R.G. Murch Nominees Pty Ltd v Paul David Annesley
[2019] VSC 107
•26 February 2019
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
COMMERCIAL LIST
S ECI 2018 02483
| R.G. MURCH NOMINEES PTY LTD (ACN 005 424 742) | Plaintiff |
| v | |
| PAUL DAVID ANNESLEY & ORS (as set out in the attached schedule) | Defendants |
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JUDGE: | SLOSS J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 20 February 2019 |
DATE OF JUDGMENT: | 26 February 2019 |
CASE MAY BE CITED AS: | R.G. Murch Nominees Pty Ltd v Paul David Annesley & Ors |
MEDIUM NEUTRAL CITATION: | [2019] VSC 107 |
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MORTGAGES AND SECURITIES – Personal property securities – Whether valid security interest – Order removing registration on the Personal Properties Securities Register – Personal Property Securities Act 2009 (Cth) s 182(4)(a).
CORPORATIONS – Receivers, managers and controllers – Controllers – Whether any foundation for the registration of controller appointment – Order rectifying register of the Australian Securities and Investments Commission – Corporations Act 2001 (Cth) s 1332(4)(b).
INJUNCTIONS – Quia timet injunction – Where plaintiff seeks order to prevent future lodging of caveats – Imminence of act to be prohibited not sufficiently clearly established to justify Court’s intervention.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr D C Harrison of counsel | Knight & Associates |
| No appearance for any of the defendants |
TABLE OF CONTENTS
Introduction......................................................................................................................................... 3
The 325 Wildwood Road property............................................................................................ 3
Intervention orders are taken out between Mr Murch and Mr Annesley............................ 3
The Annesley defendants claim a security interest against the plaintiff.............................. 4
A Form 504 is lodged by Annesley Investments............................................................ 4
The Annesley PPSR registration....................................................................................... 6
Encumbrances over the plaintiff’s property............................................................................. 6
Procedural history........................................................................................................................ 7
Hearing for final relief on 20 February 2019........................................................................... 10
Final relief sought by the plaintiff in its originating motion................................................... 10
Material relied upon by the plaintiff....................................................................................... 10
Other affidavit material relied upon by the plaintiff............................................................ 12
Rabobank’s security.................................................................................................................... 12
Other Form 504 notifications lodged by Mr Annesley and/or companies associated with him 13
Andrews Family Holdings Pty Ltd................................................................................ 13
Glentree South Holdings Pty Ltd.................................................................................... 14
Jurisdiction to grant injunctive relief........................................................................................... 16
Interim and interlocutory relief was granted to the plaintiff............................................... 16
The hearing of the application for final relief......................................................................... 18
Registration of a security interest under the Personal Property Securities Act 2009 (Cth). 19
The PPSA...................................................................................................................................... 19
The PPSR...................................................................................................................................... 19
Amendment demands - requiring that changes be made to the registration.................... 21
The amendment demand served by the plaintiff’s solicitor................................................ 22
The plaintiff seeks an order under s 182(4)(a) removing the registration of Annesley Investments’ alleged security interest................................................................................................... 23
Issue 1:Is there a security interest and, if not, should an order pursuant to s 182(4)(a) be made? 23
Acting as controllers of the plaintiff and relief sought under s 1322(4) of the Corporations Act 25
General principles: s 1322.......................................................................................................... 25
Issue 2: Is there any foundation for the registration of the Annesley controller appointment and, if not, should an order be made pursuant to s 1322(4)(b) of the Corporations Act?.......... 27
ASIC maintains a register recording ‘controller’ appointments................................. 27
No substantial injustice.................................................................................................... 27
Relief should be granted under s 1322(4)................................................................................ 28
Quia timet injunction sought by the plaintiff to restrain lodgement of caveat(s)............... 28
Issue 3:In respect of the plaintiff’s application for quia timet injunctive relief, has the plaintiff demonstrated a threatened infringement of the plaintiff’s rights sufficiently clearly to justify the Court’s intervention?......................................................................................................... 30
Conclusion......................................................................................................................................... 32
HER HONOUR:
Introduction
The 325 Wildwood Road property
In early August 2018, the plaintiff, R.G. Murch Nominees Pty Ltd, entered into a contract of sale to purchase a 180 acre property located at 325 Wildwood Road, Bulla (‘325 Wildwood Road property’).[1] The property was being sold by the Australia and New Zealand Banking Group Limited (‘ANZ Bank’) as mortgagee in possession under mortgage No. AK607474L.[2] The mortgagor of the property was Bankseea Pty Ltd (ACN 106 550 430) (‘Bankseea’), of which the first defendant (‘Mr Annesley’) was a director.[3] Mr Robert George Murch (‘Mr Murch’) is the sole director of the plaintiff. Mr Murch deposes that at the time the plaintiff purchased the property, he ‘was aware of the significant and lengthy litigation that [the ANZ Bank] had been involved in with the former registered proprietor Bankseea’[4].
[1]See the affidavit of Robert George Murch sworn 26 November 2018 (‘first Murch affidavit’) at [2]-[3].
[2]Ibid, at [2].
[3]Ibid, at [4]-[5].
[4]Ibid, at [4].
Intervention orders are taken out between Mr Murch and Mr Annesley
The settlement of the sale took place on 14 September 2018 and, on 9 October 2018, the plaintiff became the registered proprietor of 325 Wildwood Road property. Following the settlement of the sale, Mr Murch attended at the property on 15 September 2018. As no-one was in attendance, he sent a text message to Mr Annesley, who arrived shortly afterwards with another person in tow. Mr Murch introduced himself as the new owner and then they spoke about Mr Annesley removing machinery and other items from the property. A little later, Mr Murch left the property.
When Mr Murch next attended at the property on 22 September 2018, in the company of his partner, no-one was in attendance when they arrived. He drove onto the property and was inspecting it when he was confronted by Mr Annesley in his vehicle. Mr Murch deposed that Mr Annesley rammed his car, but he was able to leave the property and drove straight to the Sunbury Police Station. This episode led to the police applying for and obtaining an interim intervention order against Mr Annesley in the Broadmeadows Magistrates’ Court on 24 September 2018. About two weeks later, on 9 October 2018, Mr Annesley applied for, and was granted, an interim intervention order against Mr Murch at the Broadmeadows Magistrates’ Court. Subsequently, on 18 October 2018, the police made an application to vary the two intervention orders so as to allow Mr Murch to attend the property and to exclude Mr Annesley from it.
All intervention orders returned before the Broadmeadows Magistrates’ Court on 19 November 2018 but Mr Annesley initially failed to attend. On that day, the Magistrate proceeded in his absence, and made orders keeping all interim intervention orders in place and listing the matters for a directions hearing on 20 March 2019.
Mr Murch was subsequently informed by his then solicitor, Ms Jessica Wilkinson, that Mr Annesley had appeared in person at the Broadmeadows Magistrates’ Court later in the day on 19 November 2018. Mr Murch deposes that Ms Wilkinson informed him that when Mr Annesley arrived at the Court he was angry that the matter had been dealt with in his absence, and that at some stage during his discussions with the Magistrate, Mr Annesley stated that he had an interest in the plaintiff company.
The Annesley defendants claim a security interest against the plaintiff
A Form 504 is lodged by Annesley Investments
Once the plaintiff’s current solicitor, Ms Jan Knight, learnt of this claimed interest by Mr Annesley, she conducted a search of the plaintiff on the Australian Securities and Investments Commission (‘ASIC’) register and also sought documents from the plaintiff’s accountant.
The results of that ASIC search references ‘Document No. 030453483’, being a Form 504[5] notification of appointment of controller, which was recorded as having been lodged on 31 October 2018 and processed on 16 November 2018 (‘Annesley controller appointment’). The search showed that Mr Annesley had lodged the Form 504 document with ASIC, on behalf of the third defendant, Annesley Investments Pty Ltd (‘Annesley Investments’).
