FEDERAL COURT OF AUSTRALIA

Scottish Pacific Business Finance Pty Ltd v Qaqour, in the matter of Penny World Pty Ltd (receivers and managers appointed) [2022] FCA 725

ORDERS

THE COURT ORDERS THAT:

1.    On the undertaking of the plaintiff’s solicitor to pay the applicable filing fee, the plaintiff have leave to file the:

(a)    Originating Process dated 14 June 2022;

(b)    affidavit of Justin Nicholas Doczy dated 14 June 2022;

(c)    affidavit of Grahame Ward dated 14 June 2022; and

(d)    affidavit of Nicholas Anthony James Dale dated 14 June 2022.

2.    Prayers 1 to 6 of the Originating Process be returnable instanter.

3.    Pursuant to r 1.39 of the Federal Court Rules 2011 (Cth) (FCR), the time for service of the Originating Process and the supporting affidavits be abridged to 10.00 am on 15 June 2022, with service to be effected on the defendants by the following means:

(a)    as to the first defendant, by:

(i)    delivering a copy to Nicola Craven of Cockburn & Co Lawyers at Level 25, 88 Phillip Street, Sydney NSW 2000;

(ii)    sending a copy to Nicola Craven of Cockburn & Co Lawyers by email to [REDACTED];

(iii)    sending a copy by email to [REDACTED]; and

(iv)    sending the following text message to the mobile number [REDACTED] stating:

“Orders have been made against you by the Federal Court of Australia and have been sent by email to [REDACTED]. Please contact Nicholas Dale of Swaab on [REDACTED]”.

(b)    as to the second defendant, by:

(i)    delivering a copy to Nicola Craven of Cockburn & Co Lawyers at Level 25, 88 Phillip Street, Sydney NSW 2000;

(ii)    sending a copy to Nicola Craven of Cockburn & Co Lawyers by email to [REDACTED];

(iii)    sending a copy by email to [REDACTED]; and

(iv)    sending the following text message to the mobile number [REDACTED] stating:

“Orders have been made against Wizly Pty Ltd by the Federal Court of Australia and have been sent by email to [REDACTED]. Please contact Nicholas Dale of Swaab on [REDACTED]”.

(c)    as to the third defendant, by:

(i)    delivering a copy to [REDACTED], [REDACTED][REDACTED] NSW 2197;

(ii)    delivering a copy to [REDACTED][REDACTED] NSW 2170;

(iii)    delivering a copy to [REDACTED] [REDACTED][REDACTED] NSW 2000;

(iv)    delivering a copy to [REDACTED][REDACTED][REDACTED] NSW 2000;

(v)    delivering a copy to [REDACTED] [REDACTED] [REDACTED] NSW 2143;

(vi)    making a phone call to number [REDACTED] and stating the following to any person who answers the telephone:

“Orders have been made against Mark Maximos by the Federal Court of Australia. Please contact Nicholas Dale of Swaab on [REDACTED]”.

(vii)    making a phone call to number [REDACTED] and stating the following to any person who answers the telephone:

“Orders have been made against Mark Maximos by the Federal Court of Australia. Please contact Nicholas Dale of Swaab on [REDACTED]”.

(d)    as to the fourth defendant, by:

(i)    delivering a copy at [REDACTED] [REDACTED] NSW 2195;

(ii)    sending a copy to [REDACTED].

(e)    as to the fifth defendant, by:

(i)    delivering a copy to Penny World Pty Ltd (Receivers and Managers Appointed) C-/ Mackay Goodwin Level 2, 10 Bridge Sydney NSW 2000; Att: Grahame Ward; and

(ii)    sending a copy by email to [REDACTED].

4.    On the undertakings set out in Schedule A herein:

(a)    pursuant to s 23 of the Federal Court of Australia Act 1976 (Cth) (FCAA) and FCR 7.32 and 7.33, a freezing order be made against each of the first, second, third and fourth defendants in the form set out in Annexure A to these orders until 4.00 pm on 17 June 2022; and

(b)    pursuant to s 23 of the FCAA and FCR 7.33, a further information eliciting order be made against the first defendant in the form set out in Annexure B to these orders relating to assets disposed of or transferred by the fifth defendant.

5.    The relief sought in prayers 4 and 7 of the Originating Process be listed for further hearing before the Commercial and Corporations Duty Judge for New South Wales at 10.15 am on 17 June 2022.

6.    Leave be granted to the plaintiff to enter these orders forthwith.

7.    Liberty to the parties to apply on 24 hours’ notice to the Commercial and Corporations Duty Judge for New South Wales.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

ANNEXURE A – FREEZING ORDER

PENAL NOTICE

TO: SHADI QAQOUR, WIZLY PTY LTD ACN 168 729 182, MARK MAXIMOS AND OMAR JAMAL EDDINE

IF YOU  (BEING THE PERSON BOUND BY THIS ORDER):

(A)    REFUSE OR NEGLECT TO DO ANY ACT WITHIN THE TIME SPECIFIED IN THIS ORDER FOR THE DOING OF THE ACT; OR

(B)    DISOBEY THE ORDER BY DOING AN ACT WHICH THE ORDER REQUIRES YOU NOT TO DO,

YOU WILL BE LIABLE TO IMPRISONMENT, SEQUESTRATION OF PROPERTY OR OTHER PUNISHMENT.

ANY OTHER PERSON WHO KNOWS OF THIS ORDER AND DOES ANYTHING WHICH HELPS OR PERMITS YOU TO BREACH THE TERMS OF THIS ORDER MAY BE SIMILARLY PUNISHED.

TO: SHADI QAQOUR, WIZLY PTY LTD ACN 168 729 182, MARK MAXIMOS AND OMAR JAMAL EDDINE

This is a 'freezing order' made against you on 14 June 2022 by Justice Yates at a hearing without notice to you after the Court was given the undertakings set out in Schedule A to this order and after the Court read the affidavits listed in Schedule B to this order.

The Court orders:

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 6pm on 14 June 2022.

(2)     Subject to the next paragraph, this order has effect up to and including 4pm on 17 June 2022 (the Return Date). On the Return Date at 10.15am there will be a further hearing in respect of this order before Justice Yates.

(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$3,120,489.85 ('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:

(i)    all your assets, whether or not they are in your name and whether they are solely or co-owned; and

(ii)    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 1 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 to complying with paragraph 8 on the grounds that some or all of the information required to be disclosed may tend to prove that you:

(i)     have committed an offence against or arising under an Australian law or a law of a foreign country; or

(ii)    are 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 to your complying with paragraph 8 on the grounds that some or all of the information required to be disclosed may tend to prove that they respectively:

(i)    have committed an offence against or arising under an Australian law or a law of a foreign country; or

(ii)    are liable to a civil penalty.

(c)    You must:

(i)    disclose so much of the information required to be disclosed to which no objection is taken; and

(ii)    prepare an affidavit containing so much of the information required to be disclosed to which objection is taken, and deliver it to the Court in a sealed envelope; and

(iii)    file and serve on each other party a separate affidavit setting out the basis of the objection.

Exceptions to this order

(10)     This order does not prohibit you from:

(a)    paying up to $800 a week on your ordinary living expenses;

(b)    paying $5,000 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 plaintiff, 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 $3,120,489.85 into Court; or

(ii)    pay that sum into a joint bank account in the name of your lawyer and the lawyer 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 12(a) above, 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 Court 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.

