A.G.B.C. Pty Ltd and anor v Dessa and ors
[2012] VSC 118
•30 March 2012 (Orders made 20 March 2012)
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
CORPORATIONS LIST
S CI 2012 1337
| A.G.B.C. PTY LTD (ACN 111 524 826) (IN LIQUIDATION) | Plaintiffs |
| - and - | |
| ANDREW REGINALD YEO (AS LIQUIDATOR OF A.G.B.C. PTY LTD (ACN 111 524 826) (IN LIQUIDATION)) | |
| v | |
| GERARD CLIFFORD DESSA | Firstnamed Defendant |
| - and - | |
| Secondnamed Defendant | |
| BRUNO BORDON | |
| - and - | |
| WNP DISTRIBUTION PTY LTD | Thirdnamed Defendant |
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ASSOCIATE JUDGE: | GARDINER AsJ | |
WHERE HELD: | Melbourne | |
DATES OF HEARING: | 13 and 20 March 2012 | |
DATE OF JUDGMENT: | 30 March 2012 (Orders made 20 March 2012) | |
CASE MAY BE CITED AS: | A.G.B.C. Pty Ltd and anor v Dessa and ors | |
MEDIUM NEUTRAL CITATION: | [2012] VSC 118 | |
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CORPORATIONS – Application for interim injunction pursuant to Section 1324(4) of the Corporations Act 2001 (Cth).
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr P Fary | Frenkel Partners |
| For the Defendants | Mr J Kenny (solicitor) | Kalus Kenny |
HIS HONOUR:
On 20 March 2012, I made orders pursuant to s 1324(4) of the Corporations Act2001 (Cth) (“the Act”) granting an interim injunction restraining the defendants from engaging in specified conduct. My reasons for making those orders follow.
On 5 March 2012, an order was made by the Federal Court of Australia that A.G.B.C. Pty Ltd (“the company”) be wound up in solvency and Mr Andrew Yeo, an official liquidator, be appointed liquidator in the winding up.
On 9 March 2012, the plaintiffs made application by originating process for orders against the defendants pursuant to ss 183, 468, 474(2), 479(3), 483, 500(3), 530A and 1324 of the Act, r 37.01 of the Supreme Court (General Civil Procedure) Rules 2005 (Vic) and the Court’s inherent jurisdiction.
The originating process was first returnable on 13 March 2012. Mr Fary of Counsel appeared on behalf the plaintiffs and Mr Kenny, solicitor, appeared on behalf of the defendants. Although the plaintiffs had not issued an interlocutory process by reason of constraints as to time and the perceived urgency of the application, an oral application was made by Mr Fary seeking interim injunctive relief against the defendants.[1]
[1]On 19 March 2012, the plaintiffs filed an interlocutory process seeking relief, inter alia, under s 1324 of the Act.
In the course of the liquidation, Mr Yeo has been assisted by Ms Claire Preston, who is also an official liquidator, in the day to day conduct of the liquidation. Mr Fary initially relied on two affidavits of Ms Preston, sworn 9 and 13 March 2012. On the first return of this matter, Mr Kenny indicated that his clients had not had an opportunity to respond to Ms Preston’s affidavits, which contained serious allegations against the defendants. Directions were made for the further conduct of the application, including the filing and serving by the defendants of any affidavits upon which they intended to rely in opposition to the plaintiffs’ interlocutory application by 16 March 2012. Orders were also made restraining the defendants from engaging in specified conduct and requiring them to deliver up property of the company to which Mr Yeo, as liquidator, was entitled. That property was specified in the order made that day.
The defendants did not file material in opposition to the application by the time stipulated. Ms Preston swore a further affidavit of 19 March 2012, the purpose of which was to inform the Court of events which had occurred since the filing of the previous affidavits. This prompted the defendants to file an affidavit of Gerard Clifford Dessa sworn 20 March 2012.
