BAZZO -v- ROBERT MICHAEL KIRMAN AND WILLIAM JAMES HARRIS AS JOINT AND SEVERAL LIQUIDATORS OF WHITBY LAND COMPANY PTY LTD (IN LIQUIDATION) ACN 115 233 193 [2021] WASCA 170 (17 September 2021)

2 The appellants in CACV 127 of 2020 (Mr Caratti and Ms Bazzo) appeal against Master Sanderson's decision made on 3 December 2020 dismissing the applicants' interlocutory application for orders that:

(a) an affidavit filed in support of an application previously made by the respondents in CACV 127 of 2020 for summonses for examination pursuant to s 596A and s 596B of the Act be made available for inspection; and

(b) the summonses for examination previously issued pursuant to s 596A and s 596B be discharged or stayed pending their discharge.

3 For the reasons that follow, leave to appeal under s 60(1)(f) of the Supreme Court Act 1935 (WA) should be refused in relation to each appeal, and each of the appeals must be dismissed.

4 Section 588FF(1) provides that where, on the application of a company's liquidator, a court is satisfied that a transaction of the company is voidable because of s 588FE, the court may make one or more of the orders specified in par (a) to par (j) of s 588FF(1).

5 By s 588FF(3), an application under s 588FF(1) may only be made during the period specified in par (a) of s 588FF(3) or within such longer period as the court orders on an application under par (b) of s 588FF(3) made by the liquidator during the par (a) period.

6 Section 596A provides, in essence, that the court is to summon a person for examination about a corporation's 'examinable affairs' if an 'eligible applicant' applies for the summons and 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 two year period specified in par (b) of s 596A.

7 In s 9, 'eligible applicant', in relation to a corporation, is defined to include, relevantly, a liquidator of the corporation.

8 In s 9, 'examinable affairs', in relation to a corporation, is defined to include, relevantly, 'the promotion, formation, management, administration, restructuring or winding up of the corporation'.

9 In s 9, 'officer' of a corporation is defined to include, relevantly:

(a) a director or secretary of the corporation; or

(b) a person:

(i) who makes, or participates in making, decisions that affect the whole, or a substantial part, of the business of the corporation; or

(ii) who has the capacity to affect significantly the corporation's financial standing; or

(iii) in accordance with whose instructions or wishes the directors of the corporation are accustomed to act (excluding advice given by the person in the proper performance of functions attaching to the person's professional capacity or their business relationship with the directors or the corporation); ...

10 Section 596B(1) provides, in essence, that the court may summon a person for examination about a corporation's 'examinable affairs' if an 'eligible applicant' applies for the summons and the court is satisfied 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 court is satisfied that the person 'may be able to give information about examinable affairs of the corporation'.

11 By s 596B(2), s 596B has effect subject to s 596A.

12 Section 596C(1) provides that a person who applies under s 596B must file an affidavit that supports the application and complies with the rules. By s 596C(2), the affidavit is not available for inspection except so far as the court orders.

Relevant provisions of the Supreme Court (Corporations) (WA) Rules 2004

13 Rule 11.3 of the Supreme Court (Corporations) (WA) Rules 2004 (the Corporations Rules) is concerned with an application for an examination summons under s 596A or s 596B of the Act.

(1) An application for the issue of an examination summons must be made by filing an interlocutory process or an originating process, as the case requires.

(2) The application may be made without notice to any person.

(3) The originating process, or interlocutory process, seeking the issue of the examination summons must be ‑

(a) supported by an affidavit stating the facts in support of the process; and

...

(7) Unless the Court otherwise orders, an affidavit in support of an application for an examination summons is not available for inspection by any person.

15 Rule 11.4 makes provision for the service of an examination summons on the person who is to be examined.

16 Rule 11.5 is concerned with the discharge of an examination summons.

(1) This rule applies if a person is served with an examination summons.

(2) Within 3 days after the person is served with the examination summons, the person may apply to the Court for an order discharging the summons by filing ‑

(a) an interlocutory process seeking an order discharging the summons; and

(b) an affidavit stating the facts in support of the interlocutory process.

18 Rule 1.10 makes provision for extension and abridgement of time. It states, relevantly, that unless the Act or the Corporations Rules otherwise provide, the Rules of the Supreme Court 1971 (WA) that provide for the extension or abridgement of a period of time fixed for the doing of any act or thing in relation to a proceeding apply to a proceeding to which the Corporations Rules apply.

Relevant provisions of the Rules of the Supreme Court

19 Order 3 r 5 of the Rules of the Supreme Court makes provision for extending and abridging time as follows:

(1) The Court may, on such terms as it thinks just, by order extend or abridge the period within which a person is required or authorised by these rules, or by any judgment, order, or direction, to do any act in any proceedings.

(2) The Court may extend any such period as is referred to in subrule (1) although the application for extension is not made until after the expiration of that period.

(3) The period within which a person is required by these rules, or by any order or direction, to serve, file or amend any pleading or other document may be extended by consent (given in writing) without an order of the Court being made for that purpose.

The background facts and circumstances in relation to CACV 126 of 2020 and CACV 127 of 2020

20 The background facts and circumstances in relation to CACV 126 of 2020 and CACV 127 of 2020 are these.

21 On 10 August 2020, the respondent in CACV 126 of 2020 filed an originating process seeking, amongst other things, orders for the issue of an examination summons to Ms Bazzo under s 596B of the Act in relation to the examinable affairs of Whitby Land Company Pty Ltd (in Liquidation) (ACN 115 233 193).

22 The originating process was supported by an affidavit of Robert Michael Kirman sworn on 6 August 2020.

23 On 6 August 2020, the respondents in CACV 127 of 2020 filed an originating process seeking, amongst other things, orders for the issue of:

(a) an examination summons to Ms Bazzo under s 596A, alternatively s 596B, in relation to the examinable affairs of MNWA Pty Ltd (in liq), ACN 142 745 337 Pty Ltd (in liq) and Stockholm Developments Pty Ltd (in liq); and

(b) an examination summons to Mr Caratti under s 596A, alternatively s 596B, in relation to the examinable affairs of GH1 Pty Ltd (in liq) and MNWA Pty Ltd (in liq).

