Federal Court of Australia

Diakou v Yeo (liquidator), in the matter of ACN 152 259 839 Pty Ltd (in liquidation) [2026] FCA 896

ORDERS

THE COURT ORDERS THAT:

1.    The applicants’ application for leave to appeal from the orders of Button J made on 7 April 2026 in proceeding VID 1397/2025 be dismissed.

2.    The applicants pay the respondent’s costs of and incidental to their application for leave to appeal.

3.    The applicants’ interlocutory process dated 15 June 2026 in proceeding VID 1397/2025 seeking a review of the Judicial Registrar’s decision made on 11 June 2026 be dismissed.

4.    The applicants pay the costs of the respondent to such review to the extent that there are any additional party/party costs over and above what are provided for in order 2 of these orders.

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

REASONS FOR JUDGMENT

BEACH J:

1    The applicants seek leave to appeal from the orders made by Button J on 7 April 2026 dismissing their application filed on 29 January 2026 that sought to set aside a series of orders issuing examination and production summonses pursuant to s 596B of the Corporations Act 2001 (Cth).

2    Their proposed grounds of appeal are:

1.    Her Honour denied procedural fairness in refusing to allow an adjournment to permit Counsel with the carriage of the application on behalf of the Applicants to argue the substance of the application on a later date.

2.    Her Honour erred in proceeding with determining the application without affording the Applicants the opportunity to advance the substantive grounds of their application, or considering those grounds.

3    The applicants are various persons who are subject either to summonses to attend for public examination or to produce documents which the Court ordered to be issued on the application of the liquidator concerning the affairs of ACN 152 259 839 Pty. Ltd. (in liquidation) (the company), formerly known as Maxcon Developments Pty. Ltd., in the proceeding below being VID 1397/2025.

4    The applicants have relied on various affidavits of their solicitor. I will need to say something later about one of the affidavits sworn on 21 April 2026 as it contains new evidence that was not before her Honour on 7 April 2026, and to that extent in my view is neither admissible nor should be received to show any discretionary error on the part of her Honour. Moreover, at its highest it contains corroborative detail intended to give an air of verisimilitude to an otherwise unconvincing narrative to adapt a Gilbertian phrase.

5    In summary, the applicants say that the determination of the setting aside application without a hearing on the merits satisfies both limbs of the test in Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 398 to 400. It is said that the decision is attended with sufficient doubt because the applicants were denied a reasonable opportunity to be heard. It is said that her Honour’s errors are within House v The King (1936) 55 CLR 499 because determining the application in the absence of senior counsel briefed to argue the matter was beyond the applicants’ control and an issue which her Honour should have considered in deciding whether to proceed with a hearing. And they say that the substantial injustice that they have suffered is the permanent loss of the right to have their setting aside application determined.

6    Contrastingly, the liquidator says that the applicants did not comply with the programming orders. Further, he points out that the applicants did not file further material or any submissions on the substantive questions. Instead, at the hearing they applied for an adjournment which her Honour refused. Following that, their counsel, who had been briefed only that morning and only to make the adjournment application, withdrew. When the substantive application was called on, the applicants did not appear, although their solicitor remained in attendance via videolink. Her Honour after considering the material before her then dismissed the application.

7    For the reasons that follow, I would refuse the applicants leave to appeal. There is also a competency question that arises under s 24(1AA)(b)(ii) of the Federal Court of Australia Act 1976 (Cth) which I will need to discuss later, given that there is a bar on bringing an appeal from the refusal of an adjournment decision.

8    But first I should delve into and describe some relevant procedural history.

The procedural history

9    On 19 November 2025, the Court issued the examination summonses and made the production orders. They required production of documents by 19 December 2025. The summonses and orders directed to the applicants were served on various dates in November and December 2025.

10    The date for production under the summonses and the orders, which was originally 19 December 2025, was extended to 29 January 2026.

11    On 29 January 2026, the applicants were represented by counsel on the return of the summonses and production orders. Their senior counsel informed the Judicial Registrar that an application to set aside the summonses had been or would be filed that day and that the applicants would need two weeks to file supplementary material. The Registrar made an order that that material be filed by 5 February 2026. The applicants filed an interlocutory process, seeking inter-alia to discharge the examination summonses and orders for production.

12    The setting aside application was allocated to her Honour. On 18 February 2026, the parties sent proposed consent orders to the Court, providing programming orders and for a hearing date of 1 or 2 April 2026, which was just before Easter.

13    On 19 February 2026, her Honour made orders which extended until 23 February 2026 the time for the applicants to file their further affidavit, required the liquidator to file his evidence by 10 March 2026, required the applicants to file submissions by 20 March 2026 and required the liquidator to file his submissions by 30 March 2026. She also ordered that the setting aside application be heard on 7 April 2026. The hearing date set, which was Easter Tuesday, was not one of the dates proposed by the parties.

14    On 19 February 2026, the liquidator’s solicitors emailed the applicants’ solicitors at 1.46pm, asking about alternative dates:

Unfortunately, Counsel for the respondent to the Set Aside Application is not available to appear on 7 April 2026.

Could you please advise of your clients’ and counsel’s availability in the week commencing 20 April 2026 so that we can provide the Court with our mutual availability and seek to have the matter relisted?

15    The applicants’ solicitors replied at 3.58pm:

We have been told that our clients’ counsel will be in a class action matter which is listed for hearing including during the period from 20 April 2026 until 5 May 2026 so any time after that would be convenient.

16    On 25 February 2026, the liquidator’s solicitors emailed the applicants’ solicitors again about the applicants’ failure to file their supplementary material in a timely fashion and the hearing dates:

Evidence

Pursuant to the orders of the Honourable Justice Button made by consent on 19 February 2026, your clients’ supplementary evidence in chief were due to be filed and served by 4:00pm on 23 February 2026. To date, no such evidence has been filed or served.

Please advise us if it is your clients’ intention to seek leave to rely on late material or, alternatively, request an order from the Court extending the extant timetable.

Hearing date for set aside application

I understand from your voice message last week that your clients’ senior counsel is unavailable from 20 April 2026 to 5 May 2026. Is it the case that your clients' junior counsel is also unavailable during this period?

Our preference is for the matter to be heard on 1 or 2 April 2026 as per the original orders agreed to between the parties. However, our clients’ counsel would be available to appear on 7 April 2026 if the hearing were to proceed by way of audio-visual link. Could you please confirm the availability of your clients’ counsel for 7 April 2026.

17    The next day, 26 February 2026, the applicants’ solicitors responded to the liquidator’s solicitors, indicating the applicants’ material was being finalised and they would “in due course” seek to extend the timeframe for it to be filed:

Evidence and Hearing Date for Set Aside Application

Our clients’ material is still in the process of being finalised. We will in due course seek to extend orders for the filing of our material but have not done so as yet because we were waiting to resolve and firm up the hearing date of the Interlocutory Process with you first so we could approach the Court in relation to all matters at the same time. There may also need to be changes made to the other timetabling orders of Her Honour Justice Button made on 19 February 2026 as a result of the change to the hearing date.

Based on the correspondence below, it appears the Interlocutory Process will not be heard before 5 May 2026. In this regard, we sent you our email below at 3:58pm on 19 February 2026 and also left you a detailed voicemail during our subsequent call to you at 1:03pm on 20 February 2026.

Our clients’ senior counsel is not available on 7 April 2026 as he is in the same class action matter referred to below including from 7 April 2026 to 5 May 2026. We have not decided whether current junior counsel will continue to be briefed in the matter but Mr Daryl Williams KC is certainly briefed in the matter and will continue to be so briefed so the hearing date of the Interlocutory Process will unfortunately need to change.

The quicker we let the Court know, the more likely it is that we will get the earliest date convenient to the Court after 5 May 2026.

