BGC Australia Pty Ltd v Minspec Pty Ltd [No 2]
[2015] WASC 470
•9 DECEMBER 2015
BGC AUSTRALIA PTY LTD -v- MINSPEC PTY LTD [No 2] [2015] WASC 470
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2015] WASC 470 | |
| 09/12/2015 | |||
| Case No: | CIV:1305/2012 | 30 OCTOBER 2015 | |
| Coram: | MITCHELL J | 30/10/15 | |
| 16 | Judgment Part: | 1 of 1 | |
| Result: | Freezing orders made | ||
| B | |||
| PDF Version |
| Parties: | BGC AUSTRALIA PTY LTD MINSPEC PTY LTD MELVYN GEORGE KING JOHN THORNTON BROWN BYAMBEE PTY LTD as trustee for C BELLOTTI & CO UNIT TRUST trading as C BELLOTTI & CO OREFLOW AUSTRALIA PTY LTD DONNA-MAREE BROWN |
Catchwords: | Practice and procedure Application for freezing orders and ancillary orders Turns on own facts |
Legislation: | Rules of the Supreme Court 1971 (WA), O 52A r 3 |
Case References: | BGC Australia Pty Ltd v Minspec Pty Ltd [2015] WASC 134 Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 Federal Commissioner of Taxation v Oswal [2012] FCA 1507; (2012) 91 ATR 684 PT Bayan Resources TBK v BCBC Singapore Pte Ltd [2015] HCA 36 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- CIV 3058 of 2012
- Plaintiff
AND
MINSPEC PTY LTD
First Defendant
MELVYN GEORGE KING
Second Defendant
JOHN THORNTON BROWN
Third Defendant
BYAMBEE PTY LTD as trustee for C BELLOTTI & CO UNIT TRUST trading as C BELLOTTI & CO
Third Party
Catchwords:
Practice and procedure - Application for freezing orders and ancillary orders - Turns on own facts
Legislation:
Rules of the Supreme Court 1971 (WA), O 52A r 3
Result:
Freezing orders made
Category: B
Representation:
Counsel:
Plaintiff : Mr L A Warnick
First Defendant : Ms R L Bunney
Second Defendant : Mr D W Thompson
Third Defendant : Mr K A Dundo
Third Party : No appearance
Non-party 1 : Mr D W Thompson
Non-party 2 : Mr K A Dundo
Solicitors:
Plaintiff : Hotchkin Hanly
First Defendant : Cullen Babington Macleod
Second Defendant : Thompson Downey Cooper
Third Defendant : HopgoodGanim
Third Party : HWL Ebsworth Lawyers
Non-party 1 : Thompson Downey Cooper
Non-party 2 : HopgoodGanim
Case(s) referred to in judgment(s):
BGC Australia Pty Ltd v Minspec Pty Ltd [2015] WASC 134
Cardile v LED Builders Pty Ltd (1999) 198 CLR 380
Federal Commissioner of Taxation v Oswal [2012] FCA 1507; (2012) 91 ATR 684
PT Bayan Resources TBK v BCBC Singapore Pte Ltd [2015] HCA 36
- MITCHELL J:
(This judgment was delivered extemporaneously and has been edited from the court's record of the decision.)
Summary
1 On 30 October 2015, I heard an application for freezing and ancillary orders in this action. For the reasons set out below, which have been edited from the court's record of my oral reasons, I granted the freezing orders and made some of the ancillary orders sought by the plaintiffs.
Application
2 This is an application for a freezing order under O 52A r 2 of the Rules of the Supreme Court 1971 (WA), which provides that:
(1) The Court may make an order (a freezing order), upon or without notice to the respondent, for the purpose of preventing the frustration or inhibition of the Court's process by seeking to meet a danger that a judgment or prospective judgment of the Court will be wholly or partly unsatisfied.
(2) A freezing order may be an order restraining a respondent from removing any assets located in or outside Australia or from disposing of, dealing with, or diminishing the value of, those assets.
