Clifton v Robinson

Judgment 1HER HONOUR: Before me for hearing on 12 May 2011 was an application, by Interlocutory Process filed and served on 4 May 2011, brought by Laing O'Rourke (BMC) Pty Limited (formerly known as Barclay Mowlem Pty Limited) and two individuals in its employ at the relevant time (Mr Paul Ryan and Mr Peter Sheedy), seeking relief in relation to steps taken by Mr Adam Shepard, the deed administrator under a Deed of Company Arrangement entered into in relation to Hunter Bulk Materials Pty Limited (a construction company which went into administration in December 2005 and is now subject to a deed of company arrangement). 2In particular, the applicants seek to set aside an order for production filed on 27 April 2011 and served on BMC on 29 April 2011 (seeking the production of documents in relation to a dispute between BMC and Hunter Bulk) and orders setting aside examination summonses filed on 27 April 2011 and served on each of Messrs Ryan and Sheedy on 29 April 2011 pursuant to s 596B of the Corporations Act 2001 (Cth). As a precursor to such relief, the applicants seek an order for access to the confidential affidavit(s) filed in support of the application for the issue of the said orders for production and examination pursuant to s 596C(2) of the Corporations Act . (The relief sought at paragraphs 4 and 5 of the Interlocutory Process was not pressed.) 3The examination summonses in question were returnable on 9 May 2011, on which date I adjourned them to 13 May 2011, at the parties' request, in order to permit the preparation of submissions in relation to the present application. Meanwhile, as I understand it, the deed administrator has proceeded with other examinations in relation to the examinable affairs of Hunter Bulk. 4Having regard to the timing of the proposed examinations, I heard this application as a matter of urgency prior to the hearing of another matter that had been listed before me on 12 May 2011 and indicated that I would rule on the application in chambers as soon as possible but in any event before the scheduled commencement of the examinations the following day. I did so and then on 13 May 2011 I made formal orders to reflect those rulings. I indicated that I would publish my written reasons for the making of those orders as soon as possible. These are those reasons. Summary 5In summary, I found that there was an arguable case that there had been non-disclosure at the time of the application for the order for production and the examination summonses (on the basis that it seemed unlikely, in the absence of a good reason so to do, that the court would have given leave for an order requiring the production of records that had already been produced under a similar compulsion some years before had it been made aware that this was the case). Having so found, I accepted the submission by Counsel for the deed administrator (Mr Lo Surdo) that it was in order at that stage for me to inspect the confidential affidavits so as to determine whether access should be granted to the applicants. I inspected the affidavits in question and was of the view that the concern as to a material non-disclosure in relation to that issue was not well-founded and that the grant of access to the affidavits by the applicants was not warranted. 6Turning then to the balance of the application, I refused to set aside the order for production (though I made a direction limiting its scope) on the basis that the deed administrator was prepared to confine the production to copies of identified documents of which (although earlier produced) for some reason he did not have copies and in circumstances where that material (as identified in the applicants' evidence on this application) seemed to be readily able to be produced by the applicants without the need for a further lengthy process of review. I refused to set aside the examination summonses but was satisfied that there were special circumstances to warrant the holding of the examinations in private and I made directions as to the manner in which those examinations were to be transcribed, for the reasons set out below, limiting access to the transcript of the examinations but without prejudice to any application that might subsequently be made for access thereto. Background 7The background to the present application is not in dispute. Each of BMC and Hunter Bulk carried on business at the relevant time in the construction industry. On 4 March 2005 they entered into a sub-contract agreement for earthworks, drainage and roadwork construction to be carried out by Hunter Bulk in relation to the construction of the New Rail Spur from Mount Thorley to Wambo Coal Terminal, those works forming part of works that BMC was required to perform under a separate contract with Wambo Coal Terminal Pty Limited. 8By late 2005, Hunter Bulk and BMC were in dispute as to the works (the detail of which dispute is not material on the current application). On 6 December 2005, Hunter Bulk was placed into external administration under s 436A of the Corporations Act . Messrs Ron Dean-Willcocks and Adam Shepard were appointed administrators. 9Following the entry into administration of Hunter Bulk, BMC (by letter dated 11 January 2006) purported to invoke its rights under the contract with Hunter Bulk and assumed the carriage of the then remaining construction works under that contract. This precipitated a dispute between Hunter Bulk and BMC as to whether, by so doing, BMC had repudiated its contract with Hunter Bulk (a repudiation which Hunter Bulk in turn purported to accept as bringing to an end the contract). 10On 12 January 2006, Hunter Bulk executed a deed of company arrangement and Messrs Dean-Willcocks and Shepard were appointed the deed administrators. (Mr Dean-Willcocks subsequently retired as deed administrator, leaving Mr Shepard as the sole deed administrator.) Pursuant to clause 6.1 of the Deed, the deed administrators were to investigate and quantify the claims by Hunter Bulk against BMC in respect of the project and the prospects of success of those claims (and, subject to the merits and prospects of those claims, to obtain funding therefor - clause 6.2). The Deed contemplated that the deed administrators' tasks in relation to the proposed litigation might include a formal examination before the court of relevant persons. 11It seems that relatively promptly after the execution of the Deed of Company Arrangement steps were commenced to enable the deed administrators to investigate the claims Hunter Bulk might have against BMC in relation to the project. An order for production of documents was issued on 28 June 2006 to BMC at the request of the deed administrators, pursuant to which BMC produced a large volume of material (approximately 25 boxes of documents including computer discs of electronic documents) relating to the performance of the works and the contract as between Hunter Bulk and BMC. The order expressly encompassed minutes of meetings (paragraph [38] of the order). (It is submitted by Mr Hicks that the 2006 order for production exceeded the scope of any discovery order in any proceedings envisaged by the claims asserted by Hunter Bulk for repudiation of contract but nothing turns on this for present purposes.) 12Documents were produced by BMC in tranches, commencing on 21 August 2006, in answer to the June 2006 order for production. BMC's evidence is that the last of the documents were produced on or about March 2007. (BMC reviewed over 7,000 emails and 400 lever arch folders of documents in order to produce the material in answer to the order for production.) 13Meanwhile, also on 28 June 2006, the deed administrators caused the issue of an examination summons pursuant to s 596B of the Corporations Act, requiring Mr Ryan to attend for a public examination on 4 September 2006. (Similar examination summonses were issued to other individuals.) The deed administrator has explained that Mr Ryan's examination did not proceed (and the summons in due course lapsed) because BMC had not by then produced all documents in answer to the order for production (and had not done so until March 2007) and because there were applications that had not by then been determined (first, by a proposed examinee (Mr Gavin Heydon) seeking access to the s 596C affidavit and to set aside an order for production served on him and, secondly, by Wambo to set aside an order for production served on it). There were also disputes over the amount of costs claimed by various entities (including BMC, Wambo and Mr Heydon) for compliance with such orders. 14The deed administrator relies on a number of affidavits sworn over the period from 25 November 2007 by his solicitor, Mr Christopher David Wilkinson, deposing as to the course of events from June 2006, from which it appears that there was a delay in inspecting the documents (due to the fact that the court registry had, in error, returned the documents produced in answer to the June 2006 order for production, which led to a request in late May 2007 for the return of those documents, those documents apparently being returned only in early January 2008); that litigation funding was obtained by late October 2007; and that a dispute arose in about May 2008 between the deed administrators and BMC as to access to the documents produced by it, which dispute was not resolved until about March 2009. Further, the deed administrator sought expert building and construction advice as to the documents produced by BMS, as well as legal advice from Counsel (presumably as to the causes of action that might lie against BMC). Mr Rohan Cush, a solicitor acting for BMC, has deposed by affidavit sworn 6 May 2011 that the last occasion on which inspection of the BMC documents occurred was in May 2009. 