FRANKLIN; IN THE MATTER OF FLEURIE PTY LTD
[2016] VSC 430
•27 JULY 2016
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
S CI 2016 00846
IN THE MATTER OF FLEURIE PTY LTD
(IN LIQUIDATION) (ACN 060 643 156)
BETWEEN:
| GLENN JEFFREY FRANKLIN AND JASON GLENN STONE (IN THEIR CAPACITY AS LIQUIDATORS OF FLEURIE PTY LTD) (IN LIQUIDATION) (ACN 060 643 156) | Plaintiff |
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JUDGE: | ELLIOTT J |
WHERE HELD: | MELBOURNE |
DATE OF HEARING: | 27 JULY 2016 |
DATE OF RULING: | 27 JULY 2016 |
CASE MAY BE CITED AS: | FRANKLIN; IN THE MATTER OF FLEURIE PTY LTD |
MEDIUM NEUTRAL CITATION: | [2016] VSC 430 |
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CORPORATIONS – External administration – Winding up – Liquidators’ examination – Failure of examinee to attend – Application for issue of arrest warrant – Arrest warrant issued – Corporations Act 2001 (Cth), s 596B – Supreme Court (Corporations) Rules 2013 (Vic), r 11.10(2).
PROCEDURE – Warrant for arrest to ensure attendance.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr D Connors | Rothwell Lawyers Pty Ltd |
| For Paul Annesley | No appearance |
HIS HONOUR:
A. Introduction
This is an application made pursuant to r 11.10(2) of the Supreme Court (Corporations) Rules 2013 (Vic) for the issue of an arrest warrant to ensure the attendance of an examinee before a liquidators’ examination under the Corporations Act 2001 (Cth).
Following the issuing of a summons for examination and repeated failed attempts to serve the examinee, an order for substituted service was made by a judicial registrar. Service having occurred in accordance with the substituted service order, the examinee failed to attend on 3 subsequent occasions. On 23 June 2016, it was ordered that, if the examinee failed to attend on 30 June 2016, the matter would be referred to a judge to determine whether an arrest warrant should be issued to bring the examinee before the court for examination.
The examinee again failed to appear before the court and an application was made for the issuing of an arrest warrant.
For the reasons that follow, the application has been successful. Orders for the issue of a warrant will be made, substantially in the form attached to these reasons.
B. Background
The plaintiffs, Glenn Jeffrey Franklin and Jason Glenn Stone (“the Liquidators”), are liquidators of Fleurie Pty Ltd (“Fleurie”). On 21 March 2016, Judicial Registrar Hetyey authorised, amongst other things, a summons to be issued pursuant to s 596B of the Corporations Act (“the Summons”), addressed to Paul Annesley (“Annesley”). From the Liquidators’ investigations, Annesley appeared to be conducting Fleurie’s affairs as a shadow director and to be “in fact, the real driving mind behind (Fleurie’s) activities”.
At the time the Summons was filed, Annesley was said to be resident at 95 Green Street, Bulla, 3428, in the State of Victoria. That address was obtained, I was informed from the bar table, based on a “roles and relationship extract” company search conducted through the Australian Securities and Investments Commission website. The Summons required Annesley to attend at 9.45 am on 21 April 2016 to be examined about Fleurie’s affairs and to produce certain documents in his possession or control. Annesley was not served by the return date. As a result, on 21 April 2016, Judicial Registrar Hetyey extended the time for Annesley to attend to 9 June 2016.
C. Substituted service
Based on evidence of unsuccessful attempts to serve the Summons on Annesley personally, on 13 May 2016, Judicial Registrar Hetyey ordered that:
(1)The Summons be amended to make it returnable at 9.45 on 15 June 2016 before Judicial Registrar Hetyey.
(2)The personal service of the Summons for examination addressed to Annesley be dispensed with.
(3)A number of documents, namely:
(a)the Summons;
(b)a copy of the order of Judicial Registrar Hetyey of 21 April 2016;
(c)a copy of the order made that day (ie on 13 May 2016);
(d)a covering letter advising Annesley that the above documents were enclosed, that an order for substituted service had been made allowing service of those documents and advising that the return date for the production of the documents, collectively referred to in the documents as “the orders”, be served by:
(i)delivering the documents in an envelope addressed to Annesley, at 349 Nepean Highway, Brighton East, Melbourne 3187 (“the Residential Address”), and leaving them with a person apparently over the age of 16 or, in the event no such person is in attendance, in the letter box at the Residential Address;
(ii)posting the documents by priority prepaid post in an envelope addressed to Annesley at the Residential Address;
(iii)emailing electronic copies of the documents to Annesley at the email address [email protected]; and
(iv)sending a text message to mobile phone number 0418 384 585 as follows:
“SMS by order of the Supreme Court of Victoria – a Summons has been issued to you in proceeding S CI 2016 0846 – In the matter of Fleurie Pty Ltd (in liq) requiring your attendance at court for examination on 9 June 2016 at 9.45 am. By substituted service order, documents have been sent to you by a number of means, including to 349 Nepean Highway, Brighton East, Melbourne 3187 and by email at [email protected]”.