24 The originating process was supported by an affidavit of Mr Kirman sworn on 3 August 2020.

25 In these reasons we will refer to Mr Kirman's affidavits mentioned at [22] and [24] above, individually and collectively, as the Restricted Affidavit.

26 On 20 August 2020, Master Sanderson made orders:

(a) for the issuing of examination summonses to Ms Bazzo and Mr Caratti; and

(b) that the Restricted Affidavit not be made available for inspection unless the court ordered otherwise.

27 By letter dated 22 October 2020, the respondent in CACV 126 of 2020 requested orders to serve the summons by email or post. By letter dated 21 October 2020, the respondents in CACV 127 of 2020 requested orders to serve the summonses by email or post.

28 On 22 October 2020, Master Sanderson made the orders sought in the letters dated 21 and 22 October 2020.

29 On 26 October 2020, the respondent in CACV 126 of 2020 sent the summons by email and post to Ms Bazzo in accordance with the substituted service orders. According to Ms Bazzo's evidence, she received the summons on 27 October 2020. The examination was then listed for hearing on 10 November 2020.

30 On 5 November 2020, the respondents in CACV 127 of 2020 served the summonses on Ms Bazzo and Mr Caratti in accordance with the substituted service orders. The examinations were then listed for hearing on 10 November 2020.

31 On 10 November 2020, being the day of the examinations, Ms Bazzo served the respondent with her interlocutory application which is the subject of her appeal in CACV 126 of 2020 (the COR 105 Application).

32 Also on 10 November 2020, Mr Caratti and Ms Bazzo filed their interlocutory application the subject of the appeal in CACV 127 of 2020 (the COR 54 Application).

33 The COR 105 Application and the COR 54 Application were the subject of hearings before the Master on 19 November 2020 (the First Hearing) and 2 December 2020 (the Second Hearing).

(a) counsel for Mr Caratti and Ms Bazzo submitted that the court should first determine the question of access to the Restricted Affidavit and that the court should then proceed, at a separate hearing, to determine the COR 105 Application and the COR 54 Application insofar as they related to the discharge of the examination summonses; and

(b) counsel for the respondents submitted that those matters could be determined together in accordance with the court's ordinary practice.

35 Ultimately, the Master made orders that the hearing of the COR 105 Application and the COR 54 Application be adjourned. The substantive hearing of the applications occurred at the Second Hearing.

36 At the conclusion of the Second Hearing, the Master said that he was not satisfied that there should be an order for inspection of the Restricted Affidavit. The Master indicated that he intended to publish written reasons for that decision. On 3 December 2020, the Master published written reasons and made orders that the COR 105 Application and the COR 54 Application be dismissed.

37 On 16 December 2020, Ms Bazzo filed her appeal notice in CACV 126 of 2020. Also on 16 December 2020, Mr Caratti and Ms Bazzo filed their appeal notice in CACV 127 of 2020. On 12 January 2021, Registrar Gilich ordered that the appeals in CACV 126 of 2020 and CACV 127 of 2020 be heard together.

38 On 4 February 2021, Mr Caratti and Ms Bazzo filed one appellant's case. Some of the grounds of appeal in the appellant's case are directed to the COR 105 Application and others are directed to both the COR 105 Application and the COR 54 Application.

39 Initially, there were eight grounds of appeal as follows:

1. The Master erred in law and fact, and acted in breach of natural justice, so that his discretion miscarried, in refusing leave to extend time in COR 105 of 2020. He did so by finding that Ms Bazzo (and Mr Caratti) "must have been aware long before they were actually served" by post that an examination summons had been issued against them. He further required them to explain why they did not take steps to accept service "in an orderly and conventional way" ‑ at [12]. In so deciding he:

1.1 Referred to and relied upon three affidavits which had not been disclosed to the examinees or their solicitors until after the hearing of the application;

1.2 Relied on this point which had never been raised by the plaintiffs;

1.3 Decided the point without giving the lawyers for the examinee(s) any notice that the same was being considered or any opportunity to put on responding evidence or deal with it in argument;

1.4 Relied on conduct on the part of Mr Caratti who is not an examinee in respect of COR 105 of 2020; and

1.5 Did not deal at all with the explanation offered by Ms Bazzo on affidavit for the lateness.

2. The Master erred in law and in fact in failing to give leave for the late application filed by Ms Bazzo in COR 105 of 2020, given the explanation in her affidavit and the absence of any prejudice on the part of the plaintiff in COR 105 of 2020 in this regard.

3. The Master erred in law and in fact, and acted in breach of natural justice, in dismissing the whole application of each of the examinee(s), in circumstances where:

3.1 the Master had set down the matter on 19 November 2020 for hearing on 2 December 2020 only on the argument for access to the founding affidavits of the plaintiffs to the examination summonses, and not for the hearing on the merits of the applications to set aside the examination summonses;

3.2 the Master identified the issues for hearing on 2 December 2020 in paragraph [6] of the Reasons, and those did not include a final determination on the merits of the application to set aside the examination summonses; and

3.3 if the Master refused such access to the founding affidavits as he did, he should have afforded the examinees an opportunity to argue the merits of the application which he failed to do.

4. The Master erred in law and in fact by failing to find that the examinees established an arguable case justifying their solicitors having access to the founding affidavits. The Master erred in law and engaged in contradictory reasoning by identifying (with respect correctly) the need to raise an arguable case for access to the founding affidavits (in [6(4)] but then in paragraph [7] requiring a "prima facie" case of abuse to be established by the examinees (even without access to the affidavits), and holding that this had not been established. The Master should have held that the examinees had shown an arguable case for access to the founding affidavits and should have afforded them such access.

5. The Master further erred in law and in fact and acted in breach of natural justice, in failing to address or consider the issues of non-disclosure raised in argument by the examinees and in failing to examine the founding affidavits with respect to any such issue of non-disclosure.

