Palmer, in the matter of Queensland Nickel Pty Ltd (in liq) v Park [2017] FCA 618 | Case summary

REEVES J: 1 Mr Palmer has, by an application filed in each of these two proceedings on 7 February 2017, sought to be relieved of his obligations to produce documents at, and to attend, an examination into the affairs of Queensland Nickel Pty Ltd (in liq) being conducted under Pt 5.9 Div 1 of the Corporations Act 2001 (Cth). To be specific, Mr Palmer is seeking to set aside the orders for the production of documents made on 2 February 2017 or, in the alternative, to allow him extra time to comply with those orders and a notice that he attend an examination on 9 February 2017. 2 His application is based on two broad grounds. First, he claims the order for the production of documents made on 2 February 2017 by Registrar Belcher was not within the power of the Court, because it was not ancillary to an examination order. Secondly, he claims that it is oppressive to require him to produce the documents and to appear to be examined because he is due to appear at a trial of related proceedings in the Supreme Court of Queensland on 27 February 2017 and, in those circumstances, it is "inconvenient", to use his counsel's expression, for him to have to produce the documents and to appear as required. 3 Mr Park and a number of other persons are the general purpose liquidators of Queensland Nickel. For convenience, it should be assumed that where I refer to Mr Park henceforth in these reasons I intend to refer to the general purpose liquidators collectively. Mr Park opposes these two applications. He does so in circumstances where he has already agreed to postpone Mr Palmer's examination from Thursday, 9 February 2017, until Wednesday, 15 February 2017. That agreement was reached on 3 February 2017, in order to allow Mr Palmer to attend a funeral on 10 February 2017. As well, at about 11 am on 8 February 2017, Mr Park's lawyers sent an email to Mr Palmer's lawyers stating, in part: Our clients are prepared to agree to an extension permitting Mr Palmer until next Wednesday, 15 February 2017, to produce the documents sought in the summons. If all compliance cannot be achieved by that date, the parties should revisit the reasons why and any further extension necessary, at that time. 4 That email concluded with the statement: In light of the request from the Federal Court that the parties cooperate and resolve these issues without the need to impose on the Court's time today, please advise if Mr Palmer is agreeable to that position as soon as possible. 5 Mr Park's lawyers had not received a response to this latter query by 2.15 pm on 8 February 2017, when the urgent hearing of these applications began. Notwithstanding the implicit, if not express, reminder of the obligations a lawyer and his/her client has under Pt VB of the Federal Court of Australia Act 1976 (Cth), at the hearing of these applications, Mr Palmer's counsel could not provide any explanation for this lack of response. 6 These events provide a convenient segue to a number of other aspects of the procedural background to these proceedings, to which I will now turn. Mr Palmer was first notified of his obligation to attend an examination on 9 February 2017 by letter sent to his current address on 21 December 2016. This notice was provided in accordance with Order 2 of the orders of Registrar Belcher made on 19 September 2016 requiring Mr Park to give Mr Palmer at least eight days' notice of the date fixed for his examination. Order 7 of those orders allowed Mr Palmer liberty to apply. The present applications mark Mr Palmer's first use of that liberty to apply. No explanation has been offered by him as to why he left it to two days before the original date fixed for his examination to make these applications. 7 It is also worth noting that, according to Mr Palmer's counsel, the Supreme Court trial on 27 February 2017, which is, in part, relied upon by Mr Palmer to justify the inconvenience he says he will suffer if he has to meet his obligations to produce the documents and be examined, was set down in October 2016. Again, no explanation has been offered as to why the inconvenience associated with this confluence of the two events did not prompt a more timely application by Mr Palmer. 8 On the same theme, I note the following about the affidavits Mr Palmer has filed in support of these applications. First, they contain no explanation as to the exact nature of the "inconvenience" he claims he will suffer. Secondly, there is nothing to indicate he has taken any steps to comply with the order to produce documents in the period since it was served on him. And, thirdly, apart from giving a "preliminary" estimate that it will take at least four weeks to produce the documents, no information has been provided to support that estimate. 