, when the corporation is being wound up (at [26]).

•    …once a summons is issued, the Court controls the conduct of the examination. It could effectively limit the scope and length of the examination, and even bring the examination to a halt, if it considered it to be wasteful or unnecessary. In such circumstances, the Court could also require the applicant for the summons to pay some or all of the costs of the examination (at [29]).

•    It is not the case that a summons under s 596A must be set aside “as an abuse of process simply because the Court cannot be satisfied, on the evidence then available, that there is a reasonable or realistic prospect that the end result of the process will be the disclosure of a viable claim against the examinee or another person” (at [100]). I accept that this must also be the case under s 596B, subject to satisfaction of the pre-conditions to the making of an order for the issue of such a summons.

•    There is “little doubt that an examination summons can be discharged or stayed as an abuse of process if it is found that the eligible applicant’s predominant purpose in obtaining the examination summons was to secure a private benefit or advantage, as opposed to a benefit for the company, its creditors or contributories” (at [101]).

25    In Re Global Medical Imaging Management Ltd (in liq) [2001] NSWSC 481; (2001) 38 ACSR 214, to the same general effect, Santow J observed that:

[12] The position is well established in Australia that a liquidator may, without abuse of process have the purpose which this liquidator says was his purpose, provided that purpose is a genuine one not subordinated to the purpose of seeking forensic advantage. That is, to seek information to prosecute causes of action for potential recovery, to determine if any of these causes of action should be abandoned and to determine whether any other causes of action should be added. That such a purpose may be associated with the purpose of obtaining forensic advantage in the litigation, does not vitiate the first purpose, so long as that associated purpose of forensic advantage is not the dominant purpose…

[13] Moreover the onus is on the applicant who seeks to set aside the examination summons to prove that the liquidator is engaged in an abuse of process; Powell JA with whom Mahoney and Meagher JJA agreed in Sherlock v Permanent Trustee Australia Ltd (1996) 22 ACSR 16 at 20. That the onus is a heavy one is born out by the fact that the applicants must show that the pursuit of forensic advantage was the dominant purpose of the liquidator…

[15] Moreover if the examination demonstrates that the litigation has insufficient prospects of success or that additional particular claims should not be pursued, this will conserve the liquidator's litigious resources. That must assist the beneficial winding up and the maximising of recoveries.

26    In Meteyard v Love [2005] NSWCA 444; (2005) 65 NSWLR 36, in respect of the terms of s 596B(1)(b)(ii) of the Corporations Act (“may be able to give information about examinable affairs of the corporation”) Basten JA noted at [38] that “information can include matters of fact, belief and opinion; nevertheless, there will be a point at which opinions are better described as speculation rather than information”. His Honour continued at [39]:

A consideration of the terms of s 596B(1)(b)(ii) suggests that the scope of the power is delimited by four considerations, namely that:

(a) the proposed examinee may have “information” to give;

(b) the information must be relevant in the sense that it is about “examinable affairs of the corporation”;

(c) because the purpose of the section is to allow the receivers and managers to be informed of facts about the affairs of the company, the information should be information not within their knowledge, although the extent of knowledge will not be precisely definable, and

(d) there must be a factual basis for the Court to form a reasonable state of satisfaction that a proposed examinee may have relevant information.

27    At [42] Basten JA observed that “the internal operations or activities of another person or corporation will not fall within the examinable affairs of the corporation simply because they have the potential to affect the value of the assets of the corporation. In other words, although the “property” of the corporation may constitute part of its examinable affairs, the phrase “information about” such property should not be read so broadly as to include ‘any information which may affect the value of the property”.

28    In Palmer v Ayres at [33] the High Court also referred to the need for the criteria conditioning the power to issue a summons to be satisfied, saying:

That the application under s 596A for a summons is made ex parte, and that the criteria for the making of an order may in some cases clearly be satisfied, does not deny that the court must be satisfied, by evidence, that the criteria are met. The resolution of the “matter” yields, as its immediate result, an order for examination with direct loss of privileges for the examinee the subject of the order. Rights and liabilities are determined by that judicial determination — they are not merely affected.