6. The Master erred in fact and in law in holding (at [18]) that there is nothing to support a suggestions the examination summonses is being used as a dress rehearsal for cross‑examination in other proceedings, and that "that argument was not and could not have been raised by the examinees on this application". In truth, the argument was put and the Master should have examined the founding affidavit and the context of the other cases he was referred to, to properly decide this issue. He should have reached the conclusion that at least an arguable case had been raised in this context, and acted in breach of natural justice, in not addressing the argument put by counsel for the examinees.

7. The Master erred in law and in fact and failed to give proper and adequate reasons by deciding to refuse the whole application of the examinees without addressing in any way at [17] whether or how the founding affidavits had addressed the contested issue of the role if any played in the companies by Ms Bazzo or Mr Caratti who had denied any relevant role under oath.

8. The Master erred in law in holding that the so-called implied undertaking or principle of law restricting the use of material in one proceeding in another, applied to a statement of claim and a chamber summons filed in CIV 1653 of 2020, which ruling caused counsel for the examinees to decide not [to] rely on that statement of claim or the chamber summons. The so‑called implied undertaking or principle of law does not apply to or cover pleadings or process like a chamber summons and the excluded material should have been considered.

40 At the hearing of the appeals, the appellants abandoned ground 8.

41 Grounds 1 and 2 relate solely to appeal CACV 126 of 2020, being Ms Bazzo's appeal in respect of the COR 105 Application.

42 Grounds 1 and 2 allege, in essence, that the Master made errors and acted in breach of the rules of procedural fairness in failing to grant Ms Bazzo an extension of time within which to make the COR 105 Application.

43 Ms Bazzo filed the COR 105 Application after the time specified in r 11.5(2) of the Corporations Rules had expired. In particular, the three day time limit under r 11.5(2) expired on 30 October 2020 and Ms Bazzo did not file the COR 105 Application until 10 November 2020. Accordingly, Ms Bazzo required an extension of time within which to make the COR 105 Application.

44 The Master refused to grant Ms Bazzo an extension of time. The Master said [12]:

So far as COR 105 of 2020 is concerned, I would not be prepared to extend the time. In both cases the examinees were served pursuant to an order for substituted service. Substituted service was necessary because all efforts to serve Ms Bazzo and Mr Caratti had failed. While I could not, on the available evidence, conclude either of Ms Bazzo or Mr Caratti were actively evading service, the affidavits of Emerald Denise Petrie affirmed 16 October 2020, the affidavit of Cassandra Michelle Guy sworn 21 October 2020 and the affidavit of Eliza Dawn Wallace sworn 22 October 2020 make it plain both Ms Bazzo and Mr Caratti must have been aware long before they were actually served that an examination summons had been issued. Neither offers any real explanation as to why they did not take steps to accept service in an orderly and conventional manner. Nor do either explain why they did not act immediately to have the examination summonses set aside. I would dismiss the applications in COR 105 of 2019 on that basis. However, I will, in relation to both matters, deal with the other issues raised above.

45 Ms Bazzo asserted that the Master made three errors in deciding to refuse to extend time.

(a) The Master relied upon affidavits filed by the respondent in the COR 105 Application and by the respondents in the COR 54 Application in support of the substituted service applications, being the affidavits of Emerald Denise Petrie affirmed 16 October 2020, the affidavit of Cassandra Michelle Guy sworn 21 October 2020 and the affidavit of Eliza Dawn Wallace sworn 22 October 2020.

(b) However, those affidavits were not disclosed to Ms Bazzo or Mr Caratti or their legal representatives until after the Second Hearing.

(c) The respondent did not make any submission to the Master by reference to the affidavits of Ms Petrie, Ms Guy and Ms Wallace.

(d) The Master made findings based upon the evidence in those affidavits; in particular, the Master's findings at [12] of his reasons that Mr Caratti and Ms Bazzo 'must have been aware long before they were actually served that an examination summons had been issued' and that Mr Caratti and Ms Bazzo had not explained why they did not accept service of the summonses in a conventional and orderly way, without giving Ms Bazzo or her legal representatives an opportunity to respond to that evidence or make submissions in relation to the Master's proposed findings.

(e) The Master relied upon the findings he had made in relation to Mr Caratti despite Mr Caratti not being a party to the COR 105 Application.

47 We are satisfied that the Master's findings at [12] of his reasons that Mr Caratti and Ms Bazzo 'must have been aware long before they were actually served that an examination summons had been issued' and that Mr Caratti and Ms Bazzo had not explained why they did not accept service of the summonses in a conventional and orderly way, was a material factor which the Master took into account in deciding that Ms Bazzo should not be granted an extension of time. That is apparent on a fair reading of [12] in the context of the Master's reasons as a whole.

48 Ms Bazzo submitted in effect that, as a consequence of the matters referred to at [46] and [47] above, she was not given a proper opportunity to meet the case against the granting of an extension of time and was therefore denied procedural fairness.

49 As to the Master's reliance upon the affidavits of Ms Petrie, Ms Guy and Ms Wallace:

(a) At all material times Alan Phillip Rumsley, a lawyer, has acted for Mr Caratti and Ms Bazzo.

(b) At all material times Ms Guy, a lawyer, has acted for the respondents in respect of, amongst other litigation, the COR 105 Application and the COR 54 Application.

(c) In pars 4, 5 and 6 of her affidavit, Ms Guy deposed, relevantly and in effect:

(i) On 15 September 2020, Ms Guy sent an email to Mr Rumsley informing him that examination summonses had been issued to Mr Caratti and Ms Bazzo, and asking Mr Rumsley whether he had instructions to accept service of the summonses on his clients' behalf.

