mdroth/huggingface-course_section-5_zst huggingface dataset:
Case: Re Csidei; Ex parte Andrew (1979) 39 FLR 387
Outcome: cited
The connection between examination under bankruptcy and winding up laws has been recognised over more than 125 years that have passed since Jessell MR made his comments. The position historically is no different in Australia. As Lockhart J said in Re Csidei; Ex parte Andrew (1979) 39 FLR 387 at 390: '... the process of examining persons in the winding up of companies has been borrowed from the law of bankruptcy and the purpose of the inquisitorial powers conferred by bankruptcy and company legislation is much the same.'
Case: Ex parte Barnes (1896) AC 146
Outcome: cited
Section 8 of the Companies (Winding Up) Act 1890 (UK) provided for the examination by the court of promoters, officers and other persons who had past connections with the company following upon a report to the court by the official receiver. Unlike s 115 of the 1862 Act, which remained in force, s 8 provided for public examinations: See Ex parte Barnes (1896) AC 146. Its introduction in England in 1890 is described in McPherson as "... part of the general policy in England at the time assimilating liquidations with bankruptcy" (at 15-500). The Australian colonies prior to federation enacted companies statutes based on the Companies Act 1862 (UK). 49 In the first half of the twentieth century the laws of the United Kingdom relating to companies were reviewed at 20 year intervals by a Departmental Committee appointed by the Board of Trade. This resulted in consolidations of the Companies Act in 1908, 1929 and 1948: Gower Principles of Modern Company Law (6 th edition, Sweet &amp; Maxwell, 1997) at 48-49. Although the Companies Acts of the Australian States were based on the UK models differences developed over time between them. The inconveniences caused by these differences led to the development, by agreement between the States and the Commonwealth, of a Uniform Companies Bill based on the Companies Act 1958 (Vic). In 1961 and 1962 the States each passed a Companies Act based on the Bill. The Commonwealth made Companies Ordinances in like terms for the Australian Capital Territory, the Northern Territory and what was the then Territory of Papua New Guinea: Fords Principles of Corporations Law (12 th Edition, Butterworths, 2005) at [2-170], see also Ford HAJ, Principles of Company Law (Butterworths, 1974) at [111]. 50 The powers of examination of persons in connection with the court ordered winding up of companies were found in ss 249 and 250 of the Companies Act 1961 . The two sections were located in Div 2 of Pt 10 entitled "Winding up by the Court". They were based on ss 268 and 270 of the Companies Act 1948 (UK). Section 249 conferred power on the court to "summon before it any officer of the company or person known or suspected to have in his possession any property of the company or supposed to be indebted to the company, or any person whom the court deems capable of giving information concerning the promotion, formation, trade dealings, affairs or property of the company" (s 249(1)). Such an examination could be held, if the court so directed, before a magistrate (s 249(4)). The section was silent on whether such examinations were to be held in public. Section 250 conferred power on the court to order a public examination of persons or officers of the company where the liquidator had made a report to the court alleging the commission of a fraud or the concealment of any material fact by a promoter or officer of the company.
