Pier (WA) Pty Ltd As Trustee For Isandi Trust v Jean Maurice Pty Ltd - [2018] WASC 22

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION: PIER (WA) PTY LTD AS TRUSTEE FOR ISANDI TRUST -v- JEAN MAURICE PTY LTD [2018] WASC 22

CORAM: KENNETH MARTIN J

HEARD: 7 SEPTEMBER 2017

DELIVERED : 7 SEPTEMBER 2017

PUBLISHED : 25 JANUARY 2018

FILE NO/S: CIV 2935 of 2016

BETWEEN: PIER (WA) PTY LTD AS TRUSTEE FOR ISANDI TRUST
Plaintiff
AND
JEAN MAURICE PTY LTD
First Defendant
SANCHO BAKERY PTY LTD
Second Defendant
FRANK DUROLEK
Third Defendant
BELINDA DUROLEK
Fourth Defendant

Catchwords:

Practice and procedure - Freezing orders - Payment into court orders - Extraordinary circumstances - Orders made

Legislation:

Nil

Result:

Orders issued

Category: B

Representation:

Counsel:

Plaintiff:     Mr G R Ritter QC
First Defendant              :     Mr S O'Brien
Second Defendant         :     Mr S O'Brien
Third Defendant            :     Mr S O'Brien
Fourth Defendant           :     Mr S O'Brien

Solicitors:

Plaintiff:     HopgoodGanim Lawyers
First Defendant              :     Patrick Legal
Second Defendant         :     Patrick Legal
Third Defendant            :     Patrick Legal
Fourth Defendant           :     Patrick Legal

Case(s) referred to in judgment(s):

Allianz v Vitale [2015] NSWSC 352
Derby & Co Ltd v Weldon (No 6) [1990] 3 All ER 263; [1990] 1 WLR 1139
Jackson v Sterling Industries Ltd (1987) 162 CLR 612
Millennium Federation Pty Ltd v Bigjig Pty Ltd [2000] 1 Qd R 275; [1998] QCA 432
Sleiman v Afeich [2005] NSWSC 1063

KENNETH MARTIN J:
(This judgment was delivered extemporaneously on 7 September 2017 and has been edited from the transcript.)