(iii) On 25 September 2020, a without prejudice settlement conference was held between, relevantly, the respondent and Mr Caratti in relation to pending Supreme Court proceeding CIV 1657 of 2020. On 24 September 2020, Mr Rumsley sent an email to Ms Guy requesting confirmation that 'there will be no attempt to serve documents on Mr Caratti in relation to any ongoing matters'. Ms Guy responded by an email of 25 September 2020 in which she informed Mr Rumsley that '[a]s you are aware, we are attempting to serve [an] examination summons on Mr Caratti for other matters'. Ms Guy added that although 'it is preferred that we serve Mr Caratti with the papers as soon as possible', she had been instructed to defer service until the day after the without prejudice conference.

(iv) Since 25 September 2020, Ms Guy had received numerous emails from Mr Rumsley relating to the COR 105 Application, the COR 54 Application and other pending proceedings to which Mr Caratti and Ms Bazzo were parties. Mr Rumsley had not informed Ms Guy whether he had instructions to accept service or make arrangements for service of the examination summonses on his clients.

50 In our opinion, it was reasonably open to the Master, on the evidence in pars 4, 5 and 6 of Ms Guy's affidavit, to infer that Mr Caratti and Ms Bazzo must have been aware 'long before they were actually served' that examination summonses had been issued. Mr Rumsley was aware that the examination summonses had been issued but not served, and it is inherently incredible, having regard to his status and duties as a lawyer acting for Mr Caratti and Ms Bazzo and to the email communications between Mr Rumsley and Ms Guy, that Mr Rumsley did not tell Mr Caratti and Ms Bazzo promptly that the examination summonses had been issued.

51 However, the Master should not have drawn that inference without giving Ms Bazzo an opportunity to respond to the affidavits filed in support of the substituted service applications and to make submissions in relation to the matter. That was necessary because Ms Bazzo and her legal representatives had not been served with copies of those affidavits at or before the Second Hearing and counsel for the respondent did not make any submission to the Master by reference to those affidavits.

52 In the circumstances, there was a denial of procedural fairness.

53 Further, the Master's findings at [12] of his reasons in relation to Mr Caratti having been aware long before he was actually served that an examination summons had been issued, and that Mr Caratti had not explained why he did not accept service of the summons in a conventional and orderly way, were not relevant in deciding whether Ms Bazzo should be granted an extension of time.

54 The second alleged error was that the Master did not address the explanation for Ms Bazzo's delay 'offered by Ms Bazzo on affidavit'.

(a) Ms Bazzo did not have a right to an extension of time. The onus was upon Ms Bazzo to satisfy the Master that it was in the interests of justice for her to be granted an extension. The Master was exercising a discretion and Ms Bazzo was required to put before the Master a full and frank explanation for her delay. There had to be some cogent and persuasive evidence before the Master could exercise his discretion favourably to Ms Bazzo.

(b) On 11 November 2020, Ms Bazzo swore an affidavit in COR 105 of 2020. She said that she was served with her examination summons on 27 October 2020. However, she did not explain her failure to file the COR 105 Application within time.

(c) Mr Rumsley swore an affidavit on 1 December 2020. In par 5 of that affidavit Mr Rumsley asserted that 'shortly' before filing the COR 105 Application he became aware of the time limit in r 11.5(2) of the Corporations Rules.

(d) On 2 December 2020, Mr Rumsley swore another affidavit. In pars 3 and 4 of that affidavit Mr Rumsley asserted, based on information and belief, that although Ms Bazzo received the examination summons on 27 October 2020, the summons was 'overlooked by Ms Bazzo' until 'subsequent summonses were received and sent to me for advice'.

56 In our opinion, the Master was entitled to find, as he did in effect at [12] of his reasons, that Ms Bazzo did not give a cogent and persuasive explanation on affidavit as to the reasons for her delay after she was served with her examination summons on 27 October 2020. Mr Rumsley gave some limited and general evidence on the point. It was reasonably open for the Master to conclude that Ms Bazzo had not explained adequately why she did not act immediately to have the examination summons set aside. It was not essential, in the circumstances, for the Master to refer expressly to Mr Rumsley's affidavits.

57 The third alleged error was that the Master failed to grant the extension of time despite the absence of evidence that the respondent would suffer any relevant prejudice. As we have mentioned, the onus was upon Ms Bazzo to satisfy the Master, on the basis of some cogent and persuasive evidence, that it was in the interests of justice for her to be granted an extension. Ms Bazzo did not raise as an issue before the Master the absence of evidence that the respondent would suffer any relevant prejudice. In the circumstances, the Master was not bound to refer to the apparent absence of prejudice to the respondent.

58 The Master stated in effect in the last sentence of [12] of his reasons that he would nevertheless deal with the substantive merits of, relevantly, the COR 105 Application. The Master was not satisfied that there was a proper basis for permitting Ms Bazzo or her legal representatives to have access to the Restricted Affidavit or for discharging the examination summons. As we will explain later in these reasons, those conclusions by the Master were correct. Accordingly, the COR 105 Application was without substantive merit. However, the Master did not rely upon the absence of substantive merit as a factor which supported or justified his refusal to grant an extension of time.

59 We are satisfied that the Master's failure to accord procedural fairness to Ms Bazzo, combined with his having taken into account the findings he made at [12] in relation to Mr Caratti, vitiated the Master's decision to refuse to grant Ms Bazzo an extension of time.

60 This court has all the materials necessary to re-exercise the discretion in relation to Ms Bazzo's application for an extension of time. We would refuse to extend time because, as we will explain, the COR 105 Application is without merit. In the circumstances, granting an extension of time would be pointless.

61 Ground 3 relates both to appeal CACV 126 of 2020, being Ms Bazzo's appeal in respect of the COR 105 Application, and to appeal CACV 127 of 2020, being Mr Caratti and Ms Bazzo's appeal in respect of the COR 54 Application.

62 Ground 3 alleges, in essence, that the Master made errors and acted in breach of the rules of procedural fairness in dismissing the whole of the COR 105 Application and the whole of the COR 54 Application.

