Heidi Miller Investments Pty Ltd v McConkey and Wheeler
[2012] FMCA 576
•6 July 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| HEIDI MILLER INVESTMENTS PTY LTD v MCCONKEY and WHEELER & ORS | [2012] FMCA 576 |
| CONSUMER LAW – Misleading and deceptive conduct – import and purchase of Shelby Mustang motor vehicle. CONTRACT – Breach – import and purchase of Shelby Mustang motor vehicle. PRACTICE AND PROCEDURE – Mareva type order – power to make – principles – whether arguable case – whether demonstrated risk of asset dissipation. |
| Corporations Act 2001 (Cth) Competition and Consumer Act 2010 (Cth), s.75B, Schedule 2, s.18 Federal Magistrates Act 1999 (Cth), s.15 |
| Coolstar Holdings Pty Ltd v Cleary and Anor [2006] FMCA 1442 Mather v Luttrel Limited & Ors [2003] FMCA 62 |
| Applicant: | HEIDI MILLER INVESTMENTS PTY LTD |
| First Respondent: | ADAM WILLIAM MCCONKEY AND LISA JOANNE WHEELER TRADING AS SOLID ROCKET ENGINEERING |
| Second Respondent: | SOLID ROCKET ENGINEERING PTY LTD |
| Third Respondent | ADAM WILLIAM MCCONKEY |
| File Number: | PEG 146 of 2012 |
| Judgment of: | Lucev FM |
| Hearing date: | 2 July 2012 |
| Date of Last Submission: | 2 July 2012 |
| Delivered at: | Perth |
| Delivered on: | 6 July 2012 |
REPRESENTATION
| Counsel for the Applicant: | Mr J Healy |
| Solicitors for the Applicant: | Rowe Bristol Lawyers |
| Counsel for the Respondents: | No appearance (heard ex parte) |
| Solicitors for the Respondents: | No appearance (heard ex parte) |
PENAL NOTICE
IF YOU:
(A)REFUSE OR NEGLECT TO DO ANY ACT WITHIN THE TIME SPECIFIED IN THIS ORDER FOR THE DOING OF THE ACT; OR
(B)DISOBEY THE ORDER BY DOING AN ACT WHICH THE ORDER REQUIRED YOU TO ABSTAIN FROM DOING,
YOU WILL BE LIABLE TO IMPRISONMENT, SEQUESTRATION OF PROPERTY OR OTHER PUNISHMENT.
ANY OTHER PERSON WHO KNOWS OF THIS ORDER AND DOES ANYTHING WHICH HELPS OR PERMITS YOU TO BREACH THE TERMS OF THIS ORDER MAY BE SIMILARLY PUNISHED.
TO:ADAM WILLIAM McCONKEY AND LISA JOANNE WHEELER TRADING AS SOLID ROCKET ENGINEERING (ABN 45 749 606 163)
AND TO:SOLID ROCKET ENGINEERING PTY LTD (ACN 155 807 720)
AND TO:ADAM WILLIAM McCONKEY
This is a ‘freezing order’ made against you on 6 July 2012 by the Federal Magistrates Court at a hearing without notice to you after the Court was given the undertakings set out in this order and after the Court read the affidavits listed in paragraph (2)(c) to this order.
UNDERTAKINGS AND ORDERS
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.
By 4.00pm on 11 July 2012, file and serve upon the respondents copies of:
(a)this order;
(b)the application for this order for hearing on the return date;
(c)the affidavits of:
(i)David Frederick Miller sworn 29 June 2012;
(ii)Heidi Monique Miller sworn 2 July 2012.
(d)a document entitled “Submissions and Chronology” handed up to the Court on 2 July 2012;
(e)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; and
(f)the originating process, or, if none was filed, any draft originating process produced to the Court.
As soon as practicable, cause anyone notified of this order to be given a copy of it.
Pay the reasonable costs of anyone other than the respondents which have been incurred as a result of this order, including the costs of finding out whether that person holds any of the respondents’ assets.
If this order ceases to have effect, promptly take all reasonable steps to inform in writing anyone 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.
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.
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 charge or other security against the respondent or the respondents’ assets.
AND THE COURT ORDERS THAT:
(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 4.00pm on 11 July 2012.
Subject to the next paragraph, this order has effect up to and including 30 July 2012 (‘the Return Date’). On the Return Date at 2.15pm there will be a further hearing in respect of this order before Federal Magistrate Lucev.
Anyone 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.
In this order:
(a)‘applicant’, if there is more than one applicant, includes all 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.
(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
(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$134,930.59 (‘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.
For 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 assets in particular:
(i)the assets of your business known as Solid Rocket Engineering carried on at Unit 2, 433 Yangebup Road, Jandakot or, if any or all of the assets have been sold, the net proceeds of the sale;
(ii)any money in account BSB 016-016 Account No.2619-57302 held at the Australia and New Zealand Banking Group Limited branch in Success, Western Australia; and
(iii)any other bank accounts that you hold at bank or building society branches in Australia.
(2)The value of your assets is the value of the interest you have individually in your assets.
PROVISION OF INFORMATION
Subject to paragraph (16), you must:
(a)at or before the further hearing on the Return Date (or within such further time as the Court may allow) to the best of your ability inform the applicant in writing of all your assets in Australia, giving their value, location and details (including any mortgages, charges or other encumbrances to which they are subject) and the extent of your interest in the assets;
(b)within 7 days after being served with this order, swear and serve on the applicant an affidavit setting out the above information.
(a) This paragraph (16) applies if you are not a corporation and you wish to object to complying with paragraph (15) on the grounds that some or all of the information required to be disclosed may tend to prove that you:
(i)have committed an offence against or arising under an Australian law or a law of a foreign country; or
(ii)are liable to a civil penalty.
(b)This paragraph (16) also applies if you are a corporation and all of the persons who are able to comply with paragraph (15) on your behalf and with whom you have been able to communicate, wish to object to your complying with paragraph (15) on the grounds that some or all of the information required to be disclosed may tend to prove that they respectively:
(i)have committed an offence against or arising under an Australian law or a law of a foreign country; or
(ii)are liable to a civil penalty.
(c)You must:
(i)disclose so much of the information required to be disclosed to which no objection is taken;
(ii)prepare an affidavit containing so much of the information required to be disclosed to which objection is taken, and deliver it to the Court in a sealed envelope; and
(iii)file and serve upon each other party a separate affidavit setting out the basis of the objection.
EXCEPTIONS TO THIS ORDER
This order does not prohibit you from:
(a)paying up to $1,000 a week on your ordinary living expenses;
(b)paying $10,000 on your 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; and
(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.
You 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 parties 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.
(a) This order will cease to have effect if you:
(i)pay the sum of AUD$134,930.59 into Court; or
(ii)pay the sum of AUD$134,930.59 into a joint bank account in the name of your lawyer and the lawyer 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
The costs of this application are reserved to the Court hearing the application on the Return Date.
PERSONS OTHER THAN THE APPLICANT AND RESPONDENT
Set 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.
Bank 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.
LIBERTY TO APPLY
There be liberty to apply on an urgent basis.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PERTH |
PEG 146 of 2012
| HEIDI MILLER INVESTMENTS PTY LTD |
Applicant
And
| ADAM WILLIAM MCCONKEY AND LISA JOANNE WHEELER TRADING AS SOLID ROCKET ENGINEERING |
First Respondent
| SOLID ROCKET ENGINEERING PTY LTD |
Second Respondent
| ADAM WILLIAM MCCONKEY |
Third Respondent
REASONS FOR JUDGMENT
A Shelby Mustang paid for
$134,930.59 has been paid by Heidi Miller Investments Pty Ltd,[1] the applicant in these proceedings, for the purchase and importation of a Shelby Mustang motor vehicle[2] from the United States of America. [3] Heidi Miller Investments now alleges that it has paid that money by reason of the misleading and deceptive conduct of the respondents, for a vehicle which has not been ordered, purchased or imported from the USA.
[1] “Heidi Miller Investments”.
[2] “Shelby Mustang”.
[3] “USA”.
The parties
Heidi Miller Investments is incorporated and registered in Western Australia under the Corporations Act 2001 (Cth). Heidi Miller is the director and secretary of Heidi Miller Investments, of which she is the majority shareholder. Her husband, David Miller is the other only other shareholder. In respect of the purchase of the Shelby Mustang Mr Miller was authorised and acted on behalf of Heidi Miller Investments as its duly authorised agent and representative at all times.[4]
[4] Affidavit of David Frederick Miller, sworn 29 June 2012 (“Mr Miller’s Affidavit”), paras.11 and 75 and Annexure 12; Affidavit of Heidi Monique Miller, sworn 2 July 2012 (“Mrs Miller’s Affidavit”), paras.3, 4 and 10.
The first respondent is a partnership comprising Adam William McConkey and Lisa Joanne Wheeler trading as a family partnership under the trading name Solid Rocket Engineering (ABN 45 749 606 163).[5] The second respondent is an incorporated company, Solid Rocket Engineering Pty Ltd, of which Mr McConkey and Ms Wheeler are directors.[6] For practical purposes, both the Partnership and Solid Rocket Engineering are referred to as “Solid Rocket Engineering” in these Reasons for Judgment, unless it is necessary to distinguish them. Mr McConkey is the third respondent.