29    I turn now to the grounds upon which it is said that the examinations summonses to the non-KordaMentha examinees should be set aside. I propose to do so in more abbreviated terms than the extensive written and oral submissions for the parties because, having read and heard those submissions, I consider the case for the summonses to be set aside to be overwhelming.

Parliamentary privilege

30    The non-KordaMentha examinees contend that substantial material in the affidavit of Mr Trevor in support of the issue of the summonses is subject to Parliamentary privilege and thus should not have been included in the affidavit or, at the least, Mr Trevor should have disclosed the existence of that privilege, and its effect on the affidavit and the proposed examinations, to the Registrar.

31    The first issue to which this contention gives rise is the surprising contention on behalf of Mr Trevor that because Mr Trevor applied for the issue of the summonses in the New South Wales (NSW) District Registry of this Court, “the Parliamentary Privileges Act 1891 (WA) (the WA Act) does not apply”. This is because, it is said, s 79 of the Judiciary Act 1903 (Cth) operates to pick up the legislation which applies in NSW (the Imperial Acts Application Act 1969 (NSW), s 6 of which incorporates Article 9 of the Bill of Rights in relation to Parliamentary privilege) and not the WA Act. The WA Act would only be picked up by s 79 of the Judiciary Act had Mr Trevor filed the originating process in Western Australia (WA).

32    The problem with this submission, as the non- KordaMentha examinees pointed out, is that if the argument has any substance, then it is a matter which would have been of fundamental importance to the Registrar. The Registrar then could have considered whether it would have been appropriate to transfer the originating process from the NSW Registry to the WA Registry where, it is conceded by Mr Trevor, the WA Act would apply. Accordingly, if Mr Trevor’s affidavit offends Parliamentary privilege (which is itself in dispute) this argument does not assist Mr Trevor. It assists the prospective examinees in the case based on material non-disclosure to the Registrar.

33    Otherwise, the reasons why this argument is unattractive should be obvious; there would be a fundamentally different position depending on the location at which the jurisdiction was exercised. The non-KordaMentha examinees made a range of cogent submissions against the contention:

(1)    The law of Parliamentary privilege is, as it was put, “a substantive and fundamental principle of Western Australian public law” which applies in any matter irrespective of s 79 of the Judiciary Act).

(2)    The “same result can be achieved through the application of the choice of law rules of New South Wales. These are ‘picked up’ by s 80 of the Judiciary Act. The common law of Australia includes the rules for choice of law” (citing, in support, John Pfeiffer Pty Ltd v Rogerson [2000] HCA 36; (2000) 203 CLR 503 at [3]).

(3)    The contention is inconsistent with the statement in Pfeiffer at [44] that:

…the choice of law rules are provided by the common law of Australia. It is now well accepted that the common law must adapt to the Constitution. Ideally, it should also adapt so as to provide practical solutions to particular legal problems which occur in the federal system. Thus, ideally, the choice of law rules should provide certainty and uniformity of outcome no matter where in the Australian federation a matter is litigated, and whether it is litigated in federal or non-federal jurisdiction.

34    Because it cannot assist Mr Trevor given the fundamental nature of the non-disclosure which would exist if the contention is correct, I consider it unnecessary on an application to set aside examinations summonses to explore the issue further.

35    The second issue to which this contention gives rise is the nature of Parliamentary privilege and the interaction of that doctrine with the application for the issue of examinations summonses by Mr Trevor. In this regard, s 1 of the WA Act provides that:

The Legislative Council and Legislative Assembly of Western Australia, and their members and committees, have and may exercise –

(a)    the privileges, immunities and powers set out in this Act; and

(b)    to the extent that they are not inconsistent with this Act, the privileges, immunities and powers by custom, statute or otherwise of the Commons House of Parliament of the United Kingdom and its members and committees as at 1 January 1989.

36    I do not accept the submissions for Mr Trevor about the nature of Parliamentary privilege or the interaction of that doctrine with the application for the issue of examinations summonses. With regard to that aspect of the submissions, it is necessary to note the following:

(1)    The context of an ex parte application for an examination summons does not mean that the privilege is inapplicable. Material subject to Parliamentary privilege cannot be deployed for the purpose of satisfying the criteria which pre-condition the exercise of the judicial power to issue an examination summons.