The conduct complained of by the plaintiffs is outlined in Ms Preston’s affidavits. The affidavits describe events which have occurred since the making of the order by the Federal Court on 5 March 2012 for the winding up of the company, including:
(a)the company’s debtors have been instructed by the company’s former director, Mr Gerard Dessa and persons associated with him, to pay moneys that were owing to the company to another company, WMP Distribution Pty Ltd (“WMP”);
(b)Gerard Dessa and/or persons associated with him have removed stock and other property of the company from the company’s premises;
(c)Gerard Dessa and persons associated with him have unlawfully taken confidential information belonging to the company, including customer lists, books and records and electronic passwords to access computers of the company;
(d)Gerard Dessa and persons associated with him are continuing the business of the company through a new entity to the detriment of the company’s creditors; and
(e)assets of the company and proceeds of the sale of them will be dissipated by Mr Dessa to the obvious detriment of the creditors.
The plaintiffs seek interim injunctive relief, pursuant to s 1324 of the Act in respect of that conduct. Section 1324 of the Act provides relevantly:
1324(1)[A court may grant injunction] where a person has engaged, is engaging or is proposing to engage in conduct that constituted, constitutes or would constitute:
(a) a contravention of this Act; or
(b) attempting to contravene this Act; or
(c) aiding, abetting, counselling or procuring a person to contravene this Act; or
(d) inducing or attempting to induce whether by threats, promises or otherwise a person to contravene this Act; or
(e) being in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by a person of this Act; or
(f) conspiring with others to contravene this Act;
the Court may, on the application of ASIC, or of a person whose interests have been, are or would be affected by the conduct, grant an injunction, on such terms as the Court thinks appropriate, restraining the first mentioned person from engaging in the conduct and, if in the opinion of the Court it is desirable to do so, requiring that person to do any act or thing.
1324(1A)…
1324(1B)…
1324(2)[A court may grant an injunction requiring action to be done] where a person has refused or failed, is refusing or failing, or is proposing to refuse or fail, to do an act or thing that the person is required by this Act to do, the Court may, on the application of:
(a)ASIC; or
(b)any person whose interests have been, are or would be affected by the refusal or failure to do that act or thing;
Grant an injunction, on such terms as the Court thinks appropriate, requiring the first mentioned person to do the act or thing.
1324(3)[Injunction by consent] Where an application for an injunction under sub-section (1) or (2) has been made, the Court may, if the Court determines it to be appropriate, grant an injunction by consent of all parties to the proceedings, whether or not the Court is satisfied that that sub‑section applies.
1324(4)[Interim injunction] Where in the opinion of the Court it is desirable to do so, the Court may grant an interim injunction pending determination of an application under sub‑s(1).
1324(5)-(10)…
In Ms Preston’s affidavit of 9 March 2012, she deposes that the application for winding up in insolvency in the Federal Court was brought by the Commissioner of Taxation and was grounded on non‑compliance by the company with a statutory demand which claimed that $300,000 was owed to the Commissioner for unpaid taxation liabilities. At the first return of that application, the company was ordered to file affidavit material in opposition to the application and the application was adjourned to 5 March 2012. On 5 March 2012, the winding up order was made and Mr Yeo was appointed liquidator. The company was represented in the winding up proceedings by Bolton and Swann Pty Ltd, Solicitors, of 95-97 Greene Street, Cremorne, Victoria. It also appeared that a firm of accountants, Armstrong and Shaw, was advising the company. There appears to be no doubt that those associated with the company were aware of the making of the winding up order and the appointment of Mr Yeo.
The ASIC records reveal that the sole director of the company is Bruno Bordon, who was appointed on 3 February 2012, approximately one month before the company went into liquidation. Prior to that, Gerard Clifford Dessa was the sole director and secretary of the company. He had held those positions since the date of the company’s registration in October 2004. He resigned on 3 February 2012.
In her affidavit, Ms Preston describes her visit to the company’s premises on 6 March 2012. She was accompanied by Shaun Mathews, an employee of Mr Yeo’s firm, Pitcher Partners. On those visits, neither Mr Bordon nor Gerard Dessa were present at the premises.
The company operated from two premises, a factory at 324 South Gippsland Highway, Dandenong South, and the other located at Clare Street, Bayswater. It trades under three business names, “Exquisite Window Décor”, which was the retailing part of the business operated from the Dandenong premises, “Curtains Direct”, another retailing arm of the business operated from the Bayswater premises, and “Donnie Manufacturing”, which was the trading name of the manufacturing arm of the business and which operated from the Bayswater premises.
Ms Preston details events which occurred during her visits to the two premises. The representatives of the company present on those occasions were not cooperative with her. Ms Preston and Mr Mathews first attended the Dandenong premises and upon their arrival were greeted in the front reception area by a woman. Ms Preston provided that woman with a copy of the winding up order made by the Federal Court. The woman then handed a document to Ms Preston titled Deed of Termination of Lease. The document is dated 2 March 2012, the last business day before the company was placed into liquidation, and purports to terminate a lease for the Dandenong premises between the company and a company called Coarse Black Pepper Pty Ltd. That document appears to have been signed by Gerard Dessa as director of both the company and Coarse Black Pepper Pty Ltd and the document purports to licence Gerard Dessa to occupy the Dandenong premises.
When they attended the Bayswater premises, they saw a sign which stated “Closed for stock take. We apologise for any inconvenience.” Arrangements were made to change the locks to those premises and this was subsequently done. They entered the premises and were greeted by four employees. Ms Preston enquired of them who were they employed by and the response was that Gerard Dessa was their boss and that they worked for Curtains Direct.
In another part of the premises, they came upon a group of 15 to 20 employees who were being addressed by Clifford Dessa, apparently the father of Gerard Dessa. Clifford Dessa ignored Ms Preston, despite her indicating her presence, and continued to speak to the employees. Ms Preston interrupted his address and indicated to the group that the company had been placed into liquidation, that the employees had entitlements and that they should provide her with their contact details in order that she could keep them informed of the progress of the liquidation. She indicated that the employees were being stood down at this point while the liquidator conducted an assessment of the business to determine whether it would be continued and ultimately sold or, if not viable, closed down. Something of a confrontation ensued, culminating in Clifford Dessa forcibly retrieving the employees’ details which had been written down by them on a piece of paper. Mr Mathews escorted Clifford Dessa from the premises.
Ms Preston noticed that computers at the Bayswater premises had been removed with the only parts of the systems remaining being keyboards. Clifford Dessa professed ignorance about the whereabouts of the computers but an employee of the company volunteered that when the employees attended the premises that morning, all the computers had been removed. Although Clifford Dessa had, in the presence of Ms Preston, spoken to a solicitor shortly before being escorted from the premises, he stated that he did not have his telephone number, but an employee informed Ms Preston of the name and details of the solicitor. Ms Preston spoke to that solicitor, a Mr Philip Whiteman, who stated that he was aware of the appointment of the liquidators, that he had advised the company in the past and had provided it with cash flow advice. Mr Whiteman avoided responding to a question by Ms Preston in regard to the present director of the company, Mr Bordon, and hung up shortly afterwards.
Ms Preston and Mr Mathews then returned to the Dandenong premises and had an aggressive exchange with the woman who was behind the reception desk. The woman shouted at them to leave the premises and there was an incident in which the woman tried to snatch Ms Preston’s mobile phone out of her hands. The woman enlisted the assistance of two mechanics who worked at an adjacent business who attended and at the request of the woman, asked Ms Preston and Mr Mathews to leave which they did.
On 7 March 2012, Ms Preston and Mr Mathews returned to the Dandenong premises in company with the liquidators’ solicitors. They made arrangements for the locks to be changed. When they entered the premises they found property of the company, including books and records, computers and plant and equipment and stock.
On the same day, Ms Preston had received a telephone call from a person who identified themselves as an employee of Donnie Manufacturing. In the course of that conversation the employee said:
(a)the computers went down on Monday 5 March and notes were left on desks with a direction not to turn the computers on.
