Falcon Australia Ltd, Re [1993] QSC 23

IN THE SUPREME COURT OF QUEENSLAND IN THE MATTER of the Companies Queensland Code and IN THE MATTER of Falcon Australia Limited REASONS FOR JUDGMENT- DERRINGTON J. Delivered the 4th day of February, 1993 CATCHWORDS: Company law. Examination of Directors. Permission to third party to view transcript. Liquidator of another company with common directors. Possibility of wrongful transactions detrimental to other company. Whether liquidator of other company has sufficient interest to view transcript. Whether "fishing trip". Counsel: Solicitors: R. Lilley for applicant No appearance for respondent Sly and Weigall Cannan and Peterson for applicant Hearing date: 4th February, 1993 -- 1 of 4 -- IN THE SUPREME COURT OF QUEENSLAND IN THE MATTER of the Companies Queensland Code and IN THE MATTER of Falcon Australia Limited REASONS FOR JUDGMENT - DERRINGTON J. Delivered the 4th day of February, 1993 The applicant is the liquidator of a company which formerly had common directors with the abovenamed company and of a third company. Matters have come to the applicant's attention which suggest a real possibility that those directors may have entered into two transactions of very doubtful probity which respectively benefited each of those other companies at the expense of that which he is administering. He seeks an order entitling him to view the transcript of the public examination of the directors in the liquidation of the above company in order that he might elicit any available material for an action against that company or the directors, or at least in the hope that it may lead to further inquiries. Because of the potential cause of action referred to, the applicant can certainly be said to have some interest in such -- 2 of 4 -- matters, though it cannot would have been the only 2 be assumed that the transactions act of attention in the public examination of the directors. At this stage he is unable to point to any cause of action and concedes that the exercise would be a "fishing trip". Although he concedes that the authorities are against this argument in such circumstances generally, he claims some special position from his role as a liquidator of a company in pursuit of funds for the benefit of creditors. It is however difficult to see how in principle this is in any way different from the case of a creditor who is pursuing moneys which he is genuinely owed; and the authorities are against a "fishing trip" in those circumstances. The applicant also seeks to distinguish his position from the general class of case because he himself is entitled to have the same directors examined in the liquidation of the applicant company; and he invokes the argument of a saving in costs by the means proposed as a good reason for the avoidance of this. This saving, he says, will be enlarged in this case as he is based in Perth and the directors are in Melbourne. However, his power to have the directors examined is probably a reason against permitting a view of the transcript, at least at this stage as refusal will not deprive him of the opportunity to investigate the matter. Moreover the likelihood is that it would in any case be necessary to hold such a further examination because the inquiries in the examination already held would not have been focused upon matters relevant to the applicant's present interest. The -- 3 of 4 -- 3 geographical position does not add to the matter because the further examination will be held in Melbourne in the same way as if it were held in Perth. At present this matter bears all the adverse factors referred to in re Spedley Securities ex parte Aherns 3 A.C.S.R. 349. The suggested claims are too vague and diffuse to constitute such an interest as to justify the examination of the transcript, as referred to Needham J. in re Spedley Securities Ltd (1990) 2 A.C.S.R. 266. It may be that on the applicant's own examination of the directors, he may be able to establish such a claim by means of the examination itself. Further if his own inquiry provides more substantial evidence of a real claim on these grounds, then the result of another application here may be different. However at this stage the application is refused. -- 4 of 4 --