Federal Court of Australia

Department of Employment and Workplace Relations v Rathner as liquidator of Mentor Education Pty Ltd (in liq) [2025] FCA 1291

ORDERS

THE COURT ORDERS THAT:

1.    By 4:00pm on 30 October 2025, the parties are to file a joint minute of proposed orders, or separate minutes if they are unable to agree, to give effect to these reasons for judgment.

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

REASONS FOR JUDGMENT

NESKOVCIN J:

1    This application raises an issue concerning the interpretation of, and interaction between, s 486 of the Corporations Act 2001 (Cth) and ss 70-45 and 70-55 of the Insolvency Practice Schedule (Corporations) in Schedule 2 of the Corporations Act.

2    By Originating Process filed on 21 July 2025, the plaintiff, the Department of Employment and Workplace Relations, sought orders for production by the first defendant, the Liquidator of Mentor Education Pty Ltd (In Liquidation) (Company), of certain documents and information of the Company, pursuant to ss 70-55 and/or 70-90 of the Insolvency Practice Schedule. The Company entered voluntary administration on 20 March 2023 and was wound up by a resolution of creditors on 26 June 2023. The documents to which access was sought were documents in the Liquidator’s possession that were created prior to the Company entering into external administration.

3    The Liquidator did not resist production, but said that he did not propose to produce the documents or information sought in the absence of a Court order compelling him to do so. In particular, the Liquidator maintained that, as the relevant documents and information were created prior to the external administration of the Company, the Department was required to seek an order for inspection of the documents under s 486 of the Corporations Act.

4    For the reasons that follow, I am satisfied that the Liquidator was obliged to produce the documents and information sought by the Department pursuant to s 70-55 of the Insolvency Practice Schedule and that there should be an order for production under s 70-90 of the Insolvency Practice Schedule.

BACKGROUND

5    In support of the Originating Process, the Department relied upon an affidavit of Mr Henry Carr, a Senior Executive Lawyer and Assistant Secretary at the Department, sworn on 18 July 2025. The Liquidator did not dispute the matters set out in Mr Carr’s affidavit and the following background matters were agreed.

6    The Department administers the Fair Entitlements Guarantee Scheme (FEG Scheme) on behalf of the Commonwealth. The FEG Scheme is a government scheme that provides financial assistance to eligible employees whose employer has gone into liquidation or bankruptcy, and who are owed employee entitlements that cannot be paid by the employer from any other source. Once employee entitlements are paid under the FEG Scheme, the Commonwealth has the same priority as the employee had for that entitlement in the liquidation pursuant to s 31 of the Fair Entitlements Guarantee Act 1912 (Cth).

7    Nineteen employees of the Company lodged claims under the FEG Scheme and the Commonwealth has advanced $516,978.19 to former employees of the Company under the FEG Scheme in respect of unpaid employee entitlements. The Department has lodged a proof of debt in the liquidation in that amount.

8    During the Company’s liquidation, the Department issued two requests for documents and information under ss 70-45 and/or 70-55 of the Insolvency Practice Schedule. While several of the requested documents were ultimately provided, the Liquidator declined to produce pre-administration documents comprising:

(a)    certain pre-appointment communications;

(b)    documents associated with securities relied upon by secured creditors;

(c)    a consulting services agreement with, and information about payments to, the sole shareholder’s related entities; and

(d)    information about the Company’s cashflow and transactions.

9    The Liquidators did not produce the documents requested on the basis that ss 70-45 and 70-55 of the Insolvency Practice Schedule apply to documents created from the date of their appointment. The Liquidators’ position was that a creditor, or the Commonwealth, seeking to inspect Company records created prior to the external administration was required to obtain an order for inspection pursuant to s 486 of the Corporations Act.

THE LEGISLATIVE FRAMEWORK

10    Section 486 is contained in Pt 5.4B of the Corporations Act, which deals with “Winding up in insolvency or by the Court”. Section 486 provides:

486    Inspection of books by creditors and contributories

The Court may make such order for inspection of the books of the company by creditors and contributories as the Court thinks just, and any books in the possession of the company may be inspected by creditors or contributories accordingly, but not further or otherwise.

