Heilbronn, Greig Ronald v Australian Securities Commission

[1997] FCA 520

IN THE FEDERAL COURT OF AUSTRALIA  No QG 196 of 1996
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION

BETWEEN:GREIG RONALD HEILBRONN

Applicant

AND:AUSTRALIAN SECURITIES COMMISSION

Respondent

CORAM:Drummond J

DATE:6 June 1997

PLACE:Brisbane

MINUTES OF ORDERS

THE COURT ORDERS THAT:

1. The proceedings commenced by Greig Ronald Heilbronn by application filed 15 November 1996 be dismissed.

2. Greig Ronald Heilbronn pays the costs of the Australian Securities Commission of and incidental to the application, to be taxed.

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

IN THE FEDERAL COURT OF AUSTRALIA  No QG 196 of 1996
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION

BETWEEN:GREIG RONALD HEILBRONN

Applicant

AND:AUSTRALIAN SECURITIES COMMISSION

Respondent

CORAM:Drummond J

DATE:6 June 1997

PLACE:Brisbane

REASONS FOR JUDGMENT

The Australian Securities Commission applies to dismiss an application by Mr Heilbronn founded on his non-compliance with directions given with respect to the preparation for the hearing of Mr Heilbronn's own application. His application is for an extension of time to appeal an order of Cooper J directing the issue of a warrant for his arrest under s 486B the Corporations Law and a subsequent order that Mr Heilbronn pay part of the ASC's costs of his application for that warrant.  Mr Heilbronn will need not only an extension of time to appeal the costs order, but also leave to appeal it.

Cooper J's orders were made as long ago as February and May 1995.  Mr Heilbronn did not file his application for an extension of time to appeal them until 15 November 1996.  On 6 December 1996, directions were given requiring Mr Heilbronn to file his material in support of his application for an extension of time by 17 January 1997.   This was extended to 7 March 1997 by a consent order made on 5 March 1997.  Mr Heilbronn has not complied with these directions.  Instead, in an affidavit filed by leave when the matter first came before me on Thursday of last week, he describes in considerable detail the material he proposes to put before the Court in support of his application for an extension of time to appeal.  In his facsimile to the District Registrar of 29 May 1997he said:

"… should the RESPONDENTS Motion be dismissed I intend to file further material in this matter over the coming weeks, and I expect that the quantum of the further material will be in excess of the present filing."

He sought a further two months to file this additional material.

The issues before Cooper J on 1 February 1995, when he ordered that the warrant issue, were in narrow compass.  Yet Mr Heilbronn says that a vast range of material is required before he can comply with the directions given with respect to his application for an extension of time to appeal those orders.  This material, according to one of his affidavits, falls into 14 classes.  He describes at length the difficulties he says he is having in getting the ASC to give him access to the material, as well as the difficulties he said he has had in recovering some of that material from the Australian Federal Police and from the liquidator of Vesofe Pty Ltd, the company with which he was associated and whose property and records were the subject of the warrant that Cooper J ordered to be issued.

However, he provides no information in the mass of material he has filed in the proceedings before me upon which a view could be formed as to the possible relevance of any of the material.  By way of example, he refers to what he describes as the GRH 1995 affidavit, a 500 paragraph affidavit, with 600 pages of exhibits.  He says this was seized under the warrant on 23 April 1995.  He says that, as at the date of swearing his affidavit of 28 May last, which he read before me, he had not received either the original or complete copies of the GRH 1995 affidavit, or the GRH 1995 exhibits, and has therefore been unable for more than two years to file that affidavit and exhibits in this Court.  He says that, by virtue of his being prevented from filing the GRH 1995 affidavit and exhibits, this Court has not been informed of important facts and circumstances relevant to his application for an extension of time to appeal and he goes on to explain what the important facts are that are buried in this 1,100 pages of material.  He says only this:  firstly, they comprise the conduct of the affairs of Vesofe prior to its being placed in liquidation; secondly, the conduct and affairs of Vesofe under the appointed liquidator; thirdly, his own conduct during the period immediately preceding the ASC's originating of proceedings in this Court on or about 30 January 1995 and, fourthly, his conduct during the period of about 11 weeks from 1 February until 23 April 1995 whilst the Cooper arrest warrant was in force.   He gives no further information as to how the GRH 1995 affidavit and exhibits might be relevant to his extension of time for leave to appeal Cooper J's orders. 

