Crosbie and Bryant, in the matter of Australian Motor Finance Limited (Receivers and Managers Appointed) and Australian Motor Finance Corporate Pty Ltd (Receivers and Managers Appointed) [2009] FCA 707

REASONS FOR JUDGMENT 1 This matter has been referred to me today by a registrar of the Court. It concerns public examinations of various persons, pursuant to s 596A of the Corporations Act 2001 (Cth) ("the Corporations Act"), arising out of the appointment of receivers and managers ("the receivers") to two corporations. In particular, the matter this morning concerns Michael O'Brien, who is a director of the corporations concerned and who is the recipient of a summons, dated 22 April 2009, requiring him to attend for public examination. There is no issue that the summons has been properly issued and served on Mr O'Brien. Nor is there any issue that, for the purposes of s 596A of the Corporations Act, the receivers are an "eligible applicant" for the summons and that the summons is one requiring Mr O'Brien to be examined about the examinable affairs of the corporations. 2 Counsel appearing for Mr O'Brien desired to raise with the Court a question that he said arises under s 597(6A) of the Corporations Act. In order to ascertain the nature of that question, it is necessary to look at some other provisions. Section 596D(1) requires that a summons under s 596A is to require the person to attend before the Court at a specified place, and at a specified time, on a specified day, being a place, time and day that are reasonable in the circumstances, and to be examined on oath about the corporation's examinable affairs. Section 597(6) provides that a person who is summoned under s 596A to attend before the Court must not intentionally or recklessly fail to attend as required by the summons, or fail to attend from day to day until the conclusion of the examination. Section 597(6A) creates an exception to subs (6), by providing that subs (6) does not apply to the extent that the person has a reasonable excuse. 3 Counsel for Mr O'Brien indicated to me that the registrar has adjourned the examination of Mr O'Brien until 18 June 2009. Counsel sought an answer to the question whether, on 18 June 2009, Mr O'Brien would have a reasonable excuse, pursuant to s 597(6A), if he were not to attend. It appeared to me that it was impossible for me to decide such a question. The requirement imposed by s 597(6) that a person who is summoned must not intentionally or recklessly fail to attend as required would, if it occurred, be an offence, pursuant to s 1311(1)(b) of the Corporations Act unless, for the purposes of s 1311(1)(e), s 597(6A) were to be a provision providing that he is not guilty of an offence. In other words, s 597(6A) only raises an issue if a person has been charged with an offence as a result of failure to appear on a summons. There appears to be no power for the Court to determine the question of reasonable excuse in the absence of such a charge. In particular, if the failure to appear is yet to occur, it appears to be quite impossible for the Court to determine whether on a particular day in the future, a person will have a reasonable excuse for non-attendance. The question might be tested by asking whether, if today the Court were to determine that Mr O'Brien's medical or psychological conditions were not such as would prevent him from attending on 18 June, but he were nonetheless detained for some other reason on that date, and that reason might amount to a reasonable excuse, he would be debarred from raising the defence to a charge of failing to attend. 4 The parties desired the question of whether Mr O'Brien's medical or psychological condition would be a proper reason for his failure to appear to be determined today. This led to attention being given to the provisions of r 11.10 of the Federal Court (Corporations) Rules 2000 (Cth) ("the Corporations Rules"). Rule 11.10 provides: (1) This rule applies if a person is summoned or ordered by the Court to attend for examination, and: (a) without reasonable cause, the person: (i) fails to attend at the time and place appointed; or (ii) fails to attend from day to day until the conclusion of the examination; or (iii) refuses or fails to take an oath or make an affirmation; or (iv) refuses or fails to answer a question that the Court directs the person to answer; or (v) refuses or fails to produce books that the summons requires the person to produce; or (vi) fails to comply with a requirement by the Court to sign a written record of the examination; or (b) before the day fixed for the examination, the person who applied for the summons or order satisfies the Court that there is reason to believe that the person summoned or ordered to attend for examination has absconded or is about to abscond. (2) The Court may: (a) issue a warrant for the arrest of the person summoned or ordered to attend for examination; and (b) make any other orders that the Court thinks just or necessary. 