11    “Books” is defined in s 9 of the Corporations Act as follows:

books includes:

(a)     a register; and

(b)     any other record of information; and

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

(ca)     sustainability reports or sustainability 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.

12    The Insolvency Practice Schedule formed part of a comprehensive reform of the insolvency provisions in the Corporations Act, which came into operation on 1 March 2017. The Insolvency Practice Schedule was introduced into the Corporations Act by the Insolvency Law Reform Act 2016 (Cth) and it has effect by s 600K of the Corporations Act.

13    The objects of the Insolvency Practice Schedule include regulating the external administration of companies to “give greater control to creditors”: s 1-1(2)(b).

14    A company is taken to be under external administration if the company is under administration, under restructuring or a liquidator has been appointed: s 5-15.

15    Sections 70-45 and 70-55 are contained in Pt 3, Div 70 of the Insolvency Practice Schedule.

16    Part 3 of the Insolvency Practice Schedule is entitled “General rules relating to external administration”. The simplified outline of Pt 3, which is in s 55-1, provides:

Part 3—General rules relating to external administrations

Division 55—Introduction

55-1    Simplified outline of this Part

17    As s 55-1 makes clear, the provisions in Ch 5 of the Corporations Act also apply to companies in external administration.

18    Division 70 in Pt 3 of the Insolvency Practice Schedule deals with “Information”. The simplified outline of Div 70 is set out in s 70-1, which provides:

Division 70—Information

Subdivision A—Introduction

70-1    Simplified outline of this Division

[Emphasis added]

19    Section 70-45 is in Subdiv D of Div 70, which is entitled “Giving information etc to creditors and others”. Section 70-45 deals with the right of individual creditors to request information from an external administrator, and provides:

70-45    Rights of individual creditor to request information etc from external administrator

(1)    A creditor may request the external administrator of a company to:

(a)    give information; or

(b)    provide a report; or 

(c)    produce a document;

to the creditor.

(2)    The external administrator must comply with the request unless:

(a)    the information, report or document is not relevant to the external administration of the company; or

(b)    the external administrator would breach his or her duties in relation to the external administration of the company if the external administrator complied with the request; or

(c)    it is otherwise not reasonable for the external administrator to comply with the request.

(3)    The Insolvency Practice Rules may prescribe circumstances in which it is, or is not, reasonable for an external administrator of a company to comply with a request of a kind mentioned in subsection (1).

20    As an aside, s 70-40 is in similar terms to s 70-45, but it deals with the right of creditors by resolution to request the external administrator to provide information. Further, ss 70-46 and 70-47 allow the members by resolution, or an individual member of a company, to make equivalent requests for information in a members’ voluntary winding up.

21    Section 70-55 is in Div 70, Subdiv E, which is entitled “Other requests for information etc”. Section 70-55 deals with requests by the Commonwealth for information from the external administrator of a company, and provides:

70-55    Commonwealth may request information

Application of this section

(1)    This section applies if either:

(a)    a former employee of a company under external administration has made a claim for financial assistance from the Commonwealth in relation to unpaid employment entitlements; or

(b)    the Commonwealth considers that such a claim is likely to be made.

Commonwealth may request information etc.

(2)    The Commonwealth may request the external administrator of the company to provide specified information, reports or documents in relation to the external administration.

(3)    The external administrator must comply with the request.

(4)    The Insolvency Practice Rules may provide for and in relation to who is to bear the cost of providing the information, reports or documents.

22    Finally, ss 70-65 and 70-90 are in Subdiv G which is entitled “External administrator may be compelled to comply with requests for information etc.”. Section 70-65 provides the threshold for Subdiv G to be engaged, which relevantly includes the refusal of a request for relevant information by an external administrator under Subdivs D or E.

23    Section 70-90 relevantly provides:

70-90    Court may order relevant material to be given

(1)    The person or persons who made the request for the relevant material may apply to the Court for an order that the external administrator give the person or persons all or part of the relevant material.

...

