Case: Grosvenor Hill (Qld) Pty Ltd v Barber (1994) 48 FCR 301
Outcome: cited
A broad view of "examinable affairs" was adopted by the Full Federal Court in Grosvenor Hill (Qld) Pty Ltd v Barber (1994) 48 FCR 301. In that case the challenged orders had been made under s 596B and had required a valuer employed by Grosvenor Hill to be examined to determine whether the liquidators of a second company, Interchase Corporation Ltd (In Liq), had a good cause of action for damages against Grosvenor Hill in respect of valuation advice which the individuals had provided. In holding that the inquiry was within the examinable affairs of Interchase, their Honours said (at 305 - 306): 'In accordance with the settled course of authority ... information with respect to the probability or otherwise of success in litigation contemplated by the corporation would be information with respect to the "examinable affairs" of the corporation in question. This information would be "relevant", that is to say, it would bear upon or be connected with, the question whether the corporation possessed a cause of action, that is, a chose in action, as its property. It is not, and could not be, seriously disputed that an inquiry as to the existence, and value, of any property that the corporation may possess would be a "relevant" inquiry for the purposes of s 597(9).' The "examinable affairs" in that case were those of the company which was the subject of a winding up order albeit it was an officer of another company that was to be examined about them. The Court also referred to the special position of the liquidator as an officer of the Court under a duty and responsibility to get in and maximise the assets of the company for distribution for the benefit of the creditors. The limited knowledge of the company's assets and business affairs possessed by a liquidator had been recognised by the legislature in the enactment of the examination provisions of the Corporations Law and its predecessors. 70 The Full Court said that the language of s 597B, having regard to the definition of "examinable affairs" in s 9, had a broader operation than its statutory ancestor, s 115 of the Companies Act 1862 (UK) (at 308 - 309): 'The fact that the examination of a person under s 596B of the Law is not a proceeding inter partes is a circumstance in favour of a broad and generous construction of the section having regard to its statutory purpose, subject to the power of the Court not to allow the provision to be used oppressively to the private interests of the examinee.' The Court also held that the power could be used to order the production of relevant documents including insurance policies to ascertain whether or not the person against whom action might be taken by the liquidator had an enforceable right to indemnity from an insurer or other person (at 311): 'Realisation of the chose in action is an "examinable affair" within the meaning of ss 596B(1)(6)(ii) and 9 of the Law. Any policy of professional indemnity insurance containing the terms of the indemnity, including any exclusions and excesses and the amount of cover is, we think, a document "relevant to matters to which the examination relates or will relate" (s 597(9) of the Law)."