Plaintiff v Defendant

Supreme Court of Victoria|2008-04-01|Before: ROBSON J

CORPORATIONS LAW- Creditors voluntary liquidation - Complaint about conduct of the liquidator under s 536(1)(b) of the Corporations Act 2001 (Cth) -Application for an inquiry into the conduct of a liquidator - Application by the liquidator for dismissal of application for an inquiry under inherent jurisdiction of the court on the grounds application for an inquiry was inevitably bound to fail - Standing of complainant to seek an inquiry where complainant has no interest in the liquidation - Initial onus on complainant to establish prima facie case that the matters complained of warrant an inquiry - Discretion of court to order an inquiry if prima facie case made out - Section 536 Corporations Act 2001

PRACTICE AND PROCEDURE - Inherent jurisdiction to dismiss application for an inquiry under s 536 of Corporations Act 2001- Would the application inevitably fail - Procedure required to seek an order for an inquiry under s 536 of the Corporations Act 2001 - Affidavit required in support of application under Rule 2.4 of the Supreme Court (Corporations) Rules 2003 - Affidavit to state the facts in support of the application - Affidavit on personal knowledge and information and belief - Rule 7.11 and rule 23.01 Supreme Court Rules.

ASIC v Edge [2007] VSC 170

Belvista Pty Ltd v Murphy (1993) 11 ACSR 628

Brinson v Rocla Concrete Pipes [1982] 2 NSWLR 937

Burns Philp Investment Pty Ltd v Dickens (1993) 11 ACLC 272

Burns Philp Investment Pty Ltd v Dickens (No 2) (1993) 10 ACSR 626

Dey v Victorian Railways Cmrs [1949] HCA 1; (1948) 78 CLR 62

Knight v Bell [2000] VSCA 48

Leon v Your-O-Matic Ltd [1966] 1 WLR 1450

Leslie v Hennessy (2001) FCA 371

Magarditch v ANZ Banking Corporation (1999) 17 ACLC 424

Naumoski v Parbery [2002] NSWSC 1097

Northbourne Developments Pty Ltd v Reiby Chambers Pty Ltd (1989) 1 ACSR 79

Nut Trading Co Aust Pty Ltd v KKL (Kangaroo Line) Pty Ltd (1997) 25 ACSR 25

O'Toole v Mitcham (1977) 2 ACLR 471

Re A Debtor (No 400 of 1940) [1949] Ch 236

Re Biposo Pty Ltd (1995) 120 FLR 399

Re Day & Dent Constructions Pty Ltd (1984) 9 ACLR 319

Re Fermoyle Pty Ltd (1982) 6 ACLR 640

Re Hadfield Steelworks Ltd (1980) ACLC 40-623

Re Peters; Ex parte Lloyd (1882) 47 LT 64

1 By an originating process filed 19 June 2007, the plaintiff Martin Vink ("Mr Vink") seeks an order pursuant to s 536 of the Corporations Act 2001 ("the Act") that an inquiry be conducted into the defendant's liquidation of Corporate Interior Constructions Pty Ltd (In liquidation) ("CIC"). The plaintiff makes complaint under s 536 of the Act that the defendant Colin Roland Tuckwell ("Mr Tuckwell") has inadequately and/or improperly conducted the liquidation of CIC.[1] As required by the Supreme Court (Corporations) Rules 2003 ("the Corporations Rules") Mr Vink's application was supported by an affidavit of 18 June 2007 that purported to depose to the facts in support of the originating process

2 On 31 July 2007, the defendant issued an interlocutory application seeking an order dismissing the plaintiff's application. The defendant relies on the court's inherent jurisdiction to summarily dismiss claims without any prospect of success.[2]

3 On 2 August 2007, the defendant filed an outline of submissions in support of its application to have the plaintiff's application dismissed. The outline of submissions contended that Mr Vink's affidavit of 18 June 2007 was objectionable and did not depose to the facts necessary to support the originating process.

4 On 3 August 2007, Dodds-Streeton J granted the defendant's application and dismissed the plaintiff's application.

5 On 17 August 2007, Mr Vink sought leave to appeal from the decision of Dodds-Streeton J dismissing his application.

6 On 19 September 2007, Mr Vink's application for leave to appeal was heard. Leave was granted and the appeal allowed on the grounds that Mr Vink had been denied natural justice in not being given an adjournment to consider the defendant's written submissions, which Mr Vink had not received until the morning of 3 August 2007.

7 The Court of Appeal remitted Mr Tuckwell's application to dismiss Mr Vink's application to the commercial list for hearing and determination according to law.

8 On 1 October 2007, the matter came on before me and was adjourned to 12 October 2007.

9 On 5 October 2007, Mr Tuckwell filed a further outline of submissions, and on 9 October 2007, the solicitors for Mr Tuckwell provided Mr Vink with a list of objections to his affidavit.

10 On 10 October 2007, an affidavit by Paul Wayne Marsh was filed on behalf of the defendant verifying service of the list of objections.

11 On 11 October 2007, the plaintiff filed an outline of submissions.

12 On 12 October 2007, I adjourned the further hearing of Mr Tuckwell's application and Mr Vink's application to 2 November 2007.

13 On 1 November 2007, in a letter from ASIC to my Associate, ASIC referred to the proceeding, saying that they had been served with copies of the plaintiff's originating process filed 19 June 2007 and Mr Vink's affidavit of 18 June 2007. The letter went on to say that ASIC neither supported nor opposed the plaintiff's application in the subject proceedings. ASIC said that it had, for some considerable time, been aware of the certain related "proceedings" referred to in Mr Vink's affidavit and, in particular, Tuckwell v Linton & Ors (Supreme Court of Victoria proceeding number 8355 of 2002) and Linton v Tuckwell (Supreme Court of Victoria proceeding number 6575 of 2006). ASIC went on to say that if, following conclusion of the proceedings referred to, it would be demonstrated to ASIC that an adverse finding had been made by the Court against Mr Tuckwell with respect to his conduct as administrator or liquidator, ASIC would in that event review its consideration of the question whether or not to inquire further into the matter. ASIC concluded its letter by saying it is not ASIC's current intention to intervene in the subject proceeding.

14 On 2 November 2007, the matter again came before me and I set down for hearing on 25 February 2008 both Mr Tuckwell's application and Mr Vink's application with an estimated hearing time of two days.

15 On 8 November 2007, Mr Vink filed a further affidavit sworn 4 November 2007 that sought to overcome criticisms that Dodds-Streeton J had made in her reasons for summarily dismissing Mr Vink's application on 3 August 2007. This affidavit replaced the affidavit of 18 June 2007 as the affidavit that sought to state the necessary facts to support the originating process as required under the Corporations Rules.