ANNEXURE B – INFORMATION ELICITING ORDER

PENAL NOTICE – INFORMATION ELICITING ORDER

TO: SHADI QAQOUR

IF YOU  (BEING THE PERSON BOUND BY THIS ORDER):

(A)    REFUSE OR NEGLECT TO DO ANY ACT WITHIN THE TIME SPECIFIED IN THIS ORDER FOR THE DOING OF THE ACT; OR

(B)    DISOBEY THE ORDER BY DOING AN ACT WHICH THE ORDER REQUIRES YOU NOT TO DO,

YOU WILL BE LIABLE TO IMPRISONMENT, SEQUESTRATION OF PROPERTY OR OTHER PUNISHMENT.

ANY OTHER PERSON WHO KNOWS OF THIS ORDER AND DOES ANYTHING WHICH HELPS OR PERMITS YOU TO BREACH THE TERMS OF THIS ORDER MAY BE SIMILARLY PUNISHED.

TO: SHADI QAQOUR

This is an order made against you on 14 June 2022 by Justice Yates at a hearing without notice to you after the Court was given the undertakings set out in Schedule A to this order and after the Court read the affidavits listed in Schedule B to this order.

THE COURT ORDERS:

INTRODUCTION

(1)    (a) The application for this order is made returnable immediately.

(b) The time for service of the application and supporting affidavits is abridged and service is to be effected by 6pm on 14 June 2022 with service to be effected on you:

(i)    delivering a copy to Nicola Craven of Cockburn & Co Lawyers at Level 25, 88 Phillip Street, Sydney NSW 2000;

(ii)    sending a copy to Nicola Craven of Cockburn & Co Lawyers by email to [REDACTED];

(iii)    sending a copy by email to [REDACTED]; and

(iv)    sending the following text message to the mobile number [REDACTED] stating:

“Orders have been made against you by the Federal Court of Australia and have been sent by email to [REDACTED]. Please contact Nicholas Dale of Swaab on [REDACTED]”.

(2)    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.

(3)    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.

(4)    Subject to paragraph (5), you must:

(a)    at or before 4pm and 16 June 2022 (or within such further time as the Court may allow) to the best of your ability inform the plaintiff in writing of the following transfers of funds from bank account number [REDACTED] in the name of Penny World Pty Ltd held with the Commonwealth Bank of Australia, stating the recipient of the funds and the bank account details of that person or entity and the person who effected the transfers:

(b)    by 4pm and 16 June 2022, swear or affirm and serve on the plaintiff an affidavit setting out the above information.

(5)    (a) This paragraph (5) applies if you are not a corporation and you wish to object to complying with paragraph (4) on the grounds that some or all of the information required to be disclosed may tend to prove that you:

(i)    have committed an offence against or arising under an Australian law or a law of a foreign country;

(ii)    are liable to a civil penalty.

(b) This paragraph (5) also applies if you are a corporation and all of the persons who are able to comply with paragraph (4) on your behalf and with whom you have been able to communicate, wish to object to your complying with paragraph (4) on the grounds that some or all of the information required to be disclosed may tend to prove that they respectively:

(i)    have committed an offence against or arising under an Australian law or a law of a foreign country; or

(ii)    are liable to a civil penalty.

(c) You must:

(i)    disclose so much of the information required to be disclosed to which no objection is taken;

(ii)    prepare an affidavit containing so much of the information required to be disclosed to which objection is taken, and deliver it to the Court in a sealed envelope; and

(iii)    file and serve on each other party a separate affidavit setting out the basis of the objection.

Schedule A

Undertakings Given to the Court by the Plaintiff

(1) The plaintiff 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 plaintiff will file and serve upon the defendants 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 plaintiff at the hearing when the order was made:

(i)     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.

(3) As soon as practicable, the plaintiff will cause anyone notified of this order to be given a copy of it.

(4) The plaintiff will pay the reasonable costs of anyone other than the defendants which have been incurred as a result of this order, including the costs of finding out whether that person holds any of the defendant’s assets.

(5) If this order ceases to have effect the plaintiff 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 plaintiff 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 plaintiff 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 defendant or the defendant's assets.

Schedule B

Affidavits Relied On

1.    Affidavit of Justin Nicholas Doczy dated 14 June 2022;

2.    Affidavit of Grahame Ward dated 14 June 2022; and

3.    Affidavit of Nicholas Anthony James Dale dated 14 June 2022.

ORDERS

THE COURT ORDERS THAT:

Freezing orders against respondents

1.    The Interlocutory Process dated 16 June 2022 be returnable before the Commercial and Corporations Duty Judge for New South Wales at 10.15 am on 17 June 2022.

2.    Pursuant to r 1.39 of the Federal Court Rules 2011 (Cth) (FCR), the time for service of the Interlocutory Process and the supporting affidavits be abridged to 10.00 am on 20 June 2022, with service to be effected on the respective parties named below by the following means:

(a)    as to Constructions AU Pty Ltd ACN 652 441 104, the first respondent, by delivering a copy to [REDACTED] [REDACTED] NSW 2197.

(b)    as to AndConstruction Pty Ltd ACN 638 960 899, the second respondent, by delivering a copy to [REDACTED] [REDACTED] NSW 2195.

(c)    as to CCS 136 Castlereagh Pty Ltd ACN 157 791 869, the third respondent, by:

(i)    delivering a copy to [REDACTED] [REDACTED] Sydney NSW 2000;

(ii)    delivering a copy to [REDACTED] [REDACTED] NSW 2000; and

(iii)    sending a copy to [REDACTED].

3.    On the undertakings set out in Schedule A of Annexure A hereto, pursuant to s 23 of the Federal Court of Australia Act 1976 (Cth) (FCAA) and rr 7.34 and 7.33 FCR, a freezing order be made against each of the first, second and third respondents to the Interlocutory Process in the form set out in Annexure A to these orders until 11.59 pm on 24 June 2022.

4.    The relief in Order 3 of these orders be listed for further hearing before the Commercial and Corporations Duty Judge for New South Wales on 24 June 2022 at 2.15 pm.

Joinder of respondents

5.    Pursuant to r 9.05 FCR:

(a)    Constructions AU Pty Ltd ACN 652 441 104 be joined as the sixth defendant;

(b)    AndConstruction Pty Ltd ACN 638 960 899 be joined as the seventh defendant; and

(c)    CCS 136 Castlereagh Pty Ltd ACN 157 791 869 be joined as the eighth defendant.

6.    Leave be granted to the Plaintiff to file an Amended Originating Process by 4.00 pm on 22 June 2022 and to serve such Amended Originating Process on the defendants by the following means:

(a)    as to the first defendant, on the solicitor who has entered an appearance for the first defendant;

(b)    as to the second defendant, on the solicitor who has entered an appearance for the first defendant ;

(c)    as to the third defendant, in accordance with order 3(c) of the Orders made on 14 June 2022;

(d)    as to the fourth defendant, in accordance with order 3(d) of the Orders made on 14 June 2022;

(e)    as to the fifth defendant:

(i)    in accordance with Order 3(e) of the orders made on 14 June 2022; and

(ii)    on the solicitor who has purported to enter an appearance for the first defendant;

(f)    as to the prospective sixth defendant, in accordance with Order 2(a) of these orders;

(g)    as to the prospective seventh defendant, in accordance with Order 2(b) of these orders; and

(h)    as to the prospective eighth defendant, in accordance with Order 2(c) of these orders.