15The current application arises out of steps taken in April this year by the deed administrator - namely, the issue and service on BMC of a further order for production dated 27 April 2011 (limited to production of the agendas and minutes of meetings of the project control group for the project for the period 1 July 2004 to the date of completion but, on its face, seeking material already the subject of the earlier 2006 order for production) and the issue of a further examination summons to Mr Ryan together with an examination summons to Mr Sheedy. Both Messrs Ryan and Sheedy were employees of BMC and involved in the Mount Thorley rail spur project. (Mr Ryan was described in the subcontract as BMC's representative and Mr Sheedy as BMC's contract auditor.) 16Mr Cush has deposed to his belief, based on a review of the files in relation to the matter, that the material sought by the further order for production dated 27 April 2011 was produced by BMC in answer to the first. 17In essence, the applicants say that it is an abuse and oppressive to seek to compel a party to produce material twice and that the delay on the part of the deed administrator in progressing the matter leads to the reasonable inference that the deed administrator had elected not to pursue the litigation (and, therefore, that under the Deed of Company Arrangement, the right to do so had passed to Hunter Bulk under clause 6.6 of the Deed and hence the application for examination of Messrs Ryan and Sheedy is not for any legitimate purpose). 18A further fact to note is that there is now litigation on foot between BMC and Wambo in relation to the Mount Thorley rail project, in relation to which the matters the subject of the 2011 orders for production and examination are said to be relevant. Indeed, after I had made the orders on 13 May 2011 there was an urgent application made by Wambo in relation to the proposed examinations, which has been stood over pending the consideration by Wambo of my reasons on this present application. Even prior to Wambo's intervention, BMC had contended that the existence of this litigation gave rise to prejudice to it arising out of the present examination summonses having regard to the public nature of the examination process. Issues 19The issues for determination are therefore: (i) Is there an arguable case of non-disclosure or abuse of process by the deed administrator so as to establish a basis for access on the part of the applicants to the confidential s 596(c) affidavits(s) and, if so, should access be granted? (ii) Should the Order for Production be set aside? (iii) Should the examination summonses be set aside? 20I consider each in turn. (i) Access to confidential affidavit(s) 21An affidavit required, pursuant to s 596C of the Corporations Act to be filed in support of an application under s 596B, is not to be available for inspection unless the court orders. Such an order will not be made unless the court is satisfied that there is an arguable case to set aside the determination and that the court would not be able fairly and properly to determine that case if part of the relevant evidence was not available (noting the authorities cited in Austin and Black, Annotations to the Corporations Act [5.596]). 22The test as to whether access should be granted to a confidential s 596C affidavit was set out by Barrett J in O'Brien v Wily (2009) 74 ACSR 145. The threshold question was there noted (at [27]) as being the existence of an arguable case that the issue of the summons exceeded the court's power (following which, the question is then whether access to the affidavit is likely to assist in determining the challenge). His Honour said: In a case such as the present, the court considering the application for review may or may not have before it the s 596C(1) affidavit filed in support of the application for the issue of the examination summons. In Meteyard (above) at [140] and [141], Basten JA made it clear that a person seeking to have an examination summons set aside does not, merely by mounting the challenge, place an evidentiary burden on the liquidator to reveal the content of the s 596C(1) affidavit. If the person who has initiated the challenge wishes to the affidavit to be before the court for the purposes of its review, that person must first show that there is an arguable case that the issue of the summons exceeded the court's power under s 596B and that access to the affidavit is likely to assist in determining the correctness of the challenge: see also Ariff (above) at [25] and [26]. In other words, if that person wishes to ensure that the s 596C(1) affidavit is before the court upon the review, the person must independently negotiate the s 596C(2) hurdle. (my emphasis) 23In the present case, the applicants based their claim for access to the confidential affidavits on the grounds that there was an arguable case that: (i) there had been a failure to inform the court that an earlier order for production (issued on 28 June 2006), which encompassed the material now sought, had been answered by BMC and that there had been no issue as to the adequacy of BMC's response to the order for production issued on 28 June 2006 (and a failure to inform the court of the earlier examination summons issued to Mr Ryan, and not proceeded with, notwithstanding that he was then available and ready to be examined); and (ii) the issue of the examination summonses was for an improper purpose (that being as an impermissible 'dress rehearsal'), on the basis that the examination summonses were issued only after expert assessments had been obtained and in circumstances where it had apparently not earlier been considered necessary to proceed with an examination of Mr Ryan (since the first examination summons had been allowed to become stale) or on the basis that the deed administrator no longer has any legitimate purpose for the conduct of such an examination since it should be inferred that he has elected not to pursue any such claim on behalf of the company. It was also submitted that the documents sought did not fall within the "examinable affairs" of Hunter Bulk. 24In relation to the first of those grounds, reliance was placed on the failure of the deed administrators to confirm that there had been such disclosure, when the matter was raised by the applicants' solicitors in their letter of 9 May 2011. 25The reliance that can be placed on the failure to give such confirmation seems to me to be limited. In In the matter of Mendarma Pty Ltd (in liq) [2006] NSWSC 1306, White J considered that the applicants could not establish an improper purpose "merely by making a wide range of allegations which were patently without substance, and then relying on his not responding to those allegations as a basis for inferring that he had an improper purpose". 26That said, where (as here) there would seem to be a reasonable basis for the suspicion that the court might not have fully been informed of a relevant fact (namely, the earlier production of documents falling within the very category of which production is again now sought), then the failure by the deed administrator to confirm that such a matter had been disclosed might well permit an inference of non-disclosure (in the sense that in those circumstances it might be thought that the deed administrator could reasonably have been expected to provide such confirmation if that had been the case, particularly having regard to the manner in which commercial litigation is now expected to be run - see Allsop J, as his Honour then was, in White v Overland [2001] FCA 1333)). In saying this, however, I do not suggest that there was any evidentiary burden thrown on the deed administrator merely by reference to the fact that the challenge as to the existence or extent of any such disclosure had been made. 27Having regard to the overlap between the categories of documents sought to be produced on the respective occasions I considered that an arguable case of non-disclosure could be made out. 28As to the second ground (improper purpose), various matters were raised. In relation to the submission that this is an attempt to have a 'dress rehearsal' of cross-examination of the respective witnesses, I note that in Mendarma , White J, considering the question of when a 'dress rehearsal' may amount to an improper purpose, referred to the summary of the relevant principles by Lander J in Re New Tel Limited (In Liquidation); Evans v Wainter Pty Ltd (2005) 221 ALR 331; 54 ACSR 284 (at [252]). That summary included the propositions that it is not improper to seek an order of the court to summon a person for examination while litigation is pending against that person or entities connected with that person and that the question whether, in any particular case, the applicant has used the procedure abusively will depend upon the applicant's purpose in seeking the order and all of the surrounding circumstances (Lander J there saying that it will not be an abuse unless an offensive purpose is at least the predominant purpose). White J went on to say that: In my view, the evidence does not support the submission that Mr McDonald's purpose, let alone his dominant purpose , was the improper one of conducting a dress rehearsal of cross-examination of the applicants. Such a conclusion would not be drawn merely from the fact that proceedings are pending, let alone from the fact that proceedings are contemplated against the examinees. (my emphasis) 29His Honour also noted the caution expressed in Hong Kong Bank of Australia Limited v Murphy (1992) 28 NSWLR 512 by Gleeson CJ (at 518-519) to the effect that the fact that current proceedings are pending makes it necessary for the court to be alert to the possibility that a proposed application might be used for an improper purpose. 