18    On 4 March 2026, the liquidator’s solicitors emailed the applicants’ solicitors, confirming the liquidator would not allow the applicants to delay the examinations any further and would be maintaining the listing date and the timetable:

That the parties were in dialogue about an alternative hearing date did not relieve your clients from their obligation to comply with the orders. Respectfully, it is not for your clients or your firm unilaterally to decide whether and when to comply with orders that the Court has made.

…

The fact that your clients’ senior counsel is not available on the hearing date does not change things. As you will recall, agreed timetabling orders were provided to the Court on 18 February 2026 that would have had the matter set down on 1 or 2 April 2026. Yet, as we understand, Mr Williams KC’s other commitments meant he was unavailable on those dates too.

…

Our clients are not prepared to allow your clients further to delay this matter. They intend to maintain the listing date and the timetable set down by the existing orders.

Since our earlier email below, our clients’ counsel has altered his personal arrangements to make himself available to appear at the hearing on 7 April 2026. Our clients will oppose any attempt to change that date. Likewise, they will oppose any attempt by your clients to rely on any further material in support of the interlocutory process. They will file their responsive material by the date set by the orders. They expect your clients to comply with the balance of the timetabling orders.

19    The applicants did not comply with the programming orders. Notwithstanding their solicitors’ indications on 26 February 2026, they did not ever file further affidavit material or seek a further extension to do so. Nor did they file submissions in support of the setting aside application.

20    The liquidator filed and served his evidence on 10 March 2026 and his submissions on 1 April 2026.

21    On 2 April 2026, which was Easter Thursday, the following occurred.

22    Her Honour’s associate emailed the parties at 9.52am, pointing out the applicants’ non-compliance with the programming orders:

Pursuant to paragraph 3 of her Honour’s orders made on 19 February 2026, the Applicants to the interlocutory application were required to file and serve their outline of submissions by 4:00pm on 20 March 2026. No submissions were filed.

Her Honour requires the solicitors for the Applicants to advise, as a matter of urgency, their clients’ position in relation to the hearing next Tuesday, including whether they continue to press the interlocutory application and, if so, why they have not complied with the order to file written submissions.

23    The applicants’ solicitors emailed the Court at 10.28am, saying:

We regret to advise that the applicants are not ready to proceed with the hearing of their application next Tuesday and will be making application for an adjournment of the hearing to be supported by an affidavit which will be sworn as soon as practicable.

Our clients continue to press their application.

We apologise to the Court for the inconvenience caused.

24    The liquidator’s solicitors responded by email at 4.10pm, asking the applicants’ solicitors about the affidavit in support of the adjournment application:

With the Easter public holiday looming, please let us know when we can expect to receive the affidavit referred to in your email.

As we explained in our email on 4 March 2026, our client’s counsel altered his personal arrangements so as to be available for the hearing next week and we would prefer that such of his holidays as remain are interrupted as little as possible.

25    The application was listed at 10.15am on 7 April 2026. But it was not until 8.36am that the applicants served an affidavit, made that day by their solicitor in support of the adjournment application.

26    At the hearing, counsel appeared by videolink for the applicants and applied for an adjournment. The applicants’ solicitor was also present via videolink. The liquidator opposed the application. Her Honour gave oral reasons for refusing it and said the substantive application would proceed. The revised transcript of those reasons was as follows:

I have before me an application to adjourn today’s hearing of an application to set aside a series of summonses for examination. Those summonses were issued in November 2025. The interlocutory process seeking to set aside the summonses was filed on 29 January 2026. On 19 February 2026, orders were made by consent that provided for the hearing of the application to set aside the summonses on 7 April 2026, and there was a timetable set by consent for the filing of material and submissions.

There has been no compliance with that timetable by the applicants, nor has there been any communication to the Court, other than late indication on Thursday last week, that the applicants intended to apply to adjourn today's hearing. On the morning of the hearing, an affidavit was provided to chambers.

It appears from that affidavit that there were some communications between the parties in mid to late February 2026 regarding the availability of their respective counsel and the possibility of seeking to change the date of the hearing. It was clear from those communications that the respondents were holding the applicants to the timetable for evidence and submissions, at least until that timetable was varied, which never occurred.

On 4 March 2026, the respondents communicated that their counsel had changed counsel’s plans so as to be available for the hearing on 7 April. That is the last communication in the evidence between the parties concerning the date for the hearing of the application to set aside the examination summonses. It follows that the applicants have had more than one month to find alternate counsel if their preferred silk is unavailable today.

The affidavit filed by the applicants records facts concerning the progress of another proceeding referred to as the “recovery proceeding”. The affidavit notes that there has been a three-month adjournment by consent of that proceeding, but that is neither here nor there, other than in respect of the extent to which it may affect prejudice to the respondents. The affidavit also notes that objections to assessments issued by the tax authorities have yet to be determined, but this is also neither here nor there, other than potentially in respect of prejudice.

On the question of prejudice to the respondents, liquidators are to conduct the task which they are appointed to undertake as efficiently and expeditiously as they can. The execution of a liquidator’s task is not to be delayed for no good reason. Similarly, court resources, which are not unlimited, have been allocated to accommodate today's hearing, and no good reason has been shown for that hearing to be adjourned.

As I have mentioned, the applicants have had more than one month to replace their preferred counsel. The applicants have adduced no evidence whatsoever as to why they have not done anything, other than, it appears, sit on their hands prior to late last week or earlier this week. The application for an adjournment was made very late and the lateness of the application itself is entirely unexplained, as counsel has candidly acknowledged. Accordingly, the application to adjourn is refused.

[The Court then proceeded to hear the substance of the applicants’ interlocutory application to set aside the summonses for examination.]

27    After the applicants’ counsel said she was briefed only on the adjournment application, the matter was stood down to enable her to take instructions. Her Honour made it clear that the matter would proceed, either with the applicants represented or, if they did not appear, in their absence.

28    When the matter came back on, the applicants’ counsel informed her Honour that she was not instructed to appear on the substantive application and that she was instructed to withdraw. The liquidator did not oppose that course, and she was given leave to withdraw.

29    Thereafter, the applicants’ setting aside application proceeded. The matter was called outside court and on the videolink. There was no appearance for the applicants, although the applicants’ solicitor was still present on the videolink. Her Honour dismissed the application.

Competency

30    It was raised with the applicants that s 24(1AA)(b)(ii) of the FCA Act provides that an appeal cannot be brought from a decision not to adjourn a hearing. Section 24(1AA)(b)(ii) limits the scope of the jurisdiction conferred by s 24(1)(a) in respect of, inter-alia, a decision to adjourn, or not adjourn, a hearing. It provides that:

An appeal must not be brought from a judgment referred to in paragraph (1)(a) … if the judgment is:

…

(b)    a decision to do, or not to do, any of the following:

(i)    join or remove a party;

(ii)    adjourn or expedite a hearing;

(iii)    vacate a hearing date.

31    But the applicants say that the determination of their application to set aside the summonses for examination, in the absence of affording them the opportunity to argue the application with counsel briefed to do so, and in particular their chosen counsel, in the circumstances was a denial of procedural fairness.

32    The applicants say that s 24(1AA)(b)(ii) prohibits appeals from a decision not to adjourn a hearing, but not from the resulting denial of procedural fairness if the hearing is then determined in a procedurally unfair manner.

33    They say that a similar issue arose in Treasury Wine Estates Ltd v Maurice Blackburn Pty Ltd (2020) 282 FCR 95 where the Court considered an application for leave to appeal by Treasury Wine Estates against a decision of the determination of an interlocutory application made by the primary judge.

34    Jagot, Markovic and Thawley JJ stated (at [23] to [25]):

In ground 6 of its appeal TWE contended that the primary judge denied TWE procedural fairness by refusing to adjourn the hearing for three business days, as sought by TWE, in circumstances where there was no urgency and, according to TWE, refusing the adjournment application denied it the opportunity to adduce relevant evidence, being the defence to counter-claim in the Napier proceeding (which TWE contended proves a further breach of the Hearne v Street obligation by the first and second respondents, but not the third respondent). In ground 7 of its appeal TWE contended that the primary judge erred in exercising his discretion not to grant the adjournment by taking into account irrelevant considerations and failing to take into account relevant considerations.