Further information eliciting order against the second defendant

7.    Pursuant to s 23 of the FCAA and r 7.33 FCR, an information eliciting order be made against the second defendant in the form set out in Annexure B hereto with respect to any transfers or withdrawal of funds since 29 March 2022 from a bank account in the name of the second defendant with BSB [REDACTED] and account number [REDACTED].

Continuation of freezing orders against first to fourth defendants

8.    The time and date in Order 4(a) of the orders made on 14 June 2022 be extended until 11.59 pm on 24 June 2022.

Time for compliance by the first defendant with paragraph 4 of Annexure B of the orders made on 14 June 2022

9.    The time for compliance with paragraph 4 of Annexure B of the orders made on 14 June 2022, be extended until 4.00 pm on 23 June 2022.

Appointment of a provisional liquidator to the fifth defendant

10.    On the undertaking set out in paragraph (1) of Schedule A of Annexure A hereto, pursuant to s 472(2) of the Corporations Act 2001 (Cth), Sule Arnautovic be appointed as provisional liquidator of the fifth defendant.

Further case management

11.    Leave be granted to the plaintiff to issue a subpoena to the Proper Officer, Commonwealth Bank of Australia, substantially in the form of the document appended to these orders and marked "Subpoena", and that:

(a)    the time for service of such subpoena be abridged to 5.00 pm on 17 June 2022;

(b)    such subpoena be returnable at 2.15 pm on 24 June 2022 before the Commercial and Corporations Duty Judge for New South Wales.

12.    The proceedings be adjourned to 24 June 2022 at 2.15 pm for a case management hearing before the Commercial and Corporations Duty Judge for New South Wales.

13.    Leave be granted to the plaintiff to enter these orders forthwith.

14.    Liberty to the parties be granted to apply on 24 hours’ notice to the Commercial and Corporations Duty Judge for New South Wales.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

ANNEXURE A – FREEZING ORDER

PENAL NOTICE

TO: CONSTRUCTIONS AU PTY LTD ACN 652 441 104, ANDCONSTRUCTION PTY LTD ACN 638 960 899 AND CCS 136 CASTLEREAGH PTY LTD ACN 157 791 869

IF YOU (BEING THE PERSON BOUND BY THIS ORDER):

(A)    REFUSE OR NEGLECT TO DO ANY ACT WITHIN THE TIME SPECIFIED IN THIS ORDER FOR THE DOING OF THE ACT; OR

(B)    DISOBEY THE ORDER BY DOING AN ACT WHICH THE ORDER REQUIRES YOU NOT TO DO,

YOU WILL BE LIABLE TO IMPRISONMENT, SEQUESTRATION OF PROPERTY OR OTHER PUNISHMENT.

ANY OTHER PERSON WHO KNOWS OF THIS ORDER AND DOES ANYTHING WHICH HELPS OR PERMITS YOU TO BREACH THE TERMS OF THIS ORDER MAY BE SIMILARLY PUNISHED.

TO: CONSTRUCTIONS AU PTY LTD ACN 652 441 104, ANDCONSTRUCTION PTY LTD ACN 638 960 899 AND CCS 136 CASTLEREAGH PTY LTD ACN 157 791 869

This is a 'freezing order' made against you on 17 June 2022 by Justice Yates at a hearing without notice to you after the Court was given the undertakings set out in Schedule A to this order and after the Court read the affidavits listed in Schedule B to this order.

The Court orders:

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 10.00 am on 20 June 2022.

(2)     Subject to the next paragraph, this order has effect up to and including 24 June 2022 (the Return Date). On the Return Date at 2.15 pm there will be a further hearing in respect of this order before the Commercial and Corporations Duty Judge.

(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$3,120,489.85 ('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:

(i)    all your assets, whether or not they are in your name and whether they are solely or co-owned; and

(ii)    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 1 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 to complying with paragraph 8 on the grounds that some or all of the information required to be disclosed may tend to prove that you:

(i)     have committed an offence against or arising under an Australian law or a law of a foreign country; or

(ii)    are 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 to your complying with paragraph 8 on the grounds that some or all of the information required to be disclosed may tend to prove that they respectively:

(i)    have committed an offence against or arising under an Australian law or a law of a foreign country; or

(ii)    are liable to a civil penalty.

(c)    You must:

(i)    disclose so much of the information required to be disclosed to which no objection is taken; and

(ii)    prepare an affidavit containing so much of the information required to be disclosed to which objection is taken, and deliver it to the Court in a sealed envelope; and

(iii)    file and serve on each other party a separate affidavit setting out the basis of the objection.

Exceptions to this order

(10)     This order does not prohibit you from:

(a)    paying up to $800 a week on your ordinary living expenses;

(b)    paying $5,000 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 plaintiff, 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 $3,120,489.85 into Court; or

(ii)    pay that sum into a joint bank account in the name of your lawyer and the lawyer 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 12(a) above, 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 Court 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.

ANNEXURE B – INFORMATION ELICITING ORDER

PENAL NOTICE – INFORMATION ELICITING ORDER

TO: THE PROPER OFFICER, WIZLY PTY LTD A CN 168 729 182

IF YOU  (BEING THE PERSON BOUND BY THIS ORDER):

(A)    REFUSE OR NEGLECT TO DO ANY ACT WITHIN THE TIME SPECIFIED IN THIS ORDER FOR THE DOING OF THE ACT; OR

(B)    DISOBEY THE ORDER BY DOING AN ACT WHICH THE ORDER REQUIRES YOU NOT TO DO,

YOU WILL BE LIABLE TO IMPRISONMENT, SEQUESTRATION OF PROPERTY OR OTHER PUNISHMENT.

ANY OTHER PERSON WHO KNOWS OF THIS ORDER AND DOES ANYTHING WHICH HELPS OR PERMITS YOU TO BREACH THE TERMS OF THIS ORDER MAY BE SIMILARLY PUNISHED.

TO: SHADI QAQOUR, BEING THE PROPER OFFICER, WIZLY PTY LTD ACN 168 729 182

This is an order made on 17 June 2022 by Justice Yates at a hearing after the Court was given the undertakings set out in Schedule A to this order and after the Court read the affidavits listed in Schedule B to this order.

THE COURT ORDERS:

INTRODUCTION

(6)    (a)    The application for this order is made returnable immediately.

(b)    The time for service of the application and supporting affidavits is abridged and service is to be effected on you by:

(v)    sending a copy to Nicola Craven of Cockburn & Co Lawyers at Level 10, 131 York Street, Sydney NSW 2000;

(vi)    sending a copy to Nicola Craven of Cockburn & Co Lawyers by email to [REDACTED];

(7)    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.

(8)    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.

(9)    Subject to paragraph (5), you must:

(c)    at or before 4.00 pm and 23 June 2022 (or within such further time as the Court may allow) to the best of your ability inform the plaintiff in writing of any withdrawal or transfers of funds from bank account number [REDACTED] in the name of Wizly Pty Ltd held with the Commonwealth Bank of Australia in the period from 29 March 2022 to 16 June 2022, stating the recipient of the funds, account name, BSB number and the account name of the person or entity who was the recipient of the funds and the person who effected the transfers.

(d)    by 4.00 pm on 23 June 2022, swear or affirm and serve on the plaintiff an affidavit setting out the above information.

(10)    (a)    This paragraph (5) applies if you are not a corporation and you wish to object to complying with paragraph (4) on the grounds that some or all of the information required to be disclosed may tend to prove that you:

(iii)    have committed an offence against or arising under an Australian law or a law of a foreign country;

(iv)    are liable to a civil penalty.

(b)    This paragraph (5) also applies if you are a corporation and all of the persons who are able to comply with paragraph (4) on your behalf and with whom you have been able to communicate, wish to object to your complying with paragraph (4) on the grounds that some or all of the information required to be disclosed may tend to prove that they respectively:

(iii)    have committed an offence against or arising under an Australian law or a law of a foreign country; or

(iv)    are liable to a civil penalty.

(c)    You must:

(iv)    disclose so much of the information required to be disclosed to which no objection is taken;

(v)    prepare an affidavit containing so much of the information required to be disclosed to which objection is taken, and deliver it to the Court in a sealed envelope; and

(vi)    file and serve on each other party a separate affidavit setting out the basis of the objection.

Schedule A to the orders

Undertakings Given to the Court by the Plaintiff

(1)     The plaintiff 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 plaintiff 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.

(3)    As soon as practicable, the plaintiff will cause anyone notified of this order to be given a copy of it.

(4)    The plaintiff will pay the reasonable costs of anyone other than the defendants which have been incurred as a result of this order, including the costs of finding out whether that person holds any of the defendant’s assets.

(5)    If this order ceases to have effect the plaintiff 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 plaintiff 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 plaintiff 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 to the orders

Affidavits Relied on

1.    the affidavit of Justin Nicholas Doczy dated 14 June 2022.

2.    the affidavit of Grahame Ward dated 14 June 2022.

3.    the affidavit of Nicholas Anthony James Dale dated 14 June 2022.

4.    the affidavit of Grahame Ward dated 17 June 2022.

5.    the affidavit of Nicholas Anthony James Dale dated 17 June 2022.

Form 43B

Rule 24.13(1)(b)

Subpoena to produce documents

No.    NSD 444 of 2022

Federal Court of Australia

District Registry: New South Wales

IN THE MATTER PENNY WORLD PTY LTD ACN 123 180 503

Scottish Pacific Business Finance Pty Ltd

ACN 008 636 388

Applicant

Shadi Qaqour

others named in the Schedule

Respondents

To:    The Proper Officer, Commonwealth Bank of Australia A CN 123 123 124

  Level 1, 11 Harbour Street, Sydney NSW 2000

        OPCComplianceSyd@cba.com.au

You are ordered to produce this subpoena or a copy of it and the documents or things specified in the Schedule of documents. See next page for details.

Failure to comply with this subpoena without lawful excuse is a contempt of court and may result in your arrest.

Please read Notes 1 to 13 at the end of this subpoena.

The last date for service of this subpoena is 17 June 2022 at 5 pm. (See Note 1)

Date:      

Issued at the request of Scottish Pacific Business Finance Pty Ltd ACN 008 636 388, whose address for service is:

Swaab

Level 4, 20 Hunter Street

SYDNEY NSW 2000

Ref: NAD/KVM223367

Email: [REDACTED]

Details of subpoena

You must comply with this subpoena:

(a)    by attending to produce this subpoena or a copy of it and the documents or things specified in the Schedule of documents below at the date, time and place specified for attendance and production; or

(b)    by delivering or sending this subpoena or a copy of it and the documents or things specified in the Schedule of documents below to a Registrar at the address below, or if there is more than one address below, at any one of those addresses, so that they are received not less than 2 clear business days before the date specified for attendance and production. (See Notes 5–9)

Date, time and place at which you must attend to produce the subpoena or a copy of it and documents or things, unless you receive a notice of a later date or time from the issuing party, in which case the later date or time is substituted:

Date:     June 2022

Time:    10.15 am

Place:    Federal Court of Australia, Law Courts Building, Queens Square Sydney NSW 2000.

Address, or any address, to which the subpoena (or copy) and documents or things may be delivered or posted:

The Registrar

Federal Court of Australia

New South Wales District Registry

Level 17, Federal Court of Australia

Law Courts Building

Queens Square Sydney NSW 2000

Schedule of documents

The documents and things you must produce are as follows:

1.    All documents (including bank account statements, transaction reports and other records) recording or evidencing any bank accounts held by or in the name of Wizly Pty Ltd with Commonwealth Bank of Australia, in the period from 1 January 2022 to date.

2.    All documents (including bank account statements, transaction reports and other records) recording or evidencing the identity of any signatory to any bank accounts held by or in the name of Wizly Pty Ltd with Commonwealth Bank of Australia, in the period from 1 January 2022 to date.

3.    All documents recording or evidencing the withdrawal of funds or transfer of funds from the bank account held by or in the name of Wizly Pty Ltd with Commonwealth Bank of Australia with BSB [REDACTED] and account number [REDACTED] (Wizly Bank Account), in the period from 1 March 2022 to date.

4.    All documents recording or evidencing the destination account (including applicable account name, BSB or other financial institution identifier and account number) of any funds withdrawn or transferred from the Wizly Bank Account, in the period from 1 March 2022 to date

Notes

Last day for service

1.    You need not comply with the subpoena unless it is served on you on or before the date specified in the subpoena as the last date for service of the subpoena.

Informal service

2.    Even if this subpoena has not been served personally on you, you must, nevertheless, comply with its requirements, if you have, by the last date for service of the subpoena, actual knowledge of the subpoena and of its requirements.

Addressee a corporation

3.    If the subpoena is addressed to a corporation, the corporation must comply with the subpoena by its appropriate or proper officer.

Conduct money

4.    You need not comply with the subpoena in so far as it requires you to attend to give evidence unless conduct money sufficient to meet your reasonable expenses of attending as required by the subpoena is handed or tendered to you a reasonable time before the date your attendance is required.

Production of subpoena or copy of it and documents or things by delivery or post

5.    If this subpoena requires production of the subpoena (or a copy of it) and a document or thing, instead of attending to produce the subpoena (or a copy of it) and the document or thing, you may comply with the subpoena by delivering or sending the subpoena (or a copy of it) and the document or thing to a Registrar:

(a)    at the address specified in the subpoena for the purpose; or

(b)    if more than one address is specified - at any of those addresses;

so that they are received not less than 2 clear business days before the date specified in the subpoena for attendance and production, or if you receive notice of a later date from the issuing party, before the later date or time.

6.    If you object to a document or thing produced in response to this subpoena being inspected by a party to the proceeding or any other person, you must, at the time of production, notify a Registrar in writing of your objection and of the grounds of your objection.

7.    Unless the Court otherwise orders, if you do not object to a document or thing produced by you in response to the subpoena being inspected by any party to the proceeding, a Registrar may permit the parties to the proceeding to inspect the document or thing.

Production of a number of documents or things

8.    If you produce more than one document or thing, you must, if requested by a Registrar, produce a list of the documents or things produced.

Production of copy instead of original

9.    You may, with the consent of the issuing party, produce a copy, instead of the original, of any document that the subpoena requires you to produce.

