Walton & Anor v ACN 004 410 833 Ltd (formerly Arrium Ltd) (in liquidation) & Ors

Lower Court Judgment

30/07/2020 Supreme Court of New South Wales (Court of Appeal) (Bathurst CJ, Bell P; Leeming JA)

[2020] NSWCA 157

Catchwords

Corporations – Examinations relating to insolvency – Abuse of process – Where s 596A of Corporations Act 2001 (Cth) requires court to issue examinations summons to a person about a company if “eligible applicant” applies for summons – Where “eligible applicants” include persons authorised by Australian Securities and Investments Commission (“ASIC”) – Where ASIC can only authorise person if person’s purpose is for benefit of corporation, its contributories or its creditors – Where applicants shareholders of respondent – Where, in 2014, respondent successfully completed capital raising for purpose of paying down debt – Where respondent entered into voluntary administration in 2016 and liquidation in 2019 – Where ASIC authorised applicants as “eligible applicants” to conduct examinations of respondent’s directors and officers – Where NSW Court of Appeal found applicants’ predominant purpose investigation and pursuit of shareholders’ private claim against directors in relation to 2014 capital raising – Where Court of Appeal held fulfilment of that purpose would not confer benefit on corporation, creditors or contributories, and therefore offensive to purpose for which s 596A enacted and abuse of process – Whether implicit purpose of obtaining information about potential misconduct is beneficial to corporation – Whether applicants’ purposes offensive or foreign to s 596A.