16 On 20 December 2007, Mr Tuckwell filed a further affidavit. This affidavit has not been relied upon by Mr Tuckwell in his application to have Mr Vink's application dismissed. In the event that the court does not dismiss Mr Vink's application, then Mr Tuckwell's affidavit of 20 September 2007 may be relied upon.

17 On 1 February 2008, Mr Vink swore, filed and served an affidavit in response to the affidavit of Mr Tuckwell of 20 December 2007.

18 Mr Vink also relies upon affidavits of Lorenz Turko sworn 14 February 2008 and an affidavit of Basil Richard le Riche sworn 14 February 2008.

19 On 18 February 2008, Mr Marsh from Wisewoulds, solicitors for Mr Tuckwell, filed a further short affidavit..

20 On 19 February 2008, further submissions were filed on behalf of Mr Tuckwell which included his submissions on his application of 31 July 2007 to dismiss Mr Vink's application.

21 On 20 February 2008, Mr Vink swore a further affidavit replying to the short affidavit of Mr Marsh of 18 February 2008.

22 On 25 February 2008, the hearing commenced of Mr Tuckwell's application to summarily dismiss Mr Vink's application of 19 July 2007.

23 On 25 February 2008, Mr Vink tendered written submissions. Further written submissions were tendered on 26 February 2008.

24 The hearing of Mr Tuckwell's application concluded on 26 February 2008 and I reserved my decision which follows.

25 CIC carried on business fitting out offices. The business was conducted by Mr Van Oosterom and his wife, known throughout the proceedings as Miss Annie Linton.

26 Mr Van Oosterom was a director and secretary of CIC since its incorporation. Miss Annie Linton resigned her directorship on 6 December 1996. Mr Roland Di Carlo was a director of CIC from 17 August 2001 to 23 January 2002.

27 At the date of liquidation on 8 May 2002, the two registered shareholders were Mr Van Oosterom and Miss Annie Linton. It was claimed by Mr Vink that Miss Annie Linton had signed a transfer of her share in mid 2001 but the transfer had not been registered by the company or with ASIC.

28 On 11 April 2002, at the request of the board of CIC an administrator, Mr Tuckwell, was appointed to the company because of its financial difficulties.

29 On 17 April 2002, the first meeting of creditors was held pursuant to s 436E of the Corporations Act 2001. On 29 April 2002, Mr Tuckwell presented his first report to the creditors. Mr Vink makes complaints about this report.

30 On 8 May 2002 at the second meeting of creditors, the creditors resolved that the company go into liquidation and that the administrator, Mr Tuckwell, be appointed liquidator in the creditors voluntary winding up of the company. Mr Tuckwell had recommended such a course in his report to creditors.

31 The material does not disclose if Mr Tuckwell is an official liquidator as well as being a registered liquidator but I understand that he is.

32 The report to creditors disclosed that CIC was the trustee of four trusts: The Family Trust, the Investment Trust, the Property Trust and the Super Fund. The report to creditors noted the company had an excess of assets over liabilities of $325,019.

33 On 28 November 2002, Mr Tuckwell took proceedings in this court in matter no 8355 of 2002 on behalf of CIC (in liquidation) in respect of loan accounts owing by both Mr Van Oosterom and allegedly by Miss Annie Linton.

34 The proceedings against Mr Van Oosterom were resolved when CIC(in liquidation) obtained a default judgment for about $1.7m in March 2003. The same proceedings on the loan account against Miss Annie Linton continued and ultimately settled last year when orders by consent were made under which essentially each party walked away.

35 On 26 May 2006, Annie Linton took proceedings against Mr Tuckwell to have him removed as liquidator and also seeking that an inquiry be conducted into the conduct of Mr Tuckwell as liquidator of CIC (in liquidation) under s 536 of the Corporations Act 2001. Both those proceedings were resolved in about October 2007 at the same time as the action against Miss Linton was resolved. As mentioned above, however, in June 2007, Mr Vink commenced his own proceeding against Tuckwell, making the same allegations that Miss Linton had made in her proceedings seeking to have Mr Tuckwell removed as liquidator and seeking an inquiry into his conduct of the liquidation of CIC. Despite the proceedings of Miss Linton against Mr Tuckwell (6575 of 2006) being resolved and dismissed by consent, Mr Vink has seen fit to proceed with his proceedings.

36 The liquidator has completed winding up CIC and is only waiting for this proceeding to file the necessary return to lead to the dissolution of CIC.

37 Mr Vink was neither a director, a shareholder, a creditor nor a debtor of CIC. He had nothing to do with the company whatsoever, save that at the time the company went into liquidation Miss Annie Linton was his de facto partner and Mr Vink assisted Miss Linton in her resistance to Mr Tuckwell's action on the loan recovery in action 8355 of 2002 and assisted her in the proceeding number 6575 of 2006 seeking removal of Mr Tuckwell as liquidator and seeking an order for an inquiry into his conduct as liquidator.

38 Mr Vink says he has invested a lot of time and effort into investigating the affairs of the liquidator and he asserts it is in the public interest that he pursues his complaint seeking an order for an inquiry with respect to the conduct of Mr Tuckwell as liquidator of CIC.

(a) it appears to the Court or to ASIC that a liquidator has not faithfully performed or is not faithfully performing his or her duties or has not observed or is not observing:

(ii) a requirement of this Act, of the Regulations or the Rules; or

(b) a complaint is made to the Court or to ASIC by any person with respect to the conduct of a liquidator in connection with the performance of his or her duties;

the Court or ASIC, as the case may be, may inquire into the matter and, where the Court or ASIC so inquires, the Court may take such action as it thinks fit."

ASIC may report to the Court any matter that, in its opinion, is a misfeasance, neglect or omission on the part of the liquidator and the Court may order the liquidator to make good any loss that the estate of the company has sustained thereby and may make such other order or orders as it thinks fit.

The Court may at any time require a liquidator to answer any inquiry in relation to the winding up and may examine the liquidator or any other person on oath concerning the winding up and may direct an investigation to be made of the books of the liquidator."

"(1) A complaint to the Court under paragraph 536(1)(b) of the Corporations Act must be made -

(a) in the case of a winding up by the Court - by filing an interlocutory process seeking an inquiry; and

(b) in the case of a voluntary winding up - by filing an originating process seeking an inquiry.

