Coal of Africa Limited v Sergeant
[2012] FCA 1054
•21 September 2012
FEDERAL COURT OF AUSTRALIA
Coal of Africa Limited v Sergeant [2012] FCA 1054
Citation: Coal of Africa Limited v Sergeant [2012] FCA 1054 Parties: COAL OF AFRICA LIMITED (ACN 008 905 388) v BLAIR SERGEANT File number: NSD 1427 of 2012 Judge: BUCHANAN J Date of judgment: 21 September 2012 Date of hearing: 21 September 2012 Place: Sydney Division: GENERAL DIVISION Category: No catchwords. Number of paragraphs: 4 Counsel for the Applicant: Mr M Leeming SC Solicitor for the Applicant: Corrs Chambers Westgarth Counsel for the Respondent: The respondent did not appear.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 1427 of 2012
BETWEEN: COAL OF AFRICA LIMITED (ACN 008 905 388)
ApplicantAND: BLAIR SERGEANT
Respondent
JUDGE:
BUCHANAN J
DATE OF ORDER:
21 SEPTEMBER 2012
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
INTRODUCTION
1(a) The application for this order is made returnable immediately.
(b)The time for service of the application, supporting affidavits and originating process is abridged and service is to be effected by e-mail by 7 pm EST on 21 September 2012 to [email protected] and personally by 12 noon WST on 24 September 2012.
2Subject to the next paragraph, this order has effect up to and including 27 September 2012 (‘the Return Date’). On the Return Date at 9:30 am on 27 September 2012 there will be a further hearing in respect of this order before Justice Flick.
3Anyone served with or notified of this order, including you, may apply to the Court at any time to vary or discharge this order or so much of it as affects the person served or notified.
4In this order:
(a) ‘applicant’, if there is more than one applicant, includes all the applicants;
(b) ‘you’, where there is more than one of you, includes all of you and includes you if you are a corporation;
(c) ‘third party’ means a person other than you and the applicant;
(d) ‘unencumbered value’ means value free of mortgages, charges, liens or other encumbrances;
(e) ‘Notice Address’ means [email protected] and [email protected].
5(a) If you are ordered to do something, you must do it by yourself or through directors, officers, partners, employees, agents or others acting on your behalf or on your instructions.
(b)If you are ordered not to do something, you must not do it yourself or through directors, officers, partners, employees, agents or others acting on your behalf or on your instructions or with your encouragement or in any other way.
FREEZING OF ASSETS
6(a) You must not remove from Australia or in any way dispose of, deal with or diminish the value of any of your assets in Australia (‘Australian assets’) up to the unencumbered value of AUD$6,000,000 (‘the Relevant Amount’).
(b)If the unencumbered value of your Australian assets exceeds the Relevant Amount, you may remove any of those assets from Australia or dispose of or deal with them or diminish their value, so long as the total unencumbered value of your Australian assets still exceeds the Relevant Amount.
(c)If the unencumbered value of your Australian assets is less than the Relevant Amount, and you have assets outside Australia (‘ex-Australian assets’):
(i)You must not dispose of, deal with or diminish the value of any of your Australian assets and ex-Australian assets up to the unencumbered value of your Australian and ex-Australian assets of the Relevant Amount; and
(ii) You may dispose of, deal with or diminish the value of any of your ex-Australian assets, so long as the unencumbered value of your Australian assets and ex-Australian assets still exceeds the Relevant Amount.
7For the purposes of this order,
(1) your assets include:
(a)all your assets, whether or not they are in your name and whether they are solely or co-owned;
(b)any asset which you have the power, directly or indirectly, to dispose of or deal with as if it were your own (you are to be regarded as having such power if a third party holds or controls the asset in accordance with your direct or indirect instructions); and
(c)the following asset in particular:
(i)the property known as 28 Russell Street, Fremantle or, if it has been sold, the net proceeds of the sale.
(2)the value of your assets is the value of the interest you have individually in your assets.
EXCEPTIONS TO THIS ORDER
8This order does not prohibit you from:
(a)paying up to $1000 a week on your ordinary living expenses;
(b)paying reasonable legal expenses;
(c)dealing with or disposing of any of your assets in the ordinary and proper course of your business, including paying business expenses bona fide and properly incurred;
(d)in relation to matters not falling within (a), (b) or (c), dealing with or disposing of any of your assets in discharging obligations bona fide and properly incurred under a contract entered into before this order was made, provided that before doing so you give the applicant, if possible, at least two working days written notice of the particulars of the obligation; and
(e)dealing with or disposing of any of your assets if you provide the Applicant with 7 days written notice, sent to the Applicant at the Notice Address, of your intention to deal with or dispose of that asset.
9You and the applicant may agree in writing that the exceptions in the preceding paragraph are to be varied. In that case the applicant or you must as soon as practicable file with the Court and serve on the other a minute of a proposed consent order recording the variation signed by or on behalf of the applicant and you, and the Court may order that the exceptions are varied accordingly.
10(a) This order will cease to have effect if you:
(i)pay the sum of $6,000,000 into the Court; or
(ii)pay that sum into a joint bank account in the name of your solicitor and the solicitor for the applicant as agreed in writing between them; or
(iii)provide security in that sum by a method agreed in writing with the applicant to be held subject to the order of the Court.
(b)Any such payment and any such security will not provide the applicant with any priority over your other creditors in the event of your insolvency.
(c)If this order ceases to have effect pursuant to (a), you must as soon as practicable file with the Court and serve on the applicant notice of that fact.
COSTS
11The costs of this application are reserved to the judge hearing the application on the Return Date.