Another class of material he says he wants to put before the Court in support of his application are affidavits he wants to obtain from two of his former solicitors, one being a Mr Mazzoletti. He describes, in one of his affidavits read before me, at considerable length, the difficulties he has had, resulting, he says, from the restrictions in his bail conditions imposed in certain criminal proceedings, in gathering evidence from these former solicitors. He obtained, on the eve of last Thursday's hearing, from Mr Mazzoletti, by means Mr Heilbronn has not disclosed, an affidavit. The purpose of Mr Mazzoletti's affidavit appears to be to show that Mr Heilbronn was readily contactable prior to and on 1 February 1995, the day Cooper J ordered the issue of the warrant. Mr Heilbronn contends that the issue of a warrant was for that reason unnecessary. The warrant was issued pursuant to s 468B(1)(b)(ii) and (iii) the Corporations Law.  Even if it were relevant to show that Mr Heilbronn was readily contactable by the ASC on the day the warrant was issued, what Mr Mazzoletti has to say is, in any event, contradicted by what Mr Heilbronn apparently told his Legal Aid solicitor, Ms Schilton, recently.  The Legal Aid Review Committee in March last required an advice from Ms Schilton before it would consider whether to grant Mr Heilbronn's request for legal aid in the present application before me.  Her advice includes the following:

"I understand Mr Heilbronn is saying that it was imperative for him to go to America to give testimony in relation to his former partner's from America who had defrauded him of funds in Australia and were being investigated by the American authorities.  He says he was aware of the warrants and that he would be unable to leave the country under his own passport and therefore felt he had to resort to another passport intending to return in a short space of time."

Mr Heilbronn was convicted in May 1995, ie, after his arrest on the warrant, in respect of offences committed while attempting to leave Australia under a false name.

Mr Heilbronn sought to explain his delay in making application for the extension of time to appeal, in the very detailed affidavit he prepared and filed on 15 November last, as, in part, due to his suffering a psychiatric condition during the latter part of 1995 and into 1996, which was sufficiently serious to require hospital treatment for one and a half weeks in August 1995 and eight weeks to early December 1995.  In part, he also relies in explaining this delay on his embroilment in various criminal prosecutions brought against him by the ASC and other authorities to which he has had to devote considerable time in 1995, 1996, as well as now.  A number of prosecutions are still continuing.

Mr Heilbronn also relied on his medical condition and his involvement in these criminal proceedings in the first part of this year to explain his delay in complying with the directions of December last.

While it appears he is still receiving treatment for his medical condition, it is apparent that that has not prevented him, between November last and now, from preparing numerous elaborate affidavits which, in logical fashion, offer explanations for the delay in filing the application for the extension of time to appeal and which also offer explanations for his failure to comply with the directions in question. 

Moreover, his condition has not prevented him from being closely involved in preparation for, or in attending, the criminal proceedings that were heard in January, February and April of this year and in preparing for a further criminal trial which he says is due to commence in the District Court in October next.  Between 17 January last, when Mr Heilbronn was supposed to have filed the material he wanted to rely on in support of his application for an extension of time to appeal, and when the matter was before me last Friday evening, he set for himself, in communications with the ASC, a series of new deadlines with accompanying explanations by which he said he would file his material.  These deadlines were, firstly, 24 January, then 10 February, ie, for the material he had prepared before he claimed in his facsimile to the ASC of 7 February 1997 that he had suffered a recent deterioration in his medical condition, then 7 March, after explaining in his facsimile of 21 February to the ASC that the ongoing delay was due to difficulties he had experienced with respect to obtaining legal aid.  As to his facsimile to the ASC of 7 February, Mr Heilbronn explained his delay in complying with the directions as being due to a deterioration in his medical condition "in particular since Christmas" and the unavailability to him of certain persons and documents which he needed in order to comply with the directions.  As to the latter matter, he mentioned that a subpoena had been issued by the Legal Aid Office on his behalf to the ASC in one of the criminal proceedings in which he is involved, and that, while not specifying the documents he needed, he said that the documents subpoenaed included those documents. 