The Residential Address was an address previously provided by Annesley as his address in a proceeding commenced by Annesley in this court earlier this year. As to the email address, that was the address for service previously given by Annesley as an address for service in a County Court proceeding. In addition, it was used by Annesley as his email address on the writ in the Supreme Court proceeding commenced by Annesley. It was also used as Annesley’s email address on at least 2 occasions in correspondence with an associate judge, emails being sent by Annesley on 29 April 2016 and 2 May 2016.[1] Finally, on the writ commencing the other Supreme Court proceeding, Annesley recorded his mobile number was 0418 384 585.[2]
[1]Annesley v Westpac Banking Corporation [2016] VSC 323, [45] and [47] (Derham AsJ).
[2]This mobile telephone number was also provided to the Liquidators’ solicitors by a major creditor of a company of which Annesley was the sole director.
In addition to complying with the substituted service orders, on 6 June 2016, an affidavit of service was sworn giving evidence of a more recent attempt to personally serve Annesley at the Residential Address.
On 15 June 2016, an affidavit of service was sworn giving evidence of service of documents at [email protected] and by prepaid post to the Residential Address. On the same day, Judicial Registrar Hetyey made similar orders for service to those made on 13 May 2016, and adjourned the summons to 23 June 2016.
D. The orders leading to the application
On 23 June 2016, Judicial Registrar Hetyey made further orders. Those orders included the following:
(1)The return of the Summons be adjourned to 10.30 am on 30 June 2016 for production of the documents set out in the schedule to the Summons as required or, if Annesley does not have such documents to produce, to explain, on oath or affirmation, why he does not have such documents in his possession, custody or power and what has become of such documents.
(2)Annesley is required to personally attend court at the hearing referred to in order (1) regardless of whether he has any documents to produce pursuant to the Summons.
(3)If Annesley fails to comply with orders (1) and (2) above, he must file an affidavit with the commercial court registry, by 4.00 pm on 8 July 2016, setting out any reasonable cause for failing to attend for the production of documents as required by his summons and confirming that he will attend pursuant to his summons at 9.45 am on 14 July 2016.
(4)In the event that Annesley fails to comply with orders (1) and (2) above, and thereafter order (3), the matter will be referred to a judge to determine whether a warrant shall be issued forthwith for Annesley's arrest to bring Annesley before the court for examination.
(5)A sealed copy of this order is to be served on Annesley by the plaintiffs as soon as practicable in accordance with the same means set out in the orders of 15 June 2016.
On 28 June 2016, an affidavit of service was sworn by Rhiannon Barrett with respect to an attempted service at the Residential Address. On 29 June 2016, an affidavit of service was sworn giving evidence of service at the email address of [email protected]; by prepaid express post at the Residential Address; by prepaid express post to Paul Annesley, care of Koroneos Lawyers, Level 11/535 Bourke Street, Melbourne (being former lawyers of Annesley); and a text message to mobile number 0418 384 585 in the terms as ordered.
E. Application for an arrest warrant
The application for a warrant for the arrest of Annesley is made under the Supreme Court (Corporations) Rules 2013, r 11.10, which reads as follows:
11.10 Default in relation to examination
(1)This Rule applies if a person is summoned or ordered by the Court to attend for examination, and—
(a) without reasonable cause, the person—
(i) fails to attend at the time and place appointed;
(ii)fails to attend from day to day until the conclusion of the examination;
(iii) refuses or fails to take an oath or make an affirmation;
(iv)refuses or fails to answer a question that the Court directs the person to answer;
(v)refuses or fails to produce books that the summons requires the person to produce; or
(vi)fails to comply with a requirement by the Court to sign a written record of the examination; or
(b)before the day fixed for the examination, the person who applied for the summons or order satisfies the Court that there is reason to believe that the person summoned or ordered to attend for examination has absconded or is about to abscond.
(2) The Court may—
(a)issue a warrant for the arrest of the person summoned or ordered to attend for examination; and
(b) make any other orders that the Court thinks just or necessary.