(3)    On application under subsection (1) or (2), the Court may:

(a)    order the external administrator to give the person, or any or all of the persons, who made the request for the relevant material all or part of that material; and

(b)    make such other orders, including orders as to costs, as it thinks fit.

the parties’ submissions

24    The disagreement between the parties concerns the interpretation of s 468 of the Corporations Act and whether it prevails over or restricts the operation of ss 70-45 and 70-55 of the Insolvency Practice Schedule.

25    The Department submitted that ss 70-45 and 70-55 apply to information requests that meet the specified requirements of those sections, regardless of whether the documents were created prior to or after the commencement of the external administration. Relevantly, the specified requirements under s 70-55 have been met if the Commonwealth, having received a claim for financial assistance in relation to unpaid employment entitlements, makes a request for the external administrator of the company to provide specified information, reports or documents “in relation to” the external administration.

26    The Department submitted that ss 70-45 and 70-55 of the Insolvency Practice Schedule and s 486 of the Corporations Act operate harmoniously with each other, with s 486 having a residual application if the circumstances or specified requirements under ss 70- 45 and/or 70-55 do not exist or are not satisfied. However, s 70-55 is applicable in the present circumstances, conferring a right on the Commonwealth to request, and an obligation on the Liquidator to provide, the requested documents.

27    The Department relied on two authorities where a court made orders for the provision of pre-administration documents under s 70-90 of the Insolvency Practice Schedule. First, Watson & Co Superannuation Pty Ltd v Dixon Advisory and Superannuation Services Ltd [2022] FCA 1273 where Thawley J made an order under s 70-90 granting the applicant in a representative proceeding access to insurance policies of a company in voluntary administration. Secondly, Wadren Pty Ltd v Algeri [2024] QSC 109 where Brown J made an order that the administrators produce insurance documents of a company that was under a deed of company arrangement.

28    The Liquidator made four primary submissions. First, that for the purpose of s 486 of the Corporations Act, the “books of the company” means books in the possession of the company at the commencement of the winding up, which have come into the possession of the liquidator: Hewson v Gothard; Re Allco Finance Group Ltd (rcvrs and mgrs apptd) (in liq) (2014) 222 FCR 59; [2014] FCA 320 at [77] (Foster J), citing Nut Trading Co (Aust) Pty Ltd v KKL (Kangaroo Line) Pty Limited (1997) 25 ACSR 580 at 604 (Einstein J), Matrix Group Ltd (in liq) (Trustee) v Oates; Re Matrix Group Ltd (in liq) (Trustee) (No 3) [2017] FCA 417 (Gleeson J) at [38], Re Pats Consulting Pty Ltd [2015] NSWSC 497 at [10] (Brereton J). On the basis of those authorities, the Liquidator submitted, s 486 applies to all pre-appointment documents.

29    Second, although s 486 is contained in Pt 5.4B (Winding up in insolvency or by the Court), s 513 of the Corporations Act extends the operation of provisions within Pt 5.4B, including s 486, to voluntary windings up.

30    Section 513 is in Pt 5.6 of the Corporations Act, which is entitled “Winding up generally”. Section 513 provides:

513    Application of Part

Except so far as the contrary intention appears, the provisions of this Act about winding up apply in relation to the winding up of a company whether in insolvency, by the Court or voluntarily.

31    The Liquidator relied on Milicevic v Capital Scaffolding Pty Ltd (in liq) (2007) 65 ACSR 71; [2007] FCA 1579 (Graham J) and Choon v Chen [2019] FCA 1643 (Colvin J), where the Court held that s 482, which grants the Court power to stay or terminate a winding up and also sits within Pt 5.4B, when deployed in combination with s 513, may apply to a voluntary winding up so as to extend the application of s 482 to companies in a voluntary winding up. In Milicevic, Graham J made an order under s 482 terminating the winding up, noting that it was open to a contributory in the case of a voluntary liquidation to seek an order under s 482 “[b]y dint of s 513”: [2]–[3]. In Choon, the plaintiffs sought and were granted an order under s 482 staying a voluntary winding up. Colvin J observed, at [15], that it may be that the inclusion of s 482 in Pt 5.4B manifests a contrary intention for the purpose of the qualifying words to s 513. However, his Honour noted that the application of s 482 to a voluntary winding up was supported by the decision in Milicevic.