Case: Re Rolls Razor Ltd [1968] 3 All ER 698
Outcome: cited
The purpose of s 268 of the Companies Act 1948 (UK) on which s 249 was based was described by Buckley J in Re Rolls Razor Ltd [1968] 3 All ER 698 thus (at 700): 'The powers conferred by s 268 are powers directed to enabling the court to help a liquidator to discover the truth of the circumstances connected with the affairs of the company, information of trading, dealings and so forth, in order that the liquidator may be able, as effectively as possible and I think, with as little expense as possible and with as much expedition as possible, to complete his function as liquidator, to put the affairs of the company in order and to carry out the liquidation in all its various aspects, including of course the getting in of any assets of the company available in the liquidation.' 52 There has been debate in Australian and English authorities about whether the examination power permits "fishing" questions: See: Keay AR, " Gone Fishing!" Is it Legitimate in an Examination Under Section 597 of the Corporations Law? 1991, 9 C &amp; SLJ 70. The authorities and the issues discussed in that article revolved around the difficulties facing liquidators trying to obtain information about the affairs of a company in often chaotic circumstances following its winding up. 53 A broader power of examination was introduced into the Companies Act 1961 by the Companies Act Amendment Act 1969 (WA) which enacted s 367A. That section provided, in subs (1): 'Where it appears to the Attorney General that any officer or former officer of a company to which this section applies has conducted himself in such a way that the officer or former officer has rendered himself liable to action by the company in relation to the performance of his duties as an officer of the company, the Attorney General, or any person who is authorised in that behalf by the Attorney General, may apply ex parte to the Court for an order that the officer or former officer shall attend before the Court on a day to be appointed by the Court to be examined as to his conduct and dealings as an officer of the company.' (emphasis added) Section 367A(2) provided that any examination under that section should not be held in open court unless the court otherwise ordered. The range of companies encompassed by the term "a company to which this section applies" in s 367A was limited by s 367C(1) to companies which were in the course of being wound up or were under official management, companies in respect of which an inspector had been appointed and companies in respect of which a receiver and manager had been appointed either by the court or under an instrument. It also extended to any company which had ceased to carry on business or was unable to pay its debts.
Case: Hamilton v Oades [1989] HCA 21 ; (1989) 166 CLR 486
Outcome: cited
The operation of s 541 was discussed by the High Court in Hamilton v Oades [1989] HCA 21 ; (1989) 166 CLR 486 in the context of its effect upon the privilege of self incrimination. Mason CJ, in the leading majority judgment, described the section as creating "a system of discovery". It gave to the liquidator rights not possessed by an ordinary litigant. The Chief Justice quoted with approval from the judgment of Street J in Re Hugh J Roberts Pty Ltd (1970) 91 WN (NSW) 537 at 541 when he said that it must be accepted that the section applies equally to proceedings which a liquidator: '.. might be able to bring, proceedings he contemplates bringing, proceedings he has decided to bring, and proceedings he has already brought." See also: Rothwells Ltd (No 2) (1989) 7 ACLC 576 at 588 (Nicholson J) in which authorities relevant to the scope of the inquiry which may be undertaken under compulsory examination were collected. In that judgment Nicholson J acknowledged a difference of approach between Australian and English authorities the latter holding, as a general rule, that a liquidator could not undertake such an examination when a firm decision had been taken to commence proceedings to which the proposed examination was relevant. The Australian approach to that point merely required the court to treat the liquidator's application with greater caution (588).
Case: Re Hugh J Roberts Pty Ltd (1970) 91 WN (NSW) 537
Outcome: cited
The operation of s 541 was discussed by the High Court in Hamilton v Oades [1989] HCA 21 ; (1989) 166 CLR 486 in the context of its effect upon the privilege of self incrimination. Mason CJ, in the leading majority judgment, described the section as creating "a system of discovery". It gave to the liquidator rights not possessed by an ordinary litigant. The Chief Justice quoted with approval from the judgment of Street J in Re Hugh J Roberts Pty Ltd (1970) 91 WN (NSW) 537 at 541 when he said that it must be accepted that the section applies equally to proceedings which a liquidator: '.. might be able to bring, proceedings he contemplates bringing, proceedings he has decided to bring, and proceedings he has already brought." See also: Rothwells Ltd (No 2) (1989) 7 ACLC 576 at 588 (Nicholson J) in which authorities relevant to the scope of the inquiry which may be undertaken under compulsory examination were collected. In that judgment Nicholson J acknowledged a difference of approach between Australian and English authorities the latter holding, as a general rule, that a liquidator could not undertake such an examination when a firm decision had been taken to commence proceedings to which the proposed examination was relevant. The Australian approach to that point merely required the court to treat the liquidator's application with greater caution (588).