Essentially, at today's return of this matter I deal with two matters.
First, on the part of the plaintiff are orders sought pursuant to its chamber summons for an interlocutory injunction of 5 September 2017 and which essentially seek orders as identified in that chamber summons and which are replicated under the plaintiff's minute of proposed orders of 30 August 2017. There are two aspects to those orders. There is a controversial aspect and what I call the less controversial aspect. The less controversial aspect seeks a programming of this matter to a mediation - on the basis of a timetabling scenario that would see a mediation happen in either November or December of 2017.
This matter has been in my CMC list since November of 2016. There have been numerous prior directions hearings, particularly concerning freezing orders which I issued at close to the very first return date on an ex parte basis and then subsequently continued and extended to trial thereafter, and these freezing orders remain in place.
There have been many interlocutory applications and appearances since November 2016 - all before me and with a view to adjusting but largely tightening the extent of those November 2016 freezing orders - by reference to ancillary components such as by requiring asset disclosures by the defendants and particularly by the natural person third and fourth defendants.
I also ordered throughout 2017 a delivering up of the passports of the third and fourth defendants, along with a prohibition against them leaving this country. Then, at the plaintiff's behest, I ordered the defendant to cause a certificate in respect of amounts of gold thought to be held by a bank in France to be delivered to the Principal Registrar of the court. Subsequently, I issued orders allowing a prospective sale of a residual business owned by the defendants in Joondalup to proceed - but on the basis of the proceeds of sale being secured.
This civil action is effectively about a dispute over what was a 2016 vendor purchaser transaction - in which the first and second defendants were vendors of bakery, bread making and general goods businesses. They were manufacturers, but with franchises throughout the metropolitan area of Perth ‑ which were sold to the plaintiff. On its face a scenario of the purchaser plaintiff having acquired the business then becoming disturbed about aspects of its real turnover and asset viability became of great concern. The plaintiff believes it has been misled and deceived - hence the claim for statutory relief seeking as damages effectively for the recovery of the purchase price which was in the order of $1.8 million plus various ancillary relief. That is the basis for the present civil action which has been pleaded out, but is resisted by the defendants. By their filed defences they effectively do not accept responsibility for any misleading and deceptive conduct in respect of the sale of those businesses at all and defend the action.
The defendants have been, after the initial ex parte applications in November 2016, subsequently represented on the record by local solicitors. Mr Hardie was on the record as the solicitor for the defendants up until July of this year but subsequently removed himself from the record.
For a time the defendants were then acting in person. But now they are represented by solicitors Patrick Legal of Dianella.
The more controversial aspect of today's application is the pursuit by the plaintiff of relief under par 1 of its chamber summons, as reflected in par 1 of its draft order, seeking a rather draconian and unusual order that the defendants, other than the fourth defendant, transfer and pay A$1.6 million to the trust account of the plaintiff's solicitors to be held with an Australian bank in the name of the plaintiff's solicitors pending, and to be dealt with in accord with further orders of the court or otherwise in accordance with a joint direction from the solicitors for the plaintiff and the solicitors for the defendants.
By explicit clarification, the orders sought in those terms do not give the plaintiff a proprietary interest by security or otherwise in that amount.
The two fundamental questions which arise in respect of the controversial area, namely, the making of an order in those terms, are these: first, does the court have the power to make an order in those terms; second, is it appropriate as a matter of discretion for such orders to issue in present circumstances?