32    Third, the enactment of Div 70 of the Insolvency Practice Schedule was not intended to displace the operation of s 486, which was not repealed when the Insolvency Practice Schedule was introduced. The Liquidator submitted that the Department’s broad interpretation of Div 70 of the Insolvency Practice Schedule would leave s 486 with no work to do.

33    Fourth, there being a conflict between provisions dealing with the same subject matter, namely the regulation and restriction of access to a company’s books in the context of a winding up, the specific provision in s 486 of the Corporations Act should prevail over the general provisions in Div 70 of the Insolvency Practice Schedule, as a matter of statutory construction and application of the principle generalia specialibus non derogant: Herzfeld and Prince, Interpretation (2nd ed, Lawbook Co, 2020) at [5.210].

34    The Liquidator relied on Re Addstone Pty Ltd (in liq); Ex parte Macks (1998) 30 ACSR 177, where Mansfield J considered the rights of creditors or contributories to documents under the then Corporations Law, and in particular the scope of ss 247A, 486 and 531. Mansfield J observed, at 184, that prior to a winding up, members are given certain statutory rights to information under s 247D, but had no other right to access books of the company except by application under s 247A (which entitles a member of a company to apply to the Court for an order authorising that person to inspect books of the company). Further, that while there was no provision equivalent to s 247A entitling a creditor to inspect the books of a company, s 486 created a mechanism whereby such persons may be permitted to inspect company books in a winding up.

35    Mansfield J stated, at 185:

After the winding up, the court's power to authorise access to the books of the company under s 486 is extended, first because creditors are eligible to apply for such access, and second because the conditions upon which such access may be given either to creditors or contributories is only limited by the court being satisfied that the access sought is “just”. The court may permit access only to the extent that it is just to do so. Any such order could, no doubt, contain express conditions as to the use to which that material may be put: Re BPTC Ltd (in liq) (1992) 7 ACSR 291; 10 ACLC 271. There are obvious reasons why, following the liquidation of a company, a creditor may have a legitimate interest in the operation of the affairs of the company prior to its winding up but which did not exist prior to the winding up. Section 486 relates to an application made after the winding up of a company, but in relation to the books of the company concerning its affairs, created and maintained up to the time of the liquidation, rather than in relation to the liquidator's books. Section 531 then takes the further step, in the case of the liquidator's books, of providing that they should be generally available, unless the court otherwise orders.

36    Section 531 required a liquidator to keep proper books in which the liquidator must cause to be made certain entries or minutes of proceeding, and which any creditor or contributory could inspect unless the Court otherwise ordered. Section 531 was repealed by the Insolvency Law Reform Act 2016 (Cth). In addition, s 511, which was a general provision that related to the Court’s powers to make orders in relation to a creditors’ voluntary winding up, was also repealed by the Insolvency Law Reform Act 2016 (Cth).

37    The Liquidator relied on Mansfield J’s conclusion, at 185, that it was necessary to give each of ss 247A, 486 and 531 their “exclusive areas of operation to give full and proper effect to their respective terms”.

38    The operation of s 486 in the context of an application to inspect company books in a compulsory winding up was considered in Federal Commissioner of Taxation v Warner (2015) 244 FCR 479; [2015] FCA 659 at [39], where Perry J stated that s 486 had two aspects:

(1)     to vest power in the Court to permit inspection by creditors and contributories; and

(2)     to preclude any inspection of the company books by creditors and contributories save where, and to the extent, that any such inspection is authorised by an order of the court: IACS Pty Ltd v Australian Flower Exports Pty Ltd (1993) 10 ACSR 769 at 771–2 (Australian Flower Exports) per Rowland J.

