Polis v Zombor (No 4)

Case [2019] FCA 2101

FEDERAL COURT OF AUSTRALIA

Polis v Zombor (No 4) [2019] FCA 2101

File number: VID 217 of 2018
Judge: O'BRYAN J
Date of judgment: 16 December 2019
Catchwords: PRACTICE AND PROCEDURE – application for issue of warrant – contempt – whether Court satisfied that it is likely that the first prospective respondent will abscond or otherwise withdraw from the jurisdiction of the Court – where first prospective respondent already absent jurisdiction – whether Court’s discretion to issue warrant should be exercised – warrant issued
Legislation: Federal Court Rules 2011 (Cth) r 42.14
Cases cited:

Kazal v Thunder Studios Inc (California) (2017) 256 FCR 90

Mensink v Parbery [2018] FCAFC 101; 358 ALR 209

Polis v Zombor [2019] FCA 69

Polis v Zombor (No 2) [2019] FCA 856

Polis v Zombor (No 3) [2019] FCA 1477

Registrar, Court of Appeal v Ritter (1985) 34 NSWLR 641

Re Colina; Ex parte Torney (1999) 200 CLR 386

Schnabel v Lui (2002) 56 NSWLR 119; [2002] NSWSC 1184

Date of hearing: Determined on the papers
Date of last submissions: 12 September 2019
Registry: Victoria
Division: General Division
National Practice Area: Commercial Corporations
Sub-area: Commercial Contracts, Banking, Finance and Insurance
Category: Catchwords
Number of paragraphs: 29
Counsel for the Prospective Applicant: Mr S T Lane
Solicitor for the Prospective Applicant: Enyo Lawyers
Counsel for the Prospective Respondents: The First, Second and Third Prospective Respondents did not appear

ORDERS

VID 217 of 2018
BETWEEN:

HENRY PETER POLIS

Prospective Applicant
AND:

LUKE MICHAEL ZOMBOR

First Prospective Respondent

LMZ PROJECTS PTY LTD ACN 603 180 016

Second Prospective Respondent

LATRME PTY LTD ACN 603 176 996

Third Prospective Respondent

JUDGE:

O'BRYAN J

DATE OF ORDER:

16 DECEMBER 2019

THE COURT ORDERS THAT:

1.Service of these Orders be in accordance with paragraph 2(a) of the orders made on 5 June 2019.

2.Pursuant to rule 42.14 of the Federal Court Rules2011 (Cth), a warrant for the arrest and detention of Luke Michael Zombor until he is brought before the Court be issued in the form attached to these orders.

3.The hearing of the prospective applicant’s application filed on 22 May 2019 seeking orders that Luke Michael Zombor be punished for contempt be adjourned until the warrant referred to in the preceding order is executed.

4.There be liberty to apply on 3 business days’ notice.

5.Costs be reserved.

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Form 90
Rules 34.14(2); 41.05(1); 42.01 & 42.14(3)

Warrant for arrest

No.     VID 217 of 2018

Federal Court of Australia
District Registry: Victoria

Division: General

HENRY PETER POLIS

Prospective Applicant

LUKE MICHAEL ZOMBOR and others

First Prospective Respondent

To the Sheriff

1.Arrest LUKE MICHAEL ZOMBOR and bring him before the Court to answer the charge set out below.

LUKE MICHAEL ZOMBOR is charged with contempt of Court in that:

2.On 5 February 2019, Justice Murphy made orders requiring Mr Zombor, within 28 days of service of the orders (11 March 2019), to give…

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AGLC
Polis v Zombor (No 4) [2019] FCA 2101
Case
[2019] FCA 2101
Decision Date

CaseChat Overview and Summary

The case of Polis v Zombor (No 4) involved Mr Polis, who sought a warrant for the arrest of Mr Zombor for contempt of court. Mr Polis believed that he had potential causes of action against Mr Zombor for deceit, misleading or deceptive conduct, and unconscionable conduct. However, he required further information before deciding whether to commence legal proceedings. The dispute arose from a series of transactions between Mr Polis, Mr Zombor, and Mr Zombor's son, including a loan provided by Mr Polis to Mr Zombor and his son in 2007. The loan was intended to assist them in starting a new business, but the business eventually went into liquidation. Mr Zombor had entered into a personal insolvency agreement, which Mr Polis believed was misleading to other creditors.

The legal issue before the court was whether it should issue a warrant for Mr Zombor's arrest to bring him before the court to answer the charge of contempt. The court considered the evidence that Mr Zombor was aware of these proceedings and had actively sought to avoid the processes of the court. The Full Court observed that contempt proceedings were essentially protective in nature as to the judicial function and the role of the courts, even if they also served to vindicate private interests and rights. The protection of the judicial function justified the issue of a warrant for Mr Zombor’s arrest to bring him before the court to answer the charge of contempt. Therefore, the court made an order for the issue of a warrant for Mr Zombor’s arrest. The hearing of Mr Polis's application was adjourned until the warrant was executed, and costs were reserved.

Orders

Orders of the court

1. Service of these Orders be in accordance with paragraph 2(a) of the orders made on 5 June 2019.

2. Pursuant to rule 42.14 of the Federal Court Rules 2011 (Cth), a warrant for the arrest and detention of Luke Michael Zombor until he is brought before the Court be issued in the form attached to these orders.