Orders sought
[5] “Partnership”. Mr Miller’s Affidavit, Annexure 40.
[6] “Solid Rocket Engineering”. Mr Miller’s Affidavit, Annexure 10.
Substantive action and orders
The substantive orders sought by Heidi Miller Investments are for the payment of damages in the sum of $134,930.59 plus interest and costs by Solid Rocket Engineering to Heidi Miller Investments.
Heidi Miller Investments asserts that the representations made with respect to the purchase, California State taxes and shipping costs for the Shelby Mustang were misleading or deceptive conduct in breach of Schedule 2, Section 18 of the Competition and Consumer Act 2010 (Cth)[7] in that:
a)Solid Rocket Engineering represented that they were in contact with Mr Foreman in the USA, whom Heidi Miller Investments has subsequently discovered was not working for Shelby American Inc, and who may be a fictitious person; and
b)Solid Rocket Engineering said that the Shelby Mustang had been ordered and purchased on behalf of Heidi Miller Investments, when at no time had the order or purchase taken place.
[7] “CC Act”.
The application seeks to have Mr McConkey made liable as an accessory[8] because:
a)he made the representations and was involved in the purported ordering, purchase, and importation of the Shelby Mustang from the USA;
b)he was a director of Solid Rocket Engineering at all material times; and
c)he was aware that the representations made were misleading or deceptive or likely to mislead or deceive.
[8] CC Act, s.75B.
On the basis of the same facts as are set out above Heidi Miller Investments also asserts that there has been a breach of contract by Solid Rocket Engineering of a purchase contract entered into between Heidi Miller Investments and Solid Rocket Engineering.
Mareva type orders
Interlocutory orders are also sought by way of interim Mareva type orders freezing the assets of Solid Rocket Engineering and Mr McConkey up to an unencumbered value of $134,930.59, which is the amount claimed by way of damages in relation to the alleged misleading and deceptive conduct and contractual claims. Although the interim freezing orders are general in their application up to an unencumbered value of $134,930.59, the following assets in particular are specified in the proposed order:
a)the assets of the business of Solid Rocket Engineering, or if the business has been sold, the net proceeds of any sale;
b)money in an account of Solid Rocket Engineering held with the ANZ Bank at a branch in Success, a southern suburb of Perth; and
c)any other bank accounts held by the respondents at a bank or building society in Australia.
The application for Mareva type orders was heard ex parte on 2 July 2012.
Evidence
The application for Mareva type orders was supported by:
a)Mr Miller’s Affidavit; and
b)Mrs Miller’s Affidavit.
Factual background
In January 2012 and early February 2012 Mr McConkey, who is known to Mr Miller from a previous work relationship, and ongoing involvement in the vehicle industry, represented to Mr Miller that he could assist Heidi Miller Investments with the purchase and importation of a Shelby Mustang motor vehicle from the USA to Australia. Mr McConkey said that he had a contact in the USA, one Murray Foreman, who could help Heidi Miller Investments with the purchase and importation of the Shelby Mustang.[9]
[9] Mr Miller’s Affidavit, paras.3-14.
Mr and Mrs Miller agreed that Heidi Miller Investments would buy a new Shelby Mustang as an investment.[10] Pursuant to an authorisation from Mrs Miller, on behalf of Heidi Miller Investments, Mr Miller was authorised to act for and on behalf of Heidi Miller Investments to negotiate the purchase and importation of the Shelby Mustang.[11]
[10] Mr Miller’s Affidavit, paras.9-11; Mrs Miller’s Affidavit, para.5.
[11] Mr Miller’s Affidavit, para.11, Mrs Miller’s Affidavit, para.10.
On 21 January 2012, at 9.28am, Mr Foreman sent Mr McConkey an email concerning the purchase of the Shelby Mustang.[12] The email, as with all subsequent emails from Mr Foreman, was signed as follows:
[12] Mr Miller’s Affidavit, Annexure 1.
Murray Foreman
Historic Sales and Compliance
Shelby Motors Inc
6755 Speedway Blvd.
Las Vegas
NV 89115
Tel: 702.942.REAL (7325)
On 21 January 2012 at 10.18am Mr McConkey sent Mr Foreman an email requesting that he email to Mr McConkey “a quote [for the Shelby Mustang] so he could pay against it”.[13]
[13] Mr Miller’s Affidavit, Annexure 1.
On 25 January 2012 at 6.27am Mr Foreman sent an email to Mr McConkey advising as follows:
As requested a payement of $113336.45 Australian has been received by us here. A formal recipet will be posted to you directly. You mentioned you want ALL paperwork in your friends wife name? Please advise?[14]
[14] Mr Miller’s Affidavit, Annexure 1.