[5]Entitled ‘Notification that a person has been appointed controller/entered into possession etc.’; exhibit RGM-7 to the first Murch affidavit.
The Form 504 is a standard form document that has been completed by hand and signed by Mr Annesley in his stated capacity as director of Annesley Investments. The notification states that the notice is being given by ‘the controller (other than the receiver, receiver and manager or managing controller) under s 427(1B)’. The details of the appointment record that Mr Annesley and his wife, Sharlene Annesley (the second defendant) (‘Mrs Annesley’) were appointed ‘jointly’ as controllers by instrument registered in the Personal Property Securities Register (‘PPSR’) with security interest number 201810290022466. The description of the instrument (as set out in part 1 of the Form 504) states:[6]
PPSR – security charge over all Property of Murch Nominees including 325 Wildwood Road Bulla 3428
[6]Exhibit RGM-7 to the first Murch affidavit, at p 2 of 4.
The schedule of property (as set out in part 4 of the Form 504) states:[7]
All Property + chattels of 325 Wildwood Road Bulla Victoria 3428
Land Title information
Volume – 8861
Folio – 856
including Property – (Berrambool)
1009 Wickliffe Road Chatsworth VIC 3379
[7]Ibid, at p 3 of 4.
On the face of document, therefore, it appears that Annesley Investments appointed Mr and Mrs Annesley jointly to take control of property (and chattels) of the plaintiff for the purpose of enforcing a security interest otherwise than as receiver of that property.
The Annesley PPSR registration
On 20 November 2018, Ms Knight also conducted a search of the PPSR.[8] The search certificate she obtained records the registration of a ‘Security interest’ by Annesley Investments as the ‘Secured party’, with a registration start time of 29 October 2018 at 10:38:38 (Canberra Time) and an end time of 29 October 2043 at 23:59:59 (Canberra Time) (‘Annesley PPSR registration’).[9] The PPSR registration number is described as ‘201810290022466’. The collateral details are stated as:
[8]First Murch affidavit, at [15].
[9]Exhibit RGM-6 to the first Murch affidavit, at p 1 of 2.
Collateral type:
Commercial property
Collateral class:
All present and after-acquired property – No exceptions
Encumbrances over the plaintiff’s property
The certificate of title for the 325 Wildwood Road property records that the property is encumbered by a mortgage to Rabobank Australia Ltd, registered on 9 October 2018 (being the date the plaintiff became the registered proprietor).[10] No other encumbrances or security interests are recorded on the title.
[10]Certificate of title volume 8861 folio 856 (see exhibit RGM-1 to the first Murch affidavit).
In his second affidavit,[11] Mr Murch said the property where he lives, being 1009 Wickliffe Road Chatsworth, is known as ‘Berrambool’.[12] Further, he explained that he uses the address of the roadside letterbox, which is physically located at 1009 Wickliffe Road, as the property address because the property extends for nearly two kilometres along the frontage of Wickliffe Road. Mr Murch said that the Berrambool property is comprised of several blocks and certificates of title, most of which are in his name, however two of those titles are registered in the name of the plaintiff, being certificate of title volume 8274 folio 168, being the property located at 1012 Chatsworth-Wickliffe Road, and certificate of title volume 9757 folio 053, being the property located at 1154 Chatsworth-Wickliffe Road, Wickliffe. Each of the certificates of title for the portions of the Berrambool property that are registered in the name of the plaintiff records that the property is encumbered by a mortgage to Rabobank Australia Ltd that was registered on 15 November 2013.[13] No other encumbrances or security instruments are recorded on those titles. Mr Murch denies that he has entered into any agreement with Annesley Investments or signed any document that would have permitted Annesley Investments to lodge a notification in relation to the plaintiff on the PPSR, or any other document that could support the filing of the Form 504 ‘controller’ document with ASIC.[14]
[11]Second affidavit of Robert George Murch sworn 27 November 2018 (‘second Murch affidavit’).
[12]Ibid, at [2].
[13]Exhibit RGM-8 to the second Murch affidavit.
[14]See the first Murch affidavit, at [16].
Procedural history
Against that background, the plaintiff commenced this proceeding by originating motion and summons filed on 28 November 2018. The same day, the plaintiff applied ex parte for, and was granted, urgent interim relief restraining the first, second and third defendants (‘Annesley defendants’) from:
(a)acting or purporting to act as controllers of the plaintiff;
(b)lodging or attempting to lodge any document with the fourth defendant, ASIC, in relation to the plaintiff;
(c)enforcing or taking any further steps to enforce the purported security interest registered on the PPSR with registration number 201810290022466; and
(d)registering or attempting to register with the sixth defendant (‘Registrar of Titles’) any caveat or other document in respect of the land contained in:
(i)certificate of title volume 8861 folio 856 being the property known as 325 Wildwood Road, Bulla in Victoria;
(ii)certificate of title volume 8274 folio 168 being the property known as 1012 Chatsworth-Wickliffe Road, Wickliffe in Victoria; and
(iii)certificate of title volume 9757 folio 053 being the property known as 1154 Chatsworth-Wickliffe Road, Wickliffe in Victoria.
This suite of interim relief has effectively been continued to the present day by orders made by this Court on 6 December 2018, 12 December 2018, 31 January 2019 and 20 February 2019, in each case upon the plaintiff, by its counsel, refreshing its undertaking as to damages.
At the interlocutory hearing on 12 December 2018, Mr Annesley appeared for the first time, in person. He informed the Court that the Annesley defendants opposed the relief sought by the plaintiff, and said that they wished to file material that would support their position. In the course of that exchange, Mr Annesley mentioned that there was a written document which formed the basis of the alleged security interest. He said that his ‘legal assistant’ or ‘lawyer’ had the document[15] and that he could make it available to the plaintiff’s lawyers ‘very quickly’.[16] Accordingly, orders were made for the Annesley defendants to serve on the plaintiff’s solicitor (by no later than 12 noon on 14 December 2018) the security documents relied upon, and to file and serve any affidavit material that they proposed to rely on at the resumed hearing by 4.00 pm on 16 January 2019. Orders were also made for the continuation of the interim relief.
[15]Transcript, 12 December 2018, at p 7 lines 7-12.
[16]Transcript, 12 December 2018, at p 7 lines 18-20. See also at p 14 lines 6-28.
At 11.14 am on 14 December 2018, Mr Annesley emailed the Court, stating that he was ‘waiting on a reply from a federal government agency’ to obtain approval to send the document he had referred to.[17] To date, however, no such document has been produced.[18]
[17]See exhibit JK-4 to the affidavit of Jan Knight sworn 30 January 2019 (‘third Knight affidavit’).
[18]See the third Knight affidavit, at [3].
When the matter returned before the Court on 31 January 2019, Mr Ian Hone, solicitor, appeared as ‘solicitor advocate’ for the Annesley defendants. Towards the end of the hearing, however, Mr Hone informed the Court that he had been given instructions to act as the solicitor on the record, and would proceed to file a notice of appointment of solicitor. On 8 February 2019, Hone Legal & Conveyancing filed a notice of appearance on behalf of the Annesley defendants.
At the interlocutory hearing on 31 January 2019, counsel for the plaintiff, Mr Harrison, indicated that he wished to proceed with the hearing of the summons, and was seeking orders for final relief. Mr Hone, on the other hand, sought to have the matter adjourned so as to permit him to obtain proper instructions. He also proceeded, on instructions, to make an application for apprehended bias. In outlining the basis for the apprehended bias application, Mr Hone submitted that in a separate proceeding in the Commercial Court of this Court, initiated in late 2017 by Bonnievale Investments Pty Ltd (‘Bonnievale’), a company controlled by Mr Annesley, I had refused an application made on behalf of Bonnievale for leave to enter judgment in default of defence.[19] On that occasion, Bonnievale was not represented by a solicitor[20] and Mr Annesley had been given leave to appear on its behalf.