5 Counsel for the receivers applied, pursuant to r 11.10(1)(a)(i), for a determination whether Mr O'Brien had without reasonable cause failed to attend at the time and place appointed previously for his examination. In doing so, counsel for the receivers indicated that, if I were to reach the conclusion that Mr O'Brien had failed to attend without reasonable cause on a previous occasion, counsel for the receivers would not press for the issue of a warrant if Mr O'Brien were to give an indication that, consequent on that determination, he would attend to be examined on 18 June. It appears that it may be difficult for counsel for Mr O'Brien and his instructing solicitor to get instructions from Mr O'Brien today about that issue, should it be necessary. 6 As I have said, the summons was issued on 22 April 2009, and there is no dispute that it was properly issued and served. The original date on which Mr O'Brien was required to attend was 7 May 2009. He did not attend on that date. So much is conceded by his counsel. Pursuant to s 596F of the Corporations Act, the registrar gave directions, including directions for the programming of various examinations. Among those directions was a requirement that Mr O'Brien attend on 19 May for the production of various books and documents of the corporations. He did not attend in person on that day, although the books and documents were provided, and no point is taken about his failure to attend. The week beginning 25 May was programmed for the conduct of various examinations, and the registrar directed the attendance of Mr O'Brien on 25 May. It is conceded that he did not attend on that date. The registrar then gave various directions concerning the filing of material about the issue of reasonable excuse for non-attendance, and occupied the week dealing with the examinations of other persons. The examination of Mr O'Brien was adjourned to today to enable the issue of reasonable excuse to be determined. Counsel for the receivers then indicated to counsel for Mr O'Brien that he would not expect the actual attendance of Mr O'Brien today. Accordingly, it seems to me that Mr O'Brien has a reasonable excuse for not attending today. The question whether he had reasonable cause not to attend must be determined by reference to the initial date for his attendance, 7 May, or perhaps by reference to 25 May, the date to which his examination was adjourned. Whichever of these dates is chosen makes no difference in relation to the material before the Court. 7 That material consists of an affidavit of a general practitioner whom Mr O'Brien has consulted since February 2005, and an affidavit of a clinical psychologist who has seen Mr O'Brien on 10 March 2009, 8 April 2009, and 5 May 2009. In response to that material, the receivers have relied on reports exhibited to affidavits of two specialist psychiatrists, Dr Raeside and Emeritus Professor Goldney. None of the deponents of any of these affidavits has been cross-examined. Counsel for Mr O'Brien has also tendered in evidence the clinical notes of both the general practitioner and the clinical psychologist. Because there has been no cross-examination and because the two specialist psychiatrists have not assessed Mr O'Brien through personal consultation, the resolution of the extent of any medical or psychological condition that Mr O'Brien has is particularly difficult. Nevertheless, it seems to me that it must be done. In doing it, I bear in mind that counsel for the receivers contends, and counsel for Mr O'Brien concedes, that it is Mr O'Brien who carries the onus of proof in establishing that he had reasonable cause for non-attendance on the date or dates when he should have attended. 8 The affidavit of the general practitioner is extremely brief. Apart from recording his qualifications and experience, and specifying a series of dates up to 5 May 2009 when he was consulted by Mr O'Brien, the general practitioner only says the following: Mr O'Brien's symptoms included tremors, palpitations, deep sighing, hyperventilation and reduced mood, consistent with an anxiety/depression disorder which in his case is reactive. In September 2007, Mr O'Brien had documented heart disease which was managed by the Alfred Hospital, Melbourne. On 3 March 2009, Mr O'Brien presented to me with severe chest pains. He was admitted to the Alfred Hospital for observation. It is possible that if Mr O'Brien was to give evidence before the court while in his current state, he may suffer similar symptoms again. It is notable that nowhere does the general practitioner provide an opinion that Mr O'Brien would be disabled from attending before the Court. 