In the matter of Stewart Free as Liquidator of Futurepower Developments Pty Ltd (in liq)

Legislation Cited: - Civil Procedure Act 2005 (NSW) ss 56-58
- Supreme Court (Corporations) Rules 1999 (NSW) r 11.5
- Uniform Civil Procedure Rules 2005 (NSW) r 1.12

Cases Cited: - Re Bridgeport-Advisors and Asset Managers Pty Ltd [2005] NSWSC 757
- Re Ji Woo International Education Centre Pty Ltd (2019) 134 ACSR 448; [2019] NSWSC 93
- Re Kurmond Industries Pty Ltd (in liq) [2021] NSWSC 147

Category: Procedural rulings

Parties: Stewart Free as liquidator of Futurepower Developments Pty Ltd (in liq) (Plaintiff/Respondent to IP filed 8.5.25)
Domenic Carbone, Angela Carbone (Applicants to IP Filed 8.5.25)

Representation: Counsel:
Mr J Pokoney (Plaintiffs/Respondent to IP filed 8.5.25)
Mr J C Rogers (Examinees/Applicants to IP filed 8.5.25)
Solicitors:
Turks Legal (Plaintiffs/Respondents to IP filed 8.5.25)
Domenic Carbone and Angela Carbone (self-represented)

File Number(s): 2024/474420 (003)

JUDGMENT – ex tempore (Revised 22 May 2025)

Nature of the application and evidence

1. By Interlocutory Process filed on 8 May 2025, Mr Domenic Carbone and Ms Angela Carbone sought several orders, which they initially maintained should be made on an ex parte and urgent basis. Those orders included a vacation of orders for production and examination orders that had previously been made by a Registrar and other orders including the stay of the examination orders and orders for production. Those orders were not made, unsurprisingly, on an ex parte basis, but have instead been made returnable in the Corporations List today. The fact that the Interlocutory Process was not filed until 8 May 2025, and was not returnable until today, has the consequence that it has been made returnable on the same day on which the examinations of Mr Carbone and Mrs Carbone were due to commence, but those examinations have now been adjourned to 2:00pm today, and can proceed subject to the determination of this application.

2. Mr Carbone, and presumably Mrs Carbone, rely on a lengthy affidavit of Mr Carbone of some 46 pages and a voluminous exhibit in support of the application, although I was taken to relatively small parts of those documents in respect of the question of an extension of time to bring this application, to which I will refer below. Mr Carbone's first affidavit is so lengthy because it is somewhat repetitive, making a small number of points at great length and largely in inadmissible ways. Mr Carbone there refers to a statutory report issued by the liquidators in June 2021 and contends, in effect, that the liquidators have already determined to bring proceedings against him and his wife, and have been threatening to conduct liquidators' examinations for a considerable period, and previously sought an extension of time to conduct such examinations. He refers to the history of trading by Futurepower Developments Pty Ltd (“Company”) and suggests that a co-owner had control over aspects of a project of the Company. He refers to a suggested intention of the liquidator to use the examination summons as a "free kick" or an advantage in contemplated proceedings which appears to be directed to an allegation of abuse of process. He also refers, in paragraph 213, to an issue concerning Mrs Carbone's health, where he refers to a diagnosis in 2018 and a suggestion of "brain fog", on her part and suggests that her position would have been better had public examinations taken place at an earlier point. He also refers to a judgment of Nixon J delivered in 2024, where his Honour referred to evidence then given by Mr Carbone and Mrs Carbone about their health conditions and major surgery which Mrs Carbone required, and the extended period of therapy which was likely to follow such surgery. I bear in mind that, as Mr Rogers who appears for Mr and Mrs Carbone accepts, evidence given in other proceedings and a judgment delivered in other proceedings is not evidence of the fact in these proceedings.

3. I was in turn taken, in this application, to an email sent by Barclays Law Group, of which Mr Carbone is the principal solicitor, to the Registry on 24 April 2025, which it appears was shortly after service of the examination summons and/or orders for production of documents in mid-April 2025, indicating that the online filing system was preventing filing of his notice of appearance, notice of motion and affidavit in support. I assume that the notice of motion there referred to was the Interlocutory Process filed on 8 May 2025 supported by and the affidavit of Mr Carbone dated 2 May 2025. The Court sent an automated email response which recorded that the Online Registry support team continued to experience a large number of inquiries and that had resulted in delayed responses, and that at least seven business days should be allowed for a reply to Mr Carbone’s inquiry. The email went on to helpfully point out that, for urgent matters, documents could be lodged in person at the Registry. No step was then taken by Mr and Mrs Carbone to file any application to set aside the examination summons in the Registry, and perhaps more importantly, no step was taken to bring the application to set aside the examination summons before a Corporations Duty Judge, who has been available every business day since mid-April 2025.