(2) A report to the Court by the Commission under sub-s 536(2) of the Corporations Act must be made -

(a) in the case of a winding up by the Court - by filing -

(i) an interlocutory process seeking orders under the sub-section; and

(ii) a written report in a sealed envelope that is marked with the title and number of the proceeding; and

(b) in the case of a voluntary winding up - by filing -

(i) an originating process seeking orders under the sub-section; and

(ii) a written report in a sealed envelope that is marked with the title of the proceeding and provision for its number.

(3) The contents of a report filed under sub-rule (2) need not, at the time of filing, be verified by an affidavit.

(4) Except with the leave of the Court, a report made under sub-section 536(2) of the Corporations Act is not available for inspection by any person except the liquidator or the Commission."

"(1) Unless the Court otherwise directs, an originating process, or interlocutory process, must be supported by an affidavit stating the facts in support of the process."

41 CIC (in liquidation) is being wound up under a creditors' voluntary winding up which commenced on 8 May 2002. In such a case, Rule 7.11(1)(b) applies and under para 536(1)(b) the complaint is required to be made by filing an originating process, which Mr Vink has done, supported by an affidavit stating the facts in support of the process.

42 In CCA v Harvey[3] Marks J gave an extensive and thorough examination of the history of s 278 of the Companies Act 1961 (Vic), the then predecessor of s 563 of the Corporations Act 2001(Cth).

278(1) The Court shall take cognizance of the conduct of liquidators, and if a liquidator does not faithfully perform his duties and observe the prescribed requirements or the requirements of the Court or if any complaint is made to the Court by any creditor or contributory or by the Board in regard thereto, the Court shall inquire into the matter and take such action as it thinks fit.

(2) The Commissioner of Board may report to the Court any matter which in his opinion is a misfeasance, neglect or omission on the part of the liquidator and the Court may order the liquidator to make good any loss which the estate of the company has sustained thereby and make such orders as it thinks fit.

(3) The Court may at any time require any liquidator to answer any inquiry in relation to the winding up and may examine him or any other person on oath concerning the winding up and may direct investigation to be made of the books and vouchers of the liquidator."

43 The reference to the "Board" was to the Companies Auditors Board constituted under the Act.[4] ASIC now registers liquidators and has taken over the functions of the Board.

44 In particular Marks J explored the history of the establishment of the joint stock company and the introduction of the office of liquidator in winding up companies. He canvassed the various roles the English Court of Bankruptcy and the Court of Chancery played and the eventual supremacy of the Court of Chancery in the winding up of companies. He noted that the 1856 Act 19 & 20 Vict introduced the office of "official liquidator" who was to be appointed to conduct the proceedings of winding up by the court.[5]

45 He concluded that the United Kingdom Companies (Winding Up) Act 1890 (53 & 54 Vic c 63) was the model for the Companies Act 1896 (No 1482 of 1896)(Vic). He said that a very large number of the provisions of the Companies (Winding Up) Act 1890 (UK) and thus the Companies Act 1896 (Vic) still appeared in the Companies Act 1961 (Vic). He said that among them was the precursor to s 278 of the Companies Act 1961 (Vic), namely s 25 of the Companies (Winding Up) Act 1890 (UK) which was the model for s 146 of the Companies Act 1896 (Vic) the then predecessor of s 278 of the Companies Act 1961 (Vic).

46 Since s 278 of the Companies Act 1961 (Vic), the predecessors of s 536 of the Corporations Act (Cth) have appeared as s 420 of the Companies (Victoria) Code[6], which was amended by the Companies and Securities (Miscellaneous Amendments) Act 1983 (No 108 of 1983) (Cth); then as s 536 of the Corporations Law,[7] and now as s 536 of the Corporations Act 2001 (Cth).

47 Section 278 of the Companies Act 1961 (Vic) was succeeded by s 420 of the Companies (Victoria) Code. It contained some material differences to s 278. A complaint under sub-section 420(1) could be made by "any person" and not just by "any creditor or contributory or by the Board" as previously provided in s 278. Further, under sub-section 420(1) where either (a) or (b) was made out the sub-section now provided the court "may inquire into the matters and, where the Court or the Commission so inquires, the Court may take such action as it thinks fit" rather than as previously under s 278 where either (a) or (b) was made out the court "shall inquire into the matters and take such action as it thinks fit."

48 Under s 420 provision was also made for the Commission (then the National Companies and Securities Commission) ("NCSC") to conduct inquiries. Under the Companies (Victoria) Code the NCSC was given extensive powers of inspection under Division I Part II and powers under ss 541 and 542 which would be available to assist its inquiry.[8] Under the Companies and Securities Legislation (Miscellaneous Amendments) Act (No 108 of 1983)(Cth) further amendments were made to sub-section 420 (1) to specify with greater particularity "the prescribed requirements or the requirements of the court" as previously provided for in s 420. Section 536 of the Corporations Act 2001 is in substantially the same form as the amended s 420 in the Companies (Victoria) Code.

49 In O'Toole v Mitcham[9] (Full Court) Young CJ said that the construction s 278 of the Companies Act 1961 (Vic) is not without its difficulties. He said that "By sub-s (1) the court is directed to take cognizance of (which I would take to mean jurisdiction over) the conduct of liquidators, and if a liquidator does not faithfully perform his duties, or if complaint is made to the court, the court is directed to inquire into the matter and take such action as it thinks fit." He said further "I shall not stay to discuss the problems raised by that sub-section. It is sufficient to say that it places liquidators in a special position so far as the court is concerned, and so far as they are concerned at any rate it may throw some light on the purpose, or one of the purposes, for which the court may examine a liquidator pursuant to sub-s (3)."

50 O'Toole v Mitcham[10] concerned the right of a liquidator to refuse to answer a question asked of him when being examined under sub-s 278(3) and otherwise does not throw further light on the construction of s 278.

51 In CCA v Harvey[11] Marks J identified in nine points a range of difficulties in interpreting s 278 that came to his mind and to which he said Young CJ might well have been adverting to in O'Toole v Mitcham.[12] Nevertheless, after an extensive discussion of the role of liquidators, adversarial versus inquisitorial jurisdiction and the standing of the Commissioner for Corporate Affairs he stated his views on the difficulties of construing s 278 as far as it was necessary for him to do so in the matter before him. I shall not repeat them here. They extend over a page of the law reports and bear careful examination.

