FEDERAL COURT OF AUSTRALIA

Markey (liquidator), in the matter of Bestjet Travel Pty Ltd (in liq)

[2020] FCA 467

ORDERS

THE COURT ORDERS THAT:

1.    A direction to produce in the form of Schedule A to these orders be issued under s 597(9) of the Corporations Act 2001 (Cth) to Bestjet Travel Pte. Ltd. (Singapore Unique Entity No. 201534316D).

2.    A direction to produce in the form of Schedule B to these orders be issued under s 597(9) of the Corporations Act 2001 (Cth) to Oversea-Chinese Banking Corporation Limited (Singapore Company Registration Number: 193200032W).

3.    The plaintiffs have leave under r 10.44 of the Federal Court Rules 2011 (Cth) to serve the abovementioned directions to produce in the Republic of Singapore.

4.    The following documents, namely:

(a)    the original and amended interlocutory application filed 15 November 2019;

(b)    the affidavit of Mr Nigel Robert Markey filed 15 November 2019;

(c)    the affidavit of Mr Christopher Dudurovic filed 18 December 2019; and

(d)    the Liquidators’ outline of submissions dated 18 December 2019

be designated as confidential and not available for inspection by any person without the leave of the Court.

5.    The plaintiffs’ costs of and incidental to the original and amended interlocutory application filed 15 November 2019 be treated as a part of their reasonable expenses in the winding up of the first to third defendants.

SCHEDULE “A”

A.    DETAILS OF DIRECTION TO PRODUCE

TO:    The Proper Officer

          Bestjet Travel Pte. Ltd. (Singapore Unique Entity No. 201534316D)

          1 Goldhill Plaza #03-39 Goldhill Plaza, Singapore 308899

    You are directed under section 597(9) of the Corporations Act 2001 (Cth) to:

1.    produce before the Federal Court of Australia at Level 6, Harry Gibbs Commonwealth Law Courts Building, 119 North Quay (Cnr Tank Street), Brisbane Qld 4000, at [time] on [date], each and all of the books and records set out in Schedule A below, which may be in the possession or control of Bestjet Singapore Pte Ltd (Bestjet Singapore) relating to the examinable affairs of any or all of Bestjet Travel Pty Ltd (in Liquidation) ACN 155 965 601, Wynyard Travel Pty Limited (in Liquidation)ACN 107 305 224 and Brooklyn Travel Pty Ltd (in Liquidation) ACN 612 681 320.

Schedule A

1.    Any bank statements, transaction history or any other document issued by the Oversea-Chinese Banking Corporation Limited (OCBC) which lists any transactions in respect of any bank account held by Bestjet Singapore with OCBC or any other bank, during the period from 11 October 2015 to the date of this Direction to Produce.

2.    All books, records, correspondence or documents that relate to the sum, or approximate sum, of USD$2,317,984.82 (the Payment) paid to Bestjet Singapore by Sabre Asia Pacific Pte Ltd (Sabre) on or about 13 December 2018, including but not limited to:

(a)    the receipt by Bestjet Singapore of the Payment;

(b)    the withdrawal, transfer or disbursement of the Payment, or any part of the Payment, by Bestjet Singapore, including:

(i)    the name of the person who, as agent or otherwise for Bestjet Singapore, made any such withdrawal, transfer or disbursement;

(ii)    the bank account(s) or other account(s) from which any such withdrawal, transfer or disbursement was made, including the name of the person holding any such bank account(s) or other account(s) and the name of the banking or other institution(s) in which such account(s) was held;

(iii)    the bank account(s) or other account(s) into which any such withdrawal, transfer or disbursement was made or paid, including the name of the person holding any such bank account(s) or other account(s) and the name of the banking or other institution(s) in which such account(s) was held.

3.    Any management accounts, or any other record of income and expenditure, of Bestjet Singapore in respect of any period falling between 30 June 2015 and the date of this Notice to Produce.

4.    Any financial statements of Bestjet Singapore prepared in respect of any period falling between 30 June 2015 and the date of this Notice to Produce.

    Date:    ………………………………...

    Registrar

B.    NOTICE TO PERSON DIRECTED TO PRODUCE

Refusal to comply with this direction to produce, without reasonable cause, may result in a further Court order.

This summons is issued at the request of the Applicants whose address for service is c/- Level 8, Waterfront Place, 1 Eagle Street, Brisbane QLD 4000.