On any view, such an order is extreme in character. It would only be made in rare circumstances. A court would have to be extremely cautious about making such an order which effectively is affirmative in its mandatory nature as regards to what the defendants would be required to do. Nevertheless, I do have jurisdiction to issue a freezing order or 'Mareva' order in the old terminology in those terms.
The power for a court to make such an order in respect of a person over whom it holds jurisdiction seems to me to be well explained by the Court of Appeal of England and Wales in Derby & Co Ltd v Weldon (No 6) [1990] 3 All ER 263; [1990] 1 WLR 1139. The court approved orders affirmatively ordering the transfer of assets between jurisdictions in Europe and in so doing recognised an existence of that power. I refer generally to Dillon LJ's observations in that respect at pages 1145 to 1146 and to further observations at pages 1149, at 1151 and 1152, particularly between pars F and H at page 1152. Taylor LJ agreed with Dillon LJ, see also the further observations by Stoughton LJ commencing at page 1153, where Stoughton LJ at between pars D and E said:
now we are asked to take a further step, and order the transfer from one country to another of assets that are outside the physical bounds of our jurisdiction. Like Dillon LJ I do not doubt that the court has power to make such an order, in the exercise of its jurisdiction in personam against the defendants who have been served, duly served with process under our rules. So the question is whether the order should be made in the exercise of the courts discretion.
Confirming the existence of such power if necessary to be deployed is a decision by the Court of Appeal of Queensland, Millennium Federation Pty Ltd v Bigjig Pty Ltd [2000] 1 Qd R 275; [1998] QCA 432. I note first the observations of Pincus JA at [8] on page 277 of the report. I note further [12] where his Honour made reference to earlier observations by Deane J in the High Court of Australia in Jackson v Sterling Industries Ltd (1987) 162 CLR 612, which is at the time the leading Mareva injunction decision in Australia.
Referring to Deane J's reasons in Jackson at [625] and [626], Pincus JA noted upon the jurisdictional question that Deane J had said that the juridical basis for such orders was to prevent a defendant from disposing of his actual assets so as to frustrate the process of the court by depriving the plaintiff of the fruits of any judgment obtained in the action. Deane J had said:
It may be appropriate in a rare case that such an order requires the defendant to actually deliver assets to a named person or event to the court itself.
Deane J continued:
Even in such cases, however, the order must be confined to preserving assets until after judgment or, arguably, until there has been an opportunity to seek execution.
Further, Deane J said:
Any order requiring the delivery of assets should be made clear that the assets will be held on behalf of the defendant until after judgment or further order and will then be redelivered to defendant until they are made the subject of some other claim.
Plainly, the thrust of Deane J's observations was meant to reinforce the underlying character of a freezing (Mareva) order, namely, that it is interlocutory, prior to trial, and that it does not by its nature elevate the secured status of a person favoured by such an order to that of a secured creditor.
Such orders freeze assets to preserve them to be dealt with in due course. It may be that in due course an insolvency scenario could see those frozen assets delivered to a liquidator or some other insolvency entity such as a bankruptcy trustee to be dispersed amongst creditors more generally. That is the character of the freezing order relief.
Power for the court to issue such orders is greater supported by further decisions from New South Wales. Two cases which accord and align with this jurisdictional acknowledgement of the court's power are the decision in Sleiman v Afeich [2005] NSWSC 1063, a decision of Hamilton J delivered 17 October 2005 and, second, a subsequent decision made by Slattery J in the Equity division on 1 April 2015 in Allianz v Vitale [2015] NSWSC 352. I do note, particularly, Slattery J's observations at [67] and [69], and the conclusions and orders seen at [71] and [72].
Added to all that is an observation in a respected text by Mr Biscoe at par 3.66. It effectively acknowledges, in this jurisdiction, the authority of Derby v Weldon (No 6) towards a court holding the power to order or restrain a transfer of assets from one foreign jurisdiction to another and to issue orders as against defendants that the target assets - in that case, in Switzerland - remain there and to order that assets in foreign countries not be returned to that country or that a defendant procure all overseas assets be held to the sole order of a party - in that case, the receiver.
From a local statutory perspective, of course, the power of a court to make orders of that kind has been codified to an extent by O 52A of this court's rules, giving it power to issue ancillary orders. In particular, I referred to O 52A, r 3(1) which reads:
The Court may make an order (an ancillary order) ancillary to a freezing order or prospective freezing order as the Court considers appropriate.
The term 'ancillary order' is given meaning in the definitions under r 1. Effectively, the common law supplements the meaning of an ancillary order taking me back to case authorities which I have now mentioned.
So from a jurisdictional perspective, extreme as the belief as formulated currently sought by the plaintiff by par 1 of its chamber summons might appear, there is, on my assessment, undoubtedly power for the court to make such orders in appropriate circumstances, cautious as it must always be about issuing such an order.
The second and real question then is whether it is appropriate for such in all the present circumstances.
This requires me to track back across the history of this action. I should say that the present application made by the plaintiff is supported by an affidavit of Emily Grace Pendlebury of 1 September 2017, filed on 5 September. That affidavit effectively updates the position beyond the numerous earlier affidavits Ms Pendlebury has sworn in these proceedings for the plaintiff about various developing events since my original freezing orders were made by me back as long ago as 14 November 2016.
The fundamental question, then is whether the orders sought by the plaintiff are appropriate or not given their magnitude. So I turn back to trace the history, in relation to an assumed acquisition overseas, it would appear, of some pieces of gold, or 'lingots' as they are referred to by the third defendant, Mr Durolek. The matter was dealt with, originally, in the affidavit of the third defendant, sworn on 20 February 2017. By that affidavit, at pars 13 and 14, Mr Durolek, in circumstances where there were prevailing freezing orders made against all defendants of 14 November 2016, including himself, then swore in terms at pars 13 and 14 under a heading 'Gold'. He said:
I own 29 lingots of one kilogram of gold which was purchased on about 30 November 2016 for €1,066,825.10.
Mr Durolek annexed to that affidavit, marked FD7, what he said was a true copy of a purchase receipt for the gold. He continued:
The gold is currently stored at Crédit Agricole to Allée Roger Selengro, 34800 Clermont l'Hérault France.
And he said:
I estimate the value of the gold to be approximately the same as the price paid for the gold at the time of purchase, ie, €1,066,825.10.
His affidavit proceeded to describe his other assets.
FD7 (page 28) appended to his affidavit looked to be a document from the Crédit Agricole du Languedoc which would seem to indicate, on its face, an acquisition by Mr Durolek of 29 ingots of one kilogram of gold.
That affidavit, which is lengthy, indicates that the second defendant in this action, Sancho Bakery Pty Ltd, received a credit into its account on 26 August last year, 2016, of Australian dollars $1,604,731.26.
I am satisfied, for the purposes of today's hearing, that the credit amount to the account of the second defendant represents the settlement proceeds of the sold businesses that are the subject matter of this action in terms of the sales which are now effectively impugned in this action by the plaintiff, on a basis that they were secured by misleading and deceptive conduct of the defendants.
A document seen at FD16, at page 128 of Mr Durolek's affidavit of February 2017, shows that swiftly after the second defendant's receipt of those sale settlement funds, within four days, there was a debit to the account. Funds in the amount of $1,604,950.10 left the second defendant's account, leaving it essentially, at a zero balance after that removal of those funds and a payment of a $10 maintenance fee.
A further document, which is FD17, at page 129 to Mr Durolek's affidavit, was evidently explained at par 31 of Mr Durolek's affidavit. He said at the time:
On or about 30 August 2016, the second defendant –
that is Sancho Bakery Pty Ltd -
transferred the net sale proceeds, plus an additional amount, to my personal bank account held at Crédit Agricole in France.
Mr Durolek continued:
Annexed to this affidavit, marked FD17, is a true copy of the bank statement for this account, for the period ended 30 November 2016, which shows my receipt of the funds transferred on or about 2 September 2016 and the purchase of the gold for that amount on or about 30 November 2016.
Indeed, FD17, at page 129, would seem on its face to indicate an acquisition of gold (albeit the document is in French) by Mr Durolek personally, with an address, in France, for a purchase price of what I infer to be the amount of €1,066,825.10.
Now, in strict terms, it appears that the amount of money used to make an acquisition of that gold on 30 November 2016 was the subject of the freezing orders I issued on 14 November 2016 and which had been served upon Mr Durolek and on the other defendants the next day, that is 15 November 2016.
The money eventually used by Mr Durolek to buy the gold, it would appear, was sent out of the country, but fell, of course, under the court's in personam jurisdiction over the second defendant and the Duroleks and who had been residents in Perth, as were their operative companies, the first defendant and second defendant were bound by my November 2016 orders.
The acquisition of the 29 gold ingots - if that is, in fact, what occurred -happened after those orders were made. It, prima facie, was a breach of the freezing orders, which effectively prohibited dealings with all the assets of the defendants (unless they had other assets exceeding a value of AUD$2 million then).
Acquisition of the ingots with money out of the country would be a dealing by Mr Durolek with funds in his overseas account if, in fact, it was used to purchase the gold.
The action then proceeded through various directions hearings. It was progressing towards a trial on pleadings by exchanged affidavits. I made orders for various asset disclosures and the like by the defendants. The defendants were legally represented by Mr Hardie in all that interlocutory process.
Unconditional appearances were filed for the defendants submitting to the jurisdiction of this court with the defendants represented in this jurisdiction by solicitors of record at all relevant times. The pleadings made it clear that the defendants were resisting the plaintiff's case.
A disclosure by Mr Durolek's 20 February 2017 affidavit, however, of an existence of this gold overseas led to further ex parte orders I made on 8 March 2017.
That was followed by more orders on 6 April 2017 ordering that a certificate(s) issued by, or assumed to have been issued by, the French bank identified by Mr Durolek and effectively acknowledging the existence of his title in 29 pieces of gold be provided to this court and delivered up to the Principal Registrar of this court.
Orders were issued in those terms on 6 April 2017. Compliance was required by 10 April 2017. There was in all this an underlying assumption, for a time, that a proper certificate(s) for the gold purchased by Mr Durolek existed along with the underlying gold.
On 12 April 2017, Hardie's Lawyers, as the then lawyers of record for all defendants, wrote to the Principal Registrar of this court, referring to order 7 of the orders I made on 6 April 2017, and enclosing a copy.
What I had ordered by order 7 on that date was:
By 4 pm on Monday, 10 April, Mr Franck Durolek deliver up to the principal registrar of the court, for safe-keeping until further order, all certificates of ownership in respect of the ingots as described in Ms Pendlebury's affidavit of 7 March 2017 as being 29 gold ingots of one kilogram stored at Crédit Agricole in Clermont-l'Hérault in France, estimated to be valued at €1,066,825.10 (about 1.46 million Australian dollars).
Mr Hardie's letter of 12 April 2017 on behalf of the defendants to the Principal Registrar of this court said (inter alia):
Pursuant to the order, please find enclosed the original certificate of ownership in respect of the 29 gold ingots of one kilogram gold stored at Crédit Agricole in Clermont-l'Hérault in France.
Mr Hardie finalised that 12 April 2017 letter:
There are no other certificates of ownership in respect of the gold.
Attached to his letter was, indeed, a document which looked to be a certificate for property, number 06277, issued in the name of Mr Franck Durolek and dated 30 November 2016, as issued by Crédit Agricole.
Sadly, matters did not end there.
On 6 July 2017, there was a further affidavit in this action sworn by Ms Pendlebury relating that the plaintiff's solicitors, HopgoodGanim Lawyers, had received a written communication dated 14 June 2017 from lawyers in France acting on behalf of their client bank, namely for the Caisse Régionale de Crédit Agricole Mutuel du Languedoc.

