Gambaro v Mobycom Mobile Pty Ltd

[2020] FCCA 917

FEDERAL CIRCUIT COURT OF AUSTRALIA

GAMBARO v MOBYCOM MOBILE PTY LTD & ORS [2020] FCCA 917

Catchwords:
INDUSTRIAL LAW – Interlocutory Application – whether mareva injunctions should be granted – whether a caveat over the respondent’s bank account and assets should be granted – where a Directors Guarantee is sought – where the interlocutory application is dismissed.

Legislation:

Corporations Act 2001 (Cth), Chs.5 5.4-5.6

Federal Circuit Court of Australia Act 1999 (Cth), s.15

Federal Circuit Court Rules 2001 (Cth), rr.1.03, 1.06, 9.04

Federal Court Act of Australia 1976 (Cth), s.23

Cases cited:

AJ Bekhor & Co Ltd v Bilton [1981] QB 923

Barry v Heider [1914] HCA 79

Jackson v Sterling industries Ltd [1987] HCA 23; 162 CLR 612

Applicant: MICHAEL ALEXANDER GAMBARO

First Respondent: MOBYCOM MOBILE PTY LTD (ACN 110 558 873)

Second Respondent: SOUTHAM CONCULTING PTY LTD (ACN 110 497 295)

Third Respondent: CRAIG ANTHONY SOUTHAM

Fourth Respondent: BONNY ERIN FARRELL

Fifth Respondent: LINCOLN AARON BODLE

Sixth Respondent: JAMES KENNETH HARRISON

Seventh Respondent: BROOKE ALYSON MENZEL

File Number: BRG 874 of 2017

Judgment of: Judge Middleton

Hearing date: 13 March 2020

Date of Last Submission: 13 March 2020

Delivered at: Brisbane

Delivered on: 24 April 2020

REPRESENTATION

Applicant appeared on his own behalf

Respondent appearing on his own behalf for the First, Second and Third Respondent.

No appearance by the Fourth Respondent

No appearance by the Fifth Respondent

No appearance by the Sixth Respondent

No appearance by the Seventh Respondent

ORDERS

1. That the Application in Case filed on 3 March 2020 be dismissed.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT BRISBANE

BRG 874 of 2017

MICHAEL ALEXANDER GAMBARO

Applicant

And

MOBYCOM MOBILE PTY LTD (ACN 110 558 873)

First Respondent

And

SOUTHAM CONCULTING PTY LTD (ACN 110 497 295)

Second Respondent

And

CRAIG ANTHONY SOUTHAM

Third Respondent

And

BONNY ERIN FARRELL

Fourth Respondent

And

LINCOLN AARON BODLE

Fifth Respondent

And

JAMES KENNETH HARRISON

Sixth Respondent

And

BROOKE ALYSON MENZEL

Seventh Respondent

REASONS FOR JUDGMENT

BACK GROUND

1. By way of application in a case dated 3 March 2020 the Applicant Mr Gambaro seeks the following orders:

   a)Relief or ruling from the court to prevent the First, Second and Third Respondent from attempting to usurp the court processes, avoid Fair Work Act 2009 (Cth) and other legal obligations, and avoid liabilities (including debt to the applicant) by winding up their businesses.

   b)Directors guarantee from Third Respondent;

   c)Caveat over the bank accounts and assets of the First, Second and Third Respondent;

   d)Freezing orders and/or Mareva injunction over the assets of First, Second and Third Respondent;

   e)An order that each party have liberty to apply on four days written notice;

   f)Such further or other orders as the court thinks fit.

2. I am satisfied that that application was served on the relevant parties on various dates in February and March 2020.[1]

   [1] Affidavit of service dated 2 March 2020 and written submissions of the Applicant.

3. In support of the application the Applicant relies upon his affidavit dated 3 March 2020.

4. The First, Second and Third Respondent oppose the making of the orders.

5. All parties were self-represented, the First and Second Respondent’s by their Director, the Third Respondent.

DISCUSSION

1. The Applicant seeks the following relief:

   a)Mareva Injunction;

   b)A caveat;

   c)Directors Guarantee.

2. The Applicant submits that the First, Second and Third Respondent are attempting to avoid making payments to the Applicant arising out of the substantive claim outlined in the Applicant’s amended statement of claim filed on 12 February 2020 by “showing intent to wind up their businesses”[2].

   [2] paras 6-16,20-23 of written submissions filed by the Applicant.

3. In those alleged circumstances the Applicant seeks the relief.

THE LAW

Mareva Injunctions

1. Section 15 of The Federal Circuit Court of Australia Act 1999 (Cth) (“The Act”) permits this court “to make orders of such kinds, including interlocutory orders, as the Federal Circuit Court of Australia thinks appropriate”.

2. Section 15 of the Act is not materially different to s. 23 of The Federal Court Act of Australia 1976 (Cth), accordingly authorities setting out the test relating to that section are applicable.

3. In AJ Bekhor & Co Ltd v Bilton [1981] QB 923,CA the Court of Appeal (Stephenson Ackner and Griffiths LJJ) held that the Mareva injunction is a limited remedy and that it is an exception to the general rule that a plaintiff must obtain his judgement and then enforce it.