63 Mr Caratti and Ms Bazzo's complaint on appeal appears to be that they were denied procedural fairness in that the Master dismissed the whole of the COR 105 Application and the whole of the COR 54 Application despite Mr Caratti and Ms Bazzo having participated in the Second Hearing on the basis that the Master would deal solely with whether access to the Restricted Affidavit should be granted. Mr Caratti and Ms Bazzo submitted that they were denied procedural fairness because the Master dismissed that part of the applications in which orders were sought for the discharge of the examination summonses, without giving prior notice to them.

64 We are satisfied, for the following reasons, that:

(a) the Master did not rule at or prior to the Second Hearing on 2 December 2020 that he would deal with the COR 105 Application and the COR 54 Application on a staged basis, with the Second Hearing being confined to whether access should be granted to the Restricted Affidavit; and

(b) in the circumstances, the Master did not breach the rules of procedural fairness.

65 First, at the First Hearing on 19 November 2020, Mr Caratti and Ms Bazzo were represented by Mr Rumsley and the respondents were represented by counsel.

66 Initially, the Master proposed dealing with the COR 105 Application and the COR 54 Application by a 'staged process' (ts 37). The Master explained:

So having a hearing, setting a date for a hearing for the application to view the affidavits, and then setting a further date for hearing of the set aside application (ts 37)?

67 The Master then heard from Mr Rumsley and counsel for the respondents on his proposal.

68 Ultimately, the Master did not rule that the applications should be dealt with by a 'staged approach'.

69 Rather, the Master ordered that the COR 105 Application and the COR 54 Application be listed for hearing on 2 December 2020 at 10.30 am (ts 40 ‑ 41).

70 Secondly on, 1 December 2020, the respondent to the COR 105 Application filed a written outline of submissions. The document contained submissions in relation to, relevantly, whether Ms Bazzo should have access to the Restricted Affidavit and whether the examination summons issued to her should be discharged. Similarly, on 1 December 2020, the respondents to the COR 54 Application filed and served a written outline of submissions. The document made submissions in relation to whether Mr Caratti and Ms Bazzo should have access to the Restricted Affidavit and whether the examination summonses issued to them should be discharged.

71 Thirdly, on 1 December 2020, Mr Caratti and Ms Bazzo filed and served written submissions. The document made submissions in relation to, relevantly, whether Mr Caratti and Ms Bazzo should have access to the Restricted Affidavit and whether the examination summonses issued to them should be discharged.

72 The written submissions included the contentions that:

(a) the examination summons relating to Mr Caratti was issued for an improper purpose, namely to obtain for the respondents a forensic advantage against a company with which Mr Caratti was or had been associated, further or alternatively, to allow the respondents to conduct a 'dress rehearsal' for cross-examination of Mr Caratti in respect of issues in pending Supreme Court proceeding CIV 1653 of 2020; and

(b) the examination summonses relating to Ms Bazzo were issued for an improper purpose, namely to obtain for the respondents a forensic advantage against a company with which Ms Bazzo was or had been associated, further or alternatively, to allow the respondents to conduct a 'dress rehearsal' for cross-examination of Ms Bazzo in respect of issues in pending Supreme Court proceeding CIV 1657 of 2020.

73 Fourthly, at the Second Hearing on 2 December 2020, Dr J T Schoombee and Mr Rumsley appeared for Mr Caratti and Ms Bazzo. The respondents were represented by counsel.

(a) Shortly after beginning his oral submissions, counsel for Mr Caratti and Ms Bazzo said that he and Mr Rumsley were 'happy to file [a confidentiality] undertaking' in relation to the Restricted Affidavit if the Master decided that they should be given access to it (ts 45). Counsel added that he and Mr Rumsley could discuss with counsel for the respondents 'how access is done'. Counsel then said 'if we do get access on that basis, we can of course look at how the submissions are filed again ... because this is just the first stage' (ts 45).

(b) Counsel for Mr Caratti and Ms Bazzo then made oral submissions as to whether Ms Bazzo should be granted an extension of time (ts 45 ‑ 46).

(c) Next, counsel for Mr Caratti and Ms Bazzo referred to the written submissions of Mr Caratti and Ms Bazzo that were filed on 1 December 2020 and told the Master that 'it ought to be easiest if I just take you through our submissions' (ts 46).

(d) Counsel for Mr Caratti and Ms Bazzo said that 'we're really looking at three general areas' (ts 47). Those areas, as explained by counsel, were:

(i) whether there had been proper disclosure (ts 47);

(ii) what the purpose was of the examinations; in particular were the examinations 'just a dress rehearsal for a cross‑examination to come in two cases?' (ts 47); and

(iii) whether the Restricted Affidavit should be made available for inspection by the legal representatives of Mr Caratti and Ms Bazzo (ts 49).

75 Later in his submissions at the Second Hearing, counsel for Mr Caratti and Ms Bazzo told the Master that the legal representatives of Mr Caratti and Ms Bazzo needed to see the Restricted Affidavit 'to be put in a position to raise ... very serious and definite matters' to the effect that the examination summonses had been issued for an improper purpose (ts 61). It is plain from the context that the 'very serious and definite matters' referred to by counsel were whether there had been proper disclosure and what the purpose was of the examinations.

76 The Master informed counsel for the parties at the conclusion of the Second Hearing that he was not satisfied that there should be an order for the inspection of the Restricted Affidavit. The Master said he intended to publish written reasons for decision.

77 The next day, being 3 December 2020, the Master published his reasons for decision and made orders dismissing the COR 105 Application and the COR 54 Application.

78 In our opinion, it is apparent, on an objective appraisal of the transcript of the First Hearing and the Second Hearing and of the written submissions filed by the parties on 1 December 2020, that all of the issues raised by Mr Caratti and Ms Bazzo in the COR 105 Application and the COR 54 Application were to be dealt with at the Second Hearing. Counsel for Mr Caratti and Ms Bazzo addressed all of those issues in his written and oral submissions. It is also apparent, on an objective appraisal, that counsel for Mr Caratti and Ms Bazzo's reference at the Second Hearing to 'this is just the first stage' (ts 45) was to the position that would apply if counsel was successful in his argument that access to the Restricted Affidavit should be given to Mr Caratti and Ms Bazzo's legal representatives. If the Master had decided that Mr Caratti and Ms Bazzo's legal representatives should have access to the Restricted Affidavit, subject to the provision of a confidentiality undertaking, it would have been necessary for the Master to give counsel an opportunity to make further submissions concerning the alleged absence of proper disclosure and the alleged improper purpose of the examinations, following counsel's inspection of the affidavit.