52 What does appear from the interpretation given by Marks J to s 278 is that the three sub-sections of s 278 should be read as a whole. He makes clear that together those sub-sections set out the jurisdictional basis for the court ordering an inquiry into the conduct of a liquidator. In other words, the findings the court must make in order to have the power to order an inquiry. He makes clear that the section defines the matters the court may inquire into, the form the inquiry may take, the procedural powers of the court in the inquiry, the findings the court may make arising from the inquiry and the orders that the court may make as a consequence of the inquiry.

53 In the case before Marks J the Commissioner had made a report to the court under sub-section (2) on the conduct of Mr Harvey as liquidator of Timberlands Ltd. That report was accepted by Fullagar J. Relying on the report the Commissioner issued a summons seeking an order that Mr Harvey attend the court and be examined about and answer any inquiry concerning the winding up of Timberlands Ltd. That summons came on before Marks J. In this instance, the report under sub-section (2) led to the inquiry under sub-section (1) and the examination of Mr Harvey under sub-section (3).

54 There was no discussion in the decision of Marks J of the matters the court needed to be satisfied of to order an inquiry. The parties seem to have accepted that the report of the Commissioner justified the inquiry taking place and the inquiry proceeded accordingly.

55 It is now convenient to examine those decisions where the courts have considered the threshold matters that needed to be established to establish the court's jurisdiction to order an inquiry where a complaint had been made under para 536(1)(b).

56 In Re Hadfield Steelworks Ltd [13] Needham J of the Supreme Court of New South Wales had before him a summons by a creditor of Hadfield Steelworks Ltd seeking an inquiry by the court into the conduct of the liquidator of the company and in particular the liquidators alleged failure to deal with the creditor's proof of debt. Before the matter came on for hearing, the liquidator dealt with the proof of debt and rejected the proof. The creditor appealed the liquidator's decision. The liquidator then sought to have the summons for the inquiry dismissed or stayed indefinitely as an abuse of the processes of the court. The parties agreed to the dismissal of the summons upon the liquidator making certain acknowledgements and giving certain undertakings.

57 Needham J addressed the question whether the summons should be dismissed or whether the matter having been brought to the court's attention and some case made of improper omissions by the liquidator the court should pursue an inquiry into the liquidator's conduct despite the satisfaction of the applicant with the terms contained in the proposed consent order. In answer to that question Needham J said:

"There is doubt as to the true nature of s 278. A question arises as to whether it envisages adversary litigation between a complainant and a liquidator, or whether it is an enquiry instigated by the court on the prompting of a creditor, contributory, the Commission or the Board. So far as the general nature of the section is concerned I think there is much to be said for the latter view although it may be that once the court is seized of the enquiry the procedure would be similar to adversary procedure. It may well be that, despite the satisfaction of a particular creditor or contributory as to the resolution of the disputes, the court, in some cases, should nevertheless, enquire into the conduct of the liquidator as a result of the information given to it by the creditor or contributory."[14]

58 As it was, Needham J did not think that course should be adopted in the case before him.

59 In Re Fermoyle Pty Ltd[15] Crockett J of the Supreme Court of Victoria considered the jurisdiction of the court to order an inquiry under sub-s (1) of s 278 of the Companies Act 1961. The Commissioner of Taxation claimed that the Commonwealth was a creditor and made a complaint under sub-s (1) against the conduct of a liquidator of a company involved in the now notorious tax avoidance scheme using supposed donations to a Norfolk Island art gallery. The liquidator argued that the Commissioner was no longer a creditor and therefore had no standing to make the complaint. Referring to the observation of Young CJ in O'Toole v Mitcham,[16] Crockett J agreed the provisions of s 278 were difficult to construe.

60 Nevertheless, he held that "the creation of a jurisdiction to 'inquire into the matter and to take such action as it thinks fit' was dependent upon either less than faithful performance of duties and non-observance of appropriate requirements or complaints made to the court by (inter alios) a creditor." He said that if the Commissioner had not been a creditor when the order for inquiry was made the material the Commissioner put before the court as to the non-faithful performance by the liquidator of his duties was "such as to enable the court to validly inquire into the matter and take such action as it thinks fit."[17]

61 He also said that the direction in s 278(1) to the court to "take cognizance of the conduct of liquidators" was expressed in such general terms that the court's power to investigate a liquidator's conduct that appears to merit inquiry cannot be terminated by a change in status of the original complainant.[18]

62 Crockett J's construction reinforces the view of Needham J that the court's jurisdiction to "enquire into the matter" may be enlivened by the court becoming aware of conduct of a liquidator that appears to merit inquiry by reason of proceedings before it. Such a construction has even greater weight in relation to s 536 where sub-s (1) expressly contemplates the court's power to inquire being enlivened "where if appears to the court" that the liquidator is not faithfully performing his duties.

63 In Re Day & Dent Constructions Pty Ltd[19] Forster CJ of the Supreme Court of the Northern Territory had before him an inquiry under s 278 into the conduct of the provisional liquidator of Day & Dent Constructions Pty Ltd. The registrar of companies had submitted a report to the court under sub-s 278(2) and Forster CJ had ordered an inquiry should proceed upon the summons by the registrar of companies. At the enquiry a person claiming to be a creditor sought leave to appear. Forster CJ refused leave to appear. Agreeing with Marks J in CCA v Harvey[20], he held that "notwithstanding the use of the word "enquiry" in s 278 of the Companies Act these are adversary proceedings between the registrar and the liquidator."[21]

64 In Northbourne Developments Pty Ltd v Reiby Chambers Pty Ltd[22] McLelland J of the Supreme Court of New South Wales dealt with a claim by a person claiming to be aggrieved under s 538 of the Companies (NSW) Code and a complaint under s 420 of the Code. The plaintiff had negotiated with the provisional liquidator of Reiby Chambers Pty Ltd in relation to the sale of a Sydney property. The provisional liquidator subsequently sold the property to the fourth defendant. The plaintiff took the proceedings to reverse the decision of the provisional liquidator to enter into the sale to the fourth defendant.

65 After holding that the plaintiff had standing to make a complaint Lindgren J embarked on an examination of the substance of the complaint treating the hearing before him as the "inquiry." After examining the merits of the complaint he held it was inappropriate to make any order under s 420.

"I turn now to the application under s 420. That section empowers the Court to act on the complaint of "any person". It was submitted that the ambit of that phrase should, by implication, be limited in some way sufficient to exclude Northbourne. In my opinion, when regard is had to the scope and purpose of the section, no limitations should be implied.

Section 420 is concerned with aspects of the conduct of liquidators which are liable to attract sanctions or control for what might broadly be described as disciplinary reasons. Although the section applies to any liquidator it has particular significance in the case of a liquidator appointed by the court who is, in that sense, an officer of the court, and to a liquidator whose qualifications for office is that he is a registered official liquidator or a registered liquidator with the public accreditation that such registration involves and who is in that sense a public officer.

