FEDERAL COURT OF AUSTRALIA

Park (Liquidator) in the matter of Queensland Nickel Pty Ltd (In Liq) [2019] FCA 340

ORDERS

THE COURT ORDERS THAT:

1.    The amended applications made on 8 March 2019 by Anna Alexandrova Palmer (“Mrs Palmer”) and Mineralogy Pty Ltd are dismissed.

2.    Mrs Palmer and Mineralogy Pty Ltd pay the costs of the General Purpose Liquidators of Queensland Nickel Pty Ltd (in Liquidation) of and incidental to the amended application to set aside the orders of Registrar Belcher made on 18 February 2019 and the amended application to set aside the summons issued to Mrs Palmer on 26 February 2019.

3.    Pursuant to s 23 and s 37P of the Federal Court of Australia Act 1976 (Cth), rule 1.32 and rule 1.36 of the Federal Court Rules 2011, these orders and the reasons for judgment in support of these orders are made and published from Chambers.

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

REASONS FOR JUDGMENT

GREENWOOD J:

1    These proceedings are concerned with an application by Anna Alexandrova Palmer (“Mrs Palmer”) filed on 1 March 2019 for an order setting aside an order made by Registrar Belcher on 18 February 2019 for the issue of a summons (otherwise called an “examination summons”) addressed to Mrs Palmer requiring her to attend before the Federal Court of Australia on Thursday, 14 March 2019 at 10.00am to be examined about the “examinable affairs” of Queensland Nickel Pty Ltd (in liquidation) (the “company” or alternatively “Queensland Nickel”), and to produce, at the examination, the original or a photocopy of particular “books”, namely, the management accounts (including the transaction journal and balance sheet) of Mineralogy Pty Ltd (“Mineralogy”) for the period 1 July 2018 to 31 January 2019; and, Mineralogy’s bank account statements for the period 1 July 2018 to 31 January 2019.

2    The order for the issue of the summons requiring Mrs Palmer to attend Court for examination was made under s 596B(1) of the Corporations Act 2001 (Cth) (the “Act”) and r 11.3 of the Federal Court (Corporations) Rules 2000 (the “Corporations Rules”). The order requiring Mrs Palmer to produce the documents just described was made under s 596D(2) and s 597(9) of the Act.

3    The orders of Registrar Belcher of 18 February 2019 were sought by the joint and several General Purpose Liquidators (the “GPLs”) of the company: John Park, Kelly-Anne Trenfield and Quentin Olde. Stefan Dopking was also a joint and several liquidator of the company until 14 July 2017.

4    On 18 February 2019, Registrar Belcher also made an order under s 597(9) of the Act directed to Mineralogy itself, requiring it to produce the particular documents which Mrs Palmer is called upon to produce either as original documents or copies of those documents.

5    Mrs Palmer’s application filed on 1 March 2019 was listed for hearing on Friday, 8 March 2019 at 10.15am. At the outset, counsel for Mrs Palmer sought leave to rely upon an amended application which more accurately identifies the provisions under which Mrs Palmer seeks to set aside or discharge the examination summons. She does so under r 11.5 of the Corporations Rules. Mrs Palmer also seeks to set aside the order directed to her for the production of the identified books of Mineralogy. Mrs Palmer’s amended application refers to orders made on 22 February 2019. However, the relevant orders were made by Registrar Belcher on 18 February 2019. Apart from Mrs Palmer’s amended application, Mineralogy also seeks an order setting aside the order directed to it for the production of the identified documents. Although the application on behalf of Mineralogy refers to an order for production made on 26 February 2019, Registrar Belcher’s order, directed to Mineralogy, was made on 18 February 2019, as already mentioned. The summons of 26 February 2019 to Mrs Palmer refers to the production of documents by her should such documents be in her possession.

6    On 18 February 2019, Registrar Belcher also made an order under s 596C(2) of the Act and s 37AF of the Federal Court of Australia Act 1976 (Cth) that the “interlocutory process” filed on 24 January 2019 (although the order refers to process filed on 1 February 2019), the affidavits of John Richard Park filed on 11 February 2019 and Germaine Mei Lin Kee filed on 31 January 2019 in support of the application by the GPLs, together with the written submissions on behalf of the applicants submitted on 18 February 2019, be marked confidential and not made available for inspection without further order of the Court.

7    By their applications of 8 March 2019 both Mrs Palmer and Mineralogy seek an order under s 596C(2) that Mrs Palmer and Mineralogy and their legal advisers be granted access to the documents just described.

8    In support of each application, counsel for Mrs Palmer and Mineralogy handed up and sought leave to rely upon an affidavit of Daniel Jacobson sworn 7 March 2019 and a further affidavit of Daniel Jacobson sworn 8 March 2019 attaching a range of documents.