79 In the event, the Master decided that Mr Caratti and Ms Bazzo should not have access (through their legal representatives or at all) to the Restricted Affidavit. As we will explain, the Master's decision on that point was correct. It was therefore unnecessary, in the circumstances, for the Master to give counsel for Mr Caratti and Ms Bazzo an opportunity to make further submissions concerning the alleged absence of proper disclosure and the alleged improper purpose of the examinations.

80 The Master did not make any material errors and he did not act in breach of the rules of procedural fairness as alleged in ground 3.

82 Ground 4 relates both to appeal CACV 126 of 2020, being Ms Bazzo's appeal in respect of the COR 105 Application, and to appeal CACV 127 of 2020, being Mr Caratti and Ms Bazzo's appeal in respect of the COR 54 Application.

83 Ground 4 alleges, in essence, that the Master applied the wrong test in considering whether Mr Caratti and Ms Bazzo should be granted access to the Restricted Affidavit because he incorrectly required them to show a 'prima facie case', when he should have only required them to show an 'arguable case'.

(a) The Master said at [6(4)] that one of the issues to be determined was whether Mr Caratti and Ms Bazzo had established 'an arguable case that the summonses had been issued for an improper purpose or involved an abuse of the court's processes, such as to justify the examinees or their solicitors having access to the affidavits lodged in support of the application to issue the examination summonses'.

(b) The Master said at [7] that '[t]he authorities make it clear it is necessary for a party seeking to discharge an examination summons to first establish a prima facie case that there has been an abuse of process'.

(c) The Master said at [15] that it was necessary for him to deal with 'the question of whether there is any material which gives rise to an arguable case the summonses had been issued for an improper purpose or involved an abuse of the court's processes'.

There was no dispute between the parties as to the law on this issue. In Ariff v Fong [2007] NSWCA 183 the New South Wales Court of Appeal set out the principles in some detail. I would respectfully adopt [12] to [26] without repeating what is contained therein. It is important to note that the power to stay, is to prevent an abuse of process resulting in oppression even if the party who commenced proceedings has, or is to be assumed to have, a prima facie case. Really that is the touch stone of the jurisdiction.

85 Where a person to whom an examination summons has been issued applies to the court for an order discharging the summons and, in the context of that application, seeks to inspect the affidavit relied upon by the eligible applicant who applied for the summons, the court must be satisfied that the person who seeks to inspect the affidavit has an arguable case that the examination summons has been issued for an improper purpose or involves an abuse of the court's process. Ordinarily, if the person establishes an arguable case, it can be accepted that there are persuasive grounds for permitting the person or his or her legal representatives to have access to the affidavit. See Re Moage Ltd (in liq); Sheahan v Pitterino; [1] Re Leisure Development (Qld) (in liq); Ell v Palmer; [2]Ariff v Fong.[3]

86 In Re Excel Finance Corporation Ltd; Worthley v England,[4] Gummow, Hill and Cooper JJ said the court has 'a discretion to order the disclosure, to a prospective examinee, of material lodged in support of the application for an examination order and should do so where the justice of the case so requires' (93). Their Honours elaborated (94):

An applicant will not be permitted access to such material to enable him or her to 'fish' for a case. There must be material before the Court from which it appears that the applicant has an arguable case, to which the material is relevant, before the discretion should be exercised in favour of that applicant. But once that appears the discretion will normally be exercised in favour of the application.

87 In Re Moage, Mansfield J observed in relation to the degree of satisfaction of 'an arguable case' which needs to be made out by the applicant (95):

In my view it involves no more than that the court requires to be satisfied to an appropriate level of satisfaction that the applicant is not pursuing the application without good cause or without good reason, and in particular is not doing so purely in the hope that, by procuring the release of the affidavit, some evidentiary foundation for the allegation will be made out. In other words, if the applicant is merely 'fishing' for a case, then no reason for exercising the discretion in its favour will exist; if it presents material from which it is shown that it has passed the threshold beyond fishing, and has an arguable case based on that material, then the discretion may be exercised in its favour. Refinements of degrees of arguability is, in my view, unnecessary.

88 The term 'prima facie' has various shades of meaning in particular statutory contexts. However, the ordinary meaning of 'prima facie' is 'on the face of it' or 'as appears at first sight without investigation'. See North Ganalanja Aboriginal Corporation v The State of Queensland.[5]

89 The notion of a 'prima facie case', where a person to whom an examination summons has been issued seeks to inspect the affidavit relied upon by the eligible applicant who applied for the summons, connotes that the person must establish that, if the evidence before the court remains as it is, there is a probability that the person will prove that the examination summons was issued for an improper purpose or involves an abuse of the court's process.

90 In the present case, it appears that the Master used the notion of an 'arguable case' interchangeably with the notion of a 'prima facie case'. The well established test that has been adopted and repeatedly applied in these circumstances is that of an 'arguable case' in the sense explained in Re Excel and Re Moage. The Master's use of the term 'prima facie case' as, in effect, a synonym for the term 'arguable case' was apt to cause confusion.

91 However, the Master's use of the term 'prima facie case' was not material to the outcome because unchallenged findings of fact by the Master demonstrate that Mr Caratti and Ms Bazzo had failed to establish an 'arguable case'. In particular, the Master found that 'there was nothing in the examinees' evidence which even hinted that the issue of the summonses might be an abuse of process resulting in oppression' [17]. Also, the Master found that '[t]here is nothing to support a suggestion the examination summonses are being used as a dress rehearsal for cross-examination in other proceedings' [18]. As we will explain, those findings by the Master were correct.