9 Having regard to the chronology of events I have just outlined, the lack of any satisfactory explanations from Mr Palmer to which I have adverted, and the cooperative arrangements that have been made by Mr Park to accommodate Mr Palmer's concerns thus far, I reject the proposition that Mr Palmer will suffer any oppression if he is required to comply with the notice of 21 December 2016 to attend an examination on the rearranged date of 15 February 2017, or to produce the documents required by the orders of 2 February 2017 in accordance with the proposal set out in Mr Park's lawyer's email of 8 February 2017 (see [3] above). I should add that Mr Palmer's counsel did not submit that Mr Palmer had not been given fair and reasonable notice of his examination date, nor the requirement to produce documents. This ground was based solely on him suffering oppression. 10 Having rejected the second ground of Mr Palmer's application, I now turn to the first. This ground was aptly described by Mr Palmer's counsel as a technical argument. It is founded on the provisions of s 597(9) of the Corporations Act 2001 (Cth) and the decision of Austin J in Re Leisure Development (Qld) Pty Ltd (in liq); ELL & Ors v Palmer (2002) 41 ACSR 276; [2002] NSWSC 248 (Leisure Developments). Section 597(9) provides: 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. 11 The particular part of Leisure Developments upon which Mr Palmer relied was [25], as follows: As to the second ground, the standard of precision to be met by an order for production was considered by Bryson J in Re BPTC Ltd (No 5) (in liq) (1993) 10 ACSR 756. The practice is to require production of documents, by persons other than those who are the subjects of examination orders, under Pt 36 r 12 of the Supreme Court Rules. That power can only be exercised where the production of documents is required for the purpose of exercising the power to conduct an examination (at 762). While the power to compel production of documents is a wide one, it is ancillary to an examination order, and cannot require the production of documents independently of the examination of particular individuals. An order for production which had the effect of compelling production of documents which were not required for the examination would be oppressive and in excess of the power to make such an order (at 763). Where a call for production goes beyond these limits, it may not be possible to sever the call so far as it covers documents ancillary to the examination order from its coverage of other documents, and in such a case the whole order for production or notice to produce may need to be set aside (at 766). 12 The "second ground" to which reference was made at the beginning of this paragraph was described earlier in his Honour's judgment at [22] as: "that the notices to produce and orders for production have been drawn too widely". These observations of Austin J were, therefore, not directed to the power of the Court to issue the notice to produce, but rather to the breadth of the notices that had been issued. Indeed, his Honour made it quite clear, in the middle of [25] that the power of the Court to compel production of documents "[was] a wide one". The limits to that power are defined in s 579(9). Specifically, the documents in question must: (1) relate to an examination of that person or any other person; (2) comprise "books", an expression that is defined in s 9 of the Act to include, among other things, documents; (3) be in the person's possession; and (4) be relevant to matters to which the examination relates. 13 The affidavit materials filed and read in support of these applications clearly establish that all of these criteria have been met. First, Mr Palmer and a number of other persons have been duly summoned to attend a compulsory examination under s 596A of the Act. Those examinations are to occur on 9 February 2017 and in the week following. The fact that those orders were made in one or other of the two extant proceedings, QUD 329 of 2016 and QUD 580 of 2016, is, in my view, immaterial. There is only one matter under consideration in these two sets of proceedings, that is, the examinable affairs of Queensland Nickel, directed to the future "possibility that information gathered in the course of the examination under section 597 will support a claim for relief against the examinee or some other person". That constitutes the "matter", in the sense that it is "[a] controversy relating to the pecuniary rights or liabilities or wrongdoing of the corporation and the examinee, or some other person": see Palmer v Ayres [2017] HCA 5 at [30]. 14 As to the other criteria in s 597(9), there is no suggestion in the affidavit material, and nor was there any made in the oral submissions on behalf of Mr Palmer, that: (1) the documents in question did not fall within the definition of "books" in s 9 of the Act; (2) those documents are not in possession of Mr Palmer; or (3) those documents are not relevant to the matters to which the examination of Mr Palmer and the other examinees relate. 15 For these reasons, I also reject the first ground of Mr Palmer's applications. 16 Having rejected both of the grounds upon which Mr Palmer's applications are based, I order that the interlocutory applications filed by Mr Palmer in each proceeding on 7 February 2017 be dismissed. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Reeves.

Palmer, in the matter of Queensland Nickel Pty Ltd (in liq) v Park

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