The respondents submitted that grounds 6 and 7 are incompetent because s 24(1AA)(b)(ii) of the FC Act provides that an appeal must not be brought from a judgment of the Court constituted by a single Judge exercising the original jurisdiction of the Court if the judgment is a decision to adjourn or not to adjourn the proceeding.

In our view, s 24(1AA)(b)(ii) of the FC Act does not apply to ground 6 of the appeal, but does apply to ground 7. Ground 6 is not an appeal against the primary judge’s decision not to adjourn the hearing. It is an appeal against an alleged denial of procedural fairness. The fact that the refusal to grant an adjournment is the source of the alleged denial of procedural fairness does not make this an appeal against the primary judge’s decision not to grant the adjournment. Section 24(1AA)(b)(ii) of the FC Act could not have been intended to immunise from appeal a decision made in breach of the requirements of procedural fairness. A hearing which occurs in breach of the requirements of procedural fairness is no hearing at all. As TWE submitted, the purpose of s 24(1AA)(b) is to prevent appeals on “minor procedural decisions”: Explanatory Memorandum, Access to Justice (Civil Litigation Reforms) Amendment Bill 2009 (Cth) [80]–[82]. Its purpose was not to strip away a right of appeal concerning a fundamental characteristic of a judicial hearing, being procedural fairness.

35    The applicants say that the decision in Treasury Wine is analogous to the present case and can be applied to the application for leave to appeal.

36    They say that the restriction in s 24(1AA)(b)(ii) does not apply to grounds 1 or 2 of their application for leave to appeal since they both raise the denial of procedural fairness, rather than the refusal of the adjournment. They say that the decision of her Honour to proceed with the determination of the applicants’ interlocutory process despite the applicants’ chosen counsel being unavailable to determine the matter in the circumstances denied them procedural fairness. And they say that the decision of her Honour to refuse an adjournment to allow the applicants’ chosen counsel to appear is not the subject of the appeal per se.

37    But care needs to be taken with Treasury Wine. In Praljak v Office of the Australian Information Commissioner (2025) 311 FCR 178 at [51] to [60], Mortimer CJ, Colvin and Thawley JJ explained that the appeal in Treasury Wine was competent because the underlying proceeding had related to a contempt of court and s 24(1AA) could not operate to prevent a contention about denial of procedural fairness because the denial of procedural fairness could be said to have been caused by a refusal to grant an adjournment. But the Full Court in Praljak said that the observations in Treasury Wine “should not be understood as limiting the operation of s 24(1AA) by immunising from its exclusionary operation particular judgments based on the quality or nature of the underlying grounds of the proposed appeal” (at [60]). Further, “[t]here is no proper basis to read such a qualification into the exclusionary operation of s 24(1AA)”.

38    Succinctly stated, whilst the prohibition in s 24(1AA)(b)(ii) does not preclude an appeal against an alleged denial of procedural fairness arising from a refusal to grant an adjournment, Treasury Wine is not authority for the proposition that an application for leave to appeal is competent merely because an applicant considers that the decision to refuse an adjournment caused some procedural unfairness. Nor does the quality of proposed appeal grounds qualify the statutory prohibition. What is relevant for the purposes of s 24(1AA)(b)(ii) is the consequence of the order sought to be challenged.

39    In Anderson v Morgan Crest Pty. Ltd. [2026] FCA 258, Hill J summarised the relevant principles concerning s 24(1AA) of the Act (at [24]):

The general purpose of s 24(1AA) is to remove the right of appeal for “minor procedural decisions”: see Praljak v Office of the Australian Information Commissioner [2025] FCAFC 126; (2025) 311 FCR 178 at [39] (the Court). That said, there is no qualification to s 24(1AA) based on the quality or nature of the underlying grounds of the appeal (such as an allegation that a refusal to grant an adjournment caused a breach of procedural fairness): Praljak at [60]. Other cases have observed that the prohibition in s 24(1AA) on bringing an appeal against a refusal to adjourn a hearing is unqualified: Tucker v State of Victoria [2022] FCA 1449 at [12] (Anderson J), and the cases cited.

40    His Honour explained (at [26]) that “[t]he question of whether court orders concern a decision to adjourn a hearing (or not to adjourn) is determined as a matter of substance by considering the consequence of the orders” and that (at [28]), whilst the general purpose of s 24(1AA) is to prevent appeals from “minor procedural decisions”, that general description “does not alter or limit the text actually used, which (relevantly) is an absolute bar on appeals from adjournment decisions”.

41    In Tucker v State of Victoria [2022] FCA 1449 Anderson J said (at [14]):

It does not matter that the hearing on 25 October 2022 was not an adjournment hearing. What is relevant for the purposes of s 24(1AA) of the FCA Act is that the consequence of Order 1, which “listed” the summary judgment and trial together on 5 December 2022, was that it was a decision by a Judge to defer or postpone the hearing of the summary judgment application to a future date, namely, the date also fixed for the trial and not to a date prior to the trial date of the Bankruptcy Proceeding.

42    In the present case I have difficulty in seeing why s 24(1AA)(b)(ii) would not operate to preclude any appeal such that the leave to appeal application fails in limine.

43    There is no doubt that the applicants were accorded all the procedural fairness that they could wish for on the hearing of the adjournment application. Now this failed. The applicants then say that to proceed with and dismiss the setting aside application then amounted to a lack of procedural fairness. But nothing new or surprising occurred as this was the predictable if not inevitable outcome of the failure of the adjournment application. Is it suggested that every disappointed litigant on a failed adjournment application can then run a lack of procedural fairness point and step outside the bar in s 24(1AA)(b)(ii) because by definition they are being forced on when they are unprepared? This would be a surprising outcome if I might say so.

44    Now although I am sitting in the Court’s appellate jurisdiction, Treasury Wine has given me reason to pause such that I will not dismiss this leave application outright because of the s 24(1AA)(b)(ii) bar. The less courageous course that I propose to take is to assume in favour of the applicants that s 24(1AA)(b)(ii) does not operate and to address the leave to appeal application on its merits, which I will now do.

The first limb concerning the grant of leave

45    As I have said, the proposed grounds of appeal are:

1.    Her Honour denied procedural fairness in refusing to allow an adjournment to permit Counsel with the carriage of the application on behalf of the Applicants to argue the substance of the application on a later date.

2.    Her Honour erred in proceeding with determining the application without affording the Applicants the opportunity to advance the substantive grounds of their application, or considering those grounds.

46    It is said that her Honour’s decision determining the applicants’ setting aside application was in error because it unfairly denied the applicants a reasonable opportunity of arguing the substance of that application with properly briefed counsel.

47    It was said that the circumstances leading up to the hearing on 7 April 2026 were as follows.

48    The setting aside application was set down by her Honour for hearing on 7 April 2026 by her orders made 19 February 2026.

49    The parties each proposed moving the hearing date from 7 April 2026 to accommodate the availability of their respective senior counsel. The applicants’ solicitors informed the liquidator’s solicitors that their senior counsel was not available in the period from 20 April 2026 until 5 May 2026. Mr Daryl Williams KC was retained generally to act for the applicants in the setting aside application and the summonses for examination and production in the proceeding below.

50    Although a range of alternative dates was proposed by the parties, no agreement was reached and ultimately no change was made to the listing date of 7 April 2026, despite the unavailability of their senior counsel remaining.

51    The applicants sought an adjournment from her Honour, having briefed junior counsel of limited experience, for the sole purpose of obtaining that adjournment on that day. The adjournment was not granted, was opposed by the liquidator, and the setting aside application was dismissed because junior counsel appearing on the day was not briefed to argue the substance of the application.