9 The affidavit of the clinical psychologist is similarly brief. Apart from setting out her qualifications and experience, and the dates on which Mr O'Brien has consulted her, which are 10 March, 8 April, and 5 May 2009, the psychologist says: Mr O'Brien displays many symptoms of anxiety and depression, including flat mood, disturbed sleep and appetite, reduced attention and concentration, chest pains, shakiness, and constant worry. Mr O'Brien is currently not in a fit state to appear at court. It may exacerbate his anxiety and depressive symptoms if he were to appear in his present state. His present state is likely to compromise his ability to give evidence. I recommend that his mental state be reviewed in 2 months to ascertain if his condition has improved, and that he not appear in court before that time. 10 It is of great significance to the outcome of this dispute that there is no affidavit of Mr O'Brien himself, to confirm the nature of any symptoms that he may have related to either his general practitioner or his clinical psychologist. Nor is there any affidavit material by him suggesting that he regards himself as disabled from attending his examination. 11 The documentary material was reviewed by Professor Goldney, who provided two reports, one dated 20 May 2009, based on the affidavits of the general practitioner and the psychologist, and the other dated 27 May 2009, after Professor Goldney had seen the clinical notes of both, which were subpoenaed and which are in evidence in this proceeding. In commenting on the statement of the psychologist that Mr O'Brien was displaying many symptoms of anxiety and depression, Professor Goldney pointed out that there is no clear indication that these symptoms reached the severity required for a definite psychiatric diagnosis. He conceded the possibility that such a diagnosis may be possible, but said that there was insufficient information in the psychologist's report to substantiate such a diagnosis. In relation to the general practitioner's affidavit, Professor Goldney conceded that the information provided was suggestive of a potentially disabling psychiatric condition, but said that there was not enough information to be confident about that. 12 Professor Goldney also expressed the view that there was insufficient information to substantiate the view that Mr O'Brien was not currently in a fit state to attend Court, which was the opinion of the psychologist. In his conclusion in the report of 20 May, Professor Goldney said: It may well be that Mr O'Brien is not emotionally fit to appear in Court and give evidence at present. However, there is a paucity of information about his symptoms and there is an even greater paucity of information about the nature of any treatment. For example, the fact that he is having "counselling" on a monthly basis would not in the usual course of psychiatric, and I presume psychological, practice be an indication that a person was severely psychiatrically/psychologically disabled. It is possible that that is the case, but it would be unlikely. Similarly, the frequency of consultations with the general practitioner…as well as the paucity of clinical information provided, would make it unlikely in my view that Mr O'Brien would be unable to appear in Court. Professor Goldney then made the obvious statement that the absence of evidence is not evidence of absence of a severe psychiatric or psychological condition. He answered certain specific questions, in the course of which he expressed clearly the view that there was insufficient information to enable a determination to be made that Mr O'Brien is not fit to give evidence. 13 In his subsequent report of 27 May 2009, Professor Goldney commented on the clinical notes of both the psychologist and the general practitioner. He concluded: In neither the psychological record nor the general practice record is there sufficient documentation to consider that a person would not be able to appear in Court and conduct themselves in a reasonable manner. Indeed, the very fact that Mr O'Brien was reported on two occasions by the psychologist…to be seeking employment appears to indicate that when he wished to do so, Mr O'Brien could present himself in such a way that he felt confident in applying for employment. That being the case, there is no reason why he could not appear in Court. 14 In his report dated 22 May 2009, Dr Raeside commented on the information available from the affidavits of the psychologist and the general practitioner. In his conclusion, Dr Raeside said: In summary, there appears to be clear evidence that Mr O'Brien has been under increasing stress and anxiety related to ongoing business issues dating back at least to February 2008 and worsening in recent months with the approaching court matters. There is a clear description of anxiety related symptoms and, to a lesser extent, depressive symptoms. These are almost certainly reactive in nature, that is secondary to the stress of the current legal issues, financial concerns, employment situation, and other family issues. From the information provided it would appear that Mr O'Brien is most likely suffering from an Adjustment Disorder with Mixed Anxiety and Depressed Mood, essentially a reactive anxiety and depressive state secondary to significant stress. There is no clear evidence of a more severe psychiatric disorder such as a Major Depressive Disorder, Panic Disorder, or psychosis. This has several significant issues for the Court to consider. The first is that there does not appear to be any indication that Mr O'Brien would be