Palmer v Parbery (Liquidator), in the matter of Queensland Nickel Pty Ltd (in liq)
[2018] FCA 1709
•31 October 2018
FEDERAL COURT OF AUSTRALIA
Palmer v Parbery (Liquidator), in the matter of Queensland Nickel Pty Ltd
(in liq) [2018] FCA 1709
File number: QUD 783 of 2018 Judge: REEVES J Date of judgment: 31 October 2018 Catchwords: PRACTICE AND PROCEDURE – where summonses for examination were issued in a related proceeding – application to stay those summonses – whether the claim for relief in the related proceeding was “well arguable” – stay application dismissed Legislation: Corporations Act 2001 (Cth) Date of hearing: 31 October 2018 Registry: Queensland Division: General Division National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Category: Catchwords Number of paragraphs: 20 Counsel for the Applicants: E Robinson Solicitor for the Applicants: Alexander Law Counsel for the Respondent: R Newlinds SC and D Sulan Solicitor for the Respondent: King & Wood Mallesons ORDERS
QUD 783 of 2018 IN THE MATTER OF QUEENSLAND NICKEL PTY LTD (IN LIQUIDATION) ACN 009 842 068
BETWEEN: CLIVE FREDERICK PALMER
First Applicant
CRAIG GUNNIS
Second Applicant
RYAN MATTHEW MENSINK (and another named in the Schedule)
Third Applicant
AND: STEPHEN JAMES PARBERY IN HIS CAPACITY AS LIQUIDATOR OF QUEENSLAND NICKEL PTY LTD (IN LIQUIDATION) ACN 009 842 068
Respondent
JUDGE:
REEVES J
DATE OF ORDER:
31 OCTOBER 2018
THE COURT ORDERS THAT:
1.Paragraph 1 of the interlocutory relief sought in the originating application filed 30 October 2018 be dismissed.
2.The applicants are to pay the respondent’s costs of and incidental to the stay application, to be taxed or agreed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
EX TEMPORE REASONS FOR JUDGMENT
REEVES J:
On 15 October 2018, Mr Palmer was duly notified that he was required to appear in this Court at 10.00 am this morning, 31 October 2018, to continue his examination into the affairs of Queensland Nickel Pty Ltd (In Liquidation) being conducted on behalf of the special purpose liquidators of that company. That examination is being conducted under Part 5.9, Division 1 of the Corporations Act 2001 (Cth) (Corporations Act). The original order establishing that examination was made by Registrar Belcher on 2 August 2016. Since that order was made, I have been told that Mr Palmer has been examined on nine occasions.
Late yesterday afternoon, Mr Palmer and three other applicants, Mr Craig Gunnis, Mr Ryan Matthew Mensink and Mr Gueorgui Alexandrov Sokolov (who I will, for convenience, refer to jointly as “Mr Palmer”), filed an originating application with this Court seeking the following orders:
(1)a declaration that the examinations in proceedings QUD 580/2016 by the special purpose liquidators in respect of the whereabouts of Clive Theodore Mensink are an abuse of process;
(2)an order that all existing summonses for examination of any person or for the production of any documents issued by this Honourable Court be discharged;
(3)an order that the respondent be permanently restrained from applying for the issue of any further summons for examination of a witness or production of a document in respect of the examinable affairs of Queensland Nickel;
(4)in the alternative to (3), an order requiring that any further application by the respondents for the issue of any further summonses for examination of a witness or production of a document in respect of the examinable affairs of Queensland Nickel be made on no less than eight days’ notice to the applicants herein and that the applicants be served with a copy of any application and any affidavit or other documents filed in support of the application; and
(5)a declaration that the special purpose liquidators do not have power to conduct an examination of witnesses under ss 596A and 596B of the Corporations Act.
That application also included two claims for interlocutory relief as follows:
(1)that all existing summonses issued in proceedings QUD 580/2016 for the examination of any person or for the production of any documents issued by this Honourable Court be stayed until further order of the Court; and
(2)that summonses be issued to the following persons for them to answer on oath questions regarding what they know and what information they have received regarding the whereabouts of Mr Mensink and when they acquired such knowledge and information:
(a)Mr Craig Cowling;
(b)Ms Emma Costello;
(c)Mr Stephen James Parbery;
(d)Mr Michael Andrew Owen;
(e)Mr Marcus William Ayres;
(f)The Hon Kelly O’Dwyer MP, Minister for Jobs and Industrial Relations and Minister for Women;
(g)Senator the Hon Michaelia Cash, Minister for Small and Family Business, Skills and Vocational Education; and
(h)Ms Kerri Hartland, Secretary, Commonwealth Department of Jobs and Industrial Relations.