30On this issue, for the reasons set out in relation to issue (iii) below, I was not satisfied that the evidence disclosed an arguable case of improper purpose of this kind. I accepted the evidence of Mr Shepard as to his purpose in seeking to hold the examinations, that being a permissible purpose on the analysis of proper purpose considered in Re Westmex Ltd (in liq) (1995) 13 ACLR 1070. 31It was further submitted for BMC that the documents sought in the order for production (relating to the project control group meetings between Wambo and BMC), without being limited to the affairs of Hunter Bulk, did not relate to the examinable affairs of Hunter Bulk (and hence there was no legitimate purpose in seeking them). 32The definition of 'examinable affairs' in s 9 of the Corporations Act 2001 (Cth) is broad. In Meteyard v Love (2005) 65 NSWLR 36 at 45, Santow JA said: Insofar as the scope of the power depends upon whether the enquiry is directed to the 'examinable affairs' of the corporation, I would emphasise the need for caution in any a priori observations seeking to limit the scope of that very broadly defined expression. 33Basten JA in Meteyard said (at [39] to [43]): A consideration of the terms of s 596B(1)(b)(ii) suggests that the scope of the power is delimited by four considerations, namely that: (a) the proposed examinee may have "information" to give; (b) the information must be relevant in the sense that it is about "examinable affairs of the corporation"; (c) because the purpose of the section is to allow the receivers and managers to be informed of facts about the affairs of the company, the information should be information not within their knowledge, although the extent of knowledge will not be precisely definable, and (d) there must be a factual basis for the Court to form a reasonable state of satisfaction that a proposed examinee may have relevant information. ... In relation to such bodies [connected entities], the business affairs of the body can be examined if they are or appear to be "relevant to" the corporation or the corporation's examinable affairs. This provision confirms the conclusion that the internal operations or activities of another person or corporation will not fall within the examinable affairs of the corporation simply because they have the potential to affect the value of the assets of the corporation. In other words, although the "property" of the corporation may constitute part of its examinable affairs, the phrase "information about" such property should not be read so broadly as to include "any information which may affect the value of the property". Application of these principles would suggest that, at least where a decision has been made and communicated, the internal assessment of information by advisers to the insurer fall outside the category of "examinable affairs" of Southland Coal, even though the result of that assessment may be relevant to the decision taken by the insurer and hence to the value and even the solvency of Southland Coal. Such an assessment may need to be distinguished from the insurer's decision with respect to the claim and its grounds for refusal, if it is declined. And an assessment should be distinguished from the information being assessed and, arguably, the fact that the insurer had, or did not have knowledge of particular information. 34His Honour concluded (at [47]) that: Returning to the scope of the power conferred by s 596B, the aspect of the examinable affairs of the company of primary relevance in the present circumstances is sufficiently encapsulated in the concepts of management and administration identified in par (a) of the definition of "examinable affairs". Part of the management and administration of Southland Coal will be deciding whether to institute proceedings against QBE in relation to a denial of liability under the insurance policy. Information relevant to that decision forms part of the examinable affairs of Southland Coal. Such information will, consistently with the authorities, include: (a) information necessary to assess the justification or otherwise of the denial, and (b) in an appropriate case (of which this is not one) information as to the worth of the potential defendant in such proceedings. Such material falls within the proper field of examinable affairs described by Street J in Re Hugh J Roberts Pty Ltd (In Liq) and the Companies Act (at 540; 584), quoted with approval by the Full Court of the Federal Court in Grosvenor Hill (Qld) Pty Ltd v Barber (1994) 48 FCR 301 at 309: "The liquidator is given by the statute this special authority to proceed by way of private examination to obtain information which he needs for the due winding up of the company, the affairs of which he has the responsibility of administrating." 35Mr Lo Surdo submits, as self-evidently is the case, that the subcontract constitutes part of the business of Hunter Bulk and thus enquiries as to the contract or matters relevant to its performance will form part of the company's examinable affairs. It seems to me that minutes of what occurred in project control group meetings with the head contractor may well be relevant to the scope of work required to be performed by Hunter Bulk under its subcontract with BMC and hence to an assessment of any damages for the alleged repudiation of the agreement by BMC. Thus, I did not accept that the documents sought in the latest order for production did not relate to the examinable affairs of Hunter Bulk simply by reason of the fact that they might encompass minutes of meetings between BMC and Wambo. 36(In passing I note also that there is no suggestion that any objection was earlier taken to the production by BMC of documents of the kind listed in paragraph [6] of Mr Cush's affidavit (which Mr Lo Surdo confirmed are what is now sought by the deed administrator) on the grounds that they did not relate to the examinable affairs of the company.) 37I did not consider the scope of the present Orders for Production (at least if limited to the documents in para [6] of Mr Cush's affidavit) to be objectionable. 38As to the final matter raised in this context (whether there could be said to have been an election not to pursue any litigation), I concluded otherwise for the reasons set out in (iii) below. 39In summary, therefore, on the issue in (i), I considered that an inference could be drawn that the fact of the previous production order (and extent of compliance therewith) had not been sufficiently drawn to the attention of the court. It seemed to me that the probability was that had this issue been drawn clearly to the attention of the Registrar then (unless there was an explanation for the fact that the documents were again being sought to be produced), it was unlikely that leave to issue a further order for production would have been granted and that in the absence of any such explanation in the proceedings before me there was an arguable case of non-disclosure. (I did not consider that any such inference could be drawn as to the question of non-disclosure in relation to the renewed examination summons - since there might have been a number of reasons why a fresh application would be made and since the reasons why the earlier summons was not pursued seemed to emerge from the affidavits sworn by Mr Wilkinson over the period in question.) 40Turning then to the second part of the test for the grant of access, in order to have access to the examination summonses it must be established that the court would not be able fairly and properly to determine the application to set aside the summonses if part of the relevant evidence was unavailable. In Re Excel; Worthley v England (1994) 52 FCR 69, it was said that if one cannot fairly deal with an application in the absence of reference to the confidential affidavit then reference can be made to it. 41Mr Lo Surdo submitted that if, contrary to the deed administrators' submissions, I was of the view that there was an arguable case of non-disclosure (as I was), then I should adopt the course suggested as appropriate in Re Excel and inspect the affidavits myself in order to determine the issue as to whether access should be given based upon my review thereof. 42In Commonwealth of Australia v Sheahan, in the matter of Markethaven Pty Ltd (subject to a deed of company arrangement) [2004] FCA 1301, Emmett J in which his Honour (in considering whether the confidential affidavit was before him in evidence on the hearing of the application to discharge the orders there challenged) said (at [67]): The affidavits are on the file in which the application for discharge of the Challenged Orders has been brought. I consider that it is open to the Court to have regard to the affidavits in order to determine the extent of the disclosure made by Mr Sheahan to the Court when applying for the Challenged Orders. and at [71]: I consider that, to the extent that it is relevant, the Court may have regard to the contents of the affidavits for the purposes of determining the matters that were disclosed to the Registrar. That does not involve treating the affidavits as evidence of the truth or otherwise of the statements made in them. 43The above passages in his Honour's judgment in Markethaven followed the finding that there was at least an arguable case that the dominant or principal purpose of the liquidator in that case in obtaining the challenged orders was an improper purpose (which, if sustained, would entitle the applicant to a discharge of the orders). 