52    The applicants say that their failure to argue their case on 7 April 2026 was not entirely their fault. Their senior counsel was not available to appear on that day, and they sought a short adjournment to allow him to appear. They say that it was not unreasonable for them to believe that a short adjournment would be granted particularly as there were no pressing case management considerations requiring the issue to be determined on 7 April 2026. They say that whilst it was open in theory for them to obtain alternative senior or experienced counsel to argue the merits of the setting aside application, the applicants did not consider it possible to do so; in that respect they have relied on the new evidence in the applicants’ solicitor’s affidavit of 21 April 2026.

53    The applicants say that from a case management perspective, if the setting aside application had been determined by her Honour on a subsequent date when their senior counsel could attend, the setting aside application could have been finally determined with a hearing on the merits. They say that the progress of the underlying examinations by the liquidator would not have been delayed in any appreciable sense.

54    They say that accordingly, from a case management perspective, the interest of expedition incorrectly outweighed the applicants’ entitlement to procedural fairness in the form of obtaining a hearing on the merits. They say that the decision of the judge below was accordingly procedurally unfair and ought be set aside.

55    Generally, the applicants say that the need to resolve disputes quickly, inexpensively, and efficiently still requires that disputes be resolved in a procedurally fair way. They assert that if it is possible to provide a hearing on the merits by a short adjournment at no substantive disadvantage to the other party, then a hearing on the merits ought to be afforded. They say that proceeding with a hearing in circumstances where the moving party is not represented by counsel briefed to argue the application is not justified in those circumstances by case management considerations.

Analysis

56    In my view, her Honour’s decision was not attended by sufficient doubt to warrant its reconsideration.

57    The Court has power under r 1.32 of the Federal Court Rules 2011 (Cth) to grant an adjournment. In Dahdah v Platinum Distributors Australia Pty Ltd [2023] FCAFC 65, Rangiah, Goodman and McElwaine JJ said (at [166]) that the power is to be exercised in a manner that “best promotes the overarching purpose of facilitating the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible”. And they explained that “no litigant has an entitlement to an adjournment for the obvious reason that the business of the Court must be managed with the objective of efficient organisation in the interests of all litigants that come before the Court”.

58    The applicants correctly state that the principles of procedural fairness include a reasonable opportunity to present evidence and make submissions. As was said in Rowe v Stolze (2013) 45 WAR 116 at [51] by Newnes JA (Pullin and Murphy JJA agreeing):

… What the rules of procedural fairness require is that each party be provided with a reasonable opportunity to be heard. And what is a reasonable opportunity is to be judged nowadays not solely by reference to the interests of the parties but also having regard to the wider interest of other litigants waiting to have cases heard and the public interest in the proper and efficient use of the scarce public resources of the court. What might be perceived as an injustice to a party when considered only in the context of an action between parties may not be so when considered in a context which includes the claims of other litigants and the public interest in achieving the most efficient use of court resources. Moreover, as between parties to an action what constitutes a reasonable opportunity to be heard must be judged having regard to the effect of undue delay, including the stress and costs caused by having litigation hanging over a defendant’s head for an undue period.

[Citations omitted; emphasis in original]

59    In Shrestha v Migration Review Tribunal (2015) 229 FCR 301 Mansfield, Tracey and Mortimer JJ considered whether the summary dismissal of an application before the then Federal Circuit Court was procedurally unfair and a wrongful exercise of the power to give summary judgment. The Court said that it is axiomatic that the requirements of fairness include the provision of a reasonable opportunity to the relevant party to present evidence and to make submissions. In assessing whether there was a denial of procedural fairness, the Court said (at [53]):

The pressure of high volume decision making, such as that undertaken by the FCC in the migration jurisdiction, should be recognised. Essential tools in managing high volumes of cases include the show cause process…and the power…summarily to dismiss a judicial review application. The existence and utilisation of those processes do not obviate the need to consider the material before the Tribunal (rather than simply its reasons), nor to explain in plain terms to unrepresented applicants that they must identify to the court why the Tribunal’s decision was not made lawfully and by a fair process. Insisting to an unrepresented applicant that she or he identify a “jurisdictional error” is a pointless, and unfair, exercise. Further, the processes in s 17A and Pt 44 do not remove the obligation to give parties, whether represented or unrepresented, some reasonable time to regularise their materials and present their arguments.

60    Of course, what is required in a particular case concerning the content and the giving of procedural fairness depends upon the particular context of the case and its circumstances including the nature of the issue and interests involved. How procedural fairness is to be accommodated is very much fact and context specific.

61    In this Court, the overarching purpose of civil practice and procedure and case management within the individual docket system is to facilitate the just resolution of disputes according to law as quickly, inexpensively and efficiently as possible; see ss 37M and 37N of the FCA Act.

62    Further, although efficient case management principles are not an end in themselves, they are not irrelevant to considering together with other factors what is necessary to achieve justice in the particular case as between the particular litigants, and more broadly in terms of the efficient disposition of the Court’s business including the effect on and prejudice to any other litigants in terms of any postponement. As has been said on numerous occasions, the conduct of litigation is not merely a matter for the parties. As was said by the plurality in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 at [95], what may be just “requires account to be taken of other litigants, not just the parties to the proceedings in question”, albeit that I am dealing with a different context to Aon.

63    Further, as was said by the plurality (at [100] and [101]), the non-monetary effect and pressures on litigants including corporate litigants is not irrelevant to considering what is just. Here one has a liquidator whose role, indeed whose statutory duty, is to efficiently administer the winding up of the company including to carry out any necessary investigations, to get in assets and to realise assets. Any unnecessary or unjustifiable delays are an understandable cause of concern for the liquidator, the creditors and more broadly the efficient allocation of resources and personnel by the liquidator over this administration and no doubt his other administrations.

64    Further, the interests of justice in this case required an opportunity to be given to the applicants to put their case. But that was given, despite their belated bleating to the contrary. The fact that they did not properly avail themselves of that opportunity was a matter for them. They could not sensibly have hoped for any indulgence or insouciance from her Honour concerning the efficient and expeditious disposition of what was before her. They must bear the consequences of their choices.

65    The applicants contend that her Honour’s decision was in error because she denied them, unfairly, a reasonable opportunity of arguing the substance of their setting aside application with properly briefed counsel.

66    But the rules of procedural fairness require that each party be provided with a reasonable opportunity to be heard. Here, the matter was listed on 19 February 2026 for hearing on 7 April 2026. During that period, the applicants did nothing, whether to file material as required by the programming orders, to seek an adjournment or a variation of the hearing date, or to brief alternative counsel. Only at the last minute did they indicate that they would seek an adjournment. Procedural fairness does not require open-ended opportunities to be heard, or an automatic right to adjourn a hearing when a party’s preferred counsel is unavailable.

67    At no stage between 19 February 2026, when the hearing date was set, and 2 April 2026, when the Court emailed to ask about their intentions did the applicants do anything to seek an adjournment or a different listing date. Only on 2 April 2026, and then only in response to the email from the Court, did the applicants indicate an intention to seek an adjournment. Even then, the affidavit supporting that application was not made and counsel was not briefed until the morning of the hearing.

68    Let me deal with another aspect concerning the affidavit of the applicants’ solicitor of 21 April 2026 which sets out new evidence and makes further excuses as to why the applicants could not proceed before her Honour on 7 April 2026. A few points should be made.

69    First, it is difficult to see how it could be said that her Honour’s exercise of discretion to refuse the adjournment could be impugned by evidence and excuses not put before her.

70    Second, it may be said that where the ground is a denial of procedural fairness, more flexibility may be shown as to permitting evidence not before her Honour as to the surrounding circumstances and context. But nevertheless, if the further evidence consists of circumstances known only to the applicants and not her Honour, it is difficult to see how it could be said that her Honour had somehow denied procedural fairness.

71    Third, I am inclined to the view that if leave to appeal was granted, the applicants would have difficulty in seeking to have the Full Court receive this new evidence under s 27 of the FCA Act or if they did receive it they would give it little weight.

