FEDERAL COURT OF AUSTRALIA
Crushing Services International Pty Ltd v Jubilee Energy Pty Ltd [2009] FCA 9
WAD 3 of 2009
SIOPIS J
12 JANUARY 2009
PERTH
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IN THE FEDERAL COURT OF AUSTRALIA |
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WESTERN AUSTRALIA DISTRICT REGISTRY |
WAD 3 of 2009 |
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CRUSHING SERVICES INTERNATIONAL PTY LTD ACN 069 303 377 Applicant
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AND: |
JUBILEE ENERGY PTY LTD ACN 119 717 485 First Respondent
ANDREW RYMER Second Respondent
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JUDGE: |
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DATE OF ORDER: |
12 JANUARY 2009 |
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WHERE MADE: |
PERTH |
THE COURT ORDERS THAT:
As to the first respondent:
INTRODUCTION
1. (a) The application for this order is made returnable immediately.
(b) The time for service of the application, supporting affidavits and originating process is abridged and service is to be effected by 16 January 2009.
2. Subject to the next paragraph, this order has effect up to and including Tuesday 20 January 2009 (the Return Date). On the Return Date at 10:15 am there will be a further hearing in respect of this order before Justice Siopis.
3. Anyone served with or notified of this order, including you, may apply to the Court at any time to vary or discharge this order or so much of it as affects the person served or notified.
4. In this order:
(a) “applicant”, if there is more than one applicant, includes all the applicants;
(b) “you”, where there is more than one of you, includes all of you and includes you if you are a corporation;
(c) “third party” means a person other than you and the applicant;
(d) “unencumbered value” means value free of mortgages, charges, liens or other encumbrances.
5. (a) If you are ordered to do something, you must do it by yourself or through directors, officers, partners, employees, agents or others acting on your behalf or on your instructions.
(b) If you are ordered not to do something, you must not do it yourself or through directors, officers, partners, employees, agents or others acting on your behalf or on your instructions or with your encouragement or in any other way.
FREEZING OF ASSETS
6. (a) You must not remove from Australia or in any way dispose of, deal with or diminish the value of any of your assets in Australia (Australian assets) up to the unencumbered value of AUD$1,481,911.20 (the Relevant Amount).
(b) If the unencumbered value of your Australian assets exceeds the Relevant Amount, you may remove any of those assets from Australia or dispose of or deal with them or diminish their value, so long as the total unencumbered value of your Australian assets still exceeds the Relevant Amount.
(c) If the unencumbered value of your Australian assets is less than the Relevant Amount, and you have assets outside Australia (ex‑Australian assets):
(i) You must not dispose of, deal with or diminish the value of any of your Australian assets and ex-Australian assets up to the unencumbered value of your Australian and ex‑Australian assets of the Relevant Amount; and
(ii) You may dispose of, deal with or diminish the value of any of your ex‑Australian assets, so long as the unencumbered value of your Australian assets and ex-Australian assets still exceeds the Relevant Amount.
7. For the purposes of this order,
(1) your assets include:
(a) all your assets, whether or not they are in your name and whether they are solely or co-owned;
(b) any asset which you have the power, directly or indirectly, to dispose of or deal with as if it were your own (you are to be regarded as having such power if a third party holds or controls the asset in accordance with your direct or indirect instructions).
(2) the value of your assets is the value of the interest you have individually in your assets.
PROVISION OF INFORMATION
8. Subject to paragraph 9, you must:
(a) at or before the further hearing on the Return Date (or within such further time as the Court may allow) to the best of your ability inform the applicant in writing of all your assets world wide, giving their value, location and details (including any mortgages, charges or other encumbrances to which they are subject) and the extent of your interest in the assets;
(b) within 5 working days after being served with this order, swear and serve on the applicant an affidavit setting out the above information.