I should record that Mr Palmer’s counsel has informed me that, at this stage, he does not wish to pursue the second of these two orders.
When Mr Palmer’s examination commenced this morning before Registrar Belcher, his counsel sought to have the examination adjourned. Because that application relied, in part, on the stay application mentioned above (see [3(1)]), Registrar Belcher referred the matter to me as the Commercial and Corporations Duty Judge.
It is not in dispute that this Court has the power to make such a stay order under its implied powers and/or under s 597 of the Corporations Act, albeit that the latter is not strictly a stay order.
This interlocutory application was supported before me by the affidavit Mr Palmer made and filed yesterday in support of the originating application. I will return to that affidavit a little later.
In submissions in support of the stay application, Mr Robinson, Mr Palmer’s counsel, submitted that the claim for relief in the substantive proceeding was “well arguable” and that a failure to grant the stay would render that relief nugatory. He submitted that would, in turn, cause prejudice to Mr Palmer and his fellow applicants. Conversely, he submitted that the special purpose liquidators would suffer little, if any, prejudice if the stay were to be granted. On that aspect, he claimed that there was no situation of urgency applying to the examination necessitating it proceeding today.
The claim for relief in the substantive proceeding was well arguable, so Mr Robinson contended, for three reasons. First, based on Mr Palmer’s affidavit at paragraphs 19 to 24, he submitted it could be inferred that the special purpose liquidators have known the whereabouts of Mr Mensink for some time. Those paragraphs of Mr Palmer’s affidavit set out the details of a conversation that he claims to have had with Mr Mensink “in October 2018” when he says he met him “for dinner at a restaurant in Sofia, Bulgaria.” Mr Palmer went on to claim in his affidavit (at paragraph 21):
During the course of the dinner, Mr Mensink informed me and I believe as follows:
(a)He has crossed borders in overseas countries in the past 18 months (including entering into Bulgaria) and on all of those occasions, he has been interviewed by the immigration officials of those countries. During such interviews, the officials have informed Mr Mensink that an Interpol blue notice has been issued in respect of him at the request of the Australian Government, that his movements are not restricted but that Interpol must be advised of his whereabouts and that information will be passed back to the Australian Government;
(b)He was then staying in Bulgaria and on every occasion that he had entered Bulgaria, he completed a form titled “Registration Card of Foreigner” which form required him to complete his complete residential address and personal identifying information;
(c)That he currently uses a Westpac Banking Corporation bank account and credit card which he uses frequently to conduct banking transactions including EFTPOS transactions for purchases … He is aware from his own investigations and comments made to him when conducting transactions that “Austrac”, (Australian Transaction Reports and Analysis Centre, an agency of the Australian Government) monitors his transactions on the account and therefore will know on a daily basis where he is using his bank account and credit card;
(d)When staying at his girlfriend’s apartment in Sofia, he was informed by neighbours of his girlfriend that the neighbours were approached by persons who:
i.stated that they were investigators working on behalf of the Australian Government;
ii.Stated they were conducting investigations into the whereabouts of Clive Mensink who was a fugitive from Australia;
iii.asked if Mr Mensink was living in the girlfriend’s apartment; and
iv.took photographs of the apartment.
The affidavit goes on to depose to the results of searches Mr Palmer has conducted with respect to the contents of a Registration Card of Foreigner (see [21(b)] at [9] above), an Interpol blue notice (see [21(a)] at [9] above), and the usual operations of AUSTRAC (the Australian Transaction Reports and Analysis Centre, an agency of the Australian Government) with respect to bank accounts (see [21(c)] at [9] above).
The second reason advanced by Mr Robinson for the substantive proceeding being well arguable relied upon certain statements Mr Palmer made at paragraph 29 of his affidavit. Those statements were to the effect that the examination was an abuse of process because:
… it is not for the proper purpose of investigating the examinable affairs of [Queensland Nickel] but is for the ulterior purpose of sustaining the ongoing publication of adverse media stories regarding me and Mr Mensink, oppressing the applicants and causing damage to my reputation, credit and standing and that of entities under my control and thereby prejudice or damage my defence and my prospects of a fair hearing in proceeding 6593/17.