72    In summary and to be succinct, despite being afforded a reasonable opportunity to do so, the applicants failed to prepare for, prosecute and present their own application. When they sought at the eleventh hour to adjourn it, the Court refused their application. That refusal was justified both in principle and on the facts. The applicants have not demonstrated any House v The King error.

73    The applicants have not shown that her Honour’s decision is attended with sufficient doubt such as to justify a grant of leave to appeal. Let me turn to the second limb.

The second limb concerning the grant of leave

74    The applicants say that a substantial injustice has resulted because the applicants have been shut out from pressing the setting aside application. In summary, the applicants point to the following matters.

75    The applicants say that the liquidator is funded by the Deputy Commissioner of Taxation, who is the only substantial creditor of the company. They say that certain of the applicants have unresolved objections to personal income tax assessments being considered by the DCT, which objections were lodged more than two years ago and to which the DCT has not responded. They say that the substratum of the objections and the examinations is largely common. They say that the fact that the examinations are public and funded by the DCT, and that the DCT presumably receives a degree of reporting and cooperation from the liquidator, entails that the conduct of the examinations against them prior to the resolution of their objections is an abuse of process.

76    In elaboration, it is also convenient at this point to identify the bases set out in one of the affidavits of the applicants’ solicitor.

77    First, it is said that the summonses relate to the subject matter of the objections which have not been determined. And it is said that compelling sworn evidence through multiple public examinations on matters the subject of the objections, and in a liquidation where the DCT is in essence the only major creditor, would amount in substance to the use of the Court’s examination powers as a parallel evidentiary process to further the determination of the objections rather than for any independent insolvency purpose.

78    Second, it is said that it is expected that proceedings under Pt. IVC of the Taxation Administration Act 1953 (Cth) will be commenced once the objections are determined. In those circumstances, it is said that compelling sworn evidence through public examination on matters that will be the subject of those proceedings would materially prejudice the fairness of any such proceedings by requiring evidence to be given outside and in advance of those proceedings.

79    Third, it is said that insofar as the summonses require the production of documents, those documents have to a large extent been produced through the objections and audit of the company such that requiring their production again is duplicative and oppressive.

80    Fourth, it is said that the public nature of the examinations would cause reputational and procedural harm disproportionate to any benefit to the liquidation.

81    Fifth, it is said that these four matters taken alone or in combination give rise to the summonses being an improper use of the Court’s processes and so an abuse of process.

82    Generally, the applicants say that there is sufficient merit to the setting aside application that declining leave to appeal would work a substantial injustice to them by preventing any hearing of the application on the merits.

83    Now the applicants accept that in considering the application for leave to appeal, I should also consider the injustice flowing to the liquidator. If leave is granted, then there is a likelihood that the examinations will be delayed. But the applicants say that that prejudice is not determinative for the following reasons.

84    First, the time limit for making applications in respect of voidable transactions has not yet expired and will not expire until the latter part of 2027. Further, they say that whilst it is possible that there might be claims that have shorter remaining limitation periods that are unknown to the liquidator and which might be revealed by examinations, given the limited nature of the activities of the company, this is unlikely. Further, they say that it would be open to the liquidator to seek a shelf order to extend the time for voidable transactions claims if the examinations and associated investigations were not completed before mid 2027.

85    Second, they say that the DCT is seized of voluminous material concerning the company and the applicants from its own investigations dating back to 2017. They say that it is not apparent that the liquidator has sought access to that material by co-operation of the DCT as an interim measure to address its prejudice on limitation periods.

86    Third, they say that the liquidator has already issued recovery proceedings against the majority of the applicants and others in proceedings VID 1217/2025 (the recovery proceeding).

87    Now before descending into the detail, let me say at the outset that in my opinion the applicants have not established that substantial injustice would result if leave were refused.

88    The applicants’ argument about substantial injustice is limited to having been shut out from pressing the setting aside application, an application which is said to have merit. They say that declining leave to appeal would work a substantial injustice to the applicants by preventing any hearing of the application on the merits. But in my view, the applicants’ setting aside application has no merit. So a grant of leave to appeal would be an exercise in futility (see also my discussion at [181] below). But in order to discuss that point I first need to set out some further facts and then discuss some law.

Some further facts

89    Let me delve into some of the background.

90    The company is part of a corporate group that conducted a family-owned and operated property development business, which was established by Raymond Elzain and in which several of his adult children worked. One of them, Anthony Elzain, was the company’s sole director until 20 May 2022. Mr Dimitrios Diakou has been the sole director and secretary of the company since that time.

91    Another company in the group is the eleventh defendant, Maxcon Constructions Pty. Ltd., of which Anthony Elzain was the sole director. All the shares in the company and Maxcon Constructions are held by Elzain Pty. Ltd., which is the trustee of the Elzain Family Trust of which Raymond Elzain, his wife and children are beneficiaries.

92    On 13 April 2015, the company entered into a contract with Spencer 420 (Vic) Pty. Ltd. for the development of a property at 420-434 Spencer Street, West Melbourne. That contract provided that the company would provide or procure the provision of management, facilitation and funding services to the developer and, in consideration for providing the services, be paid a fee equal to half the profit from the development of the property. The contract provided that the company would lend Spencer 420 the sum of $27 million.

93    On 29 June 2015, the company entered a further contract for the development of the Spencer St property with Seraphim Group Pte Ltd, a Singaporean company. Seraphim had been incorporated only two weeks earlier, with Edward Elzain as a director and its sole shareholder. The Spencer subcontract provided that Seraphim would provide funding, facilitation and management services to the company, almost all of which were the same as those the company was to provide under the Spencer contract, in consideration for which the company would pay Seraphim an initial non-refundable fee of $8,500,000 and a fee equal to 90% of any profit it received from the development of the property.

94    Seraphim did not provide any services to the company under the Spencer subcontract. But between 3 August 2015 and 17 September 2019, the company made eight payments to Seraphim:

95    In its 2015 and 2018 tax returns, the company claimed the amounts of the payments as expense deductions being $8,500,000 in 2015 and $22,099,755 in 2018.

96    Between May 2017 and December 2020, the ATO undertook a review and audit of the company’s taxation affairs.

97    Following the review, the ATO concluded there was no evidence that Seraphim had provided services under the Spencer subcontract and that the deductions that the company claimed for the payments to Seraphim should be disallowed. As a consequence the following occurred.

98    On 30 October 2020, the ATO issued a position paper explaining its position for disallowing the deduction of the payment to Seraphim of $8,500,000, that it would amend the company’s 2015 tax return and that the same reasoning would apply for the deductibility of the expenditure in the 2018 income year.

99    On 11 December 2020, the DCT issued an amended notice of assessment, disallowing deductions of $8,500,000 that the company had claimed in the 2015 income year.

100    On 10 December 2021, the ATO issued a further position paper, explaining its position for disallowing the deduction of the payments to Seraphim totalling $22,099,755 and its proposal to amend the company’s 2018 tax return.

101    On 18 March 2022, the DCT issued an amended notice of assessment, disallowing deductions totalling $22,099,755 that the company had claimed in the 2018 income year.

102    In the meantime, whilst the ATO’s review was on foot, the company made payments to Elzain Pty. Ltd., which were recorded in its financial statements as dividends, as follows: $10,966,837 on 17 January 2020 and $929,000 on 28 May 2021. These totalled $11,895,837. As from 17 January 2020, when the first dividend payment was made, it was said that the company was insolvent or became insolvent by reason of that payment.

103    Between January 2022 and October 2022, Seraphim made payments to members of the Elzain family, as follows:

104    These payments were said to have been made by Seraphim predominantly from funds paid under the payments made by the company to Seraphim or their traceable proceeds. Some of the recipients are applicants/examinees in the matter before me.

105    The ATO assessments have treated these payments as taxable, to which the recipients have lodged their objections.

106    The examinees say that in the examinations they will be exposed to questions concerning these payments.

107    After the amended assessments were raised, the company ceased trading. According to the limited records that the liquidator has, at that time its assets consisted of about $70,000 held in a bank account and liabilities consisted of the amounts payable under the amended assessments and other liabilities of about $70,000.