9. (a) This paragraph (9) applies if you are not a corporation and you wish to object that compliance with paragraph 8 may tend to incriminate you or make you liable to a civil penalty;
(b) This paragraph (9) also applies if you are a corporation and all of the persons who are able to comply with paragraph 8 on your behalf and with whom you have been able to communicate, wish to object that compliance may tend to incriminate them respectively or make them respectively liable to a civil penalty;
(c) You must, at or before the further hearing on the return date (or within such further time as the Court may allow), notify the applicant in writing that you or all the persons referred to in (b) wish to take such objection and identify the extent of the objection;
(d) If you give such notice, you need comply with paragraph 8 only to the extent, if any, that it is possible to do so without disclosure of the material in respect of which the objection is taken; and
(e) If you give such notice, the Court may give directions as to the filing and service of affidavits setting out such matters as you or the persons referred to in (b) wish to place before the Court in support of the objection.
EXCEPTIONS TO THIS ORDER
10. This order does not prohibit you from:
(a) paying $30,000 on your reasonable legal expenses;
(b) dealing with or disposing of any of your assets in the ordinary and proper course of your business, including paying business expenses bona fide and properly incurred; and
(c) in relation to matters not falling within (a), (b) or (c), dealing with or disposing of any of your assets in discharging obligations bona fide and properly incurred under a contract entered into before this order was made, provided that before doing so you give the applicant, if possible, at least two working days written notice of the particulars of the obligation.
11. You and the applicant may agree in writing that the exceptions in the preceding paragraph are to be varied. In that case the applicant or you must as soon as practicable file with the Court and serve on the other a minute of a proposed consent order recording the variation signed by or on behalf of the applicant and you, and the Court may order that the exceptions are varied accordingly.
12. (a) This order will cease to have effect if you:
(i) pay the sum of $1,481,911.20 into Court; or
(ii) pay that sum into a joint bank account in the name of your solicitor and the solicitor for the applicant as agreed in writing between them; or
(iii) provide security in that sum by a method agreed in writing with the applicant to be held subject to the order of the Court.
(b) Any such payment and any such security will not provide the applicant with any priority over your other creditors in the event of your insolvency.
(c) If this order ceases to have effect pursuant (a), you must as soon as practicable file with the Court and serve on the applicant notice of that fact.
COSTS
13. The costs of this application are reserved to the judge hearing the application on the Return Date.
PERSONS OTHER THAN THE APPLICANT AND RESPONDENT
14. Set off by banks
This order does not prevent any bank from exercising any right of set off it has in respect of any facility which it gave you before it was notified of this order.
15. Bank withdrawals by the respondent
No bank need inquire as to the application or proposed application of any money withdrawn by you if the withdrawal appears to be permitted by this order.
16. Persons outside Australia
(a) Except as provided in subparagraph (b) below, the terms of this order do not affect or concern anyone outside Australia.
(b) The terms of this order will affect the following persons outside Australia:
(i) you and your directors, officers, employees and agents (except banks and financial institutions);
(ii) any person (including a bank or financial institution) who:
(A) is subject to the jurisdiction of this Court; and
(B) has been given written notice of this order, or has actual knowledge of the substance of the order and of its requirements; and
(C) is able to prevent or impede acts or omissions outside Australia which constitute or assist in a disobedience of the terms of this order; and
(iii) any other person (including a bank of financial institution), only to the extent that this order is declared enforceable by or is enforced by a court in a country or state that has jurisdiction over that person or over any of that person’s assets.
17 Assets located outside Australia
Nothing in this order shall, in respect of assets located outside Australia, prevent any third party from complying or acting in conformity with what it reasonably believes to be its bona fide and properly incurred legal obligations, whether contractual or pursuant to a court order or otherwise, under the law of the country or state in which those assets are situated or under the proper law of any contract between a third party and you, provided that in the case of any future order of a court of that country or state made on your or the third party’s application, reasonable written notice of the making of the application is given to the applicant.
