Rafferty v Time 2000 West Pty Ltd (No 10)
[2012] FCA 438
•24 April 2012
FEDERAL COURT OF AUSTRALIA
Rafferty v Time 2000 West Pty Ltd (No 10) [2012] FCA 438
Citation: Rafferty v Time 2000 West Pty Ltd (No 10) [2012] FCA 438 Parties: PATRICK CAMPBELL RAFFERTY, SANTORA HOLDINGS PTY LTD ACN 128 467 550 and KARAVILLE HOLDINGS PTY LTD ACN 009 439 178 v TIME 2000 WEST PTY LTD ACT 127 893 270, TIME 2000 SYSTEMS (AUSTRALIA) PTY LTD ACN 127 853 614, TIME 2000 OPERATIONS (AUSTRALIA) PTY LTD ACN 128 700 541, EMBLETON LIMITED (A COMPANY INCORPORATED IN HONG KONG), STEPHEN GERARD DONOVAN and MADGWICKS File number: SAD 122 of 2008 Judge: MANSFIELD J Date of judgment: 24 April 2012 Date of hearing: 24 April 2012 Place: Adelaide Division: GENERAL DIVISION Category: No catchwords Number of paragraphs: 18 Counsel for the Applicants: RJ Whitington QC with J Cudmore Solicitor for the Applicants: Cosoff Cudmore Knox Counsel for the Ms K Donovan: L Rowley with A Lazarevich Solicitor for Ms K Donovan: Madsen Rowley Counsel for Ian Lock and John Sheahan as Trustees in Bankruptcy of Mr Stephen Donovan: A Coombe Solicitor for Ian Lock and John Sheahan as Trustees in Bankruptcy of Mr Stephen Donovan: Griffins Lawyers
IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
SAD 122 of 2008
BETWEEN: PATRICK CAMPBELL RAFFERTY
First ApplicantSANTORA HOLDINGS PTY LTD ACN 128 467 550
Second ApplicantKARAVILLE HOLDINGS PTY LTD ACN 009 439 178
Third ApplicantAND: TIME 2000 WEST PTY LTD ACT 127 893 270
First RespondentTIME 2000 SYSTEMS (AUSTRALIA) PTY LTD ACN 127 853 614
Second RespondentTIME 2000 OPERATIONS (AUSTRALIA) PTY LTD ACN 128 700 541
Third RespondentEMBLETON LIMITED (A COMPANY INCORPORATED IN HONG KONG)
Fourth RespondentSTEPHEN GERARD DONOVAN
Fifth RespondentMADGWICKS
Sixth Respondent
JUDGE:
MANSFIELD J
DATE OF ORDER:
24 APRIL 2012
WHERE MADE:
ADELAIDE
THE COURT ORDERS THAT:
1.Ms Kamila Joanna Donovan (Ms Donovan) file and serve by close of business on Wednesday, 2 May 2012, an affidavit in which she discloses:
1.1full particulars of the disposition of the proceeds of the sale of the property situated at Level 1, 529 Chapel Street, South Yarra in the State of Victoria, being the sale proceeds referred to in paragraphs 7 to 11 of the affidavit of Ms Donovan dated 2 December 2011;
1.2full particulars of the disposition of the sum of $1,700,000 referred to in paragraph 2.2 of the order of Justice Lander dated 4 January 2012;
1.3the balance owing on each and every mortgage or other security granted by Gemhall Holdings Pty Limited (Gemhall) over the property situated at 5-7 Wilson Street South Yarra in the state of Victoria, being the property described in Victorian Certificates of Title Volume 09760 Folio 833, Volume 09760 Folio 832 and Volume 10661 Folio 316 (the Wilson Street Property);
1.4details of steps taken, if any, by Ms Donovan in connection with or with a view to a change, or a possible change, of the trustee of the Stephen Donovan Family Trust, being the trust established by deed dated 6 April 1994 made between Bruce Heaney and Gemhall (the Trust); and
1.5full and detailed particulars of the dates and circumstances in which each of the debts was incurred by Gemhall, and the basis of the liability of Gemhall for each of those debts, to each of:
1.5.1Wilmoth Field Warne Lawyers;
1.5.2John Curtain & Associates; and
1.5.3Kidman Partners Pty Limited,
for which debts each of those entities submitted proofs in the purported administration of Gemhall.
2.Mr Frank Lo Pilato file and serve by close of business on Thursday, 26 April 2012, an affidavit in which he discloses:
2.1details of steps taken in the purported administration and liquidation of Gemhall;
2.2details of dealings, if any, in which he has engaged in connection with the Wilson Street Property;
2.3details of steps, if any, he has taken in connection with the removal or possible removal of Gemhall as trustee of the Trust or the appointment of any other person as trustee of the Trust;
2.4details of the means by which he was purportedly appointed as administrator of Gemhall, including any documents or instrument relied upon in respect of such an appointment; and
2.5details of the proofs of debt submitted in the purported administration of Gemhall by each of:
2.5.1.1Wilmoth Field Warne Lawyers;
2.5.1.2John Curtain & Associates; and
2.5.1.3Kidman Partners Pty Ltd.
3.A sealed copy of this order, and the affidavit of Adam Scott Rosser sworn on 23 April 2012, be served as soon as possible on Mr Frank Lo Pilato by:
3.1email sent to [email protected]; and
3.2express post sent to RSM Bird Cameron Partners, Level 1, 103 Northbourne Avenue, Turner, Australian Capital Territory.
4.A sealed copy of this order, and the affidavit of Adam Scott Rosser sworn on 23 April 2012, be served as soon as possible on Ms Kamila Donovan by:
4.1email sent to [email protected]; and
4.2express post sent to Unit 1, 6 Blythswood Court, Kew, Victoria.
5.Liberty to apply on short notice.
6.Further consideration adjourned to 9:00 am on 27 April 2012.
7.Question of costs reserved.
Note:Entry of Orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
SAD 122 of 2008
BETWEEN: PATRICK CAMPBELL RAFFERTY
First ApplicantSANTORA HOLDINGS PTY LTD ACN 128 467 550
Second ApplicantKARAVILLE HOLDINGS PTY LTD ACN 009 439 178
Third ApplicantAND: TIME 2000 WEST PTY LTD ACT 127 893 270
First RespondentTIME 2000 SYSTEMS (AUSTRALIA) PTY LTD ACN 127 853 614
Second RespondentTIME 2000 OPERATIONS (AUSTRALIA) PTY LTD ACN 128 700 541
Third RespondentEMBLETON LIMITED (A COMPANY INCORPORATED IN HONG KONG)
Fourth RespondentSTEPHEN GERARD DONOVAN
Fifth RespondentMADGWICKS
Sixth Respondent
JUDGE:
MANSFIELD J
DATE:
24 APRIL 2012
PLACE:
ADELAIDE
REASONS FOR DECISION
I made an order ex parte on 20 April 2012 in the following terms:
UPON the applicant either in person or by their solicitors filing an undertaking as to damages in the usual terms:
THE COURT ORDERS THAT:
1.Until further order, Mr Frank Lo Pilato of RSM Bird Cameron Partners, Level 1, 103 Northbourne Avenue, Turner, Australian Capital Territory, be restrained from:
1.1causing or permitting any action to be taken or continued, whether directly or indirectly, in relation to or in any way connected to the purported administration and, or, liquidation of Gemhall Holdings Pty Limited;
1.2causing or permitting any action to be taken or continued, whether directly or indirectly, in relation to or in any way connected to the Stephen Donovan Family Trust, being the Trust established by deed dated 6 April 1994 made between Bruce Heaney and Gemhall Holdings Pty Limited; and
1.3causing or permitting any action to be taken or continued, whether directly or indirectly, in relation to or in any way connected to the property situated at 5-7 Wilson Street South Yarra Victoria, being the property described in Victorian Certificates of Title Volume 09760 Folio 833, Volume 09760 Folio 832 and Volume 10661 Folio 316.
2.A sealed copy of this order, and the affidavit of Adam Scott Rosser sworn on 19 April 2012, be served as soon as possible on Mr Frank Lo Pilato by:
2.1 email sent to [email protected]; and
2.2express post sent to RSM Bird Cameron Partners, Level 1, 103 Northbourne Avenue, Turner, Australian Capital Territory; and
2.3the solicitors for the applicant notifying him by telephone of the orders made today.