93 Ground 5 relates both to appeal CACV 126 of 2020, being Ms Bazzo's appeal in respect of the COR 105 Application, and to appeal CACV 127 of 2020, being Mr Caratti and Ms Bazzo's appeal in respect of the COR 54 Application.

94 Ground 5 alleges, in essence, that the Master made errors and acted in breach of the rules of procedural fairness in failing to address or consider the alleged non-disclosure raised by Mr Caratti and Ms Bazzo in their submissions and in failing to examine the Restricted Affidavit with respect to the alleged non-disclosure.

95 In their submissions before the Master, Mr Caratti and Ms Bazzo asserted that 'non-disclosure of matters ... may have occurred' in the Restricted Affidavit (emphasis added).

96 In respect of the COR 105 Application, those matters concerned claims of ownership made in respect of a parcel of land.

97 In respect of the COR 54 Application, those matters concerned pending proceedings in the Supreme Court, namely CIV 1657 of 2020 in which Ms Bazzo's company, Great Northern Land Company Pty Ltd, is a defendant and CIV 1653 of 2020 in which Mr Caratti's company Mammoth Contracting (WA) Pty Ltd is a defendant, and, additionally, matters concerning claims of ownership in respect of two parcels of land.

98 The Master's reasons do not expressly refer to Mr Caratti and Ms Bazzo's contention that non-disclosure may have occurred and, consequently, that the issue of the examination summonses constituted an abuse of the court's process.

99 Ground 5 must be evaluated in the context of counsel for Mr Caratti and Ms Bazzo's concessions in oral argument on appeal that:

(a) there is nothing to indicate that the matters relied upon by Mr Caratti and Ms Bazzo before the Master were not disclosed (appeal ts 85);

(b) there is nothing to indicate an arguable basis for apprehending that the examination summonses were sought and obtained for an improper purpose (appeal ts 86); and

(c) Mr Caratti and Ms Bazzo were unable to point to any factual basis for asserting an arguable case of improper purpose without looking at the Restricted Affidavit and they wanted to look at the Restricted Affidavit in the hope of being able to find a case of improper purpose (appeal ts 86).

100 It is apparent having regard to those concessions that, at the hearing before the Master, Mr Caratti and Ms Bazzo did not have an 'arguable case' (in the sense explained in Re Excel and Re Moage) that the examination summonses had been sought for an improper purpose or involved an abuse of the court's process. Mr Caratti and Ms Bazzo wanted to look at the Restricted Affidavit in the hope of being able to find a case of improper purpose. In other words, they wanted access to the Restricted Affidavit to enable them to 'fish' for a case. That is not permissible.

101 Mr Caratti and Ms Bazzo did not adduce any evidence or point to any evidence before the Master that the respondents had failed to make full and proper disclosure. Mr Caratti and Ms Bazzo's assertions before the Master and this court involved speculation.

102 In the circumstances, there is no basis for a conclusion that the Master acted in breach of the rules of procedural fairness in failing to address or consider the alleged non‑disclosure raised by Mr Caratti and Ms Bazzo in their submissions or in failing to examine the Restricted Affidavit with respect to the alleged non‑disclosure.

104 Ground 6 relates both to appeal CACV 126 of 2020, being Ms Bazzo's appeal in respect of the COR 105 Application, and to appeal CACV 127 of 2020, being Mr Caratti and Ms Bazzo's appeal in respect of the COR 54 Application.

105 Ground 6 alleges, in essence, that the Master erred by failing to hold that there was nothing to support a suggestion that the examination summonses were being used as a 'dress rehearsal' for pending Supreme Court proceedings.

106 The Master considered whether there was an arguable case that the examination summonses were an abuse of process in that they were being used as a 'dress rehearsal' for cross-examination of Mr Caratti in respect of issues in pending Supreme Court proceeding CIV 1653 of 2020 and for cross‑examination of Ms Bazzo in respect of issues in pending Supreme Court proceeding CIV 1657 of 2020. However, the Master found that '[t]here is nothing to support a suggestion the examination summonses are being used as a dress rehearsal for cross-examination in other proceedings ' [18].

107 Like ground 5, ground 6 must be evaluated in the context of the concessions made by counsel for Mr Caratti and Ms Bazzo in oral argument on appeal which we have set out at [99] above.

108 It is apparent having regard to those concessions that, at the hearing before the Master, Mr Caratti and Ms Bazzo did not have an 'arguable case' (in the sense explained in Re Excel and Re Moage) that the examination summonses were to be used as a 'dress rehearsal' for cross‑examination of Mr Caratti and Ms Bazzo in respect of issues in the pending Supreme Court proceedings. Mr Caratti and Ms Bazzo wanted to look at the Restricted Affidavit in the hope of being able to find a case of improper purpose. As we have mentioned in the context of ground 5, Mr Caratti and Ms Bazzo wanted access to the Restricted Affidavit to enable them to 'fish' for a case. That is not permissible.

109 Mr Caratti and Ms Bazzo did not adduce any evidence or point to any evidence before the Master that the respondents had sought the issue of the examination summonses for an improper purpose. Mr Caratti and Ms Bazzo's assertions before the Master and this court involved speculation.

110 In the circumstances, there is no basis for concluding that the Master was in error in making the impugned finding.

112 Ground 7 relates both to appeal CACV 126 of 2020, being Ms Bazzo's appeal in respect of the COR 105 Application, and to appeal CACV 127 of 2020, being Mr Caratti and Ms Bazzo's appeal in respect of the COR 54 Application.

113 Ground 7 alleges, in essence, that the Master erred by refusing the COR 105 Application and the COR 54 Application without addressing 'whether or how the founding affidavits had addressed the contested issue of the role if any played in the companies by Ms Bazzo or Mr Caratti who had denied any relevant role'.