SCHEDULE A
UNDERTAKINGS GIVEN TO THE COURT BY THE APPLICANT
(1) The applicant undertakes to submit to such order (if any) as the Court may consider to be just for the payment of compensation (to be assessed by the Court or as it may direct) to any person (whether or not a party) affected by the operation of the order.
(2) As soon as practicable, the applicant will file and serve upon the respondent copies of:
(a) this order;
(b) the application for this order for hearing on the return date;
(c) the following material in so far as it was relied on by the applicant at the hearing when the order was made:
(i) affidavits (or draft affidavits);
(ii) exhibits capable of being copied;
(iii) any written submission; and
(iv) any other document that was provided to the Court.
(d) a transcript, or, if none is available, a note, of any exclusively oral allegation of fact that was made and of any exclusively oral submission that was put, to the Court;
(e) the originating process, or, if none was filed, any draft originating process produced to the Court.
(3) As soon as practicable, the applicant will cause anyone notified of this order to be given a copy of it.
(4) The applicant will pay the reasonable costs of anyone other than the respondent which have been incurred as a result of this order, including the costs of finding out whether that person holds any of the respondent’s assets.
(5) If this order ceases to have effect the applicant will promptly take all reasonable steps to inform in writing anyone to who has been notified of this order, or who he has reasonable grounds for supposing may act upon this order, that it has ceased to have effect.
(6) The applicant will not, without leave of the Court, use any information obtained as a result of this order for the purpose of any civil or criminal proceedings, either in or outside Australia, other than this proceeding.
(7) The applicant will not, without leave of the Court, seek to enforce this order in any country outside Australia or seek in any country outside Australia an order of a similar nature or an order conferring a charge or other security against the respondent or the respondent’s assets.
SCHEDULE B
AFFIDAVITS RELIED ON
Name of Deponent Date affidavit made
(1) Mr Simon James Rushton 8 January 2009
(2) Mr Robert Johnson Nathaniel Woodhouse 8 January 2009
(3) Mr Stephen Leslie Wyatt 12 January 2009
As to the second respondent:
INTRODUCTION
1. (a) The application for this order is made returnable immediately.
(b) The time for service of the application, supporting affidavits and originating process is abridged and service is to be effected by 16 January 2009.
2. Subject to the next paragraph, this order has effect up to and including Tuesday 20 January 2009 (the Return Date). On the Return Date at 10:15 am there will be a further hearing in respect of this order before Justice Siopis.
3. Anyone served with or notified of this order, including you, may apply to the Court at any time to vary or discharge this order or so much of it as affects the person served or notified.
4. In this order:
(a) “applicant”, if there is more than one applicant, includes all the applicants;
(b) “you”, where there is more than one of you, includes all of you and includes you if you are a corporation;
(c) “third party” means a person other than you and the applicant;
(d) “unencumbered value” means value free of mortgages, charges, liens or other encumbrances.
5. (a) If you are ordered to do something, you must do it by yourself or through directors, officers, partners, employees, agents or others acting on your behalf or on your instructions.
(b) If you are ordered not to do something, you must not do it yourself or through directors, officers, partners, employees, agents or others acting on your behalf or on your instructions or with your encouragement or in any other way.
FREEZING OF ASSETS
6. (a) You must not remove from Australia or in any way dispose of, deal with or diminish the value of any of your assets in Australia (Australian assets) up to the unencumbered value of AUD$790,125.60 (the Relevant Amount).
(b) If the unencumbered value of your Australian assets exceeds the Relevant Amount, you may remove any of those assets from Australia or dispose of or deal with them or diminish their value, so long as the total unencumbered value of your Australian assets still exceeds the Relevant Amount.
(c) If the unencumbered value of your Australian assets is less than the Relevant Amount, and you have assets outside Australia (ex‑Australian assets):
(i) You must not dispose of, deal with or diminish the value of any of your Australian assets and ex‑Australian assets up to the unencumbered value of your Australian and ex-Australian assets of the Relevant Amount; and
(ii) You may dispose of, deal with or diminish the value of any of your ex‑Australian assets, so long as the unencumbered value of your Australian assets and ex-Australian assets still exceeds the Relevant Amount.