3.A sealed copy of this order, and the affidavit of Adam Scott Rosser sworn on 19 April 2012, be served as soon as possible on Ms Kamila Donovan by:
3.1 email sent to [email protected]; and
3.2 express post sent to Unit 1, 6 Blythswood Court, Kew, Victoria.
4.A sealed copy of this order, and the affidavit of Adam Scott Rosser sworn on 19 April 2012, be served as soon as possible on Mr Ian Lock and Mr John Sheahan, the trustees of the bankrupt estate of Mr Stephen Donovan, by hand delivery to level 8, 26 Flinders Street, Adelaide, South Australia.
5.That this matter be listed for further directions at 9.00am on Tuesday 24 April 2012, including to hear any application to vary or discharge order 1.
6. Liberty to apply on short notice.
I had the matter returned for directions this morning at 9:00 am to give the persons affected by the order the opportunity to consider it and, if appropriate, to apply to vary or discharge it. I was mindful that it was an ex parte order.
At the hearing of the matter this morning, Mr Lo Pilato, the liquidator of Gemhall Holdings Proprietary Limited (Gemhall) did not appear. He was one of the persons against whom the ex parte interim order was made. There was no application by Ms Donovan to vary or discharge the order.
I was then asked to make further orders relating to the provision of information by both Ms Donovan and Mr Lo Pilato. The context for the request for those further orders is the concern on the part of the applicants as to what may have been done with certain assets to which the applicants say they have an entitlement to recourse for the purposes of enforcing their judgment in recent times. In the absence of Mr Lo Pilato, but bearing in mind his position as an officer of the Court, I was minded to make the orders requiring the disclosure of information from him within a short period of time. As the liquidator of Gemhall, he should have that information readily available to him. I therefore propose to make those orders in terms of paragraph 2 of the minutes of order which I now initial and date. I will change line 1 of paragraph 2 to Thursday, 26 April 2012 as the matter is urgent and I propose, as I said in the course of submissions, to bring the matter back for further consideration at 9 am on 27 April 2012. I am bringing the matter back at short notice again because I am mindful that I should be careful not to make orders which affect the interests of persons any longer than is necessary without the opportunity for them to be heard. I will also make orders 3, 4, 5 and 7 in accordance with those minutes of order.
This morning at 9:00 am counsel for Ms Donovan expressed concern that there had not been sufficient time to obtain instructions in relation to the effect of the orders of 20 April 2012. It was partly for that reason that I selected next Friday, 27 April 2012, to bring the matter back for further directions as that would give her, in effect, a week to complete her instructions.
In the meantime, she had had only brief notice of the further order which sought for her to provide information in terms of paragraph 1 of the minutes of order. I stood the matter over to 11 o’clock this morning at the request of counsel for Ms Donovan for her to have a brief opportunity to consider those further orders, particularly as I contemplated at that time requiring the provision of information by her also by Thursday, 26 April 2012. Having heard counsel for Ms Donovan, I now propose to make the order in terms of paragraph 1 of the minutes of order but substituting close of business on Wednesday, 2 May 2012 for the date which appeared in the minutes of order. I do so to give Ms Donovan a reasonable time to accumulate the information, if she does not already have it, and to take instructions as to whether she should provide it or (as her counsel contemplated) she could or should exercise her right to decline to provide that information on the ground that it may tend to incriminate her in relation to a threatened assertion of contempt on her part made by the applicants in the final paragraph of their letter to her of 23 April 2012. That letter is annexure ASR5 or part of annexure ASR5 to the affidavit of Adam Scott Rosser, filed electronically this morning.
That accommodates two of the concerns of Ms Donovan’s counsel raised today about whether that order should be made. That was to give her sufficient time to assemble the information, and the need to take instructions as to its provision, including the implications of its provision having regard to that assertion that, on the information available to solicitors for the applicants, her actions appear to be in contempt of orders made on 21 December 2011.
The other submission on Ms Donovan’s behalf was that the Court either could not or should not direct her to provide information because the appropriate person or entity who might do so is the trustee in bankruptcy of Mr Donovan and secondly that in the circumstances, the proceeding has been completed by the initial judgment, the “freezing” orders which have been made and the decision on appeal so that the Court could not, or should not, make the proposed orders against Ms Donovan in any event.
