McDonald v Neffati
[2015] FCCA 1242
•8 May 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| MCDONALD v NEFFATI | [2015] FCCA 1242 |
| Catchwords: PRACTICE AND PROCEDURE – Interlocutory injunctions – ex parte application – mareva injunction. |
| Legislation: Bankruptcy Act 1966 ss.27, 29, 116 |
| Jackson v Sterling Industries Ltd (1987) 162 CLR 612 Re John Cecil Clunies-Ross A Bankrupt Ex Parte: Geoffrey Frank Totterdell the Trustee of the Property of John Cecil Clunies-Ross A Bankrupt v John Cecil Clunies-Ross [1987] FCA 114 Reid v Howard (1995) 184 CLR 1 |
| Applicant: | GEOFFREY DAVID MCDONALD THE TRUSTEE OF THE BANKRUPT ESTATE OF MONCEF NEFFATI |
| Respondent: | MONCEF NEFFATI (A BANKRUPT) |
| File Number: | SYG 1254 of 2015 |
| Judgment of: | Judge Street |
| Hearing date: | 8 May 2015 |
| Date of Last Submission: | 8 May 2015 |
| Delivered at: | Sydney |
| Delivered on: | 8 May 2015 |
REPRESENTATION
| Counsel for the Applicant: | Mr G. McDonald |
| Solicitors for the Applicant: | Gavin Parsons And Associates |
| There was no appearance by the respondent |
ORDERS
I now make the following orders:
The hearing in respect of the application for Interim Orders be heard ex parte.
Up to and including 14 May 2015 the Respondent by himself, his servants or agents, be restrained from taking any steps to dispose of the Respondent’s interest in the property in Tunisia identified within the annexed Schedule to the orders (“the Real Property”) or granting or taking any steps to grant any lease, license or right to use occupy or possess the Real Property in any way.
On or before 5pm on 12 May 2015, the Respondent is to file an affidavit, within a sealed envelope, which is not to be opened without an Order of a Judge of this Court, in which the Respondent must:
(a)disclose any real property of any description located in Tunisia in which the Respondent has, or has had at any time since 14 February 2008 (being a date five years before the date of bankruptcy) an interest, beneficial or legal, freehold or leasehold, improvements or land only, including title and location details;
(b)disclose any personal property of any description located in Tunisia in which the Respondent has, or has had at any time since 14 February 2008 (being a date five years before the date of bankruptcy) an interest and describe any such personal property by providing identifying details, such as a serial number or vehicle identification number;
(c)disclose the Respondent’s understanding and knowledge of the Real Property and the nature of his interest, if any, in the Real Property;
(d)disclose the bank account numbers and current account balances for any bank account in Tunisia holding any monies in which the Respondent has an interest, if any.
Up to and including 14 May 2015 the Respondent by himself his servants or agents, be restrained from withdrawing, transferring or otherwise dealing with any monies in any bank account in Tunisia in which the Respondent has an interest, including but not limited to any such bank account held with the Banque de l’Habitat.
The Applicant be directed to serve on the Respondent a sealed copy of these Orders, along with a copy of the Amended Application and the Supporting Affidavits, by 5pm on 8 May 2015.
The service of documents on the Respondent pursuant to the above Order may be effected in the following way;
(a)The Applicant forwarding an email, or a series of emails, to the address of [email protected], and
(b)The Applicant sending an sms to the Respondent, immediately after sending the above email, on 0422 262 612 and stating “Moncef, I have made a Court application today and I have sent you documents at [email protected]”.
The Respondent and any third party affected by these Orders shall have liberty to apply on 24 hour’s notice to discharge or vary these Orders or to seek directions hereunder.
The Applicant’s costs of and incidental to obtaining these Orders, including the professional costs, remuneration and charges of the Applicant and the costs of Lyrinna Wong, be reserved.
The Applicant has leave to file the Amended Application.
The proceedings be adjourned to 2.15pm on 14 May 2015 for further hearing.
Schedule
The following real property is collectively referred to as the Real Property:
1. Title Deed - TD 6064 (“Property 6064”)
Located in Mornag, Government of BEN AROUS, Tunisia.
Known as “Menzel Ennafati”
2. Title Deed - TD 58513 (“Property 58513”)
Located in Mornag, Government of BEN AROUS, Tunisia.
Known as “Zouhour”
3. Title Deed – TD 68518 (“Property 68518”)
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 1254 of 2015
| GEOFFREY DAVID MCDONALD THE TRUSTEE OF THE BANKRUPT ESTATE OF MONCEF NEFFATI |
Applicant
And
| MONCEF NEFFATI (A BANKRUPT) |
Respondent
REASONS FOR JUDGMENT
This is a matter within the Court’s jurisdiction under s.27 of the Bankruptcy Act 1966 in which the trustee is trying to get into the estate property of the bankrupt in Tunisia. This is an ex parte application for injunctive relief in the nature of a Mareva injunction and for disclosure of the assets of the bankrupt in Tunisia.
On 14 February 2013, the applicant was appointed a trustee of the estate of the bankrupt, being the respondent to these proceedings. The statement of affairs filed by the bankrupt failed to disclose any property in Tunisia. As a result of the trustee becoming aware of Family Court proceedings, the trustee ascertained, in 2013, that the bankrupt may have some property in Tunisia.