7. For the purposes of this order,
(1) your assets include:
(a) all your assets, whether or not they are in your name and whether they are solely or co-owned;
(b) any asset which you have the power, directly or indirectly, to dispose of or deal with as if it were your own (you are to be regarded as having such power if a third party holds or controls the asset in accordance with your direct or indirect instructions); and
(c) the following assets in particular:
(i) the property known as Title 17433083 which is Lot 22 Registered Plan 233913 in the County of Stanly in Queensland, or, if it has been sold, the net proceeds of the sale;
(ii) any money in your bank accounts, whether or not those accounts are in your name and whether they are a solely or co‑owned account.
(2) the value of your assets is the value of the interest you have individually in your assets.
PROVISION OF INFORMATION
8. Subject to paragraph 9, you must:
(a) at or before the further hearing on the Return Date (or within such further time as the Court may allow) to the best of your ability inform the applicant in writing of all your assets world wide, giving their value, location and details (including any mortgages, charges or other encumbrances to which they are subject) and the extent of your interest in the assets;
(b) within 7 working days after being served with this order, swear and serve on the applicant an affidavit setting out the above information.
9. (a) This paragraph (9) applies if you are not a corporation and you wish to object that compliance with paragraph 8 may tend to incriminate you or make you liable to a civil penalty;
(b) This paragraph (9) also applies if you are a corporation and all of the persons who are able to comply with paragraph 8 on your behalf and with whom you have been able to communicate, wish to object that compliance may tend to incriminate them respectively or make them respectively liable to a civil penalty;
(c) You must, at or before the further hearing on the return date (or within such further time as the Court may allow), notify the applicant in writing that you or all the persons referred to in (b) wish to take such objection and identify the extent of the objection;
(d) If you give such notice, you need comply with paragraph 8 only to the extent, if any, that it is possible to do so without disclosure of the material in respect of which the objection is taken; and
(e) If you give such notice, the Court may give directions as to the filing and service of affidavits setting out such matters as you or the persons referred to in (b) wish to place before the Court in support of the objection.
EXCEPTIONS TO THIS ORDER
10. This order does not prohibit you from:
(a) paying up to $1,500 a week on your ordinary living expenses;
(b) paying $30,000 on your reasonable legal expenses;
(c) dealing with or disposing of any of your assets in the ordinary and proper course of your business, including paying business expenses bona fide and properly incurred; and
(d) in relation to matters not falling within (a), (b) or (c), dealing with or disposing of any of your assets in discharging obligations bona fide and properly incurred under a contract entered into before this order was made, provided that before doing so you give the applicant, if possible, at least two working days written notice of the particulars of the obligation.
11. You and the applicant may agree in writing that the exceptions in the preceding paragraph are to be varied. In that case the applicant or you must as soon as practicable file with the Court and serve on the other a minute of a proposed consent order recording the variation signed by or on behalf of the applicant and you, and the Court may order that the exceptions are varied accordingly.
12. (a) This order will cease to have effect if you:
(i) pay the sum of AUD$790,125.60 into Court; or
(ii) pay that sum into a joint bank account in the name of your solicitor and the solicitor for the applicant as agreed in writing between them; or
(iii) provide security in that sum by a method agreed in writing with the applicant to be held subject to the order of the Court.
(b) Any such payment and any such security will not provide the applicant with any priority over your other creditors in the event of your insolvency.
(c) If this order ceases to have effect pursuant (a), you must as soon as practicable file with the Court and serve on the applicant notice of that fact.
COSTS
13. The costs of this application are reserved to the judge hearing the application on the Return Date.
PERSONS OTHER THAN THE APPLICANT AND RESPONDENT
14. Set off by banks
This order does not prevent any bank from exercising any right of set off it has in respect of any facility which it gave you before it was notified of this order.