Case: Rothwells Ltd (No 2) (1989) 7 ACLC 576
Outcome: cited
The operation of s 541 was discussed by the High Court in Hamilton v Oades [1989] HCA 21 ; (1989) 166 CLR 486 in the context of its effect upon the privilege of self incrimination. Mason CJ, in the leading majority judgment, described the section as creating "a system of discovery". It gave to the liquidator rights not possessed by an ordinary litigant. The Chief Justice quoted with approval from the judgment of Street J in Re Hugh J Roberts Pty Ltd (1970) 91 WN (NSW) 537 at 541 when he said that it must be accepted that the section applies equally to proceedings which a liquidator: '.. might be able to bring, proceedings he contemplates bringing, proceedings he has decided to bring, and proceedings he has already brought." See also: Rothwells Ltd (No 2) (1989) 7 ACLC 576 at 588 (Nicholson J) in which authorities relevant to the scope of the inquiry which may be undertaken under compulsory examination were collected. In that judgment Nicholson J acknowledged a difference of approach between Australian and English authorities the latter holding, as a general rule, that a liquidator could not undertake such an examination when a firm decision had been taken to commence proceedings to which the proposed examination was relevant. The Australian approach to that point merely required the court to treat the liquidator's application with greater caution (588).
Case: New South Wales v Commonwealth [1990] HCA 2 ; (1990) 169 CLR 482
Outcome: cited
In 1989 the Commonwealth, in reliance upon the Corporations power in s 51(xx) of the Commonwealth Constitution , passed the Corporations Act 1989 (Cth) imposing a national scheme of corporate regulation. It also established the Australian Securities Commission. However in New South Wales v Commonwealth [1990] HCA 2 ; (1990) 169 CLR 482 the High Court held that the Commonwealth did not have power to make laws about the incorporation of companies. This led to the introduction of the 1991 Cooperative Scheme. The Commonwealth Parliament enacted the Corporations Act 1989 as a law of the Government of the Australian Capital Territory pursuant to s 122 of the Constitution . Each of the States then passed its own Corporations Act applying the Corporations Law set out in the Corporations Act 1989 and the Australian Securities Commission Act 1989 as laws of the State. Each State conferred jurisdiction on the Federal Court "with respect to civil matters arising under the Corporations Law of [the State]". Like jurisdiction was conferred by each State Act on the Supreme Court of the State and the Supreme Court of the Australian Capital Territory. The scheme reflected the more general provisions of the reciprocal Federal and State cross vesting legislation which had been introduced in 1987. It provided a special purpose cross vesting arrangement. It operated from 1 January 1991. 59 Section 597 of the Corporations Act 1989 and the Corporations Law of each State reflected s 541 of the former Companies Codes. As the Explanatory Memorandum for the Corporations Bill 1988 succinctly stated: 'This provision is based on CA s 541. ' The examination power conferred by s 597 was subsequently described as: 'In many respects a conflation of the powers of examination in ss 249, 250 and 367A of the Uniform Companies Act 1961." AR Keay , op cit at 70. Conflation as confusion was the view of the new provisions advanced by Parker G in Liquidator's Examinations (1993) 10 Aust Bar Rev 25. He found it hard to escape the conclusion that most of the changes made in 1981 were accidental (at 29): 'The Explanatory Memoranda betrayed no awareness of the separate origins and purposes of the examination provisions which were being fused together. Not all the changes made to the previous law were identified. No reasons were given for those that were identified.'
