Merits
14 The basic idea underpinning the application is that the pendency of a proceeding in the Supreme Court in which Mr Violi may give evidence and be cross-examined means that there is a difficulty in permitting him to be publicly examined in this Court before that case is determined or at least until he has been cross-examined in that proceeding.
15 The Supreme Court proceeding is entitled GEMI 169 Pty Ltd v Suria Global (L) Pty Ltd being proceeding number 2022/00181916. Mr Violi is the fourth defendant in that proceeding. A company owned by him, F & L Violi Pty Ltd, is the third defendant. This proceeding was commenced on 22 June 2022.
16 In the Supreme Court the plaintiffs seek to recover loans of around $24 million which they say were advanced to Suria. Suria is the first defendant and its sole director and shareholder, Mr Lutui, is the second defendant. Mr Lutui was also served with an examination summons but did not obey it shortly after which a warrant for his arrest was issued by Goodman J: Livingstone (Liquidator) v Lutui, in the matter of Suria Global (L) Pty Ltd (Receivers and Managers appointed) (in liq) [2023] FCA 609. Before the warrant could be executed Mr Lutui left for the United States.
17 The plaintiffs also sue Mr Violi and his company on a deed of guarantee and indemnity under which Mr Violi's company appears to have secured the plaintiffs' loans to Suria. The guarantee and indemnity are secured by mortgages over a high rise building at Redmyre Road in Strathfield (in Sydney) and over a shopping centre at Yambil Street in Griffith which is in the Riverina region of New South Wales. Both of these are owned by Mr Violi's company. There is also a joint venture deed between Suria and Mr Violi's company.
18 Mr Violi says that what appear to be his signatures on these two deeds are in fact forgeries and that he has no knowledge of the loans which the plaintiffs now seek to recover. Mr Violi's signature appears to have been witnessed by a solicitor, Mr David. Mr David is a defendant in the Supreme Court proceedings and the liquidators have also issued an examination summons to him. Mr Violi has cross-claimed against Mr David. The nub of the allegation is that Mr Violi has been the victim of an elaborate fraudulent scheme in which Mr David is involved and that this scheme included forging his signature on documents of which he had no knowledge.
19 Mr Livingstone, one of the liquidators of Suria, has given evidence that none of the funds advanced by the plaintiffs were directly received by Suria. He also says that certain settlement records demonstrate that $2.5 million of the funds advanced by the plaintiffs were in fact received by an account entitled 'FP & LW Violi'. A bank statement for that account affirms the correctness of that record.
20 The liquidators' position is that they do not understand the affairs of Suria but they believe Mr Violi may be able to help them to do so. Where Mr Violi's version of events is that he has been the victim of an elaborate fraud but where the evidence also shows he received $2.5 million of the plaintiffs' loan funds, I accept Mr Livingstone's evidence to the extent that it suggests that one of the reasons the liquidators wish to examine Mr Violi is to gather information to assist in their inquiries into the examinable affairs of Suria.
21 The basis of Mr Violi's application is that it would be an abuse of process for the liquidators to proceed with the examination. Why? Here Mr Violi's answer is that it is because the liquidators' purpose in examining him is to assist the plaintiffs in the Supreme Court proceedings. There is of course no direct evidence of this. Mr Violi invites me to draw that inference because the plaintiffs in the Supreme Court proceedings have been funding the liquidation of Suria and because the plaintiffs' counsel in the Supreme Court proceeding are also the counsel who will be conducting the examination.
22 There are competing views of the present factual circumstances. From Mr Violi's perspective, which is understandable, he sees a piece of litigation in which there will be a substantial contest between the plaintiffs and him as to whether the signature on the two deeds are forgeries and whether, as he suggests, he has been the victim of an elaborate fraud. On this view, the plaintiffs were fraudulently induced into extending monies to Suria; the loan funds were drained away without reaching it; the fraud included putting up Mr Violi's company's properties without his knowledge or consent; and Mr Violi is now left holding a baby which is not his. This view accords with the fact that the sole director of Suria appears to have decamped from the jurisdiction in the face of an arrest warrant and with the fact, not disputed on the present application, that Suria appears to have no books and records of any kind. If this view is correct, the two victims of the fraud are the plaintiffs and Mr Violi.
23 What matters for present purposes is that the evidence of Mr Violi that the signature on the two deeds is not his is going to be crucial to the outcome of the Supreme Court litigation. The evidence of Mr David concerning the circumstances in which he appears to have witnessed Mr Violi's signature will also be critical. It is not clear to me on the present application whether Mr David admits that he witnessed the signatures (so that the signatures are indeed Mr Violi's) or whether he now denies witnessing the signatures at all. In any event, what is clear is that the Supreme Court proceeding is going to involve a close of examination of all of these matters and that it is quite likely that Mr Violi's testimony about them is going to be central.
24 Another view of the factual circumstances is this: Suria appears to have been lent $24 million almost none of which appears to have found its way into Suria's hands. The company has no books and records. Its sole director has fled the jurisdiction. Mr Violi's signature appears to be on two deeds one of which suggests that his company guaranteed the debts of Suria and the other of which suggests that his company was in a joint venture with Suria. Further, out of the loan funds advanced to (or at the direction of) Suria, the sum of $2.5 million appears to have found its way into a bank account with Mr Violi's name on it. Viewed from this perspective (which is the perspective of the liquidators) there are many unanswered questions. What was the joint venture between Suria and Mr Violi's company? What was the business in which Suria was engaged? Where did the money it borrowed from the plaintiffs go? Why did $2.5 million of that money makes its way into a bank account with Mr Violi's name on it?
25 It is an important fact that the plaintiffs in the Supreme Court proceeding have provided some limited funding to the liquidators. It is also important I think that at this stage there appear to be no other creditors of Suria apart from the plaintiffs. In my view, an inference is available that the plaintiffs would like to have the benefit of Mr Violi's version of events prior to the conduct of the Supreme Court litigation. Why would they not? In the examination, Mr Violi will no doubt be asked about the two deeds and the nature of the transactions they disclose and it may be assumed, I think, that he will be questioned about why $2.5 million of the loan proceeds appeared in a bank account with his name on it. If Mr Violi is examined then he will have to give his version of these matters before he gives his evidence in the Supreme Court. If and when he comes to be cross-examined in the Supreme Court the plaintiffs will, I accept, have had the advantage of already knowing what Mr Violi has said about this topic. They will be able to explore in advance difficulties in any account he gives. Concomitantly Mr Violi is going to be locked into the version of events he gives at the examination and his forensic flexibility is thereafter going to be impaired. I would draw the inference that the plaintiffs would like to see Mr Violi examined before he gives his evidence in the Supreme Court proceedings. It is only natural that they would.
26 However, the question of whether the examination summons should be discharged does not turn on whether the plaintiffs will have these advantages arising from Mr Violi's examination prior to the conduct of the Supreme Court litigation. Nor does it turn on whether they would wish the liquidators to proceed with the examination in order to confer upon them those advantages. It instead requires consideration of whether the liquidators are pursuing the examination of Mr Violi for the purpose of giving the plaintiffs that advantage.
27 One matter which is capable of supporting the drawing of the inference that this is indeed their purpose is that the liquidators are being funded by the plaintiffs. It is not I think surprising that the liquidators have accepted this funding. Suria has no assets and is entirely insolvent. The only prospects of a return to the creditors (who are the plaintiffs) is if the liquidators are successful in clawing back funds from third parties either by way of an insolvency remedy or by a suit enforcing some right that Suria has arising from the events surrounding the loan advances to it. At the moment, the third parties appear to be Mr Violi and Mr David but it is perhaps early days. Nevertheless, the liquidators' best hope of recovering funds in this fashion is by means of funding from the plaintiffs. Another matter which is also capable of supporting the same inference is that the counsel who are acting for the plaintiffs are the same counsel that are acting for the liquidator in this Court.
28 I would accept that these matters could sustain an inference that the liquidators have the improper purpose Mr Violi alleges. However, there are matters tending in the opposite direction. They are the matters I have outlined above which underscore how little is actually known about the affairs of Suria and the more than tenuous evidence that Mr Violi is a person who is likely to be able to assist in throwing light on that question. That evidence therefore is capable of supporting an inference that the purpose the liquidators have in conducting the examination is no more than the due discharge of their statutory obligation to investigate the affairs of Suria.
29 Thus the objective evidence before the Court is capable of sustaining an inference in either direction. The conclusion that the liquidators are acting for an improper purpose is of course a serious one. Section 140(2) of the Evidence Act 1995 (Cth) requires me to take that matter into account in assessing whether the fact alleged has been proven. The evidence that the liquidators have the proper purposes I am satisfied they do have does not logically exclude the possibility that they also have the improper purpose Mr Violi alleges. A person may after all have multiple motivations for a particular course of action. However, the inference which Mr Violi now seeks to draw from the fact that the plaintiffs are funding the liquidators and are represented by the same counsel seems to me to be a bridge too far. Whilst I accept that it is possibly open it strikes me nevertheless as to some extent ambitious. Whilst I do not use the circumstances which suggest that the liquidators have proper purposes directly to negate Mr Violi's suggestion that they have the improper purpose he alleges, I do think that those circumstances may be legitimately consulted to gauge the likelihood of that suggestion.
30 I am not persuaded on the balance of probabilities that Mr Violi has established that the purpose the liquidators have in pursing his examination is to assist the plaintiffs in the Supreme Court proceedings.
31 Also relevant is Mr Livingstone's evidence at [39] of his affidavit:
To be clear, I am seeking to examine Mr Violi in order to gather information to assist me in the administration of the Company, and to enable evidence and information to be obtained to support the bringing of proceedings in connection with the examinable affairs of the Company. I am not seeking to obtain or confer any forensic advantage on the GEMI Creditors in their proceedings in the Supreme Court. The existence of those proceedings played no part in my decision to seek the Mr Violi's Summons for Examination.
32 Mr Livingstone was not cross-examined to suggest [39] was false. Assuming in Mr Violi's favour that it is open to me to reject this evidence on the basis that Mr Livingstone was mistaken about his own motivations, I would not reject it on this basis because, as I have explained, I am not satisfied that it has been shown at the civil standard that the liquidators' motivations are as Mr Violi suggests.
33 In that circumstance, I am not persuaded that it has been shown that the pursuit by the liquidators of the examination of Mr Violi is for an improper purpose.