Clout v Anscore Pty Ltd

[2000] FCA 727

FEDERAL COURT OF AUSTRALIA

Clout (Trustee) v Anscor Pty Ltd [2000] FCA 727

MAREVA INJUNCTION - joinder of parties against whom applicant claims substantive relief under s 120 Bankruptcy Act 1966 (Cth) and interlocutory Mareva-type relief - requirements for a Mareva order to be made against a party to an action

Bankruptcy Act 1966 (Cth) s 120
Income Tax Assessment Act 1936 (Cth)

Cardile v LED Builders Pty Ltd (1999) 73 ALJR 657 considered
Agip (Africa) Ltd v Jackson [1990] 1 Ch 265 referred to
Official Trustee in Bankruptcy v Alvaro (1996) 66 FCR 372 referred to

DAVID LEWIS CLOUT (AS TRUSTEE IN BANKRUPTCY OF THE ESTATE OF GEOFFREY  ROBERT DEXTER) v ANSCOR PTY LTD, MACKAY & ALLEN PTY LTD, HINATORIE PTY LTD (PROVISIONAL LIQUIDATOR APPOINTED), THE FUND ADMINISTRATORS PTY LTD, REINSAG NOMINEES PTY LTD, SPECTRUM FUND ADMINISTRATION PTY LTD, AUSTRALIAN SECURED MORTGAGES PTY LTD, PROJECT FINANCE (QLD) PTY LTD, ANNE SHIRLEY CORBETT, CROFTBY DOWNS PTY LTD, THORNVILLE PTY LTD IN ITS OWN CAPACITY AND IN ITS CAPACITY AS TRUSTEE OF THE ANSCOR EXECUTIVE INCENTIVE TRUST AND THE THORNVILLE EXECUTIVE INCENTIVE TRUST AND ANSCOR INVESTMENTS PTY LTD

QG 7308 OF 1998

DRUMMOND J
31 MAY 2000
SYDNEY (VIA VIDEO LINK TO BRISBANE)

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QG 7308 OF 1998

BETWEEN:

DAVID LEWIS CLOUT (AS TRUSTEE IN BANKRUPTCY OF THE ESTATE OF GEOFFREY ROBERT DEXTER)
APPLICANT

AND:

ANSCOR PTY LTD
FIRST RESPONDENT

MACKAY & ALLEN PTY LTD
SECOND RESPONDENT

HINATORIE PTY LTD (PROVISIONAL LIQUIDATOR APPOINTED)
THIRD RESPONDENT

THE FUND ADMINISTRATORS PTY LTD
FOURTH RESPONDENT

REINSAG NOMINEES PTY LTD
FIFTH RESPONDENT

SPECTRUM FUND ADMINISTRATION PTY LTD
SIXTH RESPONDENT

AUSTRALIAN SECURED MORTGAGES PTY LTD
SEVENTH RESPONDENT

PROJECT FINANCE (QLD) PTY LTD
EIGHTH RESPONDENT

ANNE SHIRLEY CORBETT
NINTH RESPONDENT

CROFTBY DOWNS PTY LTD
TENTH RESPONDENT

THORNVILLE PTY LTD IN ITS OWN CAPACITY AND IN ITS CAPACITY AS TRUSTEE OF THE ANSCOR EXECUTIVE INCENTIVE TRUST AND THE THORNVILLE EXECUTIVE INCENTIVE TRUST
ELEVENTH RESPONDENT

ANSCOR INVESTMENTS PTY LTD
TWELFTH RESPONDENT

JUDGE:	DRUMMOND J
DATE OF ORDER:	31 MAY 2000
WHERE MADE:	SYDNEY (VIA VIDEO LINK TO BRISBANE)

THE COURT ORDERS THAT:

1.Anne Shirley Corbett, Anscor Investments Pty Ltd ACN 075 754 871, Thornville Pty Ltd ACN 067 231 930 in its own capacity and as trustee of the Anscor Executive Incentive Trust and as trustee of the Thornville Executive Incentive Trust and Croftby Downs Pty Ltd ACN 080 291 550 be joined as respondents to these proceedings.