9    In response to that part of each application directed to access to the confidential material, the GPLs advised the Court that they were not in a position to respond to the affidavits of Daniel Jacobson but, in any event, a redacted version of the affidavit of John Park would be made available to Mrs Palmer and Mineralogy which substantially identifies the relevant facts and contentions upon which the GPLs relied in seeking the order before Registrar Belcher on 18 February 2019. That redacted affidavit was provided to the lawyers for Mrs Palmer and Mineralogy on Friday, 8 March 2019 at about 3.30pm. Their lawyers were given an opportunity to put on submissions in relation to the material contained in that affidavit and the annexures to it, by 9.30am on Monday, 11 March 2019. Submissions about that material were received by the Court on Monday.

10    I give leave to rely upon the amended application on behalf of Mrs Palmer and leave to rely upon the application on behalf of Mineralogy both dated 8 March 2019.

11    At the date of the application before Registrar Belcher on 18 February 2019, Mrs Palmer was the Director of Mineralogy, and Mineralogy’s Company Secretary. She was appointed to those positions on 8 October 2018. Mrs Palmer has previously acted as a Director of Mineralogy. She was a Director from 8 January 2016 to 29 January 2017 and also during the period 9 March 2017 to 10 April 2017. Mrs Palmer ceased to be a Director of Mineralogy on 27 February 2019. Her appointment as Company Secretary also ceased on 27 February 2019.

12    Mrs Palmer’s husband, Clive Frederick Palmer (“Mr Palmer”), has also acted as a Director of Mineralogy from time to time. Mr Palmer’s periods of office as a Director are these: 21 February 1986 to 2 October 2008; 4 October 2008 to 20 May 2014; 8 June 2016 to 8 October 2018 including a period as sole Director from 10 April 2017 to 7 October 2018 (apart from a single day in November 2017).

13    The examination and production summons issued to Mrs Palmer on 26 February 2019 pursuant to Registrar Belcher’s order was sent by Ms Frost, an employee of the solicitors for the GPLs, to the solicitor for Mrs Palmer and Mineralogy, Mr Iskander, on 27 February 2019 at about 8.32am. Ms Frost asked Mr Iskander whether he had instructions to accept service of the summons addressed to Mrs Palmer.

14    On 27 February 2019 at about 11.21am, Ms Frost received an email from Mr Iskander attaching a letter of that date asserting that the summons issued to Mrs Palmer was “unnecessary and is further being used to obtain a forensic advantage at trial in proceedings BS6593/17 to be heard in the Supreme Court of Queensland”. That proceeding needs some explanation later in these reasons but for present purposes it is sufficient to note that the trial of consolidated proceedings in the Supreme Court of Queensland is due to commence on 15 July 2019. Mr Iskander advised that his firm had received instructions to accept service and also observed that Mrs Palmer was no longer a Director of Mineralogy and “hence has no authority to produce such documents”. Mr Iskander also said that the documents required to be produced extends beyond the “liquidation date of 22 April 2016” and thus the documents were said to be not relevant to any claims asserted by the GPLs. Finally, Mr Iskander said that any documents sought by the GPLs ought to be the subject of an application in the consolidated proceedings made before the Supreme Court of Queensland within the scope of a Mareva order made by that Court for the preservation of particular assets.

15    On 27 February 2019 at about 11.48am, Ms Frost caused a search to be conducted of the Australian Securities and Investments Commission (“ASIC”) database to obtain a then current extract of relevant information concerning Mineralogy. That search revealed that on 27 February 2019, Mr Palmer had been appointed a Director of Mineralogy and Company Secretary. Ms Frost then caused searches to be conducted of ASIC database to obtain a copy of any (one or more) Forms 484 in relation to changes to company details with respect to Mineralogy. It seems that a sequence of Forms 484 notifying ASIC of the changes (Annexures CF3-CF6 to Ms Frost’s affidavit) were lodged with ASIC between 11.07am and 12.05pm on 27 February 2019. The annexures to Ms Frost’s affidavit reveal that one form lodged at 11.07am advised ASIC of the resignation of Mrs Palmer as a Director. One form lodged with ASIC at 12.05pm notified ASIC of the appointment of Mr Palmer as a Director. Another form also lodged at 12.05pm also advised ASIC of Mr Palmer’s appointment identifying, in this form, Mr Palmer’s full name.

16    Accordingly, Mrs Palmer has acted as a Director of Mineralogy and Company Secretary from 8 October 2018 until about 11.00am on the day of service of the examination summons on 27 February 2019. Mr Palmer assumed both roles with Mineralogy from about 11.00am on that day.