3 Order 52A r 4 makes it clear that the respondent need not be a party to the proceeding.
4 Order 52A r 5(1)(b) applies in circumstances where an applicant has a good arguable case on an accrued or prospective cause of action that is justiciable in this court or, in certain circumstances, in another court.
5 Order 52A r 5(4) provides that:
The Court may make a freezing order or an ancillary order or both against a … prospective judgment debtor if the Court is satisfied, having regard to all the circumstances, that there is a danger that a judgment or prospective judgment will be wholly or partly unsatisfied because any of the following might occur …
(b) the assets of the judgment debtor, prospective judgment debtor or another person are …
(ii) disposed of, dealt with or diminished in value.
The Court may make a freezing order or an ancillary order or both against a judgment debtor or prospective judgment debtor if the Court is satisfied, having regard to all the circumstances, that …
(a) there is a danger that a judgment or prospective judgment will be wholly or partly unsatisfied because …
(ii) the third party is in possession of, or in a position of control or influence concerning, assets (including claims and expectancies) of the judgment debtor or prospective judgment debtor; or
(b) a process in the Court is or may ultimately be available to the applicant as a result of a judgment or prospective judgment, under which process the third party may be obliged to disgorge assets or contribute toward satisfying the judgment or prospective judgment.
7 Order 52A r 5(6) provides that nothing in the rule affects the power of the court to make a freezing order or ancillary order if the court considers it is in the interests of justice to do so.
Background
8 I summarised the background to the plaintiff's claim when making ancillary orders.1 There is also a statement of facts agreed between the plaintiff and defendants which have been filed in the proceedings.
9 The plaintiff operates a quarry. In 2009 and 2010 the first defendant, Minspec, designed and manufactured five screens for installation in a plant to be used for crushing stone at the quarry to produce aggregate. The plaintiff claims that the screens failed to operate properly and had to be repaired and ultimately replaced, causing the plaintiff to incur expenses and lose profits. Those claims are based on an alleged breach of express and implied contractual terms, and on statements in connection with the contract which are said to have been misleading and deceptive.2
10 The second defendant, Mr King, and the third defendant, Mr Brown, are the directors and shareholders of Minspec. The plaintiff claims that they made misleading statements,3 causing the plaintiff to acquire the screens from Minspec.
11 The amount of the claim is not specified in the statement of claim. Counsel for the plaintiff indicated from the bar table that it was in the vicinity of $3.6 million and there was no demur to that submission by any other party.
Alleged disposal of assets
12 This action was commenced on 22 February 2012. There is evidence, which is described in the plaintiff's submissions, of action being taken with the effect of reducing the value of the assets held by Minspec and Mr Brown. The transactions involved do not appear to be controversial, and are described in the plaintiff's submissions, which I accept.
13 First, on 18 April 2013, Mr Brown sold his interest in the family home to his wife, Mrs Brown, for $255,000. He used the proceeds to pay for shares in a company called JTB Perth Pty Ltd. JTB made a loan of that amount to a company called DMB Perth Pty Ltd as trustee for the DMB Trust. Mrs Brown was the sole director of DMB Perth. The DMB Trust then made a loan of $250,000 to Mrs Brown, effectively creating a round robin transaction.
14 Secondly, between 4 April 2012 and 16 October 2014, Minspec paid dividends totalling approximately $2.5 million to Mr Brown, Mr King and Melmar Pty Ltd as trustee for the King Family Trust. The effect of the dividend payments was to significantly reduce Minspec's net assets so that net assets in 2014 were $718,000. Total dividends paid in the two immediately preceding financial years were $50,900 in the 2009 - 2010 financial year and $117,816 in the 2010 - 2011 financial year. As at 30 June 2011, Minspec had retained earnings of $2.091 million after payment of dividends. The plaintiff points to this history as indicating a prior policy of conservative dividends and maintenance of a substantial fund of retained earnings.