In that facsimile of 7 February, he said he expected to serve on Monday, 10 February "that part of the further material which I have completed some weeks ago before the difficulties were experienced as to obtaining material and deterioration in my health".  That material, however, never appeared until the ASC's motion to dismiss his application came before me on Thursday of last week.  As to the explanation he gave to the ASC in early February for the non-appearance of any of the material he then referred to being due to a deterioration in his medical condition, he asserted in submissions to me, in response to my query about how he had managed to prepare his detailed affidavits, that his condition had improved throughout this year.

The delay by Mr Heilbronn in complying with the directions given on 6 December with respect to the preparation for hearing of his application for an extension of time to appeal Cooper J's orders, if considered in isolation, is not such as would justify the dismissal of his application.  But there are other matters which, in my opinion, make that course appropriate.  I do not accept Mr Heilbronn's contention that he has been disabled from complying with directions by a combination of his medical condition, demands on his time due to his involvement in the criminal proceedings, and the ASC's alleged intransigence in disabling him from complying with those directions by denying him access to necessary documents seized from him and his companies. 

I have referred to Mr Heilbronn's disavowal at the hearing before me that his medical condition was a cause of his delay in complying with the directions.  I have referred also to the lack of any explanation from him as to why the mass of material, including material he says the ASC is denying to him, is necessary for his application for the extension of time to appeal.  I have also referred to the fact that he has demonstrated a capacity to produce a large amount of affidavit material which generally deals in a relevant way with the matters to which it is directed, but he has failed to produce any material that shows he may have some basis for attacking the order for the issue of the warrant.  Mr Heilbronn's tactic appears to be to obfuscate that issue as much as he possibly can. 

Moreover, his originating application is a very stale one, seeking to challenge an order for the issue of a warrant made as long ago as February 1995, and an order for costs made in May 1995 also.  While he may well have been impeded in challenging these orders in 1995, if he had that in mind then, by reason of his medical condition in that year, he told the Deputy District Registrar on 23 April 1996 that he intended to appeal those orders, yet did nothing about it until he was faced with imminent bankruptcy.

The ASC served a bankruptcy notice founded on Cooper J's judgment for costs of May 1995 on him on 26 September 1996.  He applied on 23 October 1996 to set the bankruptcy notice aside and, on 18 November 1996, a judge ordered that this application to set aside the bankruptcy notice be adjourned until the outcome of his application of 15 November for an extension of time to appeal the costs judgment on which the bankruptcy notice was founded was known.  The ASC was only able to tax these costs on 17 May 1996 after protracted, unsuccessful negotiations with Mr Heilbronn, and after a hearing before the Deputy District Registrar to which I have referred, which took place on 23 April 1996. 

Mr Heilbronn told me in submissions on Thursday of last week that one of the grounds on which he wants to appeal the certificate of taxation is that certain of the items in the ASC's bill of costs were wrongly allowed on the taxation, but, because he could not provide the security for the ASC's costs of the taxation hearing, he was unable to pursue his objections to them.  Quite apart from the difficulties he faces in appealing the stale taxation, he has not attempted to put any material before me that might tend to make good his assertion that there are items wrongly allowed in the certificate of taxation. 

Mr Heilbronn has consistently failed to identify any material showing that this application for an extension of time to appeal Cooper J's orders might have some merits.  I have mentioned that at the hearing before the Deputy District Registrar on 23 April 1996, Mr Heilbronn said he intended to appeal the costs judgment of Cooper J.  He was given advice by the Deputy District Registrar, and the relevant forms, to assist him to do that.  But as I have said, he did not file the application with respect to the proposed appeal until 15 November last.  I infer that it was concern at the bankruptcy notice that caused Mr Heilbronn to institute the present proceedings which, among other things, attack the judgment on which the bankruptcy notice was founded. 

