In the matter of Property Asset Consultancy Services Pty Ltd trading as Property Asset Consultancy Services Pty Ltd ACN 604 192 583 (in liquidation)

HIS HONOUR: This is an application brought urgently in the Duty List (in the absence of the immediate availability of the Corporations Judge) for the issue of an arrest warrant in respect of Clinton Sarina (Mr Sarina) pursuant to r 11.10 of the Supreme Court (Corporations) Rules 1999 (NSW) (the Corporations Rules) and s 597(6) of the Corporations Act 2001 (Cth) (the Act) on the basis of Mr Sarina having failed to attend for examination as summoned pursuant to s 596A of the Act.

For the reasons which follow, the Court has determined that is appropriate for a warrant for Mr Sarina’s arrest to issue forthwith.

Section 596A includes:

Section 597(6) states:

Rule 11.10 states:

The plaintiff, who is the liquidator of Property Asset Consultancy Services Pty Ltd ACN 604 192 583 (in liquidation) (the Company) was represented today by Mr D J Edney of Counsel. The Court acknowledges the considerable assistance it has received from Mr Edney's written submissions as developed during the course of short oral argument this morning.

Mr Sarina is and was at all material times, from its incorporation until its liquidation, the sole director of the Company of which the plaintiff is now the liquidator.

On 6 December 2022, a summons was issued for Mr Sarina's examination pursuant to s 596A of the Act requiring his attendance on 3 April 2023. There were apparently some difficulties in serving Mr Sarina because orders for substituted service were made on 16 March 2023.

The formal requirements to engage the Court's jurisdiction to issue an arrest warrant were, with respect, helpfully considered by Brereton J, as his Honour then was, in Ian Lawrence Struthers (in his capacity as liquidator) of P.A.C.I. Pty Ltd [2005] NSWSC 864 (Struthers). I find that Mr Sarina has been duly summoned to attend for examination, initially for yesterday, 3 April 2023. I also find that he has relevantly failed to attend at the time and place appointed, in circumstances which I will further set out in what follows.

As will shortly become apparent, there can be no dispute that Mr Sarina was put on notice of the examination summons by reason of the orders for substituted service. This is because solicitors acting on his behalf have been corresponding with the solicitors for the plaintiff in relation to the examination summons since 24 March 2023.

Insofar as the recent history is concerned, in the face of Mr Sarina by his solicitors having raised various objections and difficulties with his compliance with the examination summons, an informal without prejudice meeting did occur between Mr Sarina, his lawyers and the plaintiff's representatives on 30 March 2023. There was then further correspondence between the parties after that without prejudice meeting in relation to the need for Mr Sarina to comply with the examination summons by attending Court on 3 April 2023.

The history disclosed by that correspondence can be conveniently summarised by reference to a letter from the plaintiff's solicitors to Mr Sarina's solicitors of 31 March 2023 which included:

In setting out that paragraph, I note that Mr Edney expressly explained that he did not rely upon, as a reason for urgency, the matter referred to in paragraph 2(a) of that letter. What is apparent from the correspondence which the Court has seen is that there is a degree of urgency, which is an important consideration as to why the Court will order an arrest warrant be issued for Mr Sarina forthwith. The reason for that urgency is that there are some limited matters upon which the plaintiff wishes to examine Mr Sarina in relation to transactions that occurred in April and May of 2017. Those matters are subject to the possibility of an impending limitation period. It is significant for present purposes that the plaintiff (as is apparent from paragraph 2(c) and (d) quoted above) had agreed to limit the examination, in the first instance, to a half-day examination about what were referred to as the "urgent questions".

Mr Sarina's solicitors responded to the letter of 31 March 2023 on the morning of 3 April 2023. That letter sets out a number of matters said to explain why Mr Sarina was "devastated and distressed by the decision to seek to proceed with his public examination today". The letter refers to Mr Sarina's medical condition, a point to which I will return. The letter concluded with:

I record that, in accordance with paragraph 13 of that letter, the totality of Mr Sarina's solicitor's letter of 3 April 2023 was drawn to my attention on this application and I have taken its contents into account.