SCHEDULE “B”

A.    DETAILS OF DIRECTION TO PRODUCE

TO:    The Proper Officer

         Oversea-Chinese Banking Corporation Limited (Singapore Company Registration Number: 193200032W)

         63, Chulia Street, #10-00, Singapore 049514

    You are directed under section 597(9) of the Corporations Act 2001 (Cth) to:

1.    produce before the Federal Court of Australia at Level 6, Harry Gibbs Commonwealth Law Courts Building, 119 North Quay (cnr Tank Street), Brisbane Qld 4000, at [time] on [date], each and all of the books and records set out in Schedule A below, which may be in the possession or control of Oversea-Chinese Banking Corporation Limited (OCBC) relating to the examinable affairs of any or all of Bestjet Travel Pty Ltd (in Liquidation) ACN 155 965 601, Wynyard Travel Pty Limited (in Liquidation)ACN 107 305 224 and Brooklyn Travel Pty Ltd (in Liquidation) ACN 612 681 320.

Schedule A

1.    Each and every bank statement, transaction statement or any other document issued by or held by OCBC, which lists any transactions upon or in respect of any bank account held by Bestjet Travel Pte. Ltd. (Singapore Unique Entity No. 201534316D) with OCBC, including but not limited to OCBC account numbers 503294985301 and 503183303201, for any of the period between 11 October 2015 and the date of this Notice to Produce.

    Date:    ………………………………...

    Registrar

B.    NOTICE TO PERSON DIRECTED TO PRODUCE

Refusal to comply with this direction to produce, without reasonable cause, may result in a further Court order.

This summons is issued at the request of the Applicants whose address for service is c/- Level 8, Waterfront Place, 1 Eagle Street, Brisbane QLD 4000.

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

REASONS FOR JUDGMENT

REEVES J:

INTRODUCTION

1    Mr Nigel Markey and Mr Bradley Hellen, the joint and several liquidators (the Liquidators) of Bestjet Travel Pty Ltd (in liquidation) (Bestjet), have applied, ex parte, for the following four orders:

(a)    to issue directions under s 597(9) of the Corporations Act 2001 (Cth) (the Act) to Bestjet Travel Pte. Ltd. (Singapore Unique Entity No. 201534316D) (Bestjet Singapore) and Oversea-Chinese Banking Corporation Limited (Singapore Company Registration Number: 193200032W) (OCBC) in respect of the documents described below (see at [19] and [20]);

(b)    for leave under r 10.44 of the Federal Court Rules 2011 (Cth) (the Rules) to serve the abovementioned directions to produce in the Republic of Singapore;

(c)    to issue a letter of request for assistance under s 581(4) of the Act to the High Court of the Republic of Singapore in respect of compliance with the abovementioned directions to produce; and

(d)    to establish a confidentiality regime under ss 596F(1)(b) and (e) of the Act in respect of certain of the materials filed in support of this application.

2    The material referred to in [1(d)] above includes two affidavits made by Mr Markey, one filed on 27 March 2019 (although this affidavit is already covered by the existing confidentiality regime) and the other filed on 15 November 2019; and an affidavit filed on 18 December 2019 and made by Mr Christopher Dudurovic, a solicitor in the employ of HopgoodGanim Lawyers, the firm acting for the Liquidators.

FACTUAL BACKGROUND

3    As well as being the Liquidators of Bestjet, Mr Markey and Mr Hellen are the joint and several Liquidators of two related companies: Wynyard Travel Pty Limited (in liquidation) and Brooklyn Travel Pty Ltd (in liquidation) (together with Bestjet, the Bestjet Companies). They were initially appointed as the administrators of those companies on 18 December 2018 and were subsequently appointed as their Liquidators on 31 January 2019. The latter appointments were made by resolutions of their creditors at meetings convened pursuant to s 439A of the Act.

4    Before they were placed in administration, the Bestjet Companies owned and operated a substantial travel agency business with its headquarters in Brisbane, Queensland. That business was largely conducted online through the website “bestjet.com”. Its customers would electronically purchase travel products (mainly airline tickets) through that website. At that time the online sales of the business were in the order of $70 million per month.

5    Bestjet Singapore is a private company, incorporated in Singapore. Its sole director is Mrs Rachel James. She has held that position since 10 September 2015. Mrs James was also the sole director of Bestjet from 28 February 2012 to 2 November 2018. Hence, for a period of around three years, Bestjet Singapore and Bestjet had a common sole director.