114 In an affidavit sworn on 10 November 2020 in support of the COR 105 Application and the COR 54 Application, Ms Bazzo deposed:

(a) at no material time has Ms Bazzo been appointed as a director or secretary of MNWA Pty Ltd (in liq), 'nor [has she] participated in the management or acted as an officer of MNWA Pty Ltd';

(b) at no material time has Ms Bazzo been appointed as a director or secretary of ACN 142 745 337 Pty Ltd (in liq), 'nor [has she] participated in the management of or acted as an officer of ACN 142 745 337 Pty Ltd'; and

(c) at no material time has Ms Bazzo been appointed as a director or secretary of Stockholm Developments Pty Ltd (in liq), 'nor [has she] participated in the management of or acted as an officer of Stockholm Developments Pty Ltd'.

115 In an affidavit sworn on 10 November 2020 in support of the COR 54 Application, Mr Caratti deposed:

From 17 January 2002 - 1 February 2002, I held the positions of director and secretary of GH1 Pty Ltd (in liquidation) ... since this period I have not been an officer of GH1 Pty Ltd (in liquidation).

116 Although Ms Bazzo denied in her affidavit that at any material time she had been a director, secretary or officer of MNWA Pty Ltd (in liq), ACN 142 745 337 Pty Ltd (in liq) or Stockholm Developments Pty Ltd (in liq), and Ms Bazzo also denied that at any material time she had participated in the management of any of those corporations, Ms Bazzo did not give any evidence as to whether she may be able to give information about the examinable affairs of any of those corporations, within s 596B(1)(b)(ii) of the Act.

117 Similarly, although Mr Caratti denied in his affidavit that he was at any material time a director or secretary of GH1 Pty Ltd (in liq), and Mr Caratti also denied that at any material time he had been an officer of that corporation, Mr Caratti did not give any evidence as to whether he may be able to give information about the examinable affairs of that corporation, within s 596B(1)(b)(ii).

118 It was not necessary for the respondents to establish that Mr Caratti and Ms Bazzo 'can give information' about the examinable affairs of the relevant corporations. It was sufficient for the respondents to establish, on the balance of probabilities, that Mr Caratti and Ms Bazzo 'may be able to' give information about the examinable affairs of the relevant corporations. The interests of Mr Caratti and Ms Bazzo will be adequately protected because the examinations will take place before a Registrar of the Supreme Court. The Registrar is obliged to ensure that the examiner is confined to questions relating to the examinable affairs of the relevant corporations. If Mr Caratti or Ms Bazzo does not have or is unable to give information in response to a proper question asked during the examinations, that issue can be raised by them or on their behalf and will be dealt with appropriately by the Registrar. See Southern Cross Petroleum Sales (SA) Pty Ltd (in liq) v Hirsch.[6]

119 The Master found, correctly in our opinion, that [17]:

It would appear that the argument of both Mr Caratti and Ms Bazzo was they were not directors or officers of any of the companies at any time that was material. That may be so. But a person may have taken part in a corporation's examinable affairs and may have information about

those affairs without being an officer of the corporation or being involved in its management.

120 Like grounds 5 and 6, ground 7 must be evaluated in the context of the concessions made by counsel for Mr Caratti and Ms Bazzo in oral argument on appeal which we have set out at [99] above.

121 The onus was upon Mr Caratti and Ms Bazzo to satisfy the Master that there was no basis for the issue of the examination summonses because they were not persons who fell within any of the categories enumerated in s 596A(b) or s 596B(1)(b), as the case may be. As we have mentioned, neither Mr Caratti nor Ms Bazzo adduced any evidence to the effect that they were unable to give any information about the examinable affairs of any of the corporations in question.

122 It was necessary for the Master to be satisfied, on the balance of probabilities, that Mr Caratti and Ms Bazzo 'may be able to' give evidence about the examinable affairs of the corporations in question before he made the orders for the issue of the examination summonses. It was necessary for the Master to attain that degree of satisfaction having regard to the material before him, including the Restricted Affidavit. However, the Master was not required, in dealing with the COR 105 Application or the COR 54 Application to examine the Restricted Affidavit for the purpose of determining whether there was an arguable case that the respondents had sought the issue of the examination summonses for an improper purpose or whether there was an arguable case that the issue of the examination summonses involved an abuse of process. Further, the Master was not bound to deal in his reasons with how or why the Restricted Affidavit revealed that Mr Caratti or Ms Bazzo may be able to give evidence about the examinable affairs of any of the relevant corporations.

124 Leave to appeal should be refused in relation to each appeal. Each of the appeals must be dismissed.

125 I agree with Buss P and Tottle J that leave to appeal should be refused in each appeal and the appeals should be dismissed. Subject to

one qualification, I agree with their Honour's reasons for making those orders.

126 The qualification is that I do not join in the criticism of the master's use of 'prima facie case' as a synonym for 'arguable case' in his reasons. The term 'arguable case' is not a statutory term. It is merely an aspect of the judicial exegesis of the statutory text which, in my view, is reasonably capable of being expressed in more than one way. When the master's reasons are read as a whole, it is apparent that he did not misapprehend the nature of the statutory discretion which he was exercising. The master's reference to Ariff as containing the relevant principles indicates that he uses the phrase 'prima facie case' to denote a case which is 'arguable' in the sense explained in decisions such as Re Excel and Re Moage. That is not a use which unduly strains the ordinary meaning of the phrase 'prima facie case'. In my view, the use of that phrase does not indicate any legal error.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] Re Moage Ltd (in liq); Sheahan v Pitterino (1997) 77 FCR 81, 95 ‑ 97.

[2] Re Leisure Development (Qld) (in liq); Ell v Palmer [2002] NSWSC 248; (2002) 41 ACSR 276 [39].

[3] Ariff v Fong [2007] NSWCA 183; (2007) 63 ACSR 384 [21] ‑ [26].

[4] Re Excel Finance Corporation Ltd; Worthley v England (1994) 52 FCR 69.

[5] North Ganalanja Aboriginal Corporation v The State of Queensland [1996] HCA 2; (1996) 185 CLR 595, 615 ‑ 616.

[6] Southern Cross Petroleum Sales (SA) Pty Ltd (in liq) v Hirsch [1998] SASC 7115; (1998) 70 SASR 527, 535 ‑ 536.