4. In Jackson v Sterling industries Ltd [1987] HCA 23; 162 CLR 612 Wilson and Dawson JJ in adopting Bilton said this[3]

   “One important result of viewing the Mareva injunction in this way is to emphasize the limits of the remedy. Its use must be necessary to prevent the abuse of the process of the court. As Ackner L.J. pointed out in A.J. Bekhor & Co. Ltd. v. Bilton [1981] EWCA Civ 8; (1981) QB 923, at pp 941-942, the Mareva injunction represents a limited exception to the general rule that a plaintiff must obtain his judgment and then enforce it. He cannot beforehand prevent the defendant from disposing of his assets merely because he fears that there will be nothing against which to enforce his judgment nor can he be given a secured position against other creditors. The remedy is not to be used to circumvent the insolvency laws.”

   [3] At para 4

5. At Paragraph 8 their Honours continued by saying

   “……. It exists not to create additional rights but to enable a court to protect its process from abuse in relation to the enforcement of its orders. It is neither a species of anticipatory execution nor does it give a form of security for any judgment which may ultimately be awarded”

6. Justice Brennan in the same case put it this way[4]:

   “The power to grant such an injunction does not support the making of an order which goes beyond what is in reasonable protection of a legal or equitable right which the court may enforce by judgment: cf. Siskina (Cargo Owners) v. Distos S.A. (1979) AC 210, at p 256. To make an order giving an applicant, who has no more than a personal claim for damages, security for the payment of an amount that might be awarded is to go beyond what is in reasonable protection of his right, for it would convert him from an unsecured to a secured creditor.”

   [4] Ibid at para 2

7. In the substantive proceedings the Applicant is seeking damages as a result of alleged unfair dismissal, unsafe work practices, discrimination and loss of wages.

8. There has been no final hearing or judgement in relation to those proceedings.

9. At its highest the Applicant fears that the relevant Respondents are trying to dissipate assets in an attempt to avoid payment of damages should they be awarded.

10. Even if I were satisfied that the Applicant’s evidence supports a finding that the relevant Respondent are attempting to avoid payment of future damages, which I am not, I would still be outside of my authority to make the orders sought as it would go beyond what is a reasonable protection of the Applicant’s right by converting him from an unsecured to a secured creditor.

11. In the alternative the Applicant seeks a finding that the First and Second Respondent are insolvent trading. On the evidence before me I cannot make that finding. Even if I were satisfied of that there are consequences under the Corporations Act 2001(Ch 5 5.4-5.6).

12. The remedy sought by the Applicant in those circumstances cannot be used to circumvent the insolvency laws.

13. It follows that I cannot and will not grant a Mareva injunction in favour of the Applicant.

Caveat

1. The Applicant seeks a caveat over the bank accounts and assets of the relevant Respondent. The Applicant provides no evidence as to any equitable or legal interest in the assets of the relevant Respondent nor does he set out what those assets might be.

2. A caveat is lodged on title. It is not a remedy to protect a party’s right to money. In those circumstances I simply cannot grant a caveat over the bank accounts of the relevant Respondent.

3. The Applicant in this case has no more than a right to sue the relevant Respondent or to put it another way he has a chose in action.

4. In Barry v Heider [1914] HCA 79 the High Court held that a chose in action is not caveatable interest.

5. The Applicant does not have a Caveatable interest and accordingly I cannot grant a caveat as sought.

Directors Guarantee

1. A director’s guarantee is a personal guarantee, often signed by directors when a company is entering into an agreement, such as a credit contract, lease or finance loan.

2. The Applicant in this case seeks a director’s guarantee from the Third Respondent.

3. A director’s guarantee should not be signed to protect a plaintiff’s chose in action against the company as the director has a fiduciary duty to the company’s shareholders.

4. Furthermore the company in this scenario receives no benefit as a result of signing the director’s guarantee and in those circumstances it is my view that the signing of the guarantee would be in breach of the director’s duties.

5. The Applicant did not take me to any relevant statutory provision or authority that would support the notion that I have the power to grant such relief.

6. In those circumstances I am satisfied that I cannot and will not grant this relief.

7. Having considered the evidence provided to the court I am not satisfied that any or all of the relevant Respondents are attempting to abuse the process of the court.  The conversation that the Applicant had with the Third Respondent was nothing more in my view than a discussion whereby the Third Respondent was informing the Applicant that he was having difficulty managing his companies and as a result was selling personal assets in order to provide finances to the companies to meet their debts.

8. As I have not found that any of the relevant Respondents are attempting to abuse the process of the court I cannot make any of the orders being sought.

ADDITIONAL MATTER

1. As the proceedings were coming to an end the Applicant raised Rule 9.04 of the Federal Circuit Court Rules 2001(“the Rules”) with me.

2. The Applicant raised an objection due to the fact that the First and Second Respondent were being represented by the Third Respondent and in those circumstances was, in the view of the Applicant in breach of the Rules.

3. That Rule provides that except as provided by or under an Act or Regulations made under an Act, with the leave of the court, a Corporation may not start or carry on a proceeding otherwise than by a lawyer.

4. I referred the Applicant to Rule 1.03 of the Rules which provides in summary that the object of the Rules is to assist in the just, efficient and economical resolution of the proceedings.

5. Of course Rule 1.06 provides me with the discretion whereby I may in the interest of justice dispense with compliance, or full compliance with any of the Rules at any time.

6. As I indicated to the Applicant at the time this hearing was before me I am of the view that it was efficient and economical to allow the Third Respondent to represent the First and Second Respondent during the interlocutory proceeding.

7. Accordingly I do not uphold the Applicant’s objection nor am I satisfied that the First and Second respondent were in breach of the Rules.

I certify that the preceding forty-one (41) paragraphs are a true copy of the reasons for judgment of Judge Middleton

Associate: 

Date:  24 April 2020