Kate Conneely and Heather Collins discuss the NSW Court of Appeal's decision in the latest Australian Restructuring Insolvency & Turnaround Association Journal.
KordaMentha Partner Kate Conneely and Heather Collins, Investment Manager for Omni Bridgeway, were featured in the latest edition of the Australian Restructuring Insolvency & Turnaround Association (ARITA) Journal. Discussing a recent decision by the NSW Court of Appeal, they shared insights into the eligibility of shareholders to pursue public examination for private claims.
Examining the appeal decision of ACN 004 410 833 Ltd (formerly Arrium Ltd) (in liquidation) v Michael Thomas Walton  NSWCA 157, Heather and Kate noted, "An examination order may be discharged if the court finds the applicant had an improper purpose for securing the examination order or it otherwise amounts to an abuse of process."
The first instance decision held that the pursuit of 'eligible applicant status' under s 597(5A)(b) of the Corporations Act 2001 (Cth) and summons for examination of a former Arrium director by the limited group of Arrium shareholders (the Shareholders) was not an abuse of process. Kate and Heather examined the NSW Court of Appeal's decision to overturned this ruling, noting the Court "held that where orders for an examination were sought by a limited group of persons, for a private purpose and not for the benefit of the company, its creditors or contributories, then the examination was for a purpose foreign to which the examination power is conferred and therefore was an abuse of process."
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