15. Bank withdrawals by the respondent
No bank need inquire as to the application or proposed application of any money withdrawn by you if the withdrawal appears to be permitted by this order.
16. Persons outside Australia
(a) Except as provided in subparagraph (b) below, the terms of this order do not affect or concern anyone outside Australia.
(b) The terms of this order will affect the following persons outside Australia:
(i) you and your directors, officers, employees and agents (except banks and financial institutions);
(ii) any person (including a bank or financial institution) who:
(A) is subject to the jurisdiction of this Court; and
(B) has been given written notice of this order, or has actual knowledge of the substance of the order and of its requirements; and
(C) is able to prevent or impede acts or omissions outside Australia which constitute or assist in a disobedience of the terms of this order; and
(iii) any other person (including a bank of financial institution), only to the extent that this order is declared enforceable by or is enforced by a court in a country or state that has jurisdiction over that person or over any of that person’s assets.
17 Assets located outside Australia
Nothing in this order shall, in respect of assets located outside Australia, prevent any third party from complying or acting in conformity with what it reasonably believes to be its bona fide and properly incurred legal obligations, whether contractual or pursuant to a court order or otherwise, under the law of the country or state in which those assets are situated or under the proper law of any contract between a third party and you, provided that in the case of any future order of a court of that country or state made on your or the third party’s application, reasonable written notice of the making of the application is given to the applicant.
SCHEDULE A
UNDERTAKINGS GIVEN TO THE COURT BY THE APPLICANT
(1) The applicant undertakes to submit to such order (if any) as the Court may consider to be just for the payment of compensation (to be assessed by the Court or as it may direct) to any person (whether or not a party) affected by the operation of the order.
(2) As soon as practicable, the applicant will file and serve upon the respondent copies of:
(a) this order;
(b) the application for this order for hearing on the return date;
(c) the following material in so far as it was relied on by the applicant at the hearing when the order was made:
(i) affidavits (or draft affidavits);
(ii) exhibits capable of being copied;
(iii) any written submission; and
(iv) any other document that was provided to the Court.
(d) a transcript, or, if none is available, a note, of any exclusively oral allegation of fact that was made and of any exclusively oral submission that was put, to the Court;
(e) the originating process, or, if none was filed, any draft originating process produced to the Court.
(3) As soon as practicable, the applicant will cause anyone notified of this order to be given a copy of it.
(4) The applicant will pay the reasonable costs of anyone other than the respondent which have been incurred as a result of this order, including the costs of finding out whether that person holds any of the respondent’s assets.
(5) If this order ceases to have effect the applicant will promptly take all reasonable steps to inform in writing anyone to who has been notified of this order, or who he has reasonable grounds for supposing may act upon this order, that it has ceased to have effect.
(6) The applicant will not, without leave of the Court, use any information obtained as a result of this order for the purpose of any civil or criminal proceedings, either in or outside Australia, other than this proceeding.
(7) The applicant will not, without leave of the Court, seek to enforce this order in any country outside Australia or seek in any country outside Australia an order of a similar nature or an order conferring a charge or other security against the respondent or the respondent’s assets.
SCHEDULE B
AFFIDAVITS RELIED ON
Name of Deponent Date affidavit made
(1) Mr Simon James Rushton 8 January 2009
(2) Mr Robert Johnson Nathaniel Woodhouse 8 January 2009
(3) Mr Stephen Leslie Wyatt 12 January 2009
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.
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IN THE FEDERAL COURT OF AUSTRALIA |
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WESTERN AUSTRALIA DISTRICT REGISTRY |
WAD 3 of 2009 |
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BETWEEN: |
CRUSHING SERVICES INTERNATIONAL PTY LTD ACN 069 303 377 Applicant
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AND: |
JUBILEE ENERGY PTY LTD ACN 119 717 485 First Respondent
ANDREW RYMER Second Respondent
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JUDGE: |
SIOPIS J |
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DATE: |
12 JANUARY 2009 |
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PLACE: |
PERTH |
REASONS FOR JUDGMENT
2 The applicant’s claim against the first respondent is founded primarily on allegations of misleading or deceptive conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth). It is said that this conduct induced the applicant to enter into a contract with the first respondent for the manufacture and supply of four generators and to make payment of two instalments of the purchase price payable under the supply contract. It is also alleged that the applicant was induced to make a payment for a contract variation, to an account purportedly held in the name of a business division of the first respondent, and that it has transpired that the nominated business name was a deregistered business name, and that the monies actually went into the bank account of the second respondent.