(2)    It is no answer that the WA Parliament has made no complaint about the deployment of the material. What is relevant is whether the material ought not to have been deployed at all. Nor is it an answer that Mr Trevor made similar allegations based on the same material in his submission to the WA Parliament. This submission was itself subject to the privilege.

(3)    It is not the case that the Court did nothing other than to issue the examination summonses. The Registrar must have been satisfied that the pre-conditions to an exercise of power in s 596B(1) were met. If that state of satisfaction was reached on the basis of material infringing the privilege than the question whether the summonses ought to be set aside necessarily arises.

(4)    Parliamentary privilege is not a mere exclusionary rule of evidence. It is a fundamental Constitutional doctrine essential to the separation of powers.

(5)    It does not matter that Mr Trevor’s submission to Parliament, containing similar material, has been published to the world. It is the attempt to invoke an exercise of judicial power relying on material said to be subject to the doctrine which is relevant.

37    I also do not accept the submissions for Mr Trevor about other decisions concerning the nature and operation of the doctrine.

38    The present application involves a justiciable controversy and thus the observation in Egan v Willis [1998] HCA 71; (1998) 195 CLR 424 at [5] that issues of Parliamentary privilege should not be entertained by a court “in the abstract and apart from a justiciable controversy” are inapplicable. Otherwise Egan v Willis at [21]-[24] undermines the submissions for Mr Trevor that the doctrine is nothing more than a rule of evidence, whereas the orthodox statement of principle in the same case at [67] by McHugh J (that “[w]hat is said or done within the walls of a parliamentary chamber cannot be examined in a court of law”) is irreconcilable with the suggestion that Mr Trevor was entitled to call in aid such matters in his affidavit seeking the issue of the examination summonses. So too Halden v Marks (1995) 17 WAR 447 at 461 is irreconcilable with the approach of Mr Trevor. Rowland, Murry and Anderson JJ said:

•    It is settled that Article 9 is to be given a wide interpretation: see Prebble v Television New Zealand Ltd [1995] 1 AC 321 at 332 et seq; Ward Royal Commission (1944) 18 ALJ 70 at 75 (at 461).

•    It is a settled principle that the courts will not intrude on the role of Parliament and will endeavour to regulate their own proceedings so as to avoid doing so (at 462).

•    …there are cases where a question of parliamentary privilege is raised in a case already before the court, as, for example, where a party seeks to rely on something said or done in Parliament. In the exercise of its general jurisdiction, and in the regulation of its own proceedings, the court will decide whether the relevant action will breach parliamentary privilege and will refuse to allow the particular matter to be ventilated, or the particular evidence to be tendered, if the court concludes that to do so would be a breach of privilege. In regulating its conduct in this way, the court is endeavouring to ensure that neither it nor the parties before it question or impeach any speech, debate or proceedings in Parliament (at 462).

•    …it is beside the point (if it is the fact) that, as things presently stand in Parliament, there will not be any challenge by Parliament to the conduct of the Commission, even if that conduct does breach its privileges. Once it is established that the matter exclusively belongs to Parliament, the courts will not go into it (at 463).

39    Mees v Roads Corp [2003] FCA 306; (2003) 128 FCR 418 does not assist Mr Trevor. Whether or not the statement at [75] that a State Act would not “ordinarily have a direct effect on the exercise of the judicial power of the Commonwealth by this Court” survives the reasoning in Rizeq v Western Australia [2017] HCA 23, the fact that the doctrine of Parliamentary privilege is now treated as a constraint on the judiciary (at [78]) is immaterial given that Mr Trevor has invoked an exercise of judicial power. Moreover, this is not a case which can be said to be analogous to using Hansard as an aid to construction or the mere fact a statement was made in aid of a judicial review application. The statement at [87] that there is no breach of the privilege as long as a court refrains from making a finding or drawing an inference that Parliament has been misled also does not assist Mr Trevor. The point which Gray J was making was that the mere fact that a finding by a court might lead someone to infer that Parliament had been misled would not infringe the privilege, but any attempt to ask the court to make such a finding, would infringe the privilege. Consideration of the substance of Mr Trevor’s affidavit discloses the gulf between what the court was being asked to do in Mees v Roads Corp and the present case. Nor was Gray J purporting to confine the doctrine to one in which the issue is whether Parliament was misled or not. That was the concern in Mees v Roads Corp but it is plain that the doctrine is not so limited; any attempt to rely on the truth of or otherwise to impugn statements in or to Parliament to found a cause of action infringe the privilege. The first of these conclusions applies also to Sportsbet Pty Limited v State of New South Wales (No 3) [2009] FCA 1283; (2009) 262 ALR 27.