When I challenged Mr Robinson as to the foundation upon which he could make such a serious allegation against a group of liquidators appointed by this Court, he said he was not contending those statements were true.
Mr Robinson’s third reason for contending that the substantive proceeding was well arguable was the opinion expressed in paragraph 30 of Mr Palmer’s affidavit, and I quote, in part:
… the [special purpose liquidators] were appointed under s511 of the Corporations Act. In my opinion, since the repeal of s511 of the Corporations Act by the Insolvency Law Reform Act 2016 (Cth) with effect from 1 September, 2018, the [special purpose liquidators] no longer have any power to conduct an examination …
Using the terms of an interlocutory injunction application, Mr Newlinds QC, for the special purpose liquidators, submitted that the substantive proceedings did not raise a good and arguable claim or question sufficient to justify the stay application Mr Palmer has sought. On the issue of the whereabouts of Mr Mensink, Mr Newlinds has told me, and I accept, that he is instructed that the special purpose liquidators do not know Mr Mensink’s present whereabouts. Mr Newlinds has also informed me, and I also accept, that this issue is one of seven matters he wishes to pursue in Mr Palmer’s examination today and he expects he will be able to complete that examination in approximately one hour.
On the question of prejudice, Mr Newlinds submitted that any delay in the examination will cause extra costs and those will have to be borne by the creditors of Queensland Nickel. He also rejected Mr Palmer’s claim that the examination has been conducted for an ulterior purpose, or to damage his reputation, or to hinder his defence in the Supreme Court proceedings 6593/2017. On that last matter, Mr Newlinds told me that he was not briefed in those proceedings.
This stay application stands or falls on the proposition that the applicants have a well, or good, arguable case in the substantive proceeding. If their claims in that proceeding are not of that character, it is self-evident that it will cause unnecessary costs and delay to the examination proceedings to stay them while this proceeding is being pursued. As well, and conversely, Mr Palmer will suffer no prejudice if this proceeding is, to use Mr Robinson’s words, “rendered nugatory” by my not granting this stay application. In saying that, I acknowledge that rejecting this application will have that effect. Consequently, I should proceed with caution and be comfortably satisfied before I take that step. For the following reasons, I am so satisfied, and I will therefore order that Mr Palmer’s stay application be dismissed.
First, and most importantly, I do not consider there is any evidence to support the claim made in Mr Palmer’s affidavit that the special purpose liquidators are conducting the examination for an ulterior purpose. Given the very serious nature of that allegation, it was unsurprising that Mr Robinson was not willing to associate himself with its truth. All the more so when I have before me a denial from Mr Newlinds of the inference upon which that claim is based. That is to say, his statement to this Court that his client and his instructors do not know the whereabouts of Mr Mensink.
Two further points might be made about this aspect. First, it is notable that Mr Palmer was very careful in his affidavit not to state Mr Mensink’s present address. He merely referred in his affidavit to him staying, not living, I interpolate, in his girlfriend’s apartment in Sofia. Secondly, while the special purpose liquidators were appointed on the application of the Commonwealth Government, they are not the agents of that Government. Instead, their appointment by this Court requires them to perform certain duties and to discharge various obligations under the Corporations Act. It is therefore fallacious to impute to them the knowledge of certain Commonwealth Government agencies, as Mr Palmer purports to do in his affidavit.
Finally, there is no merit in the proposition that the special purpose liquidators’ power to conduct the examination dissipated with the repeal of s 511 of the Corporations Act. That issue is disposed of in ss 1616(1) and (2) of Chapter 10, Part 10.35, Division 3 of the Insolvency Practice Schedule to the Corporations Act. That provision makes it clear that, what is described as “an old Act order”, does not cease to have effect with the passage of the new Act and the contemporaneous repeal of the old Act.
For these reasons, I order that:
(1)Paragraph 1 of the interlocutory relief sought in the originating application filed 30 October 2018 be dismissed.
(2)The applicants are to pay the respondent’s costs of and incidental to the stay application, to be taxed or agreed.
I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Reeves. Associate:
Dated: 8 November 2018
SCHEDULE OF PARTIES
QUD 783 of 2018 Applicants
Fourth Applicant:
GUEORGUI ALEXANDROV SOKOLOV
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