Federal Court of Australia
Georges (Liquidator), in the Matter of SIRA Pty Ltd (In Liquidation) [2023] FCA 766
ORDERS
DATE OF ORDER: |
THE COURT ORDERS THAT:
1. Pursuant to section 581(4) of the Corporations Act 2001 (Cth), the Federal Court of Australia send a letter in the form set out in Annexure A of the Interlocutory Process dated 7 June 2023 to the Supreme Court of Singapore requesting that the General Division of the High Court of Singapore act in aid of paragraphs 7 and 8 of the orders of Judicial Registrar Luxton made 30 May 2022 in this proceeding.
2. Pursuant to s 37AF(1)(b) of the Federal Court of Australia Act 1976 (Cth), on the ground that the order is necessary to prevent prejudice to the proper administration of justice as provided in s 37AG(1)(a), the following material be suppressed and not published to any person other than the Plaintiffs and their legal advisers until further order of the court:
(a) The contents of paragraph 33 in the Affidavit of John Ross Lindholm sworn on 7 June 2023; and
(b) “Confidential Exhibit JRL-21” to the Affidavit of John Ross Lindholm sworn on 7 June 2023.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
MCEVOY J:
1 By interlocutory process dated 7 June 2023, the applicants seek the following orders:
(1) Pursuant to section 581(4) of the Corporations Act 2001 (Cth), the court send a letter in the form set out in Annexure A of the Interlocutory Process dated 7 June 2023 to the Supreme Court of Singapore requesting that the General Division of the High Court of Singapore act in aid of paragraphs 7 and 8 of the orders of Judicial Registrar Luxton made 30 May 2022 in this proceeding.
(2) Pursuant to s 37AF(1)(b) of the Federal Court of Australia Act 1976 (Cth), on the ground that the order is necessary to prevent prejudice to the proper administration of justice as provided in s 37AG(1)(a), the following material be suppressed and not published to any person other than the Plaintiffs and their legal advisers until further order of the court:
(a) The contents of paragraph 33 in the Affidavit of John Ross Lindholm sworn on 7 June 2023; and
(b) “Confidential Exhibit JRL-21” to the Affidavit of John Ross Lindholm sworn on 7 June 2023.
2 The factual matters supporting the current application are set out in the affidavits of John Ross Lindholm sworn 7 June 2023, Joanne Louise Hardwick sworn 7 June 2023, and Stephen Christopher Kyrou sworn 27 June 2023. I accept this evidence for present purposes.
3 For the reasons that follow the applicants will have the orders they seek requesting judicial assistance from the Singapore Court and for the suppression of certain material in Mr Lindholm’s affidavit.
BACKGROUND
4 These proceedings relate to ongoing investigations concerning SIRA Pty Ltd (in Liquidation). Some background to these proceedings is to be found in my earlier judgment in Georges (Liquidator), in the Matter of SIRA Pty Ltd (In Liquidation) [2022] FCA 768. The liquidators of SIRA (the liquidators) commenced examination proceedings under Div 1 of Pt 5.9 of the Corporations Act 2001 (Cth) on 15 April 2022. In the examination proceedings the court made orders under s 597(9) of the Corporations Act (the Production Orders) requiring two Singaporean companies to produce documents relevant to SIRA’s examinable affairs: Nutrition Science Design Pte Ltd (NSD) and Nutrition Innovation Singapore Pte Ltd (NIS). NSD and NIS have now refused to comply with those orders on the basis that they are outside the court’s jurisdiction.
5 Thus, by their interlocutory process, the liquidators seek an order under s 581(4) of the Corporations Act that the court requests the General Division of the High Court of Singapore to act in aid of, and be auxiliary to, this court in relation to its orders that NSD and NIS produce documents in the examination proceedings under s 597(9) of the Corporations Act.