40    I also accept the submissions for the non-KordaMentha examinees that the weight of authority is against the narrow approach to the privilege adopted in R v Murphy (1986) 5 NSWLR 18(that the privilege only prevented proceedings against a member of Parliament or a witness before a parliamentary committee which would have the effect of preventing that person from exercising his or her freedom of speech in Parliament or before a committee, or punishing him or her for having done so). In particular Halden v Marks adopted the reasoning in Prebble v Television New Zealand Ltd [1994] UKPC 25; [1995] 1 AC 321 which expressly questioned the correctness of R v Murphy. It is also apparent that, as submitted, the privilege extends to all persons giving evidence before a Parliamentary committee (Re Mactiernan; Ex Parte Coogee Coastal Action Coalition Incorporated [2004] WASC 264 at [40]-[45]).

41    The third issue to which this contention gives rise is the nature of Mr Trevor’s affidavit which was relied upon to support the issue of the examination summonses. I am unable to accept the characterisation of that material as put for Mr Trevor. In my view is it beyond question that, as the non-Korda Mentha examinees put it:

Large swathes of Mr Trevor’s affidavit impermissibly seek: (1) to impeach or question the truth of statements made in the WA Parliament and in evidence given to the Legislation Committee; (2) to question the motive, intention and/or good faith of various members of the WA Parliament; and (3) to rely on the truth of, or draw, or invite the drawing of, inferences or conclusions from statements made in the Parliament and to the Legislation Committee.

42    Indeed, it seems obvious to me that everything which founded Mr Trevor’s stated beliefs about the possible causes of action from paragraphs 122 to 163 of his affidavit either infringe Parliamentary privilege or depend for their relevance upon such an infringement. Thus, for example, paragraphs 124 to 125 necessarily call into question the motives and intentions of the Parliament itself which enacted the Bell Act. Focusing on the “drafters” of the legislation and their motives overlooks the fundamental proposition that drafters necessarily act on instructions and it is Parliament alone that enacts legislation. Paragraphs 129 and 130 either rely on the truth of statements to the Legislation Committee or seek to impugn the truth of those statements insofar as the inferences Mr Trevor draws and which he necessarily asked the Registrar to accept are inconsistent with those statements. Paragraphs 132 to 134 also necessarily call into question the motives and intentions of the Parliament which enacted the Bell Act. Paragraph 140 questions the motives of Parliament and impugns the Treasurer’s statements in Parliament. Paragraph 141 also questions the motives of Parliament. The same can be said of paragraph 143. Paragraph 143 relies on the truth of a statement to the Legislation Committee. The characterisation of such statements as merely relevant for Mr Trevor’s view and merely relevant for the fact the statements were made is unpersuasive. Mr Trevor’s view must be based on acceptance of the credibility of the statements and the affidavit invites the Court to rely on the statements as true or at least credible. Paragraph 145 impugns the motives of Parliament, as do paragraphs 150 and 153. Paragraphs 154 and 155 are in the same category as paragraph 143. Paragraphs 156 to 158 are all directed at the motives of the Parliament in enacting s 33(7) of the Bell Act. Paragraphs 160 and 161 are in the same category as paragraph 143.

43    None of this material should have been before the Registrar. They are the foundation for the satisfaction of the criteria in s 596B(1) and thus were material to the Registrar’s decision. Added to this is what I consider to be material breaches of the duty of disclosure, to which I now turn.

Duty of disclosure

44    As stated by Lander J in Re Southern Equities Corporation Limited (1997) 25 ACSR 394 at 422-423:

An application for an examination summons is made ex parte. Consequently there is a heavy obligation upon the person applying for the examination summons to make full and frank disclosure of all matters which may impact upon the decision to summon a person for examination about a corporations examinable affairs.