2.Upon the applicant by his counsel giving the usual undertaking as to damages, until the trial of these proceedings or further earlier order Anscor Pty Ltd by itself, its servants or agents, or otherwise howsoever be restrained from transferring, selling, charging, mortgaging, encumbering, securing, diminishing, disposing of, parting with possession, making any declaration of trust in relation to, exercising any power to vary or modify any trust deed or any interest under any trust in relation to, removing from its present locations or otherwise dealing with all or any of its money, assets, property, interests in property of any kind whatsoever whether situate within Australia or outside Australia.

3.Upon the applicant by his counsel giving the usual undertaking as to damages, until the trial of these proceedings or further earlier order Anne Shirley Corbett, Anscor Investments Pty Ltd ACN 075 754 871, Thornville Pty Ltd ACN 067 231 930 in its own capacity and as trustee of the Anscor Executive Incentive Trust and as trustee of the Thornville Executive Incentive Trust and Croftby Downs Pty Ltd ACN 080 291 550 by themselves, their servants or agents, or otherwise howsoever be restrained from transferring, selling, charging, mortgaging, encumbering, securing, diminishing, disposing of, parting with possession, making any declaration of trust in relation to, exercising any power to vary or modify any trust deed or any interest under any trust in relation to, removing from their present locations or otherwise dealing with all or any of the real property of which they are registered as the owners and any of the property referred to in par 17(a), (c) - (e) of the affidavit of Anne Shirley Corbett sworn on 30 March 2000 and filed in Supreme Court action S 2337 of 2000 (excepting only the properties at 76 Cantwell Street, Anstead and at 530 Gold Creek Road, Brookfield owned by the said Anne Shirley Corbett).

4.The costs of and incidental to the application for interlocutory relief the subject of Orders 1, 2 and 3 be reserved.

5.In so far as the notice of motion seeks an order with respect to discovery, the notice of motion be adjourned generally with liberty to the applicant to bring it on for hearing on notice to the relevant respondents.

6.Liberty to apply.

Note:   Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QG 7308 OF 1998

BETWEEN:

DAVID LEWIS CLOUT (AS TRUSTEE IN BANKRUPTCY OF THE ESTATE OF GEOFFREY ROBERT DEXTER)
APPLICANT

AND:

ANSCOR PTY LTD
FIRST RESPONDENT

MACKAY & ALLEN PTY LTD
SECOND RESPONDENT

HINATORIE PTY LTD
(PROVISIONAL LIQUIDATOR APPOINTED)
THIRD RESPONDENT

THE FUND ADMINISTRATORS PTY LTD
FOURTH RESPONDENT

REINSAG NOMINEES PTY LTD
FIFTH RESPONDENT

SPECTRUM FUND ADMINISTRATION PTY LTD
SIXTH RESPONDENT

AUSTRALIAN SECURED MORTGAGES PTY LTD
SEVENTH RESPONDENT

PROJECT FINANCE (QLD) PTY LTD
EIGHTH RESPONDENT

ANNE SHIRLEY CORBETT
NINTH RESPONDENT

CROFTBY DOWNS PTY LTD
TENTH RESPONDENT

THORNVILLE PTY LTD IN ITS OWN CAPACITY AND IN ITS CAPACITY AS TRUSTEE OF THE ANSCOR EXECUTIVE INCENTIVE TRUST AND THE THORNVILLE EXECUTIVE INCENTIVE TRUST
ELEVENTH RESPONDENT

ANSCOR INVESTMENTS PTY LTD
TWELFTH RESPONDENT

JUDGE:	DRUMMOND J
DATE:	31 MAY 2000
PLACE:	SYDNEY (VIA VIDEO LINK TO BRISBANE)