3 The claim made against the second respondent, who is the Business Development Manager of the first respondent, is that he was knowingly involved in the misleading or deceptive conduct of the first respondent. Alternatively, it is alleged that the second respondent is liable in deceit.
4 The main issue which arises on the pleadings is whether the representations which were made as to the ability of the first respondent to deliver the four generators timeously, was conduct which was misleading or deceptive. The applicant alleges that the first respondent failed to meet the contractually agreed delivery date in September 2008. In this context, the representations allegedly made by the second respondent on 28 October 2008 as to the availability for delivery of the generators, is important in respect of the freezing orders against the second respondent. The circumstances are referred to in the affidavit of Mr Robert Woodhouse of the applicant sworn on 8 January 2009. Mr Woodhouse states:
[O]n or about 28 October 2008 during a telephone conversation Mr Rymer expressly told me that the generators were completed and available for delivery upon payment of the second milestone payment.
5 Mr Woodhouse goes on to depose that:
On the basis of what Mr Rymer told me I immediately attended to organise payment which I know from my own knowledge was made on or about 3 November 2008.
6 As it transpired, the generators were not ready for delivery. The evidence is that a representative of the applicant visited the premises of the first respondent in Queensland in December 2008 and found that the generators had not yet been assembled.
7 I am satisfied, on the evidence before me, that there is a good arguable case in respect of the applicant’s claim against the first respondent for misleading or deceptive conduct; and against the second respondent for being knowingly involved in the misleading or deceptive conduct on the part of the second respondent.
8 The next issue that I have to consider is whether there is a danger that if the orders are not made, that any judgment which might be obtained would be frustrated, either partially or wholly, by the disposal of assets by the respondents.
9 In that regard, I am confined, of course, to the evidence which is currently before me. That evidence suggests that there has been dishonesty on the part of the first respondent and/or the second respondent in the use, in September 2008, of documentation, purportedly authored by Mr Dieter Mayr and Mr Gerhard Kluser, employees of MTU, the German engine supplier, as a stratagem to placate the applicant in respect of the delay in the delivery of the generators. The evidence of Mr Stephen Wyatt is that he made inquiries of MTU which revealed that Mr Mayr had died more than two years ago, and that MTU’s representative could not locate anyone known as Mr Gerhard Kluser.
10 In addition, there is also the evidence which shows that the business name, which was referred to by the second respondent as a business division of the first respondent and nominated to receive the payment in respect of the contract variation, was a deregistered business name.
11 I am prepared to infer from this evidence of the business practices of the respondents, that there is a danger that they would seek to dispose of assets in order to render judgment against them either wholly, or partially, nugatory.
12 A further important factor which weighs in favour of granting these freezing orders is that there is evidence which suggests that the applicant was induced to pay monies for the purpose of purchasing the component parts of the generators which are currently held in Queensland by the first respondent, and that the monies were used for that purpose. It is arguable that that machinery may be held under a Quistclose trust for the benefit of the applicant. Alternatively, the applicant contends that the funds are held on trust.
13 As to the balance of convenience, the return day in this matter will be next week, and so the duration of the orders before an opposed hearing will be relatively short.
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I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis. |
Associate:
Dated: 13 January 2009
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Counsel for the Applicant |
Mr ML Bennett |
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Solicitor for the Applicant: |
Lavan Legal |
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Date of Hearing: |
12 January 2009 |
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Date of Judgment: |
12 January 2009 |