On 25 January 2012 at 10.10pm Mr McConkey sent an email to Mr Foreman requesting that the receipt be issued in the name of Heidi Miller.
On 25 January 2012 at 11.14am Mr McConkey sent an email to Mr Foreman requesting that number plates be issued to Heidi Miller.[15]
[15] Mr Miller’s Affidavit, Annexure 1.
Each of the five emails sent by Mr McConkey to Mr Foreman, and from Mr Foreman to Mr McConkey, during January 2012 are notable for the fact that January is misspelled as “Janurary” in each such email.[16]
[16] Mr Miller’s Affidavit, Annexure 1.
On 3 February 2012 Mr McConkey provided Mr Miller with a tax invoice from Solid Rocket Engineering in relationship to the purchase of the Shelby Mustang.[17]
[17] Mr Miller’s Affidavit, Annexure 2; Mrs Miller’s Affidavit, para.11.
On 9 February 2012 Heidi Miller Investments paid Solid Rocket Engineering $113,336.45 for the importation of the Shelby Mustang. The payment was made to an account held by the Partnership at an ANZ Bank branch in Success, a southern suburb of Perth.[18]
[18] “ANZ Account”.
On 12 February 2012 Mrs Miller signed an application to import the Shelby Mustang from the USA to Australia.[19]
[19] Mr Miller’s Affidavit, Annexures 19 and 20; Mrs Miller’s Affidavit, paras.15-17 and Annexure 2.
Solid Rocket Engineering was registered as a company under the Corporations Act 2001 (Cth)[20] on 20 February 2012, with Mr McConkey and Ms Wheeler as directors, and all ordinary shares being beneficially held by Solid Rocket Group Pty Ltd.[21]
[20] “Corporations Act”.
[21] “Solid Rocket Group”. Mr Miller’s Affidavit, Annexure 10.
Solid Rocket Group was also registered as a company under the Corporations Act on 20 February 2012, with Mr McConkey and Ms Wheeler as directors, and the 120 shares being beneficially held jointly by each of them.[22]
[22] Mr Miller’s Affidavit, Annexure 10.
In April 2012 Mr McConkey told Mr Miller that Heidi Miller Investments would have to pay California State taxes and shipping for the Shelby Mustang, and that the Shelby Mustang would need to be stored in America for six to nine months to save a large tax bill, and that the cost of that would be $16,201.[23] On 17 April 2012 at 10.20am Mr Foreman sent an email to Mr McConkey advising that the payment of $16,201 had gone through and that a receipt was “on its way”.[24]
[23] Mr Miller’s Affidavit, paras.37 and 38.
[24] Mr Miller’s Affidavit, Annexure 1.
Another email timed 10.20am was sent from Mr Foreman to Mr McConkey on 17 April 2012 advising that the Shelby Mustang “is now locked in with all options”.[25]
[25] Mr Miller’s Affidavit, Annexure 1.
On 26 April 2012 at 9.38am Mr McConkey sent an email to Mr Foreman.[26] The email is notable for the fact that in the time and date line the year appears with a typographical error, as follows:
[26] Mr Miller’s Affidavit, Annexure 1.
J2012
On 3 May 2012 at 8.50am Mr Foreman sent an email to Mr McConkey and to Mr Miller.[27] However, the email from Mr Foreman, in its body is addressed to “Murray”, which is obviously a reference to Mr Foreman, and sent from Mr McConkey. Thus, the email sent from Mr Foreman to Mr McConkey is, in substance, an email from Mr McConkey to Mr Foreman.
[27] Mr Miller’s Affidavit, Annexure 1.
On 7 May 2012 at 9.49am Mr McConkey sent Mr Foreman an email requesting a receipt for the $22,322 and confirmation that no further payments were required in the USA.[28]
[28] Mr Miller’s Affidavit, Annexure 25.
On 7 May 2012 at 9.56am Mr Foreman sent Mr McConkey an email, copied to Mr Miller, advising that information regarding the Shelby Mustang would be posted to Mr and Mrs Miller if a postal address could be provided.[29]
[29] Mr Miller’s Affidavit, Annexure 26.
On 7 May 2012 at 11.44am Mr Miller sent Mr Foreman an email providing a residential address for the information to be sent and requested a FedEx tracking number for the information which was to be provided. That email was only sent to Mr Foreman.[30]
[30] Mr Miller’s Affidavit, Annexure 27.
On 10 May 2012 at 9.12am Mr Foreman sent Mr Miller an email advising that a receipt for “22k” had been issued and put into a box with Mr and Mrs Miller’s “stuff”, presumably a reference to the information to be sent to Mr and Mrs Miller by Mr Foreman, and for which Mr Miller had requested a FedEx tracking number.[31]
[31] Mr Miller’s Affidavit, Annexure 27.