unfit to give evidence in Court in the usual sense of fitness (ability to understand the nature of the Court, its officers, and its procedures; ability to provide adequate instructions to his counsel; etc. Rather, the issue seems to be simply whether he currently is in a suitable state to attend court and whether his emotional/psychiatric condition would be worsened by attending. Secondly, an important consideration is whether delaying Mr O'Brien's evidence would assist him and/or the Court in any way. In my opinion, attendance at Court to give evidence would almost certainly aggravate Mr O'Brien's anxiety. Obviously it would be a natural response for someone to have to give evidence in such a situation and they would be expected to experience anxiety symptoms. In Mr O'Brien's case this would simply be an exacerbation of his already existing anxiety related to his current situation. However, in my view, this would not of itself be reason to excuse him from appearing in Court. Opportunities for more frequent breaks, opportunities to confer with his counsel more frequently, and general assistance from the Court to support him in this regard would be of benefit. Although [the general practitioner] suggests Mr O'Brien's symptoms are worsening (which would seem most likely as the Court date approaches) I do not think his comments suggest that he is likely to experience a heart attack, but rather that his anxiety symptoms are likely to be exacerbated by attending Court. As indicated, the other significant issue is whether adjourning the matter or excusing Mr O'Brien would be of assistance to him and the Court. I think it is very unlikely that simply adjourning the matter would offer any practical assistance to either Mr O'Brien or the Court. Rather, his anxiety and depressive symptoms are likely to continue while the current matters continue and his anxiety is likely to increase as the next court date approaches. He is unlikely to respond effectively to any psychological therapy or other treatment while the need to provide evidence in Court is still before him. As such, delaying the matters will simply perpetuate the same situation as currently, but with a short term reduction in anxiety if he does not have to attend. Finally, the quality of Mr O'Brien's evidence is likely to be affected by his anxiety state in court. As such, the supportive measures as noted are likely to assist in this regard. However, it would be important to factor this in to [sic] the weight given to the information he provides. Mr O'Brien might potentially benefit from a course of antidepressant medication which not only would address depressive symptoms, but possibly reduce the level of his anxiety. However, I think it is unlikely that this would produce a profound improvement in his overall condition whilst the current stressors remain. 15 Counsel for Mr O'Brien relied on the proposition that the receivers had not requested that Mr O'Brien undergo a psychiatric assessment by a practitioner of the receivers' choice, in preparation for the resolution of this issue. In my view, at least equally, and possibly more significantly because Mr O'Brien carries the onus of proof, it would have been open to Mr O'Brien to seek to obtain further expert medical opinion. As a practical matter, having regard to the serious criticisms of the existing material on which Mr O'Brien relies, it would have been obvious that Mr O'Brien might have benefited from the strengthening of that material, if it were possible. 16 Nevertheless, it is necessary for me to do the best I can in determining the issue of Mr O'Brien's fitness to attend and to be examined on the material that is before me. There is no doubt that the material on which Mr O'Brien relies is brief because it lacks detail. The opinions asserted lack any obvious justification. In particular, this criticism can be made of the assertion by the psychologist that Mr O'Brien is currently not in a fit state to appear at Court. There is no sufficient indication of the standard that the psychologist applied in reaching that opinion or the reasoning that led to it. Even from an examination of her clinical notes, it is not at all clear what facts she may have relied on in arriving at that conclusion. 17 As I have said, the general practitioner does not himself give an opinion that Mr O'Brien could not attend Court and give evidence. His opinion is limited to the proposition that, if he were to give evidence before the Court in what was then his current state, Mr O'Brien may suffer similar symptoms again. The reference to similar symptoms appears to be a reference to chest pains experienced by Mr O'Brien on 3 March 2009. 18 The opinions of Professor Goldney and Dr Raeside are not opinions based on clinical examination of Mr O'Brien. Nevertheless, the expertise of those two practitioners cannot be doubted, and their opinions on an examination of the affidavit material and of the records of the general practitioner and the psychologist must have considerable weight. 