He is facing a criminal trial in the District Court which is due to start in October next.  There is in evidence material relating to the Legal Aid Review Committee's evaluation of his claim for legal aid to assist in the present application.  It appears that the Committee thought it might be sufficient to justify the grant of legal aid for that purpose if Mr Heilbronn's legal aid solicitor representing him in the prosecution pending against him by the ASC in the matter due to come to trial in the District Court in October next "is satisfied that an appeal against the warrant is a good strategy to reduce the length of the October trial or to narrow the evidence so as to improve the chances of defending the charges in October".  The Ombudsman, in his response to Mr Heilbronn's complaint about being refused legal aid for this purpose, also advised that:

"When the matter came before the Review Committee on 12 March 1997, the Committee considered itself bound to grant aid if the report from Ms Schilton argued that funding the Federal Court matters was a good strategy in defending the October prosecution by ASC."

However, as the Ombudsman reported, the Committee considered Ms Schilton's report to be equivocal, did not conclude that funding the Federal Court matters "was imperative as far as the October criminal case was concerned" and confirmed the refusal of legal aid in respect of this matter. 

It did that on 17 March, yet Mr Heilbronn did not then direct his abundant energies to explaining why the material he says he cannot access might be relevant to his application for the extension of time he is now seeking.  In paragraph 60 of his affidavit of 28 May Mr Heilbronn says under the heading "Disadvantage to Defendant in later Criminal Prosecution in filing common material":

"I can say and verily believe that there is material vital to the APPLICANT's case in these proceedings which is material which is intended as evidence in defence to the CRIMINAL PROSECUTION commencing on 13 October 1997; AND in the absence of professional legal representation I am gravely concerned that to reveal the said material at an earlier date in these proceedings will be significantly detrimental to the said Defence; AND THAT the scope of the proceedings in this Honourable Court may be insufficient to fully canvass the facts and circumstances which would result in a definitive outcome in respect of the CRIMINAL PROSECUTION."

I read this as throwing light upon Mr Heilbronn's conduct in not complying with the directions of 6 December and his conduct in the other respects which I have referred to above, which involves a failure to identify the respects in which the material he contends he is denied access to will assist him in support of his application for an extension of time to appeal Cooper J's decision.  In my view, it is likely that Mr Heilbronn has no intention of putting material of that kind to this Court, at least until it suits him to do that, which will not occur in all probability until after the criminal hearing.

In issuing the warrant Cooper J, in his reasons, found that Mr Heilbronn was, in April 1994, in possession of certain records of the company Vesofe, which Mr Heilbronn controlled, and that at the time Vesofe went into liquidation it owned certain computer equipment. His Honour found, on the basis of evidence from two former employees of Vesofe, Messrs Mansfield and Raasch, and on the evidence of the liquidator, that Mr Heilbronn had concealed or removed this property in order to prevent or delay the liquidator taking custody of it and that Mr Heilbronn had concealed or removed the books of the company from the liquidator and that the warrant should accordingly issue pursuant to s 486B(1)(b)(ii) and (iii) the Corporations Law.

In the course of the hearing on last Thursday, I directed Mr Heilbronn, because of certain assertions he made in the course of argument, to file any evidence he wished to rely on to show that he had complained to the ASC that the documents and the computer equipment referred to by Cooper J were not the property of Vesofe but belonged to other entities and that Mr Heilbronn had complained to the ASC that it had in its possession documents that would prove that, and further, that the ASC has refused Mr Heilbronn access to these documents.  Mr Heilbronn represented himself on Thursday last. 

Today he is represented by a solicitor, Mr Eleftheriou, for the purpose of dealing with the matter with respect to which I gave Mr Heilbronn leave to put further material before me today.  The result of that opportunity has been the production by Mr Heilbronn of numerous affidavits which deal with a host of issues that have nothing to do with the issues with respect to which I gave Mr Heilbronn the opportunity to file material.