There can be no doubt, in my opinion, that a person who makes an application of this kind is under an obligation to bring all facts and material to the court's attention which might bear upon the order to be made. The applicant has no lesser obligation than that imposed upon a party seeking an injunction ex parte. Indeed, in my opinion, the obligation for frankness and candour is even greater in an application of this kind. That is because, unlike on the return of an interlocutory injunction obtained ex parte, on the return of an examination summons the material supporting the application is not ordinarily made available to the proposed examinee.

Because the proposed examinee, ordinarily, is not privy to the information or material which was used to support the application for the examination summons, the person applying for the examination summons has the very highest obligation relating to frankness and candour and any breach of that obligation, in my opinion, ought to be viewed very seriously by the court.

The obligation is to provide to the court all material which might impact upon the order sought, including all material which might lead the court to refuse the application. The applicant must act in the place of the proposed examinee and therefore draw to the attention of the court anything which might lead the court to refuse the application.

If an applicant fails to provide all of the information bearing upon the order sought, in my opinion, that might be sufficient ground to set aside the order, because the order will have been obtained in circumstances where the court has not been apprised of a reason or reasons for the refusal of the order.

45    Contrary to the submissions for Mr Trevor, it is apparent that the affidavit does not disclose that much of the material in the affidavit infringes the doctrine of Parliamentary privilege and ought not to have been deployed at all. Nor does it disclose, as a result, that the examinations themselves would necessarily involve substantial claims for Parliamentary privilege. I do not infer that the impermissible use of the material or the failure to draw the Registrar’s attention to the privileged nature of the material was deliberate. I infer this resulted from an oversight. But it is an oversight with substantial consequences for the affidavit and thus the application which was before the Registrar.

46    Contrary to the submissions for Mr Trevor, I consider that it is obvious that there was a direct overlap between the WASC proceedings in which ICWA seeks to vindicate rights based on the Reconfirmation Agreement and the subject matter of the examination summonses. At all material times since the letter of 29 May 2015 Mr Trevor was asserting that the Reconfirmation Agreement was repudiated by reason of the preparation of the Bell Bill, a repudiation which he said he accepted in that letter. That was always an essential issue in the WASC proceedings because ICWA was asserting a right to a declaration based on the Reconfirmation Agreement imposing existing obligations on Mr Trevor. If repudiated, it could not have done so. As submitted against Mr Trevor in this regard:

Mr Trevor did not disclose the connection between the subject matter of the proposed examinations and the matters in issue in the WASC Proceedings.

… Mr Trevor fails to set out that:

a    BGNV contends that ICWA has repudiated the Reconfirmation Agreement, and BGNV has purported to accept that repudiation;

b    BGNV contends that the repudiation is founded on the passage of the Bell Legislation Proposal;

c    BGNV proposes to raise that repudiation in its defence in the WASC Proceeding; and

d    BGNV proposes to seek discovery from ICWA and cross-examine officers of ICWA and the SSO in relation to the Bell Legislation Proposal.

The effect of this non-disclosure is that Mr Trevor failed to alert the Court to the possibility that the matters the subject of the proposed examination would trespass on matters in issue in extant litigation.

47    These matters were significant and should have been disclosed. As Allsop J (as he then was ) said in Walter Rau Neusser Oel Und Fett AG v Cross Pacific Trading Ltd [2005] FCA 955 at [38] it was not for the Registrar to be left to “search out, organise and bring together what can be said on the respondents’ behalf. That is the responsibility of the applicant, through its representatives”.

48    Mr Trevor’s affidavit does not discharge this responsibility because it fails to make clear that the very matter the subject of the proposed examinations, being the passage of the Bell Bill and the Bell Act, which is said to underlie the possible causes of action sought to be explored (the WASC proceedings being an abuse of process, misleading and deceptive conduct relating to a mediation of the WASC proceedings, misfeasance in public office by ICWA and the State Solicitor in respect of the Bell Bill and Bell Act, unconscionable conduct, intimidation and causing loss by unlawful means via the Bell Bill and Bell Act, and misuse of confidential information), all also found Mr Trevor’s inevitable and necessary position in the WASC proceedings that the Reconfirmation Agreement had been repudiated by reason of the preparation of the Bell Bill.