9A.    The copy of a document may be:

(a)    a photocopy; or

(b)    in an electronic form in any of the following electronic formats:

.doc and .docx – Microsoft Word documents

.pdf – Adobe Acrobat documents

.xls and .xlsx – Microsoft Excel spreadsheets

.jpg – image files

.rtf – rich text format

.gif – graphics interchange format

.tif – tagged image format

Applications in relation to subpoena

10.    You have the right to apply to the Court:

(a)    for an order setting aside the subpoena (or a part of it) or for relief in respect of the subpoena; and

(b)    for an order with respect to your claim for privilege, public interest immunity or confidentiality in relation to any document or thing the subject of the subpoena.

Loss or expense of compliance

11.    If you are not a party to the proceeding, you may apply to the Court for an order that the issuing party pay an amount (in addition to conduct money and any witness’s expenses) in respect of the loss or expense, including legal costs, reasonably incurred in complying with the subpoena.

Contempt of court - arrest

12.    Failure to comply with a subpoena without lawful excuse is a contempt of court and may be dealt with accordingly.

13.    Note 12 is without prejudice to any power of the Court under any rules of the Court (including any rules of the Court providing for the arrest of an addressee who defaults in attendance in accordance with a subpoena) or otherwise, to enforce compliance with a subpoena.

REASONS FOR JUDGMENT

YATES J:

INTRODUCTION

1    On 14 June 2022, on the application of the plaintiff, Scottish Pacific Business Finance Pty Ltd, I made the following interlocutory orders, ex parte, as the presiding Commercial and Corporations Duty Judge in New South Wales (CCDJ).

2    First, I made freezing orders against the first, second, third, and fourth defendants: Order 4(a). These orders were expressed to remain in effect until 4.00 pm on 17 June 2022.

3    Secondly, I made an order that the first defendant make and serve on the plaintiff an affidavit detailing the transfer of certain funds from a bank account maintained by the fifth defendant with the Commonwealth Bank of Australia (CBA): Order 4(b).

4    Thirdly, I abridged the time for service of the originating process and the three affidavits that were relied on for making the freezing orders: Order 3.

5    Fourthly, I made an order that the relief sought in prayers 4 and 7 of the originating process be listed for further hearing at 10.15 am on 17 June 2022: Order 5.

6    Prayer 4 of the originating process concerned the freezing orders. The effect of Order 5, in that regard, was that the matter would come before the Court on 17 June 2022 for the continuation of the freezing orders for a further limited time or until further order.

7    Prayer 7 of the originating process sought the appointment of a provisional liquidator to the fifth defendant pursuant to s 472(2) of the Corporations Act 2001 (Cth) (the Corporations Act).

8    When the matter came before me on 17 June 2022, the first, second, and fifth defendants appeared by counsel. The third and fourth defendants did not appear. On that occasion I made the following orders.

9    First, I extended the freezing orders made on 14 June 2022 until 11.59 pm on 24 June 2022. The first and second defendants did not oppose the extension.

10    Secondly, on the application of the first defendant, I extended the time for making and serving the affidavit referred to at [3] above, to 4.00 pm on 23 June 2022.

11    Thirdly, I appointed a provisional liquidator to the fifth defendant. The fifth defendant sought an adjournment of that application. I was not persuaded that an adjournment was warranted or should be granted in the circumstances.

12    Fourthly, I made freezing orders against three additional companies and joined them as parties to the proceeding. These freezing orders were expressed to remain in effect until 11.59 pm on 24 June 2022.

13    Fifthly, I granted leave to the plaintiff to file and serve an amended originating process.

14    Sixthly, I granted leave for a subpoena to be issued to the CBA returnable at 2.15 pm on 24 June 2022 before the CCDJ. I abridged the time for service of the subpoena to 5.00 pm on 17 June 2022.

15    Seventhly, I adjourned the proceeding for case management before the CCDJ at 2.15 pm on 24 June 2022. I also made an order listing the matter for further hearing at that time in relation to the freezing orders I had made against the additional defendants. Although no express order was made concerning any further hearing in relation to the freezing orders I had made on 14 June 2022, the clear understanding was that, absent consent by the first, second, third, and fourth defendants to the further continuation of those orders, the plaintiff would make an application for continuation at that hearing.

16    These are my reasons for making the orders on 14 and 17 June 2022.

BACKGROUND

17    The plaintiff’s primary business is the provision of debtor finance to borrowers (whom it calls clients). In providing this finance, the plaintiff requires its clients to: assign to it particular debts which are due and payable to the client by the client’s own debtors (whom the plaintiff calls customers); grant security to the plaintiff; and procure personal guarantees to be given by the directors of the client and, sometimes, associated entities. The plaintiff then advances to the client amounts which are subject to facility limits. The plaintiff seeks payment directly from the customers based on the value of the debts that have been assigned (as shown on applicable invoices). Payment is made by the customers into a bank account which the plaintiff controls.

18    The plaintiff’s ability to recover amounts that the client has invoiced to its customers is a key aspect of the plaintiff’s debtor finance agreement with the client. In this connection, the plaintiff’s usual practice is to obtain and rely on warranties given by the client about the recoverability of the amounts that the client has invoiced to the relevant customers; to periodically check that the invoices are due and payable following the client’s supply of goods or services to the customers; and to rely on information obtained as a result of the checking process, to determine whether to make further funding available to the client.

19    On 11 December 2019, the plaintiff entered into a debtor finance facility agreement with the fifth defendant, Penny World Pty Ltd. The facility was guaranteed by three guarantors: the first defendant, Shadi Qaqour; the second defendant, Wizly Pty Ltd; and Penny Panel Machine Pty Ltd.

20    The first defendant is the sole director, secretary, and shareholder of the fifth defendant and the second defendant. He was also the sole director and shareholder of Penny Panel Machine Pty Ltd, but that company has now been deregistered. Previously, the third defendant, Mark Maximos (who is said to be the first defendant’s business partner and best friend), and the first defendant’s ex-wife, Nisrin Jebril, were directors of Penny Panel Machine Pty Ltd.

21    The fifth defendant’s debtor finance facility with the plaintiff is in default. The fifth defendant owes the plaintiff $3,120,489.85. The plaintiff advanced this amount to the fifth defendant based on invoices that now appear to have been fabricated.

22    The sums advanced by the plaintiff were deposited by it in a bank account maintained by the fifth defendant with the CBA. These funds were then transferred, apparently by the first defendant, from that account into an account maintained by the second defendant, also with the CBA. I say “apparently by the first defendant” because the first defendant is the only signatory for the fifth defendant’s CBA account.

23    The fifth defendant’s CBA account now has a nil balance. At the present time, it is not known whether, and if so what, funds transferred from the fifth defendant’s CBA account, and sourced from the advances made by the plaintiff, remain in the second defendant’s CBA account.

24    At the time it entered into the debtor finance facility, the fifth defendant represented that its business was “wholesale building materials”. The facility limit was, originally, $800,000. The facility limit varied from time to time. On 21 June 2021, the facility limit was increased to $5,000,000.

25    Under the terms and conditions of the facility, the fifth defendant warranted that:

(a)    the details given to the plaintiff of the account, the related rights, the customer, the invoice, the agreement, and the goods or services, are true and correct;

(b)    any copy invoice given to the plaintiff is exactly the same as the invoice given to the customer or, if the invoice is a recipient created tax invoice, is exactly the same as the invoice given by the customer;

(c)    the fifth defendant has performed all obligations required for the enforcement of the account;

(d)    the account is an existing, legal, valid, binding, undisputed, and enforceable payment obligation for its net value as evidenced by an invoice, is payable in full by the customer by no later than the recourse date, and is capable of being transferred by the fifth defendant to the plaintiff; and

(e)    the fifth defendant will immediately give the plaintiff any information that it obtains in relation to the validity of an account, the creditworthiness of the fifth defendant’s customer, any dispute or possible dispute about the account, the related rights, the agreement, or the goods and services, and anything else that might affect the collection of the account.

