In Hathway (in his capacity as liquidator of Tightrope Retail Pty Ltd (in liq)) v Tripolitis, ERA Legal persuaded the Federal Court to grant leave to a liquidator to cross-examine the director and his family members concerning their financial affairs as disclosed in sworn affidavits provided by those individuals.

The matter relates to the collapse of the women’s retail clothing chain ‘Tightrope’.  As the court had previously made a freezing order, under rule 7.33 of the Federal Court Rules 2011 the court could make an order ancillary to that freezing order or to a prospective freezing order as it considers appropriate to illicit information relating to assets relevant to the freezing order or prospective freezing order.

In granting leave to the liquidator, the Court considered a number of factors weighing in favour of granting leave, including:

• An ancillary order to cross-examine the defendants was a convenient way of ensuring that all relevant assets are identified before any opportunity arises for dissipation;
• The liquidator specified the issues which he wishes to investigate and on which he wishes to cross-examine and if confined to those issues, it cannot be suggested that cross-examination is a fishing expedition; and
• The liquidator had made previous attempts to illicit the information without the need for the Court’s intervention, but had been unsuccessful.

For more information contact ERA Legal.