44Here, where the application to set aside was based at least in part on non-disclosure, and I formed the view that there was an arguable case of non-disclosure to which the content of the confidential affidavits must logically be of relevance, I considered the second part of this test to be met. I therefore reviewed in chambers the confidential affidavits. That review satisfied me that there had been adequate disclosure as to the previous orders (and as to the reason the documents in question were now sought) and I refused access on the part of the applicants to the confidential affidavits. (ii) Application to discharge Order for Production 45It was submitted first, that there was no basis for the order for production to stand to the extent that it compels BMC to do that which it has already done, and thus it should be set aside as oppressive and an abuse of process. 46(Further, insofar as the Act provides that an order for production for the purposes of an examination under s 596A or s 596B of the Corporations Act may be issued provided that the order is for the purposes of a particular examination and if the court is satisfied that there is sufficient connection between the production of the documents sought in the order and the particular examination (per Onefone Australia Pty Limited v One Tel Limited [2007] NSWSC 1188), it is said that if the examinations summons are set aside then so also should the order for production be set aside. This basis for the challenge logically can only be determined after a ruling on issue (iii) and, as I have formed the view on that issue that the examination summonses should not be set aside, this ground of complaint must also fail.) 47As to the oppression said to result from the need to comply a second time with an order for production of documents, it seems to me that this was sufficiently met by the fact that the deed administrator (whether or not he or his representatives had earlier inspected these particular documents) now says that he does not have copies of the documents identified in paragraph [6] of Mr Cush's affidavit and is content for the Order for Production to be limited to those documents. As there was no suggestion that production of these limited documents would be oppressive, and the duplication of effort in producing them a second time could be met by an order for costs, I considered it appropriate to limit the Order for Production accordingly but not to set it aside. (iii) Application to discharge examination summonses 48It was accepted by the parties that the relevant principles guiding the approach to this application are as set out by Barrett J in O'Brien v Wily , this being a review of the Registrar's decision and not a hearing de novo (although I note that in other proceedings recently before me it has been submitted that this is an incorrect conclusion, albeit one that is binding on a judge at first instance in this Court - In the matter of Idoport Pty Ltd (in liq)(recs apptd) [2011] NSWSC 322 - and therefore it cannot be assumed that there is no doubt on the point). 49An examination summons may be set aside where the examination summons was issued for an improper purpose so as to constitute an abuse of process; in the case of an examination under section 596B, where the exercise of the discretion by the Court has miscarried or in reviewing the decision of the Registrar with the benefit of additional evidence, the summons ought to be set aside; or where there has been material non disclosure by the applicant in making the application for the examination summons. 50The application to discharge the summonses in this case was based on the same two broad grounds as the application for access to the confidential affidavits: first, that there had been non-disclosure of material matters and, secondly, that there was an improper purpose and thus that the issue of the summonses was an abuse of the court's process. There were also issues raised going to the exercise of the discretion having regard to the delay in seeking to invoke the power to examine and the prejudice said to be likely to flow therefrom. (i) Non-disclosure 51In Mendarma (at [45ff]) White J noted that in Re Southern Equities Corporation Ltd (in liq); Bond & Caboche v England (1997) 25 ACSR 394 Lander J, with whom Cox and Bleby JJ agreed, had said (at 422-423) that as an application for an examination summons is made ex parte, "there is a heavy obligation upon the person applying for the examination summons to make full and frank disclosure of all matters which may impact upon the decision to summon a person for examination about a corporations examinable affairs". 52In Southern Equities, Lander J went on to say: There can be no doubt, in my opinion, that a person who makes an application of this kind is under an obligation to bring all facts and material to the court's attention which might bear upon the order to be made. The applicant has no lesser obligation than that imposed upon a party seeking an injunction ex parte. Indeed, in my opinion, the obligation for frankness and candour is even greater in an application of this kind. That is because, unlike on the return of an interlocutory injunction obtained ex parte, on the return of an examination summons the material supporting the application is not ordinarily made available to the proposed examinee. Because the proposed examinee, ordinarily, is not privy to the information or material which was used to support the application for the examination summons, the person applying for the examination summons has the very highest obligation relating to frankness and candour and any breach of that obligation, in my opinion, ought to be viewed very seriously by the court. The obligation is to provide to the court all material which might impact upon the order sought, including all material which might lead the court to refuse the application. The applicant must act in the place of the proposed examinee and therefore draw to the attention of the court anything which might lead the court to refuse the application. (my emphasis) 53In Walter Rau Neusser Oel Und Fett AG v Cross Pacific Trading Ltd [2005] FCA 955, Allsop J, as his Honour then was, adopted the relevant principles of ex parte disclosure as those discussed by Isaacs J in Thomas A Edison Ltd v Bullock (1912) 15 CLR 679 at [681]-[682] and by Mahoney AP in Gerrard v Email Furniture Pty Ltd (1993) 32 NSWLR 662 at 676-77 (and in the cases there referred to by his Honour) and emphasised the high standard of candour and the heavy responsibility on those who seek ex parte orders, especially where a discretion is involved. His Honour said that: In an ex parte hearing, it is the obligation of the party seeking orders, through its representatives, to take the place of the absent party to the extent of bringing forward all the material facts which that party would have brought forward in defence of the application : ... squarely putting the other side's case, if there is one, by coherently expressing the known facts in a way such that the Court can understand, in the urgent context in which the application is brought forward, what might be said against the making of the orders. 54In Town & Country v Partnership Pacific (1988) 20 FCR 540 at 543, the rationale behind this principle was noted, namely that it is of the utmost importance in the due administration of law that the courts and the public are able to have confidence that an ex parte order has been made only after the party obtaining it has complied with its duty to disclose all relevant facts. 55 Mr Hicks further observed that the duty of disclosure in general terms was such that even if something had been forgotten (such as, perhaps here, the compliance with an earlier order for production) a failure to disclose it may be sufficient to lead to the order being set aside (see Clifton v Robinson (1853) 16 Beav 355; 51 ER 816) . 56I accept that there is a heavy duty on the applicant seeking ex parte orders in this case. However, having reviewed the confidential affidavits I was not satisfied that there was any material non-disclosure. (ii) Improper purpose 57The second basis on which the challenge was made was that the deed administrator was seeking to exercise the coercive power to examine Messrs Ryan and Sheedy for improper purposes. In this regard, a number of matters were raised. 58First, it was said, that this was in truth a private interest being pursued (not that of the company) because under the Deed of Company Arrangement the failure to pursue the litigation to date meant that the right had now reverted to the company (and thus that the present examinations were not being carried out in the interests of the corporation, its contributories and creditors) and, if so, then the deed administrator has no legitimate power to exercise pursuant to s 596B of the Corporations Act and what is being exercised then is not an assessment of the examinable affairs of the company but the use of that power for the forensic benefit of an (unidentified) third party. It was noted in support of such an inference that there have been no reports provided by the deed administrator to creditors as to the status of the litigation (as contemplated or required under clause 6.7 of the Deed of Company Arrangement). 