Orbis Commodities Pty Ltd v Pacific Investment Holding Pty Ltd; in the matter of Orbis Commodities Pty Ltd

Solicitor for the Second Respondent: M Doble of Eakin McCaffery Cox

ORDERS NSD 1019 of 2021

IN THE MATTER OF ORBIS COMMODITIES PTY LTD (RECEIVER AND MANAGER APPOINTED) (ADMINISTRATORS APPOINTED) (ACN 003 546 898) & PACIFIC INVESTMENT HOLDING PTY LTD (RECEIVER AND MANAGER APPOINTED) (ADMINISTRATORS APPOINTED) (ACN 001 614 964) RICHARD ALBARRAN AND KATHLEEN VOURIS IN THEIR CAPACITY AS JOINT AND SEVERAL ADMINISTRATORS OF ORBIS COMMODITIES PTY LTD (RECEIVER AND MANAGER APPOINTED) (ADMINISTRATORS APPOINTED) (ACN 003 546 898) First Plaintiff RICHARD ALBARRAN AND KATHLEEN VOURIS IN THEIR CAPACITY AS JOINT AND SEVERAL ADMINISTRATORS OF PACIFIC INVESTMENT HOLDING PTY LTD (RECEIVER AND MANAGER APPOINTED) (ADMINISTRATORS APPOINTED) (ACN 001 614 964) Second Plaintiff PATRICK SHUNG WONG Interested Person CHRISTOPHER DAMIEN DARIN Interested Person

ON THE INTERLOCUTORY APPLICATION BETWEEN: PATRICK SHUNG WONG Applicant AND: RICHARD ALBARRAN AND KATHLEEN VOURIS IN THEIR CAPACITY AS JOINT AND SEVERAL ADMINISTRATORS OF ORBIS COMMODITIES PTY LTD (RECEIVER AND MANAGER APPOINTED) (ADMINISTRATORS APPOINTED) (ACN 003 546 898) AND PACIFIC INVESTMENT HOLDING PTY LTD (RECEIVER AND MANAGER APPOINTED) (ADMINISTRATORS APPOINTED) (ACN 001 614 964) First Respondents CHRISTOPHER DAMIEN DARIN Second Respondent

order made by: STEWart J DATE OF ORDER: 26 October 2021

1. Schedule A to each of the summonses to Patrick Shung Wong and Christopher Damien Darin issued on 8 October 2021, which are Schedules A to the respective orders of Registrar Schmidt on 8 October 2021, be amended by deleting the words "included but not limited to" and replacing them with the word "being".
2. The time and date in paragraph (a) of each of the summonses to Patrick Shung Wong and Christopher Damien Darin issued on 8 October 2021 for the attendance and production of books and records be extended to 2.00pm on 29 October 2021.
3. The interlocutory process issued on 15 October 2021 otherwise be dismissed.
4. The applicant on the interlocutory process pay the costs of the first respondents on the interlocutory process, as taxed or agreed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Introduction 1 By interlocutory process filed on 15 October 2021, Patrick Shung Wong seeks the review and setting aside of the orders of Registrar Schmidt made on 8 October 2021 requiring Mr Wong and Christopher Damien Darin to produce to the Court at a time and place appointed by the Registrar the documents described in Schedule A to the orders. Mr Wong seeks that relief on two grounds, namely: (1) Although the orders for the production of documents were expressed to be pursuant to s 597(9) of the Corporations Act 2001 (Cth) and r 30.34 of the Federal Court Rules 2011 (Cth), the summonses issued on the same day required the attendance of Mr Wong and Mr Darin before a registrar of the Court to produce the books and records specified in the relevant schedule only with reference to ss 596A (in the case of Mr Darin) and 596B (in the case of Mr Wong) of the Corporations Act, and not with reference to r 30.34. Mr Wong contends that ss 596A, 596B and 597(9) of the Corporations Act only authorise the issuing of a summons to produce documents at an examination under ss 596A or 596B and not to the Court at some earlier and separate occasion as required by the summonses. This is in circumstances where the production of documents is listed on 27 October 2021 and the examination of Messrs Wong and Darin on 9 and 10 November 2021. A subpoena to produce documents under r 30.34 could have required such separate production. (2) Production of certain of the documents by Mr Wong would cause him as a director of certain companies, to which I will return, to be in breach of statutory prohibitions governing those companies in the Solomon Islands and an injunction of the High Court of Solomon Islands made on 2 September 2021 against Mr Wong. 2 The urgency for the relief arises, as noted, from the fact that the summonses require Mr Wong and Mr Darin to attend before a registrar of the Court to produce the documents at 9:30 am on 27 October 2021, i.e., tomorrow.

