FEDERAL COURT OF AUSTRALIA

Merryport Pty Ltd (Trustee) v Lawson (No 2) [2023] FCA 874

ORDERS

PENAL NOTICE 

THE COURT ORDERS THAT:

1.    Anyone served with or notified of this order 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.

2.    In this order, save where the context otherwise requires:

(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.

3.    If You:

(a)    are ordered to do something, you must do it by yourself or through directors, officers, partners, employees or agents or others acting on your behalf or on you instructions;

(b)    are ordered not to do something, you must not do it yourself or through directors, officers, partners, employees, agents or in any other way or others acting on your behalf or on you instructions or with your encouragement or in any other way.

Freezing of Assets

4.    You, being in this paragraph Michelle Kathleen Lawson, 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$3,439,233.07 (‘the relevant amount’) until the trial of this proceeding or further order.

5.    You, being in this paragraph Heath Ashley Lawson, 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$793,983.58 (‘the relevant amount’) until the trial of this proceeding or further order.

6.    You, being in this paragraph Hayden Garry Terrence Lawson, 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$233,271.26 (‘the relevant amount’) until the trial of this proceeding or further order.

7.    If the unencumbered value of any of your Australian assets exceeds the respective relevant amount as applying to you as set out in orders 4 to 6 above, 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 respective relevant amount for that Respondent.

8.    For the purposes of this order, your assets include:

(a)    all your assets, whether or not they are in its 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)    in the case of Michelle Kathleen Lawson:

A.    the property known as Lot 403 Old Tully Road, Birkalla, QLD, 4854 which is also known as 131 Old Tully Road, Birkalla, QLD, 4854 or, if it has been sold, the net proceeds of the sale;

B.    the shares owned by the First Respondent in Bowmun Pty Ltd, or if those shares have been sold, the net proceeds of the sale ; and

C.    any money in account BSB: 083-004, Account number 86-679-2993 in the name of Michelle Kathleen Lawson at the National Australia Bank;

D.    any money in account BSB: 084-974, Account number 54-973-0107 at the National Australia Bank;

E.    any money in account BSB: 084-974, Account number 56-043-7868 at the National Australia Bank;

F.    any money in account BSB: 084-974, Account number 13-442-1230 at the National Australia Bank;

(ii)    in the case of the Heath Ashley Lawson:

A.    the property known as Lot 403 Old Tully Road, Birkalla, QLD, 4854 which is also known as 131 Old Tully Road, Birkalla, QLD, 4854 or, if it has been sold, the net proceeds of the sale;

B.    any money in account BSB: 084-974, Account number 54-973-0107 at the National Australia Bank;

C.    any money in account BSB: 084-974, Account number 55-853-6517 at the National Australia Bank.

(iii)    in the case of the Hayden Garry Terrence Lawson:

A.    the property known as 25 Dugong Crescent, Mount Louisa, QLD, 4814 or, if it has been sold, the net proceeds of the sale;

B.    any money in account BSB: 084-974, Account number 13-442-1230 in the name of Hayden Garry Lawson at the National Australia Bank.

Exceptions to this order

9.    This order does not prohibit each of you from:

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

(b)    paying $40,000.00 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.

10.    You and the applicants may agree in writing that the exceptions in the preceding paragraph are to be varied. In that case the Applicants 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 Applicants and you, and the Court may order that the exceptions are varied accordingly.

11.    This order will cease to have effect in respect of you, being in this paragraph Michelle Kathleen Lawson, if you:

(a)    pay the sum of AUD$3,439,233.07 into Court; or

(b)    pay that sum into a joint bank account in the name of the First Respondent’s solicitor and the solicitor for the Applicant as agreed in writing between them; or

(c)    provide security in that sum by a method agreed in writing with the Applicant to be held subject to the order of the Court.

12.    This order will cease to have effect in respect of you, being in this paragraph Heath Ashley Lawson, if you:

(a)    pay the sum of AUD$793,983.58 into Court; or

(b)    pay that sum into a joint bank account in the name of the Second Respondent’s solicitor and the solicitor for the Applicant as agreed in writing between them; or

(c)    provide security in that sum by a method agreed in writing with the Applicant to be held subject to the order of the Court.

13.    This order will cease to have effect in respect of you, being in this paragraph Hayden Garry Terrrence Lawson, if you:

(a)    pay the sum of AUD$233,271.26 into Court; or

(b)    pay that sum into a joint bank account in the name of the Third Respondent’s solicitor and the solicitor for the Applicant as agreed in writing between them; or

(c)    provide security in that sum by a method agreed in writing with the Applicant to be held subject to the order of the Court.

14.    Any payment and any security given in accordance with any of orders 11 to 13 will not provide the Applicant with any priority over your other creditors in the event of your insolvency.

15.    If this order ceases to have effect in respect of a respondent pursuant to order 11, 12, or 13, that respondent must as soon as practicable file with the Court and serve on the Applicants notice of that fact.

Costs

16.    The costs of the hearing on 20 July 2023 before Lee J and of today be the parties’ costs in the proceeding.

Persons other than the Applicants and Respondents

17.    This order does not prevent any bank from exercising any right of set off it has in respect of any facility which it gave the Respondent before it was notified of this order.