[19]See S ECI 2017 00285: Bonnievale Investments Pty Ltd v Crema Group Pty Ltd & Ors.
[20]See r 1.17 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic).
As I understood Mr Hone's submission, the reasonable apprehension of bias contended for was that I had wrongly refused Bonnievale's application for leave to enter interlocutory judgment in default of defence and, having done so, it might lead a fair-minded bystander to think that I might not decide this proceeding impartially because it involves the Annesley defendants, and in particular Mr Annesley, who are associated with Bonnievale.
Following an adjournment of the hearing on 14 December 2018, the Court delivered a short ruling dismissing the apprehended bias application, following which orders were made timetabling the filing of any further affidavit material and outlines of submissions, and for the plaintiff’s application for final relief to be heard on 20 February 2019.
Further affidavits of the plaintiff’s solicitor, Ms Jan Knight, sworn on 8 and 9 February 2019, were filed on RedCrest, followed by delivery of the plaintiff’s outline of submissions dated 14 February 2019.
No affidavit material or outline of submissions had been filed by or on behalf of the Annesley defendants in this proceeding.
Hearing for final relief on 20 February 2019
The matter was listed for a final hearing on 20 February 2019.[21] On that day Mr Harrison appeared as counsel for the plaintiff. There was no appearance for the Annesley defendants. However, Mr Hone, as the solicitor on the record for the Annesley defendants, attended and informed the Court that he was ‘appearing’ simply as a matter of courtesy, but had no instructions in relation to the matter. He said that he had been unable to make contact with his clients since 6.45 am on 8 February 2019, despite multiple daily attempts to do so. In those circumstances Mr Hone sought, and was granted, leave to withdraw from the Bar table. Mr Hone then moved to sit in the body of the courtroom where he remained for the duration of the hearing.
[21]No transcript of the hearing for final relief on 20 February 2019 has been made available as yet. Accordingly, these reasons have been prepared on the basis of notes made by me in Court during the course of the hearing.
Neither ASIC, the Registrar of Personal Property Securities, or the Registrar of Titles, have taken any active part in the proceeding.
Final relief sought by the plaintiff in its originating motion
The plaintiff seeks relief in relation to three matters:
(a) the Form 504 controller appointment document filed in respect of the plaintiff with ASIC;
(b) the PPSR security interest registration document filed by Annesley Investments in respect of the plaintiff with the Registrar of Personal Property Securities, the fifth defendant; and
(c) preventing the Annesley defendants from filing further documents, including any caveats over properties of which the plaintiff is the registered proprietor.
Material relied upon by the plaintiff
In support of its application, the plaintiff has filed, and relies upon, seven substantive affidavits, namely:
(a) the first Murch affidavit;
(b) the second Murch affidavit;
(c) the affidavit of Jan Knight sworn 28 November 2018 (‘first Knight affidavit’);
(d) the second affidavit of Jan Knight sworn 12 December 2018 (‘second Knight affidavit’);
(e) the third Knight affidavit;
(f) the fourth affidavit of Jan Knight sworn 8 February 2019 (‘fourth Knight affidavit’); and
(g) the fifth affidavit of Jan Knight sworn 9 February 2019 (‘fifth Knight affidavit’).
In essence, the plaintiff submits that the evidence before the Court, which is uncontested, makes clear that none of the Annesley defendants has demonstrated any evidentiary basis for either the asserted PPSR security interest registration or the asserted Form 504 controller appointment. Further, counsel for the plaintiff contends that Mr Annesley has a ‘history’,[22] documented in decisions of this and other courts, ‘of lodging multiple caveats over properties without any proper basis’,[23] and in one case he has lodged them ‘in breach of court orders restraining him from doing so’.[24] In those circumstances, counsel submitted, the Annesley defendants should be restrained from lodging caveats over any real property registered in the name of the plaintiff unless they first obtain the leave of the Court to do so.[25]
[22]See plaintiff’s outline of submissions filed on 14 February 2019.
[23]See ANZ Banking Group Ltd v Bankseea Pty Ltd [2017] VCC 1852 (Judge Marks); ANZ v Annesley [2015] VSC 781 (Riordan J); Andrews Family Holdings Pty Ltd v Yellow Tractor Pty Ltd [2017] VSC 682 (Ginnane J); Andrews Family Holdings Pty Ltd v Yellow Tractor Pty Ltd (No 2) [2017] VSC 695 (Ginnane J); and Australia and New Zealand Banking Group Ltd v Paul Annesley (Unreported, Supreme Court of Victoria, Riordan J, 23 October 2018).
[24]Andrews Family Holdings Pty Ltd v Yellow Tractor Pty Ltd (No 2) [2017] VSC 695, [2].
[25]Hearing on 20 February 2019, oral submissions of Mr Harrison.
Other affidavit material relied upon by the plaintiff
At the final hearing, counsel for the plaintiff also sought to rely upon material set out in the fourth and fifth Knight affidavits, concerning the plaintiff’s potential for exposure to loss and damage under the Rabobank mortgages occasioned as a result of the conduct of the Annesley defendants, and two other instances where Mr Annesley had lodged Form 504 controller appointments where the subject company maintained there was no foundation for it. Mr Harrison referred to these affidavits and said the evidence set out in them might be instructive as to the bona fides of the Annesley defendants in this instance and may also be relevant on the question as to costs.
For completeness, the gist of that evidence is set out below.
Rabobank’s security
The Memorandum of Common Provisions for the Rabobank mortgages contains an extensive suite of provisions concerning events of default and the steps Rabobank may take. Relevantly for present purposes, clause 11.1 states that if ‘An Insolvency Event occurs’ then an ‘Event of Default at Rabobank’s option will have occurred.’ Clause 11.2 deals with ‘Rights on default’, and provides:
Despite any other provision of the Mortgage, at any time after an Event of Default occurs how and when Rabobank in its absolute discretion decides, Rabobank may sign anything and do anything Rabobank considers appropriate to recover the Secured Money and deal with the Secured Assets. Without limiting the rights specified in the last sentence, Rabobank may do any one or more of the following:
(a) Demand and require immediate payment of the Secured Money.
(b)Exercise any right, power, or privilege conferred by law, equity, the Mortgage, or any of the Collateral Documents.
(c)Eject occupants from, enter, seize or otherwise take possession of , and withdraw from possession of the Mortgaged Land.
(d)Deal in any way with the Mortgaged Land, any estate or interest in it, any right attaching to it or any Encumbrance affecting it.
[etc.]
. . .
Counsel for the plaintiff submitted that the appointment of a controller would (at least prima facie) constitute the occurrence of an ‘Insolvency Event’, and thereby enliven clause 11.1 such that an ‘Event of Default at Rabobank’s option will have occurred.’ There is, however, no evidence before the Court as to the position adopted by Rabobank.
Other Form 504 notifications lodged by Mr Annesley and/or companies associated with him
Counsel for the plaintiff also pointed to the practice of Mr Annesley and/or companies associated with him in lodging Form 504 notifications of appointment of a controller against two other companies without just cause.
In her fourth affidavit, Ms Knight deposed that Mr Murch had informed her that he had learnt that Mr Annesley had previously lodged a Form 504 notification of appointment of a controller against each of Andrews Family Holdings Pty Ltd and Glentree South Holdings Pty Ltd.
