Background
Fortworx Pty Ltd was being wound up in insolvency. Its liquidator, Ozem Kassem, obtained a summons under s 596A of the Corporations Act requiring Alexander Kladas, Fortworx’s sole director, to attend a public examination concerning the company’s affairs on 7 September 2026 and thereafter until excused.
Kladas did not attend on 7 September. His counsel sought an adjournment, initially asserting that Kladas believed discussions with the liquidator meant he need not attend. The examination was adjourned by consent to the following morning on Kladas’s agreement to appear, and the liquidator’s solicitor personally delivered the relevant orders and documents to him. Kladas again did not attend, relying on two medical certificates and his solicitor’s evidence that he was experiencing atrial fibrillation, hyperventilation, and was attending a heart specialist.
The Court’s Holding
Derrington J refused the adjournment. The medical certificates did not adequately explain Kladas’s symptoms, their severity or duration, or—critically—why his condition prevented him from travelling to court and effectively participating in the examination. One certificate addressed only incapacity for work; the other was vague and internally uncertain as to the period of incapacity. The solicitor’s affidavit did not establish that the specialist appointment on the examination date was medically urgent or could not occur at another time.
The Court also held that Kladas had failed to attend the examination without reasonable cause, enlivening the power in r 11.10(2)(a) of the Federal Court (Corporations) Rules 2000 (Cth) to issue an arrest warrant. Given his central role as Fortworx’s sole director, the importance of his evidence to the liquidation, and prior unsuccessful efforts to secure his attendance, the Court issued a warrant and ordered him to pay the liquidator’s costs. The warrant was subsequently discharged after Kladas appeared and gave evidence on 9 September 2026.
Key Takeaways
- Medical evidence supporting an adjournment must explain why the condition prevents effective court attendance or participation, not merely state that a person is unfit for work.
- A failure to comply with an examination summons without reasonable cause can support an arrest warrant under r 11.10(2)(a).
- The court will weigh the seriousness of arrest against the need to enforce examination summonses and obtain evidence essential to an insolvency investigation.
Why It Matters
The decision underscores the evidentiary standard for last-minute health-based adjournments in Australian courts. Vague medical certificates will not establish either medical unfitness or reasonable cause for non-attendance.
It also confirms that public examination summonses in insolvency matters are enforceable tools. Where a key company officer repeatedly fails to attend and the evidence does not justify the absence, the Federal Court may order arrest to secure compliance.