REASONS FOR JUDGMENT

1. The applicant, Mr Clout, is the trustee in bankruptcy of Geoffrey Robert Dexter.  The bankruptcy commenced on 28 May 1998.  For some years prior to March 1998, Mr Dexter ran a scheme under the name “the Wattle Group” through which he offered a return of 50% per annum to persons prepared to lend their moneys to him on an unsecured basis.  The scheme collapsed in March 1998 when the Australian Securities Commission sought an injunction to restrain Dexter from carrying it on.  But it was for a time very successful, at least for those involved in running it:  many persons were prepared to lend Dexter moneys totalling, in all, many millions of dollars.  Lenders were recruited into the scheme not by Dexter, but by other organisations who were paid by Dexter very large commissions, approximating 50% of the loan moneys procured, for introducing lenders to the Wattle Group scheme and for administering the loans as between Dexter and the lenders.  The respondent Anscor Pty Ltd was one such organisation.  At the date of Clout’s appointment, Clout says Dexter owed over 3,100 lenders in excess of $155,000,000 in respect of which Dexter had paid commission to Anscor and others of over $43,000,000.  Clout says little is likely to be recovered for distribution to these unsecured lenders.

2. Last year, Clout commenced proceedings against Anscor and other unrelated organisations who solicited business for Dexter claiming, among other things, orders that almost the whole of the commission moneys received by Anscor and those others are transfers of money by Dexter which are void against Clout as undervalued transfers within s 120 the Bankruptcy Act 1966 (Cth). Clout’s claim under s 120 against Anscor is now limited to commissions received since February 1997. Between February 1997 and Dexter’s bankruptcy, the latter paid commissions to Anscor sums totalling almost $20,000,000.

3. The application that Clout has now brought before me is for Mareva-type relief against Anscor, and also against Mrs Corbett and three other companies, Anscor Investments Pty Ltd, Thornville Pty Ltd and Croftby Downs Pty Ltd.  At all times of present relevance, Mrs Corbett was the sole director of all four companies.

4. Oral argument focused on whether Mareva-type relief should be granted against any of these five entities.  But in addition to seeking such relief, Clout’s application seeks an order that each of Mrs Corbett, Anscor Investments, Croftby Downs and Thornville be joined as respondents in the action.  The amended statement of claim which Clout proposes to deliver in the event that joinder is ordered shows that he wishes to raise substantive causes of action against each of the four which, if made out, will entitle him to a declaration that each holds on trust for him property purchased in their name with moneys paid by Dexter to Anscor.  For reasons set out below, the evidence before me is sufficient to show that these proposed claims cannot be dismissed as lacking any substance.  I consider that Clout is entitled to an order joining all four as respondents so that he can sue them on the causes of action set out in his proposed statement of claim against them.

5. The reliance placed by senior counsel for the respondents to the motion on Cardile v LED Builders Pty Ltd (1999) 73 ALJR 657 and the strictures contained in the judgment on the limited circumstances in which it is permissible to grant Mareva-type relief against non-parties is therefore misplaced.

6. However, I accept counsel’s submission as to the requirements which must be satisfied before a Mareva order can be made against a party to an action, viz, that the applicant must establish by evidence a prima facie case, in the sense of an arguable case, that it will obtain a judgment against the particular party, that the applicant must demonstrate by evidence that there is a real risk that, unless restrained, the respondent will deal with its assets so as to frustrate enforcement of that judgment and, finally, that the Court, in granting any interlocutory relief, including a Mareva order, should generally grant the minimum relief necessary to do justice between the parties.

7. The event that provoked Clout’s urgent application for Mareva-type relief late last week was his discovery that Croftby Downs proposes today, 31 May 2000, to grant a further mortgage over and so reduce its interest in a farm property it purchased with what I will call “Anscor commission moneys”, though Mareva-type relief is also sought against Anscor and the other four new respondents. It is said that this transaction involves circumstances sufficiently unusual to raise, with other evidence, the inference that it is being entered into for the purpose of preventing Clout obtaining satisfaction of the judgment he is seeking against Anscor, and now against Croftby Downs itself, in his action based on s 120 the Bankruptcy Act 1966 (Cth).