At 10.29am on 3 April 2023, the plaintiff's solicitors responded to that letter. That response included:

At 11.10am yesterday (3 April 2023), consequent on Mr Sarina’s failure to appear, the Registrar before whom the examination was to be conducted made orders which were included in an email shortly thereafter to Mr Sarina's solicitors from the plaintiff's solicitors:

That email led to a response on behalf of Mr Sarina from his solicitors at 12.54pm which included:

I record that the various correspondence and attachments referred to in the concluding paragraphs of that letter were drawn to my attention and I have taken them into account.

At 1.12pm yesterday, the plaintiff's solicitors, noting that that Mr Sarina was interstate, provided the link to Mr Sarina's solicitors for him to appear via video at 2pm yesterday. Mr Sarina did not appear at that time.

The Registrar then made orders which included:

Mr Sarina failed to appear at 11am today. I was informed at approximately noon that the present application would be made to me, owing to the Corporations Judge being engaged in another hearing.

Before going any further, it is appropriate that I say something more about the references that have already been made in these reasons to Mr Sarina's medical condition. The Court has before it a medical certificate from a urological surgeon dated 31 March 2023. I have taken account of the requests in the correspondence from Mr Sarina's solicitors that a confidentiality order be made in relation to that medical certificate. I am not satisfied that any such order should be made.

For the purposes of these reasons, it is sufficient for me to record that while the medical certificate sets out that Mr Sarina had major surgery last year, nothing in it explains why Mr Sarina would have been unable, by reason of any medical condition, to have attended for examination either yesterday or today. The surgeon records that he had a consultation with Mr Sarina “last week”, the result of which was that the doctor has ordered some tests, and required Mr Sarina to rest until the test results have been received. The certificate expresses no view about Mr Sarina's fitness to give evidence.

I accept Mr Edney's submission that no real weight should be given to Mr Sarina's reliance on whatever his medical condition may be in the absence of more substantial evidence than that provided by the medical certificate. In particular, I accept Mr Edney's submission that if, as appears to have been the case, Mr Sarina was well enough to attend a without prejudice meeting with the plaintiff's representatives, there is nothing before the Court at the moment that would provide any medical reason sufficient to persuade the Court that Mr Sarina could not have attended for examination either yesterday or today.

I have already set out in [9] above why the Court is satisfied that the first two prerequisites to engage the jurisdiction to issue an arrest warrant under the Rules have been met. The third consideration is that the person has failed to attend without reasonable cause. I respectfully adopt the observation made by Brereton J in Struthers that, because such a matter is almost exclusively within the examinee's knowledge, only relatively "slight" evidence would be required to establish the absence of reasonable cause. The Court is satisfied that Mr Sarina has failed to attend both yesterday and today for examination without reasonable cause.

It is clear from the correspondence that, while he has apparently travelled interstate, Mr Sarina knew that the examination summons had not been set aside and that he was required to attend both yesterday and today. Furthermore, insofar as an issue appears to have arisen because he has travelled interstate, that was accommodated by orders being made for him to give evidence by video link if necessary. I have already explained why I am not satisfied that whatever medical condition Mr Sarina has is not, on the evidence, a sufficient basis to explain his refusal to appear for examination.

Next, while I am satisfied that the requirements for the issue of a warrant have been met, it is also necessary to take into account any relevant discretionary considerations as to whether or not a warrant should issue (see Struthers at [45]). In that regard:

I have also not overlooked that there has been some degree of informal cooperation by Mr Sarina by agreeing to meet on a without prejudice basis with the plaintiff's representatives. However, that is not a sufficient reason to overcome the public interest in ensuring that the Court's order in relation to the examination summons is satisfied.

Finally, I have also taken into account, but am unpersuaded by, the arguments made in the correspondence on behalf of Mr Sarina that there appears to have been some delay in the plaintiff taking steps to examine Mr Sarina, given that the liquidation has now been ongoing for some years. Mr Edney fairly accepted that there had been some delay, but submitted that it was not sufficient in and of itself to disqualify the plaintiff from being able to seek enforcement of the summons that has been issued. I accept that submission. I also note that some months of the most recent delay may be attributed to the need to obtain orders for the substituted service of the examination summons on Mr Sarina.

Nothing else raised in the correspondence to which I have been taken, written by Mr Sarina's legal representatives, persuades me that there is any other discretionary reason why the Court should not issue the warrant for Mr Sarina's arrest forthwith in order to compel his compliance with the Court's orders.

The Court’s orders are: