Pattison v May
[2005] VSC 454
•31 October 2005
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
CORPORATIONS LIST
No. 9416 of 2004
IN THE MATTER of an Ex Parte Application under the Corporations Act 2001 (Cth) s 530C
IN THE MATTER of GLOBAL SDR TECHNOLOGIES PTY LTD
(ACN 101 234 860) (Provisional Liquidator Appointed)
| PAUL ANTHONY PATTISON | Applicant |
| V | |
| ROGER THOMAS MAY and JASON ROGER MAY | Respondents |
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JUDGE: | WHELAN J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 31 October 2005 | |
DATE OF JUDGMENT: | 31 October 2005 | |
CASE MAY BE CITED AS: | Pattison v May | |
MEDIUM NEUTRAL CITATION: | [2005] VSC 454 | |
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CORPORATIONS – Liquidators – Warrant granted pursuant to s 530C of the Corporations Act 2001 (Cth) – Whether conditions should be imposed upon warrant – Contrasting practices of the Supreme Court of New South Wales and the Federal Court of Australia.
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APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr C Charles (solicitor) | Charles Fice Solicitors |
HIS HONOUR:
This is an application made ex parte under s 530C of the Corporations Act 2001 (Cth) by Global SDR Technologies Pty Ltd’s (“Global SDR”) liquidator, Mr Paul Pattison. He seeks a warrant to search for and seize all property and books of Global SDR in the possession or control of the respondents, Mr Roger May and Mr Jason May.
Such applications are a last resort to be made only after all other reasonable steps have been taken.[1]
[1]See Cvitanovic v Kenna & Brown Pty Ltd (1995) 18 ACSR 387.
Global SDR is a company which is a member of a group of entities formerly controlled by, or associated with, Mr Roger May and Mr Jason May. Mr Roger May and Mr Jason May are now each bankrupt. They were formerly directors of Global SDR.
Mr Pattison was appointed provisional liquidator of Global SDR by Mandie J on 14 October 2004 on an application made by the Australian Securities & Investments Commission (“ASIC”). Mr Pattison was appointed liquidator on 7 June 2005.
The material relied upon in support of the application is an affidavit of Mr Pattison sworn 28 October 2005 and an affidavit of Mr Simon Peter Cleary also sworn 28 October 2005. It seems from his affidavit that Mr Cleary is, or was, a close associate of Mr Roger May and Mr Jason May in relation to the development of the software which is in issue in this application.
On that material I am satisfied that Mr Jason May and Mr Roger May have concealed or removed company property, being SpectruCell software and related hardware.
As the material presently stands, it appears that Global SDR acquired that property from a related company, Advanced Communications Technologies (Australia) Pty Ltd (“ACTA”) pursuant to a deed of 13 August 2003. Under this deed, Global SDR acquired all of the intellectual property associated with SpectruCell and defined “Related Assets”, which included hardware resources used to form the core physical implementation of the SpectruCell system.[2]
[2]See exhibit “PAP-5”; affidavit of Mr Paul Pattison, paragraph 12; exhibit “PAP-8” – Schedule C to the RATA completed by the Mays; and exhibit “PAP-8A” – a balance sheet produced by Mr Jason May.
Any subsisting claim ACTA itself may have had to the software or associated hardware has been resolved by an agreement between Mr Pattison and ACTA’s receivers and managers, which was most recently embodied in a letter dated 27 October 2005.[3]
[3]Exhibit “PAP-20”.
Documents, computers and software concerning SpectruCell were stored at premises controlled by the Mays in Lorimer Street, Docklands at the time of Mr Pattison’s appointment as provisional liquidator.[4]
[4]See affidavit of Mr Paul Pattison, paragraph 14.
Despite numerous requests,[5] summonses,[6] and court orders,[7] according to the affidavit of Mr Cleary, which I accept for the purposes of this application, property requested and/or ordered to be handed to Mr Pattison or to the Court still remains under the control of Mr Jason May and Mr Roger May.[8]
[5]See affidavit of Mr Paul Pattison, paragraph 19, and affidavit of Mr Simon Peter Cleary, paragraph 24.
[6]See affidavit of Mr Paul Pattison, paragraph 20.
[7]See affidavit of Mr Paul Pattison, paragraphs 22 and 23.
[8]See affidavit of Mr Simon Peter Cleary, paragraphs 17 to 27, and in particular paragraphs 25 and 26.
Mr Pattison, in cooperation with the receivers and managers of ACTA, has arranged a possible sale of the SpectruCell system. On the material as it presently stands, there are grounds for serious concern that Mr Roger May and Mr Jason May may wish to prevent the sale by withholding company property.[9]
[9]See affidavit of Mr Simon Peter Cleary, paragraphs 25 to 27, and particularly the last sentence of paragraph 27.
It further appears to me that there are grounds for serious concern that the Mays may exploit any opportunity given to them for explanation or preparation in order to inhibit and delay the liquidator in the performance of his duties. They have previously given inconsistent accounts of ownership of the relevant property, as a consequence of which there has been uncertainty and confusion which has impeded realisation of the property and enhanced their capacity to maintain control of the property. In this respect I refer in particular to the account given by Mandie J of the submissions made to him on the application for the appointment of a provisional liquidator, as set out in his reasons of 18 October 2004,[10] the account given of the examination of the Mays before Master Kings,[11] and Mr Roger May’s email of 18 October 2005.[12]
[10]Exhibit “PAP-4”.
[11]Affidavit of Mr Paul Pattison, paragraph 15, and exhibit “PAP-9”.
[12]Exhibit “PAP-19”.
Mr Charles, the solicitor for the applicant, told me that the liquidator is concerned that if the Mays were advised of this application or given forewarning of the execution of the warrant, they may hide or even destroy the property. On the material I have seen, it seems to me that there are grounds for this concern.
I have considered the difference in practice between the Federal Court[13] and the Supreme Court of New South Wales[14] concerning the imposition of conditions on warrants. It does not seem to me that either approach should be invariably followed. In the particular circumstances here it seems to me that the Federal Court approach is the appropriate one. The liquidator’s solicitor has indicated that a letter will be given to the Mays, or delivered to the Mays, as soon as the warrant is executed, and a copy of the letter has been handed to me, which I have initialled and placed on the court file.
[13]See Australian Securities Commission v Samson (1997) 24 ACSR 555; Re Whitemore Holdings Ltd (in liq) [2004] FCA 806.
[14]See Cvitanovic v Kenna & Brown Pty Ltd (1995) 18 ACSR 387; House of Diamonds (NSW) Pty Ltd (in liq) v Lemery Pty Ltd [2002] NSWSC 868.
Further, I have indicated that if a police officer is not present when the warrant is executed, it would be advisable if the liquidator had in attendance an independent solicitor having no association with any of the relevant parties. The liquidator should return to the Court setting out the circumstances of execution of the warrant, and seeking directions as to the disposition of any property seized as soon as is practicable. The Mays will be advised by the letter to which I have been referred of their ability to apply urgently, should they wish to do so.
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