Case Management

18.    Paragraph 12 of the Order dated 20 July 2023 is varied such that the Second and Third Respondents have an additional 7 days to comply with it.

19.    The respondents file and serve their defences by 4 pm on 1 September 2023.

20.    The proceeding be referred to the National Operations Registrar for allocation to a docket judge.

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

Annexure A

Undertakings Given to the Court by the Applicants

1.    The applicants undertake 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 freezing orders sought.

2.    As soon as practicable, the applicants will cause anyone notified of any freezing orders obtained to be given a copy of it.

3.    The applicants will pay the reasonable costs of anyone other than the respondents which have been incurred as a result of any freezing orders obtained, including the costs of finding out whether that person holds any of the respondents’ assets.

4.    If any freezing orders obtained cease to have effect, the applicants will promptly take all reasonable steps to inform in writing anyone who has been notified of this order, or which they have reasonable grounds for supposing may act upon the orders obtained, that it has ceased to have effect.

5.    The applicants will not, without leave of the Court, use any information obtained as a result of any orders obtained for the purpose of any civil or criminal proceedings, either in or outside Australia, other than this proceeding.

6.    The applicants will not, without leave of the Court, seek to enforce any orders obtained 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 respondents or the respondents’ assets.

THE COURT ALSO NOTES THAT, IN ACCORDANCE WITH THE UNDERTAKINGS OFFERED TO THE COURT ON 20 JULY 2023, THE APPLICANTS HAVE:

(a)    caused an irrevocable undertaking to pay in the sum of $100,000.00 to be issued by a bank with a place of business within Australia, in respect of any order the court may make pursuant to the first undertaking offered; and

(b)    caused a copy of it to be served on the respondents.

REASONS FOR JUDGMENT

(Revised from Transcript)

DOWNES J:

1    This is the return date of an application for the continuation of freezing orders made by Lee J on 20 July 2023. Since those orders were made, each of the respondents has been personally served with both the orders as well as the other material relied upon by the applicants.

2    Paragraph 12 of the orders of Lee J required the respondents to do certain things including, in particular, that certain things be done by today. Mr Derrington, who appeared for the applicants, accepted that, as the orders and the applicants’ material had only been served on the second and third respondents during the last week, it was appropriate to extend the time for compliance by the second and third respondents with paragraph 12 of the orders by allowing them an additional seven days to comply with it. I will make that order.

3    The first respondent appears to have taken steps to comply with paragraph 12 of the orders of Lee J, although, as at the time of today’s hearing, the affidavit of the first respondent had not been accepted for filing and had not been served on the applicants.

4    The first respondent appeared at today’s hearing by her counsel, Mr Seccull, who appeared by Teams. The first respondent consented to the continuation of the freezing orders in the terms of the draft handed up by counsel for the applicants.

5    The hearing of the application proceeded in the absence of the second and third respondents. As they are the husband and son of the first respondent, and, as they have been served, I am satisfied that they are likely to be aware of today’s hearing.

6    The essence of the applicants’ case is identified at [3], [4], [10], [11] and [12] of the reasons given by Lee J in Merryport Pty Ltd v Lawson [2023] FCA 838. Having reviewed the material relied upon by the applicants and in the absence of evidence adduced by any of the respondents which is relevant to the merits of the applicants’ case, I accept that the applicants have a good arguable case and that there is a sufficient prospect that a judgment in their favour will be enforced in this Court.

7    That is so notwithstanding the content of statements made by the first respondent to the police which sought to exonerate her husband and son. That is because one interpretation of those statements is that they were an attempt by the first respondent to ensure that her husband and son are not blamed for, or caught up in the consequences of, the fraud alleged against her.

8    Because this matter involves allegations of what amounts to theft by the first respondent and the receipt by each of the respondents of the proceeds of that theft, with associated acts of dishonesty, I am also satisfied that there is a real risk of dissipation of assets by the respondents with the result that there is a danger that the prospective judgment will not be satisfied.

9    Accordingly, it is appropriate to make the orders sought by the applicants.

10    Of course, it must be emphasised that, as at today, the Court has only heard one side of the story through the affidavit material provided by the applicants and, at trial, each of the respondents may be able to establish a defence to the claims such that those claims are defeated. Further, today is not about resolving factual issues. Nor can I form a view about the prospects of success of any (as yet unarticulated) defence which might be mounted by the respondents in circumstances where no evidence has been adduced by them which is relevant to such prospects.

11    It is a drastic thing to make freezing orders, and they are not lightly made. However, in the circumstances of this case they are justified, but I emphasise that the matter will not be allowed to linger and the applicants must progress the matter to trial expeditiously. For that reason, I will include an order requiring the respondents to file and serve their defences by 1 September 2023 and, in the event that the matter comes back before me as docket judge, I intend to allocate trial dates as soon as possible in the event that the proceeding is defended.

12    For these reasons, I will make an order in the terms that I have indicated and as sought by the applicants.

Associate:

Dated:    31 July 2023