6 For present purposes it is unnecessary to descend into the circumstances of the liquidation of SIRA, and the nature of the enquiries being made by the liquidators. These matters are, however, the subject of detailed evidence in the affidavit of Mr Lindholm sworn 13 April 2022 in support of the application for orders under ss 596A, 596B and 597(9) of the Corporations Act. The procedural history of the liquidation proceeding is set out in paragraphs [3] – [14] of the liquidators’ submissions filed on this application, and I accept as accurate that summary of the course of events for present purposes.
reasons for seeking an order under s 581(4)
7 Mr Lindholm’s affidavit explains the reasons the liquidators seek an order under s 581(4) of the Corporations Act, including why they consider that NSD and NIS are likely to possess documents relevant to the examination proceedings and why attempts to obtain those documents have failed.
8 By way of overview, the liquidators’ examinations are said to have revealed a chain of events in which it appears:
(a) certain directors of SIRA assigned all present and future intellectual property in connection with certain sugar refining technology to SIRA;
(b) certain patent applications were subsequently lodged in the name of Dr Kannar, a director of SIRA, in respect of the intellectual property referred to in (1);
(c) SIRA’s former patent attorneys requested that the Commissioner of Patents register the patents in NSD’s name, ostensibly with Dr Kannar’s authority;
(d) Dr Kannar executed a deed of assignment purporting to assign the intellectual property referred to in (1) above from himself to NSD;
(e) certain international patent applications claiming priority from the patent applications referred to in (2) above were made and nominated NSD as the applicant; and
(f) NSD appears to have licensed to NIS the intellectual property purportedly assigned to it by Dr Kannar and to which the patents and patent applications relate.
9 The liquidators submit that the documents sought to be obtained from NSD and NIS are likely to be relevant to SIRA’s examinable affairs and to potential claims in respect of SIRA’s property. I accept their submissions in this regard.
the STATUTORY REGIME AND RELEVANT PRINCIPLES
10 Section 581(4) of the Corporations Act confers discretionary powers on the court. This section provides that:
The Court may request a court of a country other than Australia that has jurisdiction in external administration matters to act in aid of, and be auxiliary to, it in an external administration matter.
11 The legal principles relevant to the application of s 581(4) of the Corporations Act are summarised by Farrell J in Re Donnelly (as liquidator), in the matter of Advance Finances Pty Ltd (in liq) [2013] FCA 514 at [23] (citing McGrath & Anor as liquidators of HIH Insurance Limited [2008] NSWSC 780 at [19] (Barrett J)); see also Re Yeo and Rambaldi (as liquidators), in the matter of Rennie Produce (Aust) Pty Ltd (in liquidation) [2015] FCA 849 at [6], [11]-[15] (Middleton J).
12 The principles require that:
(a) the requirements of s 581(4) are met;
(b) there is a good substantive reason for the request; and
(c) 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.
THE SINGAPORE COURT SHOULD BE REQUESTED TO ACT IN AID
13 Having regard to the matters set out in the affidavits of Mr Lindholm, Ms Hardwick and Mr Kyrou, I am satisfied that the orders sought by the applicants pursuant to s 581(4) of the Corporations Act should be made.
14 The conditions of s 581(4) of the Corporations Act would appear to have been met. First, the examination proceedings are an “external administration matter” within the meaning of s 580 of the Corporations Act: see Re Markey, Bestjet Travel Pty Ltd (in liq) (2020) 145 ACSR 228 at 237 [41] (Reeves J). Secondly, the liquidators seek an order for a request for assistance from the Singapore court to enforce the Production Orders against NSD and NIS. Whether the court has jurisdiction is a question of fact which overlaps with the third criterion stated in Re Donnelly: see Re Markey at [42]. As Middleton J observed in Re Yeo, this fact is usually to be proved by providing the court with an opinion of a lawyer indicating that the relevant court has jurisdiction to receive and act upon the proposed letter of request. The liquidators have provided the court with a legal opinion from a Singaporean lawyer to the effect that the General Division of the High Court of Singapore has jurisdiction to receive and act upon the proposed letter of request.
15 Further, I also accept that there is a good substantive reason for the request, this criterion being satisfied by the same considerations that gave rise to the order for production sought to be enforced, coupled with the fact that the persons subject to the order for production are outside the jurisdiction and therefore not directly compellable under Commonwealth law. Having regard to the matters which have arisen through the liquidators’ investigations and through the examination proceedings, I accept that there is a good substantive reason for the proposed request. Each of NSD and NIS is likely to possess documents relevant to SIRA’s examinable affairs.