26    The plaintiff has two types of funding limits. The first is a limit on the total amount which the client will be permitted to owe the plaintiff at any given time. The second is a limit on the amount which the plaintiff will advance having regard to the client’s debtor concentration.

27    On 3 May 2022, the fifth defendant sought an increase in respect of the second limit for some of its customers. When the plaintiff reviewed this request, it noted some anomalies in respect of some invoices which the fifth defendant had presented. For example, there were no references in the invoices and delivery documents to addresses for construction sites. Some customers appeared to be retail and grocery convenience stores, not customers involved in the building or construction industry in which the fifth defendant said it was engaged. There were other matters relating to the customers which raised the plaintiff’s concerns. As a result, the plaintiff decided to make further enquiries.

28    In the course of undertaking these enquiries, the plaintiff discovered that a large number of the fifth defendant’s customers had websites that were registered by the third defendant or by the fourth defendant, Omar Eddine. Further, the plaintiff noted that there appeared to be associations between the guarantors under the facility and some of the fifth defendant’s supposed customers. When the plaintiff attempted to contact customers by telephone, it was met with automated messages, or the telephone line was disconnected.

29    The plaintiff investigated the bank account it maintained with Australia and New Zealand Banking Group Ltd (ANZ) into which the fifth defendant’s customers were required to make payments. When it traced the source of funds represented as having been deposited into the account by some of the fifth defendant’s customers, the plaintiff discovered that, on 11 out of 19 occasions, the deposit had been made by Constructions AU Pty Ltd, now the sixth defendant. The third defendant is the sole director, secretary, and shareholder of the six defendant. He was the signatory for the sixth defendant’s bank account with the Bank of Queensland. On five occasions, the deposit had been made by AndConstruction Pty Ltd, now the seventh defendant. The fourth defendant is the sole director, secretary, and shareholder of the seventh defendant. He was the signatory for the seventh defendant’s bank account with the Bank of Queensland.

30    The fourth defendant is also the sole director, secretary, and shareholder, of CCS 136 Castlereagh Pty Ltd, now the eighth defendant. The eighth defendant was listed as one of the fifth defendant’s customers. It conducts a convenience store in Sydney’s Central Business District. It does not appear to have any business connection with the building and construction industry. The evidence indicates that it did not receive the invoice that the fifth defendant had presented to the plaintiff as one of the invoices that supported the plaintiff’s financing.

31    On 18 May 2022, the first defendant had a meeting with the plaintiff’s General Manager for NSW/ACT, Mr Doczy. The meeting was held at the first defendant’s request in the foyer of the building in which the plaintiff’s office is located. The meeting was also attended by other employees of the plaintiff. In an affidavit made 14 June 2022, Mr Doczy deposed to the following conversation:

DOCZY:    Thanks for meeting, it would have been better to meet at your premises.

QAQOUR:    I’m too busy.

DOCZY:    We could also have met up in our office.

QAQOUR:    No, I know how you guys operate – I’m busy and don't have long.

DOCZY:    Ok - as you know after attempting to verify and approve your new invoicing - it has not met our approval requirements and as such has been disapproved. We also re-conducted this process on all other active invoices and the result was the same. This has resulted in your account being overdrawn by more than three million dollars and this amount is due and payable to Scotpac - when can you repay that?

QAQOUR:    I need you to give me 60 days to refinance your facility—but I need you to fund my invoices in the meantime.

DOCZY:    We cannot fund invoices that don't meet approval. What additional security can you offer us to be able to agree to a period to secure refinance?

QAQOUR:    I don't have any assets.

DOCZY:    What about the other ledger you have - the invoices you don't give to Scotpac?

QAQOUR:    Oh, they’re all the same - to debtors that are developers - they just pay me when they get paid.

DOCZY:    You are obliged to send all invoicing to Scotpac.

QAQOUR:    Look, you have to give me time to refinance your facility otherwise we will find ourselves in a very dark place.

DOCZY:    Is that a threat?

QAQOUR:    No, I mean a dark place financially.

JURJEVIC:    Are any of the invoices collectable?

QAQOUR:    You already know the answer to that.

DOCZY:    We will be issuing you with a breach letter and demand.

QAQOUR:    No, you can't do that as it might affect my refinance - you can’t discuss this with other financiers either.

DOCZY:    Have you got a current offer?

QAQOUR:    From a long time ago.

    [As Qaqour said that, I saw him make a scrolling motion on his mobile telephone, and the conversation continued].

DOCZY:    Who have you been speaking to?

QAQOUR:    Matthew Erwin and others.” [I understood the reference to Matthew Erwin to be to another invoice financier, of Cashman Consulting].

DOCZY:    Who are the others?

QAQOUR:    I can't remember. I can’t find the emails. Do not send the breach and demand

DOCZY:    It is required—it does not show on public record but it will be sent and you will need to respond.

VEERANI:    Can you please update us on the progress of refinance facility with debtor finance providers?

QAQOUR:    Yes, I will let you know.

32    Mr Doczy heard nothing further from the first defendant.

33    On 19 May 2022, the plaintiff issued notices of default under the debtor financing facility to the fifth defendant, and to the first defendant and the second defendant as guarantors.

34    On 23 May 2022, the plaintiff appointed receivers and managers (Grahame Ward and Domenic Calabretta of Mackay Goodwin) (the receivers) to the fifth defendant.

35    The receivers’ investigations have uncovered the following facts.

36    The fifth defendant’s registered office is given as Unit 24, 809 Pacific Highway, Chatswood. When Mr Ward attended the address on 24 May 2022 (a commercial high-rise), he was informed by the female occupant of the premises that: she conducted a business called Wealthpool; she had occupied the premises for several years; and that she had never heard of Penny World.

37    The invoices issued by the fifth defendant record its address as Suite 903, Level 9, 10 Help Street, Chatswood. When Mr Ward attended the address on 24 May 2022 (also a commercial high-rise), he observed that Suite 903 had signage which showed the occupant as WHG Oceania Pty Ltd. The premises were unattended. Mr Ward saw nothing that would suggest that the premises had anything to do with the fifth defendant.

38    A property search conducted against the second defendant revealed that it is the tenant of premises at 3/7 Exell Street, Banksmeadow. This is a large industrial unit. When Mr Ward attended the premises on 24 May 2022 he observed a sign recording the name Penny World or Penny Panel (Mr Ward could not recall the exact name) on the front entrance window. The premises had an upstairs office space with a sign showing the name Penny World. The premises contained large machinery primarily used for packaging and manufacturing (such as for boxing and labelling), but not building materials. Mr Ward observed items associated with the packaging and sale of tobacco-related products. He did not observe any activity consistent with the premises being used for the supply of building or construction materials. Amongst the items he found at the premises was a cheque book for the account name Opal International Pty Ltd. The fifth defendant represented this company as one of its customers.