In such circumstances the legislature may well have taken the view that it is not in the public interest to limit the class of persons who might bring a complaint to the court of misconduct by a liquidator. The phrase "any person" must, I think, be taken to have its literal meaning."

67 In Burns Philp Investment Pty Ltd v Dickens[23] Young J had before him a summons claiming relief under s 538 of the Corporations Law with a schedule of complaints annexed. The complaints were in general terms but essentially complained of excessive fees charged by the liquidator. At issue before Young J was "whether as a matter of procedure the plaintiffs must get over a barrier before the inquiry is commenced, that is they must convince the court that there are grounds for embarking on the inquiry." Young J held:

"I have looked at some of the cases that have occupied the court's time under this section or its equivalent in earlier legislation and it is very difficult to see any defined practice that has been applied. It would seem to me, however, that it is not in the public interest that anybody who feels that he or she or it has a grievance against the liquidator which they hope might be able to be proved in due course, may set in train a full blown inquiry. It seems to me the proper construction of the section is that the court must be given some material to suggest that it would be in the public interest to conduct an inquiry. That means that the complaint of the plaintiffs must put forward material which prima facie satisfies the court of that matter. Just what will satisfy the court will obviously depend on the circumstances. If, as I put in argument in a hypothetical case, it would seem that the liquidator had suddenly left Australia or there has been a reported deficiency in his trust account probably little else would be needed but if on the other hand the complaints are mere unspecified allegations of overcharging, then the court would need to look at the matter in far more detail to see whether it would be justified in using the resources to pursue the matter. The instant complaint is closer to the second example that I have given, though it is not in that exact category and, it seems to me, I should not take this matter further unless there was material which convinces me prima facie that I would be justified in so doing."[24]

68 Young J went on to say he would not permit subpoenas or notices to produce at that stage. I believe this is of significance when I subsequently consider Mr Vink's expressed wish to examine Mr Tuckwell before the court has decided that Mr Vink has established a prima facie case that warrant investigation.

69 In Burns Philp Investment Pty Ltd v Dickens (No 2)[25] Young J considered whether the plaintiffs should now be permitted to proceed to an inquiry after that had put more material before the court consequent upon the earlier hearing. After considering the plaintiffs' case in great detail Young J ordered that an inquiry should be held.

70 Young J again addressed the issue of the barrier the plaintiffs should be made to pass to have an inquiry mounted. He said:

"Mr Campbell QC for the plaintiffs, put that the barrier over which the plaintiffs should be made to pass to have an inquiry mounted should not be a very high one and that all that was necessary for his clients to show was that there was a prima facie case that something needed to be investigated. In my view this is correct. The court at this stage should not make any finding on the reasonableness or otherwise of the liquidator's conduct, but if there are sufficient matters prima facie calling for further investigation then, subject to proper safeguards as to the scope of the inquiry, an inquiry should be permitted. "

71 Both passages were cited with approval by Einfeld J in Magarditch v ANZ Banking Corporation.[26] In this case extensive allegations of misconduct were levelled by a disgruntled owner of the company in liquidation against the liquidator. Einfeld J dismissed the application for an inquiry under s 536 as the applicant failed to establish a prima facie case that something needed to be investigated.

72 Dodds-Streeton J of this court in ASIC v Edge also cited Young's judgment with approval adding "It is recognised that the threshold precondition for the instigation of an inquiry should not be a very high one."[27]

73 In Belvista Pty Ltd v Murphy[28] McLelland CJ in Equity of the Supreme Court of New South Wales considered an application under s 536 of the Corporations Law where a creditor sought to challenge a decision of the liquidator. McLelland CJ dismissed the application on grounds other than ones relating to s 536 but said in obiter;

"...where, as here, a creditor or other interested party wishes to challenge the decision of a person in the position of a scheme administrator, or a liquidator, apparently arrived in good faith, it is generally inappropriate to utilise the "complaint" provisions of s 36 of the Corporations Law rather than the "appeal" provisions of s 1321. As I observed in Northbourne Developments v Reiby Chambers Pty Ltd (1989) 8 ACLC 39 at 43 in relation to the predecessor of s 536, that section is concerned with aspects of the conduct of liquidators and others which are liable to attract sanctions or control for what might be broadly described as disciplinary reasons."[29]

74 In Re Biposo Pty Ltd[30] Young J addressed the position of liquidators. He said:

"The court will be very jealous of its delegate exercising the powers that it is given. The court will take every precaution to make sure those powers are used impartially and for a proper purpose. The corollary of this is that the court will not permit its officer to be sued by a creditor or have an inquiry made under s 536 unless it is satisfied that there is a prima facie case: Re Siromath Pty Ltd (1991) 9ACLC 1583 at 1590."

75 In Nut Trading Co Aust Pty Ltd v KKL (Kangaroo Line) Pty Ltd[31] Einfeld J said:

"Some support for the proposition that the appellant must put forward material which justifies the court being satisfied that a report should be prepared may be gleaned from the approach taken by Young J in Burns Philp Investment Pty Ltd v Dickens ... There the applicants had sought relief under s 536 of the Code. The section enables the court, if it appears that a liquidator is not faithfully performing his or her duties, to conduct an inquiry into the performance of the liquidation and to make consequential orders."[32]

76 In Leslie v Hennessy[33] the Full Court of the Federal Court of Australia consisting of Ryan, Dowsett and Hely JJ considered an appeal from the decision of Drummond J dismissing motions for an inquiry under s 536 based on complaints. The Full Court referred with approval to the observations of Young J in Burns Philp Investments Pty Ltd v Dickens (No 2)[34], of McLelland J in Belvista Pty Ltd v Murphy[35] and of Einstein J in Nut Trading Co Aust Pty Ltd v KKL (Kangaroo Line) Pty Ltd [36] all referred to above.

