Pradhan v Eastside Day Surgery Pty Ltd & Anor No. SCGRG-98-833 Judgment No. S256

[1999] SASC 256

Supreme Court of South Australia

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Interrogate

Catchwords

1. Corporations
2. › Winding up
3. › Liquidator
4. › Removal
5. › Duty of independence
6. › Whether liquidator's employee's previous involvement with plaintiff and company in liquidation likely to impede or inhibit liquidator from acting impartially
7. › Corporations Law, s 588G, s 588M
1. Corporations
2. › Winding up
3. › Liquidator
4. › Removal
5. › Conflict of interest
6. › Chartered accountant's duty of confidentiality to former client
7. › Whether duty of confidentiality extends to accountants as to solicitors
8. › Whether liquidator may be removed where employee holds confidential information of party to litigation
1. Equity
2. › Fiduciary obligations
3. › Professional advisers
4. › Duty of confidentiality
5. › Accountants
6. › Whether duty of confidentiality arising from fiduciary relationship extends beyond solicitors to accountants
7. › Whether duty survives termination of fiduciary relationship
1. Practice and Procedure
2. › Appeal
3. › Fresh evidence on appeal
4. › Whether admission in interests of justice
5. › Whether new evidence materially affects outcome
6. › Supreme Court Rules, r 95.15

Quick Take

The duty of confidentiality arising from a fiduciary relationship with a professional adviser extends to accountants and is not confined to solicitors. A liquidator may be removed where an employee holds confidential information of a party to litigation brought by the liquidator, and the test is whether there is a real (not merely fanciful) risk of disclosure — the Rakusen 'real mischief and real prejudice' test is not followed. Chinese walls will rarely be sufficient protection, particularly in small firms. The evidential burden shifts to the liquidator to demonstrate no risk of disclosure once possession of relevant confidential information is established.