17    As to the proceedings in the Supreme Court of Queensland, the position is this.

18    On 29 March 2017, the company issued proceedings in the Supreme Court (BS3202/17) against Mineralogy seeking an order that Mineralogy pay the company an amount of $105,981,599.81. Three other proceedings have been commenced in the Supreme Court. The Special Purpose Liquidators (“SPLs”) have commenced proceedings (BS6593/17) in which particular claims are made against Mineralogy in an amount of $14,558,217.94. There is a further proceeding in the Supreme Court (BS6847/16) in which certain transactions are sought to be set aside as voidable. There is a further proceeding (BS4720/17) in the Supreme Court referred to as the “Martino (s 418A) proceeding”. On 19 December 2017, the Supreme Court made an order for consolidation of all four proceedings in that Court. A consolidated statement of claim was filed in the consolidated proceeding (BS6593/17) on 30 November 2018. In the consolidated proceeding, the money claim advanced by the GPLs against Mineralogy as the seventh defendant in the consolidated proceedings is now $104,480,277.21 rather than the earlier amount. Alternatively, the GPLs claim an amount of $54,985,027.55 plus interest. As to these events, see Re Queensland Nickel (In Liq) [2017] QSC 258.

19    In the proceeding commenced by the SPLs and the company, orders were sought that the assets of particular defendants to that proceeding be frozen. On 25 May 2018, the Supreme Court made orders requiring that Mineralogy “not remove from Australia or in any way dispose of, deal with or diminish the value of any of its assets in Australia up to the unencumbered value of AUD$14,458,217.94, until judgment or further order”.

20    On that day a further order was made that “each of the defendants must … to the best of their ability inform the plaintiffs in writing of all their assets, giving their value, location and details (including any mortgages, charges or other encumbrances to which they are subject) and the extent of their interests in the asset … [and] swear an affidavit setting out the above information and serve it on the plaintiffs’ solicitors”.

21    Although there is a freezing order made against Mineralogy in an amount of $14,458,217.94, there is nevertheless a significant shortfall between the amount of the freezing order and the amount claimed against Mineralogy by the GPLs: $90,022,059.27.

22    Although the relevant statutory provisions are well known, it should be noted that under s 596B(1), the Court may summon a person for examination about a corporation’s “examinable affairs” if an eligible applicant applies for the summons and the Court is satisfied that the person may be able to give information about examinable affairs of the corporation. Section 596D(2) provides that a summons to a person under, relevantly, s 596B may require the person to produce at the examination, specified books that are in the person’s possession; and relate to the corporation or any of its examinable affairs. Section 597(9) provides that the Court may direct a person to produce, at an examination of that or any other person, “books” which are in the first-mentioned person’s possession and which are relevant to matters to which the examination relates or will relate.

23    The term “books” includes a register; any other record of information; financial reports or financial records, however compiled, recorded or stored; and a document: s 9 of the Act.

24    The term “examinable affairs” in relation to a corporation means, (a) the promotion, formation, management, administration or winding up of the corporation; or (b) any other affairs of the corporation (including anything that is included in the corporation’s affairs because of s 53); or (c) the business affairs of a connected entity of the corporation, 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 paras (a) or (b): s 9 of the Act.

25    The term “examinable affairs” is broad in its statutory scope and operation: Evans and Others v Wainter Pty Ltd (2005) 145 FCR 176, Lander J at [86], Ryan J agreeing at [1]-[2], and Crennan J agreeing at [265]-[271]; Grosvenor Hill (Qld) Pty Ltd v Barber (1994) 48 FCR 301 at 311 D-E, Beaumont, Spender and Cooper JJ.

26    In the redacted affidavit of John Park (and the original affidavit relied upon before Registrar Belcher by reference to annexures), Mr Park says that he is “concerned about Mineralogy’s use of its assets, and the risk that that use will affect the ability of Mineralogy to satisfy any judgment which may be obtained above the sum of $14,458,217.94”, which is an amount of approximately $90 million. Mr Park then says, at para 7, that the reason for his concern is this:

(a)    On 10 September 2018, the Australian Associated Press reported that [Mr Palmer] had announced plans to a 700 megawatt power station in Queensland [the report is annexed to his affidavit marked JP-12]. Similar reports were made between 1 March 2018 and 22 November 2018 [and those reports are annexed to his affidavit marked JP-13]. Mr Palmer also published a number of tweets and a Facebook post on 10 September 2018 announcing the proposal [copies of that material is annexed to his affidavit marked JP-14].

(b)    I know from having watched an interview of Mr Palmer on 11 September 2018 on Sky News that Mr Palmer said when interviewed on that program, in response to the question, “are you going to stump up all the money for the coal-fired power station under this plan or would you be seeking finance from someone else on top of your money?”, that “we’re currently funding all of it 100% and we’re happy to do that”.

(c)    An article which appeared in the International Business Times on 6 October 2018 stated that funding to build a new coal-fired power station in the Galilee Basin (“Project”) could be derived from a liquidation of Mr Palmer’s existing assets – “including his shares in Sino Iron and other businesses” [and Mr Park annexes as JP-15 a copy of that article].

(d)    On 15 October 2018, the solicitors for the GPLs, HWL Ebsworth Lawyers, sent a letter to Mr Palmer and the solicitors for Mineralogy about the use of the assets of Mineralogy, raising the GPLs’ concerns about the use of Mineralogy’s assets, and inviting Mr Palmer to comply with the invitation given by his counsel on 17 May 2017 (set out in the letter) for questions relevant to the examinable affairs of the Company to be put to him in writing so that they could be answered without a further examination. A copy of that letter is annexed to the affidavit of Germaine Kee filed by the GPLs in [QUD 580/2016] on 3 December 2018 and marked GK-1 [that affidavit is annexed to Mr Park’s affidavit marked JP-16].

(e)    On 17 October 2018, that invitation was refused by a letter sent by the solicitors for Mineralogy, Alexander Law. [Mr Park annexes to his affidavit a copy of an affidavit of Ms Key which in turn annexes a copy of the letter of 17 October 2018.]

27    Both the redacted affidavit of Mr Park and the affidavit in the form relied upon before Registrar Belcher contain a section of transcript of an examination of Mr Palmer on 17 May 2017. In that transcript, Mr Palmer is asked about the proceeds of litigation which might flow to Mineralogy as a result of a claim made by the company in proceedings in Western Australia against parties described as the “CITIC parties”: CITIC Limited, Sino Iron Pty Ltd and Korean Steel Pty Ltd. Mr Palmer was asked whether there had been any discussions about disposing of the proceeds of that claim which might otherwise flow to Mineralogy. In response, he said:

No, I would have to consult with my wife on that. She’s in charge of financial things. I just – I am just a pawn in her hands. She obviously would have high on her agenda going shopping, I think, you know but I haven’t got any intention … I live a frugal life.

[emphasis added]

28    Mr Palmer was also asked whether he had undertaken any discussions with third parties about Mineralogy selling its rights in the proceeding against the CITIC parties. He said that some parties had offered some amounts but he could not recall the exact amounts and he accepted that “fund managers” had exhibited a “great interest”. He then said this:

… let’s say you did have an amount awarded there, right, the most advantageous commercial way and you decided you wanted to sell that, which we haven’t, the most advantageous way is to do it on a competitive market basis. That way you will get a higher price than you would by listing to a private transaction. So – you know, I find it unhelpful to make advance decisions to deal with money that you don’t have because you may well be disappointed and it may … up [to] the intentions in [of] my wife, for example, that we might get – I don’t want to build her intentions up more than they are. … You can ask her about that. Yes.

[emphasis added]

29    It seems to follow, according to Mr Palmer’s evidence, that Mrs Palmer has, or at least had, some decision-making authority concerning Mineralogy at least in relation to the issues about which Mr Palmer was being asked questions. Mrs Palmer was not a Director of Mineralogy as at 17 May 2017 when Mr Palmer was answering those questions. She had been a Director during the period 9 March 2017 to 10 April 2017 and had been a Director from 8 January 2016 to 29 January 2017. Mrs Palmer was a Director from 8 October 2018 until 27 February 2019. Prima facie, Mrs Palmer is a person who is likely to have knowledge in relation to the affairs of Mineralogy due to her office at the date of Registrar Belcher’s order and at the time of the issue of the summons on 26 February 2019; and by reason of Mr Palmer’s evidence.

30    The statutory provisions are concerned with matters relating to the examinable affairs of the company, Queensland Nickel, not Mineralogy. However, it should be noted that an examination summons issued to Mr Palmer on 3 August 2016. Mr Palmer was examined three times in September 2016 and four times in 2017. He was examined again on 31 October 2018 and the summons was adjourned to a date to be fixed on eight days’ notice. On 22 November 2018, the GPLs gave notice by their solicitors that the summons had been re-listed for further hearing on 6 December 2018 at 2.15pm. By that date, Mr Palmer was no longer a Director of Mineralogy. Mrs Palmer had, by then, been appointed to that role. On 30 November 2018, the GPLs made an application for an order for the production of particular documents of Mineralogy essentially in aid of the re-listed summons for the examination of Mr Palmer. That application directed to Mineralogy was opposed by Mr Palmer and Mineralogy. They relied upon an affidavit of Mr Jonathan Shaw, a solicitor employed by the solicitors acting for Mr Palmer and Mineralogy on that application. Mr Shaw appeared before Registrar Belcher on 6 December 2018. In that proceeding, questions arose about whether inquiries into the “worth” and “assets” of Mineralogy, with a view to protecting the interests of the creditors, fell within the statutory notion of the examinable affairs of Queensland Nickel. As to that question, Mr Shaw said this (T, p 16):