59It does not seem to me that the evidence in the present case supports a finding that the deed administrator has elected not to pursue any litigation. While there has been a delay in the commencement of any proceedings, and in the pursuit of the examinations the subject of this application, the fact that the deed administrator has incurred the costs and expenses of obtaining expert building and construction advice in relation to the project and has sought legal advice as to the matter, seems to me to be inconsistent with an election not to pursue any such claim. I consider that the evidence supports the conclusion that the deed administrator is seeking to hold the present examinations for the very purpose of assessing the prospects of a claim so as to be able to make an election in that regard. 60In Excel ( at p 92), the distinction between the pursuit of private interests and interests for the benefit of those contemplated in the section was discussed, the distinction being noted as to the purpose of the creditor in funding the examination (motivated to advance its own interests) and the purpose of the liquidator in conducting the examination. There is nothing to suggest the deed administrator is acting other than in the interests of the Hunter Bulk, nor that anyone with an interest in Hunter Bulk is asserting any basis to act in place of the deed administrator. 61Secondly, it is submitted that the present application is an attempt to obtain an impermissible forensic advantage. In Excel , the court said of the question of improper purpose: Street J said in Re Hugh J Roberts Pty Ltd (In liq) [1970] 2 NSWR 582 at 585, in a passage quoted with approval by the Court of Appeal in the HongkongBank case (at 518) and by Mason CJ in Hamilton v Oades (at 497): A liquidator needs information concerning his company just as much in connection with current or contemplated litigation as in connection with other aspects of its affairs. In using the statutory machinery of private examination he will in many cases be gathering evidence as an ordinary and legitimate use of this procedure ... In my judgment it is immaterial in basic substance whether the private examination is sought to be used by a liquidator to gather information in connection with proceedings he believes he might be able to bring, proceedings he contemplates bringing, proceedings he has decided to bring, and proceedings he has already brought. There is no presently relevant distinction in substance between gathering information referable to commencing proceedings and gathering information referable to continuing proceedings. On the same page Street J counselled liquidators not to be diffident in using a private examination for the ordinary and legitimate purpose of gathering in information. His Honour warned, of course, that the process should not be abused, giving, as an illustration, an attempt, where litigation was either contemplated or commenced, to summon the prospective or existing defendant's probable witnesses and examine them simply for the purpose of destroying their credit. So to do would involve using the examination process to obtain a forensic advantage in litigation, whether or not that litigation was yet commenced. Another, albeit related, case of abuse would be the conduct of an examination to enable a "dress rehearsal of the cross-examination" to be instituted of a trial impending or contemplated. Other examples may be the use of an examination summons to obtain de facto discovery where a discovery order had been refused in proceedings already on foot. It is neither possible nor desirable to catalogue all the circumstances where use of an examination summons might constitute an abuse of process. Whether there will be, in a particular case, a use of the process or an abuse of it will depend upon purpose rather than result . The consequence of an examination may well be that the examiner has conducted a "dress rehearsal" of cross-examination which may take place in a subsequent trial. The fact that the trial has commenced, or is contemplated, may throw light upon the purpose. But merely because other proceedings had been commenced or are contemplated would not involve, of itself, an abuse of process. This follows having regard to the nature of the investigative process which could throw light on the question, inter alia, whether there was evidence which would warrant a liquidator, for example, proceeding against an examinee. But it may be quite a different question where proceedings contemplated or instituted are not proceedings to be brought by the company, but proceedings brought by some other party for the advantage of that party rather than the company. For example, it would be an abuse of process for a creditor approved by the Commission for the purposes of s 597(1) to obtain an examination summons to conduct an examination for the purpose of obtaining evidence in proceedings which the creditor proposed to bring against the examinee for defamation. That would be a purpose completely foreign to the power of examination which is ultimately in aid of the company itself and not the personal advantage of the person seeking to conduct the examination. (my emphasis) 62In Meteyard at [44], Basten JA said: There is, in addition, an established line of authority to the effect that an eligible applicant under s 596B may examine a potential defendant, or an existing defendant, in relation to proposed or actual litigation, in order to determine whether the defendant has sufficient assets to meet an adverse judgment, if unsuccessful in the litigation. On the other hand, the authorities draw a line between those possible topics of inquiry and use of the examination process to determine the strength or weakness of the corporation's case, or its opponent's case, in relation to the dispute. In the recent decision of the Full Court of the Supreme Court of South Australia, Re Normans Wines Ltd (Receivers and Managers appointed) (In Liq); Harvey v Burfield (2004) 88 SASR 541 at 552 [41], Mullighan J quoted without criticism, the following statement of the trial judge: " '[41] The authorities establish that an improper purpose includes a purpose of using the examination as a dress rehearsal for cross-examination, or for the purpose of destroying the credibility of the examinees or witnesses who might be called for the examinee in substantive proceedings, or for the predominant purpose of obtaining a forensic advantage not available from ordinary pre-trial procedures, or simply to cause undue inconvenience or embarrassment to the examinee or to inflict costs'." 63Similarly, in Excel it was noted (as stated by Gleeson CJ in Hong Kong Bank of Australia Ltd v Murphy (1992) 28 NSWLR 512 at 519) that the possibility that a forensic advantage will be gained does not mean that a making of an order will not advance a purpose intended to be secured by the legislation. Further, what is required is that there be an improper forensic advantage and that the purpose in question must be the predominant purpose: It is apparent that the question whether there is, in a particular case, an abuse of process will be a question which will depend upon the purpose of the applicant seeking the order of the court and the circumstances of the case. For an abuse to be found it will be necessary that the offensive purpose be, at the least, the predominant purpose: see Burns Philp & Co Ltd v Murphy (supra) at 732 and Williams v Spautz (supra) at 529. 64The applicants place weight on the delay on the part of the deed administrator(s) (of some nine months since Mr Wilkinson's affidavit of 29 June 2010 when it was anticipated that the affidavit and process in relation to the application for examination summonses could be filed within the next four weeks before the issue of the order for production and the examination summons on 27 April 2011, and of some five years in making the applications for the examination summonses and orders). They submit that this delay is a guide as to the purpose of the deed administrator in now seeking to undertake an examination, particularly where (it is said) the delay is unexplained; the deed administrators had the opportunity to examine Mr Ryan and elected not to do so; the application is made after the deed administrator has obtained expert evidence in connection with the claims against BMC; it is a reasonable inference that these reports have been obtained by reference to documents provided in answer to orders for production, including the order served upon BMC of 28 June 2006; and the application was made after the deed administrator has had access to BMC's documents for five years and has both consulted other witnesses in respect of these documents and obtained advice from Counsel. 65The issue of examination summonses at this time (in circumstances where Messrs Ryan and Sheedy may be examined as to relevant matters by reference to expert assessments) is said by Mr Hicks to give rise to the inference that this is not a process undertaken for a legitimate purpose but is an impermissible dress rehearsal of the kind that is not permitted as a matter of established principle (an inference said to be supported by the fact that the deed administrators did not consider there was any need to examine Mr Ryan when there was the prior opportunity to do so). 