6    Mrs James is married to Mr Michael James. Mr James was also involved in the affairs of both Bestjet and Bestjet Singapore. He was the Chief Executive Officer of Bestjet Singapore and he was employed by Bestjet as its General Manager and Fares and Pricing Analyst. The Liquidators also contend that he was a de facto director of Bestjet.

7    Bestjet Singapore and the Bestjet Companies were part of a broader group of companies and entities incorporated, or based, in Australia, Singapore and the British Virgin Islands. These companies were managed by Mr James, with some involvement by Mrs James, and variously had operations in Australia, Singapore and the Philippines. As a part of those operations, on 10 October 2015, Bestjet Singapore entered into a global distribution system agreement (Subscriber Agreement) with a company called Sabre Asia Pacific Pte Ltd (Sabre). That company was also incorporated in Singapore.

8    Sabre is a travel technology company which carries on a global business supplying software and related services, referred to as a “Global Distribution System”. In essence, that system acts as an intermediary between travel agents and the airlines whose tickets they sell to electronically track, calculate and receive the various rebates and incentives that are payable to those agents from time to time in respect of those sales.

9    Over a period in excess of three years, under the Subscriber Agreement, Bestjet Singapore regularly received from Sabre a series of rebates and incentives payments. For example, during the period between 2 November 2017 and 20 September 2018, Bestjet Singapore received the total sum of USD$6,072,147.22 from Sabre in the form of such payments.

10    During the period that the Subscriber Agreement operated, Bestjet Singapore and Bestjet had an arrangement whereby Bestjet Singapore would pass on to Bestjet about 90% of the rebates and incentives payments it received. Bestjet treated those monies as its own income for the purposes of its financial accounts.

11    OCBC is a multinational banking and financial services business based in Singapore. Its shares are listed on the Singapore Stock Exchange. Until late 2018, Bestjet Singapore operated an account with OCBC which it used to receive and disburse monies in the course of its business.

12    On 13 December 2018, Sabre paid an amount of USD$2,317,984.82 into the OCBC account mentioned above. This sum represented the rebates and incentives payments then due to Bestjet Singapore. More importantly, it was a particularly large amount by comparison to those which Bestjet Singapore had previously received from Sabre.

13    At about the same time, Mrs James sold her shares in Bestjet to a company controlled by Mr Robert McVicker Junior. Mr McVicker was aware that the abovementioned payment was imminent and was anxious for Bestjet to receive it. However, as it turned out, Bestjet Singapore did not pay any part of that sum to Bestjet in accordance with the usual arrangements described above. Instead, those monies were paid out of the OCBC account to an unknown party. Soon thereafter the OCBC account was closed. These events occurred on, or soon after, 13 December 2018. The destination of those monies is one of the main issues presently being pursued by the Liquidators.

14    On 18 April 2019 and 24 April 2019, this Court issued summonses in this and a related set of proceedings under ss 596A and 596B of the Act to 22 individuals to be examined and to produce documents relating to the examinable affairs of the Bestjet Companies. Those affairs included, amongst other things:

(a)    whether there was in fact an agency relationship, or alternatively, an implied contract, between Bestjet and Bestjet Singapore;

(b)    the present location of the monies comprising the 13 December 2018 rebates and incentives payment, including to whom, when, how, and where, any part of those monies may have been disbursed; and

(c)    the recoverability by Bestjet of those monies, and any other rebates and incentives payments that may be owed to it, for the benefit of its creditors.

15    The public examinations of the recipients of the summonses mentioned above were conducted over a 12 day period between 17 July 2019 and 7 August 2019. Amongst the examinees were Mr James and Mrs James. During the course of Mr James’ examination, Registrar Lynch directed him to:

(a)    produce the internal management accounts prepared for Bestjet Singapore encompassing the period between 1 July 2018 and 18 December 2018 (Management Accounts); and

(b)    identify whether any closing statement had been issued by OCBC in respect of the OCBC account and produce it to the Court (Closing Statement).

16    Mr James subsequently claimed that he was unable to produce either the Management Accounts or the Closing Statement. He also claimed that he was unable to identify whether the Closing Statement had been issued. Accordingly, despite these examinations, the Liquidators have still not been able to ascertain what happened to the monies comprising the 13 December 2018 rebates and incentives payment. Thus the present applications.

