Australian Securities and Investments Commission v Merlin Diamonds Limited (No 2) [2019] FCA 2094

Australian Securities and Investments Commission v Merlin Diamonds Limited (No 2) [2019] FCA 2094

Leave was granted for non-party shareholders/noteholders to inspect the provisional liquidators' report, as they have a legitimate interest relevant to the winding up application and procedural fairness requires access. A limited suppression order was made, restricting dissemination of valuation information to external legal advisers, to prevent prejudice to the administration of justice in relation to the sale of assets if a winding up occurs.

Parties
Plaintiff: Australian Securities and Investments Commission; Defendant: Merlin Diamonds Limited; Provisional Liquidators: Salvatore Algeri and Timothy Norman (provisional liquidators); Interested Party: Edensor Holdings Pty Ltd; Interested Party: Non-party shareholders and noteholders of the Defendant
Jurisdiction
Australia
Judgment Date
11 December 2019
Procedural Posture
Interlocutory Application / Ruling on Applications for Inspection and Suppression Orders
Outcome
Leave granted for inspection of the provisional liquidators' report; limited suppression order made; provisional liquidators' application otherwise dismissed; costs reserved.
Legal Topics
Inspection of Documents, Suppression Orders, Provisional Liquidation, Procedural Fairness
Practice and Procedure Corporations Law Inspection of Documents Suppression Orders Provisional Liquidation Procedural Fairness

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Parties

Australian Securities and Investments Commission

Plaintiff

Merlin Diamonds Limited

Defendant

Salvatore Algeri and Timothy Norman (provisional liquidators)

Provisional Liquidators

Edensor Holdings Pty Ltd

Interested Party

Non-party shareholders and noteholders of the Defendant

Interested Party

Procedural Posture

Interlocutory Application / Ruling on Applications for Inspection and Suppression Orders

Legal Issues

  1. 1 Whether non-party shareholders/noteholders should be granted leave to inspect the provisional liquidators' report
  2. 2 Whether parts of the provisional liquidators' report should be suppressed under s 37AF of the Federal Court of Australia Act 1976 (Cth)

Ratio Decidendi

Leave was granted for non-party shareholders/noteholders to inspect the provisional liquidators' report, as they have a legitimate interest relevant to the winding up application and procedural fairness requires access. A limited suppression order was made, restricting dissemination of valuation information to external legal advisers, to prevent prejudice to the administration of justice in relation to the sale of assets if a winding up occurs.

Court Disposition

Leave granted for inspection of the provisional liquidators' report; limited suppression order made; provisional liquidators' application otherwise dismissed; costs reserved.

Orders

  • Non-party shareholders and noteholders granted leave to inspect a copy of the provisional liquidators' report, subject to redaction of valuation information.
  • Provisional liquidators to provide a copy of the PL Report to specified opposing shareholders.