Andrews Family Holdings Pty Ltd
Ms Knight exhibited extracts from a company search of Andrews Family Holdings Pty Ltd which recorded that a Form 504 was lodged on 20 November 2017. Correspondence from ASIC to Mr Annesley’s company, Bonnievale Investments Pty Ltd (‘Bonnievale’), dated 27 November 2017, recorded that the Form 504 document had been lodged by Bonnievale but it was returned by ASIC ‘because it has not been properly completed’ as it did not state the date of appointment of the receiver and manager.[26] ASIC requested that the document be corrected and returned.[27]
[26]Exhibit JK-9 to the fourth Knight affidavit.
[27]Ibid.
By letter dated 25 December 2017, ASIC wrote to Andrews Family Holdings Pty Ltd noting that as the Form 504 document was not properly completed, ASIC had requested that it be completed and returned by 18 December 2017, but ASIC said its records ‘show that the document still has not been completed and returned’.[28] ASIC stated that it was ‘of the view that the document has not been properly lodged as required by the Corporations Act 2001’, and requested that it be corrected and returned by 15 January 2018.[29]
[28]Exhibit JK-10 to the fourth Knight affidavit.
[29]Exhibit JK-10 to the fourth Knight affidavit.
Ms Knight deposes that on 6 February 2019 she contacted the solicitor acting for Andrews Family Holdings Pty Ltd, Mr Will Punivalu of Whyte Just & Moore, in relation to the ASIC correspondence. Mr Punivalu informed her to the effect that ‘a letter was subsequently forwarded to ASIC asking that ASIC refrain from lodging any further documents lodged by Mr Annesley or Bonnievale Investments Pty Ltd, and putting ASIC on notice that Andrews Family Holdings Pty Ltd will at no point in time have any dealings with any entity associated with Mr Annesley’.[30] Ms Knight states that as a consequence, the Form 504 document was not processed and thus has not been imaged.[31]
[30]Fourth Knight affidavit, at [4].
[31]Ibid, at [5].
Glentree South Holdings Pty Ltd
The second company that was apparently the subject of a Form 504 lodgement by Mr Annesley was Glentree South Holdings Pty Ltd. In her fourth affidavit, Ms Knight exhibited an extract from a company search, recording that ASIC had registered a court order rectifying the Register of the Commission pertaining to Glentree South Holdings Pty Ltd.[32] Ms Knight also exhibited a copy of an order made by the Honourable Justice Elliott in proceeding no. S CI 2017 05081 in this Court on 20 December 2017 ordering the removal of the registration and restraining Mr Annesley and Bonnievale from lodging any documents at ASIC in respect of Glentree South Holdings Pty Ltd without first obtaining leave of the Court.[33]
[32]Exhibit JK-11 to the fourth Knight affidavit.
[33]Exhibit JK-12 to the fourth Knight affidavit.
In her fifth affidavit, Ms Knight deposes that she had caused a search to be made of the Court file in proceeding no. S CI 2017 05081, where Glentree South Holdings Pty Ltd had successfully applied to have a Form 504 lodged by Mr Annesley removed from the ASIC database. The affidavit material filed in support of Glentree South Holdings Pty Ltd’s application by its director, Mr Wesley Derek Ballantine, was to the effect that the company ‘has not had any dealings with either defendant [Mr Annesley or Bonnievale]’ and the only connection between the company and either defendant was that it had ‘purchased land from a company called Andrews Family Holdings Pty Ltd’ and it has never entered into any agreements or transactions with the defendants and has never provided any security to either of them.[34]
[34]See affidavit of Wesley Derek Ballantine sworn 12 December 2017, at [2]-[3].
Mr Ballantine deposed that shortly prior to the settlement of the sale of the land to Glentree South Holdings Pty Ltd, Yellow Tractor Pty Ltd, a company that formerly was controlled by Mr Annesley, lodged a caveat over the title, thereby necessitating that the vendor commence a proceeding in this Court for its removal so as to permit settlement to take place. Application was made by the vendor in proceeding S CI 2017 04444, which was heard by the Honourable Justice Ginnane on 8 and 14 November 2017. His Honour made orders for the removal of caveats and also an order that Mr Annesley be restrained from lodging any further caveats.
In late November 2017, Mr Ballantine learned through Glentree South Holdings Pty Ltd’s solicitors, Einsiedels, that Mr Annesley had obtained registration of security interests over the company and others associated with it, being himself, his brother-in-law, his wife and his sister’s company, Stroud Property Investments Pty Ltd. He said that the registration of these security interests was ‘a great surprise’ to him because neither he nor any of the others was aware of any basis upon which Mr Annesley could claim to have a security interest in any of their property. Einsiedels then wrote a letter to Mr Annesley giving notice to remove the registration, and a letter to the Australian Financial Security Authority requesting removal of the registration on the PPSR.
A little later Mr Ballantine was advised by Einsiedels that Mr Annesley had lodged a document with ASIC in which he purported to have been appointed as controller of Glentree South Holdings Pty Ltd. The notification document also apparently made reference to Bonnievale, whom Mr Ballantine had never heard of before. He said that this controller appointment was also a surprise to him as there was no basis for it. Mr Ballantine then instructed Einsiedels to take steps to have the notification removed. This culminated in the application that was made before Justice Elliott, ASIC staff having advised that the only way to have the appointment removed was by court order.
Jurisdiction to grant injunctive relief
Section 37 of the Supreme Court Act 1986 (Vic) provides that the Court may by order, whether interlocutory or final, grant an injunction ‘if it is just and convenient to do so, and such orders may be made ‘unconditionally or on such terms and conditions as the Court thinks just’.
In considering whether an interlocutory injunction should be granted, the Court must be satisfied that the applicant has made out a prima facie case, that damages would not be an adequate remedy and that the balance of convenience would favour the grant of such relief.
Interim and interlocutory relief was granted to the plaintiff
At each of the earlier hearings, where orders were made initially granting the interim relief and then providing for the continuation of the interim relief, the Court was satisfied that the plaintiff had identified at least two serious questions to be tried, namely whether there is any basis for:[35]
(a) the Annesley PPSR registration; and
(b) the Annesley controller appointment.
[35]Plaintiff’s outline of submissions dated 14 February 2019, at [9].
Further, the Court was satisfied on the material before it that the plaintiff had demonstrated a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial.[36]
[36]Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57, at 82 [65] (per Gummow and Hayne JJ).
The position was less clear, however, in relation to the injunctive relief sought by the plaintiff to restrain the Annesley defendants from lodging caveats over land of which the plaintiff is the registered proprietor. Counsel for the plaintiff submitted that the extent of the past conduct of Mr Annesley, and in particular his conduct in lodging caveats and similar documents without any proper basis, manifested his modus operandi. Further, counsel submitted, in circumstances where courts have repeatedly ordered the removal of those caveats[37] and enjoined Mr Annesley from lodging further caveats, there is significant risk that the Annesley defendants may lodge with the Registrar of Titles a caveat or other document in respect of the properties the plaintiff owns, such that the balance of convenience would favour the grant of the additional injunctive relief sought. Accordingly, the plaintiff submitted that if the Court were to grant the injunctive relief sought, it would save the plaintiff significant time and money in later having to apply to have a caveat removed.
[37]The orders or cases include:
(a)ANZ v Annesley [2015] VSC 781 [23] (Riordan J);
(b)Andrews Family Holdings Pty Ltd v Yellow Tractor Pty Ltd (No 2) [2017] VSC 695 [1], [11] (Ginnane J);
(c)Australia and New Zealand Banking Group Ltd v Paul Annesley (Unreported, Supreme Court of Victoria, Riordan J, 23 October 2018) [1]; and
(d)orders made by Judge Cosgrave on 6 November 2015 in proceeding no. CI-15-04970, as referred to in ANZ Banking Group Ltd v Bankseea Pty Ltd & Anor [2017] VCC 1852 [121], [125].