15 The plaintiff relies on a number of factors to support an inference that the dividends paid by Minspec to its shareholders were alienations of property made with intent to hinder, delay or defeat the plaintiff's claim. It is contended that the dividend payments began within six weeks after the action was commenced and therefore at a time when Minspec, through its directors, had clear knowledge of Minspec's contingent indebtedness to the plaintiff. The plaintiff says that the size and frequency of the dividend payments far exceeded the rate at which Minspec had previously paid dividends. It is put that the dividends had the effect of reducing Minspec's net assets to a fraction of the amount needed to meet the plaintiff's claim. The plaintiff says that, in parallel with the dividend payments, the defendants were taking other action to place assets beyond the reach of any judgment which the plaintiff might obtain. It refers to the transaction involving Mr Brown's transfer of his interest in the family home, and also to evidence which the plaintiff submits gives rise to a concern that there may have been a transfer of business from Minspec to other entities.
16 It is unnecessary for me to make findings in relation to the alleged transfer of business in order to determine the application for freezing orders.
17 Putting aside for the moment the reference to the transfer of business, I do draw the inference for which the plaintiff contends from the circumstances in which dividends were paid and in which the asset of Mr Brown was transferred.
18 Mr Brown paid approximately $800,000 of the dividends he received to his and his wife's superannuation accounts with AMP Superannuation. In addition, Mr Brown deposited approximately $432,000 in a joint bank account, the balance of which, in 2015, is approximately $2,000.
19 Mr King used funds from dividends in various ways, but in light of the agreement which has been reached between the plaintiff and Mr King, I do not need to make any finding about his use of the funds.
Section 89 of the Property Law Act
20 The plaintiff says that s 89 of the Property Law Act 1969 (WA) confers a right to claim against Mrs Brown, and may also be relied upon against Mr Brown and Mr King (to the extent that judgment is obtained against Minspec, but not the individual directors).
21 The principles governing the operation of s 89 of the Property Law Act were summarised by Gilmour J in Federal Commissioner of Taxation v Oswal,4 in the following terms:
Section 89 of the Property Law Act 1969 (WA) provides as follows:
(1) Except as provided in this section, every alienation of property made, whether before or after the coming into operation of this Act, with intent to defraud creditors is voidable, at the instance of any person thereby prejudiced.
(2) This section does not affect the law of bankruptcy for the time being in force.
(3) This section does not extend to any estate or interest in property alienated for valuable consideration and in good faith or upon good consideration and in good faith to any person not having, at the time of the alienation, notice of the intent to defraud creditors.
Section 89 of the Property Law Act 1969 (WA) is the modern manifestation of the statute 13 Eliz I c5, entitled 'An Act against fraudulent Deeds, Gifts, Alienations, etc' 1571 (Statute of Elizabeth). Section 37A of the Conveyancing Act 1919 (NSW) is the New South Wales modern manifestation of the Statute of Elizabeth and is substantially identical to s 89 of the Property Law Act 1969 (WA). In Marcolongo v Chenthe High Court considered the application of s 37A of the Conveyancing Act 1919 (NSW). Accordingly, the reasoning in Marcolongois of equal application to s 89 of the Property Law Act 1969 (WA). The principles derived from Marcolongoas applied to s 89 are as follows:
(a) s 89 of the Property Law Act 1969 (WA) applies to conveyances and assignments made with intent to hinder or delay creditors and renders void against all creditors so hindered or delayed the conveyance or assignment, that being the language of the Statute of Elizabeth;
(b) there is no superadded requirement to be found in s 89 of the Property Law Act 1969 (WA) to show dishonesty or fraud over and above an intention to hinder or delay creditors and there is no requirement to find an animus against a particular creditor: an intention to hinder or delay creditors is the relevant species of fraud;
(c) the fact that a conveyance or assignment of property is made voluntarily is a fact which may, on its own, support an inference of the existence of the intention to hinder or delay creditors, but need not do so. At the same time, the fact that the conveyance was made for value does not necessary establish the absence of the relevant intention. The intention required by the statute is an actual intention, but ordinarily the existence of the actual intention will be inferred from the objective facts; and
(d) there is no requirement in s 89 of the Property Law Act 1969 (WA) that the intent to hinder or delay creditors be the sole or even the predominant purpose of the conveyance or assignment and it does not matter if the relevant intention was formed because of or at the instigation of another.