On 12 May 2012 Caroll Shelby, who founded Shelby Mustang, apparently died. Mr Miller asked Mr McConkey whether Caroll Shelby had signed off on the Shelby Mustang for Heidi Miller Investments, as Caroll Shelby was meant to sign every Shelby Mustang that came out of his garage.[32]
[32] Mr Miller’s Affidavit, para.47.
Sometime in April or May 2012, but prior to 14 May 2012, Mr McConkey provided an undated invoice in the amount of $16,201 to Mr Miller.[33] On 14 May 2012 Heidi Miller Investments transferred an amount of $21,594.14 to the ANZ Account in payment of the abovementioned invoice.[34]
[33] Mr Miller’s Affidavit, para.49 and Annexure 6.
[34] Mr Miller’s Affidavit, Annexure 5; Mrs Miller’s Affidavit, para.18 and Annexure 3.
On 14 May 2012 at 4.54pm Mr Miller sent Mr Foreman, and copied to Mr McConkey, an email in the following terms:
Hi Murray
Adam is getting on my back about the receipts for the car, Can you please forward me the tracking number for the fed-ex. Can you also confirm what is being sent in the bag from Fed-ex.[35]
[35] Mr Miller’s Affidavit, Annexure 28.
On or about 16 May 2012 Mr Miller telephoned Shelby American Inc and spoke to a Mr Tim Pittsenbarger who worked in customer relations at Shelby American Inc. Mr Pittsenbarger said that no Shelby Mustang for Heidi Miller Investments was on the system, and that Shelby American Inc knew nothing about the Shelby Mustang for Heidi Miller Investments. Mr Pittsenbarger, in response to a query from Mr Miller, said that he had never heard of Mr Foreman, and that Mr Foreman was not employed by Shelby American Inc.[36] Mr Pittsenbarger’s address and numeric telephone contact details at Shelby American Inc. were the same as those for Shelby Motors Inc in Mr Foreman’s emails.[37]
[36] Mr Miller’s Affidavit, paras.53-55.
[37] Mr Miller’s Affidavit, Annexures 1 and 28.
Mr Miller immediately told Mr McConkey of his conversation with Mr Pittsenbarger, including the fact that Mr Foreman was not employed by Shelby American Inc. Mr Miller expressed concern as to what had happened to the money that Heidi Miller Investments had paid for the Shelby Mustang. Mr McConkey, according to Mr Miller, acted surprised, said he could not believe it, and that he would try to find out who exactly Mr Foreman was, and what his whereabouts were in the USA.[38]
[38] Mr Miller’s Affidavit, paras.56 and 57.
Mr McConkey also advised that Heidi Miller Investments’ money had not actually been sent to the USA, but had been placed in a bank account in Australia, and that that bank had guaranteed the funds to Shelby Motors once the Shelby Mustang had been completed.[39]
[39] Mr Miller’s Affidavit, para.59.
On 16 May 2012 at 7.19am Mr Miller received an email from Mr Pittsenbarger, asking him “Who is Shelby Motors Inc?”[40]
[40] Mr Miller’s Affidavit, Annexure 1.
On 16 May 2012 at 9.19am Mr Miller received an email from Mr Foreman, which was also copied to Mr McConkey, advising that the Shelby Mustang had Caroll Shelby’s signature upon it.[41]
[41] Mr Miller’s Affidavit, Annexure 28.
On 16 May 2012 at 11.57am Mr McConkey sent Mr Foreman an email, which was copied to Mr Miller, as follows:
Murray,
Who are and what’s the go we have cancelled the bank guarantee and stopped all except $2707 from CCard. You have 24 hours MAX to respond don’t ring me ring DAVE. ALL funds stop. We are fucking pissed why can’t you ghive us recipets Shelby don’t even heard of you you have pissed me right off what’s the fucking go![42]
[42] Mr Miller’s Affidavit, Annexure 30.
On 16 May 2012 at 12.28pm Mr McConkey sent Mr Foreman a further email in the following terms:
Please contact us we will be sending a formal we don’t want your services or anything you are selling as Shelby don’t know you AT ALL … we want our 2700 back yesterday and we have contacted police over there to help us … if Shelby says he knows you etc is the only way the deal would go ahead …. not LIKELY.
REPSPONSE PLEASZE[43]
[43] Mr Miller’s Affidavit, Annexure 32.
On 16 May 2012 at 12.38pm Mr Miller received an email from Mr McConkey advising as follows:
Just giving you a formal we are covered
Its confirmed from NAB total funds in that account are $177895.41
Most of it yours and the rest mine ….. the bank guarantee has been cancelled they will get that over to us and ill give you a copy
They are confirming in writing the stop on CC and that deposits only im out $2707.00 but im confident we will get that back
As agreed I’m typing up that letter saying due to Shelby not knowing who he is etc we no longer want his services etc. ill send you a copy before I email it[44]
[44] Mr Miller’s Affidavit, Annexure 7.