Case: New Zealand Steel (Australia) Pty Ltd v Burton (1994) 13 ACSR 610
Outcome: cited
In New Zealand Steel (Australia) Pty Ltd v Burton (1994) 13 ACSR 610 Hayne J, in the Supreme Court of Victoria, quoted and evidently adopted for the purposes of s 596B of the Corporations Law, what Gleeson CJ had said in HongKong Bank v Murphy . His Honour did so in aid of the proposition that (at 616): '... no longer are the examination provisions of the companies legislation to be regarded as restricted to cases in which the company has been wound up and it therefore follows that the provisions are not to be limited to cases in which the examination will be for the purpose of a winding up and the benefit of those interested in that winding up.' In New Zealand Steel the company whose examinable affairs were in issue had a receiver and manager appointed. The question before the court was whether the examination proposed was an abuse of process because it was directed to obtaining a private forensic advantage in pending litigation. 77 Lander J made some observations relevant to the question now before the Court on whether Pt 5.9 is limited in its application to the examinable affairs of corporations under external administration. At one point he said of s 596A (at [84]): 'The corporation may be in administration, subject to a deed of company arrangement, or being wound up. However, that is not essential. ASIC, or a person authorised by ASIC, could apply to summon an examinable officer about the corporation's examinable affairs even where the company is solvent and still trading provided that the person is an examinable officer at the time of the application: s 596A(b)(iv).' That observation was, with respect, obiter as the case before the Court concerned the examinable affairs of a company in liquidation. And later in the reasons for judgment his Honour agreed with the observations of Hayne J in New Zealand Steel , and said (at [245]): 'In my opinion, the procedure in Pt 5.9 of the Law and the Act is to aid persons who have the responsibility of the external administration of the company in carrying out their duties.'
Case: Re Wakim; Ex parte McNally [1999] HCA 27 ; (1999) 198 CLR 511
Outcome: cited
The cross vesting arrangements under the Corporations Law were challenged in Gould v Brown as an element of a challenge to the exercise of the examinations power under ss 596A and 596B by the Federal Court. The High Court divided evenly on the challenge to the cross vesting scheme which was therefore upheld as it had been in the Full Federal Court below. It was, however, only a matter of time before the validity of the cross vesting arrangements would come up again for consideration by the High Court. They did so and were held by a majority in Re Wakim; Ex parte McNally [1999] HCA 27 ; (1999) 198 CLR 511 to be invalid to the extent that the State Corporations Laws purported to confer jurisdiction on the Federal Court. 104 Spinks v Prentice (1998) 87 FCR 89 was one of a group of appeals decided in conjunction with Re Wakim . It was an appeal from the Full Court of the Federal Court with respect to an order for examination of former officers of a company in liquidation. The company was taken to be incorporated in the Australian Capital Territory. The Full Court held that the Corporations Act 1989 (Cth), which applied the Corporations Law to the ACT, validly conferred jurisdiction on the Federal Court to entertain the application for an examination summons. The examination orders were also challenged before the Full Court on the basis that they did not involve an exercise of judicial power. As to that the Court said (at 96): 'It is true that, although there is no challenge to the winding up order made here, s 596A would permit an examination where there has been no winding up. But given the long history of courts exercising such powers, we can see nothing foreign to the exercise of judicial power in this aspect of s 596A.' They referred to the Compass Airlines and Grosvenor Hall cases. It is not clear, given the absence of any long history of judicial examination of corporations at large unrelated to winding up or other judicial procedures, whether their Honours were saying that applications under s 596A when there was no winding up order or pending court proceedings were an exercise of judicial power. To the extent that they were so saying, their observations were dicta.
Case: Flanders v Beatty (1995) 16 ACSR 324
Outcome: cited
Ryan and Crennan JJ generally agreed with Lander J subject to certain expressed qualifications. Lander J did not accept the correctness of the opinions of the Full Court of the Supreme Court of Victoria in Flanders v Beatty (1995) 16 ACSR 324 and the Full Court of the Supreme Court of South Australia in Sandhurst Trustees Ltd v Harvey (2004) 88 SASR 519, that the scope of the examination process had been greatly expanded by the 1992 amendments ([187] and [206]). Ryan and Crennan JJ both held it unnecessary to reflect upon those views for the purpose of dealing with the appeal before them.
Case: Sandhurst Trustees Ltd v Harvey (2004) 88 SASR 519
Outcome: cited
Ryan and Crennan JJ generally agreed with Lander J subject to certain expressed qualifications. Lander J did not accept the correctness of the opinions of the Full Court of the Supreme Court of Victoria in Flanders v Beatty (1995) 16 ACSR 324 and the Full Court of the Supreme Court of South Australia in Sandhurst Trustees Ltd v Harvey (2004) 88 SASR 519, that the scope of the examination process had been greatly expanded by the 1992 amendments ([187] and [206]). Ryan and Crennan JJ both held it unnecessary to reflect upon those views for the purpose of dealing with the appeal before them.