Thank you, Registrar. I might just start with the issue of examinable affairs. So there’s no controversy that it is an examinable affair to inquire into the assets of Mineralogy whether or not proceedings have been commenced or not commenced. We don’t quibble with anything in relation to that. But this is not an application in relation to the assets of Mineralogy. This is an application for orders for production of documents in relation to how Mineralogy is spending its money. So the proposed orders are Mineralogy’s management accounts including its transaction journal and balance sheet and its bank statements. In my submission, Registrar, there is no authority that an examiner is entitled to see how an examinee is spending its money, the use to which it puts the money. It’s entitled to have information about the income of the examinee and its assets, but what it spends its money on is not in any of the authorities that are referred to an examinable affairs.

[emphasis added]

31    Mr Byrne who appeared for Mrs Palmer and Mineralogy on the present applications, does not resile from Mr Shaw’s remarks and, as I understand it, Mr Byrne accepts that Mrs Palmer is a person who may be able to give information about the examinable affairs of Queensland Nickel because she can give information about aspects of the income and assets of Mineralogy and that topic is accepted as a proper topic falling within the description of the examinable affairs of Queensland Nickel. As I understand it, Mr Byrne accepts that the production of documents by Mineralogy in aid of Mrs Palmer’s examination falls within the statutory power.

32    The question Mr Byrne raises on behalf of Mrs Palmer and Mineralogy is whether the exercise of the power in each case is for a proper purpose. Mr Byrne says that the invoking of the power by the GPLs by making the application and obtaining the order for the issue of the summons to Mrs Palmer is an abuse because its real purpose is to provide the GPLs and the company with a forensic advantage in the consolidated Supreme Court proceedings and is thus oppressive and unfair.

33    As a preliminary matter, it should be noted that the point of distinction Mr Shaw makes about, on the one hand, an examination of the assets and income of Mineralogy falling within the examinable affairs of Queensland Nickel, but, on the other hand, an examination of Mineralogy’s expenditure of its money, falling outside the examinable affairs of Queensland Nickel, is not sustainable having regard to the breadth of the statutory term “examinable affairs” as defined within ss 9 and 53 of the Act.

34    The real question is whether Mrs Palmer and Mineralogy correctly assert that invoking the exercise of the power to summon Mrs Palmer for examination and securing the production order directed to Mineralogy is an abuse.

35    Mrs Palmer and Mineralogy assert that seeking and obtaining the orders of 18 February 2019 is an abuse having regard to a number of authorities which explain that notion. As to the jurisprudence concerning the general principles on that topic, however, see UBS AG v Tyne (2018) 92 ALJR 968. The particular proposition put by Mrs Palmer and Mineralogy is that the seeking and obtaining, by the GPLs, of the orders of 18 February 2019 is an abuse because on 6 December 2018 the GPLs unsuccessfully sought an order that Mineralogy produce the same “books”, described in the same way, as the orders obtained on 18 February 2019. Thus, the GPLs are said to be seeking to re-litigate the same matter which is said to be an abuse. However, as Registrar Belcher made clear, the application filed on 30 November 2018 was for an order for the production of documents from Mineralogy in aid of the re-listed examination of Mr Palmer on 6 December 2018. However, as it transpired, Mr Palmer was, by then, no longer a Director of Mineralogy, Mrs Palmer having assumed that role on 8 October 2018. Registrar Belcher refused to make an order under s 597(9) directed to Mineralogy in aid of an examination of a person who was, by then, no longer a Director.

36    On 18 February 2019, the question in issue was an entirely different question. It was a question of whether an order ought to be made under s 597(9) requiring Mineralogy to produce books in aid of Mrs Palmer’s examination. There is no abuse, at least on that ground, in the GPLs seeking the exercise of the power in aid of an examination of Mrs Palmer.

37    Mr Park says (in both the redacted and un-redacted affidavits) that he is concerned about the matters described at [26] of these reasons because it suggests that there is a risk a transaction might be entered into in relation to the royalty streams available to Mineralogy and other “intangible assets” of Mineralogy that will affect the company’s ability to recover against any of the assets of Mineralogy “that are excluded from the Special Purpose Financial Report of Mineralogy for the year ended 30 June 2018”. Apart from the matters mentioned at [26] of these reasons, Mr Park says that subsequent to the solicitors for the GPLs sending a letter to the solicitors for Mineralogy on 16 October 2018 expressing the concerns recited at [26], the GPLs were provided with a document described as the “Special Purpose Financial Report for the year ended 30 June 2018” (“the SPF Report”) for Mineralogy. That document states that Mineralogy had cash on hand as at 30 June 2018 in a particular sum (the amount is confidential) and net assets in a particular amount (also confidential). Mr Park says that notwithstanding that report, he remains concerned about the “use of Mineralogy’s assets”, a topic which is accepted as an examinable affair of Queensland Nickel. The basis for his concern is put this way (in both affidavits):

(a)    First, each of the statements of Mr Palmer in the media articles, tweets and posts, copies of which are annexed to [his affidavit at JP-1 to JP-4], concern the use of Mineralogy’s assets after 30 June 2018, that being the date at which the [SPF Report] stated Mineralogy’s position.