19 On the weight of the evidence before me, I have reached the conclusion that I am not satisfied that Mr O'Brien was unable to attend Court on either 7 May or 25 May, and to undergo public examination. I bear in mind that the clear legislative purpose of the provisions of the Corporations Act with which I am dealing is to set up a procedure which is bound to be onerous to those who are summoned for public examination. It is a procedure that is bound to create a good deal of anxiety in any person involved in it. It might truly be said that the more serious the issues that a person perceives as being likely to be raised in the examination from that person's point of view, the greater the level of anxiety that is likely to be raised. In order to be satisfied that an anxiety state amounted to a reasonable cause for non-attendance for the purposes of r 11.10 of the Corporations Rules, it would be necessary in my view to be satisfied that the anxiety state concerned went beyond the normal anxiety that involvement in such a procedure would be liable to generate. If that were not the case, the legislative purpose would be frustrated, because everybody summoned to attend for examination would be entitled to resist attendance on the basis that he or she was suffering from an anxiety state in consequence of being so summoned. 20 There is material in the present case that Mr O'Brien's anxiety state is due to causes beyond the mere serving of the summons on him. In particular, the records of the clinical psychologist and the general practitioner suggest a history of anxiety on the part of Mr O'Brien, arising from issues associated with business and family and, more lately, with inability to obtain employment. Of course, external causes need to be taken into account in assessing the level of the condition from which Mr O'Brien suffers. Nevertheless, I am not satisfied on the material before me that the level of anxiety from which he suffers is significantly greater than would be suffered by anybody who was in his position and was required to be examined in public in consequence of problems with a corporation. Nor can I be satisfied that there is any great significance in the suggestion of a heart condition that might be exacerbated. In saying this, I express confidence that a registrar of this Court would conduct an examination in a way that was fair to any person being examined. If it becomes clear that an examinee is suffering physically or psychologically, obviously the registrar would adjourn the examination to enable steps to be taken to preserve the health of the person concerned. There would be nothing to stop arrangements being made for the presence of a medical practitioner, or a paramedic, if there were doubts about a person's condition, in order to provide some confidence on the part of that person that his or her health will be managed appropriately if the examination should lead to any difficulties. It is unnecessary for me to determine at whose expense such arrangements might be made. In the absence of other evidence they could just as easily be made by Mr O'Brien himself as by the registrar, if they were felt to be necessary. 21 In the circumstances, given the kind of procedure that Mr O'Brien is to be subjected to, it is not possible for me to make a finding that he had reasonable cause for failing to attend on either 7 or 25 May 2009. As a consequence of that, it would be open to me to exercise the power in r 11.10(2)(a) to issue a warrant for the arrest of Mr O'Brien, and the power in (2)(b) to make any other orders that the Court thinks just or necessary. It would be open to me to order the issue of a warrant, but to stay its execution until such time as it could be determined whether Mr O'Brien does appear on 18 June. It would be necessary, of course, for me to order his attendance on that date to make it clear that he was a person required to attend. As I have said, counsel for the receivers was not disposed to press me to make such orders, at least if there were an indication given on behalf of Mr O'Brien that he would propose to attend on 18 June. 22 Counsel for Mr O'Brien now having indicated to the Court that he has instructions that Mr O'Brien will attend on 18 June, if required, counsel for the receivers has indicated that he does not seek the immediate issue of a warrant. Accordingly, the appropriate orders are to adjourn the return of the summons addressed to Mr O'Brien to 18 June 2009, to reserve the question of the issue of a warrant, and to order Mr O'Brien to pay the costs of the issue that has arisen as to his attendance. 23 The orders I make are as follows: 1. The return of the summons addressed to Michael O'Brien, issued on 22 April 2009, is adjourned to 10.00 am on 18 June 2009. 2. The question of the issue of a warrant pursuant to r 11.10(2)(a) of the Federal Court (Corporations) Rules 2000 (Cth) be reserved. 3. Michael O'Brien pay the costs of the receivers and managers of and incidental to the application under r 11.10 of the Federal Court (Corporations) Rules 2000 (Cth). I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gray.