The reasoning in Marcolongowas applied to s 89 of the Property Law Act 1969 (WA) by Lee A-JA in Westpac Banking Corporation v Bell Group Ltd (In Liq) (No 3). Earlier, at first instance in Bell Group Ltd (In Liq) v Westpac Banking Corporation (No 9), Owen J, prior to Marcolongo, had reviewed in detail the authorities relevant to s 89 of the Property Law Act 1969 (WA). Owen J collected together a number of principles. Excising those propositions affected by Marcolongoand the Court of Appeal's decision, Owen J said:
…
3. Intention can be established by inference.
4. If the natural and probable consequences of the disposition are such that its effect will be to defeat or delay creditors, the necessary inference can be drawn and a court might more readily do so. But a finding to that effect is a finding of an actual or real intention, not one that is imputed to the disponor by virtue of a legal presumption.
5. The essence of the concept of defrauding creditors lies in a disposition which subtracts from the property which is the proper fund for the payment of the debts, an amount without which the debts cannot be paid. …
6. Other relevant circumstances from which the necessary inferences might be drawn include:
(a) the insolvency or difficult financial circumstances of the disponor (although establishing insolvency at the time of the disposition is not a necessary element); and
(b) whether the transaction was voluntary or the consideration was colourable, negligible or trivial.
…
8. It is not necessary that the disposition affects creditors as a class generally; it is sufficient if one or some creditors are adversely affected. In this context 'creditor' is not confined to those to whom a debt is (at the time of the disposition) presently due and owing. It extends to impending liabilities and future creditors …
In Marcolongo, French CJ, Gummow, Crennan and Bell JJ noted that the parties had, in effect, accepted the conclusion of the majority of the Supreme Court of New Zealand in Regal Castings Ltd v Lightbody 'that the indefeasibility provisions of the Torrens system allowed for the enforcement against the registered proprietor of in personam remedies given by the [Statute of Elizabeth] and its local representative.' The High Court also noted in Marcolongothat the approach of the Supreme Court of New Zealand was consistent with the academic view of the Torrens system. (citations omitted)
22 I did not understand those principles to be subject to any real contention in the submissions of the parties.
Good arguable prospective case
23 I am satisfied that the evidence relied on by the plaintiff establishes a good arguable prospective case against Mrs Brown, AMP Superannuation Ltd and (to the extent necessary) Mr Brown under s 89 of the Property Law Act. If it is established that the dividend payments were made to defeat creditors, subsequent disposals by the parties with knowledge of this intent would also be voidable by the application of s 89.
24 On this basis, there is a process available within the court by which the plaintiff, if successful in the action, may be able to require proceeds of the Minspec dividend payments to be disgorged. The amounts of dividend payments made by Mr and Mrs Brown into their superannuation funds are approximately $800,000. The balance of dividends received by Mr Brown was $454,000. I need not deal with Mr King's position since that is agreed.
25 However, the proceeds of the dividend payments will only be disgorged to the extent that they remain available in the recipient, or in the hands of another party with knowledge of an intent to defeat or defraud creditors. Therefore, the plaintiff seeks freezing orders against Mr Brown, Mrs Brown and AMP Superannuation, as well as Mr King, to prevent further dissipation of these funds. They also seek certain ancillary orders to which I will come.