(b)    Second, on 6 December 2018, an affidavit of Mr Shaw exhibiting the [SPF Report] was relied upon by Mineralogy in respect of an application made by the GPLs in this proceeding. Mr Shaw’s affidavit disclosed that on 16 August 2018, an affidavit of Chitondo Michael Mashayanyika was filed in the SPL proceeding on behalf of the defendants to that proceeding pursuant to the notification order made by Bond J as part of the orders made on 25 May 2018 [as to which see [20] of these reasons] in which Mr Mashayanyika deposed that the cumulative estimated value of Mineralogy held in Australian dollars is [a particular amount; the nominated amount is probably intended by Mineralogy to be a confidential figure although the same number was mentioned by Mr Shaw in the proceedings before Registrar Belcher without any qualification].

(c)    The [SPF Report] provided to the GPLs subsequent to 16 August 2018 but in respect of Mineralogy’s position prior to that date, shows a difference in the amount of the alleged assets of Mineralogy in [a particular sum of substance]. Mr Shaw deposes at [para (15(b)] of his affidavit to the reason for that difference in sum, that being that he is informed, and believes that “in accordance with the accounting standards, the audited accounts do not bring to account the fair value of intangibles or consider such matters other than as set out specifically in the accounts, namely mining tenements, the right to receive royalty payments, mining projects, legal claims and the right accruing to the company where no final judgment has yet been received”.

(d)    As that difference is a substantial amount, and reflects sums that auditors will not include in the assets of Mineralogy, I am concerned that should Mineralogy’s assets be used in the manner that Mr Palmer says that he intends to use them, there is a risk that Mineralogy’s realisable assets will be depleted such that the full amount of any judgment may not be recoverable.

(e)    That is particularly so in circumstances where I consider that the assets disclosed in the [SPF Report] appear to primarily consist of cash and other assets attributable to the receipt of [a particular sum; also confidential] in royalty income, which the report discloses was the result of a judgment of Martin J of the Supreme Court of Western Australia delivered in 2017. I know that an appeal from that judgment was heard on 4 and 5 December 2018. However, even if Mineralogy is successful in that appeal, I am concerned that the proposed use of Mineralogy’s assets may still deplete its assets to a point at which the recovery of $104 million may be affected.

38    Mr Park also says that he is concerned that Mineralogy’s assets may be depleted by the use of its funds to support a political campaign by Mr Palmer and the United Australia Party for this year’s federal election. Mr Park says that on 15 January 2019, Mr Palmer was quoted in the Sydney Morning Herald in the way reflected in this extract from the article:

The mining magnate and property developer refused to reveal the cost of the massive print, radio and television advertising campaign for his revamped United Australia Party, which includes prime-time slots on the major networks.

“We’re spending money and we’ve got a lot of money to spend”, Mr Palmer said. He said “of course” his firm, Mineralogy, was contributing to the party, as it did to his former Palmer United Party to the tune of $3.7 million in 2014-15 alone.

“There’s no limit to how much we will contribute; I’ve put no limit on it”, he said.

39    Mr Park also says that his concerns are “only exacerbated” by the fact that the shareholding in Mineralogy which was previously held by Mr Palmer personally and two Australian companies controlled by Mr Palmer, has been transferred to an offshore entity, Mineralogy International Ltd. Mr Park refers to an annexed copy of an historical extract as at 21 January 2019 maintained by ASIC for Mineralogy which records the change in share ownership. He also annexes to his affidavit a copy of an historical extract as at 15 January 2019 maintained by the New Zealand Company’s Office for Mineralogy International Ltd which shows that that company is owned by Mr Palmer and the two companies that previously owned Mineralogy.