8. Croftby Downs bought the farm in late 1997, early 1998 for a total of $1,510,000.  In addition, it paid sums totalling about $640,000 for equipment and improvements in connection with the acquisition of the farm.  It is not disputed before me that Croftby Downs obtained all these funds from Anscor.  On the evidence before me, the probabilities are that Anscor in turn obtained these moneys by way of commissions from Dexter, its activities in connection with the Wattle Group scheme being its only substantial source of income both in the period in question and for some years prior to that.

9. The evidence before me as to the likely market value of the services performed for Dexter by Anscor and the other organisations is limited to evidence by Clout that his inquiries reveal that commission of the order of about 7.5% of funds advanced was the market rate.  So far as Anscor itself is concerned, the evidence given by Mrs Corbett and her husband at their compulsory examinations conducted on behalf of Clout shows that Anscor did very little indeed in return for receipt by way of commission of 50% of all investors’ funds that passed through its hands to Dexter.  On the evidence before me, Clout has an arguable case on the first limb of his claim against Croftby Downs, viz, that he is entitled to avoid the transfer by Dexter to Anscor of almost the whole of the commission moneys paid to Anscor from February 1997.

10. Clout has obtained extensive, though not complete, access to the books of both Anscor and Croftby Downs (as well as the books of the other companies the subject of the present application).  He has been unable to identify any documentary evidence apart from journal entries describing the advances made by Anscor to Croftby Downs that I have referred to as loans:  he has not discovered any loan agreement and it appears that Croftby Downs has not paid any interest in respect of these moneys to Anscor.  He submits that Anscor obtained no identifiable benefit from these payments made to Croftby Downs.  The respondents to the present application do not challenge this.

11. Counsel for Clout submits that, in this state of the evidence, the inference can be drawn that there was in truth no loan but rather that Anscor’s own moneys were used to acquire the farm and associated property so that Croftby Downs holds it all on a resulting trust for Anscor.  Counsel submits in the alternative that if the moneys were provided by Anscor by way of loan, Croftby Downs holds the property on a constructive trust because the Anscor funds it used to acquire those properties were provided to it in breach of Mrs Corbett’s duty to Anscor as its sole director, to the knowledge of Croftby Downs (via Mrs Corbett as the latter’s sole director):  that a breach of duty was involved is shown by the absence of any benefit to Anscor from such a loan.  It is a proposition supported by Agip (Africa) Ltd v Jackson [1990] 1 Ch 265 at 290F.

12. Croftby Downs would have acquired a good title to the moneys, if the moneys used to buy the property in question were in truth provided by Anscor to it by way of loan. But if Clout succeeds in obtaining an order under s 120 the Bankruptcy Act 1966 (Cth) setting aside the transfer of those funds by Anscor to Croftby Downs, Clout will be able to obtain an order for the transfer to him of Croftby Downs’ interest in the farm property pursuant to the principles discussed in Official Trustee in Bankruptcy v Alvaro (1996) 66 FCR 372 at 426 - 427, since the Anscor moneys used by Croftby Downs to buy the farm property will be traceable by Clout into that property. See Agip at 290G-H.

13. I accept that, on the evidence before me, Clout has an arguable case that Croftby Downs holds the property on a resulting or constructive trust for Anscor which Clout can enforce for the benefit of Dexter’s estate.

14. As appears from his proposed statement of claim, Clout intends to set up causes of action against the other three new respondents similar to that raised against Croftby Downs. All are based on the purchase by the particular respondent of real property in her or its own name with moneys provided by Anscor which are all moneys which Anscor itself was paid by way of commissions by Dexter. These commission payments to Anscor are all said to be void as against Clout by force of s 120 the Bankruptcy Act 1966 (Cth).