108    On the application of the DCT, the company was wound up for failure to pay its tax liabilities under amended assessment notices issued after a review and audit into its tax affairs. Mr Yeo was appointed its liquidator (proceeding VID 585/2024).

109    The DCT has submitted a proof of debt for $24,175,869 in the company’s liquidation, which the liquidator has admitted for voting purposes.

110    On 20 December 2023, the ATO made assessments and amended assessments of the income tax liabilities of various examinees, namely, Raymond Elzain, Edward Elzain, Anthony Elzain, Carol Elzain and Joanne Elzain. The assessments and amended assessments issued to the examinees were based on payments that Seraphim made to them. At about the same time, the DCT commenced a proceeding being VID 1082/2023 against the examinees seeking ex parte freezing orders. The Court granted the freezing orders.

111    In February 2024, the examinees lodged objections against the assessments. The objections have yet to be determined.

112    In December 2024, the DCT obtained summary judgment against some of the examinees being Raymond Elzain, Anthony Elzain, Joanne Elzain, and Carol Elzain for the amounts of the assessments issued respectively to them.

113    Mr Diakou, the company’s sole director as I have said, has provided only limited records of the company to the liquidator. His predecessor, Anthony Elzain has provided none. So, only limited records have been provided to the liquidator and those that have been provided are either incomplete or require corroboration.

114    Despite the liquidator’s requests to Mr Diakou and Anthony Elzain, further information and documents have not been forthcoming.

115    On 13 February 2025, the liquidator made a non-party access request to the Court, seeking access to documents filed in proceeding VID 1082/2023. The documents that the Court released to the liquidator included a redacted version of an affidavit made by Dung Dinh on 18 December 2023. It would seem that the DCT relied on this affidavit in support of the application for freezing orders.

116    Accordingly, the liquidator applied for the issue of examination summonses and for orders for production of documents about the company’s examinable affairs. The Court has issued the summonses and made the production orders.

117    In the recovery proceeding, the company and the liquidator are seeking to recover the payments that the company made to Seraphim and the payments Seraphim made to the various examinees, including on the bases that the payments are voidable in the company’s liquidation or were paid in breach of duty.

118    When he applied for the issue of the examination summons, the liquidator knew of the matters set out above, save that he did not know at that time of any of the details of the objections or on what basis they had been made or that the objections had not yet been determined.

119    In the recovery proceeding, the liquidator and the company sue to recover payments totalling $30.599 million that the company paid to Seraphim between 2016 and 2019.

120    The payments made to Seraphim were the subject of an audit and review undertaken by the ATO, which disallowed tax deductions the company had claimed for them because there was no evidence that Seraphim had provided services to the company. The audit also revealed that during 2022, Seraphim made payments totalling $31,992,946 to members of the family associated with the company.

121    Whilst those proceedings were concerned with the income tax consequences of the payments, the recovery proceeding is concerned with recovery of the money the company paid to Seraphim and which ultimately found its way into the hands of the family members.

122    The harm suffered by the company comprises its loss of the payments to Seraphim totalling $30,599,755 and the “dividend” payments totalling $11,895,837, its loss of the use of that money, and the fact that it has been wound up including all the fees, costs and expenses thereof. The liquidator sues in his capacity as liquidator of the company.

123    The legal grounds for the relief sought by the plaintiffs include the following matters.

124    It is said that the payments to Seraphim and the “dividend” payments were made in breach of Anthony Elzain’s statutory and fiduciary duties as a director of the company.

125    Further, it is said that each of Raymond Elzain, Edward Elzain, Joanne Elzain and Caroline Elzain, Seraphim and Elzain Pty. Ltd. was involved in Anthony Elzain’s breaches of duty. Further, it is said that each of them, Anthony Elzain, Maxcon Constructions and others received the respective payments with knowledge or notice that they comprised funds that had been paid in breach of Anthony Elzain’s duties to the company.

126    Further, it is said that the Spencer subcontract, Seraphim payments and family payments together constituted a transaction of the company in that they comprised a composite of dealings or a course of conduct undertaken to reduce the company’s liability to pay tax on income from the development of the Spencer Street property and direct or divert that money to or for the benefit of members of the Elzain family.

127    Further, it is said that the family enrichment transaction that I have just described was: (a) an unreasonable director-related transaction of the company within the meaning of s 588FDA of the Corporations Act and is voidable under s 588FE(6A); (b) an uncommercial transaction of the company within the meaning of s 588FB and an insolvent transaction of the company within the meaning of s 588FC, and is voidable under s 588FE(4); and (c) an insolvent transaction of the company to which the company became a party for the purpose of defeating or interfering with the rights of its creditors on a winding up and is voidable under s 588FE(5).

128    Further, it is said that the family enrichment transaction, alternatively each of the payments to Seraphim and each of the family payments, was an alienation of property of the company made with the intent to defraud creditors of the company and is voidable under s 172 of the Property Law Act 1958 (Vic).

129    Further, it is said that each of the “dividend” payments was: (a) an unreasonable director-related transaction of the company that is voidable under s 588FE(6A); (b) an uncommercial transaction and an insolvent transaction to which a related entity of the company was party, that is voidable under s 588FE(4); (c) an insolvent transaction of the company to which the company became a party for the purpose of defeating or interfering with the rights of its creditors on a winding up that is voidable under s 588FE(5); and (d) an alienation of property of the company made with the intent to defraud creditors of the company that is voidable under the said s 172.

Some statutory provisions and principles

130    Division 1 of Pt 5.9 of the Corporations Act makes provision for the compulsory examination of a person before the Court about the “examinable affairs” of a corporation in “external administration”.

131    Section 596A, which is headed “Mandatory examination”, relevantly provides:

    The Court is to summon a person for examination about a corporation’s examinable affairs if:

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

(b)    the Court is satisfied that the person is an officer or provisional liquidator of the corporation or was such an officer or provisional liquidator during or after the 2 years ending:

…

(iii)    if the corporation is being, or has been, wound up — when the winding up began; or

…

132    Section 596B, which is headed “Discretionary examination”, provides:

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

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

(b)    the Court is satisfied that the person:

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

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

(2)    This section has effect subject to section 596A.

133    There is a difference between s 596A and s 596B. Section 596A imposes a duty on the Court to make an order summoning a person for examination if the Court is satisfied that the person is, or was during a specified period, an “officer” or “provisional liquidator” of the corporation. Contrastingly, s 596B confers a discretion on the Court to make an order summoning a person for examination. The discretion arises if the Court is satisfied either that the person “has taken part or been concerned in examinable affairs of the corporation and has been, or may have been, guilty of misconduct in relation to the corporation” or the person “may be able to give information about examinable affairs of the corporation”. A liquidator of the corporation is an “eligible applicant” (s 9).

134    The phrase “examinable affairs” in relation to a corporation is defined (s 9) to mean:

(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 section 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 paragraph (a) or (b):

(i)    a body corporate that is, or has been, related to the corporation;

(ii)    an entity that is, or has been, connected with the corporation.

135    The expression “examinable affairs” is of very broad amplitude. As is apparent from par (c) of the definition, that term includes the business affairs of entities and persons connected with a corporation. Section 53 provides an extended meaning of “affairs” for the purposes of the definition of “examinable affairs” and, as a result, extends what may constitute the “examinable affairs” of a corporation.

136    A liquidator can properly apply for an examination when it will increase or protect the assets available in the winding up even if it will incidentally assist a creditor to pursue the creditor’s own interests and that creditor funds the liquidator's examinations.

137    An examination to determine whether the corporation would be likely to succeed in litigation against its officers, auditors or third parties is within its “examinable affairs”. Such an examination would assist an eligible applicant in identifying a chose in action which is an asset of the corporation. Likewise, an examination to determine whether any chose in action will be ultimately recoverable from any party or the party’s insurer is within the contemplation of the section. Indeed, such an examination may be of a person against whom litigation is contemplated or even pending.