17    Finally, it is to be noted that, on 7 June 2019, Bestjet filed a statement of claim in the High Court of the Republic of Singapore (Singapore Proceeding) claiming against Bestjet Singapore, amongst other things, the recovery of the 13 December 2018 rebates and incentives payments and the recovery of any further rebates and incentives payments it had received (or may receive) from Sabre which had not been passed on to it.

THE DIRECTIONS UNDER SECTION 597(9)

18    Relying on s 597(9) of the Act, the Liquidators seek a range of documents from Bestjet Singapore and OCBC relating to the period from 30 June 2015 to the date of the direction to produce and to the dealings between Bestjet Singapore, Sabre and OCBC concerning, in particular, the receipt and disbursement of the 13 December 2018 rebate and incentive payment.

19    The documents sought from Bestjet Singapore are as follows:

1.    Any bank statements, transaction history or any other document issued by the Oversea-Chinese Banking Corporation Limited (OCBC) which lists any transactions in respect of any bank account held by Bestjet Singapore with OCBC or any other bank, during the period from 11 October 2015 to the date of this Direction to Produce.

2.    All books, records, correspondence or documents that relate to the sum, or approximate sum, of USD$2,317,984.82 (the Payment) paid to Bestjet Singapore by Sabre Asia Pacific Pte Ltd (Sabre) on or about 13 December 2018, including but not limited to:

(a)    the receipt by Bestjet Singapore of the Payment;

(b)    the withdrawal, transfer or disbursement of the Payment, or any part of the Payment, by Bestjet Singapore, including:

(i)    the name of the person who, as agent or otherwise for Bestjet Singapore, made any such withdrawal, transfer or disbursement;

(ii)    the bank account(s) or other account(s) from which any such withdrawal, transfer or disbursement was made, including the name of the person holding any such bank account(s) or other account(s) and the name of the banking or other institution(s) in which such account(s) was held;

(iii)    the bank account(s) or other account(s) into which any such withdrawal, transfer or disbursement was made or paid, including the name of the person holding any such bank account(s) or other account(s) and the name of the banking or other institution(s) in which such account(s) was held.

3.    Any management accounts, or any other record of income and expenditure, of Bestjet Singapore in respect of any period falling between 30 June 2015 and the date of this Notice to Produce.

4.    Any financial statements of Bestjet Singapore prepared in respect of any period falling between 30 June 2015 and the date of this Notice to Produce.

20    The documents sought from OCBC are as follows:

Each and every bank statement, transaction statement or any other document issued by or held by OCBC, which lists any transactions upon or in respect of any bank account held by Bestjet Travel Pte. Ltd. (Singapore Unique Entity No. 201534316D) with OCBC, including but not limited to OCBC account numbers 503294985301 and 503183303201, for any of the period between 11 October 2015 and the date of this Notice to Produce.

21    Section 597(9) provides:

The Court may direct a person to produce, at an examination of that or any other person, books that are in the first‑mentioned person’s possession and are relevant to matters to which the examination relates or will relate.

22    This section provides a discretionary power to require the production of “books”, as that expression is defined in s 9 of the Act, that:

(a)    relate to an examination of the person directed to produce them, or any other person;

(b)    are in the possession of the person directed to produce them; and

(c)    are relevant to matters to which the examination relates.

23    Section 9 defines “books” to mean:

 (a)    a register; and

 (b)    any other record of information; and

(c)    financial reports or financial records, however compiled, recorded or stored; and

 (d)    a document;

but does not include an index or recording made under Subdivision D of Division 5 of Part 6.5.

24    In respect of [22(a)] above, it has been held that, unlike ss 596A and 596B, a direction to produce under s 597(9) may be issued to a corporate person (see Re Interchase Corporation Limited (In Liquidation) (No 2) (1993) 47 FCR 253 at 261). Otherwise, the range of persons, natural and corporate, who may be required to produce documents under this provision is limited only by the criteria of relevance and possession described above. Conversely, the provision is not limited to a person who is an examinee. In this respect I should record that I agree with the supplementary submissions of the Liquidators.

25    In respect of [22(b)] above, s 86 provides:

A thing that is in a person’s custody or under a person’s control is in the person’s possession.