49    The submissions to the contrary for Mr Trevor fail to confront the reality that from 29 May 2015 Mr Trevor’s stated position was that the preparation of the Bell Bill constituted a repudiation of the Reconfirmation Agreement which he had accepted, with the consequence that so far as Mr Trevor was concerned the Reconfirmation Agreement had ceased to exist. When, by the WASC Proceedings, ICWA sought a declaration of rights against Mr Trevor founded on the Reconfirmation Agreement an essential issue between them was whether the Reconfirmation Agreement had been repudiated or not as a result of the Bell Bill (and enactment of the Bell Act). It does not matter that Mr Trevor had a good jurisdictional point which forced ICWA to commence a fresh proceeding in the High Court seeking the same relief as in COR 208 (which, as noted, were remitted to the WA Supreme Court commenced there as CIV 2666). Nor does it matter that there is an unresolved application for strike out of the WASC proceedings in which Mr Trevor apparently believes he will succeed. At the time he applied for the examination summonses he knew that the subject-matter of the examinations was also necessarily the substance of his defence to the WASC proceedings, yet he did not disclose that in his affidavit.

50    This non-disclosure is not minor. It is significant. The “fact that current proceedings are pending makes it necessary for the court to be alert to the possibility that a proposed application might be used for an improper purpose” (Hong Kong Bank of Australia Ltd v Murphy (1992) 28 NSWLR 512 at 518-519). The Registrar could not have been alert to that possibility in the present case. As such, the Registrar could not have made an informed decision consistent with the principle also stated at 519 of Hong Kong Bank that:

the court will not permit a liquidator, or other eligible person, to abuse its process by using an examination solely for the purpose of obtaining a forensic advantage not available from ordinary pre-trial procedures, such as discovery or inspection, on the other hand, the possibility that a forensic advantage will be gained does not mean that the making of an order will not advance a purpose intended to be secured by the legislation.

51    It is difficult to know why such a significant omission occurred. All that I can say is that he need for disclosure of the overlap with the WASC proceedings should have been obvious.

52    As I have seen the whole of Mr Trevor’s affidavit I do not accept that he failed to disclose the existence of other likely extensive claims for legal professional privilege or public interest immunity. This, however, is different from the fact that, as discussed above, much of his affidavit by reason of Parliamentary privilege should not have been before the Registrar at all, and that he failed to disclose the potential impact of Parliamentary privilege on the course of the examinations and production of documents.

53    He did, however, fail to disclose another matter which would have been significant to the entire underpinning of the thesis he was advancing in support of the issue of the examination summonses (which was that the proposal for and passage of the Bell Bill and Bell Act had and were intended to cause harm to BGNV). Despite Mr Trevor knowing of the existence of the Authority’s draft report and calling in aid its recommendations in paragraph 118 of his affidavit to support the contention that the concerns of a related entity were justified as the draft report had recommended no payment to that entity, he failed to mention that the draft report had recommended a substantial payment of over $600 million to BGNV. It is difficult to escape the conclusion that this fact was inconvenient to Mr Trevor’s thesis and thus simply overlooked.

Interim conclusions

54    It is appropriate to record my conclusions based on the matters discussed thus far. Recognising that not every non-disclosure means that an examination summons must be set aside, I am of the view that the failure to disclose the overlap between the subject matter of the summonses and the WASC proceedings was of such significance that, for this reason alone, the summonses should all be set aside. I am also of the view that the improper placing before the Registrar of material subject to Parliamentary privilege and associated failure to disclose the existence and consequences of that privilege are separate and sufficient reasons to set aside all of the summonses.

55    The summonses to the KordaMentha examinees cannot survive the successful challenge to the other summonses because as Mr Izzo of counsel explained in oral submissions:

the liquidator is interested in us [Mr Stiassny and Mr Garrett] because of our ability to throw light on the causes of action said to be available against Mr Hutley’s clients, but the objections which Mr Hutley has articulated, if accepted, would mean that that would not be a feasible or useful exercise, and indeed, if they’re accepted, it would mean that there would have been no basis for the issue of examination summonses against us.