77 The appellant had disputed the correctness of the approach taken by Young J in Burns Philp Investment Pty Ltd v Dickens (No 2)[37] and adopted by Drummond J at first instance of requiring the complainant to establish a prima facie case that something needed to be investigated before the court would consider ordering an inquiry to be held.[38] The Full Court said:

"However, we believe that both Young J and Drummond J were describing something less formal than a prima facie case according to some evidential burden or proof. Their Honours both meant only that an applicant must show a sufficient basis for making an order, that there is something which requires inquiry. The court then has a discretion which it must exercise. Many factors will be relevant to that exercise. They include the strength and nature of the allegations, any answers offered by the liquidator, other available remedies, the stage to which the liquidation has progressed, the likely amounts of money involved, the availability of funds to pay for an inquiry, the likely benefit to be derived and the "legitimate" interest of the applicant in the outcome."[39]

78 The court went on to uphold Drummond J and find that the appellants had not demonstrated need for an inquiry. Drummond J had dealt with numerous complaints. On appeal the appellant argued that notwithstanding the fact that none of the complaints individually may have been sufficient to require investigation, when taken together they might justify an inquiry. The Full Court considered this most unlikely. They said that "the section does not contemplate a detailed investigation of the whole of the liquidator's conduct simply because a specific allegation of misconduct has been made." They concluded that "if an applicant cannot demonstrate that any one of numerous matters of complaint requires investigation, the cumulative totality of these matters will rarely justify a general inquiry into the liquidation."[40] This observation has particular relevance in this case where Mr Vink has made numerous complaints.

79 In Leslie v Hennessy the Full Court of the Federal Court said the applicant "must show there is sufficient basis for ordering an inquiry, that there is something which requires inquiry." [41] Paragraph 536(1)(a) expressly provides for matters which may require inquiry including where "a liquidator has not faithfully performed or is not faithfully performing his or her duties or has not observed or is not observing (i) a requirement of the Court or (ii) a requirement of this Act , of the regulations or of the rules." Paragraph 536(1)(b) also includes "conduct of a liquidator in connection with the performance of his or her duties." As indicated above, the conduct complained of should involve the liquidator not faithfully performing his or her duties or observing the matters referred to in para 536(1)(a).

80 Sub-section (2) refers to "misfeasance, neglect or omission." In CCA v Harvey Marks J in listing the matters he considered difficult to construe in s 278 of the Companies Act 1961 said it was not clear what distinction, if any there was between failure faithfully to "perform duties and observe the prescribed requirements or the requirements of the Court and "misfeasance, neglect or omission." He said that in practice these matters must overlap.[42]

81 As quoted above in Northbourne Developments Pty Ltd v Reiby Chambers Pty Ltd McLelland J of the Supreme Court of New South Wales said in respect of s 420 the predecessor to s 536 that it was "concerned with aspects of the conduct of liquidators which are liable to attract sanctions or control for what might broadly be described as disciplinary reasons."[43] He repeated this observation in Belvista Pty Ltd v Murphy[44] which I have quoted above. His observation was quoted with approval by the Full Federal Court in Leslie v Hennessy.[45]

82 This approach is reinforced by the traditional approach of the courts not to interfere with the discretion of liquidators. In Naumoski v Parbery[46] Young CJ in Equity said "There is a considerable amount of learning to the effect that under the modern system of company liquidation the Court rarely interferes with the exercise by liquidators of their statutory powers, and in particular, it does not interfere where the liquidator's decision is really one of commercial judgment."[47] Young CJ referred as authority for this proposition to Leon v Your-O-Matic Ltd[48], Re A Debtor (No 400 of 1940)[49] and Re Peters; Ex parte Lloyd[50] where Sir George Jessel said in a bankruptcy case: "The court will not interfere unless the trustee is doing that which is utterly unreasonable and absurd that no reasonable man would so act."

83 On the other hand, Dodds-Streeton J of this court in ASIC v Edge[51] conducted an inquiry into the conduct of Mr Edge as liquidator under s 536 and under the heading of 'liquidator's role, duties and powers' examined them in detail. She said:

"The extensive powers vested exclusively in the liquidator entail a corresponding vulnerability in the creditors, members and public. The liquidator is a fiduciary on whom high standards of honesty, impartiality and probity are imposed both by the Act and the general law. As an officer of the company, the liquidator has a statutory duty of care, diligence and good faith." [52]

84 In my opinion, the authorities establish that where a complaint is made as the basis for holding an inquiry under s 536 the complainant bears an initial onus of establishing a prima facie case that there is something which requires enquiry. If the complainant does establish as a first step such an initial case then the court has a discretion whether or not to order an inquiry as indicated by the Full Court of the Federal Court of Australia in Leslie v Hennessy.[53]

85 The complainant does not need to put sufficient evidence before the court to enable the court to make a prima facie finding that the liquidator has not faithfully performed his or her duties or has not observed the matters he is obliged to as referred to in para 536(1)(a). It is sufficient if the material merely establishes that there is something that should be investigated.

86 A complaint under para 536(1)(b) with respect to the conduct of the liquidator in connection with the performance of his or her duties should be confined to the liquidator's failure to observe the matters referred to in para 536(1)(a) and normally should be concerned with aspects of the conduct of liquidators which are liable to attract sanctions or control for what might be broadly described as disciplinary reasons. Normally, the court should be satisfied that there is a public interest being served in holding the inquiry.

87 Rule 23.01 gives effect to the inherent jurisdiction of the court to stay or dismiss any proceeding or strike out any pleading which is scandalous, frivolous or vexatious or is an abuse of process.[54] Rule 23.01(1)(b) refers to a proceeding or claim that is scandalous, frivolous or vexations and r 23.01(1)(c) to one that is an abuse of process of the court. Ormiston JA held in Knight v Bell[55] that in substance there is no difference between the two provisions.

88 In Dey v Victorian Railways Cmrs[56] Dixon J said that "A case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner with or without a jury." Dixon J referred to the importance of maintaining "the integrity of the principle that under cover of the inherent jurisdiction to stop abuse of process litigants are not to be deprived of the right to submit real and genuine controversies to the determination of the courts by the due procedure appropriate for the purpose."[57]

89 In R v Smith[58] Brooking J said that "Civil or criminal proceedings are an abuse of process, not if it can be said of them only that they will very likely fail, but if it can be said of them that it is quite clear that they must inevitably fail." He further said:

"The very function of the courts is to hear and determine claims, sound and unsound, and to filter out those which are unsound, not (save in extreme cases, where a stay or other summary determination may be appropriate) by declining to deal with them in the usual way, by hearing and determining them... Time and again it has been said that it is only exceptional circumstance that a proceeding, civil or criminal, will be stayed on the ground that it constitutes an abuse of process."[59]

90 No issue was raised by Mr Tuckwell as to the standing of Mr Vink to make a complaint. As discussed above, Mr Vink had no association with CIC or its liquidation as a creditor, debtor, shareholder, and employee or otherwise save that his former partner Miss Linton had been a director and was closely involved in the liquidation. Further his complaints do not allege he is aggrieved in any way by the actions of the liquidator.

91 Section 536 refers to a complaint by "any person" with respect to the conduct of a liquidator in connection with the performance of his or her duties. Does that give standing to any person whatsoever irrespective of any association, interest or grievance he or she may have?

92 In the context of a complaint at law, should the complainant having some grievance? The Oxford Dictionary meaning of complaint includes: (3) "outcry against or because of injury; representation of wrong suffered; utterance of grievance." On the other hand, s 1321 which provides for appeals against decisions of liquidators gives standing to "a person aggrieved."

93 The weight of authority suggests that "any person" means just that. As discussed above, in Northbourne Developments Pty Ltd v Reiby Chambers Pty Ltd[60] McLelland J of the Supreme Court of New South Wales considered the issue of standing under s 420 of the Companies (NSW) Code, the then equivalent of s 536. He said that s 420 is concerned with "aspects of the conduct of liquidators which are liable to attract sanctions or control for what might broadly be described as disciplinary reasons." He said that although the section applied to any liquidator "it had particular significance in the case of a liquidator appointed by the court" who he said in a sense is an officer of the court and "to a liquidator whose is a registered official liquidator or a registered liquidator with the public accreditation that such registration involves and who in that sense is a public officer." He concluded:

"In such circumstances the legislature may well have taken the view that it is not in the public interest to limit the class of persons who might bring a complaint to the court of misconduct by a liquidator. The phase "any person" must, I think be taken to have its literal meaning."[61]

94 McLelland J also said that by contrast a person aggrieved for the purposes of s 538 (the equivalent of s1321) is only aggrieved if he or she has suffered a "legal grievance."[62]

95 In Leslie v Hennessy[63] Drummond J of the Supreme Court of New South Wales in considering the issue of standing in a complaint under s 536(1)(b) said he saw no reason to read down the expression "any person" in s 536(1)(b) "to limit complainants to persons with an interest in the particular liquidation over and above that of any member of the public." [11] The matter went on appeal but the question of standing was not examined: Leslie v Hennessy[64].

96 In Young v Parbery[65] Young CJ the Chief Judge in Equity in the Supreme Court of New South Wales considered an objection to standing in an application that relied on several provisions of the Corporations Act. As to a complaint under s 536 he cited with approval the observation of McLelland J of the Supreme Court of New South Wales in Northbourne Developments Pty Ltd v Reiby Chambers Pty Ltd[66] referred to above. Further, strong support for this construction is given by the expansion of those who could complain from any "creditor or contributory or the Board" as appearing in s 278 of the Companies Act 1961 to "any person" as appearing in s 420 of the Companies Act 1981 and retained in s 536 of the Corporations Act (Cth). Finally, the view that the inquiry should be in the public interest[67] avoids any need for the complainant to have a personal interest in the matter complained of.

97 I therefore accept the authorities of the Federal Court of Australia and the Supreme Court of New South Wales and find that "any person" must be given its literal meaning.

98 As mentioned above, as required by Corporations Rule 2.4 Mr Vink relies on his affidavit of 4 November 2007 to state the facts to support the originating process of 19 June 2007.

99 Mr Tuckwell submitted that the plaintiff's originating process would inevitably fail as it was not based on any admissible evidence. In particular, it was submitted that Mr Vink's affidavit of 4 November 2007, which replaced his affidavit of 18 June 2007, was inadmissible and should not be received into evidence and/or alternatively failed to state facts necessary to support the application.

"Except where otherwise provided by or under these Rules, an affidavit shall be confined to facts which the deponent is able to state of the deponent's own knowledge."

"On an interlocutory application an affidavit may contain a statement of fact based on information and belief if the grounds are set out."

101 Mr Tuckwell conceded for the purpose of the hearing that the application was interlocutory and that the affidavit purporting to support the originating process could contain statements of fact on information and belief.

102 Counsel for Mr Tuckwell went through Mr Vink's affidavit sworn 4 November 2007 paragraph by paragraph. In respect of nearly every paragraph, it was submitted that the paragraph contained hearsay, speculation, conclusions.

103 My rulings on the objections to Mr Vink's affidavit of 4 November 2007 are set out in the schedule hereto.

104 As can be seen from my rulings much of the affidavit is inadmissible. It was submitted that the whole affidavit including the exhibits ought to be excluded due to the significant portion of the affidavit that was inadmissible. It was submitted Mr Tuckwell ought not to be obliged to pick through the affidavit and seek to separate the admissible evidence sought to be put forward to make out the complaints from the extensive inadmissible portions. I will rule on this submission in due course. As this is a proceeding to strike out the application as one that must inevitably fail I will err on the side of caution and at this stage of the proceeding permit Mr Vink to rely on the affidavit for the limited purpose of determining that issue.

105 At this stage, I am not determining whether or not the application should fail or succeed. It is, however, appropriate for me to form a view on whether or not the application is likely to succeed on the material presently before me in assessing whether or not the application must inevitably fail and therefore be stayed dismissed or struck out. I now turn to that analysis.

106 The affidavit is divided into several sections. Many of the paragraphs are in an objectionable form and Mr Tuckwell took objection to them. I have ruled on those objections. Irrespective of the rulings, those paragraphs are merely setting the scene for the complaints which were to follow.

107 The first 17 paragraphs depose as to Mr Vink's experience, the documents he has read, his investigations and his involvement in the proceedings concerning Miss Linton.

The Structure of Corporate Interior Constructions Pty Ltd paras 18-41

108 This section contains details of the directorships and shareholdings of CIC. The section also contains details of the various trusts the company acted as trustee of including the Family Trust, the Investment Trust, the Super Fund and the Property Trust. Mr Vink also deposes to the activities of each trust including that the business of CIC was conducted for the benefit of the Family Trust. He also makes allegations about Mr Oosterom being an absentee owner/director after March/April 2001.

109 In this section Mr Vink also deals with how the accounts of CIC were kept and the involvement of Mr Creighton-Brown and Mr Moran as accountants for CIC and the various trusts.

110 This section contains evidence on the first complaint made against Mr Tuckwell as liquidator of CIC. It runs from paras 42 to 64.

111 In substance this section makes the following complaint against Mr Tuckwell. It is asserted that by October 2001 CIC was insolvent. It is asserted that the then two directors Mr Van Oosterom and Mr Di Carlo permitted the company to incur debts when they knew or ought to have known CIC was insolvent. It is asserted that despite the insolvency of CIC Mr Van Oosterom continued to draw large sums of money from CIC for his personal use.

112 It is further said by Mr Vink that he believes that neither Mr Van Oosterom nor Mr Di Carlo were reported by Mr Tuckwell to ASIC for trading whilst insolvent. Further Mr Vink says the possibility of misconduct of Mr Van Oosterom (presumably taking drawings whilst CIC was insolvent) was not sufficiently considered in Mr Tuckwell's report to creditors of 29 April 2002.

113 It is further said that Mr Van Oosterom owned a farm "La Castella" in Guilford and that asset was available to meet any claim made against him in respect of his alleged trading whilst insolvent or his alleged taking of drawings whilst CIC was insolvent.

114 It is then said that in the liquidation there was a short fall to creditors and by inference the creditors could have been better off if Mr Tuckwell had successfully recovered moneys from Mr Van Oosterom and Mr Di Carlo.

115 In my opinion Mr Vink has not put forward facts to support this complaint. He opines that CIC was insolvent. His opinion is inadmissible. He asserts that the loan to Mr Van Oosterom lacked asset backing. His opinion is inadmissible. In any event, on the other hand he asserts that Mr Oosterom had assets to meet a claim against him. His evidence is mere speculation and unfounded assertions.

116 There is not evidence of the relevant insolvency. There is no evidence that debts were being incurred. There is no evidence that the directors knew or ought to have known CIC was insolvent (if it was). There is no evidence of the information that Mr Tuckwell had or the reasons why he took no action against the directors (if that be the case).

117 These sections of the affidavit merely float suspicions unsupported by facts. In my opinion, the evidence put forward in these paragraphs very likely will fall short of establishing a prima facie case that something needs to be investigated under s 536.

Abortive Attempt by Howarth to Sell Linton's Properties paras 65-71

118 The second complaint is found in paras 65 to 71 under the above heading. I understand that Mr Tuckwell was a member of Howarth accountants.

119 In substance these paragraphs make the following complaint about Mr Tuckwell's conduct as liquidator.

120 Mr Vink asserts that CIC was the registered proprietor of two properties that beneficially belonged to Miss Linton: the Flinders Street property and the Queensbridge Street property.

121 The statement of financial affairs provided by Mr Van Oosterom to Mr Tuckwell at the time of Mr Tuckwell's appointment as administrator indicated that CIC owned the two properties.

122 Mr Vink says that Mr Tuckwell commenced preparations to sell those properties to satisfy debts of CIC.

123 Mr Vink says that between May and August 2002 Miss Linton was "forced" to sell the Queensbridge Street Property together with other properties to pay the legal costs of proving her ownership of the Flinders Lane Property and the Queensbridge Street Property. He says further that in February 20004, Miss Linton had to sell her last investment property, the Flinders Lane Property to pay legal expenses.

124 Mr Vink says that Mr Tuckwell ought to have known that he could not satisfy the debts of a company by the realisation of assets of a trust without first establishing a legitimate right of indemnity.

125 The inferential complaint is that Mr Tuckwell should not have sought to sell the properties despite them being in CIC's name and being listed as assets of CIC by the director.

126 There is no admissible evidence of what in fact Mr Tuckwell did or did not do. There is no admissible evidence of what material he had before him that indicated one way or the other what was the beneficial ownership of the properties. There is no evidence at all to suggest that Mr Tuckwell acted other than in accordance with his duty to get in the assets of CIC.

127 These sections of the affidavit merely float suspicions unsupported by facts. In my opinion, the evidence put forward in these paragraphs very likely will fall short of establishing a prima facie case that something needs to be investigated under s 536.

128 The third complaint is found in paras 72 to 83 under the above heading.

129 In substance these paragraphs make the following complaint about Mr Tuckwell's conduct as liquidator.

130 Mr Vink complains about several matters included in Mr Tuckwell's report to creditors of 29 April 2002. In particular he complains of the following.

131 Mr Vink asserts the report falsely alleged that Miss Linton was a current shareholder. In fact the report said that the ASIC search showed she was and this was correct.

132 Mr Vink assets that the report falsely alleged that there were shareholder loans owing to the business in the amount of $ 1,184,266. Mr Vink does not say why this was false.

133 Mr Vink asserts the report misled creditors that CIC held properties registered in its name and that these properties were available to satisfy the debts of creditors. Mr Vink has already deposed that the statement of financial affairs listed these properties as assets of CIC. There is no evidence to suggest that Mr Tuckwell believed otherwise. In submissions from the bar table Mr Vink said his complaint was that Mr Tuckwell may have been negligent in not making proper inquiries to ascertain what Mr Vink asserts was the true state of affairs. If that be the complaint, there is no evidence of what inquiries Mr Tuckwell did or did not do. There is no evidence to support any allegation of negligence.

134 Mr Vink assets the report falsely alleged there was misconduct on the part of Miss Linton in that the report said "attempted matrimonial settlements also reduced the company's financial strength." There is no evidence one way or the other of the matrimonial settlements that took place between Mr Van Oosterom and Miss Linton and what affect they had on CIC's financial strength. Mr Vink's evidence is no more than groundless assertions.

135 Mr Vink asserts the report falsely suggests that creditors were secured by the Linton properties as the report said "it would appear that there are sufficient realisable assets to cover the costs of administration /liquidation and pay all creditors in full." In fact on the balance sheet in the report to creditors that was correct. In substance, the complaint against Mr Tuckwell is that after only two or three weeks with CIC he had not worked out that properties in the name of the company and listed as the company's assets may in fact be beneficially owned by Miss Linton (if that in fact be the case). There is no evidence as to who was the beneficial owner in the affidavit. This complaint is based on speculation and lacks any evidence to support it.

136 The affidavit then makes an accusation about the conduct of Mr Van Oosterom in having an administrator appointed. Mr Vink alleges that Mr Van Oosterom never intended to save CIC but appointed an administrator to avoid the potential prosecution of Van Oosterom and Di Carlo for mismanagement of CIC. There is not a scintilla of evidence to suggest that Mr Tuckwell accepted the appointment other than in good faith and for the purposes envisaged by the Act.

137 These sections of the affidavit contain mere assertions unsupported by facts. In my opinion, the evidence put forward in these paragraphs very likely will fall short of establishing a prima facie case that something needs to be investigated under s 536.

The Defendant Solicits Additional Funds from Creditors paras 84 -96

138 Paragraphs 84 to96 supported a complaint under the above heading which Mr Vink withdrew during the hearing. He did however wish to maintain the paragraphs in support of other complaints in the affidavit.

139 Mr Vink's fourth complaint is contained in paragraphs 97 to 105.

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