Background 3 The principal proceeding is brought by the joint and several administrators of Orbis Commodities Pty Ltd (receiver and manager appointed) (administrators appointed) and Pacific Investment Holding Pty Ltd (receiver and manager appointed) (administrators appointed). It is an application under ss 596A, 596B and 597 of the Corporations Act and Div 11 of the Federal Court (Corporations) Rules 2000 (Cth) for the issuing of summonses for examination of persons and orders for the production of books and records with regard to the examinable affairs of the companies. It was pursuant to the administrators' originating process that the orders and summonses that are attacked by Mr Wong in the interlocutory process were made and issued. 4 Mr Wong is the sole director of two entities incorporated in the Cook Islands, Pacific Finance Ltd (PFL) and Cross Pacific Trading Ltd (CPTL), and two entities incorporated in the Solomon Islands, Pacific Management Services (SI) Ltd (PMSL) and International Comtrade & Shipping (SI) Ltd (ICSL). Mr Wong holds 50% of the shares in each of those companies through an intermediate company wholly owned by him. 5 ICSL owns 75.1% of the shares on issue in two further corporations incorporated in the Solomon Islands, Russell Islands Plantation Estates Ltd (RIPEL) and Lever Solomons Ltd (LSL). Mr Wong is a director of both RIPEL and LSL. RIPEL and LSL, between them, have significant land ownership which constitutes the ultimate principal assets of Orbis and Pacific. That arises because Orbis, through its wholly owned subsidiary Pacific and, in turn, Pacific's wholly owned Cook Islands subsidiary Pacific Investments Pty Ltd (PIL), is the holder of the remaining 50% of the shares on issue in the ICSL. 6 The effective result is that Orbis through its 100% interest in Pacific has a 37.55% indirect interest in each of RIPEL and LSL, being the companies that own the relevant land. 7 As the holder of a General Security Agreement over the assets and undertaking of Orbis and Pacific, Mr Wong appointed Mr Darin as receiver and manager. 8 As explained by Rees J in Re Orbis Commodities Pty Ltd (administrators appointed) (receiver and manager appointed) [2021] NSWSC 1172 at [2], the second meeting of creditors in the administration of the two companies was adjourned in July 2021, August 2021 and again in September 2021. The most recent adjournment sets the meeting for 3 December 2021. It is not likely that a further adjournment would be granted, if sought. That, therefore, constitutes a backdrop to the urgency associated with the examinations that are the subject of the summonses which are in turn the subject of the present interlocutory process. 9 As receiver and manager, the summons for examination and production of documents directed to Mr Darin was issued under s 596A of the Corporations Act, i.e., mandatory examination. The summons directed to Mr Wong was issued under s 596B of the Corporations Act, i.e., discretionary examination. 10 The relevant orders for the production of documents on 8 October 2021 are in the following terms: 4. Pursuant to section 597(9) of the Corporations Act 2001 (Cth) and Rule 30.34 of the Federal Court Rules 2011, Mr Darin [Mr Wong] is to produce to the Court at a time and place appointed by the Registrar, the documents described in Schedule A to this Order. 11 The summonses for examination issued on 8 October 2021 are in the following terms: You are summoned under section 596A [596B] of the Corporations Act to: (a) attend before a Registrar of the Federal Court of Australia at Law Courts Building, Queens Square, Sydney NSW 2000 at 9.30 am on 27 October 2021 to produce the books and documents specified in Schedule A to this Summons; and (b) attend before the Federal Court of Australia at Law Courts Building, Queens Square, Sydney NSW 2000 at 10:00 am on 9 November 2021, and from day to day until excused by the Court, to be examined on oath or affirmation about the examinable affairs of Orbis Commodities Pty Ltd (Receivers and Manager Appointed) (Administrators Appointed) (ACN 003 546 898) and Pacific Investment Holdings Pty Ltd (Receiver and Manager Appointed) (Administrators Appointed) (ACN 001 614 964); … 12 The schedules to each of the orders and the summonses set out a long list of documents described in 13 separate paragraphs in the case of Mr Wong and nine in the case of Mr Darin, most of which have numerous subparagraphs and each of which commences with the words "Documents that disclose, evidence or otherwise relate in any way to…". Those paragraphs that contain subparagraphs include the words, immediately preceding the subparagraphs, "including but not limited to". The result is that a very wide net is cast which requires the person summoned to exercise judgment on whether any particular document in his possession or control not only falls within one of the described subparagraphs, but also whether it discloses, evidences or is otherwise in some way related to the particular subject matter identified by the paragraph. I will return to these matters. 13 Turning now to Mr Wong's grounds of review, I will consider each in turn.