40    In the affidavit material put before Registrar Belcher (contained in both that affidavit and the redacted affidavit provided to Mrs Palmer and Mineralogy), Mr Park says that because of Mrs Palmer’s appointment as a Director of Mineralogy (at least as at 18 February 2019 and from 8 October 2018), the information that Mrs Palmer may be able to give, and the documents that Mrs Palmer may be able to produce, will assist the GPLs to determine these matters:

(a)    the financial position of Mineralogy subsequent to 30 June 2018; and

(b)    whether Mineralogy has, subsequent to obtaining judgment in the proceeding in Western Australia, advanced its position on selling its interests in the royalty stream obtained from the defendants in that case; and

(c)    whether the use of Mineralogy’s assets since 30 June 2018 has substantially altered its financial position; and

(d)    whether the use of Mineralogy’s assets since 30 June 2018 has been such that it is necessary to bring an application in the Supreme Court of Queensland to vary the orders made by Bond J on 25 May 2018 to protect the position of the creditors and contributories of the Company; and

(e)    whether the change in control of Mineralogy is in any way affecting its conduct and plans.

41    As to the matters described at [26] to [28] and [37] and [38], counsel for Mrs Palmer and Mineralogy say that these matters are “evidence of nothing”. However, the question is not whether those matters and the press reports and other documents which support them, are admissible in evidence in a proceeding as probative of a matter in controversy. Those matters are matters which an eligible applicant in the form of the GPLs can properly take into account in determining whether an application ought to be made for orders for the issue of a summons directed to a relevant person and an order for the production of documents by a relevant person.

42    Counsel for Mrs Palmer and Mineralogy accept that an allegation that the GPLs are engaging in an abuse of power by seeking and obtaining the orders of 18 February 2019, is a serious allegation to make. In that context, the contention needs to be supported by proper material. I accept the submission of the GPLs that for an abuse to be found, it is necessary for an offensive purpose to be identified, and that purpose must be, at the least, the predominant purpose: Re Excel Finance Corporation Ltd; Worthley v England (1994) 52 FCR 69 at 89 (at (D)), Gummow, Hill and Cooper JJ. I also accept that if the GPLs invoke the procedure under Part 5.9 of the Act for an improper purpose, such conduct would be an abuse of process: Palmer v Ayres (2017) 259 CLR 478, Kiefel CJ, Keane, Nettle and Gordon JJ at [35]; Gageler J at [98].

43    Counsel for Mrs Palmer and Mineralogy assert that the Court should infer that the summons and the order for production of documents have been issued for an improper purpose for these reasons.

44    First, the GPLs are seeking to re-litigate the matters of 6 December 2018. I have already indicated why that is not a sustainable proposition.

45    Second, the consolidated Supreme Court proceedings have progressed a considerable way along the path to trial. The Supreme Court consolidated proceeding is listed for trial commencing on 15 July 2019. The pleadings have closed and the parties have filed their evidence-in-chief and expert reports. The plaintiffs are to file evidence in reply. Disclosure has been completed. The remaining steps include the provision of joint expert reports; conferral in relation to a trial bundle and trial plan; and the preparation of outlines of opening submissions. Counsel for Mrs Palmer and Mineralogy say that the circumstances of this case are therefore unusual because the GPLs are not seeking orders for examination to “ascertain the viability of a claim”. They say that the advanced stage of the Supreme Court proceedings is a “powerful factor” in setting aside the summons. They say that Queensland Nickel and the GPLs should be limited to their rights under the UCPR in the Supreme Court proceedings and should not be permitted to “circumvent the proper processes in those rules”. That circumstance, that advanced proceedings are on foot is not, by itself, a basis upon which an inference of abuse on the part of the GPLs can be drawn. That fact alone does not support such an inference. The circumstance that a claim is in existence is no answer to an application by the GPLs and does not give rise to an inference of abuse. If the factors informing the application for the orders included an attempt to ask questions and obtain answers and documents in relation to a matter expressly in controversy on the pleadings in the Supreme Court proceedings, that would be an entirely different matter. There is no basis upon which it can be said that the GPLs are seeking to obtain a forensic advantage in the matters in controversy in the proceedings. The subject matter of the concerns of the GPLs are identified above and they are proper matters going to the examinable affairs of Queensland Nickel.

46    Third, to the extent that the summons seeks “evidence” to address the “concerns” as to the use of Mineralogy’s assets, the summons is said to impermissibly seek to gain a forensic advantage not otherwise available to Queensland Nickel under r 260B of the UCPR.

47    Fourth, to the extent that the summons seeks evidence to identify assets which may be recoverable if Queensland Nickel is successful in the Supreme Court proceedings against Mineralogy, the summons is said to impermissibly seek to gain a forensic advantage not otherwise available to Queensland Nickel at this stage of the proceeding under r 808 of the UCPR.

48    Fifth, the summons otherwise seeks to circumvent other avenues presently available to Queensland Nickel under the Freezing Orders made in the Supreme Court of Queensland.