Freezing orders - general principles
26 Order 52A regulates the inherent jurisdiction of this court to prevent abuse or frustration of its processes. The nature of the jurisdiction was recently considered by the High Court in PT Bayan Resources TBK v BCBC Singapore Pte Ltd:5
[T]he inherent power of the Supreme Court of a State includes the power to make such orders as that Court may determine to be appropriate 'to prevent the abuse or frustration of its process in relation to matters coming within its jurisdiction'. And it has been noted more than once in this Court that a freezing order is 'the paradigm example of an order to prevent the frustration of a court's process'.
…
Even where a court makes a freezing order in circumstances in which a substantive proceeding in that court has commenced or is imminent, the process which the order is designed to protect is 'a prospective enforcement process'. That description is drawn from the explanation of the nature of a freezing order given by Lord Nicholls of Birkenhead in Mercedes Benz AG v Leiduck. That passage was cited with approval by five members of this Court in Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia in a passage which (subject to presently immaterial qualifications) was itself adopted as a correct statement of principle by four members of this Court in Cardile v LED Builders Pty Ltd. Lord Nicholls explained [36]:
'Although normally granted in the proceedings in which the judgment is being sought, [a freezing order] is not granted in aid of the cause of action asserted in the proceedings, at any rate in any ordinary sense. It is not so much relief appurtenant to a money claim as relief appurtenant to a prospective money judgment. It is relief granted to facilitate the process of execution or enforcement which will arise when, but only when, the judgment for payment of an amount of money has been obtained.'
The actual holding in Cardile v LED Builders Pty Ltd illustrates that the prospective enforcement process that a court might protect by making a freezing order can be a process contingent on factors in addition to the outcome of a substantive proceeding in that court. The holding was that a freezing order can be made against a third party against whom no present cause of action exists and against whom no present proceeding has commenced. It is enough that some future legal process (which might be contingent, for example, on the appointment by another court of a liquidator or a trustee in bankruptcy) may be available pursuant to which the third party may be obliged to contribute to the funds of the judgment debtor to help satisfy the judgment against the judgment debtor.
27 There is a need for great care in granting an order of this kind, especially against third parties. The position was described in Cardile v LED Builders Pty Ltd:6
We agree with the tenor of what was said with particular respect to Marevarelief before judgment by the Court of Appeal of New South Wales (Mason P, Sheller JA, Sheppard AJA) in Frigo v Culhaci:
'[A Mareva order] is a drastic remedy which should not be granted lightly ... A [Mareva order] is an interlocutory order which, if granted, imposes a severe restriction upon a defendant's right to deal with his or her assets. It is granted at the suit of a plaintiff whose status as a creditor is in dispute and who need not be a secured creditor. Its purpose is to preserve the status quo, not to change it in favour of the plaintiff. The function of the order is not to 'provide a plaintiff with security in advance for a judgment that he hopes to obtain and that he fears might not be satisfied; nor is it to improve the position of the plaintiff in the event of the defendant's insolvency' ... Many authorities attest to the care with which courts are required to scrutinise applications for [Mareva orders]. The leading decision in this State is Patterson v BTR Engineering (Aust) Ltd.'
Another reason, unfortunately rarely adverted to in the cases, for care in exercising the power to grant a Marevaorder is that there may be difficulties associated with the quantification and recovery of damages pursuant to the undertaking if it should turn out that the order should not have been granted. These matters were the subject of discussion by Aickin J in Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd(112). A further question to which a Marevaorder gives rise is the identification of the events to trigger its dissolution or an entitlement to damages. So far as this is possible, some attention to that question should be given at the time that the order is framed in the first instance.