39    The Liquidator relied on Warner, at [42], where her Honour stated:

In short, s 486 vests exclusive power in the court in the case of a compulsory winding up to permit the inspection of the company’s books by creditors and contributories, so that the court not only determines whether those persons may inspect the company’s books, but the conditions on which any such inspection is permitted. By these means, the court can ensure that access by creditors or contributories is not permitted otherwise than in the pursuit of their legitimate interests in the winding up, as opposed to some other agenda.

40    As a result of the foregoing, the Liquidator submitted that the preferrable construction is that s 486 continues to apply in the context of a winding up to regulate and restrict access to a company’s books. Furthermore, that despite the repeal of s 531 of the Corporations Act and the introduction of Div 70 of the Insolvency Practice Schedule, a hard line between pre- and post-appointment documents remains and should be maintained. Accordingly, and relevantly for the purpose of this case, s 486 requires the Commonwealth to obtain an order from the Court under that section before it can inspect the Company’s pre-appointment books held by the Liquidator.

41    Finally, the Liquidator submitted that the authorities relied upon by the Department, Watson and Wadren, involved companies in administration rather than liquidation and were distinguishable. In any event, the question of the construction of ss 70-45 and/or 70-55, and the interaction between Div 70 of the Insolvency Practice Schedule and s 486 of the Corporations Act, did not arise in Watson or Wadren.

consideration

42    The Explanatory Memorandum to the Insolvency Law Reform Bill 2015 (Cth) provides the following context to the insertion of Pt 3 of the Insolvency Practice Schedule, including Div 70:

Context of amendments

6.5    Representations made to the 2010 Senate Inquiry regarding the high cost of external administrations and the feeling of general creditor powerlessness during them, reflected deeper concerns about the efficiency and effectiveness of corporate insolvency administration governance…

6.11    Personal and corporate insolvency laws contain a number of mechanisms designed to ensure that creditors and other stakeholders are appropriately informed of debtors' affairs and the process of insolvency administrations. These mechanisms impose obligations on practitioners to provide specified types of information and provides rights for stakeholders to make ad hoc requests for information.

6.12    Information asymmetry interferes with the efficiency of the insolvency market and contributes to the risk of misconduct by market participants. The current regulatory barriers to creditors obtaining information entrenches the inherent problems creditors face in assessing the quality of the insolvency services provided.

…

Summary of new law

…

6.18     Creditors will be able to request information from a corporate insolvency practitioner and request that a creditors’ meeting be held during an external administration. Creditors and members with a financial interest will be able to make reasonable requests for information that practitioners would be obliged to meet provided there is funds available to meet the request. Reporting obligations during an administration will be prescribed by the Insolvency Practice Rules.

…

Comparison of key features of new law and current law

…

…

…

(Explanatory Memorandum, Insolvency Law Reform Bill 2015 (Cth), pp 164-167, 169, 170.)

43    Prior to the introduction of the Insolvency Practice Schedule, there was no corresponding provision in the Corporations Act which enabled creditors to make ad hoc requests for documents from an external administrator. Nor was there a corresponding provision that enabled the Commonwealth to request specified documents or information when a claim was made or likely to be made under the FEG Scheme.

44    The reforms introduced by the Insolvency Practice Schedule expanded the rights of creditors in an external administration, including their rights to information. The reforms conferred additional rights of access to information upon creditors generally, and the Commonwealth where the FEG Scheme may be called on, where the requirements under ss 70-45 and/or 70-55 are satisfied.

45    Under s 70-55(2) of the Insolvency Practice Schedule, the Commonwealth may request the external administrator of the company to provide specified information, reports or documents “in relation to” the external administration and, under s 70-55(3), the external administrator must comply with the request. There is nothing in the provisions of the Insolvency Practice Schedule that suggest any limits were to be placed on what information or documents may be requested or must be provided to the Commonwealth under ss 70-55(2) and 70-55(3) beyond the requirement that the information or documents are “in relation to” the external administration, which is a term of wide import: First Provincial Building Society Ltd v Commissioner of Taxation (Cth) (1995) 56 FCR 320 at 333 (Hill J, with Black CJ and Carr J agreeing).