15. Just as the evidence before me shows that Clout has an arguable case of the kind to which I have referred in relation to Croftby Downs, so does it show that he has an arguable case against each of Mrs Corbett, Thornville and Anscor Investments, that properties they hold which they purchased with moneys obtained from Anscor after January 1997 are also impressed with either a resulting or a constructive trust in favour of Anscor, which Clout can enforce against them.

16. Mrs Corbett’s properties at 76 Cantwell Street, Anstead and at 530 Gold Creek Road, Brookfield were purchased by her in 1994:  Clout has not shown any basis upon which it would be proper to grant relief now sought against Mrs Corbett in respect of those two properties.  Nor has he shown any basis upon which such relief can be granted against any of the four new respondents in respect of any of their assets other than the land and chattels owned by each which the evidence shows to have been acquired by each with moneys provided after January 1997 by Anscor from its Dexter commissions.

17. In my opinion, on the material before me, Clout therefore has an arguable case for obtaining relief under s 120 the Bankruptcy Act 1966 (Cth) against Anscor in respect of all commission moneys received by it from Dexter from February 1997, including those moneys transferred by Anscor to Mrs Corbett, Croftby Downs, Anscor Investments and Thornville since February 1997. In the event that such a case succeeds at trial, on the material before me, Clout also has an arguable case for relief against Croftby Downs, Mrs Corbett, Thornville and Anscor Investments in the form of orders that each transfer the properties I have referred to, to Clout for realisation in Dexter’s bankruptcy.

18. In order to establish that the proposed mortgage by Croftby Downs of its interest in the farm property is being undertaken to prevent Clout obtaining satisfaction of the judgments he is seeking against Anscor and Croftby Downs, Clout relies in part upon information about that transaction provided to Clout last Friday by Mr Saunders, the solicitor for each of Anscor, Mr and Mrs Corbett, Croftby Downs, Thornville and Anscor Investments.

19. Croftby Downs’ interest in the farm is to be provided as security to a bank for its loan of $1,800,000 to a company controlled by Mr Corbett’s brother.  These loan moneys are to be used by that company to purchase a tavern in Western Australia for $1,600,000, to pay $100,000 in associated purchase costs and as to the remaining $100,000, to use as working capital.  The loan is for a term of twenty-five years.  In return for making its interest in the farm property available as security, Croftby Downs is to have only an unsecured promise by the purchaser company to pay an annual fee of $150,000, presumably for twenty-five years, with payment moreover being dependent upon the profitability of the tavern business.  No security is intended to be taken by Croftby Downs from Mr Corbett’s brother or anyone else.  A further term of this transaction that appears unusual, in the absence of evidence as to the realisable value of the farm, equipment and improvements, is that Pacific International Asset Management Limited (“PIAM”), to which I will later refer, which holds a mortgage from Croftby Downs over the farm to secure $2,000,000, is prepared to subordinate its mortgage to the bank’s security for its loan to the purchaser company in return for Croftby Downs giving PIAM a debenture over its plant, equipment, stock and crops on the farm:  PIAM appears to be very ready to fall in with Croftby Downs (and Mrs Corbett’s) wishes.

20. The evidence suggests that there is a real risk that this mortgage transaction is being undertaken to impede Clout in obtaining satisfaction of the judgment he anticipates obtaining against Anscor and Croftby Downs.  The other evidence Clout relies on as relevant to this issue of risk of dissipation in relation to the relief Clout is seeking against Mrs Corbett, Anscor, Anscor Investments and Thornville, as well as Croftby Downs, consists of the following matters:

    (1)Between February 1997 and March 1998 Anscor received nearly $20,000,000 in commissions from Dexter.  It disbursed a substantial part of these moneys to Mrs Corbett and the other three new respondents in the circumstances referred to, which suggest that it received no benefit from those disbursements, even though at all times it was acting in its capacity as trustee of the Anzcorp Discretionary Trust.  Clout has been able to identify from his examinations of the relevant financial records what Anscor did with a substantial part of the $20,000,000, but he has not been able to identify what became of a very large sum indeed.  The respondents through their solicitor confirm the correctness of what Clout says was done by Anscor with those commission moneys, the application of which he has been able to identify.  But they do not offer any explanation for what has become of the other very substantial sums that Anscor received as commissions from February 1997.  Despite this, it appears that Anscor now has little in the way of assets under its control:  it has a strata-title office mortgaged to an arms’ length third party and it has what may be debts, substantial in amount, owing to it by Mr and Mrs Corbett and the other new respondents.  But Clout has not been able to identify anything else in the way of assets held by it, despite the large income received by it in the period from February 1997 to March 1998.  Anscor appears to have dissipated a large part of the $20,000,000 it received in the period February 1997 to March 1998.

    (2)On 26 March 1998, the day Dexter appointed Clout as his controlling trustee under s 188 the Bankruptcy Act 1966 (Cth) and at a time when Dexter’s Wattle group activities were under investigation by the Australian Securities Commission, Croftby Downs executed the mortgage I have referred to in favour of PIAM. On the same day, Mrs Corbett executed a mortgage in favour of PIAM over her own properties, including two acquired by her with moneys obtained from Anscor and which Clout also seeks to freeze in the present application. In terms, these mortgages secure to PIAM a loan by it in the sum of $2,000,000 to Croftby Downs at an interest rate of 10% per annum.

    (3)PIAM is a New Zealand company which, from time to time in the period January 1998 to 28 December 1999, has advertised on its website that it is part of a network of professional firms offering services which include international funds movement and international asset protection from “the unwanted and untimely claims from government authorities, creditors and others who may have a claim on their assets”.

    (4)Like Croftby Downs, each of Mrs Corbett, Thornville and Anscor Investments purchased properties in south east Queensland in the period the subject of Clout’s claim against Anscor, ie, from February 1997, with moneys each obtained from Anscor. The Anscor transfers of these funds are noted in the books of Anscor, Thornville, Croftby Downs and Anscor Investments as loans by Anscor, though Clout has been unable to identify any loan documentation, any payment of interest to Anscor in respect of these loans or any benefit to Anscor from the making of these loans. He submits the disbursement of these funds by Anscor in these circumstances evidences a course of conduct by it in seeking to ensure that it will have put beyond Clout’s reach the moneys it received from Dexter, the transfers of which to Anscor are all that can be voided by force of s 120 the Bankruptcy Act 1966 (Cth).

    (5)In proceedings brought in the Supreme Court of Queensland against Anscor by a third party, Zipside Pty Ltd, that company obtained Mareva orders freezing all the assets of Anscor, Mr and Mrs Corbett, Croftby Downs, Anscor Investments and Thornville.  That order was amended by further order of the Supreme Court in December 1999 to limit the restraint imposed upon the various respondents to dealing with property to the value of the amount at issue in the Zipside action, $650,000.  An appeal against the Supreme Court orders of June 1998 and December 1999 was instituted in January 2000 and that appeal is pending before the Court of Appeal.  On 31 March 2000, the Supreme Court further ordered that Zipside remove caveats which it had previously lodged in respect of dealings with the real property I have referred to of Mrs Corbett, Anscor Investments, Thornville and Croftby Downs.  It is said that fairly promptly after the blanket restraint imposed by the Supreme Court Mareva injunction was relaxed and after Zipside’s caveats were withdrawn, ie, fairly promptly after it was in a position to do so, Croftby Downs determined to enter into the mortgage transaction mentioned.

    (6)It is further said that at about the same time, in mid April 2000, Thornville put its Greer Street units on the market, was unable to sell them at auction and, as at 22 May, they remain listed for sale.  It is also said that Anscor Investments has got one of its Sunshine Beach villas on the market.

1. Evidence on behalf of the respondents to the motion comes from their solicitor, Mr Saunders, and their tax adviser, a chartered accountant Mr McAuley.