138    A liquidator is not limited to ascertaining whether there is a good cause of action and its prospects of success, but may have as a purpose the intention of advancing the case against the examinee, provided the examinations do not fall within one of the categories of abuse of process or improper purpose.

139    In Walton v ACN 004 410 833 Ltd (formerly Arrium Limited) (in liquidation) (2022) 275 CLR 508, the majority held that it was not an abuse for shareholders of a company in liquidation, who had obtained “eligible applicant” status from ASIC, to examine the company’s former director and auditor for the predominant purpose of investigating and pursuing in their capacity as shareholders a personal claim against directors of the company or against its auditors.

140    A summons to a person under s 596A or s 596B is to require the person “to attend before the Court” at a specified place and time on a specified day “to be examined on oath or affirmation about the corporation’s examinable affairs” (s 596D(1)). A summons may also require the person to produce at the examination specified books that (a) are in the person’s possession and (b) relate to the corporation or to any of its examinable affairs (s 596D(2)).

141    Considerable powers are given to the Court on the return of the summons for examination to regulate under ss 596F and 597 how the examinations are to be conducted and the documents to be produced. The Court controls the conduct of the examination. It may give directions about the matters to be inquired into and the procedure to be followed at the examination (s 596F(1)). It may put or allow to be put to a person being examined “such questions about the corporation or any of its examinable affairs as the court thinks appropriate” (s 597(5B)). It 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” (s 597(9)). It may order the questions put to a person and answers given at an examination be recorded in writing and may require the person to sign the written record (s 597(13)). Subject to s 597(12A), any written record of an examination so signed by a person, or any transcript of an examination of a person that is authenticated as provided by the rules, “may be used in evidence in any legal proceedings against the person” (s 597(14)). Further, an examination is to be held in public “except to such extent (if any) as the Court considers that, by reason of special circumstances, it is desirable to hold the examination in private” (s 597(4)).

142    Let me turn to making some observations concerning abuse of process.

143    There is no doubt that examination summonses may be set aside when an attempt to invoke the public examination process under the Act amounts to an abuse of process. It will constitute an abuse of process where an applicant for an examination summons has a predominant purpose foreign to that which the legislature intended. The onus of establishing an abuse of process is on the applicant.

144    In Evans v Wainter Pty. Ltd (2005) 145 FCR 176 at [252], Lander J identified ten propositions, which were said to be relevant to any abuse of process question. Given the later authority of Walton v Arrium I would only seek to mention point 3 in this context which was in the following terms:

    …

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.

…

145    The five matters identified in point 3 are non-exhaustive examples of legitimate purposes as Edelman and Steward JJ said in Walton v Arrium at [185] and [186].

146    Walton v Arrium involved an application by shareholders of a company in liquidation for orders that a former director of the company appear for examination and produce documents and that the company’s auditor and a corporate advisor produce documents. The purpose of the examination was to investigate the merits of a potential class action by shareholders. The shareholders obtained “eligible applicant” status through an authorisation from ASIC (see s 9 definition, limb (e))..

147    Gageler J said (at [118]) that:

there was not under Pt 5.9 of the Corporations Law any requirement for an examination sought by an eligible applicant to be for the purpose of benefiting the corporation or the general body of creditors or contributories. Nor can that, or any other, purposive requirement be discerned in the text or structure of Pt 5.9 of the Corporations Act.

148    His Honour explained (at [125]) that the legitimacy of any purpose to which the examination process might be put “may well lie in the nature and quality of the connection between the purpose and the examinable affairs of the corporation that is in external administration”.

149    Gageler J went on to say (at [126]):

Suffice it for the purpose of the present case to conclude that the appellants did not seek to examine the third respondent for a purpose foreign to the nature of the process of compulsory examination for which Pt 5.9 of the Corporations Act provides by reason only that the result which the appellants intended to achieve would bring no commercial or demonstrable benefit to the first respondent or its creditors. The appellants' ultimate purpose of enabling evidence and information to be obtained to support the bringing of proceedings against officers and other persons in connection with the examinable affairs of the first respondent was not illegitimate.

150    Edelman and Steward JJ considered (at [169]) that:

The statutory history, context, and terms of s 596A, set out above, demonstrate that a characterisation of the purpose of s 596A at a higher level of generality than its terms should not be curtailed by “muffled echoes of old arguments” concerning its predecessors. In particular, the purpose of s 596A cannot be confined by reference to benefit to the company, its creditors, or its contributories. As the scope of application of s 596A expanded, so did its underlying purpose and concern. That expanded concern is with the administration or enforcement of the law concerning the public dealings of the corporation in external administration and its officers. The only vestige that remains of the old approaches to purpose that might have confined the predecessors to s 596A is the public aspect of the purpose of the power.

[footnote omitted]

151    So, they explained (at [170]):

… A summons for examination will not be an abuse of process unless the predominant purpose of the examination would contradict or stultify – in some way – this public interest in the external administration of a company.

152    And they said that (at [175]):

Legitimate purposes under s 596A therefore include the enforcement of the Corporations Act, the promotion of compliance with that Act, and the protection of shareholders or creditors from corporate misconduct. An examination conducted for a purpose that included investigating the possible existence of misconduct on the part of a company’s officers might be expected to serve the public interest in ways such as these. Hence, regardless of whatever ultimate purpose a litigant might have, a summons that is sought for a substantial purpose that includes the public purpose of enforcement of the Corporations Act, whether by ASIC or another eligible applicant, is not a summons sought for a purpose foreign to s 596A in the sense that it is inconsistent with the purposes of s 596A.

153    Further, they emphasised (at [191]) that:

It should also be emphasised that setting aside a summons for an improper purpose would be, in the usual case, inapt where the threat of abuse is capable of being addressed by the court in other ways. In the case of a summons issued pursuant to s 596A, the integrity of any examination should be capable of protection by the court through the making of appropriate directions and by the controlling of what questions might be asked. It would only be when these alternatives were unable adequately to address the threat of an abuse of process that a more “draconian” remedy might be appropriate, such as the setting aside of the summons. Even then, the setting aside of a summons on the grounds that it is an abuse of process should be a measure of “last resort”; such a remedy must be reserved for only the most exceptional or extreme cases.

[footnotes omitted]

154    None of the foregoing is to say that there may not be instances where an examination is an abuse of process. Examples of an abuse of process may be examinations brought for the purpose of rehearsing the cross-examination of a potentially hostile witness in pending litigation, to cross-examine a person to destroy credit, or to obtain de facto discovery when an order for discovery has been refused. It may be said that in such cases the applicant is seeking an illegitimate and collateral forensic advantage that is not otherwise available by ordinary pre-trial processes.

Analysis

155    I agree with the liquidator that none of the bases on which the applicants rely can sustain the relief the applicants seek.

156    Slightly adjusting what Edelman and Steward JJ said in Walton v Arrium, the concept of abuse of process covers various classes of cases including, first, the case where the Court’s processes are being used or invoked for a predominantly improper or collateral purpose, second, where the Court’s processes are being used or invoked in a manner that is unfairly or disproportionately oppressive on one of the parties and, third, where the Court’s processes are being used or invoked in a manner directly or indirectly inconsistent with or amounts to an interference with the proper administration of process. There are no bright lines between these categories, although each category does to some extent have its own independent sphere of operation.

157    The applicants’ arguments before me would appear to best fit into the first and second classes, although they lack merit under either class. As to the first class, there is no probative evidence that the liquidator had such an improper purpose, whether one looks at his immediate purpose which is the most relevant, or his ultimate purpose. Indeed, the evidence is to the opposite effect. As to the second class, there is no evidence of this either.

158    Let me make some other general points.

159    Insofar as the examinations are concerned, it is neither here nor there that the applicants are in dispute with the DCT. The liquidator has an independent duty and entitlement to examine the applicants on the company’s affairs. Moreover, this extends beyond the matters in dispute with the DCT. Further, even if there is an overlap, it is quite permissible for the liquidator to inquire into matters concerning any debt or obligation concerning the DCT. Whether the liquidator can provide the fruits of his examinations to a creditor such as the DCT is quite another matter. Such fruits and how they can be used may be regulated under s 596F or s 597. But I am not at this point concerned with that latter question.