46    Section 70-45(1) is in similar terms, entitling a creditor to request information, reports or documents from an external administrator. The external administrator must comply with the request unless an exclusion under s 70-45(2) applies, namely:

(a)    the information, report or document requested is “not relevant to the external administration of the company”: s 70-45(2)(a);

(b)    the external administrator would breach their duties in relation to the external administration if they complied with the request: s 70-45(2)(b); or

(c)    it is otherwise not reasonable for the external administrator to comply with the request: s 70-45(2)(c).

47    The circumstances in which it is “not reasonable” for an external administrator to comply with a request for information or documents are exhaustively stated in r 70-15(2) of the Insolvency Practice Rules (Corporations) 2016 (Cth): Re 1st Fleet [2019] NSWSC 6 at [24] (Black J); Secatore; Re Last Lap Pty Ltd (in liq) (2020) 144 ACSR 648; [2020] FCA 627 at [45] (Anderson J). By way of example, it is not reasonable for an external administrator to comply with a request if doing so would substantially prejudice the interests of one or more creditors or a third party, if the information is privileged or if disclosure would found an action for breach of confidence: rr 70-15(2)(a), (b) and (c) of the Insolvency Practice Rules. It is otherwise reasonable for an external administrator to provide the information if one of the prescribed exceptions does not apply: r 70-15(4).

48    As the Explanatory Memorandum makes clear, the statutory purpose of the Insolvency Practice Schedule was to expand the rights of creditors to obtain information from external administrators and remove the regulatory barriers to creditors obtaining information. Sections 70-45 and 70-55 do not distinguish between pre- or post-administration documents. There is nothing in the text of ss 70-45 or 70-55 or the objects of the Insolvency Practice Schedule which purport to limit the external administrator’s obligations to post-administration documents or information or the nature of the information that must be provided beyond the requirements already mentioned. Indeed, the text and statutory purpose point the other way. As the Department submitted, requiring a creditor to seek a court order under s 486 would entrench the regulatory barriers to information access that the legislature intended to remove through the reforms that were introduced by the Insolvency Practice Schedule.

49    Where the threshold in s 70-65 is met, by the making of a relevant request and refusal to comply, s 70-90 enables the person or persons who made the request to apply for an order for the production of the requested documents. Section 70-90(3) confers a discretion on the Court to make an order for production: Watson at [35] (Thawley J). However, as Black J observed in Re 1st Fleet at [27], it seems unlikely that the Court has a further discretion, at large, under s 70-90(3) to withhold an order for the provision of information or documents where ss 70-45 or 70-55 required that such information or documents be provided. Anderson J agreed in Secatore, at [54], adding that while there may be limited circumstances in which the Court, acting under s 70-90(3), might exercise its residual discretion to not order the production of the relevant material, such circumstances are likely rare, such as where there is no longer any utility in making an order, referring to Re 1st Fleet at [27].

50    In my assessment, s 486 of the Corporations Act still has scope to operate where the requirements of ss 70-45 or 70-55 are not met. The reforms enacted by the Insolvency Practice Schedule provide creditors and the Commonwealth with an entitlement to information of the company in external administration, provided the requirements in ss 70-45 and/or 70-55 are met, without the need to obtain a court order. However, if the requirements under ss 70-45 and/or 70-55 are not met, s 486 allows the Court to make orders for inspection of the books of the company “as the Court thinks just”, and subject to conditions.

51    The statements from the authorities relied upon by the Liquidator, including Addstone, should be considered in light of the legislative context under which they were decided, which was before the changes in the Insolvency Practice Schedule were introduced. In that context, Mansfield J’s emphasis on the distinction in the statutory provisions between pre- and post-administration documents, and the need to give them their “exclusive areas of operation” in light of the restricted rights of creditors to obtain documents, are well understood.

conclusion

52    There was no dispute that the documents requested fell within the scope of s 70-55 of the Insolvency Practice Schedule. The Court’s power under s 70-90 to compel the Liquidator to comply with the request was engaged by the Liquidator refusing the Department’s request made under s 70-55. I am satisfied that an order should be made under s 70-90 of the Insolvency Practice Schedule for the production of the information or documents sought in the Originating Process.

Associate:

Dated:    24 October 2025