Beyond power 14 As mentioned, Mr Wong contends that the summonses are beyond power insofar as they require the production of documents because the section of the Corporations Act under which they are issued authorises the production of documents at an examination, and not separately to the Court on an earlier occasion. 15 Section 597(9) of the Corporations Act provides that the court may direct a person to produce, "at an examination of that or any other person", books that are in the first-mentioned person's possession and are relevant to matters to which the examination relates or will relate. The authorities support Mr Wong's submission that that provision only authorises a summons to produce a document at the examination and not at some other time or place: e.g., Re Blue Ridge WA Pty Ltd (in liq) [2015] FCA 567 at [17]-[18]. 16 However, I do not accept Mr Wong's submission that the summonses in question have the effect contended for by him. Each summons states that it summons the relevant examinee under either s 596A or s 596B of the Corporations Act to attend before a registrar of the Court and to produce the books and documents specified in the schedule. That makes it clear that such attendance before the registrar is an examination contemplated by the relevant section. It is not some separate or prior occasion. 17 As explained by Mansfield J in Re Blue Ridge WA at [17]-[21], which was endorsed by Derrington J in Re Australasian Liquid Storage Pty Ltd (in liq) [2017] FCA 559; 121 ACSR 119 at [53], it is practical to require production of documents at an examination and to direct that they be made available to the (in that case) liquidators and for the examination to then be adjourned to a subsequent date for the examinee to be examined. The court is expressly permitted by s 597(17) to permit the adjournment of an examination. It must, of course, also be appreciated that r 16.1 of the Corporations Rules, with reference to Sch 2 Pt 1 item 96, expressly authorises a registrar of the Court to exercise the powers of the Court under, relevantly, ss 596A, 596B and 597 of the Corporations Act. 18 It is true that in Re Digital Infrastructure Pty Ltd (in liq) [2021] FCA 1274 at [27], Derrington J described that process of convening an examination for the production of documents only to adjourn it to a later date for the examination of the witnesses to commence as "somewhat contrived", but his Honour did not characterise it as unlawful. Rather, his Honour explained that such a process can be avoided by exercising the power to issue a subpoena to produce documents under r 30.34 as a precursor to an examination under s 596A or s 596B. It was not held that the subpoena process has to be followed. 19 In the circumstances, I conclude that the summonses in this case that require Mr Wong and Mr Darin to produce documents before a registrar of the Court tomorrow at an examination are not beyond power. 20 It is also submitted by Mr Wong that the process of a registrar making an order that a summons can be issued requiring the production of documents to the Court "at a time and place appointed by the Registrar" and then, possibly, a different registrar appointing that time and place is itself unlawful. That is said to be because the person appointing the time and place would not have given consideration to whether sufficient time was being given because they would not know the details of the case and the volume of the documents. I reject that submission. 21 In this particular case, the summonses that were issued on 8 October 2021 were served on 11 October 2021 for production of documents on 27 October 2021. That gave a period of more than two weeks. On the face of it, that is sufficient time. Whoever it is who issued the summonses on the authority of the earlier orders was well able to make an assessment that on the face of things that was sufficient time. If, for whatever reason, it turned out to be genuinely insufficient then under s 597(7)(d) the examinee would have "reasonable excuse" for not making full production. The registrar could, in that event, make further orders for completing production at a later date and adjourn the examination accordingly. 22 Mr Wong's solicitor, Mr Brown, has put on an affidavit explaining how Mr Wong is not able to gather all the documents in the time provided to him. Whether or not that is indeed so need not be decided on this occasion. However, it did direct attention to the broad terms of the schedules attached to the summonses. I have already referred to the breadth of the language employed. Senior Counsel for the administrators accepts that it would be reasonable to narrow each of the categories. In essence, the difficulty is created not so much by the breadth of the introductory wording to each paragraph, but rather the words preceding the subparagraphs which identify narrower categories of documents, namely "including but not limited to". Those words should be replaced with the word "being". 23 I now turn to the next ground of review.