66The applicants contend that clause 6.5 of the Deed of Company Arrangement, which provides for the deed administrators to pursue the litigation (subject to there being valid prospects and funding) makes it clear that what is taking place by the issue of the order for production and the examinations summons on 27 April 2011 is a dress rehearsal for the proposed proceedings. It seems to me, to the contrary, that the fact that the deed administrator is required to investigate and quantify the prospective claim is a factor that points to the legitimacy of the purpose for which the examinations are now being sought, not otherwise. 67Mr Lo Surdo submits that the onus of satisfying a court that there is an abuse lies on the party alleging it and the onus is a heavy one and that it lies on the proposed examinee to demonstrate that predominant purpose in seeking the examination is improper. The statement of purpose contained in the s 596C affidavit is given great weight. 68Mr Lo Surdo notes that permissible purposes for the conduct of examinations have been said to include the determination as to whether proceedings are sufficiently meritorious to warrant them being commenced or continued and their likely prospects of success; to demonstrate the viability of a proposed proceeding; and to gather information to assist in the administration of a corporation. Those seem to me to be the purposes for which the examination summonses have now been issued. I accept that the deed administrator is invoking the examination summons process in order to determine the prospects of success of litigation on foot (as was contemplated, if not indeed required, under the terms of his appointment). 69While it is well established that the examination process is not a "dress rehearsal" for cross examination or seeking to assemble material in order to attack the credit of a witness ( Evans v Wainter Pty Limited at [252] per Lander J; quoted in Wily re LED (South Coast) Pty Ltd [2009] NSWSC 946; (2009) 74 ACSR 145 at [36] and [42] and see the discussion earlier above), there is in my view no basis for concluding that the present case is an attempt to have a "dress rehearsal" of cross-examination simply because the deed administrator appears to have prepared (perhaps more extensively than may in other cases have been done) by reviewing the documents and obtaining expert advice on project or construction matters (as well as legal advice) before the commencement of the examinations. Where the claim is one that may involve technical matters, it seems to me to be prudent for the deed administrator to have sought to be in the position where any examination can yield informative results and that it can be inferred that this was at least one of the purposes for the preparatory steps carried out. 70I was therefore not satisfied that an impermissible forensic purpose had been established at all, let alone one which was the predominant purpose of the deed administrator. (iii) Other matters 71The power to compel for examination, which is otherwise unfettered, must be exercised judicially ( Southern Cross Petroleum Sales (SA) Pty Ltd (in liq) v Hirsch (1998) 70 SASR 527, per Lander J at 536). In that case, his Honour noted that in exercising the discretion to issue an examination order, the court may have regard to a number of matters. Those include the seriousness of the matters to be inquired into; the use to which the information obtained on the examination might be put; the possibility of an advantage to the eligible applicant which he or she would not otherwise enjoy and the concomitant disadvantage to the prospective examinee; the availability of the information from other sources; the cost to the prospective examinee in attending for examination; whether the information sought is so peripheral to make the attendance of the prospective examinees oppressive; and the wider public interest in investigating the affairs of the corporation (at 536-537). 72In relation to the matters to be taken into account in considering the exercise of the court's discretion in issuing an examination order (or discharging that order), it is submitted by Mr Hicks that it is relevant that that the application is made 5 years after the proceedings were instituted, at a time when recollections of examinees will not be as good as they would have been had the examinations taken place earlier. 73It has, of course, been recognised in a number of cases that delay in the conduct of litigation may cause prejudice by reference to the deterioration in the quality of the evidence ultimately able to be adduced at trial. In Brisbane South Regional Health Authority (1996) 139 ALR 1, McHugh J (in the context of considering the broad rationales for the existence of limitation periods) noted (at [8]) the general perception that, where there is delay, the whole quality of justice deteriorates and that such deterioration in the quality of evidence will not necessarily be recognisable even by the parties. I note also the comments on the unreliability of human memory by McLelland CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315. 74As to the explanation for the delay, the deed administrators contend that this has been caused by a number of factors: the need to obtain funding for the examinations (obtained by October 2007); the administrative error in relation to the premature return of documents by the court registry, causing a delay in the inspection of the documents (not completed apparently until some time in 2009); a dispute between the deed administrators and BMC regarding access orders to the documents produced by it (not resolved until approximately March 2009); the need to inspect the voluminous documents produced, retain an expert to consider those documents and provide relevant reports, the briefing of counsel experienced in building and construction matters and attending to matters requested by counsel; and the receipt of advices from Counsel. At least up to the point at which the decision was taken to obtain expert reports (which of itself also seems to be not unreasonable), it seems to me that it is difficult to criticise the deed administrator for the delay. 75I accept that this is a matter to be taken into consideration in exercising a discretion whether to permit examination summonses to issue after a period of delay. However, the delay in the present case has not been excessive in my view (having regard to the explanation proffered for the delay). Moreover, having regard to the policy which must be taken to be reflected in the limitation period applicable to claims for wrongful repudiation of contract (of six years since the cause of action accrued) and the fact that that period has not yet elapsed, any deterioration in memory up to now is one that must be seen as an acceptable risk. 76Further, where, as here, the question for the proposed examinations is as to the assessment of the prospects of success of a cause of action, the impact of delay on the witnesses' recollection of events may be a matter relevant to be tested at the examination stage. (It would also seem to support the conclusion that it would be in the interests of all parties that steps be taken to preserve evidence of events in advance of what might be a delay in any proceedings reaching a hearing.) Therefore, the delay to date is not a matter that I considered should lead to the conclusion that the present examination summons be set aside, though it is a relevant factor. 77It is also said by Mr Hicks that, in circumstances where proceedings have in the meantime been issued against BMC by Wambo in relation to matters the subject of the subcontract between BMC and Hunter Bulk, there is a prejudice to BMC arising out of the public nature of the examinations (since that means that Wambo will have access to the transcripts of the examination on payment of a fee by reference to s 597(14A) of the Corporations Act and hence will be in a position to obtain a forensic advantage over BMC). As such, it is said that the delay in making this application has caused prejudice to BMC and its witnesses even though the deed administrator has given evidence that he was unaware of the proceedings commenced by Wambo against BMC. That is a matter that was of greater concern to me, as I outline below. 78As to the risk of prejudice said to arise out of the existence of civil proceedings now on foot which cover the same or some of the same ground as the matters the subject of the proposed examinations, in one sense it might be said that there is no prejudice beyond that which would have been imaginable back in 2006 had the examination of Mr Ryan been held at that time (since there would then presumably have been a prospect of litigation by the head contractor and there would have been the same ability of Wambo to obtain the transcript at that stage and potentially to use the knowledge gleaned from the examinations in preparation for its own case or to seek to admit that transcript in evidence in its own proceedings). Nevertheless, I accept that whatever the position in 2006 there is a potential prejudice now to BMC arising from the forensic disadvantage of being examined about the very matters that will be before the court in other civil proceedings. 