Case: Re Glowbind Pty Ltd (in Liq); Takchi v Parbery [2003] NSWSC 1190 ; (2003) 181 FLR 208
Outcome: referred to
My Chambers indicated to Burness that I did not want any further written submissions or further affidavit material from him in response to the defendants at this stage in the proceeding. By a subsequent letter dated 4 January 2006, my associate drew the parties' attention to Burns Philp Investments Pty Ltd v Dickens (1993) 11 ACLC 525; GIS Electrical Pty Ltd v Melsom [2002] WASCA 302 ; (2002) 172 FLR 218 at 228; and Re Glowbind Pty Ltd (in Liq); Takchi v Parbery [2003] NSWSC 1190 ; (2003) 181 FLR 208 and invited their submissions on these cases, as well as costs, including the position of RAM Parts. 41 Section 536 gives the Court a discretionary power: that is, it " may inquire into the matter" (emphasis added): see Re Glowbind Pty Ltd (in Liq); Takchi v Parbery [2003] NSWSC 1190 ; (2003) 181 FLR 208 (" Glowblind ") at 217 per Burchett AJ. Importantly, s 536 does not provide an automatic right to an inquiry upon application. As his Honour said in Glowblind at 217: "Where an inquiry under s 536 is appropriate, this will be because the court considers that inquiry to be 'in the public interest', and 'it is satisfied that there is a prima facie case' to justify subjecting the liquidator to it." See also Burns Philp Investments Pty Ltd v Dickens (1993) 11 ACLC 525 (" Dickens ") at 526, where Young J noted that "it is not in the public interest that anybody who feels that he or she or it has a grievance against the liquidator which they hope might be able to be proved in due course may set in train a full blown inquiry". 44 Section 536 "is to be distinguished from s 1321 , which confers the jurisdiction that is generally appropriate to be exercised when the reversal or modification of a decision of the liquidator is in question": see Glowbind at 217. Section 1321 was not available to the defendants because, under Rule 14.1(2)(a) of the Federal Court (Corporations) Rules 2000 (Cth), any appeal under s 1321 of an act, omission or decision of a liquidator must be filed within "21 days after the date of the act, omission or decision appealed against". 45 Considering the first two factors in this case, I accept that, on the face of it, the defendants have raised some valid concerns about the affidavit that Burness filed in support of the application he made on 3 December 2003 for a warrant under s 530C of the Corporations Act 2001 . In particular, this affidavit did not fully disclose that other companies were operating from the 420 Burnley Street premises. Moreover, given McDermott's lax (to put it mildly) record keeping, Burness probably should have noted that it would be difficult for him to distinguish property belonging to Richmond Sales from property belonging to other persons or from property belonging to other McDermott companies. It should be borne in mind, however, that the Court record indicates that Burness was acting on legal advice in these proceedings. Nevertheless, even if I were to accept all of the defendants' criticisms of Burness's conduct in securing the warrant, I do not consider these matters sufficient to justify, at this late stage, an inquiry under s 536. There are far weightier considerations that militate against an inquiry.