2. Mr Saunders swears on information and belief from the Corbetts that they were unaware of the Australian Securities Commission investigation into Dexter’s activities until 24 March 1998, ie, two days before Dexter appointed Clout his controlling trustee and two days before Mrs Corbett and Croftby Downs granted the mortgages to PIAM; Mr Saunders also swears that the Corbetts then had no knowledge that the Australian Securities Commission investigations were such as might expose them and the companies Mrs Corbett controlled to any legal action.

3. The association of the Corbett interests with PIAM is explained particularly by Mr McAuley, who says Anscor, Mr and Mrs Corbett, Anscor Investments, Thornville and Croftby Downs have been clients of his since about 1996.  He said he learned of the existence of PIAM in about May 1997 in the context of his then considering the possibility of establishing, in relation to Anscor as trustee of the Anzcorp Discretionary Trust, a non-resident, non-complying superannuation fund in order to obtain certain benefits available under the Income Tax Assessment Act 1936 (Cth). The consequence was that, on 30 June 1997, he arranged for documentation to be executed appointing PIAM as trustee of just such a fund. The employee members of the fund plan included Mr and Mrs Corbett. On the same day, $2,805,000 was paid by Anscor as trustee of the Anzcorp Discretionary Trust to PIAM as a superannuation contribution to the new fund in respect of employees of the Trust who included Mr and Mrs Corbett. On the same day Anscor received almost the whole of the $2,805,000 back in the form of a loan by PIAM as trustee of the new superannuation fund to Anscor as trustee of the Anzcorp Discretionary Trust. According to Mr McAuley, this loan was expressed to be for a twelve month period with repayment due on thirty days notice after 30 June 1998, with interest at 10% per annum. He says the arrangements in question were made with PIAM solely to ensure the new fund would have a non-resident trustee appropriately experienced and prepared to charge a fair fee for its services. Because PIAM answered these requirements, Mr McAuley says it has not been removed as trustee of the superannuation fund, though he was shocked to learn in mid June 1998 that PIAM holds itself out as providing asset protection services.

4. He also says that in late 1997, various announcements by the Australian Government as to its plans for changing the tax treatment of private companies and trusts caused him to take action which led, in early 1998, to PIAM releasing the security it had taken from Anscor for the $2,800,000 loan to Anscor on 30 June 1997 and replacing it with the mortgage offered by Croftby Downs over its farm property and the mortgage offered by Mrs Corbett over her own properties, to which I have referred. These mortgages only secure to PIAM an indebtedness in an amount of $2,000,000:  it appears that Anscor repaid the difference between $2,000,000 and the amount then owing by it to PIAM as part of this re-arrangement.  As part of these arrangements, the loan by PIAM to Anscor which would become repayable on thirty days notice after 30 June 1998 was converted to a five year term loan owing by Croftby Downs to PIAM, with Croftby Downs having the option to extend it for a further five years.

5. Mr Saunders says that Thornville has put its Greer Street units up for sale because the arms’ length mortgagee is pressing for repayment and that Anscor Investments has had one of its Sunshine Beach units on and off the market “over the last couple of years” and that, if it should be sold, Anscor Investments proposes to reduce the mortgage debt owing to the Bank of Queensland with the proceeds of any sale.  Both companies complied with the Supreme Court Mareva orders in force when they took this action.

6. I am satisfied that there is a sufficient risk that unless relief is now granted, Mrs Corbett will act to ensure that none of the properties in question will remain available to Clout to satisfy any judgment he may obtain in the proceedings against Anscor and the four new respondents.  The practice of Mrs Corbett causing Anscor to transfer large sums to herself, Croftby Downs, Anscor Investments and Thornville in circumstances where there is an apparent lack of documentation evidencing the nature of the transfers which could be expected to exist if the transfers were bona fide commercial ones and the absence of any identifiable benefit from these transfers for Anscor, even though it is operating only as the trustee of the Anzcorp Discretionary Trust in dealing with these moneys, points to that.  The fact that Clout has only been able to identify what was done by Anscor with a relatively small part of the $20,000,000 of Dexter moneys that Anscor received since February 1997 also points to that risk, as does the fact that, despite having had control of such a large sum, Anscor now appears to have little in the way of assets.  The nature of the mortgage transaction that Croftby Downs now proposes to consummate provides further evidence that Mrs Corbett is acting to ensure that the judgment Clout may obtain against Anscor and Croftby Downs (and the other new respondents) will be an empty one.