Contravention of Solomon Islands' provisions 24 The Companies Act 2009 (Solomon Islands) provides, in s 68: A director of a company who has information in his or her capacity as a director or employee of the company, being information that would not otherwise be available to him or her, must not disclose that information to any person … except: (a) in the interests of the company; or (b) as required by law; or (c) … 25 Moreover, as mentioned, on 2 September 2021 orders were made in the High Court of Solomon Islands restraining Mr Wong from, in effect, acting in contravention of that provision in relation to two of the companies referred to above, namely RISEL and LSL. The background to or circumstances of the injunction were not explained. 26 Mr Wong submits that insofar as his summons requires him to produce documents that are in his possession or control as a director of those companies, he is required to act in such a way as to put him in contravention of the law of the Solomon Islands and in contempt of the High Court of Solomon Islands. On that basis, he submits that he has a reasonable excuse not to produce such documents. Whilst not specifically identified on his behalf, that is presumably in reference to s 597(7)(d) of the Corporations Act. 27 The administrators refer to the treatment of "reasonable excuse" in a different context by Hely J in Bank of Valletta PLC v National Crime Authority [1999] FCA 791; 164 ALR 45. It was held that the possibility of a bank breaching a criminal law of Malta was not a reasonable excuse for non-compliance with a notice for production lawfully issued by the National Crime Authority. Hely J referred to Brannigan v Davison [1997] AC 238 in which the Privy Council considered "reasonable excuse" not to produce documents to a Commission of Inquiry in New Zealand. In Bank of Valletta (at [44]), Brannigan was summarised as holding, relevantly, that the "sufficient cause" and "just excuse" exceptions (which are synonymous) provide ample scope for all the circumstances to be taken into account. Inherent in those expressions is the concept of weighing all the consequences of the refusal to give evidence: the adverse consequences to the inquiry if the questions are not answered, and the adverse consequences to the witness if they are compelled to answer. 28 I am not in a position to weigh the relevant circumstances at this stage and, having done so, rule on whether Mr Wong should be permitted not to produce any particular document or category of documents. In that regard, it is presumably only a small proportion of the overall volume of documents that he is required to produce that will fall within the terms of the Solomon Islands prohibitions, namely that: (1) Mr Wong has possession or control of the document in question in his capacity as a director of either RISEL or LSL; (2) the document would not otherwise be available to Mr Wong, i.e., other than in his capacity as a director of one or other of those two companies; and (3) it is not in the interests of those companies for the document to be disclosed in the examination. 29 Also, I do not know, and am in no position to gauge, the importance of a particular document or documents to the purpose of the examination. Nor do I know the consequences for Mr Wong if he produces the document or documents contrary to the Solomon Islands prohibitions. 30 In the circumstances, I reject Mr Wong's challenge to the summonses on this ground.

Disposition 31 For those reasons, Mr Wong's challenge to the summonses to him and Mr Darin must fail. I also mention that the interlocutory application makes other, and broader, challenges which were not pressed. 32 However, for the reasons given, I will nevertheless in exercise of the powers of the Court under s 35A(6) of the Federal Court of Australia Act 1976 (Cth) make an order that: Schedule A to each of the summonses to Mr Wong and Mr Darin issued on 8 October 2021, which are Schedules A to the orders of Registrar Schmidt on 8 October 2021, be amended by deleting the words "included but not limited to" and replacing them with the word "being". 33 In view of explanations made on behalf of Mr Wong and Mr Darin that they have struggled to get the relevant documentation together in time, and considering that the day for production is tomorrow, I will also extend the date and time for production to 29 October at 2.00 pm. I consider that the additional two and a half days may be considerably helpful to Mr Wong and Mr Darin in meaningfully and substantially complying with the summonses, and that it will not too severely prejudice the administrators in preparation for the examinations otherwise commencing on 9 November 2021. I have checked with Registrar Cridland, before whom the documents are to be produced, that that is convenient to her. 34 I otherwise dismiss the interlocutory application filed on 15 October 2021. I will hear the parties on costs.

Thereafter on costs 35 Mr Wong submits that there should be no order as to costs on the basis that it was conceded that on behalf of the administrators that the schedules of documents that are sought were expressed more broadly than was necessary. Whilst that submission is correct in respect of the schedules, it is not particularly to the point. Mr Wong launched an interlocutory process seeking urgent wide-ranging relief including the setting aside of orders for the examinations altogether, most of which was then not pursued at the hearing. That relief which was pursued at the hearing substantially failed. 36 In the circumstances, the usual rule should apply, namely that the costs follow the event with the result that the applicant pay the administrators' costs of the interlocutory process. I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Stewart.