160    Now it is correct that the liquidator is being funded by the DCT. And as he has explained:

However, [in] my experience as a liquidator, it is not unusual for the major creditor in a liquidation to provide funding to a liquidator; in fact, that is typically the case, since the major creditor stands to gain the most from the liquidation. However, none of that means the public examinations have been commenced “to further the determination of the Objections rather than for any independent insolvency purpose”. Whatever the Commissioner’s reasons for providing the funding, the “Assessments”, the “Objections” and applicants’ personal tax affairs have no bearing on my duty as the Company’s liquidator to investigate its affairs and pursue claims and make recoveries that to meeting the claims of the Company’s creditors.

161    But the suggestion that the liquidator can or will use the examination process as a “dry run” concerning obtaining evidence relevant to an objection process and ongoing litigation cannot be sustained. First, it misstates the liquidator’s function and conflates him with the DCT. Second, the liquidator is not involved in the objection process. Third, there is no factual basis for asserting the “dry run” that the applicants describe. And ultimately, the Court can control any examination to prevent or ameliorate injustice or unfairness.

162    Let me descend into some of the detail.

163    The first basis asserted is that the examinations constitute a parallel evidentiary process, where the parallel process is presumably said to be the objections. But these have yet to be determined. Further, the premise to this basis, namely, that the summonses relate to the subject matter of the objections has not been established by the evidence. Without the assessments, which the liquidator has not seen, or the objections about which the liquidator does not know any details, the premise cannot be accepted. And without the premise, the first basis falls away.

164    But even if the applicants could establish the premise, an overlap between or a factual field that mirrors the subject matter of the examinations and the objections does not provide a basis to set aside the summonses.

165    First, it is implausible to suggest that there is or could be a total overlap or mirroring between the objections and the subject-matter of the examinations. The liquidator has explained why he applied to commence the examinations. Specifically, he has said in evidence:

(a)     only limited records of the Company have been provided to me;

(b)    those records are either incomplete or require corroboration;

(c)    despite my requests to Mr Diakou and Anthony Elzain, further information and documents have not been forthcoming; and

(d)    I need further information and documents to perform my functions as the Company’s liquidator, including:

(i)    to investigate the reasons for and circumstances leading to the Company’s failure;

(ii)    to identify the assets of the Company available for distribution to its creditors;

(iii)    to assess the claims that are the subject of the recovery proceeding;

(iv)    to identify transactions involving the Company or its assets, including transactions that may be voidable in its liquidation and a source of potential recoveries for the benefit of creditors; and

(v)    to investigate the existence of other claims or causes of action that may provide recoveries for the benefit of creditors.

166    Now the topics that he has identified in subparagraph (d) are broad. It cannot be seriously suggested that there is a total overlap between such topics and the objections, leaving nothing else to be examined. Clearly there is not a perfect overlap between the subject-matter of the objections and the reasons for and circumstances of the company’s failure or between the objections and other voidable transactions or other claims or causes of action, including any not involving the various examinees, that may provide recoveries.

167    Second, the assessments and objections concern the personal tax affairs of the various examinees, not those of the company. So, in and of themselves the assessments and the objections are not directly relevant to the company, the liquidator or the examinations. But even if the examinations do canvass some or all of the factual field relevant to the assessments or the objections, that does not mean that the examinations should not be conducted.

168    Further, as to the suggestion that the examinations have been brought as a parallel evidentiary process to further the determination of the objections rather than for any independent insolvency purpose, the liquidator has cogently explained why he applied to commence the examinations and why the assessments and the objections are not relevant.

169    Further, the applicants’ position suffers from the further vice of conflating the role and interests of the DCT as a creditor qua the company and as a creditor qua the examinees. The DCT is a creditor of the company and the various examinees, but that is the consequence of the DCT’s particular role under Commonwealth income tax legislation. Further, the DCT’s capacity as a creditor of the company arises from a different basis from the DCT’s capacity as a creditor of the examinees.

170    Further, the fact that an examination may incidentally assist a creditor to pursue its own interests and that the creditor funds the examinations does not make the examinations improper or illegitimate. It is not unusual for the major creditor in a liquidation to provide funding to a liquidator, particularly given that the major creditor usually stands to gain the most from a liquidation.

171    There is no merit in the applicants’ first basis.

172    The second basis asserted by the applicants is said to arise from the expectation that proceedings under Pt IVC of the Taxation Administration Act 1953 (Cth) will be commenced once the objections are determined. But those proceedings can only be understood as the review proceedings that the examinees will or are likely to commence if the objections are not determined in their favour. But the review proceedings have not been commenced and may never be commenced. Further, the fact of other litigation is no impediment to the conduct of examinations, particularly when the other litigation is hypothetical.

173    Now it has been suggested that giving evidence in the examinations would materially prejudice the conduct of the expected review proceedings. But why this is the case has not been explained. Further, the assessments and the objections concern the personal tax affairs of the examinees, not the company.

174    There is no merit in the second basis.

175    The third basis asserted by the applicants is that the documents sought under the summonses have to a large extent been produced through the objections and the company’s tax audit, such that requiring their production is said to be duplicative and oppressive.

176    But whatever documents were provided through the objections or the tax audit, they are in the possession of the DCT. The liquidator does not have access to them. Indeed, he had to make a non-party access request to the Court for access to the documents filed in VID 1082/2023 and even went so far as to issue a freedom of information request to the ATO for documents. This was withdrawn after receiving notice of the ATO’s intention to refuse it. Further, one of the liquidator’s reasons for conducting the examinations is to obtain the information and documents he needs to perform his functions as the liquidator.

177    There is no merit in the third basis.

178    The fourth basis asserted by the applicants is that the examinations would cause reputational and procedural harm that is disproportionate to any benefit to the liquidation. But the applicants have not identified the reputational and procedural harm relevant to the fourth basis, who would suffer it, or how it would be disproportionate to the benefits that the examinations will produce for the liquidation. Moreover, if genuine issues of reputational or procedural harm arise during the examinations, they can be addressed by appropriate orders or directions under ss 596F and 597.

179    There is no merit in the fourth basis.

180    In summary, either singularly or collectively, none of the bases on which the applicants rely is sufficient to support a contention that the examinations are an improper use of the Court’s processes or an abuse of process.

181    Now there is one last point that I would make concerning the second limb of the leave to appeal test. Normally the question of substantial prejudice is predicated on the assumption that her Honour’s decision is wrong, and the question is whether substantial prejudice would arise if it was left to stand. But if her Honour’s decision was wrong, that is, she proceeded without procedural fairness, then should I be getting into the merits of the setting aside application at all? After all there has been no hearing on that question if procedural fairness was denied. I think the answer is that if, as I have determined, the setting aside application lacked merit, then I am entitled to avoid an exercise in futility by also invoking the second limb to refuse leave to appeal.

Other matters

182    Given that I have determined to refuse leave to appeal, the foundation for any stay sought by the applicants of order 1(g) of the Judicial Registrar’s order made on 13 April 2026 in proceeding VID 1397/2025 falls away. I need not discuss that further.

183    Further and relatedly, given that I have determined to refuse leave to appeal, again the foundation for the review sought by the applicants in their interlocutory process dated 15 June 2026 in proceeding VID 1397/2025 concerning the Judicial Registrar’s decision made on 11 June 2026 falls away. I will simply dismiss that interlocutory process with costs, to the extent that there are any additional party/party costs incurred by the liquidator beyond the liquidator’s costs concerning the leave to appeal application which I have awarded to the liquidator.

Conclusion

184    For the foregoing reasons, I refuse to grant leave to appeal. I will make the necessary orders to accord with these reasons.

Associate:

Dated:    10 July 2026    

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