16 Also, as has been mentioned, NSD and NIS have refused to produce the documents the subject of the Production Orders (and the 29 July 2022 order, in respect of NIS) on the basis that this court lacks jurisdiction over them.
17 I accept that while there is a theoretical possibility that the liquidators could take further steps in this court against Medical & Dental Accounting Pty Ltd in connection with NIS’s failure to produce the documents the subject of the Product Orders or the 29 July 2022 orders, for which omissions it may be liable as NIS’s local agent under s 601CJ of the Corporations Act, this should not cause the court to refuse to make the order sought in connection with NIS.
18 First, it would seem to be the case that Medical & Dental Accounting has stated that it has no relevant documents in its possession or control to produce. Secondly, it is not clear whether the sole director of Medical & Dental Accounting, Ms Caroline Poon, is a director of NIS. Thirdly, even if Ms Poon is a director of NIS and is amenable to attempting to persuade the directors of NIS to produce the documents sought, NIS has expressly adopted the position that it is not required to produce the documents, and that it will not produce documents consensually, but that it may do so following a substantial payment from the liquidators.
19 Further, I accept that although some of the documents sought from NIS may overlap with the documents sought from NSD, there are several categories of documents sought from NSD in respect of which there is no overlap with those sought from NIS.
20 Finally, I am satisfied there is utility in the proposed request. As has been mentioned, there is overlap between this criterion and the second limb of the first. It must be shown that the court the subject of the request has jurisdiction to receive and act upon the proposed letter of request, and that the foreign court is likely to act upon that request: Re Yeo at [15]. The utility of the request is evidenced by the opinion which has been mentioned above, which is to the effect that the General Division of the High Court of Singapore has jurisdiction to receive and act upon the request, and it is likely to do so.
21 For these reasons, I am satisfied that it is appropriate for a letter of request in the terms sought to be sent by this court to the Supreme Court of Singapore to act in aid of paragraphs 7 and 8 of the orders of Judicial Registrar Luxton made on 30 May 2022 in the proceeding.
Confidentiality order
22 The liquidators have also sought suppression orders under ss 37AF and 37AG of the Federal Court of Australia Act in respect of the contents of paragraph 33 of Mr Lindholm’s affidavit, as well as “Confidential Exhibit JRL-21” (the Confidential Material).
23 Section 37AF provides:
(1) The Court may, by making a suppression order or non-publication order on grounds permitted by this Part, prohibit or restrict the publication or other disclosure of:
(a) information tending to reveal the identity of or otherwise concerning any party to or witness in a proceeding before the Court or any person who is related to or otherwise associated with any party to or witness in a proceeding before the Court; or
(b) information that relates to a proceeding before the Court and is:
(i) information that comprises evidence or information about evidence; or
(ii) information obtained by the process of discovery; or
(iii) information produced under a subpoena; or
(iv) information lodged with or filed in the Court.
(2) The Court may make such orders as it thinks appropriate to give effect to an order under subsection (1).
24 By s 37AG(1)(a), the court may make a suppression order or non-publication order on the ground that the order is necessary to prevent prejudice to the proper administration of justice. By s 37AG(2), a suppression order or non-publication order must specify the ground or grounds on which the order is made.
25 The liquidators contend that the confidentiality order is necessary to prevent prejudice to the proper administration of justice. The suppression is sought until further order of the court. In determining this application I am required to take into account that a primary objective of the administration of justice is to safeguard the public interest in open justice: s 37AE of the Federal Court of Australia Act.
26 Suppression orders of this kind are commonly made where, for example, a liquidator has obtained litigation funding for recovery proceedings or to investigate the possibility of claims being available in a winding up: see Livingstone, in the matter of NewSat Limited (In Liquidation) [2022] FCA 1559 at [66] – [71] (Stewart J); citing Woods, in the matter of Paladin Energy Ltd (Administrators Appointed) [2017] FCA 836 at [34] (Barker J); Krejci (liquidator), in the matter of Community Work Pty Ltd (in liq) [2018] FCA 425 at [58]-[64] (Gleeson J); Hancock (liquidator), in the matter of South Townsville Developments Pty Ltd (in liq) [2019] FCA 71 at [10] (Perry J); Pascoe (Liquidator), in the matter of Matrix Group Ltd (in liq) (Trustee) [2019] FCA 1844 at [58]-[60] (Gleeson J).