4. My attention was also drawn to two medical certificates on which Mr Carbone and Mrs Carbone rely. The first, dated 1 May 2025 in relation to Mrs Carbone, certifies that she attended a medical centre on 1 May 2025 and would be unfit to attend Court from that date until 30 May 2025 due to "high stress levels" from physical and mental triggers and would be attending psychology support. I pause to note that, first, that medical certificate does not refer to recent medical procedures of the kind referred to in Nixon J's earlier judgment, but to a question of stress. Second, it also does not provide any explanation of the manner in which Mrs Carbone's high stress levels were said to be disabling, so as to prevent her complying with a compulsory order made by the Court for attendance at a liquidator’s examination. The second medical certificate dated 24 April 2025 and issued by Professor Lau, a surgeon, in respect of Mr Carbone in turn indicated, without further explanation, that Mr Carbone was suffering from “surgery and post-operative care” and would be unable to attend Court from 11 April 2025 until 20 June 2025. That certificate is also wholly inadequate so far as it discloses no reasoning process to indicate the basis of the conclusion, or what information had been provided to Professor Lau in order to allow him to reach that conclusion, what steps he had taken to test that information, or what he had assumed as to the nature of the proceedings in order to reach a conclusion that Mr Carbone was unable to attend them. It is, with respect, no more than an ipse dixit by Professor Lau, who makes no attempt to explain why the view he asserts should be accepted. Neither medical certificate complies with the requirements under the Expert Witness Code of Conduct in Schedule 7 of the UCPR for expert evidence led in this Court, and neither doctor indicates that they had made such inquiries as were necessary to lead expert evidence before the Court.

Extension of time to bring the application

5. These matters, including the delay in the application, are significant because of the statutory regime which deals with compulsory examinations under the Corporations Act 2001 (Cth) and the associated Court rules. Relevantly, rule 11.5 of the Supreme Court (Corporations) Rules 1999 (NSW) applies if a person is served with an examination summons. It provides that, within three days after a person is served with the summons, he or she may apply to the Court for an order discharging the summons by filing an interlocutory process seeking an order discharging the summons and an affidavit stating the facts in support of the interlocutory process and, as soon as practicable after filing the interlocutory process and affidavit, must serve a copy of that document on the person who applied for the examination and the Australian Securities and Investments Commission. Plainly, Mr and Mrs Carbone did not comply with that requirement, so far as the steps which were taken, in a somewhat desultory way by Mr Carbone, did not bring about the filing of either the interlocutory process or the evidence in support within that three day period, or its service upon the Australian Securities and Investments Commission.

6. The question then arises whether the Court should extend the time for Mr and Mrs Carbone to bring the application to set aside the liquidator’s examination. The Court has power to do so, under r 1.12 of the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) although Mr and Mrs Carbone did not bring any express application for the extension of that time. I recognise that orders have been made, for example, to extend the time period for such an application in cases including Re Bridgeport-Advisors and Asset Managers Pty Ltd [2005] NSWSC 757, where Barrett J extended the time to bring an application, but dismissed the application on the facts. On the other hand, I did not extend the time to bring such an application in Re J**i W**oo International Education Centre Pty Ltd (2019) 134 ACSR 448; [2019] NSWSC 93, and again in Re Kurmond Industries Pty Ltd (in liq) [2021] NSWSC 147 (“Kurmond Industries”).

7. I proceed on the basis that the question whether to extend the time to bring the relevant applications should be determined by reference to ss 56-58 of the Civil Procedure Act 2005 (NSW), including the matters which I summarised in Kurmond Industries at [23]. I am not persuaded, here, that an extension of time to bring the application to set aside the liquidator’s examinations should be granted. First, no reasonable steps were taken by Mr and Mrs Carbone to file that application within a reasonable time. There is no reason that, having been faced with a difficulty in filing a notice of motion or notice of appearance electronically, Mr Carbone could not have taken steps to file the application in the Registry or to bring it before a Corporations Duty Judge reflecting the urgency of the matter. The evidence in support of the application is weak, so far as Mr Carbone's application is lengthy, but largely repetitive and inadmissible and provides little, if any, probative evidence to suggest abuse of process on the part of the liquidator, as distinct from an ordinary course of inquiry into the factual matters which are relevant to the liquidator’s potential proceedings against Mr Carbone and/or Mrs Carbone. The medical evidence, particularly where led by a person who practises as a solicitor, is devoid of detail and does not support a conclusion that either Mr Carbone or Mrs Carbone have medical issues which are such that they could not attend for an examination, or indeed, that any serious attempt is made to establish the existence of such difficulties in a way that would be testable by the liquidator or could rationally be assessed by the Court.

8. In these circumstances I am satisfied that leave should not be granted to bring the application to set aside the examination summons out of time. The Interlocutory Process filed on 8 May 2025 is therefore dismissed. I order that Mr and Mrs Carbone pay the liquidator’s costs of the application as agreed or as assessed.

9. As I noted above, the Registrar has stood down the applications listed today until 2:00pm today, while this application was heard. It is to be hoped that, in the relevant circumstances, Mr and Mrs Carbone will comply with a compulsory order of the Court that requires their attendance for examination, to avoid any need for the liquidator to seek an arrest warrant. Mr Rogers indicated that he had passed on observations of the Court as to the nature of a compulsory examination to Mr and Mrs Carbone, but he was unable to advise whether they would be attending the compulsory examination. In those circumstances I will make a further order reserving liberty to the liquidator to apply on two business hours' notice, if an arrest warrant is sought to be issued in respect of Mr Carbone or Mrs Carbone.

Leave to cease to act

10. The solicitors acting for Mr and Mrs Carbone seek leave to cease to act for them on the basis that, although they filed a notice of appearance for all purposes, they were retained only for the purpose of this application to set aside the examination summons. I am not prepared to grant that leave. It ought to be known to solicitors that the filing of a notice of appearance, for all purposes, commits the solicitor to act for all purposes, unless and until a proper basis for withdrawal is established. Here, so far as the notice of appearance communicated the solicitor’s position to the Court, he was retained by Mr and Mrs Carbone for all purposes and it seems to me that the solicitor is under a continuing obligation to the Court to act for them unless and until he or she gives notice of ceasing to act in accordance with the Rules. I decline to grant leave to cease to act in those circumstances.

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