Discretionary considerations generally also should carefully be weighed before an order is made. Has the applicant proceeded diligently and expeditiously? Has a money judgment been recovered in the proceedings? Are proceedings (for example, civil conspiracy proceedings) available against the third party? Why, if some proceedings are available, have they not been taken? Why, if proceedings are available against the third party and have not been taken and the court is still minded to make a Marevaorder, should not the grant of the relief be conditioned upon an undertaking by the applicant to commence, and ensure so far as is possible the expedition of, such proceedings? It is difficult to conceive of cases where such an undertaking would not be required. Questions of this kind may be just as relevant to the decision to grant Marevarelief as they are to a decision to dissolve it. These are matters to which courts should be alive. As will appear, they are matters which should have been considered by the Full Court in this case. (footnotes omitted)
28 In relation to the third parties, matters relevant to the exercise of the discretion were referred to in Cardile:
What then is the principle to guide the courts in determining whether to grant Mareva relief in a case such as the present where the activities of third parties are the object sought to be restrained? In our opinion such an order may, and we emphasise the word 'may', be appropriate, assuming the existence of other relevant criteria and discretionary factors, in circumstances in which: (i) the third party holds, is using, or has exercised or is exercising a power of disposition over, or is otherwise in possession of, assets, including 'claims and expectancies' (114), of the judgment debtor or potential judgment debtor; or (ii) some process, ultimately enforceable by the courts, is or may be available to the judgment creditor as a consequence of a judgment against that actual or potential judgment debtor, pursuant to which, whether by appointment of a liquidator, trustee in bankruptcy, receiver or otherwise, the third party may be obliged to disgorge property or otherwise contribute to the funds or property of the judgment debtor to help satisfy the judgment against the judgment debtor [57].
Freezing orders - conclusion
29 I am satisfied in the present case that it is necessary to make an order against Mr and Mrs Brown and AMP Superannuation to prevent the frustration of the existing processes of this court and prospective processes anticipated under s 89 of the Property Law Act.
Donna Brown
30 The value of Mrs Brown's assets sought to be frozen is $535,000. That amount comprises:
(a) $255,000 (which was the proceeds of the Carmel property that were transferred back to Mrs Brown by what the plaintiff contends is, and on the face of it appears to be, a round robin transaction); and
(b) $280,000 (from the dividend payments which were deposited into Mrs Brown's AMP Superannuation account).
31 Counsel for Mrs Brown argues that Mr Brown's willingness to have a freezing order in relation to the shares which he purchased is adequate protection of the court's processes. I do not accept that submission. The value of the redeemable preference shares would seem to be open to significant doubt, depending on the value of the company to which they relate. The money in the hands of the person with whom it appears to have ended up would be the appropriate subject of the freezing order.
John Brown
32 In relation to Mr Brown, the value of property sought to be frozen is $1,509,952.63. This figure comprises:
(a) $255,000 (proceeds he received from the sale of the Carmel property; and
(b) $1,254,952.63 (dividends Mr Brown received from Minspec since the commencement of the action).
33 Mr Brown is willing to consent to a freezing order in relation to the superannuation account with a value of $830,000. His counsel submits that should be sufficient, particularly given the agreement which has been reached between Mr King and the plaintiff.
34 I do not accept that submission. Dividends in the amount of $1.25 million flowed from Minspec to Mr Brown. An order should be made in respect of the full value of that amount. The court is not privy to the considerations which led to the agreement between Mr King and the plaintiff. I am not convinced that the existence of that agreement provides a discretionary reason for declining to make the freezing order sought by the plaintiff against both Mr and Mrs Brown.
AMP Superannuation
35 I accept Mr and Mrs Brown's submission that an order against AMP Superannuation ought to allow any mandatory withdrawals to be made from their superannuation account. I also accept the plaintiff's submission that this allowance should not affect the total sum which is to be the subject of the freezing order. Provision for allowing for mandatory withdrawals should be contained in a separate clause in the freezing order.
Pleading issue
36 Counsel for Mr and Mrs Brown submitted that the case against Mr Brown was not particularly strong. He noted that a plea in par 6.2 of the defence, which was to the effect that Mr King had provided some information, was admitted in par 4 of the reply. I dealt with that argument in my previous decision.7 I reject that argument here for the same reason. Bearing in mind the caution which needs to be adopted when matters are at the pleading stage, I am satisfied on the pleaded facts that there is a good arguable case.