PERSONS OTHER THAN THE APPLICANT AND RESPONDENT
12Set off by banks
This order does not prevent any bank from exercising any right of set off it has in respect of any facility which it gave you before it was notified of this order.
13Bank withdrawals by the respondent
No bank need inquire as to the application or proposed application of any money withdrawn by you if the withdrawal appears to be permitted by this order.
14Persons outside Australia
(a)Except as provided in subparagraph (b) below, the terms of this order do not affect or concern anyone outside Australia.
(b)The terms of this order will affect the following persons outside Australia:
(i)you and your directors, officers, employees and agents (except banks and financial institutions);
(ii)any person (including a bank or financial institution) who:
(A)is subject to the jurisdiction of this Court: and
(B)has been given written notice of this order, or has actual knowledge of the substance of the order and of its requirements; and
(C)is able to prevent or impede actions or omissions outside Australia which constitute or assist in a disobedience of the terms of this order; and
(iii)any other person (including a bank of financial institution), only to the extent that this order is declared enforceable by or is enforced by a court in a country or state that has jurisdiction over that person or over any of that person’s assets.
15Assets located outside Australia
Nothing in this order shall, in respect of assets located outside Australia, prevent any third party from complying or acting in conformity with what it reasonably believes to be its bona fide and properly incurred legal obligations, whether contractual or pursuant to a court order or otherwise, under the law of the country or state in which those assets are situated or under the proper law of any contract between a third party and you, provided that in the case of any future order of a court of that country or state made on your or the third party’s application, reasonable written notice of the making of the application is given to the applicant.
LIBERTY TO APPLY
16The parties have liberty to apply on 24 hours’ notice.
SCHEDULE A
UNDERTAKINGS GIVEN TO THE COURT BY THE APPLICANT
(1)The applicant undertakes to submit to such order (if any) as the Court may consider to be just for the payment of compensation (to be assessed by the Court or as it may direct) to any person (whether or not a party) affected by the operation of the order.
(2)As soon as practicable, the applicant will file and serve upon the respondent copies of:
(a) this order;
(b)the application for this order for hearing on the return date;
(c)the following material in so far as it was relied on by the applicant at the hearing when the order was made:
(i) affidavits (or draft affidavits);
(ii) exhibits capable of being copied;
(iii) any written submission; and
(iv) any other document that was provided to the Court.
(d)a transcript, or, if none is available, a note, of any exclusively oral allegation of fact that was made and of any exclusively oral submission that was put, to the Court;
(e)the originating process, or, if none was filed, any draft originating process produced to the Court.
(3)As soon as practicable, the applicant will cause anyone notified of this order to be given a copy of it.
(4)The applicant will pay the reasonable costs of anyone other than the respondent which have been incurred as a result of this order, including the costs of finding out whether that person holds any of the respondent’s assets.
(5)If this order ceases to have effect the applicant will promptly take all reasonable steps to inform in writing anyone to who has been notified of this order, or who the applicant has reasonable grounds for supposing may act upon this order, that it has ceased to have effect.
(6)The applicant will not, without leave of the Court, use any information obtained as a result of this order for the purpose of any civil or criminal proceedings, either in or outside Australia, other than this proceeding.
(7)The applicant will not, without leave of the Court, seek to enforce this order in any country outside Australia or seek in any country outside Australia an order of a similar nature or an order conferring a change or other security against the respondent or the respondent’s assets.
SCHEDULE B
AFFIDAVITS RELIED ON
Name of Deponent
Date affidavit made
Wayne Gregory Koonin
20 September 2012
Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 1427 of 2012
BETWEEN: COAL OF AFRICA LIMITED (ACN 008 905 388)
ApplicantAND: BLAIR SERGEANT
Respondent
JUDGE:
BUCHANAN J
DATE:
21 SEPTEMBER 2012
PLACE:
SYDNEY
REASONS FOR JUDGMENT
The applicant is an Australian corporation. The respondent was, until 1 April 2011, a director of the applicant, and its Finance Director. The applicant has commenced proceedings in this Court by application and statement of claim alleging that in various ways the respondent has breached his duties as a director, committed other wrongdoing and been responsible for substantial losses to the applicant. The allegations are serious ones, although not all the allegations are relied upon for the purpose of the application for urgent interlocutory relief with which this judgment particularly deals.
In view of the fact that the applications are as yet untested and though they have been deposed to by the present Financial Director of the applicant, Mr Wayne Gregory Koonin, in an affidavit sworn 20 September 2012, I do not propose canvass the detail beyond saying that I am satisfied by the matters to which Mr Leeming SC has taken me today that there is, on the face of the application, statement of claim and Mr Koonin’s affidavit, a substantial and respectable case for relief.
The immediate question with which I must deal is the application for freezing orders to prevent the respondent disposing of assets in Australia up to a value of $6 million. In view of the fact that the restraint which I propose to impose is very limited at present, and in light of the matters to which I was taken, I am satisfied that there is justification for a temporary restraint on the disposition of the respondent’s assets up to a value of $6 million until the matter can receive further attention by a judge of the Court in circumstances where the respondent will have an opportunity to be present or be represented.
For reasons which were discussed during the hearing I do not propose to require the respondent to provide information to the applicant. Whether such a course should be taken will be a matter which will receive consideration after the respondent has a chance to appear. Otherwise the orders which have been sought appear to me to be appropriate in the circumstances. I therefore make orders in the form sought, as endorsed by me with respect to service.
I certify that the preceding four (4) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan. Associate:
Dated: 26 September 2012
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