The recent decision of the New South Wales Court of Appeal in ACN 004 410 833 Ltd (formerly Arrium Limited) (in liq) v Michael Thomas Walton [2020] NSWCA 157, offers a poignant reminder that the examination powers conferred by the Corporations Act to inquire into the “examinable affairs” of a company are to be used only for a predominant purpose that benefits the company, its contributors and its creditors.
A private or personal purpose which does not offer any apparent benefit to those parties is an abuse. This decision makes it plain that a prospective collateral benefit is not enough where the predominant purpose is beyond power. The case also resolved what may have been perceived as an inconsistency between intermediate appellate courts on the breadth of the examination power.
Gavin Handran has prepared a case note discussing this recent decision and its implications for the future. The note can be accessed here: Case Note – Re Arrium Ltd.
Gavin Handran