Application of Robert William Whitton [2007] NSWSC 606

1886/07 Application of Robert William Whitton JUDGMENT 1 HIS HONOUR: This is an application by one of two liquidators of Zenith Developments Company (Australia) Pty Limited (in liquidation). The plaintiff and Mr Hugh Martin were appointed as administrators of the company on 27 August 2004. They were appointed as liquidators on 16 September 2004. The company is subject to a creditors' voluntary winding-up. 2 On 21 March 2007, a summons for examination was issued pursuant to s 596A of the Corporations Act 2001 (Cth) on the application of the plaintiff to a Mr Ian Michael Prider and a Mr Kim Alexander Epton. On the same day, orders for production of documents were made pursuant to s 68 of the Civil Procedure Act 2005 (NSW) requiring each of Mr Prider and Mr Epton to produce documents in connection with the examinations. Mr Prider had been a director of the company from 26 May 2003 until 13 July 2004. Mr Epton was appointed a director of the company on 13 July 2004. 3 The plaintiff has been unable to serve Mr Prider. It appears that Mr Prider is presently living in the United States of America. On 13 May 2007, he advised the plaintiff that he did not consider that the court had jurisdiction because he was a resident of the United States. He advised that his mailing address was at a given address in California. 4 The liquidator seeks leave pursuant to r 11.5 of the Uniform Civil Procedure Rules 2005 (NSW) to serve the examination summons and order for production on him outside Australia. That rule applies to service of a document other than originating process outside Australia. It provides that service is effective only if it is effected pursuant to leave or is subsequently confirmed by the Supreme Court. 5 It is clear that a summons issued by a court on an application made under s 596A of the Corporations Act is not, as distinct from the application for the summons, an originating process (Re Austral Oil Estates Limited (in liq) (1986) 7 NSWLR 440; Re Absolutely Fabulous Exhibitions & Events (Management) Pty Limited; Fiorentino v Irons (1997) 25 ACSR 577 at 578). 6 Mr Prider was an officer of the company during the period of two years ending before the commencement of its winding-up. Mr Prider is an Australian citizen. He holds property in New South Wales. He holds a current practising certificate as a solicitor in this State. In my view, it is appropriate that leave be given to serve him with a summons for examination and the order for production of documents so that he can be required to give an account of his stewardship or otherwise provide information as to the examinable affairs of the company. 7 A question may arise as to whether both of the liquidators of the company ought to be joined as plaintiffs. I do not need to resolve that question. Mr Martin applies for an order that he be added as a plaintiff. As there is at least a question as to whether he and the present plaintiff are jointly entitled to the relief claimed, it is appropriate that Mr Martin also be joined as a plaintiff. Even if Mr Martin ought to have been joined as a plaintiff on the application under s 596A, his not being joined would be a procedural irregularity which would not affect the validity of the orders made on 21 March 2007. 8 The plaintiff seeks orders in relation to the service of the summons for examination and order for production of documents on Mr Prider, including an order that service may be affected by posting the summons for examination, and the order for production, to his address in New South Wales, and by delivering unsealed copies of the documents to him via his email address. I am not satisfied that, at this stage, it is appropriate to make an order for substituted service. No attempt has been made to serve the documents on Mr Prider in the United States. He has provided an address which appears to be an address at which he can be served. I decline to make orders for substituted service at this stage. 9 I order that Hugh Sutcliffe Martin of Bernadi Martin, Level 1, 195 Victoria Square, Adelaide, South Australia be added as a plaintiff and that the originating process be taken to be amended accordingly. I dispense with any requirement to file an amended originating process. 10 I give leave to the plaintiffs pursuant to r 11.5 of the Uniform Civil Procedure Rules 2005 (NSW) to serve the summons for examination and order for production, both dated 21 March 2007, on Ian Michael Prider outside Australia. 11 The plaintiffs also seek an order that a warrant be issued for the arrest of Mr Epton. He resides in Ballajura, Western Australia. He was served on 28 March 2007 with the order for production and summons for examination at 7 Bullfinch Way, Ballajura, Western Australia. In correspondence with the liquidator, he has denied having been validly served because he says he has not been provided with sufficient conduct money to attend at the examination in Sydney. He also claims to have already produced to the liquidator such documents as are in his possession called for by the order for production of documents. 12 The summons addressed to him requiring his attendance to be examined, and the order for production of documents, are both processes which fall within the definition of "subpoena" in the Service and Execution of Process Act 1992 (Cth). Section 32 of that Act provides that service of a subpoena is effected only if at the time of service, or at some other reasonable time before the person to whom the subpoena is addressed is required to comply with it, allowances and travelling expenses sufficient to meet the person's reasonable expenses of complying with the subpoena are paid or tendered to the person. It is not a sufficient objection to complying with a subpoena served under the Service and Execution of Process Act that any necessary conduct money is not tendered at the time of service. The question will remain whether allowances and travelling expenses sufficient to meet the person's reasonable expenses of complying with the subpoena are paid or tendered at a reasonable time within which the person to whom the subpoena is addressed is required to comply with it. 13 The liquidators have made arrangements to provide airline tickets and accommodation for Mr Epton to allow him to travel to Sydney from Perth to attend for the examination. They advised him on 17 May 2007 that cab charges for taxi travel would be sent to his address via post. It is submitted for the liquidator that the liquidators have complied with their obligation to tender expenses as required by s 32 of the Service and Execution of Process Act (see Harris D-E Pty Limited v McClelland's Coffee and Tea Pty Limited [1999] NSWSC 36 at [25]-[26]). 14 However, there is a difficulty with the application. Section 31 of the Service and Execution of Process Act provides that service of the subpoena is effective only if copies of such notices as are prescribed are attached to the subpoena or the copy of the subpoena served. Regulation 4(1)(b) of the Service and Execution of Process Regulations 1993 (Cth) prescribes a notice in the form of Form 2 as the prescribed notice to be attached to the subpoena when served. In this case the notice which was attached to the summons for examination was a notice in accordance with Form 1, rather than a notice in accordance with Form 2. Form 2 was attached to the order for production of documents. However, the application for the issue of an arrest warrant is not based upon an asserted non-compliance with the order for production of documents, but upon Mr Epton's failure to attend pursuant to the summons for examination. 15 Mr Epton is presently in the United States. He says that he will be returning on 22 July 2007 to Perth. No order is sought for leave to serve the examination summons on him in the United States. I need not decide the question as to whether the liquidators have complied with s 32 of the Service and Execution of Process Act. 16 Mr Epton claimed that he should be provided with his airfares of returning from Florida to Sydney and that he should be provided with business class airfares because of what he claims to be his medical condition. So far as appears, these matters are a mere assertion on his part. However, the failure to attach the correct form to the summons for examination is fatal. 17 I therefore decline the order sought in paragraph 1 of the notice of motion. 18 The orders which I have made may be taken out forthwith.

At a glance

Court

Decision date

Before

Source

Judgment (10 paragraphs)

Legislation Cited (5)

Cases Cited (2)

Cited By (1)