7. Subject to one qualification, Clout seeks a general restraint upon Mrs Corbett, Anscor Investments, Thornville and Croftby Downs’ dealing with any of their assets, including the various properties to which I have referred.  The qualification is that Clout proposes an order which will leave Mrs Corbett free to incur and pay costs reasonably incurred in these proceedings up to an amount of $50,000 and to expend a sum not exceeding $1,000 per week on her ordinary living expenses.

8. For the reasons given, while Clout has made out an entitlement to wide-ranging Mareva-type relief against Anscor, he has shown an entitlement against the four new respondents only to relief in respect of the real properties of each of them and the equipment and improvements on Croftby Downs’ farm acquired with Anscor moneys from February 1997.  Given this and given that upwards of $20,000,000 has passed through Anscor’s hands since February 1997 when Mrs Corbett has been its sole director and that Clout has only been able to point to what has become of part of that large sum and given further that the respondents to the motion have not provided any explanation for what has become of the $20,000,000 received by Anscor from Dexter since February 1997, I think that the wide-ranging relief sought against Anscor and the limited relief I am prepared to grant against each of the four new respondents will do justice between Clout and those respondents in the present context.  I will not give Mrs Corbett access to any of the assets the subject of the restraints I propose to impose as suggested by Clout, a suggestion based I think on Clout’s unjustified assumption that the Court will impose a total freeze on all of the respondents’ assets.

9. The motion came before me as an urgent one and argument was limited to the question of Mareva relief.  In so far as it seeks an order with respect to discovery, the motion will be adjourned generally with liberty to Clout to bring it on before me for hearing on notice to the relevant respondents.

10. There will be an order in terms of par 1 of the notice of motion as amended.

11. If the applicant gives the usual undertaking as to damages, I will make an order against Anscor Pty Ltd in terms of the order sought against it by par 2 of the notice of motion and I will make a further order that, until the trial of these proceedings or further earlier order, the respondents Anne Shirley Corbett, Anscor Investments Pty Ltd, Thornville Pty Ltd in its own capacity and as trustee of the Anscor Executive Incentive Trust and as trustee of the Thornville Executive Incentive Trust and Croftby Downs Pty Ltd by themselves, their servants or agents or otherwise howsoever be restrained from transferring, selling, charging, mortgaging, encumbering, securing, diminishing, disposing of, parting with possession, making any declaration of trust in relation to, exercising any power to vary or modify any trust deed or any interest under any trust in relation to, removing from their present locations or otherwise dealing with all or any of the real property of which they are registered as the owners and any of the property referred to in par 17(a), (c) - (e) of the affidavit of Anne Shirley Corbett sworn on 30 March 2000 and filed in Supreme Court action S 2337 of  2000 (excepting only  the properties at  76  Cantwell  Street, Anstead and  at 530 Gold Creek Road,

    Brookfield owned by the said Anne Shirley Corbett).

I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Drummond.

Associate:

Dated:            31 May 2000

Counsel for the Applicant:	Mr McMurdo QC and Mr Quayle
Solicitor for the Applicant:	Minter Ellison
Counsel for the First, Ninth, Tenth, Eleventh and Twelfth Respondents:	Mr Cooper SC
Solicitor for the First, Ninth, Tenth, Eleventh and Twelfth Respondents:	Shand Taylor
Date of Hearing:	29 May 2000
Date of Judgment:	31 May 2000