In determining where the balance of convenience lies, the Court noted that it should take whichever course appears to carry the lower risk of injustice if it should turn out to have been wrong, in the sense of granting an injunction to a party who fails to establish his right at the trial, or in failing to grant an injunction to a party who succeeds at trial.[38] As the Court of Appeal noted in Bradto Pty Ltd v State of Victoria,[39] there is a relationship between ‘a prima facie case’ or ‘a serious question to be tried’ and ‘the balance of convenience’. The two requirements need to be examined together and it follows that if the claim of a plaintiff is weak, then the balance of convenience must be more strongly in favour of the plaintiff before the court grants injunctive relief.
[38]See Bradto Pty Ltd v State of Victoria (2006) 15 VR 65, at 73 [35] (per Maxwell P and Charles JA).
[39]Ibid, at 82 [84] (citations omitted).
In the present case, the Court was satisfied that the balance of convenience favoured the grant of interim (and later interlocutory) injunctive relief in respect of both the Annesley PPSR registration and the Annesley controller appointment, and also by way of enjoining the Annesley defendants from lodging any caveats over properties of which the plaintiff is the registered proprietor.
The Court was also satisfied that if no injunctive relief were granted, but the plaintiff’s claim were ultimately vindicated, there was potential for it to suffer irreparable harm for which damages will not be an adequate remedy. In that regard, the plaintiff initially submitted that if Mr and Mrs Annesley were allowed to remain registered with ASIC as controllers of the plaintiff, ‘there is no end’ to the harm that they could inflict on the plaintiff. Such harm was said to have the potential to materialise in the event that Mr and Mrs Annesley, as controllers of the plaintiff, were to purport to sell or otherwise deal with real estate or chattels owned by the plaintiff. Similar considerations were said to apply to the Annesley PPSR registration. Further, the plaintiff submitted, there was no evidence before the Court that the Annesley defendants have any assets which could be used to pay an award of damages.
The hearing of the application for final relief
Against that background, at the hearing on 20 February 2019 the plaintiff pressed its claim for final relief in respect of both the Annesley PPSR registration and the Annesley controller appointment, and it also sought to maintain its claim for injunctive relief to prevent the Annesley defendants lodging any caveats over properties of which the plaintiff is the registered proprietor.
As will be apparent, there are three issues that fall to be determined. First, in the case of the Annesley PPSR registration, is there a security interest and, if not, should an order be made pursuant to s 182(4)(a) of the Personal Property Securities Act 2009 (Cth) (‘PPSA’)? Secondly, in the case of the Annesley controller appointment, is there any foundation for the registration of the Annesley controller appointment and, if not, should an order be made pursuant to s 1322(4)(b) of the Corporations Act? Thirdly, in respect of the plaintiff’s application for a quia timet injunction enjoining the Annesley defendants from lodging caveats, has the plaintiff demonstrated a threatened infringement of the plaintiff’s rights sufficiently clearly to justify the Court’s intervention? I turn to consider each of these issues below.
Registration of a security interest under the Personal Property Securities Act 2009 (Cth)
The PPSA
Generally speaking, the PPSA establishes a national law governing security interests in personal property. Importantly, a security interest will not arise under the PPSA unless the grantor consensually provides for or grants it in favour of the secured party.[40]
[40]See Mirzai and Harris, The Annotated Personal Property Securities Act 2009 (Cth), (3rd ed 2018, Wolters Kluwer), at ¶1-065, [12.5.1.1] (‘Consent’).
The PPSR
Under s 147 of the PPSA, the Registrar is required to establish and maintain the PPSR. The PPSR is a mechanism for providing notice of the existence of a security interest over a grantor’s collateral. As such, the PPSR relies upon ‘notice-based filing’ (through financing statements) rather than requiring the lodgement of entire security agreements.[41]
[41]Ibid, at ¶5-030, [150.5.1] (‘The role of registration’).
Relevantly, it is security interests over a grantor’s interest in ‘personal property’, not real property, that are amenable to registration and notification. Section 10 of the PPSA defines the related concepts of ‘collateral’, ‘interest’ and ‘personal property’ in broad terms, as follows:
collateral:
(a) means personal property to which a security interest is attached; and
(b)in relation to a registration with respect to a security interest — includes personal property described by the registration (whether or not a security interest is attached to the property).
Note:Section 161 authorises the registration of a financing statement that describes personal property before or after a security agreement is made covering the property, or a security interest has attached to the property.
. . .
interest, in personal property, includes a right in the personal property.
. . .
personal property means property (including a licence) other than:
(a) land; or
(b) a right, entitlement or authority that is:
(i)granted by or under a law of the Commonwealth, a State or a Territory; and
(ii)declared by that law not to be personal property for the purposes of this Act.
Note:This Act does not apply to certain interests even if they are interests in personal property (see section 8).
A ‘security interest’ is defined in s 10 as having the meaning set out in s 12 of the PPSA. Section 12 relevantly provides as follows:
(1)A security interest means an interest in personal property provided for by a transaction that, in substance, secures payment or performance of an obligation (without regard to the form of the transaction or the identity of the person who has title to the property).
Note: For the application of this Act to interests, see section 8.
(2)For example, a security interest includes an interest in personal property provided by any of the following transactions, if the transaction, in substance, secures payment or performance of an obligation:
(a) a fixed charge;
(b) a floating charge;
(c) a chattel mortgage;
[etc.]
. . .
(3A)A person who owes payment or performance of an obligation to another person may take a security interest in the other person’s right to require the payment or the performance of the obligation.
. . .
As Beach J observed in National Australia Bank Ltd v Garrett, the PPSR is maintained online and it is a relatively simple exercise to access and to create a registration or to seek an amendment.[42] Section 150(1) provides that a person may apply to the Registrar to register a financing statement with respect to a security interest or personal property prescribed by regulations made for the purposes of s 148(c). Pursuant to s 150(3), the Registrar is required to register a financing statement or financing change statement where the application is in the approved form, any fee determined under s 190 has been paid and the Registrar is satisfied that the application is not frivolous or vexatious (etc.) or made in contravention of s 151, and the registration would not be prohibited by the regulations.
[42](2016) 340 ALR 532, at 539 [21]; [2016] FCA 714, at [21].
Section 151, which deals with the applicant for registration’s belief about a security interest, relevantly provides that:
(1)A person must not apply to register a financing statement, or a financing change statement, that describes collateral, unless the person believes on reasonable grounds that the person described in the statement as the secured party is, or will become, a secured party in relation to the collateral (otherwise than by virtue of the registration itself).
Civil penalty: 50 penalty units.
. . .
Amendment demands - requiring that changes be made to the registration
Part 5.6 of the PPSA (‘Amendment demands’) enables a person with an interest in collateral who requires changes to the registration to give an ‘amendment demand’ to the secured party, requiring that changes be made to the registration. Section 178 prescribes how amendment demands are given. Sections 179 to 181 deal with the ‘Administrative process’ for registration amendments and s 182 deals with the ‘Judicial process’ for considering an amendment demand. I note that s 179(2) expressly provides that the administrative process stops applying if either a financing change statement is registered in accordance with the amendment demand or proceedings come before a court, in relation to an application under s 182, that relate to the amendment demanded.
The amendment demand served by the plaintiff’s solicitor
In the present case, an amendment demand letter dated 19 December 2018 was given by the solicitor for the plaintiff to Mr Annesley as director of Annesley Investments, on or about the date it bears.[43] The amendment demand letter expressly stated that it was provided under s 178 of the PPSA. In the letter, the plaintiff’s solicitor demanded ‘an amendment to end effective registration (including any amendment to remove the registration) because no collateral described in the registration secures any obligation (including a payment) owed by a debtor to the Secured Party’.[44] Further, the letter stated that ‘R.G. Murch Nominees Pty Ltd has never granted a security interest in favour of the Secured Party’ and requested that Annesley Investments ‘submit a financing change statement to the Registrar to effect the change requested within 5 business days of receipt of this letter’.[45]
[43]Third Knight affidavit at [5], and exhibit JK-6.