26    The principles bearing on the question of relevance raised in [22(c)] above were conveniently summarised by Middleton J in Yeo and Rambaldi (as liquidators), in the matter of Rennie Produce (Aust) Pty Ltd (in liquidation) [2015] FCA 849 (Yeo) in the following terms (at [9]–[10]):

9    The “books” will be “relevant to matters to which the examination relates or will relate” if they are relevant to the “examinable affairs” of the company and will assist or facilitate the examination: see Onefone Australia Pty Ltd v One.Tel Ltd [2007] NSWSC 1188 at [22].

10    The “examinable affairs” criterion has been interpreted widely to include any of the affairs of the corporation prior to and during the external administration (see Gerah Imports Pty Limited v Duke Group Ltd (in liq) (1993) 61 SASR 557), as well as matters relating to the existence of circumstances that may give rise to a claim being made by the company: see Re BPTC at 764. The use of liquidators’ examinations as a means of gathering evidence for current or contemplated litigation is an ordinary and legitimate use of that procedure: see Re Hugh J Roberts Pty Ltd (in liq) [1970] 2 NSWR 582 at 585.

27    On this aspect, I also agree with the submissions of the Liquidators that investigating the value of undertaking a tracing exercise and the steps that might be involved with such an exercise “may well fall into the examinable affairs of a company, depending on the circumstances” (see Pleash (liquidator) v Tucker (2018) 264 FCR 374; [2018] FCAFC 144 at [73]).

28    With respect to the documents the subject of the proposed directions to produce (see at [19] and [20] above), the Liquidators’ submitted they:

(a)    are “books” within the meaning of that term in section 597(9) of the Act because they are one or all of “any other record of information”, a “financial record” and/or “a document”;

(b)    are in Bestjet Singapore’s [and OCBC’s] possession because Bestjet Singapore [and OCBC have] custody and/or control of the Bestjet Singapore [and OCBC] Documents. To the extent to which the Bestjet Singapore [and OCBC] Documents are books of the [companies], these documents are controlled by Bestjet Singapore [and OCBC (which administers and maintains the transaction records of the OCBC Account (and indeed accounts operated by all of its other customers))]. The remainder of the Bestjet Singapore [and OCBC] documents, such as the statements of the OCBC Account, are in Bestjet Singapore’s control because Bestjet Singapore can obtain those documents from OCBC; and

(c)    are relevant to the examinable affairs of the Bestjet Companies because:

(1)    they will assist the [Liquidators] in establishing whether there was a course of conduct between Bestjet and Bestjet Singapore consistent with an agency relationship and/or implied contractual arrangement by illustrating:

(A)    whether and to what extent, during the course of the Subscriber Agreement, Bestjet Singapore would from time to time transfer to Bestjet some or all of Rebates and Incentives it received from Sabre; and

(B)    the way in which Bestjet Singapore treated the Rebates and Incentives it received from Sabre in its own financial statements/documents,

(2)    they will assist the [Liquidators] in identifying whether, to what extent, when and to whom the December Rebates and Incentives may have been disbursed from the OCBC Account;

(3)    they will assist the [Liquidators] in locating the December Rebates and Incentives because they will reveal the accounts to which they were disbursed;

(4)    they will assist the [Liquidators] in determining the recoverability of the December Rebates and Incentives by Bestjet with reference to:

(A)    the location of the December Rebates and Incentives;

(B)    the costs associated with recovering the December Rebates and Incentives from that location, and

(d)    will assist the [Liquidators] in conducting the ongoing examinations of the Examinees, in particular Mr James and Ms James.

(Footnotes omitted)

In respect of (d) above, it should be noted that, as a result of orders made by Registrar Lynch on 2 and 9 August 2019, those examinations are deemed to have concluded on 2 and 6 February 2020 respectively. However, I do not consider this affects the general import of the Liquidators’ submissions above.

29    Further to [28(c)] and [28(d)] above, the Liquidators submitted that the documents sought were relevant because they will assist them in their investigations into the Bestjet Companies and in potentially recovering funds for the benefit of the creditors of those companies. They outlined what it was, in particular, that they expected to ascertain from Bestjet Singapore’s direction as follows:

(a)    the precise dates when Bestjet Singapore transferred to Bestjet the various Rebates and Incentives it had received from Sabre (and the amount transferred on each occasion);

(b)    whether, when and to whom the December Rebates and Incentives were dissipated from the OCBC Account;

(c)    the account(s) to which the December Rebates and Incentives were transferred;

(d)    how Bestjet Singapore treated, recorded, or otherwise categorised, the Rebates and Incentives (including the December Rebates and Incentives) in its own:

(1)    financial statements;

(2)    management accounts; or

(3)    other records of its income and expenditure; and

(e)    whether the December Rebates and Incentives currently form part of the assets of Bestjet Singapore.