On 16 May 2012 at 5.39pm Mr McConkey sent an email to Mr Foreman in the following terms:
I know it hasn’t been 24hrs but we are very angry the only thing is u didn’t get our money we WANT our 2707 back if we don’t have a reply or an exceptional explanation, in saying this we want your position and relationship assigned, also if you were fucking legitimate you would have given us a receipt im just happy you didn’t get shit PLEASE EXPLAIN AND REPLY.[45]
[45] Mr Miller’s Affidavit, Annexure 8.
On 16 May 2012 at 11.56pm Mr Pittsenbarger sent Mr Miller an email advising that Caroll Shelby had not been signing vehicles since mid November 2011.[46]
[46] Mr Miller’s Affidavit, Annexure 28.
On 17 May 2012 at 8.10am Mr McConkey sent an email to Mr Foreman in the following terms:
You still owe $957 and I aint fucking stoping till we have it all !!!!!!!!!!!![47]
[47] Mr Miller’s Affidavit, Annexure 8.
On 18 May 2012 at 8.13am Mr McConkey forwarded an email from Mr Pittsenbarger regarding the “Shelby 1000”. The email from Mr Pittsenbarger to Mr McConkey is generic information concerning the Shelby 1000 and not specifically related to Heidi Miller Investments’ order of a Shelby Mustang. Mr McConkey forwarded the email on to Mr Miller with the comment “Now this is more like it”.[48]
[48] Mr Miller’s Affidavit, Annexure 34.
On 19 May 2012 at 11.45pm Mr Miller notified Mr McConkey that he was contacting Shelby concerning the Shelby Mustang.[49]
[49] Mr Miller’s Affidavit, Annexure 36.
On 21 May 2012 at 9.50am Mr McConkey sent an email to Mr Foreman copied to Mr Miller in the following terms:
Subject: YOU’RE A FUCKING IDIOT
…
I NOTICED YOUR RETURNED 500 OVER THE WEEKEND YOU STILL HAVE MORE TO PAY AND APPARENTLYT YOU LIVE IN BAKERSVILLE CALIFORNIA … I’M SENDING SOME VISITORS ARSEHOLE.[50]
[50] Mr Miller’s Affidavit, Annexure 9.
On 25 May 2012 at 6.52am Mr Miller sent Mr McConkey an email stating that money “has not come thru”. This elicited a response from Mr McConkey which was in part as follows:
By our records it was transferred 3:19 yesterday after holding it up to sort out the currency thing, the bank said it will hit the bank 3-7 working days.[51]
[51] Mr Miller’s Affidavit, Annexure 37.
On 30 May 2012 at 7.19am Mr Miller asked Mr McConkey to check with the bank as the money had not yet come through.[52] Within the hour, Mr McConkey sent Mr Miller an email saying that he would check with the bank.[53]
[52] Mr Miller’s Affidavit, Annexure 38.
[53] Mr Miller’s Affidavit, Annexure 38.
There is no evidence of further contact between Mr Miller and Mr McConkey, or between Heidi Miller Investments and Solid Rocket Engineering, after 30 May 2012.
At the start of June 2012 Mr Miller had a conversation with a Mr Nathan Anderson. Mr Anderson advised Mr Miller that he had paid Mr McConkey to buy two caravans from California and to have them imported to Australia, but “they had never turned up and he had reported it to the police”.[54]
[54] Mr Miller’s Affidavit, paras.67 and 68 (the quote is from para.68).
Mr Miller filed a complaint with the Western Australian Police Service on 4 June 2012 concerning this matter. Mr Miller was subsequently advised by the Police that Mr McConkey had been arrested and charged with fraud on or about 20 June 2012, and had been released on conditional bail.[55]
[55] Mr Miller’s Affidavit, paras.69-70 and 72.
There is evidence that Mr McConkey, Ms Wheeler, Solid Rocket Engineering and Solid Rocket Group hold no real property in Western Australia, or at least no real property recorded on the Landgate Register.[56]
[56] Mr Miller’s Affidavit, Annexures 15-18.
As at the time of publication of these Reasons for Judgment the $134,930.59 has not been repaid to Heidi Miller Investments by Solid Rocket Engineering.
The power to make a freezing or Mareva type orders
In Deputy Commissioner of Taxation v Barnes[57] this Court said as follows in relation to the power to make a Mareva type order:
[57] (2008) 70 ATR 776; [2008] FMCA 7 (“Barnes”).