[44]See exhibit JK-6.
[45]Ibid.
Counsel for the plaintiff noted that the amendment demand letter was framed in substantially identical terms to the amendment demand that was served in National Australia Bank Ltd v Garrett.[46] In that case, Beach J conveniently summarised the relevant provisions of the PPSA and its operation as a national law governing security interests in personal property. Relevantly, for present purposes, when dealing with the procedure for amendment demands, Beach J observed that:[47]
[46](2016) 340 ALR 532, at 537-538, [13]; [2016] FCA 714, at [13].
[47](2016) 340 ALR 532, at 541-542, [26]; [2016] FCA 714, at [26].
[26]If the amendment demand is not accepted, then an administrative “show cause” process can be followed to resolve the dispute (see ss 179 to 181). Alternatively, a judicial process can be followed to resolve the dispute. Such a process allows the affected secured party or the party giving the amendment demand to apply to the court for an order to give effect or otherwise to the amendment demand. Section 182 allows both the secured party and the person who gave the amendment demand to apply to a court for an order relating to the amendment demand. Relevantly, s 182(4) gives the court power to make a wide range of orders in respect of amendment demands and provides:
(4)On an application under this section, a court may make the following orders:
(a)if the court considers the amendment demanded to be authorised under section 178 — an order requiring the Registrar to register a financing change statement amending the registration (including an amendment to remove the registration);
(b)if the court does not consider the amendment demanded to be so authorised — one or more of the following orders:
(i)an order restraining the Registrar from registering a financing change statement amending the registration at the Registrar’s initiative (under section 181);
(ii)an order restraining the person who gave the amendment demand from making such further amendment demands as the court specifies;
(iii)an order restraining the Registrar from giving the secured party amendment notices under section 180 in relation to such further amendment demands as the court specifies;
(c) any other order that the court thinks fit.
In her third affidavit, the plaintiff’s solicitor deposes that as at the date of swearing (being 30 January 2019), ‘there has been no response to this [amendment demand] letter’.[48] That remained the case as of the date of the final hearing.
The plaintiff seeks an order under s 182(4)(a) removing the registration of Annesley Investments’ alleged security interest
[48]See third Knight affidavit, at [5].
Counsel for the plaintiff submits that in circumstances where the alleged security party has not responded to that letter, it is appropriate for the Court to make orders removing the registration under s 182(4)(a) of the PPSA.[49] In this regard, I note that at the hearing on 20 February 2019, counsel for the plaintiff sought, and obtained, leave nunc pro tunc for the plaintiff to file and serve an amended originating motion and summons to formally seek relief under s 182(4)(a) of the PPSA.
Issue 1: Is there a security interest and, if not, should an order pursuant to s 182(4)(a) be made?
[49]Plaintiff’s outline of submissions dated 14 February 2019, at [26].
In the present case, the security interest claimed by Annesley Investments purports to relate, in whole or in part, to the 325 Wildwood Road property, of which the plaintiff is the registered proprietor. As noted above, the definition in s 10 of the PPSA makes clear that real property is not ‘personal property’ for the purposes of the PPSR regime. Accordingly, it is difficult to see how, at the time of lodging its application to register, Annesley Investments (or one or more of the Annesley defendants), as the person described in the statement as the secured party, could have had a belief on reasonable grounds that Annesley Investments was, or would become, a secured party in relation to the collateral insofar as it comprises the 325 Wildwood Road property and (part of) the ‘Berrambool’ property (otherwise than by virtue of the registration itself), as required by s 151.
Further, as noted earlier, a ‘security interest’ for the purposes of the PPSA must arise from a transaction that is consensual. Robson J so held in Sandhurst Golf Estates Pty Ltd v Coppersmith Pty Ltd,[50] and Beach J endorsed that view in National Australia Bank Ltd v Garrett.[51] Robson J also held that a court has jurisdiction to restrain a person from registering a security interest in another’s personal property in circumstances where that person has been found to have no such interest.[52]
[50](2014) 285 FLR 267, at 282 [99]; [2014] VSC 217 at [99].
[51](2016) 340 ALR 532, at 542, [32]; [2016] FCA 714, at [32].
[52](2014) 285 FLR 267, at 284-285 [117]; [2014] VSC 217 at [117].
In the present case, Mr Murch denies that he has entered into any agreement or signed any document that would have permitted Annesley Investments to lodge any notification in relation to the plaintiff on the PPSR. When Mr Annesley appeared at the hearing on 12 December 2018, he asserted that there was a security document and undertook to serve it forthwith. However, he has failed to produce the document, and the Annesley defendants have not adduced any other evidence in this proceeding that might support the security interest claimed. Accordingly, the position is that there is no evidence before the Court of any consensual transaction, let alone one capable of giving rise to a security interest in the relevant sense over any personal property of the plaintiff.
In circumstances where there is an absence of any evidence supporting the grant of a security interest by the plaintiff in favour of Annesley Investments as the secured party, and where there has not been any response to the amendment demand letter served by the plaintiff’s solicitor, I am satisfied that it is appropriate for the Court to make orders removing the registration under s 182(4)(a) of the PPSA.[53]
[53]Section 182(4)(a) of the PPSA provides:
(4) On an application under this section, a court may make the following orders:
(a)if the court considers an amendment demanded to be authorised under section 178—an order requiring the Registrar to register a financing change statement amending the registration (including an amendment to remove the registration).
As a general proposition, under the PPSA the jurisdiction of the ‘court’ concerning the operation of the Act, and applications to be made to a court with respect to a ‘PPS matter’, is broadly conferred on superior courts of record: ss 206, 207 and Division 2 of Part 6.2 generally of the PPSA. See also Sandhurst Golf Estates Pty Ltd v Coppersmith Pty Ltd (2014) 285 FLR 267; [2014] VSC 217.
Acting as controllers of the plaintiff and relief sought under s 1322(4) of the Corporations Act
Under the suite of interim relief granted on 28 November 2018, orders were made restraining the Annesley defendants from inter alia:
(a) acting or purporting to act as controllers of the plaintiff; and
(b) lodging or attempting to lodge any document with ASIC in relation to the plaintiff.
In addition to the interlocutory relief which the plaintiff now seeks be made ‘final’ the plaintiff also seeks orders, pursuant to s 1322(4) of the Corporations Act, to:
(a)remove document number 030453483 from the records [ASIC] holds of the plaintiff, and
(b)rectify the records [ASIC] holds of the plaintiff so that no record remains of:
(i)document number 030453483 having been filed with ASIC,
(ii)a controller having been appointed to the plaintiff pursuant to document number 030453483.
General principles: s 1322
Section 1322 of the Corporations Act is titled ‘Irregularities’. Relevantly, s 1322(4)(b) empowers the Court, on an application by any interested person, to make ‘an order directing the rectification of any register kept by ASIC under [the Corporations Act]’ as well as ‘such consequential or ancillary orders as the Court thinks fit’. Section 1322(6) prescribes certain preconditions to the Court making orders under s 1322. Section 1322(6)(c) relevantly requires in every case ‘that no substantial injustice has been or is likely to be caused to any person’. Accordingly, before making an order of the kind sought by the plaintiff under s 1322(4)(b), the Court must first be satisfied that there is a register kept by ASIC under the Corporations Act that the Court can direct to be rectified, and secondly, that no substantial injustice has been or is likely to be caused to any person.
In Re Helios Energy Ltd,[54] Gilmore J conveniently summarised the principles that are generally applicable on an application made under s 1322 as follows:
[54](2017) 122 ACSR 174, at 176-177 [20]; [2017] FCA 840 at [20].