It would appear that albeit posted from France on 14 June 2017 to HopgoodGanim Lawyers of Allendale Square, Perth, this communication was only received having regard to a date stamp on 3 July 2017. The letter then needed to be translated.
The essence of that communication was very disturbing. Basically, the translated communication from French lawyers acting for the French bank deduced that property certificate, 06277, which they had obviously been asked about in a communication sent prior to then by HopgoodGanim Lawyers for the plaintiff, was a forgery.
The second page (which is page 39 of Ms Pendlebury's affidavit) of that communication of 14 June 2017 reads:
From the aforementioned, can be deduced that the document entitled Property Certificate 06277 was not issued by the CRCA M DU Landuedoc and can only be a forged document (one may add that the seal of the Lodève branch is oval shaped and has no resemblance to the seal appearing in the so-called certificate).
They continued (page 3):
As far as the bank statement is concerned, it cannot possibly have been issued to an address unknown to that bank for the reasons explained above and it is very likely a photo montage constructed from a 3 September 2009 statement.
The bank's lawyers also said:
I also advise you that my client intends to bring its case to the public prosecutor at the Tribunal de Grande Instance of Montpellier in relation to those documents.
And they ended:
The present letter has no confidential character and is absolutely official.
That disturbing communication changed matters considerably. What had once been thought to be a position which was slightly unsatisfactory but, nevertheless, by the existence of the 29 gold ingots was of some comfort in terms of a certificate for gold held at a French bank being secured by this court's Principal Registrar holding the original certificate for the gold worth €1,066,825.10, was a completely false premise.
The communication led to an application by the plaintiff's lawyers for me to strengthen considerably the interlocutory freezing orders which I previously made, including taking a very draconian step of removing from the freezing orders as they had issued the usual living allowance exception - which is customarily given for a party to deal with frozen assets in order to pay their reasonable and living expenses in the interim before the case is resolved.
I was concerned by the communication from the bank. But that concern then coupled with various further matters dealt as with in Ms Pendlebury's affidavits. It now emerged that the third and fourth defendants had likely left the country for France (contrary to the passport surrender orders I had first issued back on 15 June 2017). They had failed to surrender their passports up to Mr Hardie, their then lawyer, in accord with orders that I had made on 15 June 2017 and Mr Hardie's undertaking to hold them on terms once they were received. They were never surrendered to him as I ordered.
Information Ms Pendlebury obtained from DFAT essentially led me to a view that, at some point they had, in fact, left the country. Obviously, their passports had not been surrendered as had been contemplated under my previous orders of 15 June 2017 and then of 26 June 2017.
[Mr Durolek now admits they left for France via a trip to Thailand made along the way on 20 June 2017: see par 8(2) page 10 of the affidavit of 23 November 2017.]
That necessarily is a brief and incomplete summary of the multiple interlocutory events that would require more time than I have this morning to relate in full.
But, essentially, otherwise what is demonstrated by a very unsatisfactory catalogue of conduct from the defendants is a situation that is both rare and extreme. I emphasise that I am not presently dealing with an application for contempt sanctions against any of the defendants.
What I am asked to do by the plaintiff presently is to issue an order over property which, on the best evidence before me, as money lies outside the jurisdiction, possibly in France, but possibly converted into gold ingots although the French bank's lawyers' communication of the forgery developments puts all assumptions into question.
What I reliably know at this point is that there was a 2016 sale of two Perth businesses, that there was then money paid over by the plaintiff, that the money was received by the second defendant, that the money was transferred to the third defendant and that the money was then likely sent overseas. It may be that 29 ingots of gold have been acquired with the money or possibly not, depending upon what the true facts are. But the position is that, albeit represented on the record now by new solicitors of record, Patrick Legal, today the defendants have not put in any substantive materials before the court dealing with these very concerning issues.
Today the evidence is all one way in terms of what has happened. Moreover, I am satisfied that Mr Franck Durolek is well aware of what is going on in this jurisdiction in terms of the prior orders which have been made. That is demonstrated through his affidavit of August 2017 which at first was not properly sworn by him, but was provided to the plaintiff's solicitors and then was today provided to me to indicate that there had been an attempt in August 2017 by Mr Durolek to swear that affidavit before a notary of some kind, so it would appear. That all eventuated recently and most likely in Thailand, it would appear.
I re-emphasise then that all defendants have been properly served with the court's process. They are more than likely aware of the extreme freezing orders which were made, then extended in duration to trial and then tightened over time since November 2016 against them.
The case which is put against the defendants in terms of a risk that, if the plaintiffs gets to a trial and succeeds in obtaining orders for damages or compensation under the Australian Consumer Law for misleading and deceptive conduct by the defendants, there may well be no assets of any sufficient worth to meet such a judgment, is now overwhelming.
That is, effectively, why I issued the freezing orders in the first place in November 2016 and have since strengthened them from time to time in order to deal with the various new and concerning defendant contingencies which have arisen - such as undisclosed attempts at selling their Joondalup business without disclosure to the plaintiff or to the court, the realising of the proceeds of that business, the third and fourth defendants' June 2017 departures from the jurisdiction and their failure to surrender their passports. For a period of time, the fact that the defendants were unrepresented but now are represented again by local solicitors of record.
The position is quite extraordinary and exceptional. There now presents to my satisfaction on the evidence an extreme risk that this court is effectively about to preside over an action where, at the end of the day, if the plaintiff succeeds - and it is clear to me that the plaintiff has a more than respectable case. I conclude that the plaintiff will not receive anything, by reason of the assets of the defendants, including the proceeds of sale of the two businesses, being removed away from the jurisdiction of the court.