58. This Court has power to make a Mareva type order freezing the assets of the Respondents. Further, the Court in exercising jurisdiction in bankruptcy has power to grant, on an ex parte application, a Mareva type order under s.30(1)(b) of the Bankruptcy Act.
59. In determining whether a Mareva type order ought to issue the Court has regard to the following principles:
(a) that the Applicant show an arguable case that judgment against the other party or parties will be obtained;
(b) that the Applicant demonstrate by real evidence, and not mere assertion, that a refusal to make the orders sought involves a real risk that judgment in the Applicant’s favour would remain unsatisfied because of concealment or dissipation of assets; and
(c) that the balance of convenience requires the making of an order.
60. The application of the above principles have regard to the fact that it is the efficacy of the Court’s own processes, and the need to ensure that the Court’s jurisdiction is not usurped, which is the principle concern of a Mareva type order.
61. The Court also notes that Mareva type orders are:
(a) discretionary;
(b) a drastic remedy not to be granted lightly and therefore requiring close scrutiny of the available evidence; and
(c) if granted, only granted to the minimum extent necessary.
62. In determining this interim ex parte application the Court has had regard to the principles, and mode of application, set out above.[58]
[58] Barnes ATR at 784-785 per Lucev FM; FMCA at paras.58-62 per Lucev FM (and cases there cited).
In determining this interim ex parte application the Court has had regard to the principles, and mode of application, set out in Barnes.
Consideration
Is there evidence which would indicate that there is a likelihood of dissipation of assets by Solid Rocket Engineering and Mr McConkey such as to defeat any judgment?
There is, not unusually, no direct evidence as such. However, is there evidence which the Court might draw an inference from that assets, and in particular the $134,930.59 already paid by Heidi Miller Investments, might be dissipated if a Mareva type order is not made? It is to that question the Court now turns.
Firstly, it is relevant to note that no money has been returned to Heidi Miller Investments by Solid Rocket Engineering. It has been evident since mid-May 2012 that there have been doubts as to the existence or bona fides of Mr Foreman. Assuming he exists, the doubts as to his bona fides clearly extend to Mr McConkey, if the strident tone and urgent demands of his emails post-16 May 2012 are any indication. However, assuming Mr Foreman exists, those bona fides are, at least on one view, immaterial. That is because Heidi Miller Investments had been told, by Solid Rocket Engineering, that the purchase of the Shelby Mustang was secured by a bank guarantee from an Australian bank (NAB), and not by forwarding the funds to the USA. Indeed, Solid Rocket Engineering went so far as to advise Heidi Miller Investments, that there was a sum of $177,895.41 in the NAB account and that most of it belonged to Heidi Miller Investments. If that be the case, then, given that in the same email Heidi Miller Investments are advised that the bank guarantee has been cancelled, there can be no reason on the face of the materials as they presently stand why the sum of $134,930.59 could not have been returned to Heidi Miller Investments by now. On that basis alone, it would be open for the Court to draw an inference that it was not Solid Rocket Engineering’s intention to return that sum of money to Heidi Miller Investments, and to ask what the purpose of holding Heidi Miller Investments’ money is, if not to dissipate it.
Secondly, Solid Rocket Engineering has provided inconsistent information with respect to the whereabouts of Heidi Miller Investments’ $134,930.59. On the one hand it is said that a bank guarantee has been cancelled and the money is in an unspecified NAB account in Australia. On the other hand, when Heidi Miller Investments later seeks to find out when the money is being returned, or where it is, Solid Rocket Engineering asserts that the bank has transferred it on 24 May 2012 “after holding it … to sort out the currency thing”, and that “the bank said it will hit the bank 3-7 working days”. That statement is directly inconsistent with the earlier statement that the money was in the NAB account held by Solid Rocket Engineering. The statement is also internally inconsistent, saying that the money “had” been transferred, but then saying that it would “hit the bank” within a further period of days. Unlike much of the remainder of the email correspondence from Mr McConkey to Mr Miller, no correspondence or emails from any bank in relation to the holding of the monies, any bank guarantee, or the transfer of the money, is attached to Mr McConkey’s emails. Those inconsistencies and omissions raise significant doubt as to whether the content of Solid Rocket Engineering’s assertion about the whereabouts of the money is true. However, if it is true, then it does not explain why the $134,930.59 has not yet been returned to Heidi Miller Investments. These circumstances raise:
a)considerable doubt arising as to whether Mr McConkey or Solid Rocket Engineering have any intention to return; and
b)concerns as to the whereabouts of,
Heidi Miller Investments’ money.