(a)The prescriptive requirements of the wording in ss 1322(4)(a), 1322(4)(d) and the pre-conditions in 1322(6) need to be satisfied: Weinstock v Beck (2013) [251 CLR 396 at 416 [43], 419 [53] and 422-3 [64]] (Weinstock).
(b)Satisfaction of any one of the conditions set out in s 1322(6)(a)(i) or s 1322(6)(a)(ii) or s 1322(6)(a)(iii) will meet the requirements of s 1322(6)(a): Weinstock, [403 [10]].
(c)The Court retains a discretion under ss 1322(4)(a) and 1322(4)(d) as to whether it makes the orders sought, as the statute uses the permissive "may".
(d)These broad powers reflect a “broad legislative policy that the law should not inflict unnecessary liability or inconvenience or invalidate transactions because of non-compliance with its requirements where such non-compliance is the product of honest error or inadvertence and where the court can avoid its effects without prejudice to third parties or to the public interest in compliance with the law”: Re Wave Capital Ltd [(2003) 47 ACSR 418] at 426 [29] affirmed in [Re Solco Ltd [2015] FCA 635] at [23].
(e)Limitations to the broadly expressed powers in s 1322 will not be readily implied: Weinstock at [416 [43], 419-420 [55]-[56] and 422-423 [64]].
(f)The Court can make orders under ss 1322(4)(a) and 1322(4)(d) on conditions and also make such consequential and ancillary orders as it thinks fit: s 1322(4).
(g)An order can be made under s 1322(4)(a) notwithstanding that the contravention or failure concerned resulted in the commission of an offence: s 1322(5).
Issue 2: Is there any foundation for the registration of the Annesley controller appointment and, if not, should an order be made pursuant to s 1322(4)(b) of the Corporations Act?
The Annesley controller registration lodged with ASIC pursuant to s 427(1A) effectively ‘piggybacks’ on the Annesley PPSR registration. As the Court has found that there is no basis for the security interest alleged to have been granted by the plaintiff in favour of Annesley Investments, and that an order should be made removing the Annesley PPSR registration, it follows that there is no foundation for the Annesley ‘controller’ appointment and an order should likewise be made removing it from the ASIC register.
ASIC maintains a register recording ‘controller’ appointments
In the present case, it is clear that there is relevantly a register kept by ASIC under the Corporations Act that records the ‘controller’ appointment. The ‘Current Organisation Extract’ for R.G. Murch Nominees Pty Ltd[55] states that it ‘contains information derived from the [ASIC] database under section 1274A of the Corporations Act 2001’ and the ‘Current Organisation Details’ record the status of the company as ‘Under External Administration And/Or Controller Appointed’.
[55]Which appears as exhibit RGM-5 to the first Murch affidavit and records the Annesley controller appointment.
No substantial injustice
Turning then to the ‘no substantial injustice’ requirement, counsel for the plaintiff contends that there is no evidence that any substantial injustice ‘has been or is likely to be caused to any person’. None has been adduced by or on behalf of the Annesley defendants, and counsel for the plaintiff observed that in circumstances where the Annesley defendants have been provided with the opportunity to inform the Court of any injustice, ‘their failure to do so speaks volumes’.[56] Further, counsel submitted, there is no evidence to suggest that any third party has acted to its detriment on the Annesley ‘controller’ registration.
[56]Hearing on 20 February 2019, oral submissions of Mr Harrison.
As the Court is satisfied that there is no demonstrated foundation for either the registration of the security interest under the PPSR, or the Annesley ‘controller’ appointment, it is difficult to identify what injustice, substantial or otherwise, is likely to be caused to any person by the removal of the Annesley ‘controller’ appointment registration.
Relief should be granted under s 1322(4)
Accordingly, I am satisfied that relief should be granted under s 1322(4)(b) to rectify the register kept by ASIC under the Corporations Act as it pertains to the plaintiff.
Quia timet injunction sought by the plaintiff to restrain lodgement of caveat(s)
By way of final relief, the plaintiff also continues to seek an order restraining the Annesley defendants from filing further documents, including any caveats over the 325 Wildwood Road property and the two other ‘Berrambool’ properties of which the plaintiff is the registered proprietor.
The application to restrain the lodging of caveats does not arise from the Annesley defendants having lodged a caveat over any of the plaintiff’s properties to date, but rather from their history of doing so in the context of property disputes in other cases and in circumstances where the respective courts have found those caveats to have been lodged without just cause. Accordingly, the relief sought in respect of the lodgment of caveats is in the nature of a quia timet injunction, based on the plaintiff’s apprehension that the Annesley defendants will lodge caveats over the plaintiff’s properties.
In the recent case of Rasco Pty Ltd v Lucas,[57] McMillan J helpfully summarized the principles that pertain to the grant of quia timet injunctive relief as follows:
[57][2017] VSC 703.
[84]In order to be granted quia timet relief, Rasco must show that what the defendant intends or is likely to do will cause immediate and substantial damage to their property or business.[58] While the onus is on Rasco to demonstrate that the defendant is likely to cause immediate and substantial damage, the authorities do not establish that any fixed or absolute standard of proof is required before quia timet injunctive relief will issue.[59]
[58]Neville Jeffress Advertising Pty Ltd v Barlow (No 2) (Unreported, Supreme Court of Tasmania, Zeeman J, 15 October 1993) 10. This statement of principle was not contested on appeal: see Barlow v Neville Jeffress Advertising Pty Ltd (1994) 4 Tas R 391, 400–1 (Cox J).
[59]Magic Menu Systems Pty Ltd v AFA Facilitation Pty Ltd (1997) 72 FCR 261, 269–70 (Lockhart, Cooper and Kiefel JJ).
[85]Relevantly, the Full Court of the Federal Court noted in Hurst v State of Queensland (No 2):
In quia timet proceedings, the court will have regard to the degree of probability of apprehended injury, the degree of the seriousness of the injury, and the requirements of justice between the parties.[60]
[60]Hurst v State of Queensland (No 2) [2006] FCAFC 151 [21] (Ryan, Finn and Weinberg JJ).
[86]A useful survey of the general principles applicable to the grant of quia timet injunctions was provided by Bennett J in Apotex Pty Ltd v Les Laboratories Servier (No 2), where her Honour noted:[61]
The following principles generally apply to the grant of a quia timet injunction:
•A quia timet injunction is granted to prevent a threatened infringement of the rights of the applicant. The applicant must show that what the respondent is threatening and intending to do will cause imminent and substantial damage to the applicant.
•The word “imminent” means that the injunction must not be granted prematurely. The degree of probability of future injury is not an absolute standard. What is to be aimed at is justice between the parties, having regard to all the relevant circumstances. However, this is not to be taken as conveying that future injury need not be shown to be likely at all.
•Quia timet injunctions are not to be granted unless the imminence of the act to be prohibited is sufficiently clearly established to justify the court’s intervention.
•In deciding whether to grant a quia timet injunction, the court will have regard to the degree of probability of the apprehended injury, the degree of seriousness of the injury and the requirements of justice between the parties.
[61]Apotex Pty Ltd v Les Laboratoires Servier (No 2) (2012) 293 ALR 272, 281–2 (citations omitted). See also Plaintiff S99/2016 v Minister for Immigration and Border Protection (2016) 243 FCR 17, 134 [479] (Bromberg J).
The plaintiff refers to the body of past conduct of Mr Annesley in the improper lodging caveats and similar documents, recorded in judgments of this and other courts, as manifesting his modus operandi. Against that background, the plaintiff submits that there is significant risk that Mr Annesley or one or more of the Annesley defendants may proceed to lodge with the Registrar of Titles a caveat or other document in respect of the plaintiff’s properties and, accordingly, that the balance of convenience favours the grant of the injunctive relief sought. Further, the plaintiff submits that in those circumstances, the grant of a quia timet injunction of the kind sought would save the plaintiff significant time and money because it would avoid it incurring the costs and expenses associated with later having to apply to have a caveat removed.