Case: HongKong Bank of Australia Ltd v Australian Securities Commission (1992) 40 FCR 402
Outcome: cited
The Corporations Act makes no express provision for ASIC to authorise a person to make an application under Pt 5.9. Its function in that respect is identified in the definition of "eligible applicant". The function so identified is picked up by the general provisions of s 11(1) of the ASIC Act. The power to do whatever is necessary for the performance of its functions is conferred upon ASIC by s 11(4). Section 11(4) is therefore the source of ASIC's power to authorise a person as an "eligible applicant". That has been so held in respect of analogous provisions of the Corporations Law in three decisions of the Full Court: HongKong Bank of Australia Ltd v Australian Securities Commission (1992) 40 FCR 402; Mercantile Mutual Life Insurance Co Ltd v Australian Securities Commission (1993) 40 FCR 409 and Re Excel; Worthley v England (1994) 52 FCR 69. The Court of Appeal of New South Wales in Burns Philp &amp; Co Ltd v Murphy (1993) 29 NSWLR 723 held that the power was located in the definitional provision of s 597(1) of the Corporations Law, reflected in the definition of "eligible applicant" in s 9 of the Corporations Act . I will, with respect, follow and apply the analysis and conclusions of the Full Court of the Federal Court in the three decisions mentioned. They are helpfully discussed in Zumbo F, Liquidator's Power of Examination under the Corporations Law: The State of Play (1994) 12 C &amp; SLJ 504. The precise location of the statutory power to authorise a person to make application for an examination summons was relevant, in those cases, to the availability of administrative review by the Administrative Appeals Tribunal. The decisions of the Full Court of the Federal Court had the consequence that such review was not available. No such limitation applies in respect of judicial review of the ASIC decision whether under the ADJR Act or the provisions of s 39B(1A) of the Judiciary Act 1903 (Cth).
Case: Mercantile Mutual Life Insurance Co Ltd v Australian Securities Commission (1993) 40 FCR 409
Outcome: cited
The Corporations Act makes no express provision for ASIC to authorise a person to make an application under Pt 5.9. Its function in that respect is identified in the definition of "eligible applicant". The function so identified is picked up by the general provisions of s 11(1) of the ASIC Act. The power to do whatever is necessary for the performance of its functions is conferred upon ASIC by s 11(4). Section 11(4) is therefore the source of ASIC's power to authorise a person as an "eligible applicant". That has been so held in respect of analogous provisions of the Corporations Law in three decisions of the Full Court: HongKong Bank of Australia Ltd v Australian Securities Commission (1992) 40 FCR 402; Mercantile Mutual Life Insurance Co Ltd v Australian Securities Commission (1993) 40 FCR 409 and Re Excel; Worthley v England (1994) 52 FCR 69. The Court of Appeal of New South Wales in Burns Philp &amp; Co Ltd v Murphy (1993) 29 NSWLR 723 held that the power was located in the definitional provision of s 597(1) of the Corporations Law, reflected in the definition of "eligible applicant" in s 9 of the Corporations Act . I will, with respect, follow and apply the analysis and conclusions of the Full Court of the Federal Court in the three decisions mentioned. They are helpfully discussed in Zumbo F, Liquidator's Power of Examination under the Corporations Law: The State of Play (1994) 12 C &amp; SLJ 504. The precise location of the statutory power to authorise a person to make application for an examination summons was relevant, in those cases, to the availability of administrative review by the Administrative Appeals Tribunal. The decisions of the Full Court of the Federal Court had the consequence that such review was not available. No such limitation applies in respect of judicial review of the ASIC decision whether under the ADJR Act or the provisions of s 39B(1A) of the Judiciary Act 1903 (Cth).