56    The summonses for production of documents necessarily also fall because, under s 596D(2) of the Corporations Act, such a summons depends on the summonses for examination.

57    I turn now to the two remaining issues in the non-KordaMentha examinees’ case, improper purpose and oppression.

Improper purpose

58    The non-KordaMentha examinees contend that the summonses to them are infected by Mr Trevor’s improper purpose of obtaining a forensic advantage in the WASC proceedings rather than exploring the examinable affairs of BGNV. This contention is said to be supported by the following propositions considered cumulatively.

59    First, Mr Trevor has been the liquidator of BGNV for 20 years and thus must be “cognisant of those matters that affect its interests”.

60    Second, the proposed examinees are not “insiders” of BGNV. At best it can be said that they might be able to say something about legislation which Mr Trevor believed had impacted the value of the company which does not constitute part of the examinable affairs of the company.

61    Third, the proposed causes of action are speculative and tenuous in the extreme given that they are based on the passage of legislation through Parliament.

62    Fourth, the loss said to be suffered by reason of the Bell Bill and Bell Act is not and cannot be reasonably be expected to be of such magnitude as to warrant 10 days of examinations, as put before the Registrar.

63    Fifth, any effect of the Bell Bill and Bell Act on BGNV’s assets is not part of the examinable affairs of BGNV (see Meteyard at [42], discussed above).

64    Sixth, the overlap with the WASC proceedings is profound. The forensic advantage of being able to effectively cross examine the officers of ICWA and the State Solicitor in the context of the examination summonses about the passage of the Bell Bill and Bell Act when Mr Trevor’s defence of the claim against him in the WASC proceedings is repudiation of the Reconfirmation Agreement based on the passage of the Bell Bill and Bell Act is obvious and could not have been overlooked by Mr Trevor. Despite this, he was silent about that overlap in the affidavit. In these circumstances, “Mr Trevor’s failure to advert to such matters raises an inference that he failed to do so in order to obscure his true purpose”, an inference supported by the decision to seek issue of the summonses in NSW in this Court rather than the WA Supreme Court, which “is seized of all relevant Bell related proceedings and may have been aware of the existence of any relevant overlap”.

65    Given the heavy onus to which a party alleging an improper purpose is subject and the fact that I am persuaded the summonses must all be set aside on the other grounds dealt with above, I prefer not to found my decision on these contentions. Another reason to forebear from doing so is that, as noted, I infer that the inclusion of material subject to Parliamentary privilege and failure to disclose that privilege to the Registrar in Mr Trevor’s affidavit was a result of inadvertence. If, as appears to be the case, Mr Trevor did not appreciate the significant impact that Parliamentary privilege has not only for the purpose of the examinations summonses, but also the possible causes of action which he has identified then that necessarily would have affected the formation of his purposes in seeking the issue of the summonses. In other words, the error in relation to Parliamentary privilege must have impacted upon the relative weight in Mr Trevor’s mind about the legitimate purpose of obtaining information about the examinable affairs of BGNV and the illegitimate purpose or mere consequence of obtaining a forensic advantage in the WASC proceedings.

66    What cannot be gainsaid, and would have been fundamental for the Registrar to understand, is that, leaving aside Parliamentary privilege (as I infer Mr Trevor did), Mr Trevor stood to gain a substantial (perhaps even overwhelming) forensic advantage by reason of the conduct of the examinations in his defence of ICWA’s claim against him in the WASC proceedings based on alleged repudiation of the Reconfirmation Agreement by reason of the preparation of the Bell Bill. Effectively, Mr Trevor must have believed that he would have been able to rehearse the entirety of the evidence of his repudiation case in the WASC proceedings in the examinations. He could not have been unaware of this advantage. He did not disclose this advantage to the Registrar. If he were to reconsider the matter in the future, he and those advising him would have to give careful consideration to the effects of the doctrine of Parliamentary privileges and other privileges and immunities on any examinations and the ultimate causes of action. That said, if on any further application for the issue of summonses under s 596B of the Corporations Act Mr Trevor can demonstrate that his purpose is proper, the court to which the application is made would still need to be satisfied that the examinees may be able to give information about BGNV’s examinable affairs and to weigh the potentially overwhelming forensic advantage Mr Trevor would obtain in the WASC proceedings along with other relevant discretionary considerations.