He complains in this material of being in possession of Vesofe documents after liquidation with the consent of the liquidators, which documents were then seized under the warrant.  He does not suggest that the evidence of the two former Vesofe employees related to documents which were the property of entities other than Vesofe.  He refers at length to material which he describes only as "certain assets, books and records " of unidentified third parties stored in a range of self-storage complexes in Brisbane and Sydney until it was all seized either by the liquidators of Vesofe, the ASC or the Australian Federal Police.  Mr Heilbronn is obviously closely familiar with all this material.  He describes at some length alleged misconduct on the part of the ASC and the liquidator in unlawfully refusing to return these third party documents to him and that examination of this material will show that it does not belong to Vesofe.  But Mr Heilbronn does not say that the evidence on which the warrant was issued included evidence with respect to this vaguely described third party material or that that material was incorrectly identified to Cooper J as the property of Vesofe.

Mr Heilbronn has also filed an affidavit to much the same effect from his wife.  The only piece of evidence in the entire mass of material that Mr Heilbronn has now filed in relation to the present motion to strike out his extension of time application to which I was referred by Mr Heilbronn or the solicitor now representing him which relates to the question whether the warrant may have been issued in respect of material wrongly identified to Cooper J as material belonging to Vesofe, when it may have belonged to another entity, is a short passage in a letter written on 11 April 1995 by Mrs Heilbronn to the ASC.  Mrs Heilbronn refers in this short passage in her very long and detailed letter to her being "extremely concerned at the gross inaccuracy" of an article that appeared in The Courier-Mail on 23 March 1995.  She goes on to say:

"I am extremely concerned that the goods seized and referred to therein will be sold on behalf of the company, Vesofe Pty Ltd (in liquidation).  These goods do not belong to that company as my letter will explain."

The only portion of this lengthy letter that the solicitor directed me to as purporting to make good Mrs Heilbronn's proposal to explain how the goods identified in the newspaper article, and apparently the subject of auction by the liquidator, were not in fact the goods of Vesofe, appears at page 7.  I was referred to references to the computer equipment appearing at the top of that page, which seems to refer to computers described as Mr Meek's computers, and also to other computer equipment which Mrs Heilbronn describes as owned by Merabond, a company with which Mr Heilbronn was also associated.

There is no evidence before me to confirm that the small range of computer material identified at the top of page 7 by Mrs Heilbronn as Mr Meek's computers was, in fact, the property of Mr Meek, as well as being property seized under the warrant.  There is no explanation for why such evidence from Mr Meek is not available, there being material before me to indicate that the Heilbronns were well acquainted with the Meeks.  So far as the computer material, which Mrs Heilbronn describes at page 7 of this letter as being the property of Merabond, she then wrote to the ASC to say:

"If you want proof of ownership from Merabond, then I will be happy to supply that to you."

There is no attempt made to make good Mrs Heilbronn's confident assertion on 11 April 1995 that she could prove that certain of the material, which it is suggested was seized under the warrant and presumably wrongly identified to Cooper J as material of Vesofe, was the property of another.  Mr Heilbronn has, since the last hearing, filed an affidavit from Mr Eleftheriou, who is also the solicitor acting for him in respect of his prosecution for contraventions of the sales tax legislation.  Mr Eleftheriou says nothing more than that he has inspected documents held by the ASC in connection with his retainer by Mr Heilbronn and that they relate to a range of companies associated with Mr Heilbronn and that some of the documents he has seen relate to Vesofe.

I therefore propose to make an order in terms of the ASC's notice of motion dismissing Mr Heilbronn's application for an extension of time to appeal the orders of Cooper J.  There will be an order in terms of paragraph 1 of the notice of motion.

I certify that this and the preceding 14
pages are a true copy of the reasons
for judgment herein of the Honourable
Justice Drummond.

Associate:

Date:6 June 1997