37 In any event, there is a case against Mr Brown under s 89 of the Property Law Act even if he were found not to be personally liable in respect of representations he is alleged to have made.
Duration of order
38 I accept Mr and Mrs Brown's submission that the freezing order ought to operate only until 31 October 2016 or further order of the court. The freezing orders will have a significant adverse financial effect on Mr and Mrs Brown and the other parties restrained. Having obtained those orders, it is incumbent upon the plaintiff to progress its principal claim with all due expedition. If the matter is not at, or close to trial in a year's time, there will be a real question as to whether the freezing orders ought to continue, depending on the reasons for any delay.
Ancillary orders against Mr and Mrs Brown
39 The chamber summons seeking further ancillary orders sets out very detailed questions for both Mr and Mrs Brown to answer. The request for ancillary orders is to be dealt with in a context where the freezing orders which I am going to make today will operate to prevent frustration of the court's processes and will lead to roughly $3 million in assets being frozen.
40 It is also relevant to note that the litigation about the freezing orders in this case has distracted the resources and the attention of the parties away from the resolution of the plaintiff's principal claim. The ancillary orders that will be made today by consent will provide a considerable amount of information to the plaintiff. The orders to which Minspec has agreed will provide for it to disclose the details of assets which have been disposed of and the value of those assets. Most of these questions concern the apparent winding down of the business of Minspec and the alleged establishment of the same business by other entities.
41 The plaintiff notes that the structures adopted by the defendants are complex and confusing.8 In my view, the focus of any action would need to be on the transfer of assets from Minspec for some undervalue. The orders which I would make in order 10 will deal with that subject matter. It is not necessary or appropriate at this point to require Mr and Mrs Brown to provide further information in relation to those matters.
42 I will, however, make an order generally in the terms of par 3(k) and par 5(b) of the chamber summons. This will require Mr and Mrs Brown to indicate how they have dealt with money in the bank account into which $432,000 of dividends were paid.
43 I will make some modifications to the orders sought.
44 The requirement for invoices is not appropriate. Mr and Mrs Brown could not be expected to have kept invoices for every item of expenditure over the relevant period. Those orders should be reformulated so as to require the provision of information as to how those amounts were being disbursed away from Mr and Mrs Brown.
45 A higher threshold also ought to be imposed, rather than requiring Mr and Mrs Brown to account for each item of expenditure over $500.
Orders sought against Mr King
46 The plaintiff and Mr King have reached agreement as to the form of orders to be made against Mr King. I will make orders in those terms.
Orders sought against Minspec
47 Orders sought against Minspec are agreed, subject to two minor matters.
48 Counsel for Minspec proposes that the words 'invoices and/or' in par 10(c) of the proposed orders be deleted. She says that copies of documentation relating to manufacturing, sales and activities undertaken by Minspec since 18 April 2012 will be sufficient to identify whether Minspec and the Oreflow Unit Trust manufactured or sold similar equipment or goods. The amendments proposed by counsel for Minspec should be made. In all the circumstances it would be an unwarranted burden on Minspec to require it to produce all of the relevant invoices. I am also satisfied that the date of 18 April 2012 is appropriate.
Orders
49 The plaintiff should prepare a minute of orders based on these reasons and confer with other parties to see if agreement can be reached as to the terms of the orders which follow from my decision.
1BGC Australia Pty Ltd v Minspec Pty Ltd [2015] WASC 134.
2 Alleged to be in contravention of s 52 of the Trade Practices Act 1974 (Cth).
3 Alleged to be in contravention of s 10 of the Fair Trading Act 1987 (WA).
4Federal Commissioner of Taxation v Oswal [2012] FCA 1507; (2012) 91 ATR 684 [21] - [25].
5PT Bayan Resources TBK v BCBC Singapore Pte Ltd [2015] HCA 36 [43] - [47].
6Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 [51] - [53].
7BGC Australia [5].
8 At par 54 of its submissions.
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