39    The receivers’ investigations revealed that many of the premises of the fifth defendant’s customers are, in fact, convenience stores. Some of the premises had closed. A number of the premises were not connected with the customer said to have been operating from the premises. The occupants of the premises that were visited had never heard of Penny World and had not received the invoices from the fifth defendant, on the faith of which the plaintiff had made the advances.

40    The fifth defendant’s bank statements, in relation to its CBA account, for the period 25 March 2022 to 31 May 2022, show large deposits by the plaintiff in that period (29 March; 1, 6, 12, 14, 20, 26, and 28 April; and 3, 4, 9, and 13 May) in respect of the advances it had made, in most cases followed by what appears to have been the almost immediate withdrawals of funds in round figures corresponding to the deposited amounts. None of the withdrawals have a clear and obvious relationship with the fifth defendant’s represented business.

41    Overwhelmingly, the withdrawals appear to have been for personal expenditure (apparently, the first defendant’s personal expenditure), including overseas travel. In this latter regard, the bank statements show what is obviously the purchase of an airline ticket with Emirates, international ATM withdrawal fees, international transaction fees, in-flight service fees, hotel accommodation in Jordan, and expenditure in Dubai, to name just a few entries. The entries include a transfer to RTGS Constructions, which is meant to be one of the fifth defendant’s customers. The entries also include a transfer to “Omar”. This appears to be a reference to the fourth defendant.

42    The receivers’ investigations revealed that the third defendant is, or was, a director of many of the entities represented as being the fifth defendant’s customers. As I have noted, the fourth defendant is the sole director of the eighth defendant (one of the represented customers). He replaced the third defendant in that role.

THE FREEZING ORDERS

43    The originating process seeks relief against the first, second, third, and fourth defendants under ss 236, 237, and 243 of the Australian Consumer Law (Sch 2 to the Competition and Consumer Act 2010 (Cth)) (ACL) based on the alleged contravention of s 18 thereof. The evidence summarised above demonstrates, at the very least, a prima facie case for that relief. It was on that basis that I made the freezing orders on 14 June 2022. I was satisfied that, in light of the above facts, and what seems to have been fraudulent conduct perpetrated on the plaintiff, there was a clear and present danger that, without such orders, any prospective judgment sought against those defendants would be wholly or partly unsatisfied.

44    The additional evidence before me on 17 June 2022, established that the round sum withdrawals from the fifth defendant’s CBA bank account were transferred to the second defendant’s CBA bank account. As I have said, at the present time it is not known whether, and if so what, funds sourced from the advances made by the plaintiff remain in the second defendant’s CBA account.

45    At that time, I was also satisfied that the evidence demonstrated a prima facie case for relief under the ACL against the sixth, seventh, and eighth defendants who appear to have been involved in the fifth defendant’s prima facie contraventions of s 18. The evidence also demonstrated a prima facie case that the eighth defendant had engaged in misleading or deceptive conduct by representing to the plaintiff that the fifth defendant’s invoice raised against it was genuine, when other evidence indicates that this was not the case. I was satisfied that, given their involvement in the apparently fraudulent conduct, there was a clear and present danger that, without such orders, any prospective judgment against the sixth, seventh, and eighth defendants would be wholly or partly unsatisfied.

APPOINTMENT OF PROVISIONAL LIQUIDATOR

46    The additional evidence before me on 17 June 2022, showed that the fifth defendant did not own any real property and did not have an income stream of any kind. Mr Ward’s evidence was that, in the course of the receivers’ investigations, there had been nothing to indicate that the fifth defendant has carried on business supplying building materials. Indeed, there was nothing to indicate that the fifth defendant had any ongoing trading activity at all.

47    The receivers obtained a valuation from Lloyd’s Auctions of the property found at the Banksmeadow property. In Lloyd’s Auctions’ opinion, the total market value of the inventory is $52,000. However, the total estimated realisable value of the inventory is only $10,920. The receivers were not aware of any other property which might be owned by the fifth defendant, other than a computer which remains in their possession.

48    The matters referred to in [46] – [47] above indicated that the fifth defendant could not possibly meet any judgment that the plaintiff might obtain against it for the very large debt it owes.

49    Apart from this, there was evidence which pointed to the fact that the fifth defendant had falsified the address of its registered office as well as the address given on its invoices as its place of business.

50    At the hearing on 17 June 2022, the plaintiff pointed to all these matters (including the fifth defendant’s apparently fraudulent conduct) as indicating a strong case that the fifth defendant should be wound up by the Court under the just and equitable ground: s 461(1)(k) of the Corporations Act, as sought in prayer 9 of the originating process. The plaintiff also contended that all the above circumstances warranted the appointment, now, of a provisional liquidator pursuant to s 472(2) of the Corporations Act.

51    In Deputy Commissioner of Taxation v Ausmart Services Pty Ltd [2018] FCA 1912, I noted (at [22]):

22    The Court’s power to appoint a provisional liquidator is a wide one. The appointment is, however, a drastic intrusion into the affairs of the company, and an appointment will not be made unless the Court is satisfied, firstly, that there is a reasonable prospect that a winding up order will be made on the application to wind up and, secondly, some good reason is shown for placing the affairs of the company under external control prior to the hearing of the winding up application, such as public interest considerations, to preserve the status quo, or to protect the company’s assets and affairs: Allstate Explorations NL v Batepro Australia Pty Ltd [2004] NSWSC 261 at [27] and [30]; Australian Securities and Investments Commission v Uglii Corporation Ltd [2016] FCA 1099; 116 ACSR 389 at [72]. It may be appropriate to appoint a provisional liquidator where the affairs of the company have been carried on casually and without due regard to legal requirements so as to leave the court with no confidence that the company’s affairs will be properly conducted: Australian Securities Commission v Solomon (1996) 19 ACSR 73 at 80, citing Montgomery Windsor (NSW) Pty Ltd v Ilopa Pty Ltd (1984) 2 ACLC 224.

52    In an appropriate case, particularly in circumstances involving fraudulent conduct (Carr v Darren Berry International Marine Pty Ltd (No 1) [2013] FCA 1150), it might be appropriate to appoint a provisional liquidator on an ex parte basis.

53    In the present case, the fifth defendant was before me, represented by counsel. The fifth defendant was on notice that, on that occasion, the plaintiff would be seeking the appointment of a provisional liquidator. The fifth defendant was also on notice of the substance of the serious allegations made against it. Indeed, these allegations had been canvassed in correspondence with the first, second, and fifth defendant’s solicitors from about 24 May 2022, at the time of the receivers’ appointment. In a letter dated 31 May 2022, the plaintiff’s solicitors made clear the plaintiff’s view that the sums it had advanced had been fraudulently misappropriated.

54    As I have recorded, although the fifth defendant sought an adjournment of the plaintiff’s application for the appointment of a provisional liquidator, I was not persuaded that an adjournment was warranted or should be granted in the circumstances. No convincing reason was advanced for such an adjournment.

55    The principles applicable to winding up a company on the just and equitable ground are conveniently summarised by Gordon J in Australian Securities and Investments Commission v ActiveSuper Pty Ltd (No 2) [2013] FCA 234; 93 ACSR 189 at [20] – [24]:

20    It has long been established that a company may be wound up where there is “a justifiable lack of confidence in the conduct and management of the company's affairs” and thus a risk to the public interest that warrants protection: Loch v John Blackwood Ltd [1924] AC 783 at 788. In Australian Securities and Investments Commission v ABC Fund Managers (2001) 39 ACSR 443 at [119], Warren J (as her Honour then was) set out three “general fundamental principles”:

“First, there needs to be a lack of confidence in the conduct and management of the affairs of the company … Second, in these types of circumstances it needs to be demonstrated that there is a risk to the public interest that warrants protection. Third, there is a reluctance on the part of the courts to wind up a solvent company.”