The communications between the trustee and the bankrupt raised the issue of what property the bankrupt may have and it is clear that the bankrupt conveyed to the trustee that there were only two properties, being an olive farm and an interest in a villa which the bankrupt alleged were of little value and the subject of restrictions in respect of both transfer and remittal of funds from Tunisia.
In April of this year, the trustee was provided with information from the Australian Financial Security Authority which has lead to the making of this application. That information was to the effect that there are, in fact, potentially six properties, in respect of which the bankrupt has an interest, and that the value of those six properties is potentially substantial, in the order of $2 million. This is an estate in which there are substantial creditors, in the order of $3 million.
Two of the title searches tendered in evidence identify the bankrupt, with the bankrupt’s Tunisian ID number disclosed on the title deed search. Those searches appear to have been obtained at the end of 2014 or early 2015.
The first issue that this Court must be satisfied of is its jurisdiction to grant the interim relief sought. The substantive relief, in the application, seeks a declaration, relevantly, that the property in Tunisia is part of the property vested in the trustee under s.116 of the Bankruptcy Act.
The final relief also includes potential relief under s.29 of the Bankruptcy Act seeking the assistance of the Tunisian Courts in aid of and ancillary to the enforcement of the trustee’s rights under the Bankruptcy Act in respect of the property vested in the trustee.
French J, as his Honour then was in Re John Cecil Clunies-Ross A Bankrupt Ex Parte: Geoffrey Frank Totterdell the Trustee of the Property of John Cecil Clunies-Ross A Bankrupt v John Cecil Clunies-Ross [1987] FCA 114 held that there was jurisdiction under the Bankruptcy Act and the provisions under the Federal Court of Australia Act 1976 to grant the Mareva injunction in respect of property of the bankrupt in the Cocos (Keeling) Islands Territory.
This Court, under s.15 of the Federal Circuit Court Act 1999, has jurisdiction to make an interim order in the nature of a Mareva injunction given the provisions of the Bankruptcy Act to which I have referred, consistent with the decision in of Re John Cecil Clunies-Ross A Bankrupt Ex Parte: Geoffrey Frank Totterdell the Trustee of the Property of John Cecil Clunies-Ross A Bankrupt v John Cecil Clunies-Ross, supra., see Jackson v Sterling Industries Ltd (1987) 162 CLR 612. Given the jurisdiction conferred on this Court in this matter by the Bankruptcy Act1966 the grant of the power in s.15 of the Federal Circuit Court Act 1999 to make interlocutory orders as the Court thinks appropriate, carries as a matter of construction everything necessary for its exercise and in this Court that includes an interim order in the nature of a Mareva injunction to preserve the subject-matter of the proceedings. On the proper construction of s.15 the power to grant an interlocutory asset preservation order includes power to require disclosure of the assets the subject of the preservation order.
It was identified by Deane J, in Jackson v Sterling Industries Ltd supra. at [622] that the general interlocutory power includes a power to order the disclosure by a defendant of his or her assets in aid of the Mareva injunction. An order for disclosure of assets, in this case, given the provisions of the Bankruptcy Act, could give rise to an issue of privilege against self-incrimination of the kind identified in Reid v Howard (1995) 184 CLR 1 at [6]-[11].
It is appropriate for the Court to craft an order appropriate to the circumstances of this case and which protects that privilege. I am satisfied that the disclosure order, in the present case, that requires an affidavit to be placed in a sealed envelope, not to be opened otherwise than by order of a judge of this Court, fully protects the fundamental right of the respondent in respect of the privilege against self-incrimination.
I am satisfied that this Court has jurisdiction to grant the proposed orders. On the evidence before the Court, I am satisfied that the applicant has established a prima facie case of there being property in Tunisia owned by the respondent which is within the divisible property vested under s.116 of the Bankruptcy Act in the applicant.
I am satisfied the applicant has established a prima facie case that the limited nature of the information was conveyed by the bankrupt to the applicant trustee was a concealment of the full nature, extent and value of the property of the applicant. I am satisfied, on the evidence before this Court at this ex parte stage, that the applicant has established a prima facie case of a deliberate concealment by the bankrupt and that there is a well-founded fear by the applicant of a real risk of the property being dissipated otherwise disposed of unless injunctive relief is granted.
I am satisfied that the full nature and extent of that potential deliberate concealment by the bankrupt only came to the attention of the applicant as a result of the information provided in April by the Australian Financial Security Authority. The balance of convenience warrants the grant of the interlocutory relief and this is clearly a case where damages would be an inadequate remedy. I am satisfied that there has been no relevant delay by the applicant in moving for this ex parte relief after the information was provided by the Australian Financial Security Authority.
Notwithstanding the earlier information as to the existence of potential property in Tunisia, this is an appropriate case in which ex parte relief should be granted. The applicant has identified, on this ex parte application, that the properties may no longer be the property of the bankrupt, title may not have been vested in the bankrupt and that the searches and potential value may be incorrect.
The Court proposes to make orders but directs that these reasons will not be published until the return date of the interlocutory application.
I certify that the preceding sixteen (16) paragraphs are a true copy of the reasons for judgment of Judge Street
Associate:
Date: 14 May 2015
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