Thirdly, there are a number of features of the email correspondence between Mr McConkey, Mr Foreman and Mr Miller which are peculiar. The fact that in each of the five emails to and from Mr McConkey and Mr Foreman in January 2012, January is misspelled “Janurary”. Ordinarily, this might lead the Court to infer that such a date had been manually typed into the time and date line. In that regard, the Court might infer that for one person to make this mistake, might be excusable, but for two people to make the same mistake, in at least five email exchanges whilst seemingly manually typing in a time and date rather than using the usual automatic time and date generated by emails, is very strange indeed. It gives rise to a possible inference that Mr Foreman is an email creation of Mr McConkey, and that the emails to and from Mr McConkey and Mr Foreman are all creations of Mr McConkey alone. Other examples include:
a)in a 26 April 2012 email from Mr McConkey to Mr Foreman the year appears as “J2012”,
b)two separate emails in a particular chain from Mr Foreman bear the same time (10.20am on 17 April 2012) and are separated by an email dated 9 days later (26 April 2012) in which the year appears as “J2012”;
c)emails in the chain of emails attached to emails to and from Mr McConkey and Mr Foreman are out of date order, as in:
i)sub-paragraph (c) above;
ii)an email dated 24 January 2012 appearing after an email dated 25 January 2012;
d)the email of 3 May 2012 which is ostensibly from Mr Foreman, but the text of which is addressed to Mr Foreman by his first name “Murray”;
which reinforces the possibility that each of the above emails were being manually created by Mr McConkey, to procure the payment of money by Heidi Miller Investments for the Shelby Mustang which had not been ordered, and was which it was not going to be possible to purchase or import. There may be a rational explanation for these peculiar emails, but it is not presently apparent.
The Court also notes that although Mr Foreman’s emails bore a street address and telephone number the same as that of Shelby American Inc., when Mr Miller contacted Shelby American Inc., Mr Foreman and Shelby Motors Inc. were not known in the customer relations division of Shelby American Inc.
Having regard to the above matters, the Court is of the view that because of:
a)the failure to return to Heidi Miller Investments the sum of $134,930.59 in circumstances where it is clear that no Shelby Mustang can be procured by Solid Rocket Engineering through Mr Foreman (if he exists);
b)the doubts about Mr Foreman’s existence, and whether he is in fact a separate person from Mr McConkey;
c)the inconsistencies in the emails from Mr McConkey to Mr Miller concerning the whereabouts of Heidi Miller Investments’ $134,930.59; and
d)the peculiarities in Mr McConkey’s email exchanges with Mr Foreman, such as to lead to doubts about the existence of Mr Foreman,
the Court may draw an inference which is sufficiently strong to enable the Court to conclude that Solid Rocket Engineering and Mr McConkey might dissipate Heidi Miller Investments’ assets, namely the $134,930.59, if not restrained from doing so, at least temporarily.
In all of the above circumstances, and particularly where:
a)the Shelby Mustang was never purchased or imported, or prepared to be imported, from the USA by Solid Rocket Engineering or Mr McConkey; and
b)Mr Foreman may not exist, but if he does exist then he was not a person in a position to give guarantees about the production of a Shelby Mustang such as to warrant the representations made by Solid Rocket Engineering and Mr McConkey,
Heidi Miller Investments shows an arguable case that judgment would be obtained against Solid Rocket Engineering, and Mr McConkey as an accessory, for at least misleading and deceptive conduct under the CC Act.
As to the balance of convenience it is the Court’s view that it favours the making of a Mareva type order. Heidi Miller Investments has paid for a Shelby Mustang which on the evidence as it presently stands it will never receive. Heidi Miller Investments ought to therefore have its money returned by Solid Rocket Engineering. On the view of the evidence most favourable to Solid Rocket Engineering and Mr McConkey the money that Heidi Miller Investments has paid for the purchase of the Shelby Mustang sits in an account held by Solid Rocket Engineering. The failure of Solid Rocket Engineering to return all, or any, of the $134,930.59 paid to it by Heidi Miller Investments for the Shelby Mustang, together with the other circumstances outlined above, gives rise to a real risk of asset dissipation in this case. In those circumstances, and where the money is not, and never has been, money to which Solid Rocket Engineering is ultimately entitled (even if there were a bona fide purchase of a Shelby Mustang), the balance of convenience favours the making of a Mareva type order. No prejudice can attach to Solid Rocket Engineering from the freezing of money held by it, to which it ultimately has no right.
In the circumstances the application for interim ex parte freezing orders requested by the applicant will be granted. Subject to the giving of undertakings in the form proposed in the Undertakings and Orders set out in the coversheet to these Reasons for Judgment, there will be interim orders in the terms set out in the Undertakings and Orders.
I certify that the preceding sixty-seven (67) paragraphs are a true copy of the reasons for judgment of Lucev FM
Date: 6 July 2012
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