Secatore, in the matter of Last Lap Pty Ltd (in liq) [2020] FCA 627 - FCA 2020 case summary — Zoe

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Secatore, in the matter of Last Lap Pty Ltd (in liq) [2020] FCA 627

[2020] FCA 627

Federal Court of Australia|2020-05-14|Before: Anderson J

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Court

Federal Court of Australia

Decision date

2020-05-14

Before

Anderson J

Source

Original judgment source is linked above.

Judgment (36 paragraphs)

[1]

Introduction 1 This decision involves two applications in related proceedings, namely proceeding VID 687 of 2019 (Examination Proceeding) and proceeding VID 1047 of 2019 (Funding Disclosure Proceeding). Both proceedings relate to the insolvency of Last Lap Pty Ltd (in liq) (Last Lap). 2 Last Lap has been in liquidation for nearly 28 years. The current liquidator of Last Lap, Mr Bruno Secatore (Liquidator), was appointed in April 2015 by order of the Supreme Court of Victoria on the application of Bob Jane Corporation Pty Ltd (Bob Jane Corp). Bob Jane Corp is one of the two unsecured creditors of Last Lap. 3 The Examination Proceeding was commenced by the Liquidator in June 2019. The Liquidator sought, and obtained from a Registrar of the Court, orders for the issuing of various summonses for examination (Summonses) pursuant to ss 596A and 596B of the Corporations Act 2001 (Cth) (Act). One of the summonses issued pursuant to s 596B was directed to Mr Rodney Bruce Jane (Rodney Jane). 4 Before the examinations pursuant to the Summonses were scheduled to occur, the Funding Disclosure Proceeding was commenced by Bob Jane Corp in September 2019. Bob Jane Corp sought orders that, broadly, the Liquidator disclose the identity of any person who had provided the Liquidator with funds to facilitate the examinations, and also disclose and produce any agreement between the Liquidator and any third party in relation to the funding of the examinations (Funding Disclosure Application). 5 Prior to the scheduled hearing of the Funding Disclosure Application, Rodney Jane filed an interlocutory application in the Examination Proceeding (Summonses Application) seeking disclosure of the Liquidator's affidavit that was filed in support of the application for the issue of the Summonses (Secatore June 2019 Affidavit). The Summonses Application also seeks the discharge of each of the Summonses. 6 The Funding Disclosure Application and the Summonses Application (collectively, Applications) were referred by a Registrar for determination by a judge of the Court. I heard both of the Applications together on 7 April 2020. These reasons set out and explain my decision in relation to the Applications. 7 In summary, my conclusion in relation to Bob Jane Corp's Funding Disclosure Application is that it was not unreasonable for the Liquidator to comply with Bob Jane Corp's request for the documents regarding the funding of the examinations. As such, the Funding Disclosure Application is granted, and I order that the Liquidator provide the relevant information and documents to Bob Jane Corp. 8 In relation to Rodney Jane's Summonses Application, my view is that Rodney Jane has established an arguable case that the issue of the summons directed to him exceeded the power of this Court under s 596B of the Act, and that access to the Secatore June 2019 Affidavit is likely to assist in determining the correctness of that challenge. As there is no other sufficient reason to prohibit disclosure, I accordingly order that the Liquidator make the Secatore June 2019 Affidavit available for inspection by Rodney Jane and his representatives. 9 Rodney Jane's application for the discharge of the Summonses will be adjourned for future determination.

[10]

Legislative provisions 27 As specified in the originating process, the Funding Disclosure Application seeks orders under s 600K of the Act and s 70-90 of Pt 1 of Sch 2 (entitled the "Insolvency Practice Schedule (Corporations)") (IPS) to the Insolvency Law Reform Act 2016 (Cth). 28 Section 600K of the Act simply gives effect to the IPS. Section 70-90 of the IPS in turn relevantly provides as follows: Court may order relevant material to be given (1) The person or persons who made the request for the relevant material may apply to the Court for an order that the external administrator give the person or persons all or part of the relevant material. … (3) On application under subsection (1) or (2), the Court may: (a) order the external administrator to give the person, or any or all of the persons, who made the request for the relevant material all or part of that material; and (b) make such other orders, including orders as to costs, as it thinks fit. 29 As evident from the opening words of s 70-90(1), the Court's power to order disclosure of the relevant material is dependent on there being a request, the statutory ability for which is addressed earlier in the IPS. Relevantly for the present case, s 70-45 of the IPS provides for an individual creditor of a company in liquidation to request certain materials: Right of individual creditor to request information etc. from external administrator (1) A creditor may request the external administrator of a company to: (a) give information; or (b) provide a report; or (c) produce a document; to the creditor. (2) The external administrator must comply with the request unless: (a) the information, report or document is not relevant to the external administration of the company; or (b) the external administrator would breach his or her duties in relation to the external administration of the company if the external administrator complied with the request; or (c) it is otherwise not reasonable for the external administrator to comply with the request. (3) The Insolvency Practice Rules may prescribe circumstances in which it is, or is not, reasonable for an external administrator of a company to comply with a request of a kind mentioned in subsection (1). 30 In accordance with s 70-45(3), the Insolvency Practice Rules (Corporations) 2016 (Cth) (IPR) prescribes circumstances as to whether or not a request made under s 70-45(1) is reasonable. Rule 70-15 of the IPR provides as follows: Right of individual creditor to request information etc. from external administrator (1) This section is made for the purposes of section 70-45 of the Insolvency Practice Schedule (Corporations). Unreasonable requests (2) It is not reasonable for an external administrator of a company to comply with a request to give information, provide a report or produce a document to a creditor if the external administrator, acting in good faith, is of the opinion that: (a) complying with the request would substantially prejudice the interests of one or more creditors or a third party and that prejudice outweighs the benefits of complying with the request; or (b) the information, report or document would be privileged from production in legal proceedings on the ground of legal professional privilege; or (c) disclosure of the information, report or document would found an action by a person for breach of confidence; or (d) there is not sufficient available property to comply with the request; or (e) the information, report or document has already been provided; or (f) the information, report or document is required to be provided under the Corporations legislation within 20 business days of the request being made; or (g) the request is vexatious. (3) Without limiting paragraph (2)(g), a request may be taken to be vexatious if the external administrator receives the request within 20 business days of receiving a similar request from the creditor. Reasonable requests (4) It is reasonable for an external administrator of a company to comply with a request to give information, provide a report or produce a document to a creditor if subsection (2) does not apply to the request. (5) Despite paragraph (2)(d), (e) or (f), it is also reasonable for an external administrator of a company to comply with a request to give information, provide a report or produce a document to the creditor if: (a) the creditor agrees to bear the cost of complying with the request; and (b) if required to do so by the external administrator - security for the cost of complying with the request is given to the external administrator before the request is complied with.

[11]

Request for information and documents by Bob Jane Corp 31 On 10 September 2019, the solicitors for Bob Jane Corp, HWL Ebsworth, after learning of the issuing of the Summonses, sent a letter to the solicitors for Liquidator, B2B Lawyers. The letter relevantly contained a request for certain information and documents as follows: 4. … pursuant to section 600K of the Act and section 70-45(1)(a) of Schedule 2 to the Insolvency Law Reform Act 2016 (Cth) (ILRA), our client requires your client to give us the following information: (a) Who has provided your client with funds to enable the Examinations to be conducted? (b) What agreement has been made between your client and any third party funder in relation to the Examinations and any assets recovered as a consequence of the Examinations and/or subsequent proceedings? (c) In particular, what priority, if any, has been given by your client to the third party funder in respect of any assets which may be recovered as a consequence of the Examinations and/or subsequent proceedings? 5. Further, pursuant to section 600K of the Act and section 70-45(1)(c) of Schedule 2 to the ILRA, our client also requires your client to produce the following documents: (a) A copy of any agreement entered into between your client and any third party for funding in relation to the Examinations and/or any subsequent proceedings. (b) Any correspondence between your client (or your firm on behalf of your client) and any third party in relation to the funding of the Examinations and/or any subsequent proceedings. 32 Further correspondence ensued between the solicitors. In particular, B2B Lawyers, on behalf of the Liquidator, sought confirmation as to whether HWL Ebsworth had, or expected to receive, instructions from Rodney Jane. On September 2019, HWL Ebsworth replied that, as at that date, it did not have instructions from Rodney Jane. 33 On 23 September 2019, B2B Lawyers provided its substantive response to HWL Ebsworth's request for information and documents. The response relevantly provided as follows: In our view based upon: (a) the contents of your correspondence referred to above; (b) your office previously having informed us that it does act for Mr Rodney Jane; and (c) your office actively avoiding confirming the status of its current instructions; it is reasonable for our client (and the Court) to infer that your office does presently, or intends to, act for Mr. Rodney Jane and his interests in relation to the examinations being conducted in relation to the Company. We further note that, as is apparent from the summonses issued by our client, he is presently investigating whether causes of action exist against Mr Rodney Jane and /or entities and persons associated with him. That being so, it is apparent it would be unreasonable within the meaning of s 70-45(2)(c) of Schedule 2 (and by reason inter alia of matters stated in s 70-10(2)(a), (b) or (g) of the Insolvency Practice Rules (Corporations) 2016) for our client to comply with the request for information and documentation set out in your letter dated 10 September 2019. Our client also relies on s 70-45(2)(b) of Schedule 2. Notwithstanding the above, and if it is of assistance, we confirm that our client has not extended any priority to a third-party funder in respect of assets which may be recovered as a consequence of the Company examinations and/or subsequent proceedings. We trust that this confirmation satisfies any legitimate purposes [Bob Jane Corp] may have for the request for information. 34 Three days later, on 26 September 2019, Bob Jane Corp commenced the Funding Disclosure Proceeding.

[12]

Bob Jane Corp's submissions 35 Bob Jane Corp argues that it is entitled to the information and documents sought in the Funding Disclosure Application because: (a) it is one of only two creditors of Last Lap; (b) as far as Bob Jane Corp is aware, Last Lap has no assets or income; (c) since the appointment of the Liquidator in April 2015, Bob Jane Corp has not received a single report from the Liquidator concerning the affairs of Last Lap, and no meeting of creditors of Last Lap has been convened; and (d) despite that, the Liquidator has issued the Summonses without explaining to the creditors of Last Lap how the prosecution of those Summonses is being funded and what is to happen in respect of any assets recovered as a consequence of the Summonses or in any subsequent proceedings. Bob Jane Corp submits that the Liquidator requires approval of the Court, or the two creditors of Last Lap, before entering into any funding agreement on behalf of Last Lap if the: (i) term of the agreement may end; or (ii) obligations of a party to the agreement may be discharged by performance; more than three months after the agreement is entered into (see s 477(2B) of the Act). There has been no resolution passed by the two creditors of Last Lap and Bob Jane Corp is not aware of any application made by the Liquidator to the Court. 36 Bob Jane Corp explains that Last Lap's directors once included the late Mr Robert Jane (Robert Jane), who is the father of Rodney Jane. According to Bob Jane Corp, this is relevant because: (a) for more than a decade, there have been bitter disputes and court proceedings among the Jane family, including between (among others) Robert Jane, his third wife Ms Laree Jane and Rodney Jane, regarding ownership and control of various assets and companies; (b) proceedings between Laree Jane and Rodney Jane have been on foot for nearly seven years in the Family Court of Australia; and (c) at present, it is impossible to know if that dispute in that Court has affected the Liquidator's decision to commence these examinations because the Liquidator has refused to disclose information regarding their funding and the basis on which the Summonses were issued at his request to, amongst others, Rodney Jane. 37 Bob Jane Corp contends that its concerns about the purpose of the examinations are reinforced by the Liquidator's refusal to serve the Secatore June 2019 Affidavit, the Liquidator's refusal to disclose the identity of any funder, and the decision not to serve Laree Jane, one of the examinees, at the same time as serving every other examinee. Bob Jane Corp further submits that, if the examinations are being funded by a party who is not a creditor for an ulterior purpose, the examinations may also constitute an abuse of process. 38 Bob Jane Corp argues that the Liquidator has failed to establish that the request by HWL Ebsworth for documents and information was unreasonable. Bob Jane Corp submits its request was bona fide, and that none of the forms of unreasonableness specified in r 70-15(2) of the IPR are applicable.

[16]

… (Explanatory Memorandum, Insolvency Law Reform Bill 2015 (Cth) pp 165, 166 and 170.) 43 It was undisputed that Bob Jane Corp, as a creditor of Last Lap, had made a request for information or documents for the purposes of s 70-45(1) of the IPS. The Liquidator was accordingly compelled by s 70-45(2) to comply with that request unless one or more of the exceptions applied. The Liquidator contends it was not reasonable for him to comply with Bob Jane Corp's request for the purposes of the exception in s 70-45(2)(c). 44 Although Bob Jane Corp, which is seeking an order of the Court under s 70-90(3) of the IPR, is the moving party on the Funding Disclosure Application, my view is that, for the purposes of s 70-45(3), the onus rests on the Liquidator to prove that it was "not reasonable" for the Liquidator to comply with Bob Jane Corp's request for documents. This attribution of the onus of proof is consistent with the policy underpinning the mechanisms for information requests under the IPS, which acknowledges the information asymmetry between external administrators and creditors. It is moreover consistent with the fact that it will be the external administrator that is optimally placed to characterise the degree of reasonableness of him or her having to comply with a request for information, reports or documents. 45 The seven circumstances specified in r 70-15(2) of the IPR (as extracted above at [30]) provide a complete statement of the circumstances in which it is not reasonable for an external administrator of a company to comply with a request for information or documents: In the matter of 1st Fleet Pty Ltd (in liquidation) [2019] NSWSC 6 (1st Fleet) at [24] per Black J. The Liquidator relies on four of the circumstances to demonstrate the unreasonableness of him having to comply with Bob Jane Corp's request, namely paragraphs (a), (b), (e) and (g) of r 70-15(2). The Liquidator predominantly relies on certain aspects of the (confidential) Secatore October 2019 Affidavit to establish that unreasonableness. 46 I have read the relevant aspects of the Secatore October 2019 Affidavit that are raised by the Liquidator to establish the unreasonableness of the Liquidator having to comply with Bob Jane Corp's request for information and documents. However, having done so, I am not satisfied that: (a) the Liquidator complying with the request would substantially prejudice the interests of one or more creditors of Last Lap or a third party, and that prejudice outweighs the benefits of complying with the request (r 70-15(2)(a) of the IPR); (b) the documents requested would be privileged from production in legal proceedings on the ground of legal professional privilege (ibid, r 70-15(2)(b)); (c) the documents requested have already been provided (ibid, r 70-15(2)(e)); or (d) Bob Jane Corp's request is vexatious (ibid, r 70-15(2)(g)). 47 As for r 70-15(2)(a) (substantial prejudice to a creditor or third party), the Liquidator has not identified how complying with Bob Jane Corp's request would substantially prejudice the interests of one or more of Last Lap's creditors or a third party. In my view, the Liquidator providing the requested documents will not adversely affect the ability of the Liquidator to conduct the examinations. In this regard, it is not apparent on the relevant affidavit evidence how the information and documents requested are relevant to the subject matter of the examinations as detailed in the Summonses. 48 As for r 70-15(2)(b) (legal professional privilege), the Secatore October 2019 Affidavit merely asserts that complying with Bob Jane Corp's request would require the Liquidator to disclose correspondence between the Liquidator's solicitors, B2B Lawyers and the Liquidator's firm, Cor Cordis, which is, amongst other things, "possibly privileged". There is no material put forward by the Liquidator which would enable the Court to determine the validity of that assertion. This is insufficient to establish that the information and documents requested would be subject to legal professional privilege. 49 As for r 70-15(2)(e) (information and documents have already been provided), I do not accept that the information and documents requested by Bob Jane Corp have already been provided by the Liquidator. In this regard, the Liquidator relies on previous correspondence from his solicitor to HWL Ebsworth on 23 September 2019 (as extracted above at [33]) that relevantly expressed the following: … if it is of assistance, we confirm that our client has not extended any priority to a third-party funder in respect of assets which may be recovered as a consequence of the Company examinations and/or subsequent proceedings. We trust that this confirmation satisfies any legitimate purposes [Bob Jane Corp] may have for the request for information. Although that statement appears to address Bob Jane Corp's enquiry set out at para 4(c) of HWL Ebsworth's letter (see above at [31]), it does not address the significant balance of the information and documents requested. 50 As for r 70-15(2)(g) (vexatious request), I do not accept that Bob Jane Corp's request for the information and documents was made for an improper purpose "in the sense of a purpose that was unrelated to the creditor's claims in, or the conduct of, the external administration or was made for a purpose of harassing or annoying the external administrator or causing delay or detriment to the external administration": 1st Fleet at [43]. 51 Bob Jane Corp's request for information and documents should be characterised in light of the unusual and particular circumstances of the external administration of Last Lap to date. These circumstances include the following: (a) Last Lap has been in liquidation for nearly 28 years; (b) between June 1992 and February 2015, there were five liquidators appointed to Last Lap; (c) in February 2015, Last Lap entered into a creditors' voluntary winding up (with Messrs Rambaldi and Yeo being appointed as joint and several liquidators); (d) in April 2015, the Liquidator was appointed as the liquidator of Last Lap; (e) about four years later, on 4 July 2019, the Liquidator estimated that the total realisation of Last Lap's assets would be $10, and that there were only two unsecured creditors of Last Lap (one of which is Bob Jane Corp) with estimated debts valued at a total of approximately $2.4 million; (f) since his appointment, the Liquidator has not provided to Bob Jane Corp (as one of the two creditors of Last Lap) any report concerning the affairs of Last Lap, and no meeting of creditors of Last Lap has been convened; (g) then, in August 2019, upon application by the Liquidator, the Summonses were issued without the Liquidator explaining to the creditors of Last Lap how the prosecution of those Summonses were to be funded, and what was to happen in respect of any assets recovered as a consequence of the Summonses or in any subsequent proceeding. 52 Given the prolonged timeframe in which no substantive action was taken by an external administrator of Last Lap; the fact that there is apparently only nominal assets held by Last Lap; and the fact that the Liquidator did not inform the creditors of the Liquidator's objectives for the examinations, it was not unpredictable that Bob Jane Corp, as one of the creditors of Last Lap, would be surprised by the Liquidator's sudden enthusiasm to take action. Bob Jane Corp's request for information and documents regarding the funding of the examinations initiated by the Liquidator is consistent with an attempt by Bob Jane Corp to enquire into "the quality of the insolvency services", a purpose expressly contemplated as legitimate by the Explanatory Memorandum underlying the IPS. 53 It is apparent, as submitted by the Liquidator, that Bob Jane Corp was also motivated to request the relevant information and documents out of a concern that the Liquidator was himself motivated in issuing the Summonses by interests concerning a Family Court proceeding involving the Jane family wealth. That motivation of Bob Jane Corp is clear from the written submissions filed on behalf of Bob Jane Corp (and Rodney Jane) in the proceeding. But, in light of the broader circumstances described above, that does not render Bob Jane Corp's request for information and documents vexatious. Bob Jane Corp's concerns regarding the motivations of the Liquidator is not a matter that is unrelated to Bob Jane Corp's claims in, or the conduct of, the external administration of Last Lap. I do not agree with the Liquidator's submission that Bob Jane Corp's request can be characterised as the company simply trying to "flush out" or "fish for" a case that the Summonses should be set aside. 54 Finally, I add that there may be limited circumstances in which the Court, acting under s 70-90(3) of the IPS, will exercise its residual discretion to not order the production of the relevant material, although such circumstances are likely rare, such as where there is no longer any utility in making an order: 1st Fleet at [27]. There is no exceptional circumstance in the present case that would prevent me from making the orders sought by Bob Jane Corp.

[20]

Rodney Jane's submissions 61 To support his application for inspection of the Secatore June 2019 Affidavit, Rodney Jane claims that he has an arguable case that the issue of his summons exceeded the power of the Court under s 596B. According to Rodney Jane, this is so for two broad reasons. The first is that the Liquidator failed to comply with his obligation to make full and frank disclosure to Registrar Allaway of all matters which may impact upon the decision to issue the Summonses. The second is that the scope of the Summonses goes beyond Last Lap's examinable affairs in contravention of s 596B(1) of the Act. 62 Both of these complaints relate to the relationship between Last Lap and other entities. The Rodney Jane Summons seeks, among other things, documents which solely concern the business affairs of Bob Jane Corp, Bob Jane Properties and another entity named Calder Park Raceway Pty Ltd. However, according to Rodney Jane, Bob Jane Corp, Bob Jane Properties and Calder Park Raceway have no relationship with Last Lap that would bring the relevant documents sought by the summons within the examinable affairs of Last Lap. 63 In any event, Rodney Jane alternatively argues that there is no utility in his examination being conducted. This is because many of the documents sought by the Liquidator under the summons concern transactions which occurred almost 11 years ago and, accordingly, if there was any cause of action arising from those transactions, it is now statute barred. In these circumstances, Rodney Jane submits that the Registrar ought to have not exercised his discretion to issue the Summonses. 64 Rodney Jane contends that access to the Secatore June 2019 Affidavit should be granted because the affidavit is likely to assist in determining the correctness of his challenge to the Summonses. To this end, Rodney Jane submits that, at this point in time, the function of the Court is not to address his application for discharge of the Summonses. In his view, the immediate focus of the Summonses Application (the disclosure of the Secatore June 2019 Affidavit) concerns a prior question as to whether there is an arguable case that there was an abuse of process in the issue of the Summonses. He submits that, once there is material before the Court from which it appears that he has an arguable case, then the discretion under s 596C(2) should be exercised for the Secatore June 2019 Affidavit to be made available.

[23]

Access to supporting affidavit: The discretion 70 Subsection 596C(2) provides that an affidavit filed in support of an application under s 596B is not available for inspection except insofar as the Court orders. 71 Mere application for access to the supporting affidavit is insufficient: Re Moage Ltd (in liq); Sheahan v Pitterino (1997) 77 FCR 81 (Re Moage) at 94-95 per Mansfield J. The purpose of granting access to the supporting affidavit is not to permit a party to "fish" for information that would establish that the summons for examination had been issued for an improper purpose: Excel Finance Corporation Ltd (rec and mgr apptd); Worthley v England (1994) 52 FCR 69 (Excel Finance) at 94 per Gummow, Hill and Cooper JJ; Simionato v Macks (1996) 19 ACSR 34 (Simionato) at 63 per Lander J; Re Moage at 95; Ariff v Fong [2007] NSWCA 183; 63 ACSR 384 (Ariff) at [17] per Beazley, Giles and Santow JJA. Moreover, the court, in exercising its discretion, should also be wary as to whether the examination process will be frustrated by the release of confidential information which may disclose matters upon which the examinee is sought to be examined: Excel Finance at 94; Simionato at 63; Re Moage at 95; see also Re Kaso (in their capacities as joint and several liquidators of Dalstonville Pty Ltd (in liq) and Don Leunig Pty Ltd (in liq) [2018] VSC 774; 133 ACSR 473 (Re Kaso) at [15] per Hetyey JR. 72 That said, the court should order disclosure of the supporting affidavit where the justice of the case so requires: Excel Finance at 93; Simionato at 63; Re Moage at 94-95. An applicant for disclosure will generally be given access to the supporting affidavit if an arguable case has been established that the issue of the summons exceeded the power of the court, and that access to the affidavit was likely to assist in determining the correctness of the challenge: Re Moage at 95; Fetzer v Irving as Liquidator of Mawson KLM Holdings Pty Ltd (In Liq) [2005] SASC 53; 91 SASR 54 (Fetzer) at [27]-[28] per Besanko J; Meteyard v Love (in their capacity as recs and mgrs of Southland Coal Pty Ltd (in liq)) [2005] NSWCA 44; 65 NSWLR 36 (Meteyard) at [141] per Basten JA (with Beazley and Santow JJA agreeing); Ariff at [25]. 73 There must be material before the Court (other than the supporting affidavit) from which to discern the arguable case, to which the material is relevant, before the discretion should be exercised to make the supporting affidavit available: Excel Finance at 94; Simionato at 63-64; Ariff at [17]. However, an arguable case may emerge from the undisputed facts without any necessity to adduce specific evidence of the motives of the party that applied for, and obtained, the summons for examination: Re Leisure Development (Qld) (in liq); Ell v Palmer [2002] NSWSC 248; 41 ACSR 276 (Re Leisure Development) at [37] per Austin J, cited in Ariff at [21]. 74 Where access to the supporting affidavit is granted, it may be appropriate for the court to limit the scope of inspection: Re Kaso at [16], citing Accord Pacific Holdings Pty Ltd v Accord Pacific Land Pty Ltd (in liq) [2011] NSWSC 707 (Accord) at [103] per Ward J and Re Bell Group NV (in liq) [2016] FCA 851; 116 ACSR 294 (Re Bell Group (No 1)) at [145]-[147] per Yates J.

[27]

Last Lap's "examinable affairs" 81 Last Lap's "examinable affairs" is the focal point for defining the legitimate scope of the examinations pursuant to the Summonses. Section 596B(1) of the Act provides that "[t]he Court may summon a person for examination about a corporation's examinable affairs". In turn, a person summonsed is only required to attend court "to be examined on oath about a corporation's examinable affairs" (s 596D(1)(b); see also s 597(5B)), and is only required to produce specified books that "related to the corporation or to any of its examinable affairs" (s 596D(2)(b)). 82 The "examinable affairs" of a corporation are defined in s 9 of the Act as meaning the following (with reference to the "corporation" being replaced with "Last Lap"): (a) the promotion, formation, management, administration or winding up of [Last Lap]; or (b) any other affairs of [Last Lap] (including anything that is included in [Last Lap's] affairs because of section 53); or (c) the business affairs of a connected entity of [Last Lap], in so far as they are, or appear to be, relevant to [Last Lap] or to anything that is included in [Last Lap's] examinable affairs because of paragraph (a) or (b). 83 The "affairs" of Last Lap for the purposes of para (b) of this definition are defined broadly in s 53 of the Act. The "business affairs" of a connected entity of Last Lap for the purposes of para (c) of this definition are also defined broadly by reference to the definition of "business affairs" in s 9, which in turn refers to ss 53AA, 53AB, 53AC and 53AD of the Act (depending on the legal nature of the connected entity). 84 A "connected entity" of Last Lap (for the purposes of para (c) of the definition of "examinable affairs") is defined under s 9 of the Act as meaning: (a) a body corporate that is, or has been, related to [Last Lap]; or (b) an entity that is, or has been, connected … with [Last Lap]. 85 For the purpose of this definition, whether a body corporate is, or has been, "related to" Last Lap is addressed by s 50 of the Act, which provides as follows: Related bodies corporate Where a body corporate is: (a) a holding company of [Last Lap]; or (b) a subsidiary of [Last Lap]; or (c) a subsidiary of a holding company of [Last Lap]; the first‑mentioned body and [Last Lap] are related to each other. 86 Moreover, for the purposes of the definition of a "connected entity", whether an entity is, or has been, "connected with" Last Lap is addressed by s 64B of the Act, which, in relation to a body corporate, provides as follows: Entities connected with a corporation Body corporate (1) A body corporate is connected with [Last Lap] if, and only if, [Last Lap]: (a) can control, or influence materially, the body's activities or internal affairs; or (b) is a member of the body; or (c) is in a position to cast, or to control the casting of, a vote at a general meeting of the body; or (d) has power to dispose of, or to exercise control over the disposal of, a share in the body; or (e) is financially interested in the body's success or failure or apparent success or failure; or (f) is owed a debt by the body; or (g) is engaged by the body under a contract for services; or (h) acts as agent for the body in any transaction or dealing. … 87 Turning to the facts of the present case, Rodney Jane contends that Bob Jane Corp, Bob Jane Properties and Calder Park Raceway are not connected to Last Lap for the purposes of the definition of a "connected entity" to Last Lap. He also contends that Bob Jane Corp and Calder Park Raceway are not related to Last Lap, although he accepts that Bob Jane Properties and Last Lap are related because they are both 100% subsidiaries of ACN 005 490 540 Pty Ltd (the ACN Company).

[28]

Evidence on transfer of shares in Bob Jane Properties 88 The evidence said by Rodney Jane to substantiate an arguable case is found in the Mereine October 2019 Affidavit sworn by Richard Mereine (Mr Mereine), a Partner at HWL Ebsworth. To start, that affidavit annexes, amongst other documents, a copy of the historical company extract for Bob Jane Properties dated 4 October 2019. The extract states, amongst other details, that: (a) the current sole director of Bob Jane Properties is Rodney Jane; and (b) the current sole shareholder of Bob Jane Properties is the ACN Company. 89 A historical company extract for the ACN Company dated 4 October 2019 also details, amongst other things, that the current sole director of the ACN Company is Rodney Jane. 90 Mr Mereine asserts that, since 2016, there has been a real and substantive dispute concerning the legal ownership of the issued share capital of Bob Jane Properties. According to Mr Mereine, Bob Jane Properties asserted in 2016, and continues to assert, that the ACN Company holds all of the issued share capital of Bob Jane Properties, but that the Liquidator asserted in 2016, and continues to assert, that Last Lap holds all of the issued share capital. 91 To detail this dispute, the Mereine October 2019 Affidavit recounts a sequence of events that occurred between October 2015 and November 2016. According to the relevant correspondence, the dispute centres on the legal effectiveness (or not) of a transfer of four million issued shares in Bob Jane Properties from the ACN Company, which is the trustee of the Mimulus Trust, to Last Lap. These reasons refer to this transaction (actual or purported) as the "BJP Shares Transfer". 92 Bob Jane Properties says the BJP Shares Transfer was ineffective. The reasons for this are best summarised in a letter from HWL Ebsworth to the Liquidator dated 5 November 2015 (a reference to "the Company" is to the ACN Company and "BJP" means Bob Jane Properties): Initial Acquisition in BJP by the Company (formerly The Australian Motorsport Club Pty Ltd and Mimulus Pty Limited) 1. By the declaration of trust dated 31 December 1989, the Company declared that it held the shares in BJP on behalf of the Mimulus Trust and confirmed that Mimulus Trust had "provided all the money for the purchase of the security by the trustee". A notice was also sent by the Company to BJP confirming the beneficial ownership by the Mimulus Trust. 2. The annual return filed by BJP in 1989 records Mimulus Trust as the member holding 4,000,000 issued shares in BJP. 3. The annual returned filed by BJP in 1990,1991,1996, 2000, 2002, 2003 and 2004 record the Company as the member holding 4,000,000 issued shares in BJP but not beneficially. Mimulus Trust was and remains the beneficial owner of the issued shares. The Purported Transfer of the Shares from the Company to Last Lap (Purported Transfer) 4. On or about 13 May 2005, a form 484 was executed by Gregory John Sargent (Mr Sargent), the secretary of BJP, advising ASIC that there had been a change in the Member's Register Details of BJP by the transfer of 4,000,000 shares from the Company to Last Lap. 5. It was said that the change occurred on 1 July 1990, some 15 years after the transfer was alleged to have occurred. It was noted that the shares were not beneficially held by Last Lap. 6. The document is extraordinary and contrary to the records of Last Lap and the Company. Further, there is no evidence to support the Purported Transfer and, in particular, there is no record that: (a) any party signed a share transfer; (b) a resolution was passed approving the transfer of share or authorising Mr Sargent on behalf of the Company to transfer the shares to Last Lap. (c) the Company or the Mimulus Trust otherwise approved or ratified the transfer; (d) BJP recorded any transfer in its members register. 7. Despite the Purported Transfer, the shareholdings continued to be shown in the accounts of the Mimulus Trust and not in the accounts of Last Lap. 8. Further, the Purported Transfer could not have occurred on 13 May 2005 as Last Lap had been in liquidation since 29 June 1992. 9. In all the circumstances, the Purported Transfer was ineffective or a nullity. 93 The letter dated 5 November 2015 attached various documentation in support of these matters, including documentation that, on its face, appears to substantiate the fact that the ACN Company's shares in Bob Jane Properties were held on trust for the Mimulus Trust. 94 According to the Mereine October 2019 Affidavit, on 20 November 2015 a meeting of directors of Bob Jane Properties was held at which resolutions were passed that sought to have the ASIC records of Bob Jane Properties updated to reflect that the BJP Shares Transfer never took place. 95 The Mereine October 2019 Affidavit details further events and correspondence that occurred thereafter, which are unnecessary to detail for the purposes of this decision.

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Conclusion as to arguable case 96 In light of the circumstances outlined above, I am satisfied that Rodney Jane has established an arguable case that the issue of the Rodney Jane Summons exceeded the power of this Court under s 596B of the Act, and that access to the Secatore June 2019 Affidavit is likely to assist in determining the correctness of that challenge. 97 If Rodney Jane's contentions are accepted, then, although Bob Jane Properties is related (but not connected) to Last Lap, Bob Jane Corp and Calder Park Raceway are not related to, or connected with, Last Lap. There is clearly a real and substantive dispute as to the ownership of the shares in Bob Jane Properties. If the position of Bob Jane Properties in relation to the legal effectiveness of the BJP Shares Transfer is accepted (as Rodney Jane contends), then the ACN Company (and not Last Lap) holds, and has always held, 100% of the shares in Bob Jane Properties. 98 There is sufficient material before the Court (other than the Secatore June 2019 Affidavit) to establish that these contentions by Rodney Jane are arguable in the necessary sense. As such, in circumstances where the scope of the Rodney Jane Summons appears to extend to matters solely concerning the business affairs of one or more of Bob Jane Corp, Calder Park Raceway and Bob Jane Properties (and not Last Lap), there is an arguable case that the scope of the Rodney Jane Summons extends beyond the examinable affairs of Last Lap. 99 Contrary to the Liquidator's submission, the relevant material before the Court establishes that Rodney Jane's application for the disclosure of the Secatore June 2019 Affidavit is more than the mere "fishing" for a case. Instead, there is, pre-existing the disclosure of that affidavit, an arguable question that warrants further investigation. In this regard, the Liquidator criticised Rodney Jane's submission that disclosure of the Secatore June 2019 Affidavit "might throw some light on" Rodney Jane's claims of the excess of power under s 596B of the Act. However, there was no obligation at this stage for Rodney Jane to establish that the contents of the supporting affidavit tended to impugn the issue of the summons. Rodney Jane did not have access to the affidavit so he could not make any definitive submissions on the effect of its content. At this stage, it was only necessary for Rodney Jane to establish that the affidavit was "likely" to assist: see Ariff at [25], citing Meteyard at [141]. In my view, he has done so.

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Disposition 110 For the reasons expressed above, I make the following orders in the Examination Proceeding: 1. Pursuant to subsection 596C(2) of the Corporations Act 2001 (Cth), the affidavit of Bruno Anthony Robert Secatore sworn on 19 June 2019 and filed in this proceeding on 25 June 2019 be made available for inspection by the Interested Person and his legal advisors. 2. Until further order, the Interested Person must keep the Secatore June 2019 Affidavit confidential and not disclose it, or its contents, to any person other than his legal advisors. 3. The costs of the Interested Person's interlocutory application dated 7 October 2019 be reserved. 111 I also make the following orders in the Funding Disclosure Proceeding: 1. Pursuant to subsection 70-90(3) of the Insolvency Practice Schedule (Corporations), the Second Defendant: (a) disclose to the Plaintiff in writing the identity of any person who has provided the Second Defendant with funds to enable the examination of various persons pursuant to sections 596A and 596B of the Corporations Act 2001 (Cth) (Examinations) in Federal Court of Australia Proceeding No. VID687/2019 in relation to the First Defendant; and (b) produce to the Plaintiff: (i) any agreement made between the Second Defendant and any third party in relation to the funding of the Examinations or any potential proceeding arising in connection with the subject of the Examinations; and (ii) any correspondence between the Second Defendant (or his solicitors on his behalf) and any third party in relation to the funding of the Examinations or any potential proceeding arising in connection with the subject of the Examinations. 2. Until further order, the Plaintiff must maintain the confidentiality of the information and documents disclosed to it in accordance with paragraph 1 of this Order and must not disclose such information and documents to any third party, save for its legal advisors. 3. The costs of the Plaintiff's application is reserved. 112 As can be seen from the orders, I have reserved the question of costs in relation to this decision. I will list a case management hearing in both proceedings for the parties to address me on any argument as to costs (unless the parties reach agreement in the interim). The case management hearing will also be an opportunity for the parties to address me on the manner in which Rodney Jane's challenge to the Summonses in the Examination Proceeding is to proceed. I certify that the preceding one-hundred and twelve (112) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Anderson.

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SCHEDULE Documents to be produced A. In this schedule the term "document" refers to any item (whether electronic or hardcopy) including but not limited to:- i. Correspondence (including but not limited to memoranda, advice, letters, facsimiles, emails, text message, instant messaging or the like, and including any further document attached enclosed linked or the like to any such document); ii. Written records (including but not limited to contracts, agreements, court documents, demands, tenders, valuations, Insurance policies, spreadsheets, statements, or the like); iii. Notes (including but not limited to handwritten or typed records, minutes of meetings, conferences or conversations, diary or journal notes, telephone notes, file notes, working papers, worksheets, or the like); iv. Financial records, including MYOB, Xero or other software based electronic or hardcopy accounts, projected or actual cash flows, profit and loss or balance sheets, asset registers, valuations, Insurance policies, receipts or other records for tax or GST or capital calculations, bank statement, bank records, cheque books, or any other item in your power possession or control, for the purpose of buying, selling, insuring, valuing, or raising funds or seeking a loan for or in relation to any relevant asset interest or business; and v. Recordings, including audio and audiovisual. B. The documents are to be produced whether they are held in your personal capacity, as a director of any entity or in any other capacity. The documents you must produce are as follows:

All documents concerning the circumstances in which Ian Arthur Lee was appointed liquidator of Last Lap Pty Ltd (ACN 004 532 030) in place of Philip Wayne Burnett.
All documents concerning the circumstances in which Timothy Bryce Norman and Simon Alexander Wallace-Smith were appointed as liquidators of Last Lap Pty Ltd (ACN 004 532 030) in place of Ian Arthur Lee on 4 October 2005.
All documents concerning the corporate and/or tax advice directly or indirectly concerning: (a) the Calder Park Raceway property; (b) income derived from activities at the Calder Park Raceway Property; and/or (c) the declaration of a dividend by Bob Jane Properties Pty Ltd (ACN 004 627 963) to Last Lap Pty Ltd (ACN 004 532 030) and ultimate distribution of that dividend through the Mimulus Trust to the Troyes Trust in September 2009; provided by Deloitte Tax Services Pty Ltd, Deloitte Touche Tohmatsu Ltd and/or any other entity trading under the name "Deloitte" to one or more of Rodney Jane, Robert Jane and/or to any company to whom they, or one of them, are or have been a related entity (within the meaning of s 9 of the Corporations Act 2001 (Cth)), including but not limited to Bob Jane Properties Pty Ltd (ACN 004 627 963), Calder Park Raceway Pty Ltd (ACN 004 532 049), Bob Jane Corporation Pty Ltd (ACN 005 870 431), Last Lap Pty Ltd (ACN 004 532 030).
All documents concerning the circumstances in which Mr Norman and Mr Wallace-Smith were replaced as liquidators of Last Lap Pty Ltd (ACN 004 532 030) on 25 February 2015 by Gess Michael Rimbaldi and Andrew Reginald Yeo.
All documents directly or indirectly related to the request by Anthony Bradica of Deloitte Touche Tohmatsu Ltd to the Australian Tax Office for amended assessments to be issued for the years ended 30 June 2005 - 30 June 2008 for Bob Jane Corporation Pty Ltd (ACN 005 870 431) and Last Lap Pty Ltd (ACN 004 532 030) dated 8 December 2009.
All documents regarding the Australian Tax Office Position Paper in relation to the assessable income from landfill operations to Last Lap Pty Ltd (ACN 004 532 030) dated 15 August 2012.
All documents regarding the registration of the transfer of shares in Bob Jane Properties Pty Ltd from ACN 005 490 540 Pty Ltd to Last Lap Pty Ltd (ACN 004 532 030) on 13 May 2005.
All documents regarding the execution and registration of the transfer of shares in Bob Jane Properties Pty Ltd from Last Lap Pty Ltd (ACN 004 532 030) to ACN 005 490 540 Pty Ltd on or about 28 October 2016.
All documents concerning the assignment on around 30 June 2009 of a receivable of $2,764,987 owed to Last Lap Pty Ltd (ACN 004 532 030) by Bob Jane T-Marts Unit Trust to Calder Park Raceway Pty Ltd.
All documents concerning the financial position of Calder Park Raceway Pty Ltd (ACN 004 532 049) both in around 30 June 2009 and presently, including but not limited to the ability by Calder Park Raceway Pty Ltd (ACN 004 532 049) to repay its the outstanding debt to Last Lap Pty Ltd (ACN 004 532 030) pursuant to the assignment of that liability from Bob Jane T-Marts Unit Trust on around 30 June 2009.
All documents concerning the sale by Bob Jane Properties Pty Ltd (ACN 004 627 963) of one or more of its properties in or around Queen Street on about 30 June 2009.
All documents concerning: (a) the dividend declared by Bob Jane Properties Pty Ltd (ACN 004 627 963) and paid to Last Lap Pty Ltd (ACN 004 532 030) on or about 24 September 2009 in the amount of $1,743,371; (b) the declaration and payment of a dividend of $1,743,371 by Last Lap Pty Ltd (ACN 004 532 030) in favour of the Mimulus Trust on 24 September 2009; (c) the declaration and payment of a dividend of $1,743,371 on 24 September 2009 by ACN 005 490 540 Pty Ltd atf the Mimulus Trust to the Troyes Trust; and/or (d) the final distribution by Mainline Transport Pty Ltd (ACN 006 154 150) atf the Troyes Trust of the net dividend of $1,743,371 from the Troyes Trust to Robert Frederick Jane on 24 September 2009.
All documents concerning the loan agreement between Calder Park Raceway Pty Ltd (ACN 004 532 049) and Bob Jane Corporation Pty Ltd (ACN 005 870 431) dated on or around 24 September 2009, pursuant to which Bob Jane Corporation Pty Ltd (ACN 005 870 431) has appointed itself controller of the property at 377 and 479 Calder Freeway, Calder Park, Victoria (Property).
All documents concerning the equity in the Property held by Calder Park Raceway Pty Ltd (ACN 004 532 049).
All documents concerning the alleged debt of $865,691 (as at 31 August 2015) owing to Bob Jane Corporation Pty Ltd (ACN 005 870 431) by Last Lap Pty Ltd (ACN 004 532 030).
All documents concerning the current financial position of Bob Jane Properties Pty Ltd (ACN 004 627 963).
All documents concerning the purchase by Last Lap Pty Ltd (ACN 004 532 030) on around 1 July 1990 of 4,000,000 shares in Bob Jane Properties Pty Ltd (ACN 004 627 963) (formerly Bob Jane Corporation Limited) for $1,616,000 from the Mimulus Trust.
Any documents regarding the declaration in or around 31 December 1989 by ACN 005 490 540 Pty Ltd (formerly The Australian Motorsport Club Pty Ltd and Mimulus Pty Ltd) that it held its shares in Bob Jane Properties Pty Ltd (formerly Bob Jane Corporation Pty Ltd) on trust for the Mimulus Trust.
Any documents regarding notice by ACN 005 490 540 Pty Ltd (formerly The Australian Motorsport Club Pty Ltd and Mimulus Pty Ltd) to Bob Jane Properties Pty Ltd (ACN 004 627 963) (formerly Bob Jane Corporation Pty Ltd) confirming the Mimulus Trust was the beneficial owner of the Trust.
All documents concerning the transfer of carparks and storage spaces in Elizabeth Street, Melbourne in June 2009 from Bob Jane Properties Pty Ltd (004 627 963) to Kushinda Pty Ltd (089 149 879).