This article was written by Nancy Wang Principal Solicitor at W & G Lawyers.
When a company fails, the people it owes money to are often the ones left most in the dark. The directors step back, an outside professional — called an external administrator (an administrator or liquidator) — takes over the company’s records, and you, the creditor, still have to make hard decisions. Should you make a claim? Should you sue? Is it worth the money and effort? The law helps by giving you a right to ask for information, and a way to force the issue if you’re refused. Here’s how that works in Australia.
Where the right comes from
The rules sit in something called the Insolvency Practice Schedule (IPS), which is part of the Corporations Act 2001. A set of regulations, the Insolvency Practice Rules (IPR), fills in the detail.
There are two layers. First, an administrator has to give creditors certain reports and updates anyway, whether you ask or not. Second — and this is the part that matters most here — you can make your own request for specific information, a report, or a document.
That personal right is in section 70-45 of the IPS. The key thing to understand is how it’s worded. It says the administrator must comply with your request unless one of three things is true:
- the information isn’t relevant to the administration of the company; or
- handing it over would put the administrator in breach of their own legal duties; or
- it’s otherwise not reasonable to comply.
In plain terms: saying yes is the default. Saying no is the exception, and the administrator can only say no for one of those three reasons. That’s a strong position for a creditor to start from.
First hurdle: are you actually a “creditor”?
You have to be a creditor to use this right. The good news is the term is read broadly. It covers people who are owed money, but also people with a claim that hasn’t been finalised or even gone to court yet.
In practice, though, this is often the first place an administrator pushes back. In a 2024 Queensland case, Wadren Pty Ltd v Algeri, the people asking for information were told twice that they weren’t creditors yet. The administrator only accepted they were once they had actually started court proceedings against the company. So if your status might be questioned, be ready to nail down your claim — for example, by starting proceedings or setting out clearly what you’re owed — before or when you ask.
What the three “no” reasons really mean
- Not relevant. The information has to relate to the administration itself — how it’s being run, what the company owns, where creditors stand, whether there’ll be a payout. If you want something purely for an unrelated business reason, it probably won’t pass.
- Breach of duty. The administrator can’t be made to do something that breaks their own obligations — like giving up legally protected (privileged) material, or acting against the interests of creditors as a whole.
- Not reasonable. This is the catch-all, and the regulations spell out when refusing is fair. Broadly, an administrator can say no if:
- handing it over would harm other creditors or someone else more than it would help you;
- the material is legally privileged;
- releasing it could expose someone to a “breach of confidence” claim;
- there isn’t enough money in the estate to cover the cost of pulling it together;
- you’ve already been given it; or
- the request is just a nuisance.
Two useful points here. “Confidence” is stricter than it sounds — it’s not enough to slap a “confidential” label on something; the test is whether releasing it could actually trigger a legal claim. And if the only real problem is cost, you can often get around it by offering to pay the reasonable expense of getting the documents together. (These regulations change over time, so check the current version before relying on the detail.)
If the administrator says no: going to court
A right to ask isn’t much use without a way to enforce it. If you’re refused — or just ignored — you can apply to a court under section 70-90 of the IPS. The court can order the administrator to give you all or some of what you asked for, and can deal with who pays the costs.
There used to be an argument that the court could only step in if the administrator had acted in bad faith. That argument has lost. The courts have confirmed (in Watson v Dixon Advisory in 2022, and again in Wadren) that the court has a broad discretion. So a court can order the documents handed over even if the administrator refused honestly and in good faith. A sensible refusal carries weight, but it isn’t the final word.
When deciding, the court weighs up the same things as the three “no” reasons — relevance, the administrator’s duties, fairness to other creditors, confidentiality, privilege, how broad the request is, and whether you’d get an unfair tactical edge. And it will often order a narrower version of what you asked for, with confidentiality protections attached, rather than simply granting or refusing the whole thing.
The most common fight: insurance information
A lot of these cases come down to one thing: the failed company’s insurance. It makes sense. Before you spend money suing a company with no assets, you want to know if there’s an insurer standing behind it, how much cover is left, and whether any exclusions might block your claim. Without that, you’re guessing — and you may be holding everyone else’s payout up while you do.
The courts have struck a practical balance. They’ve ordered disclosure of things like the policy limits, sub-limits, exclusions and conditions — enough to let a claimant judge whether it’s worth proceeding and how hard to push — while accepting that an insurer’s relationship with the insured is sensitive and shouldn’t be exposed wholesale.
Wadren is a good example. The creditors asked for broad insurance documents to decide whether to sue over building defects. The judge said the request was too wide, cut it back to what was genuinely needed to judge whether the claim was worth pursuing, refused the fine detail of other claims (which would have given an unfair advantage), and protected the insurers with a confidentiality undertaking. The takeaway: courts tend to trim an over-broad request, not throw it out.
Other ways to get information
This isn’t the only tool. Depending on the situation, creditors might also rely on the regular reports administrators must give, requests made collectively by a vote of creditors, formal “public examinations” (a much more powerful investigation tool, usually run by liquidators), or “preliminary discovery” through the courts (a separate process for getting documents to decide whether to sue). Each has its place — but using several at once can draw complaints that you’re misusing the system, so pick the right one.
Practical tips
- Explain why you need it. Link your request to a genuine purpose tied to the administration — for example, working out whether it’s worth suing, which affects how you’ll claim. Courts respond well to that.
- Don’t ask for everything. Broad requests get cut back. Ask for the specific things you need (limits, exclusions, how much cover is left), not the whole file.
- Deal with confidentiality up front. Offer a confidentiality undertaking and respect legal privilege. Courts usually see confidentiality as something to manage, not a reason to refuse.
- Offer to cover the reasonable cost. This removes the “too expensive” objection and shows good faith.
- Sort out your standing. If your status as a creditor might be challenged, be ready to back it up.
The bottom line
The law gives creditors a real, enforceable right to information — not a polite request an administrator can brush aside, but a “must comply unless” obligation, backed by a court that can order disclosure if needed. There are genuine limits: relevance, the administrator’s duties, confidentiality, privilege, fairness to others, and not asking for too much. But recent decisions like Wadren show courts are willing to look past an honest refusal, balance everyone’s interests, and tailor what’s handed over rather than deny it. For a creditor trying to make a smart decision in a messy situation, that information can be the difference between an informed call and an expensive gamble.
Risk Warning: This is general information about Australian insolvency law, not legal advice. The rules change over time, so check the current law and get advice on your own situation.
References
Wadren Pty Ltd v Algeri [2024] QSC 109 (Supreme Court of Queensland) — the Queensland decision on the s 70‑90 application: https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/qld/QSC/2024/109.html
Wadren Pty Ltd v AIG Australia Pty Ltd [2024] VSC 807 — the related Victorian preliminary‑discovery decision (useful for the contrast I draw between preliminary discovery and the s 70‑90 route): https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSC/2024/807.html ASIC’s information for creditors of insolvent companies (rights, including the right to request information) https://www.asic.gov.au/regulatory-resources/insolvency/insolvency-information-for-directors-employees-creditors-and-shareholders/
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