(Citation omitted.)

21    In relation to the first, a lack of confidence may arise where, “after examining the entire conduct of the affairs of the company” the Court cannot have confidence in “the propensity of the controllers to comply with obligations, including the keeping of books, records and documents, and looking after the affairs of the company”: Galanopoulos v Moustafa [2010] VSC 380 at [32]; see also Australian Securities Commission v AS Nominees Limited (1995) 62 FCR 504 at 532-3; ABC Fund Managers at [117]-[118]; Australian Securities and Investments Commission v International Unity Insurance Pty Ltd (2004) 22 ACLC 1416 at [135]-[139].

22    There is thus a significant overlap between the matters relevant to the just and equitable ground and the matters which weigh in favour of the exercise of the Court’s discretion to appoint a provisional liquidator. For example, matters which indicate “the propensity of the controllers to comply with obligations, including the keeping of books, records and documents, and looking after the affairs of the company” might also demonstrate that “the company's affairs have been conducted in a manner without regard to legal requirements or accepted principles of corporate management”.

23    In relation to the second, a risk to the public interest may take several forms. For example, a winding up order may be necessary to ensure investor protection or where a company has not carried on its business candidly and in a straightforward manner with the public: International Unity Insurance at [138]; see also Australian Securities and Investments Commission v Finchley Central Funds Management Ltd [2009] FCA 1110 at [3]. Alternatively, it might be justified in order to prevent and condemn repeated breaches of the law: Kingsley Brown Properties at [96]; see also AS Nominees at 527; Australian Securities and Investments Commission v Chase Capital Management Pty Ltd (2001) 36 ACSR 778 at 793. Again, there is an overlap between matters which would pose a risk to the public interest for the purpose of s 461(1)(k) and which are relevant to the appointment of a provisional liquidator.

24    In relation to the third, it has been said that “a stronger case might be required where the company was prosperous, or at least solvent”: Kingsley Brown Properties at [96]. Solvency, however, is not a bar to the appointment of a liquidator on the just and equitable ground, particularly where there have been serious and ongoing breaches of the Act: ABC Fund Managers at [124]-[130].

56    In Hipages Group Pty Ltd v Reach Aussie Pty Ltd [2017] FCA 112 at [47] – [48], Perry J said:

47    … it is well established that the Court may order that a company be wound up on the ground that it is just and equitable where the company in question is simply being used as a vehicle to carry on unlawful conduct: Re London and County Coal Company (1866) 3 LR Eq 355. Subcategories of the just and equitable ground include where there has been serious fraud, misconduct or oppression in the conduct of the company’s affairs, or where a company has operated an illegally managed investment scheme: see the discussion by Barrett J in Macquarie Bank Ltd v TM Investments Pty Ltd [2005] NSWSC 608; (2005) 223 ALR 148 at [11]-[13]. It may also be just and equitable to wind up a company in circumstances where “the management are operating fraudulently, misleadingly or in breach of the law”: Australian Securities & Investments Commission v Centro Financial Synergy Group [2007] FCA 2084 at [5] (Gilmore J). Similarly, Lander J said in Australian Securities & Investments Commission v International Unity Insurance Pty Ltd [2004] FCA 1059 at [139]:

“An order may be made if a company has not carried on its business candidly and in a straightforward manner with the public: Australian Securities & Investments Commission v Austimber Pty Ltd [1999] FCA 566; (1999) 17 ACL C 893. Such an order would also be appropriate where the corporation has acted fraudulently or entered into sham transactions.”

48    In Australian Securities & Investments Commission v Stone Assets Management Pty Ltd [2012] FCA 630, Besanko J, after holding that the power of the plaintiff to seek this form of relief on public interest grounds is well established, held that a winding up order should be made having regard to a number of factors:

“47     In the present case, I have found that the defendant has engaged in repeated contraventions of the Act, and as such, there is a real risk to actual and potential investors that such breaches will continue. This is particularly so in a case where the defendant has no director present in Australia, against whom any required action could be taken. Further, and perhaps most relevantly, the defendant failed to comply with the interim injunction I made on 8 December 2011, requiring the company to cease publication of its website (www.aftfx.com.au). In addition, the affidavit of Lily Yang, sworn 27 January 2012, and the translation therein contained, shows that the defendant continued to publish a Chinese language version of the website (www.aftfx.com) which persisted in making reference to the possession of an AFSL licence. Such conduct, in clear disregard of the orders of this court, also favours the order sought by the plaintiff. Finally, the overall misconduct and mismanagement of the defendant justifies a finding that there is cause for a lack of confidence in the future conduct and management of the defendant, should it be allowed to continue trading. The defendant does not have a director who ordinarily resides in Australia and appears never to have had such a person (s 201A(1)). It appears to have been prepared to make false or misleading statements contrary to subs 1308(2) in relation to the address of Ms Liang (ss 205B and 205D) and the defendant's principal place of business in its application for registration as an Australian company. For all these reasons I will make the winding up order sought by the plaintiff under s 461(1)(k) of the Act.”

57    These observations are particularly apposite to the present case.

58    On the evidence before me, I was satisfied that the fifth defendant was not carrying on any trading activity, let alone one involving the supply of building products. I was satisfied that it had minimal assets, no apparently legitimate income stream, and no realistic prospects of meeting any judgment that the plaintiff might obtain against it in respect of its indebtedness.

59    Further, I was satisfied that, absent any convincing explanation to the contrary, the fifth defendant had been used as the vehicle for fraudulent conduct. I had no confidence that the affairs of the fifth defendant would be appropriately managed and conducted under the control of the first defendant.

60    I was satisfied that, in light of all the matters discussed above, and absent substantial countervailing evidence, there were more than reasonable prospects that the fifth defendant would be wound up under s 461(1)(k) of the Corporations Act.

61    In all the circumstances, I was persuaded that it was appropriate to appoint a provisional liquidator to the fifth defendant now. In reaching that conclusion, I was mindful of the fact that receivers and managers had already been appointed to the fifth defendant and were exercising control over it in that capacity. A court will generally decline to appoint a provisional liquidator pending final determination of a winding up application if some suitably stabilising interim regime is in place: Labraga v Pomfret [2005] NSWSC 490 at [33]; Triulcio v Chase Property Investments Pty Ltd [2003] NSWSC 861 at [30]; In the matter of Crow Inn Pty Limited [2020] NSWSC 601.

62    I was persuaded, however, that the appointment of a provisional liquidator would provide greater control over the fifth defendant, with the provisional liquidator exercising powers that the receivers did not have: see, for example, ss 486A, 530C, 596A, and 596B of the Corporations Act; see also the observations of Robson J in Vasco Trustees Limited v IPO Wealth Holdings No 2 Pty Ltd [2020] VSC 549 at [90] – [91].

63    In the present case there was, of course, no realistic prospect that the appointment of a provisional liquidator would cause reputational or commercial damage to the fifth defendant.

Associate:

Dated:    23 June 2022

SCHEDULE OF PARTIES