It is apparent that the power under that rule to issue the warrant depends on; first, proof that the person has been summoned or ordered by the court to attend for examination; secondly, relevantly, that the person has failed to attend at the time and place appointed; and thirdly, has done so without reasonable cause.[3]
[3]Cf Pascoe, in the matter of GMP Electrical and Technical and Technical Services Limited (in liq) [2010] FCA 999, [3] (Stone J); Struthers (in his capacity as liquidator) of PACI Pty Ltd [2005] NSWSC 864, [34] (Brereton J).
F. Issuing an arrest warrant
Based on the evidence before the court and the history of the matter as set out above, I am satisfied that each of those 3 matters referred to in the preceding paragraph have been met. In particular, I note that Annesley has not appeared or provided any material setting out any reasonable cause for failing to attend the examination, in compliance with the orders made by Judicial Registrar Hetyey on 23 June 2016.[4]
[4]See par 11(3) above.
I have proceeded on the basis that the Liquidators bear the onus of establishing an absence of reasonable cause.[5] However, since that knowledge is within the possession almost exclusively of Annesley, it is a relatively light threshold that has to be met in the circumstances of this case.[6]
[5]Struthers (in his capacity as liquidator) of PACI Pty Ltd [2005] NSWSC 864, [44] (Brereton J).
[6]Ibid.
Accordingly, I am satisfied that orders should be made for an arrest warrant to be issued substantially in the following form:
1.Pursuant to r 11.10(2) of the Supreme Court (Corporations) Rules 2013 (Vic), a warrant be issued for the arrest of Paul Annesley in terms of Annexure A attached to this order, to bring Paul Annesley before the Practice Court of the Supreme Court of Victoria as soon as practicable, to be examined under s 596B of the Corporations Act 2001 (Cth) on oath or affirmation about the examinable affairs of Fleurie Pty Ltd (In Liquidation) (ACN 060 643 156), or to be subject to such other order or direction as the Practice Court judge orders or directs.
2.The summons for examination dated 24 March 2016 is adjourned to 10.00 am on 4 August 2016 before Judicial Registrar Hetyey.
3.Paul Annesley and the plaintiffs have liberty to apply on 24 hours’ notice or such other period of notice as the court may allow.
4.The plaintiffs serve a copy of this order on Paul Annesley by:
(1)Delivering to Paul Annesley at 349 Nepean Highway, Brighton East, Melbourne 3187 (“the Residential Address”) and leaving the order with a person apparently over the age of 16 or, in the event no such person is in attendance, in the letter box at the Residential Address.
(2)Posting the order by priority prepaid post in an envelope addressed to Paul Annesley at the Residential Address.
(3)Emailing an electronic copy of the order to Paul Annesley at email address: [email protected].
(4)Sending a text message to mobile phone number 0418 384 585 as follows:
“SMS by order of the Supreme Court of Victoria – an order has been made in proceeding S CI 2016 00846 – In the matter of Fleurie Pty Ltd (in liq) – attaching an arrest warrant in your name. By substituted service order, the order has been sent to you by a number of means, including to 349 Nepean Highway, Brighton East, Melbourne 3187 and by email to [email protected]”.
ANNEXURE A
WARRANT FOR ARREST
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TO:All members and special members of the Australian Federal Police and to all officers of the police force of the State or Territory in which PAUL ANNESLEY is to be found, and to the Governor or Keeper of any of Her Majesty’s Gaols within the Commonwealth of Australia, and to the Sheriffs of the State of Victoria, as officers of this court.
BY summons filed 24 March 2016 directed to PAUL ANNESLEY, now of 349 Nepean Highway, Brighton East, Melbourne 3187, and by reason of court orders, PAUL ANNESLEY was required to attend for the production of documents and examination before a judicial registrar at the Supreme Court of Victoria at 436 Lonsdale Street, Melbourne, Victoria, at 9.45 am on 15 and 23 June 2016, and at 10.30 am on 30 June 2016.
AND, without reasonable excuse, on each occasion PAUL ANNESLEY failed to attend at the time and place appointed.
THIS warrant therefore requires and authorises all officers to whom this warrant is addressed, to take PAUL ANNESLEY and bring him up for examination to the Practice Court of the Supreme Court of Victoria at 210 William Street, Melbourne, Victoria between the hours of 10.30 am and 4.15 pm on a day the office of the court is open.
THIS warrant also requires and authorises you, if PAUL ANNESLEY cannot immediately be brought before the Practice Court, to deliver him to the Governor or Keeper of Her Majesty’s Gaol at a convenient place and you the Governor or Keeper are to receive PAUL ANNESLEY and keep him safely in the gaol and in your custody until the court otherwise orders, and you are to produce him before the Practice Court as set out in the preceding paragraph as soon as practicable, but in any event by the next day upon which the office of the court is open or otherwise as the court directs.
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