79I was informed by Mr Lo Surdo that the deed administrator did not oppose a direction that the examinations be held in private (as is recognised can be appropriate where the evidence in an examination may prejudice the position of the examinee in other proceedings). However, Mr Hicks raised concern that this might not address the whole of the question of prejudice of this kind as the transcript of the examinations might still be available to Wambo (an anomaly recognised by Barrett J in Strarch International Ltd [2005] NSWSC 583). In that case, his Honour said (at [26]): It may be said that this approach [namely that there is a statutory entitlement to have access to transcript under 2 597(14A)] produces the anomalous or undesirable consequence that, if, for reasons judged sufficient for the purposes of s 597(4), the court orders that the whole or some part of the examination be held in private, the unavailability of s 596F(1)(e) as a means of denying the right to inspect a s 597(13) record of questions and answers means that the decision that the examination be in public is undermined. though noting (in the introduction to a passage to which I will return) that It is to be remembered, however, that the court is not compelled to make an order under s 597(13) that questions and answers be recorded in writing. Its power to make such an order is discretionary. 80The first question, therefore, in considering the import of the forensic disadvantage identified by reference to the subsisting Wambo proceedings is to consider whether that could be addressed by a direction that the examinations be held in private and then as to whether any directions could or should be made in relation to access to transcript of such private examinations. 81In Austin & Black's Annotations to the Corporations Act it is said (at [5.597] that: ... The presumption that an examination be held in public reflects a legislative recognition that a public examination is beneficial to the commercial and general community, and that the privilege of incorporation is given on terms that the company's affairs can be examined and any examination will ordinarily be held in public if the company fails. The court will not order that an examination proceed in private unless a question and answer or line of questioning would result in prejudice which outweighs that presumption: Friedrich v Herald and Weekly Times Ltd [1990] VR 995; (1989) 1 ACSR 277; 8 ACLC 109; Jagelman v Sheahan (2002) 41 ACSR 487; [2002] NSWSC 419; Re Pan Pharmaceuticals Ltd (2003) 176 FLR 341; 48 ACSR 452; [2003] NSWSC 1204; Re Euro Star Pty Ltd (in liq) [2004] NSWSC 462; Re New Tel Ltd (in liq); Evans v Wainter Pty Ltd (2005) 145 FCR 176; 54 ACSR 284; [2005] FCAFC 114 at [91]. 82In Parbery Re Trio Capital Ltd [2010] NSWSC 775, Barrett J at [7] - [8] noted that the court cannot order that an examination or any part of it be conducted in private unless it is satisfied that there are "special circumstances" by reason of which it is desirable that the examination be held in private and that a positive case of the desirability of examination in private must be established by reference to "special circumstances". His Honour referred to John Fairfax Publications Pty Ltd v District Court (NSW) [2004] NSWCA 324; (2004) 61 NSWLR 344 and to the philosophy recognised in Friedrich v Herald and Weekly Times Ltd (1990) VR 995, at p 1003 as underlying the requirement that such examinations be held in public: There can be little doubt, therefore, that an examination in public, in contrast to one in private, is seen as the norm under the present legislation. One may venture some opinions as to why this is so. The legislature must have seen it to be desirable that, whenever an examination is ordered, it should be given as much publicity as the matter deserves. Since no dispute is resolved upon the hearing of an examination, the benefit must be seen in the general publication of the proceedings, whether by press, radio, television or by word of mouth. Not only might that lead to the possibility of further information being provided from other sources to the liquidator or other person in control of the company, but the risk that improper activities of company officers might thereby be spread abroad may have been thought as some form of deterrence to them: cf McPherson on Company Liquidation, 3rd ed, p 431. One may doubt that the more thick skinned of the company "sharks" of this world would be especially conscious of the risk of examination, but at least the possibility of public examination may be seen as part of the price paid for the privilege of incorporation and the right to transact business as a company, albeit that the price is usually paid by those who become directors or officers of that company. However, it is not for this court to query the policy of the statute, whatever views one may have as to the need for a public examination for the purposes of para (b) of subs(2). 83In Parbery , his Honour was satisfied that there was a competing public interest in the protection of investigative and law enforcement functions of the kind dealt with by the international agreement there before him and that this outweighed the general expectation that proceedings should take place in public. 84In other contexts it is also recognised that concerns may arise not simply because of the existence of proceedings commenced by the liquidator against the examinee and that there is an issue as to the appropriateness of the liquidator conducting an examination where that may give a forensic advantage to another party in other litigation. (In McPherson's Law of Company Liquidation at [15.720] the issue is discussed in the context of when a person who is likely to be a party to (or a witness at the hearing of) legal proceedings that the liquidator or another person is either contemplating or has already commenced in relation to the affairs of the company in liquidation can be examined, the authors noting that "The obvious concern of parties who may be or are the subject of a liquidator's action is that the liquidator (or, I might add, a third party) will be able to gain, through the use of an examination, significant forensic advantages in the conduct of contemplated or pending litigation." The relevant interests to be balanced in this regard are said to be "on the one hand, the interests of the public and the creditors to permit the collecting of all necessary information relating to the winding up of the relevant company and, on the other hand, that the proposed witness is accorded justice and the right to privacy" (citing, amongst others, Ford's Principles of Corporations Law at [27.170.1]; Australian Corporation Law Principles and Practice at [5.7B.0005]-[5.7B.0100]; McPherson's Law of Company Liquidation at Ch 15; G Parker, "Liquidator's Examinations" (1993) ABR 25; PJ Keenan, "Investigations by External Administrators" (1995) 13 C&SLJ 368; S Maiden, "Tensions between the Public and Private Purposes of Examinations under Pt 5.9 of the Corporations Act 2001 (Cth)" (2004) 12 Insolv LJ 28.) 85Here, the argument that there were special circumstances that should lead to the examination being held in private by reference to the other civil proceedings was less compelling than in Parbery . However, on balance it did not seem to me that the public interest in having examinations of this kind conducted in public (noting that the emphasis on the application of such principles in cases involving the examination of directors of a company will not necessarily have the same import where the examinee is an employee, having a lesser role in the public life of the company) was such as would necessarily require that a party in the position of BMC should be submitted to the forensic disadvantage of having its opponent in other civil proceedings made privy to the evidence of its witnesses in advance of the time at which that would ordinarily occur in that litigation. While in the context of criminal proceedings, such prejudice would be given considerable weight particularly having regard to the right to silence on the part of an accused, I accept that such considerations will have less weight in the civil context. Nevertheless, on balance, I formed the view that there were special circumstances sufficient to enliven the power to make a direction that the examinations be held in private. 86What then of the concern as to access to the transcript? I considered that Mr Hicks was correct in his submission that even if the examinations were conducted in private there would be a statutory right to have access to the transcript of the examinations. 87The weight of authority favours the conclusion that a direction under s 597(4) or 596(1)(e) cannot restrict the statutory right of access to transcript in s 597(14). 88In Strarch , Barrett J addressed a claim for orders by the liquidator pursuant to s 569F(1)(e) of the Corporations Act that no person or organization have access to documents produced to this court in these proceedings or the records of the examinations in these proceedings apart from the liquidator or his legal advisors without first obtaining an order of this Court, and held that there was no power to make orders under that section restricting the right to access to transcript that was the subject of an order under s 597(13). The relevant sections provide: 597 (13) The Court may order the questions put to a person and the answers given by him or her at an examination to be recorded in writing and may require him or her to sign that written record. (14) Subject to subsection (12A), any written record of an examination so signed by a person, or any transcript of an examination of a person that is authenticated as provided by the rules, may be used in evidence in any legal proceedings against the person. (14A) A written record made under subsection (13): (a) is to be open for inspection, without fee, by: (i) the person who applied for the examination; or (ii) an officer of the corporation; or (iii) a creditor of the corporation; and (b) is to be open for inspection by anyone else on paying the prescribed fee. 89In Strarch, reference was made to the consideration given by to the interaction between ss 596F(1)(e) and 597(14A) by Santow J (as his Honour then was) in Re New Cap Reinsurance Corp Holdings Ltd; Gibbons [2001] NSWSC 835 (although there in circumstances where the application before the court was an application for a direction under s 596F(1)(e) allowing access to records rather than denying or curtailing it). His Honour had proceeded on the basis that "records of the examination" referred to in s 596F(1)(e) was not synonymous with the "written record made under subs (13)" referred to in s 597(14A). 