Oppression

67    The non-KordaMentha examinees contend that the summonses are oppressive given that:

(1)    the proposed causes of action are untenable;

(2)    nearly everything will be the subject of claims for privilege or immunity given the subject matter;

(3)    the summonses for production are very broadly expressed; and

(4)    the documents number in the tens of thousands but all will have to be reviewed to see if any of the grounds of privilege or immunity apply.

68    At the least there is substance in propositions (2) to (4), it being unnecessary for me to comment on proposition (1). As already noted, Mr Trevor’s disclosure about the privileges likely to apply was inadequate because it failed to deal with Parliamentary privilege. Apart from this he failed to disclose that, as the submissions against him put it, the vast majority of the documents sought and the subject matter raised in the proposed examinations must be subject to some or other privilege. This fact would have been material to the exercise of discretion under s 596B. As noted, it would remain relevant if any attempt were made to seek the issue of further summonses.

69    The remaining topic is the summonses to the KordaMentha examinees.

KordaMentha examinees

70    Apart from the fact that I accept these summonses cannot survive the successful challenge to the other summonses, I am persuaded by the submission for these prospective examinees that that there was nothing beyond the merest speculation that someone might have said something to Mr Stiassny or Mr Garrett that might be relevant to the possible causes of action. As Mr Izzo put it in his written submissions in reply:

In relation to the other possible causes of action Mr Trevor wishes to pursue, it is now clear from Trevor Submissions [101] that the only suggested connection of the KordaMentha examinees to those causes of action lies in the possibility that the KordaMentha examinees might have had dealings with either ICWA or the Evans applicants in which one of those persons made some relevant admission. This is self-evidently speculation. Mr Trevor points to no particular reason for thinking that either Mr Stiassny or Mr Garrett witnessed any such admission. Moreover, the timing tells against it: as emphasised in chief, the KordaMentha examinees were not involved in development of the Bell Act and had no role to perform before it was passed. Contrary to Trevor Submissions [101], the “mere possibility” that something was said to Messrs Stiassny and Garrett does not justify the issue of an examination summons to them – any more than it could justify the issue of a summons to any other person to whom the Evans applicants might perchance have spoken after the Act was passed.

71    Otherwise, consistent with the observations in Meteyard at [42], I am unable to see how Mr Stiassny or Mr Garrett may be able to give information about examinable affairs of BGNV. Both are strangers to BGNV. Mr Stiassny, with Mr Garrett’s assistance, discharged functions under the Bell Act before it was declared invalid. BGNV’s assets were not purported to be transferred to the Authority under s 22 of the Bell Act. At worst, the actions of the Authority might have impacted on the value of BGNV’s assets but this is not part of the examinable affairs of BGNV.

72    Further, and as Mr Izzo submitted:

•    The KordaMentha examinees have not the slightest connection with such a cause of action. In particular, there is no suggestion that either of them ever had any involvement with either COR 208 of 2014 or the drafting of the Bell Act.

•    Mr Trevor’s chain of reasoning provides no factual basis for the Court to form a reasonable state of satisfaction that either of the KordaMentha examinees may have relevant information to give in relation to any cause of action for abuse of process.

•    Mr Stiassny and Mr Garrett have put on evidence stating that they have not provided to the State any confidential or privileged material of BGNV and they do not believe that anyone else has done so.

•    There is no factual basis for the Court to form a reasonable state of satisfaction that either of the KordaMentha examinees may have relevant information to give in relation to any possible cause of action arising from the disclosure of confidential or privileged information.

73    These provide independent grounds to conclude that the summonses to the KordaMentha examinees should be set aside.

74    As a result, a further contention about the forensic advantage Mr Trevor would obtain if the KordaMentha examinees were required to produce documents relating to the settlement discussions as required need not be resolved.

Conclusions

75    The summonses and orders for production should each be set aside.

Associate:

Dated:    1 September 2017

SCHEDULE OF PARTIES