Federal Court clarifies rule on requesting foreign court's assistance in external admin matter

Two Singaporean companies refused to comply with court orders to produce documents

Federal Court clarifies rule on requesting foreign court's assistance in external admin matter

In a recent case, the Federal Court has clarified the rule on seeking assistance from a foreign court to aid in external administration matter.

In Georges (Liquidator), in the Matter of SIRA Pty Ltd (In Liquidation) [2023] FCA 766, the liquidators of SIRA Pty Ltd. Commenced examination proceedings under the Corporations Act. In the examination proceeding, the judicial registrar of Luxton ordered two Singaporean companies to produce documents relevant to SIRA's examinable affairs. The two companies, Nutrition Science Design (NSD) and Nutrition Innovation Singapore (NIS), refused to comply with the court's orders because they are outside the court's jurisdiction.

Accordingly, the liquidators sought an order under s. 581(4) of the Corporations Act that the court requests the General Division of the High Court of Singapore "to act in aid of and be auxiliary to the Federal Court of Australia in relation to its orders that NSD and NIS produce documents in the examination proceedings."

The federal court noted that the SIRA liquidators considered that NSD and NIS likely possessed documents relevant to the examination proceedings. The liquidators' examinations revealed that patent applications concerning SIRA's sugar refining technology were lodged in the name of a director of SIRA who later executed a deed of assignment purporting to assign the intellectual property to NSD. In turn, NSD appeared to have licensed NIS the intellectual property. The liquidators alleged that the documents sought to be obtained from NSD and NIS are likely to be relevant to SIRA's examinable affairs and potential claims concerning SIRA's property.

The court noted that under the Corporations Act, the court has the discretion of requesting another country's court that has jurisdiction in external administration matters to act in aid of and be auxiliary to it in an external administration matter. The court further said that in exercising its discretion, it must first determine a good substantive reason for the request and that there is "utility" to the request because the foreign court is likely to accept and act upon the request if it is made.

The federal court was satisfied that the orders sought by the applicants must be granted. The court found that the examination proceedings were an "external administration matter", and the liquidators sought an order for a request for assistance from the Singapore court to enforce the federal court's production orders against NSD and NIS.

The federal court further noted that the liquidators had provided the court with a legal opinion from a Singaporean lawyer that the General Division of the High Court of Singapore has jurisdiction to receive and act upon the proposed letter of request.

The court ultimately found a good and substantive reason for the request, which is the same consideration that gave rise to the court's order for production. The court also gave weight to the fact that the persons subject to the order for production are outside the jurisdiction of the Australian courts and, consequently, not directly compellable under Commonwealth law.

In the end, the court was satisfied that it was appropriate for a letter of request to be sent to the Supreme Court of Singapore to act in aid of external administration matters.

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