It was held that s.597 is not a provision "with respect to winding up" for the purposes of s.601.
Gleeson C.J. said (at 521):
"Here, however, the object is to determine whether a statutory provision applies to a given body corporate. Either it does or it does not. In such a context, the inquiry must be as to the essential character of the law, rather than as to whether there is a connection between the law and the matter
of winding up.
It is true that the origins of provisions such as s.597 are to be found in insolvency law. It is also true, however, that its immediate precursor, s.541 of the Companies (New South Wales) Code, had been held not to be a law with respect to winding up: Re Hall Autotorium Pty Ltd (in Liq)... .
As appears from its place in the legislative scheme, and from its terms, whilst s.597 has an important role to play in relation to companies that are being wound up, and liquidators or provisional liquidators will be amongst those who most commonly take advantage of its provisions, the operation of the section is by no means confined to liquidators. The statutory context of "external administration", in which s.597 has its place, throws light on the purposes for which the power to order examinations (or to authorise persons to apply for examination orders) is conferred. Those purposes include the protection of shareholders and creditors and of interested members of the public. They are not, however, confined to the need for such protection in the case of winding up. Winding up is only one form of external administration. The scope of s.597 is wider.
I do not consider that s.597 can be characterised as a law with respect to winding up within the meaning of s.601."
But, in our view, the exercise of characterisation to be undertaken in determining whether a law is "with respect to" a specific subject matter is not an appropriate test here, where, as a matter of form and of substance, the language and context are different. The relevant question here, whether the "matter" is one "relating to" a winding up, is concerned with the existence of a relationship. It does not raise a question of characterisation.
Of the phrase "relating to", Taylor J. said, in Tooheys Ltd. v Commissioner of Stamp Duties (NSW) (1961) 105 CLR 602 (at 620):
"... the expression ... is extremely wide but it is also vague and indefinite. Clearly enough it predicates the existence of some kind of relationship but it leaves unspecified the plane upon which the relationship is to be sought and identified. That being so, all that a court can do is to endeavour to seek some precision in the context in which the expression is used".
Taylor J. went on to say (at 620) that "relating to" in the context there considered was not the "equivalent of referring to;' the relationship' must be based upon some more substantial ground".
Other decisions of the High Court have acknowledged that, ordinarily, "relates to" is a wide term, and that it will depend upon context whether it is necessary that the relationship be direct or substantial, or whether an indirect or less than substantial connexion will suffice (see Re Dingjan; Ex parte Wagner (1995) 183 CLR 323 at 338 (Brennan J.), 347 (Dawson J.), 354 (Toohey J.) and 370 (McHugh J.); P.M.T. Partners Pty. Ltd. (In Liq.) v Australian National Parks & Wildlife Service (1995) 131 ALR 377 at 385 (Brennan C.J., Gaudron and McHugh JJ.) and 398-9 (Toohey and Gummow JJ.); Re Jarman; Ex parte Cook, High Court, 15 May 1996, unreported, at 5 (Brennan C.J., Gaudron J.) and 12 (Kirby J.). Tooheys' Case has been followed in this Court (see, e.g., Secretary, Department of Foreign Affairs and Trade v Boswell (1992) 36 FCR 367 at 374 (Hill J.) and 383 (Cooper J.)).
In our view, there is nothing in the present context to suggest that the term "relating to", where used in s.580 and when picked up by s.581(4), was not intended to have a wide operation or that an indirect, but relevant, connection would not be a sufficient relationship for present purposes.
It will be necessary, later, to consider whether the requisite relationship, in fact and in law, exists here. It will also be necessary to consider the meaning of "matter" and "winding up" in this connection. Before doing this, we should refer to the other cases relied on for Mr. Joye.
Mr. Bennett referred to Elna Australia Pty. Ltd. v International Computers (Aust.) Pty. Ltd. (1987) 14 FCR 461 where Gummow J. dismissed an application brought under s.7V(1)(c) of the Evidence Act 1905 or, alternatively, in this Court's inherent jurisdiction, for the issue of a letter of request by this Court "to the [English Supreme] Court of Judicature for an order for evidence to be obtained in the United Kingdom by an order for documents [then specified]." By s.7V(1)(c), the Court was empowered to make an order "for the issue of a letter of request to the judicial authorities of a foreign country to take, or to cause to be taken, the evidence of [a] person [outside Australia]." In holding that there was no jurisdiction, Gummow J. said (at 465):
"The production of documents to a court in compliance with a subpoena or an order in the nature of a subpoena is not the taking of evidence or the
causing of the taking of evidence of the person producing the documents... .
The applicant submits that nevertheless, on the true construction of Pt IIIB, the procedure I have described is one for the taking of evidence. He referred to the Attorney-General's second-reading speech; but whilst the Attorney certainly dealt with the obtaining of oral and documentary evidence he did not do so in any way which, in my view, supports the applicant's submission. The applicant further referred to s.7V(9) as throwing light upon s.7V(1)(c). But the reference there to production of documents at an examination is plainly to production at a proceeding for the taking of evidence: see the definition of examination' in s.7T, and subss (5) and (6) of s.7V." In our view, the decision and reasoning in Elna have no application in limiting the operation of the general words of s.581(4) of the Law, given especially the absence from that provision of any reference to the taking of evidence as the basis for the issue of the letter of request. Reference was also made by Mr. Bennett to the distinction made between (1) proceedings brought by a liquidator in that capacity, for instance, in recovery of a preference and (2) proceedings brought by the company being wound up, where the liquidator decides that proceedings will be brought in the company's name. The distinction is well established (see, e.g. Hession v Century 21 South Pacific Ltd. (in liq.) (1992) 28 NSWLR 120). But it does not follow that, for the purposes of the provisions with which this case is concerned, the former category comprises matters relating to the winding up whereas the latter does not. Nor, therefore, does it follow that the letters of request are invalid. Mr. Sheahan has certain functions and responsibilities in his capacity as liquidator of Cortaus: that is, functions of doing, and responsibilities to do, things as liquidator which Cortaus itself could not do. Cortaus itself, on the other hand, could bring and maintain proceedings SG 111 of 1993, liquidation or no liquidation. Their maintenance, however, in the liquidation of Cortaus, in the name of Cortaus, results from a decision of Mr. Sheahan made in exercise of a power he has as liquidator (see Growden v Wiltshire (1935) 52 CLR 286). As a practical matter that was what the situation, viewed in the light of the liquidator's powers and responsibilities, called for. In Gerah Imports Pty. Ltd. v The Duke Group Ltd. (in liq.) (1994) 119 ALR 401, Dawson J. held that the rights of action of a corporation being wound up, against former accountants, were "examinable affairs" of the corporation within the meaning of s.596B of the Law. Dawson J. said (at 404): "The section of the Corporations Law which is critical is s.596B. That confers power upon the court to summon a person for examination about a corporation's examinable affairs. When regard is had to the definitions of examinable affairs', affairs' and property' contained in ss.9 and 53, examinable affairs' include any legal or equitable estate or interest (whether present or future and whether vested or contingent) in real or personal property of any description and include a thing in action. Clearly the rights of action, if any, of the corporation against the applicants are examinable affairs within the meaning of the legislation. The Full Court concluded that an examination of those rights under the relevant provisions was not confined to their existence but extended to their extent and value. Plainly the latter are matters of considerable moment to the liquidator of a corporation in pursuing the assets of the corporation in an economical and efficient manner. And as was pointed out in Hamilton v Oades... a liquidator performs a public function in which one of his duties is to protect the interests of the creditors. It is not contended before me by the applicants that the examination ordered by the master is oppressive. What is said is that it extends beyond the affairs of the corporation to the affairs of other persons and is merely for the purpose of ascertaining their potential liability and their capacity to satisfy any judgment against them. However, as I have said, these are matters of importance to a liquidator, going in a practical way as they do to the value of the property of the corporation. The applicants are unable to point to any authority in their favour. The decision of Drummond J. in Re Interchase Corp Ltd (in prov liq)... is indeed against them." An appeal in Interchase was unsuccessful: see Grosvenor Hill (Qld) Pty. Ltd. v Barber (1994) 48 FCR 301. That, as has been indicated, leads to a consideration of the meaning of "matter" and "winding up" in the context of the words "matter" "relating to" a "winding up" for the purposes of s.580 and thus of s.581(4). First, as to "matter", it is well settled that, for the purposes of the exercise of federal judicial power, the word "matter" means the subject matter for determination in a legal proceeding, rather than the proceeding itself (see, e.g. Fencott v Muller (1983) 152 CLR 570; Crouch v Commissioner for Railways Q'ld) (1985) 159 CLR 22 per Mason, Wilson, Brennan, Deane and Dawson JJ. at 37). Although the Law is State legislation, there is no reason to suppose that "matter" was not intended to have its ordinary meaning in the present context. As to "winding up", in our view, it means the process that follows the making of a winding up order, including collecting and realising assets and distributing the proceeds. In Re Crust n' Crumbs Bakers (Wholesale) Pty. Ltd. [1992] 2 Qd R 76 at 78, McPherson S.P.J. said (at 78):
"What is meant by winding up' in this context? In my opinion it does not comprehend steps or proceedings taken for the purpose of obtaining an order that the company be wound up. Winding up is a process that consists of collecting the assets, realising and reducing them to money, dealing with proofs of creditors by admitting or rejecting them, and distributing the net proceeds, after providing for costs and expenses, to the persons entitled. It is a process, comparable to an administration in equity, that begins or starts' with an order of the Court. However, it is not the court order itself that winds up' the company; the order does no more than direct that the company be wound up, which is then carried into effect by an officer of court, the liquidator, who does the things I have identified in order to liquidate the company's assets and wind up its affairs. In referring to winding up' or to the company being wound up', and to the manner and the incidents of doing so, s.601 therefore speaks not of proceedings aimed at obtaining an order of court to wind up the company but of the process that ensues from and follows such an order. Leaving aside the case of a successful appeal, winding up this starts' when, and not before, an order to wind up is made appointing a liquidator."
See also Re Scobie; Ex parte Commissioner of Taxation (1995) 59 FCR 177, per Cooper J. at 185.
It follows, in our opinion, that any step taken by a liquidator in getting in the assets of the corporation is a step taken in the winding up; and this is so whether or not the step taken involves litigation aimed at recovery of the assets. If litigation is necessary, the conduct of that litigation is, in our view, a "matter" that "relates to" the "winding up". Moreover, as was held in Duke, the practical prospects of satisfaction of a possible verdict out of insurance cover held by a defendant, is an "affair" of the corporation, and thus a "matter" that "relates to" the winding up. The fact that the step taken by the liquidator in recovering the corporation's asset may be an administrative one, does not mean that the step is not such a "matter". Gummow J. was prepared so to assume, at least, in an application under s.581(4): see Re Dallhold Estates (U.K.) Pty. Ltd. (1992) 10 ACLC 1,374 where (at 1,379) his Honour concluded that it was desirable that the best possible realisation of the assets of Dallhold Estates be achieved for the benefit of all its unsecured creditors by requesting the assistance of the English courts. A similar example, in an analogous bankruptcy context, is Clunies Ross v Totterdell (1988) 20 FCR 358 where a request was made of another court for aid "in [a] matter of bankruptcy" with a view to getting in assets by taking an administrative step.