49    The propositions at points 3, 4 and 5 turn upon the notion that any question the GPLs may seek to determine relating to matters which would otherwise be properly the subject of questions as part of an examination of Mrs Palmer going to the examinable affairs of Queensland Nickel, ought to be brought to the Supreme Court of Queensland within the scope of the Mareva orders made by that Court. Those orders are Freezing Orders in relation to a particular sum. The circumstance that the GPLs might be entitled to agitate an issue of, for example, an extension of a Freezing Order beyond the limits of that which currently prevails, is no answer to the statutory entitlement of an eligible applicant (as the GPLs clearly are) to engage the scope of the power recited in s 596B of the Act, s 596D of the Act and s 597(9) in circumstances where the integers of those sections are properly satisfied. Invoking such an application, notwithstanding the circumstance that a Freezing Order has been made in particular Supreme Court proceedings, does not give rise to an inference of abuse of process. As already indicated, if the scope of the inquiry or examination is directed to engaging the relevant person in questions and answers about the matters in controversy in the Supreme Court proceedings, with a view to gaining a forensic advantage in the conduct of the substantive proceeding, an abuse would arise. That follows because a sequence of questions and answers directed to that topic would be oppressive and unfair and an invoking of the power, for an improper purpose.

50    In Evans and Others v Wainter Pty Ltd (supra), Lander J made these observations about the following propositions which inform the operation of s 596B of the Act:

252    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 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.

[emphasis added]

51    In this case, the application for the order for the examination of Mrs Palmer is not for a purpose “unconnected” with the purposes authorised by the legislation. The purposes are identified by Mr Park. The GPLs are not seeking to invoke the procedure to obtain a forensic advantage in the conduct of the litigation in the Supreme Court and nor are they invoking the procedure as part of a “dress rehearsal” for the cross-examination of Mrs Palmer with respect to the Supreme Court litigation. Having regard to all the surrounding circumstances described in these reasons, the purpose of the GPLs in invoking the procedure is not an abuse of process.

52    As to other matters, it should be noted that the proposition that Mrs Palmer is no longer a Director does not mean that she is not able to answer questions about the examinable affairs of the company or answer questions about her knowledge of the financial affairs of Mineralogy since 30 June 2018. It is no answer to the summons that Mrs Palmer now has no authority to produce the nominated documents. If she has the documents or copies of them she can produce them. If she does not have them she will not be able to produce them. No doubt, she will respond to that part of the summons in a way which reflects whatever the position may be.

53    Mrs Palmer and Mineralogy seek an order that the confidential material upon which the GPLs relied in obtaining the orders be disclosed to them. The GPLs have provided Mrs Palmer and Mineralogy with a redacted version of Mr Park’s affidavit. I have had the benefit of reading the un-redacted affidavit and the redacted affidavit. I am satisfied that all of the material deposing to the purposes of the GPLs in making the application and annexed material, and the expression of the GPLs concerns, are set out in the redacted affidavit. Accordingly, I do not propose to vary the order made by Registrar Belcher as to the confidentiality of the material made on 18 February 2019.

54    Yesterday, the solicitors for Mrs Palmer and Mineralogy filed a further affidavit from Mrs Palmer in which she responds to aspects of Mr Park’s redacted affidavit. Mrs Palmer says this at para 2: “Upon my appointment as a director of Mineralogy, I gave Mr Clive Palmer full authority to represent the Board of Mineralogy in all commercial transactions and negotiations, and directed him to notify me of any events or transaction that may materially affect Mineralogy’s financial position”. She did so because Mr Palmer “is the ultimate beneficial shareholder of all the shares in Mineralogy”: para 3. Mrs Palmer also says that, as a Director of Mineralogy, she reviewed the audited accounts and signed them on 30 November 2018. She says that since signing the accounts, she has not become aware of the accounting transactions of Mineralogy and it is her understanding that Mineralogy is only required to produce audited accounts annually: para 4.

55    These may be matters which are properly the subject of Mrs Palmer’s examination by the GPLs. At paras 5 to 12 of her affidavit, Mrs Palmer responds to specific matters such as the Mineralogy proposal to build a 700 megawatt power station; issues in relation to whether there is or was any plan to dispose of Mineralogy’s royalty streams during the period of her directorship; Mr Park’s concerns; Mineralogy’s ability to pay a judgment debt and other matters.

56    However, an affidavit in the application is not the forum for the answer to the concerns of the GPLs. The question is whether the GPLs have properly invoked the power. I am satisfied they have. If Mrs Palmer is asked questions about the topics relating to the concerns of the GPLs, she will no doubt respond, in the course of the examination, in a way which is consistent with what she says in her affidavit affirmed on 11 March 2019.

57    The amended applications by Mrs Palmer and Mineralogy to set aside the orders of Registrar Belcher made on 18 February 2019 and discharge the summons and the order for the production of documents are dismissed with costs.

Associate:

Dated:    12 March 2019