30    As for the direction to OCBC, they submitted it was expected to ascertain:

(a)    the precise dates upon which Bestjet Singapore received from Sabre various Rebates and Incentives (and the amount of each payment) over the period of time specified therein;

(b)    the precise dates upon which Bestjet Singapore transferred to Bestjet monies on account of the Rebates and Incentives it had received from Sabre (and amounts transferred on each occasion) over the period of time specified therein;

(c)    whether, when and to whom the December Rebates and Incentives were dissipated from the OCBC Account; and

(d)    the account(s) to which the December Rebates and Incentives were transferred.

31    Having regard to the history of this matter set out earlier in these reasons, in particular to the impasse reached in Mr James’ examination insofar as these documents are concerned and the affidavit materials before me, I am satisfied that the Liquidators have established the necessary criteria for the issue of the directions to produce under s 597(9) to Bestjet Singapore and OCBC. That is to say, in very brief summary, I am satisfied that the documents are books as defined, that they are variously in the possession of Bestjet Singapore and OCBC and that they are relevant to the examinable affairs of the Bestjet Companies as outlined in the Liquidators’ submissions above.

LEAVE TO SERVE UNDER RULE 10.44

32    Because both Bestjet Singapore and OCBC are located in the Republic of Singapore, the Liquidators sought leave under r 10.44 of the Rules to serve the directions on them in the Republic of Singapore.

33    Rule 10.44 relevantly provides:

(1)    A party may apply to the Court for leave to serve a document filed in or issued by the Court, other than an originating application, on a person in a foreign country in accordance with a convention, the Hague Convention or the law of the foreign country.

(2)    An application under subrule (1) must be accompanied by an affidavit that includes the information mentioned in paragraphs 10.43(3)(a) to (c).

(Notes omitted)

34    The Republic of Singapore is not a party to the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters. The Liquidators therefore rely on the “or law of the foreign country” provision.

35    Rule 10.43(3)(a) to (c) (mentioned in r 10.44(2) above) provides:

The application under subrule (2) must be accompanied by an affidavit stating:

(a)    the name of the foreign country where the person to be served is or is likely to be; and

(b)    the proposed method of service; and

(c)    that the proposed method of service is permitted by:

(i)    if a convention applies—the convention; or

(ii)    if the Hague Convention applies—the Hague Convention; or

(iii)    in any other case—the law of the foreign country.

36    In one of his affidavits in support of this application, Mr Markey annexed searches of the records of the Accounting and Corporate Regulatory Authority of the Republic of Singapore which revealed that both Bestjet Singapore and OCBC were companies that were registered in the Republic of Singapore and have registered offices located there. In the same affidavit, Mr Markey described the results of an inquiry his lawyers had made of the Australian Government Attorney-General’s Department as to the appropriate method for transmitting documents for service in the Republic of Singapore as follows:

(a)    the Republic of Singapore permits service of a foreign process via a private agent; and

(b)    service of foreign process in the Republic of Singapore may be effected by a method of service authorised by the Singapore Rules of Court for the service of an analogous process issued by the Singapore Court.

37    Furthermore, Mr Markey deposes to having obtained confirmation of the abovementioned advice from Virtus Law, the firm of lawyers he had retained in the Republic of Singapore.

38    Based on this evidence, I am satisfied that the Liquidators have met the criteria in r 10.43(3)(a) to (c) above and that leave should be given to the Liquidators to serve the directions to produce on Bestjet Singapore and OCBC in the Republic of Singapore.

REQUEST FOR ASSISTANCE UNDER SECTION 581(4)

39    To facilitate compliance with the directions to produce, the Liquidators have also sought to have the Court issue a letter of request under s 581(4) of the Act. That section provides:

The Court may request a court of an external Territory, or of a country other than Australia, that has jurisdiction in external administration matters to act in aid of, and be auxiliary to, it in an external administration matter.