90Reference was also made to the decision of Anderson M in Re Emanuel Investments Pty Ltd (1996) 19 ACSR 198, where it was held to be both possible and appropriate to make an order under s 596F(1) restricting inspection of a written record made under s 597(13). In that case, Anderson M had expressed the opinion that it could not be correct that s 597 was to be treated "as an island when it comes to the rights of interested parties" and that if that were to be so there would be no work for s 596F(1) to do. Master Anderson considered that the court retained its power to give directions due to its power to prevent injustice. 91Barrett J also referred to the analysis of Campbell J in Re Eurostar Pty Ltd [2003] NSWSC 633 and said (at [23]): With one exception, none of the cases to which I have been referred supports the construction for which the liquidator contends. Rather, all, to my mind, tend against the correctness of that construction. The exception is the Emanuel Investments case but I am bound to say in relation to it that I consider the submissions made by Mr Lockhart to be compelling. The reference in Emanuel Investments to the power to give directions under s 596F as an instrument in the hands of the court for the prevention of injustice is no doubt apposite. But that, to my mind, says nothing about the interaction between s 596F(1)(e) and s 597(14A). That interaction is entirely a matter of statutory construction. To regard the s 596F(1)(e) power as not available to preclude or curtail the right to inspect given by s 597(14A) is not to treat s 597 "as an island when it comes to the rights of interested parties" or to say that there is "no work for ... s 596F(1) to do". Once the distinction emphasised by Santow J is accepted, there is ample work for s 596F(1) to do in relation to "records of the examination" even allowing for the fullest operation of s 597(14A). 92His Honour concluded (at [25]) that: In my opinion, the provisions in question must, despite what is said in the Emanual Investments case, be approached on the basis that s 597(14A) is a legislative directive that every person who wishes it is to have the ability to inspect any written record of question and answers made pursuant to s 597(13). A fee must be paid where the person desiring to inspect is not within s 597(14A)(a); otherwise, inspection is free of charge. There is also, in my view, a manifested legislative intention that the ability to inspect is not to be curtailed through an order under s 596F(1)(e), even though such an order may preclude access to the whole or any part of the remainder of the "records of the examination" in the wider sense referred to by Santow J; and this is so whether or not the examination is conducted in private or in public. 93With respect to his Honour, I consider that to be correct. However, relevantly for present purposes, his Honour went on to note the distinction between a transcript as ordered by s 597(13) and otherwise (from [27]): In drawing the valid distinction between a written record made under s 597(13) and the "records of the examination" referred to in s 596F(1)(e) and observing correctly that the latter comprehends the former, Santow J had no need, in the New Cap Reinsurance case, to mention another species of documentary recording expressly contemplated by s 597. I refer to "any transcript of an examination of a person that is authenticated as provided by the rules". Section 597(14) refers to such a transcript as well as to "any written record of an examination so signed by a person". It is thus clear that there may be either a written record made under s 597(13) or a "transcript" of the kind mentioned in s 597(14) - or, indeed, there may be both. The reference to a "transcript", it seems to me, acknowledges that, as was recognised by Campbell J in Re Doran Constructions Pty Ltd (2002) 194 ALR 101, an examination under s 596A is a proceeding in the court. Where a transcript of an examination is made and authenticated as contemplated by s 597(14) but there is no order under s 597(13) (and accordingly no written record of questions and answers made pursuant to an order under s 597(13)), s 597(14A) does not create any right to inspect the particular form of record of the examination, being the transcript. A transcript of the kind mentioned in s 597(14) is therefore amenable to directions under s 596F(1)(e) in a way that a record made pursuant to an order under s 597(13) is not. That is a circumstance that would no doubt be relevant to a decision as to the more appropriate way of proceeding in a particular case in which the existence of the statutory rights of inspection created by s 597(14A) gave cause for concern. 94In the present case, the concern is with the potential use by Wambo of transcripts of the examinations in evidence in subsequent proceedings. In Fodare Pty Ltd v Shearn [2010] NSWSC 737, Barrett J likened the evidence given in the liquidator's examinations to that given in Royal Commissions and held that no exception to the hearsay rule could be applied but found that the signed transcripts were admissible as evidence in subsequent civil proceedings. His Honour observed that s 597(14) expressly contemplated that signed transcripts would be admissible against the examinee despite any other rule of evidence. His Honour held that the admissibility of such evidence created by Commonwealth legislation prevailed "over any denial of admissibility by reason of the general provisions with respect to hearsay contained in the New South Wales enactment". 95In the circumstances, I considered that the appropriate course was to make orders for the examinations to be held in private and to put in place a regime that would maintain the ability of the Court to preclude access to the transcripts of the examinations subject to any order that might later be made on a subsequent application for access to the transcripts. It seemed to me that in this way the appropriate balance would be struck between the interest of the creditors in having the deed administrator complete the examinations necessary to assess the prospects of a claim to the potential benefit of the creditors and the concerns of BMC not to be placed in a position of forensic disadvantage (while at the same time preserving the ability of a third party (such as Wambo), if it considered there was a basis so to do, to make an application for access to the transcript of the examinations, on which occasion a (perhaps more focussed) balancing of the competing interests could be explored). Conclusion 96As to the examination summonses, for the reasons set out above, I was satisfied that they had been issued for a proper purpose. The explanation given for the delay and the steps that had been taken since 2006 were, in my view, is inconsistent with the use of the examination process being for a predominant purpose that would be seen as impermissible. In particular, I did not accept that the fact that the deed administrator had had the benefit of reviewing the BMC documents (and obtaining expert advice or legal advice as to the content of the documents or the causes of action that might be suggested thereby) meant that a subsequent examination based on that analysis would be an impermissible dress rehearsal nor that it would give the deed administrator a forensic advantage not otherwise available in litigation. 97As to delay and the potential deterioration of the quality of the witnesses' memory, I accept that this amounts to a prejudice that cannot readily be measured in all cases. However, on one view it might be thought that this makes an exercise of the examination process at this stage all the more desirable in order to preserve evidence that might otherwise be lost if the deed administrators were to wait until after proceedings were instituted and brought to the stage of the hearing. While I was not unconcerned as to the delay, I did not see it as sufficient in this case to lead to a conclusion that the examination summonses should be set aside. 98I accepted Mr Shepard's evidence as to his purpose in invoking this process. My main concern as to the impact of the delay was the prejudice that might now be occasioned insofar as the examinations are sought to be conducted while related proceedings against the company (brought by Wambo) are on foot (and where Wambo might obtain a forensic advantage through what would ordinarily be the public nature of the examinations that it would not otherwise have in the existing litigation to which it was a party). 99I considered that the appropriate course was to follow the procedure in Re Strarch and to leave open to be determined in due course, should the question arise, whether access to transcript should be granted to Wambo or any other applicant. 100Therefore, on 13 May 2011 I made the following orders: