Sutherland v Pascoe; in the matter of Matrix Group Limited as Trustee for the Matrix Group Unit Trust: Examination Summons

In Sutherland v Pascoe; in the matter of Matrix Group Limited as Trustee for the Matrix Group Unit Trust (in liq) ACN 061 549 371 [2013] FCAFC 15 the full court of the Federal Court has refused to grant leave to appeal  by directors of Matrix Group Limited (Matrix).

The key issue in the case was whether it could reasonably be argued that the primary judge erred in rejecting application to set aside examination summons on the basis of non-disclosure to the registrar of the Court by the liquidator.

Background

The proceeding had a long history involving Matrix and its former directors which had lead to the matters in the current case, namely; the proceedings before the primary judge which were the subject of the application for leave to appeal and a chain of proceedings in various other courts involving Matrix and the liquidators appointed to wind the company up. 

The applicants sought to have examination summonses and notices for production of documents set aside. Their interlocutory application had been heard by the primary judge on 22 November 2012 and his Honour delivered judgment on 28 November 2012 dismissing the application. The applicants sought leave to appeal against some, but not all of the primary judge’s findings in dismissing their interlocutory application concerning the “challenged orders”. 

The court revisited the reasoning of the primary judge and discussed at length the provisions of the Corporations Act 2001 (Cth) s 569B dealing with discretionary examination and the powers given to the courts and liquidators under that provision.

The Full Court Decision

In dismissing the appeal the full Court said at [57]:

In our view, none of these claims warrants a grant of leave to appeal.  At the heart of the matter is the question whether his Honour erred in finding, as a matter of fact, that the liquidator’s failure to disclose that the two potential liquidator initiated proceedings were time-barred was not material.  In our view, that finding was plainly open to the primary judge . . .

And at [58], [59]:

Finally, having regard to those matters and to our view that the primary judge correctly stated the relevant legal principles; we do not consider that the applicants’ claims of error of law are reasonably arguable.

For all these reasons, the interlocutory applications for leave to appeal should be dismissed and the applicants ordered to pay the respondent’s costs.

Legislation discussed in the case:

• Corporations Act 2001 (Cth) ss 181, 182, 477(2B), 479, 588FB, 588FDA, 588FF, 596B, 596C, 596D, 597, 597A 1324

• Conveyancing Act 1919 (NSW) ss 37A

• Federal Court (Corporations) Rules 2000 r 11.3

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