(b)on Tuesday 6 March the computers were gone from the Bayswater premises.
(c)the employees were directed to keep working as normal.
In addition, the employee said that a box with records of the company’s customers, together with files, had been taken and that Gerard Dessa’s father had indicated to the employees on 6 March that they would be paid for that week but not to attend on Wednesday 7 March. The employee said that Philip Whiteman attended the premises on 6 March 2012 and informed the employees, amongst other things, that the company had a tax debt but that everything would be carrying on as normal. Ms Preston asked the employee whether they knew of a person named Bruno Bordon. The employee said that they had not heard of anybody with that surname, but noted that they were aware of a Bruno who was a representative for a fabric company but did not think his name was Bordon.
On 8 March 2012, in another telephone conversation, an employee indicated to Ms Preston that Mr Dessa was attempting to recruit some staff to commence work in the following week.
Ms Preston’s investigations reveal that the company has two bank accounts with the National Australia Bank, one in the name of Exquisite Window Décor and Curtains Direct, and the second in the name of Donnie Manufacturing.
When Ms Preston reviewed the documents which she had had taken from the Bayswater premises, she found a facsimile on a company’s letterhead dated 6 March 2012 setting out new bank details with the ANZ Bank, with a new account number. Ms Preston contacted the ANZ Bank and was informed that the account was in the name of a company called WNP Distribution Pty Ltd (“WNP”). Her investigations reveal that WNP was registered on 4 November 2011 and its registered office and principal place of business is located at the offices of Armstrong and Shaw Pty Ltd at the Green Street, Cremorne address. This is also the address for the law firm Bolton and Swann Pty Ltd which acted for the company in the Federal Court winding up proceedings. The sole director of WNP is Peter John Hannah. Exhibit CTP-6 of Ms reston’s affidavit exhibits ASIC records which reveal that he is a director and secretary of a very large number of other companies. The ANZ Bank have been requested to freeze the ANZ account opened by WNP and this has apparently occurred.
Ms Preston details in her affidavit other conversations that she had with an employee of the company in which was indicated:
(a)Clifford Dessa had contacted employees after Ms Preston had first visited the premises, apologised to them for what had occurred and also told them not to worry because they will keep their jobs.
(b)The employee said that the workers at the company thought something unusual was going on with the company on 6 March when all the doors to the premises were locked and the computers were gone.
(c)The employee said that there were problems with the computers but understood that Mr Dessa was arranging for those computers to be fixed.
(d)The employer said that all finished goods had been removed from the Bayswater premises overnight on Monday 5 March by both Donnie Manufacturing and Curtains Direct. The employee said that two full racks on a stack of shelves of finished stock had been taken.
Ms Preston also deposes to a telephone conversation with a security officer, a Mr Pell, who has been engaged to assist in the liquidation. Mr Pell said that the company’s telephone number was currently being diverted elsewhere and being answered by a woman called Penny. Mr Pell said that he had dialled the company’s telephone number and a woman who identified herself as Penny answered the phone. Mr Pell said that he asked Penny why the business was closed. She responded that there was currently a health and safety dispute and that the business would re‑open on Tuesday 13 March 2012.
Ms Preston had been unable to locate Mr Bordon by telephone but ultimately, she was able to do so. In the telephone conversation Mr Bordon said that he is a director of the company but says that he has never met Gerard Dessa. He stated that he was not being paid to be a director but thought that it “seemed like a good idea to accept the appointment”. He then hung up.
As of the date of swearing her first affidavit, Ms Preston had not been able to speak to or locate Gerard Dessa. She had left numerous messages for him but they were unanswered. However, by the time the matter first came on for hearing on 13 March 2012, Mr Kenny had been engaged on behalf of the defendants.
In other developments, Ms Preston has been informed by a man who identified himself as Rob Rennie, who was a representative of the landlord for the Bayswater premises, that he had had discussions with a person named Graham Clarke, who he had been told was the accountant for Gerard Dessa, requesting that the name on the lease be changed for the Bayswater premises. Mr Clarke is an employee of Armstrong and Shaw.