3. The hearing of the prospective applicant’s application filed on 22 May 2019 seeking orders that Luke Michael Zombor be punished for contempt be adjourned until the warrant referred to in the preceding order is executed.

4. There be liberty to apply on 3 business days’ notice.

5. Costs be reserved.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Form 90

Rules 34.14(2); 41.05(1); 42.01 & 42.14(3)

Warrant for arrest

No. VID 217 of 2018

Federal Court of Australia

District Registry: Victoria

Division: General

HENRY PETER POLIS

Prospective Applicant

LUKE MICHAEL ZOMBOR and others

First Prospective Respondent

To the Sheriff

1. Arrest LUKE MICHAEL ZOMBOR and bring him before the Court to answer the charge set out below.

LUKE MICHAEL ZOMBOR is charged with contempt of Court in that:

2. On 5 February 2019, Justice Murphy made orders requiring Mr Zombor, within 28 days of service of the orders (11 March 2019), to give discovery to the Prospective Applicant of:

(a) all bank statements for any and all bank accounts owned, operated or controlled by Mr Zombor during the period 1 January 2012 to 1 February 2018;

(b) all bank statements for any and all bank accounts owned, operated or controlled by the second or third prospective respondents during the period 3 December 2014 to 1 February 2018;

(c) any documents with respect to the sale of General Brokerage Services Pty Ltd (ACN 158 266 141) (GBS) to iSelect, the disbursement of the sale proceeds of GBS and the incorporation of the second and third prospective respondents.

3. The Orders made on 5 February 2019 carry an Endorsement pursuant to Rule 41.06 of the Federal Court Rules 2011 (Cth).

4. Mr Zombor has not given discovery of the documents set out in paragraph 2 and thereby failed to comply with the orders of Justice Murphy made on 5 February 2019.

Date: 16 December 2019

Signed by Justice O’Bryan

Background

Background to the litigation

While I have doubts about the overall utility of these proceedings, the evidence establishes that Mr Zombor is aware of these proceedings and has actively sought to avoid the processes of the Court. In those circumstances, and for the reasons given below, I consider that a warrant should be issued for Mr Zombor’s arrest.Background Mr Polis considers that he may have causes of action based in deceit, misleading or deceptive conduct and/or unconscionable conduct against the prospective respondents, including Mr Zombor, but he requires further information to assist him in deciding whether to commence such a proceeding. The potential causes of action arise out of the following events, as set out by Murphy J in Polis v Zombor [2019] FCA 69:(a)In about November 2007, Mr Polis says that he provided a $70,000 loan to Mr Zombor and his son, Mr Benjamin Polis, to assist them in starting a new business. The loan was interest-free, repayable at call and Mr Zombor and Benjamin Polis were jointly and severally liable to repay the loan. Mr Polis transferred $70,000 to a bank account set up in the name of Polis Australia Pty Ltd (now deregistered) (at [6(a)]. (b)In February 2009, Mr Zombor and Benjamin Polis incorporated Energy Watch Pty Ltd (Energy Watch), and the new business was operated through that entity (at [6(b)]).(c)In about June 2012, Energy Watch went into liquidation. Mr Polis did not lodge a proof of debt as the loan agreement was with Mr Zombor and Benjamin Polis personally (at [6(e)]).(d)On or about 12 April 2013, Mr Zombor executed a personal insolvency agreement under Part X of the Bankruptcy Act 1966 (Cth) (at [6(f)]).(e)The Report by Controlling Trustee prepared by the controlling trustee under the personal insolvency agreement provided that Mr Zombor had creditors of $9,694,182, and assets of only $13,000 (at [6(h)]).(f)Under the personal insolvency agreement, Mr Zombor agreed to pay a total of $95,000 in 2 instalments. The first, being $10,000, was to be paid on or before 31 May 2013, while the second, being $85,000, was to be paid on or before 1 December 2013. The personal insolvency agreement was accepted by creditors (excluding Mr Polis) and complied with by Mr Zombor (at [6(i)]).(g)Mr Polis believes that creditors who voted in favour of the personal insolvency agreement may have been misled by Mr Zombor as to his true financial capacity. That belief arises from the following matters:(i)Mr Polis believes that, at some time in around April 2012, the assets of Energy Watch were sold by Mr Zombor to General Brokerage Services Pty Ltd (GBS), that Mr Zombor was contracted to that business and was promised 20% of the proceeds of the sale of that business (at [7(b)]).(ii)Mr Zombor agreed to pay Benjamin Polis one half of the amount Mr Zombor would receive on the sale of GBS (at [7(d)]).(iii)On 30 May 2014, it was announced that iSelect Ltd had agreed to purchase GBS for $10 million (at [7(e)]).(iv)Mr Polis believes that Mr Zombor received an amount of $1.93 million from the sale of GBS, indirectly (at [7(f)]).

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Contempt proceedings are a serious matter. As the Full Court observed, they are essentially protective in nature as to the judicial function and the role of the courts, even if they also serve to vindicate private interests and rights. In this matter, the protection of the judicial function justifies the issue of a warrant for Mr Zombor’s arrest to bring him before the Court to answer the charge of contempt.Conclusion Accordingly, I consider it appropriate to make an order for the issue of a warrant for Mr Zombor’s arrest to bring him before the Court to answer the charge of contempt.

Ratio Decidendi

Legal Principle Established

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