27 As Stewart J observed in Livingstone at [68]-[69]:
…It is well-established that commercial sensitivity can be an appropriate basis for making a suppression or non-publication order, the reasoning being that to fail to provide such protection would unduly inhibit liquidators or commercial parties from being able to utilise the processes of the law: Tracy, in the matter of Linchpin Capital Group Ltd (In Liq) [2022] FCA 104 at [21] and the authorities cited therein, namely Clark v Digital Wallet Pty Ltd [2020] FCA 877 at [21]-[22]; ACCC v Air New Zealand Ltd (No 3) [2012] FCA 1430 at [35]; ACCC v Origin Energy Electricity Ltd [2015] FCA 278 at [148].
In Onefone Australia Pty Ltd v One.Tel Ltd [2010] NSWSC 498; 78 ACSR 163 at [2], Barrett J referred to the “funding of the litigation” as information of a “commercially confidential and sensitive kind”. In McGrath & Anor Re HIH Insurance Ltd [2005] NSWSC 731 at [12]-[13], Barrett J explained that the administration of justice is very likely to be prejudiced in two ways by the availability to potential defendants of, and any public airing of, information concerning the liquidator’s proceeding that will inevitably be divulged by the adducing of evidence in the making of submissions on the hearing of an application under s 477(2B) with regard to litigation funding. First, there is a likelihood of a real and negative impact on the due and orderly conduct of the proposed proceeding itself in that the defendants in the proceeding will have access to information that, in the ordinary course, a plaintiff is entitled to keep confidential in the plaintiff’s own interests. Secondly, any such access would produce an undue distorting effect in relation to the due conduct of the proceeding.
28 I accept that the liquidators may suffer prejudice if the Confidential Material were publicly available, and that it is therefore appropriate to make the order sought to preserve the confidentiality of this information.
.
I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice McEvoy. |
Annexure A
LETTER OF REQUEST
Supreme Court of Singapore 1 Supreme Court Lane
Singapore 178879
Email: SUPCOURT_Registry@supcourt.gov.sg
Attention: Registrar of the Supreme Court
Dear Registrar
IN THE MATTER OF SIRA PTY LTD (IN LIQUIDATION) (ACN 163 988 690)
Case Number: VID 197/2022
The Federal Court of Australia hereby requests the General Division of the High Court of Singapore to assist this Court and to act in aid of and to be auxiliary to this Court in respect of the winding up of SIRA Pty Ltd (In Liquidation) (ACN 163 988 690) by making orders, to the extent it has jurisdiction to do so, as follows:
(1) Orders recognising and giving effect to George Georges and John Ross Lindholm of KPMG, Official Liquidators, having been appointed Liquidators of SIRA Pty Ltd on 21 December 2020 (Liquidators).
(2) Orders recognising and giving effect to the attached orders made by the Federal Court of Australia pursuant to section 597(9) of the Corporations Act 2001 (Cth) on 30 May 2022 (Orders) that Nutrition Science Design Pte Ltd (UEN 201703213M) and Nutrition Innovation Singapore Pte Ltd UEN 201703025W produce the documents specified in paragraphs 7 and 8 of the Orders to the Liquidators.
(3) Such orders as it would be open to:
(a) the Federal Court of Australia to make if the entities referred to in paragraph 2 above had been within the territorial jurisdiction of the Federal Court of Australia; and
(b) the General Division of the High Court of Singapore to make if SIRA Pty Ltd (In Liquidation) (ACN 163 988 690) had been a company formed and incorporated in Singapore and was being wound up in Singapore, by way of assisting the Liquidators in the exercise of their powers and the discharge of their duties and functions as Liquidators.
(4) Such further orders as the General Division of the High Court of Singapore may consider just and appropriate.