Staff from the liquidator’s office have contacted the company’s accountants, Portmin & Associates Pty Ltd, and obtained a copy of some of the books and records of the company, including a depreciation schedule for the year ended 30 June 2011. That schedule lists a number of motor vehicles. Initially, most of those vehicles were unaccounted for. In her second affidavit, Ms Preston deposes that five of the vehicles have been located but another six were still unaccounted for. As events have unfolded, Mr Yeo’s concerns in that regard have been assuaged as the vehicles have been gradually located.
The case that Mr Yeo seeks to make by the originating process is that WNP appears to have become the successor in business of the company in circumstances designed to defeat the creditors of the company and that the first and second defendants are closely involved in that process.
In Australian Securities and Investments Commission v Mauer‑Swisse Securities Limited and anor,[2] Palmer J of the Equity Division of the Supreme Court of New South Wales considered the principles to be applied in applications for interim injunctions under s 1324(4) of the Act. He described an inconsistency in approach in the authorities as to the principles upon which the Court should act in an application for an interim injunction under the sub-section. In the judgment, he summarised the principles he considered should be applied. Those which have relevance in the present context are as follows:[3]
–the jurisdiction which the Court exercises under s.1324 CA is a statutory jurisdiction, not the Court’s traditional equity jurisdiction;
–Parliament has made it increasingly clear by successive statutory enactments that the Court, in exercising its statutory jurisdiction under s.1324, is not to be confined by the considerations which would be applicable if it were exercising its traditional equity jurisdiction;
–amongst the considerations which the Court must take into account in an application for an injunction under s.1324 CA are the wider issues referred to by Austin J in Sweeney and Parkes, and by Davies AJ in Pegasus; they may be gathered under the broad question whether the injunction would have some utility or would serve some purpose within the contemplation of the Corporations Act;
–these considerations are to be taken into account regardless of whether the application is for a permanent injunction under s. 1324(1) or for an interim injunction under s. 1324(4);
–although the questions whether there is a serious question to be tried and where the balance of convenience lies will not circumscribe the Court’s consideration in an application for an interim injunction under s. 1324(4), the interests of justice will always require that those questions be examined carefully when restrictions are sought to be imposed before the case has been properly examined by the Court, even where the protection of the public is said to be involved: see per Young J (as his Honour then was), in Corporate Affairs Commission (NSW) v Lombard Nash International Pty Ltd (1986) 11 ACLR 566, at 570-571;
[2](2002) 42 ACSR 605 (“Mauer-Swisse”).
[3]Mauer-Swisse (2002) 42 ACSR 605, [36].
I consider it is clear that on an application of the principles collected by Palmer J in Mauer‑Swisse that it is appropriate to make orders of the type proposed by the plaintiffs. Having regard to events which have occurred since the order for winding up, such orders clearly have “utility” and “serve purposes within the contemplation of the Corporations Act”. Mr Yeo, as an officer of the Court, is entitled to approach it to obtain assistance in the performance of his duties as liquidator and the orders which I have made are designed to provide such assistance.
Although Gerard Dessa has filed an affidavit late in the piece, he does not take issue with the account of the events deposed to by Ms Preston in her affidavits but rather contends that there has now been compliance with the orders that I made on the first return of the application.
Even if the plaintiffs’ application was treated as a conventional application for an injunction in the equitable jurisdiction of the Court, there are abundant facts in Ms Preston’s affidavits to establish that there is a serious question to be tried and a good arguable case that WMP, with the assistance of Gerard Dessa and Bruno Bordon, have improperly acquired the business undertaking and assets of the company. The more significant features of the evidence in that regard include Gerard Dessa’s involvement in the document styled Deed of Termination of Lease in which the lease of the Dandenong premises is purported to be terminated shortly before the winding up order is made and the purported grant of a licence in respect of that property. The incorporation of WNP by the very same advisers that acted on behalf of the company in the Federal Court winding up proceedings has not been explained and is obviously more than a coincidence.