40    In Donnelly (as liquidator), in the matter of Advance Finances Pty Limited (in liq) [2013] FCA 514 (Donnelly), after noting that, while applications under s 581(4) were uncommon, they were not completely unknown (at [22]), Farrell J identified the principles bearing on such an application as follows (at [23]):

… first, that the requirements of s 581(4) are met; second that there is a good substantive reason for the request; and third, that there is utility in the request in the sense that the foreign court is likely to accept and act upon the request if it is made.

41    As for the first of these principles, s 581(4) of the Act relevantly requires two things: that this matter is an “external administration matter” and that the court from which assistance is sought “has jurisdiction in external administration matters”. As to the former, s 580 of the Act defines the expression “external administration matter” for the purposes of Division 9 of Part 5.6, which contains s 581, to include “(a) winding up, under this Chapter, a company or a Part 5.7 body”. Having regard to the history of this matter set out above (at [3] and [14]–[16]), I am satisfied that it constitutes an “external administration matter” for the purposes of s 581(4) of the Act. As to the latter, while the Republic of Singapore is a prescribed country under s 581(2)(iii) of the Act, which prescribes when courts are to act in aid of each other in external administration matters, that does not necessarily mean that the High Court of Singapore has jurisdiction in such matters.

42    In both Donnelly and Yeo, the latter matter appears to have been dealt with in conjunction with the third principle above, namely the utility of the request. On that question in Yeo, Middleton J remarked that this “will ordinarily be satisfied by providing the Court with an opinion of a lawyer indicating that the foreign court has jurisdiction to receive and act upon the proposed letter of request, and that the foreign court is likely to act upon that request” (see Yeo at [15]). Consistent with this observation, his Honour had before him, and acted upon, such an advice (see Yeo at [20]). In Donnelly, Farrell J remarked on the fact that such an advice or opinion was usually required (see Donnelly at [26]). However, her Honour did not consider it was necessary in that matter because of comments made by the presiding judge in related proceedings that were extant in the District Court of Tel Aviv-Jaffa (see Donnelly at [26] and [13]).

43    In this matter, I have not been provided with any such advice or opinion and there are no related proceedings in the Republic of Singapore from which I am able to be satisfied about the jurisdiction of the High Court of Singapore in external administration matters and, more importantly, the utility of issuing this letter of request to that Court. I include in this the proceedings referred to above (at [17]).

44    For these reasons, I do not therefore consider that the Liquidators have established all the necessary criteria expressed in the principles outlined above such that it is appropriate to issue this letter of request.

THE CONFIDENTIALITY REGIME UNDER SECTION 596F(1)

45    Finally, the Liquidators have sought to extend the confidentiality regime that already exists with respect to the materials previously filed in this Court in seeking the examination orders, to cover documents pertaining to the commercially sensitive material of Sabre. They have identified the following documents as containing that sensitive material:

(a)    the original and amended interlocutory application filed 15 November 2019;

(b)    the affidavit of Mr Nigel Robert Markey filed 15 November 2019;

(c)    the affidavit of Mr Christopher Dudurovic filed 18 December 2019; and

(d)    the Liquidators’ outline of submissions dated 18 December 2019.

46    The Liquidators have submitted that this material is sensitive because it relates to the method by which Sabre calculates the rebates and incentives payable to its customers which formed an important part of Sabre’s business.

47    Section 596F relevantly provides:

(1)    Subject to section 597, the Court may at any time give one or more of the following:

(a)    a direction about the matters to be inquired into at an examination;

(b)    a direction about the procedure to be followed at an examination;

(c)    a direction about who may be present at an examination while it is being held in private;

(d)    a direction that a person be excluded from an examination, even while it is being held in public;

(e)    a direction about access to records of the examination;

(f)    a direction prohibiting publication or communication of information about the examination (including questions asked, and answers given, at the examination);

(g)    a direction that a document that relates to the examination and was created at the examination be destroyed.

(2)    The Court may give a direction under paragraph (1)(e), (f) or (g) in relation to all or part of an examination even if the examination, or that part, was held in public.

…

48    I am satisfied on the materials before me that the documents concerned are commercially sensitive and that an order should be made that the documents described be designated as confidential and not available for inspection by any person without the leave of the Court.

49    Accordingly, I will make the orders sought to extend the existing confidentiality regime to include these documents.

Associate:    

Dated:    9 April 2020