There already is evidence about purchase price money going overseas and the acquisition of gold (perhaps), if versions of events by Mr Durolek are accepted.
I add that Mr Durolek returned to this very issue on 13 June 2017 in another affidavit he swore - where he referred to these same 29 gold ingots as being the only significant asset of the defendants. And he then said at par 14(b) of that affidavit of 13 June 2017 that this significant asset was:
[A]lready secured with the original certificate of ownership, having been delivered up to the principal registrar of the Supreme Court by the defendants' solicitor on 12 April 2017.
Mr Durolek continued:
If we had any intention of permanently leaving the jurisdiction, clearly, we would have done so before delivering up the certificate of ownership of the gold, an asset worth approximately $1.6 million, for the court.
As events have subsequently transpired, the position looks to be different. There is, in fact, now a basis for extreme concern over whether, in fact, this court has been effectively subjected to deceit - in terms of a false certificate for the gold ingots provided to the Principal Registrar. That is on the evidence before me, which I emphasise is unanswered. Indeed, that evidence has not even been attempted to be answered. In the circumstances, in what is an extreme case, I am satisfied that I hold the power and that, as a matter of discretion, I should exercise it to order effectively in the terms as are now sought by the plaintiff as regards tightening even further the freezing orders I have issued to date.
There will be an interlocutory order. It can be varied on application of the defendants on evidence being provided to that end. I would, in fact, add to any orders as ultimately crafted that the defendants should have liberty to apply to set aside and vary them on a proper basis with notice. But that is a matter for the future. I think, in broad terms, subject to some clarifications that I will raise with Mr Ritter QC, that there should be an order in terms of par 1.
For pragmatic purposes, I should make this action returnable for further directions on 28 September 2017 in terms of par 7 of the plaintiff's minute. It is logical then that I should make compliance with this order precede that return date. In those circumstances, compliance should be 26 September 2017 rather than 29 September 2017. That, I think, will just be a matter of a few days. I do not think that a short truncation in time is all that significant and would work better in the scheme of things.
A more substantive variation is to add an alternative to par 1, so it would read after providing for the payment of AUD$1.6 million:
[O]r alternatively deliver up to the custody of the Principal Registrar of this court the 29 gold ingots which are the subject matter of Mr Durolek's affidavits.
Effectively then, it will be for these defendants the money or the ingots under par 1. So that were it theoretically a problem to find that amount of money, then transporting the 29 gold ingots into this jurisdiction and lodging it with the Principal Registrar of this court will be an alternative.
I will also, as Mr O'Brien suggests, order that the payment be made into an interest-bearing trust account. That should be feasible, I think, notwithstanding it is a trust account. Had it been asked for, I might have considered an order that it be a trust account in the joint names of the solicitors for the plaintiff and the defendants.
But that has not been proposed. In the circumstances, I do not propose to make it.
That, I think, deals with the controversial aspects of what is sought this morning. In terms of a proposed mediation, that is less controversial. But I think I should make orders in terms of the plaintiff's progression proposal, clarified on the basis that, if there is to be a mediation, it would happen either in November or December 2017.
The only other clarification I would add is that these orders are made – I would preface them as being in addition to the orders already made, which remain in place. It may be, if they are complied with, they might require adjustment in due course. But for the moment they will be augmentations to the existing orders.
In case I did not make it clear, in the circumstances of the conclusions that I have reached about the appropriateness of those orders inherently, I think, but I will say so explicitly, I do not believe that the proposal under par 1 of the proposal put on the part of the defendants in terms of restoring the allowance provisions in the freezing orders upon a return of the third and fourth defendants is appropriate.
If the third and fourth defendants do return to the jurisdiction and then deliver up their passports and comply with my orders then, of course, the court can consider appropriate variations. But until that happens, it is not appropriate to consider orders in those terms. I will add that to my ex tempore reasons.
So in terms of orders then, what I would order by reference to the plaintiff's minute is first a preface that:
In addition to orders already made to date against the defendants, it is then ordered that:
And order 1 will be:
By 26 September 2017, the defendants other than the fourth defendant transfer and pay –
and I will add this too –
AUD$1.6 million, to an interest-bearing trust account of the solicitors for the plaintiff to be held with an Australian bank in the name of that firm, pending and to be dealt with in accordance with a further order of this court, or otherwise in accordance with a joint direction in writing of the solicitors for the plaintiff and the solicitors for the said defendants, or alternatively that the defendants other than the fourth defendant deliver up to the custody of the Principal Registrar of this court, the 29 gold ingots which are referred to as the subject of pars 13 and 14 of Mr Durolek's affidavit sworn 20 February 2017 within that time.
And then add the proviso, which is appropriate, that:
This order does not give the plaintiff a proprietary interest by way of security or otherwise in the said sum.
I add by way of augmentation to my reasons, which are already long enough, that I was satisfied by the plaintiff's evidence that the amount identified of AUD$1.6 million, or the 29 ingots, is appropriate. There was some argument about that question of the payment of money. But, in the end, I accept the plaintiff's submissions that even allowing for a half a million dollar realisation in terms of the acquired businesses that were sold by the plaintiff, with interest and costs, an amount of AUD$1.6 million at this point is appropriate.
With greater clarity in an affidavit, perhaps, by the defendants in due course there may be an occasion in future to vary that. But for the moment that is the appropriate sum. Now, in terms of par 2, there will be an order in these terms:
The costs of today be costs in the cause as proposed.
And I will make those orders at 1.12 pm, 7 September 2017.