WNP’s registered office is located at the accountants advising the company prior to its winding up, Armstrong and Shaw. Those accountants are located at the same address as the solicitors, Bolton and Swann Pty Ltd, the solicitors acting in the Federal Court proceeding. There is evidence that the moneys that should have been directed to the company have been requested to be paid into WMP’s account with the ANZ Bank. I also consider that there are serious questions to be tried as to whether:
(a)each of the items of property referred to in Ms Preston’s first affidavit is property of the company;
(b)the defendants are using that property without the company’s consent;
(c)the defendants have or are threatening to use confidential information; and
(d)the first and second defendants are in breach of their director’s duties.
In addition, there is evidence of an employee in regard to goods of the company being removed from the Bayswater premises overnight on 5 March 2012. The diversion of the company’s telephone is another factor. Further, an employee at Armstrong and Shaw, Mr Clarke, has allegedly been instrumental in discussions to assign the lease to the Bayswater premises.
Further, the plaintiffs’ claims have a sufficient likelihood of success to justify preservation of the status quo pending trial. In that regard, the plaintiffs must show that it has a putative legal or equitable right in respect of which final relief is sought that would justify the restraint sought. The deprivation by the defendants of the company’s property and the conduct complained of which are the subject of the orders for restraint, would not be adequately compensated by the remedy of damages.
I also consider that the balance of convenience favours the granting of the orders sought. As was observed in Bradto Pty Ltd v Victoria,[4] the Court must in determining whether to grant an interlocutory injunction:
… [T]ake whichever course appears to carry the lower risk of injustice if it should turn out to have been “wrong”, in the sense of granting an injunction to a party who fails to establish his right at the trial or in failing to grant an injunction to a party who succeeds at trial.
[4](2006) 15 VR 65, [35].
Mr Fary of Counsel proposed certain orders which are set out below which provide for an interim injunction pending the determination of the principal proceeding. He has also proffered the usual undertaking as to damages. As often happens with these types of applications, it was dynamic in nature and events unfolded to the point where the plaintiffs’ application has in practical terms been acceded to by the defendants. Indeed, when pressed, Mr Kenny indicated to the Court that the orders I pronounced on 20 March 2012 could be made by consent.
For completeness, I set out the orders that I made on 20 March 2012 on the basis of the Plaintiffs giving the usual undertaking as to damages.
(1)Until the trial and determination of this proceeding or further order of the court, the defendants, whether by themselves, their employees or their agents be restrained from removing, disposing of, dealing with or diminishing the value of the money in the account at the ANZ Bank with account number 279400828 and BSB number 013 410 and styled in the name “WNP Distribution Pty Ltd” without the prior written agreement of the plaintiffs.
(2)Until the trial and determination of this proceeding or further order of the court, the defendants, whether by themselves, their employees or their agents be restrained from taking any step to recover, deal with or give directions for the payment of amounts owing to the first plaintiff (‘company’) without the prior written agreement of the plaintiffs.
(3)Until the trial and determination of this proceeding or further order of the court, the defendants, whether by themselves, their employees or their agents be restrained from taking any step to transfer any telephone numbers formerly used by the company and the numbers set out in order 3(h) of the orders made on 13 March 2012 without prior written agreement of the plaintiffs.
(4)Until the trial and determination of this proceeding or further order of the court, the defendant whether by themselves, their employees or their agents be restrained from using:
(a)any customer lists of the company;
(b)any computer or electronic device of the company;
(c)any hardcopy document of the company;
in any further trade or commerce without the prior written agreement of the plaintiff without prior written agreement of the plaintiffs.
(5)Until the trial and determination of this proceeding or further order of the court, the defendants whether by themselves, their employees or their agents be restrained from instructing employees of the company not to communicate with and/or not to assist the second plaintiff.
(6)The costs of this application are reserved.
(7)Liberty to apply.
(8)The matter be referred to a directions hearing to be held on Friday 4 May at 10:30am in Court 5, 436 Lonsdale Street, Melbourne.
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