Issue 3: In respect of the plaintiff’s application for quia timet injunctive relief, has the plaintiff demonstrated a threatened infringement of the plaintiff’s rights sufficiently clearly to justify the Court’s intervention?
In my view, the position concerning the plaintiff’s apprehension that one of other of the Annesley defendants will lodge caveats against its property unless restrained stands in a different position to the Annesley PPSR registration and the Annesley controller registration.
The plaintiff became the registered proprietor of the 325 Wildwood Road property on 9 October 2018 and of the two constituent Berrambool properties on 12 May 2004 and 1 November 1985 respectively.[62] When the Annesley defendants registered the security interest on the PPSR on 29 October 2018 and the Form 504 notification of controller appointment on 29 October 2018, no caveats were lodged, or sought to be lodged, by them on any of the titles registered in the plaintiff’s name.
[62]See exhibit RGM-8 to the second Murch affidavit.
Counsel for the plaintiff acknowledges that the plaintiff cannot point to any factor or threat made concerning the lodgement of caveats. Rather, he submits, the evidence demonstrates that one or more of the Annesley defendants have registered two documents on statutory registers, one contending that there is a ‘security interest’ under the PPSR and the other with ASIC, notifying that a ‘controller’ has been appointed to the plaintiff, each of which is ‘baseless’. These registrations, he submitted, were ‘little more than fraudulent and malicious’ and evidenced the fact that Mr Annesley ‘was not acting as a responsible member of society’.[63]
[63]Hearing on 20 February 2019, oral submissions of Mr Harrison.
Counsel for the plaintiff noted that since 28 November 2018, under the suite of interim relief ordered, the Annesley defendants were (and continue to be) restrained from registering or attempting to register any caveats over the plaintiff’s land.
The form of the order the plaintiff seeks by way of final relief in respect of the lodgement of caveats is framed as follows:[64]
[64]I note that the form of relief sought takes into account the comments provided by the Registrar of Titles in his letter to the plaintiff’s solicitor dated 3 December 2018: see exhibit JK-7 to the affidavit of service of Jan Knight sworn 5 December 2018.
8.Each of the first, second and third defendants, their servants and agents is restrained from lodging a caveat over any of the following folios in the Register of Titles:
(a)certificate of title volume 8861 folio 856 being the property known as 325 Wildwood Road, Bulla in Victoria;
(b)certificate of title volume 8274 folio 168 being the property known as 1012 Chatsworth-Wickliffe Road, Wickliffe in Victoria; and
(c)certificate of title volume 9757 folio 053 being the property known as 1154 Chatsworth-Wickliffe Road, Wickliffe in Victoria,
without first obtaining the leave of the Court.
9.If a caveat is lodged in breach of order 8, upon receiving notification of such registration (including its dealing number) from the plaintiff, the Registrar of Titles is required to remove it forthwith.
10.Each of the first, second and third defendants, their servants and agents is restrained from directing, procuring, inciting, asking, requesting, aiding or abetting any person doing any act referred to in orders . . . and 8.
Counsel for the plaintiff observed that the interim orders have been effective, as no caveats have been lodged. But counsel readily acknowledged that if the Court were minded to take a strict approach to the general principles that must be made out before a quia timet injunction is granted, then the application for the final relief sought restraining the lodgement of caveats cannot succeed.
In my view, in circumstances where there is no evidence before the Court of the Annesley defendants threatening or intending to lodge caveats against the plaintiff’s land, the plaintiff’s apprehension that they may do so falls short of qualifying as an ‘imminent’ threat that they will do so unless restrained by an order of the Court. As Bennett J made clear in Apotex Pty Ltd v Les Laboratories Servier (No 2),[65] quia timet injunctions are not to be granted unless the imminence of the act to be prohibited is sufficiently clearly established to justify the court’s intervention. In the present case, I am not satisfied of the ‘imminence’ of the lodgement of caveats, and view the plaintiff’s application for relief of the kind sought as ‘premature’.
[65]Apotex Pty Ltd v Les Laboratoires Servier (No 2) (2012) 293 ALR 272, 281–2 (citations omitted). See also Plaintiff S99/2016 v Minister for Immigration and Border Protection (2016) 243 FCR 17, 134 [479] (Bromberg J).
Conclusion
It follows from the conclusions I have reached that the plaintiff’s application for final relief should be granted in respect of the Annesley PPSR registration and the Annesley controller registration. No quia timet injunctive relief should be ordered, on a final basis, enjoining the lodgement of caveats. Accordingly, orders should be made along the following lines:
Concerning the Form 504 Annesley ‘controller’ appointment registration[66]
[66]These orders are modelled on the orders made by Elliott J in in proceeding no. S CI 2017 05081 in respect of the Form 504 lodged by Mr Annesley in relation to Glentree South Holdings Pty Ltd – see exhibit JK-12 to the fourth Knight affidavit.
1.Pursuant to s 1322(4)(b) of the Corporations Act, the fourth defendant (ASIC) is directed to:
(a)remove document number 030453483 from the records pertaining to the plaintiff held on the ASIC register; and
(b)rectify the records pertaining to the plaintiff held on the ASIC register, so that no record remains of:
(i)document number 030453483 having been filed with ASIC,
(ii)a controller having been appointed to the plaintiff pursuant to document number 030453483.
2.Each of the first, second and third defendants, their servants and agents be and is hereby restrained from:
(a)acting or purporting to act as controllers of the plaintiff;
(b)lodging or attempting to lodge any document with ASIC in relation to the plaintiff without first obtaining the leave of the Court.
3.If a document is registered with ASIC in breach of order 2(b), upon receiving notification of such registration from the plaintiff, ASIC is required to remove it forthwith.
Concerning the Annesley PPSR ‘security interest’ registration[67]
4.Pursuant to s 182(4) of the Personal Property Securities Act 2009 (Cth) (PPSA), the fifth defendant (Registrar of Personal Property Securities) be and is hereby required to register a financing change statement removing the registration of a purported security interest with registration number 201810290022466 from the Personal Property Securities Register (PPSR).
5.Each of the first, second and third defendants, their servants and agents be and is hereby restrained from enforcing or taking any further steps to enforce the security interest described as ‘Security interest number 201810290022466’ registered on the PPSR.
6.Each of the first, second and third defendants, their servants and agents be and is hereby restrained from registering, causing to be registered or attempting to register on the PPSR any further document in respect of any security interest or purported security interest in property of the plaintiff without first obtaining the leave of the Court.
7.If a registration is made on the PPSR in breach of order 6, upon receiving notification of such registration (including its identifying registration number) from the plaintiff, the Registrar of Personal Property Securities is required to remove it forthwith.
[67]This formulation is based on the relief granted by Beach J in National Australia Bank Ltd v Garrett (2016) 340 ALR 532, at 548, [65]; [2016] FCA 714, at [65].
I will hear from the parties on the appropriate form of orders, including as to costs.
SCHEDULE OF PARTIES
| R.G. MURCH NOMINEES PTY LTD (ACN 005 424 742) | Plaintiff |
| -and- | |
| PAUL DAVID ANNESLEY | First Defendant |
| SHARLENE PHYLLIS ANNESLEY | Second Defendant |
| ANNESLEY INVESTMENTS PTY LTD (ACN 123 100 943) | Third Defendant |
| AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION | Fourth Defendant |
| REGISTRAR OF PERSONAL PROPERTY SECURITIES | Fifth Defendant |
| REGISTRAR OF TITLES | Sixth Defendant |
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