In my view, the Court has the power, notwithstanding the events which have happened, to continue to make orders of the nature which were made on 20 April and which I propose to make, as I have foreshadowed, including an order in relation to Ms Donovan. I have had regard to the role of Ms Donovan in the primary proceedings and more recently, in relation to a series of interlocutory applications concerning the freezing orders which have been made from time to time and other matters. I have had regard to the power of the Court to ensure that its decisions and orders are effective.
Gemhall has brought several interlocutory applications in this matter, being on 10 November 2010, 2 February 2011 and 2 November 2011. Each of the applications sought a variation to the freezing orders originally made by Besanko J on 19 December 2008, which orders were then varied on subsequent occasions. Ms Donovan has deposed several affidavits in support of Gemhall’s applications and it is evident that she has an intimate understanding of the facts and issues in this matter, and is playing a not insignificant part in those applications. She has been one of the two directors of Gemhall. Following the bankruptcy of Mr Donovan by order of 15 November 2011, she remains as its sole director (although I am told that under Gemhall’s Articles of Association she cannot act alone, as a quorum of two directors is required). Nevertheless, she has, and has demonstrated, an active awareness of Gemhall’s position and support for it, and so would be likely to have material information about its affairs and including its activities as the trustee of the Stephen Donovan Family Trust.
The order which is sought by the applicants in relation to Ms Donovan can be characterised as an ancillary order to the freezing orders already made in this matter. This is specifically contemplated by the Federal Court Rules 2011 (r 7.33) and is supported by Universal Music Australia Pty Ltd v Sharman License Holdings Ltd (2005) 228 ALR 174 (Universal Music v Sharman). In that matter an order to preserve assets was made and a subsequent notice of motion was filed seeking further orders for the filing of disclosure affidavits. Moore J in Universal Music v Sharman at [20] agreed to make such an order and noted:
Ancillary orders can be made to make the [freezing] order more efficacious. One such order involves directing the party bound by the [freezing] order to file an affidavit disclosing assets on which the [freezing] order operates.
In this matter, I am satisfied that although Ms Donovan is not a party to the proceedings, she is closely involved through her position as director of Gemhall and appointer of the Stephen Donovan Family Trust (SDFT). Ms Donovan was appointed to both of these positions on 10 December 2008. The Federal Court Rules make provision for orders to be made against a person who is not a party to the proceeding. Rule 7.34 is as follows:
The Court may make… an ancillary order against a person even if the person is not a party in a proceeding in which substantive relief is sought…
An order for the filing of an affidavit by Mrs Donovan is appropriate in this matter to protect the interests of the applicants as judgment creditors and to maintain the effect of the freezing orders previously made by this Court. It is appropriate in these circumstances for the Court’s power to extend to Ms Donovan, particularly because she has a degree of interest in, if not control and influence over, the property the subject of the freezing order.
The necessity of the order is made even more urgent by the fact that Gemhall is now in liquidation. Counsel before me today raised their concern that Mr Lo Pilato may be unaware of the orders that affect the property of Gemhall and of the Stephen Donovan Family Trust and that he may, in his capacity as liquidator, inadvertently deal with the property. This may have the effect of frustrating the enforcement of the judgment in favour of the applicants.
I am satisfied that the character of Ms Donovan’s participation in this matter to date and the Court’s powers under r 7.33 and r 7.34 are sufficient to warrant the making of the Order against her.
There is one additional matter that I should mention. Counsel for Ms Donovan raised the concern that there had been no formal application for the orders which are sought today in relation to her. To the extent necessary, I dispense with compliance with the rules to enable that application to have been made orally. In my view, it is in the interests of justice to have granted that dispensation in circumstances where the applicants, as they indicated through senior counsel, are very concerned about the way in which assets which they claim to be available to satisfy their judgment might otherwise be rendered beyond their reach. Of course, I make no final conclusion as to whether that concern is in fact correct but it is obviously a genuine one and, on the limited information I know, is one which has some reasonable foundation.
In making that order I am mindful that the matter will come back on 27 April 2012 before the order in relation to Ms Donovan has been complied with. This will enable any further application to be brought discharge the order or to vary it in some way.
I now make the orders in terms of the minutes of orders, as altered and initialled by me.
I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield. Associate:
Dated: 30 April 2012
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